US economy slowdown
Bill Bonner
The Daily Reckoning
24 Jul, 2006
...USA Today also reports
that 'casual dining' restaurants are suffering... Judged by the
numbers, either middle America is sitting down less, or paying
up somewhere else...
If Americans have two SUVs
in the driveway, notes USA Today, they have to count on spending
$1,500 more per year to keep their tanks full. In June, gasoline
consumption in America rose to 9.5 million barrels per day. So
far, Americans are not cutting back their use of fuel. The American
military - the single biggest user of petroleum products in the
world - is using more than ever, too. Oil is still priced at
nearly $75 a barrel, despite what was billed as a major pullback
for commodities.
The expense seems to be forcing cuts in other areas. USA Today
also reports that 'casual dining' restaurants are suffering.
Applebees, Outback Steakhouse, and Red Lobster, to give some
examples, are where Middle America eats. They are not real restaurants
- in the sense that there is no real chef, no wine list, and
nothing that could be mistaken for fine cuisine. But at least,
you get to sit down... and pay up. And, judged by the numbers,
either middle America is sitting down less, or paying up somewhere
else. Red Lobster says its sales went down 5% in June. Industry
experts say they've never seen anything like it.
USA Today mentions the price of petrol, increased competition
from the fast-food places, and the rise in credit card minimum
payments as reasons for the falloff in casual dining. Our guess
is that US real estate figures in it too. People who dine at
Red Lobster often have houses with regular payments, and in the
country's hottest markets, 4 out of 5 of the housing payments
written on new houses in the last 2 years had adjustable rates.
Those rates are now being adjusted - upwards. And then there
are also those 'soaring property taxes' to pay, say the papers.
Meanwhile, the whole zeitgeist of the US housing market has changed.
"For sale signs multiply across US," says the Wall
Street Journal. Out here on our farm, we've seen how cows multiply
and how chickens and rabbits multiply. We've never actually caught
two for-sale signs in the act, but it must be going on. The number
of houses waiting to be taken to a good home is at a record level.
July 21, 2006
Bill Bonner
http://www.dailyreckoning.co.uk/
 Bill Bonner is the founder and editor
of The Daily Reckoning.
He is also
the author, with Addison Wiggin, of The Wall Street Journal best
seller Financial
Reckoning Day:
Surviving the Soft Depression of the 21st Century (John Wiley
& Sons).
In Bonner and
Wiggin's follow-up book, Empire
of Debt:
The Rise of an Epic Financial Crisis, they wield their sardonic
brand of humor to expose the nation for what it really is - an
empire built on delusions.
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