The households headache

Things are looking pretty bad for households, the bedrock of U.S. growth. It all started with the housing recession back in '06, leading to a steady erosion in the value of homes. This in turn led to a surge in debt as the corresponding collateral shrunk in value. With the sharp rise in delinquencies and the widespread direct and indirect exposure to the subprime market, confidence was shaken to the core, triggering a material and chronic pullback in lending. In this environment, households have been finding it increasingly difficult to borrow to counter the rise in naked debt (savings is unfortunately nonexistent in the U.S.). Further harming an already precarious condition has been the constant rise in food and gas prices which have acted as a sort of disposable income tax, not to mention inflation in other goods and services that are eating away into salaries which are already growing at a slower pace (leading to a lower real disposable income). A jittery stock market and signs that unemployment is rising isn't much help either.
No wonder consumer sentiment is at an all time low. So why isn't there more gloom and doom in the numbers given that the great unwind is in full swing and households are being battered from all directions?
Well for one, the rest of the world has so far shown a surprising degree of resilience to the crisis (although there is strong contention as to how long this will continue). Combined with a dramatically weaker dollar, exports have been booming (not to mention the sovereign fund bargain hunting spree). To this we add a federal reserve, that, although in the beginning was dragging its feet (with its inflation concern), is now much more focused in its bid to save the economy. Bernanke's creative touch combined with a willingness to sacrifice moral hazard risk to avert the growing risk of a protracted recession (as seen with Bear's rescue) should help diminish the impact of the crisis. This will take time though considering contagion and the abundance of toxic debt still to be written off. It will take a painful cleansing process of the economy before we start to see an end to the obsessive/compulsive nature of the markets.