The retail industry appears to be skidding toward its first big wreck in 17 years.
Chains are slamming the brakes on store openings, cutting back on inventory and girding for leaner times as consumer spending chills. The speed with which sales slowed during the holidays caught even cautious retailers off-guard, prompting a flurry of profit warnings.
.....
An expected 4% sales increase for the November-December holiday period at stores open at least a year rang in at only 3% compared with the 2006 holidays, according to trade group National Retail Federation -- the smallest increase since 2002. Even then, sales were propped up by inflation-boosted prices of food, fuel and drugs. Apparel, jewelry and home-products chains reported same-store sales declines.
It will be a discouraging first half of the year, economists warn. "It will feel like a recession to many people even if we technically avoid one," says Frank Badillo, senior economist at market researcher TNS Retail Forward. "Financial stress from high energy costs, the fallout from the housing slump and sluggish employment and income growth" will weigh on shoppers, projects Rosalind Wells, chief economist of the National Retail Federation.
This should surprise no one.
I'm traveling today. I'll probably write one or two more things as time permits
6 comments:
Sometimes things just revolt me, like this quote from our esteemed Fed chairman.
"Especially important is making sure a plan can put cash into the hands of poor people and the middle class, who are most likely to spend it right away, he said, though he added that research shows affluent people also spend some of their rebates."
http://timesunion.com/AspStories/story.asp?storyID=655092&category=&BCCode=&newsdate=1/18/2008
I'm ignoring the "poor" choice of words. Ben, considering the current state of household debt, you had better hope that most people put it towards existing balances.
Also the idea of printing money for the poor and middle class just offset a correction ( one that the fed created ) seems completely asinine.
Given the history of Bush appointees, you should take Bernacke's words at face value.
They believe the things they say.
It would appear political Ben has agreed to humor Bush, as opposed to formulating sound, intelligent economic policy. If not, he really is grossly unqualified.
Proceed with caution.
BTW, bonddad, you're an excellent writer, making complex financial information interesting, and easy to understand.
I always enjoy reading your work.
Thank you.
I guess this really really worries me. I've commented on DK so you know I'm pretty much in the dark on economics, but just from a know-nothing commonsense view, it sounds like a terrible idea. If I get anything from the government, I'm not going to spend it, I'm going to apply it to some of my debt. And where is this magic money coming from? I'm not getting that part either. As much as it might hurt everyone, my admittedly simple sugarbowl accounting says we need a tax hike.
utahgirl
utahgirl,
Here are a few select quotes from Bernanke that should make anyone worry.
"But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost." - Baenanke
"If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation." - Bernanke
Germany did this very thing right before they collapsed a ways back.
When your currency starts going south, ya got serious problems. The method of putting water from the deep end of the pool into the shallow end to adjust the level seems somehow destined to fail. With prices continuing to rise (via the rise of oil), PEOPLE have to cut back since there's less "discretionary funds" to spend. Hold on to your seats, folks, the ride down has just begun.
Post a Comment