Quickie today...

Consumer spending came in 0.1%, with income up 0.5% m/o/m. Unfortunately the reason for the change is largely technical (read: statistical noise due to the way the data is collected) on the income side, and spending? Well, its flat.

Here's the money quote:

"Within the 0.1 percent rise in personal spending in February, the gain was led by a 0.3 percent rise in durables and in services. Nondurables fell 0.2 percent. But in inflation adjusted terms, overall spending was unchanged in February after rising a mere 0.1 percent the month before. For now, it looks like the consumer sector is going to be doing very little to keep real GDP growth in positive territory in the first quarter."

No kidding.

Or, if you prefer, just look here, from the above link:





Any questions?

Consumer sentiment dropped to 69.5, with inflation expectations for the next 12 months up to 4.3%. That's a print that historically has been associated with recessions.

Fundamentally this "credit crisis" is morphing rapidly to an economic crisis. Reality is this - we have had tremendous "faux wealth" that is now being destroyed, with the creator of that "faux wealth" being the criminally-unsound lending that took place over the last few years.

Now the chickens have come home to roost and the check is on the table.

There is no cheap, fast, easy, or painless way out of this. Consumers cannot spend without real income, and they are rapidly having their wealth destroyed as the faux fraud-based "appreciation" of their assets is unwound.

Everyone is now screaming for "the government" to come save us, but in fact the government can't save us. The problem didn't come from government, it came from Wall Street and the insatiable desire among Americans to get something for nothing. While Wall Street created the environment that allowed you to think you were a "genius" for having a house that doubled in price in the last four years, the fact is that you were a fool for spending that faux money, and now you're stuck with the real debt.

Let's see what Congress decides to cook up with this Bear "StealOut". And before you judge (or vote) make sure you first check out who's been buttering your CongressCritter's bread - odds are you will find big PAC and campaign contributions coming from these very same Wall Street firms that stole your retirement - and your future.

Make sure you say "thanks" this coming November, but remember that this is not a Democrat or Republican issue - both parties have been blowing the Big Wall Street execs under the board room table for more than 20 years.

Psst - and go sign the petition to stop this crap, beginning with Bear Stearns.

Your money was stolen folks. Either speak up or give up - your choice.

Oh, and now we have hard proof that the Auction Rate Security turmoil (ARS), which has hit lots of high-net-worth people and countless firms, has spread beyond a simple "lockup" - UBS is marking down values in customer's holding accounts!

"UBS, however, using an internal model to value the securities, will mark them down this afternoon and inform clients via their online statements shortly thereafter, people familiar with the matter said. The markdowns will range from a few percentage points to more than 20%, the people said."

Oh, those were "cash equivalents" eh? Now they have a 20% haircut? Why do I think that's not going to go over very well?

Yes, there are lawsuits over this already, and there will be plenty more too I suspect......

Psst - FGIC garnered another "junk" rating today. Booya!