no assets no income no job - Look ma, I'm a ninja!

Kimmy Simon, left, and her friend, Tate Madden, try to keep warm under a blanket early this morning before the opening of a Best Buy store in Cincinnati, Ohio. - NYT

Since this is the first day of real real shopping, LI wants to get inject just the right amount of grinch into the jollity of the day. But how [he said, tapping his long green fingers with the long green nails] can I make those awful Whos suffer?

Business week has a story about the projected shrinkage of consumer spending. It’s an astonishing beast, that American consumer. There has been only one down quarter since 1981:

“It's been a glorious run for the consumer. In the past 25 years, Americans have kept shopping through good times and bad. In every quarter except one since 1981, consumer spending rose over the previous year, adjusted for inflation. The exception was the first quarter of 1991, and even then the decrease was a mild 0.4% dip.”

The projection of a cutback in spending is based on the projection that housing prices will fall, with every dollar less in the price of a house matched by 9 cents less spending – or so the pretend figures go. Thus, we are looking at maybe 200 to 300 billion dollars less spending next year.

Or so saith the cautious spoilsports. Others still see a rainbow, as big and broad as all outdoors:

Will the consumer crunch spread to the rest of the economy? Conventional wisdom is that consumer spending makes up 70% of gross domestic product. While technically true, that figure is deceptive, because so much of what Americans buy these days is made overseas. Compared with the early 1980s, which was the last time consumers cut back, much more of what Americans buy is made abroad. Today, imports of consumer goods and autos run about $740 billion a year. That's fully one-third of consumer spending on goods outside of food and energy. As a result, most of the spending cutbacks won't cost Americans their factory jobs--those factory jobs have mostly fled offshore anyway. Workshop China, in contrast, will get hurt.

What's more, it's still a low-rate world for most nonfinancial corporations, which have access to relatively cheap funds for expansion and capital investment. Asia and Europe are continuing to expand, with German and French growth accelerating in the third quarter. Exports of aircraft and other big items are likely to rise, too, supplying the U.S. economy with an extra lift. In other words, globalization has made consumers less central to the American economy.

Still, the consumer recession will hit some parts of the economy harder than others. Particularly at risk are retailers, who have already seen sharp declines in their stock prices since the extent of the subprime crisis became clear. Nordstrom shares, for example, fell from 52 in September to as low as 32 before rebounding. On Nov. 14, Macy's cut its sales forecast for the fourth quarter, sending its stock down to $28 a share from $43 in July. "Retailers are looking to pare inventories," says Rosenberg.

Not everyone thinks American shoppers are tapped out. Consumers have about $4 trillion in unused borrowing capacity on their credit cards, enough to keep spending afloat, points out Stuart A. Feldstein, president of SMR Research in Hackettstown, N.J., which studies consumer loan markets.”

Four trillion dollars to go – we can’t stop now! We are still swimming in yolk – everything is rich and sweet here in the New World. The Whos need to get their Woofers, their drums and their little Who bugles! Or fuck that – think bigger. Mamma needs a new pair of shoes, preferably an adorable 390 dollar pair of Bettye Muller Coast Pumps. And baby sooo definitely needs a Nintendo Wii that he was torn out of the womb already shrieking and screaming for one.

In the NYT, there is an article by Floyd Norris about what we need much, much more of in our race to accumulate the good things of life. Ostensibly, the article is about Freddie Mac, the giant mortgage lending enterprise, as Norris calls it, which had this wee wee loss of a few billions this quarter.

“Freddie Mac historically did not buy subprime loans. But that did not stop it from buying some truly dubious loans. The borrowers may not have qualified as subprime, but many of the loans should have raised questions before they were made.

''The underwriting standards declined,'' said Anthony S. Piszel, Freddie Mac's chief financial officer. ''That was across the board.''

Those who made loans and expected to sell them quickly did not care much about assuring that the loans would be repaid. It turns out that the financial wizards who made it easy to transfer risk also assured that more risks would be taken. They produced innovations like Nina loans, which, Mr. Piszel said, ''found their way into prime space.''

Nina loans?

The abbreviation stands for ''No income, no assets.'' It does not mean the loans went to people without either assets or income, only that the borrowers were not asked if they had either. I had known about ''stated income'' loans -- also known as ''liars' loans'' -- in which the bank took a borrower's word for how much he earned. But I had not realized you could borrow money without even being asked about your income.
Starting this month, Freddie won't guarantee such loans, which seem to default more often than other loans.”

No income, no assets, eh? That describes my whole life so well that I have to have that inscribed on my tombstone. Except, wait! Having no assets means probably not being able to afford the tombstone. Damn. Finally, a consumer good worth saving up for.

PS - Shamefully, I forgot that the 90th birthday of the Russian Revolution fell this year on November 21st. So a big shout out to the thronging Bolshevik ghosts in the underworld. And since I couldn't find a satisfactory translation of even a bit of the Twelve, here's another Blok poem - which has nothing to do with the Revolution, and everything to do with a certain thirst for revolution:

To the Muse

In your hidden memories
There are fatal tidings of doom...
A curse on sacred traditions,
A desecration of happiness;

And a power so alluring
That I am ready to repeat the rumour
That you have brought angels down from heaven,
Enticing them with your beauty...

And when you mock at faith,
That pale, greyish-purple halo
Which I once saw before
Suddenly begins to shine above you.

Are you evil or good? You are altogether from another world
They say strange things about you
For some you are the Muse and a miracle.
For me you are torment and hell.

I do not know why in the hour of dawn,
When no strength was left to me,
I did not perish, but caught sight of your face
And begged you to comfort me.

I wanted us to be enemies;
Why then did you make me a present
Of a flowery meadow and of the starry firmament --
The whole curse of your beauty?

Your fearful caresses were more treacherous
Than the northern night,
More intoxicating than the golden champagne of Aï,
Briefer than a gypsy woman's love...

And there was a fatal pleasure
In trampling on cherished and holy things;
And this passion, bitter as wormwood,
Was a frenzied delight for the heart!