Household deleveraging casts doubt on bank and consumer stock advances


	Household deleveraging casts doubt on bank and consumer stock advances

jasonkelly

6-13-2009 9:39 PM

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tags:

investing, economy

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/0d971d3f-7297-4ca1-b2d6-da92c613658b/68A3058B-BACA-4550-A04A-15B9D72728A3/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.nakedcapitalism.com/2009/06/what-is-different-this-time.html" href="http://www.nakedcapitalism.com/2009/06/what-is-different-this-time.html" style="font-size: 11px;">www.nakedcapitalism.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.nakedcapitalism.com/2009/06/what-is-different-this-time.html">Looking at the unique aspects of this recession, we find the sharp reversal of household financial balances from a deep deficit position to a net saving position quite important. Households are reducing debt loads, in part with higher saving out of income flows, and this has implications for prospective bank loan volumes and sales revenue growth at consumer discretionary firms.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.nakedcapitalism.com/2009/06/what-is-different-this-time.html">In addition, the shift of investors toward inflation hedges like oil is draining income from US households to foreign producers that tend to net save. We try not to be stubborn in our portfolio positioning – having learned the hard way that is a very expensive luxury – but we can think of two sectors that have led the US equity market charge, banks and consumer discretionary stocks, that can be questioned if we are correct that household deleveraging is unique to this business cycle recession and still matters.</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/68A3058B-BACA-4550-A04A-15B9D72728A3/blog/" title="blog or email this clip"><img src="http://content9.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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