Today it is less than half that interest rate. The shakeout ravaging the Internet-related stocks is bringing some reality back to the mind of the US consumer. No longer can he hope for a new car each year and is postponing the purchase of the new house. Money is coming into the stock market at a much lower rate than in the past few years. Portfolio allocation from the funds is decreasing as far as stocks are concerned.
Consumer spending is the reflection of consumer confidence.
Here in the Philippines it is less so. Here consumer spending is a reflection of consumer income, not so much consumer attitude. The way we can measure our consumer confidence is in the peso-dollar rate. Whenever we get a little nervous, we have this mindset to run into the dollar, hoping to benefit from the fruits of the land of milk and honey, where the streets are paved with gold. The peso is trading at historic lows, reminiscent of the January and September 1998 periods.