Black Friday (BF) could have been called Green Friday. The stock market rose sharply on increases in consumer spending – up 20% from last year. Online purchases outpaced traditional retailers growing 26% and eclipsing the $1 billion mark for a single day. Apple’s iPad dominated tablet traffic at 88.3%, source TGDaily. So you ask, “Where is the new found money driving the spending spree coming from?” Is it a jump in employment and new hires; what about worker pay raises? Or, is this sudden windfall from sources more sinister, such as moneylenders with IOU’s attached.
Credit, Credit, Credit. Home Equity Lines of Credit (HELOC) are expected to rise 30% to $79.8 billion this year, according to Moody’s Corp. The recent housing spurt has added equity to consumer balance sheets, which in turn is kindling credit expansion. The Mortgage Bankers Association is predicting 8 percent home price appreciation next year. HELOCs are projected to jump 31% totaling $104 billion next year. So there you have it, spend baby spend – buy now and pay later; it’s the American way – minute’s up.
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