Pragmatic Capitalism

Practical Views on Money, Finance & Life


It’s no secret that the consumer remains under a great deal of pressure.  David Rosenberg of Gluskin Sheff believes the consumer is in the process of retrenching.  In a recent note he cited the 5 reasons he believes consumer retrenchment is bound to deteriorate in 2012 (Via David Rosenberg):

“1.  Relief from lower gas prices comes to an end.

2.  The lagged impact from the $2.5T contraction in household net worth in the past two quarters shows through a rising savings rate.

3.  The rise in savings rate is compounded through the year by uncertainties surrounding the longevity of the Bush era tax cuts.

4.  Employment has picked up over the past year but overall, growth is still tepid by standards of the past and the jobs that are being created (retail, leisure, accommodation) are in low-paying areas as such are not helping provide much of a lift to overall work-based incomes.

5.  Ongoing fiscal retrenchment at a state and local government level, including something new – reductions in pension benefits.”

Source: Gluskin Sheff

Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC.Orcam is a financial services firm offering asset management, private advisory, institutional consulting and educational services.He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.
Cullen Roche

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