Zeev's Turnips Patch-No Politics (ZEEV)

[Lane Hall-Witt]

TG--

Good question about the refis: I don't know what proportion are cashouts and what proportion are going to reduce monthly payments.

My point was basically to agree with the analyst's sense that consumer dollars (whether a product of refis or any other source) are buying automobiles and, as a result, are not buying other products -- such as DVD players, in the case the analyst was discussing. The additional point about a "profitless recovery" is due to the fact that profit margins for the automobile makers have been squeezed nearly to zero at this point. In effect, consumer spending is being concentrated in a sector where there is almost no money to be made: hence the specter of a profitless recovery.

By the end of the year, I expect analysts to be scratching their heads, wondering how profits could come in so low even though consumer spending remained robust--.