The Consumer is Tapped Out...No, for REAL This Time

Just as gas prices are falling, providing a more positive outlook for consumer spending in the upcoming all-important shopping season, Bloomberg is still pimping the gas price wrecks the economy meme. In what is an atrociously bad article titled "Credit Card Users, Hurt at Pump, May Sap Retail Sales", Bloomberg introduces you to Sandra Cuevas, a Queens, NY woman who has racked up $25,000 in credit card debt. In a display of either enormously disingenous journalism or sheer stupidity, the reporter, Andrea Cheng, links energy prices with this woman's woes. There is no earthly possibility that Ms. Cuevas from Queens could have racked up $25,000 in credit card debt due to the high gas prices we have experienced for the last six to twelve months. Only Ms. Cuevas's sad profligacy could have achieved that feat.

Cheng does admit that gas prices are falling, but notes that they are higher than 2004. Yes, but so what? That was two years ago, all that anybody is concerned about is comparisons with last year. The article then goes on to make some mildly acceptable assertions that credit card balances have increased and that it presents a risk to the consumer outlook (despite the fact that carried credit card balances have been on an upward trend for many years as more and more of what we buy everyday is now able to be bought via credit card). Finally, after presenting us with dueling analysts and after inserting the de rigeur worn out and heretofore inaccurate phrase "the consumer is tapped out", we get this stunner - Sandra Cuevas has paid off all of her credit card debt! Apparently times have been so bad, wot with gas prices and all, that Ms. Cuevas found the money to expunge her debts. What's more, it would seem then that this Queens shopaholic has dry powder going into the holiday season. Hmmm. Might be time to buy retail stocks.