Already large retailers in the consumer discretionary sphere have begun announcing slowdowns in traffic, revenue and earnings. As the mortgage ATM has begun to malfunction, the consumer-based economy has begun to feel the pinch. With savings rates at historic lows, many retailers were dependent upon homeowners’ abilities to cash out a portion of the equity of their homes to pay for toys. Now those days may finally be coming to an end. When it’s all said and done, you reap what you sow, and buying a huge house and refinancing to all hilt is not the way to become wealthy.

Click here to read Paul Kasriel’s latest analysis.

Comstock calls it the “tip of the iceberg”.

Filed under: Social Mood, Economics