What Doug fears is that sometime soon
>households will change their states of mind: they will think that
>the risk of losing and then being without a job, or being unable to
>find anything other than a crappy job, is too high; and thus that
>they need to cut back on their spending significantly in order to
>build up their buffer stocks of savings..."
I agree with the last part, but I'm also worried that the U.S. economy has come down with a case of accumlation crisis, which is being treated with intense speedup and cost-cutting and with huge tax breaks for the rich. If employment doesn't recover soon, there will be nothing to compensate for the fading stimulis of cashout refi and tax refunds, and consumption could finally have its recession. Positive GDP and falling employment looks like what stock market technicians call a negative divergence or nonconfirmation - like when the averages are rising but the advance/decline line is falling. Bad omen. All that would change with a few six-figure positive monthly job figures.
Doug ^^^^^ CB: Is the thing feared here decline in profits because of a drop in mass demand ? I realize a fall in profits would lead to more layoffs and increased unemployment , too. But the direct thing feared is profit decline ?