In the CNBC video recorded today and shown below, American Express CEO Ken Chenault comments on credit conditions at American Express as well as broader issues associated with consumer spending. As we have noted in the past, economic recovery will ultimately depend on the extent to which consumers are willing and able to spend.
At a time when unemployment appears to be headed for a sustained period above 10 percent, will the American consumer be able to hold up the 70 percent of GDP accounted for by consumption? As we reported yesterday, Warren Buffett significantly increased Berkshire Hathaway’s investment in Wal-Mart, a company that has seen flat stock price performance for an extended period. While we do not know the rationale for the purchase, it is entirely possible that Mr. Buffett may view the shift of consumers to low priced retailers to be a long term trend.
For RSS Feed subscribers, please click on this link for the video.