` Comparing Consumer Discipline Post Holiday Season

Comparing Consumer Discipline Post Holiday Season

on Jan 02, 2011 in Fox Business, Media Center by Ed Butowsky | No Comments »



Ed Butowsky, managing partner of Chapwood Investment Management, appears live as a co-host of Varney & Co. on Fox Business News to discuss a recent email to the show about comparing consumer disciplines throughout this past holiday season.

In a recent email to Varney & Co. via FoxBusiness.com a viewer writes:

“I would like to see a comparison between the rise in Christmas sales and the rise in credit card debt. Before everyone celebrates Christmas sales, let’s compare consumer discipline.” Varney@FoxBusiness.com from Terry in New Jersey

The viewer brings up an interesting point. While the economy may be in a fragile state, consumers are getting right back into spending. By spending meaning spending with credit cards, and saving less. Its very possible that as a consumers pre-recession times everyone was spending too much on credit (and of course saving much less), and during the recession everyone went to a save as much as possible (and spend very little). Now were feeling better as consumers we need to find a middle ground where we save, but spend within our budgeted means. Charles Payne asks an important question, “can consumers only spend a little because they can, or will they fall off the bandwagon and go on a binge?” Ed Butowsky explains that many more people will, in fact, spend more on credit because they do not have the cash. Ed continues that as long as consumers do not see the bill they will spend. Thirty days later when that credit card bill comes in and they see the enormity of how much they spent along with the little number that is not soo little describing the interest rate at which they borrowed, this may start a ripple effect.

The bottom line is this is a glass half full situation. The consumer has to be applauded because the consumer has done a much better job throughout this recession at tightening their belt in terms of spending, cutting down their debt, for example, pay off credit card debt, tightening house hold spending, etc. More so then our government has. While the consumers represent 75%-80% of our economy, they have accomplished measures to maintain their households above water while many of them were loosing wealth and value in their homes, and many continue to do so.

Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry.

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To the readers here at EdButowsky.com please chime in with your opinions and point-of-view in the comments section below.


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  1. Ed Butowsky | Comparing Consumer Holiday Discipline « Jay Oyakawa's Blog
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About Ed

Ed Butowsky is a nationally-recognized expert in investment management. Butowsky has been in the financial services industry for over 25 years. He was previously a Senior Vice President at Morgan Stanley and a Managing Director ... More »

Contact

Ed Butowsky, Managing Partner
Chapwood Capital Investment Management, LLC
Website: www.chapwoodinvestments.com
Email: ed@chapwoodinvestments.com
Phone: (972) 865-2225