Sometimes one doesn’t have to look very far for something to post about. I open up my intarweb thingie this morning, and one of the very first things I encounter (after scouring the webs for paeans to me) is this AP headline:
Despite Economy, Malls and Stores Jammed
Just the latest in a proud history of AP “despite” headlines, such as “Despite Failure of Surge, Civilian Deaths in Baghdad Down.” All of them mean, in essence, “when I assert contrary to all the available evidence that things are this way, reality is being stubbornly uncooperative.”
Gold is at near-historic highs, Dan. Oil is pushing a hundred bucks a barrel. Europe just suspended mortgage bond trading. The credit industry, not that it bothers me, is going to write down two trillion dollars. Some housing markets will drop by over a third by the end of next year from 2005 highs.
Debt to GDP is now 350%. There’s eight times more paper in circulation than twenty-five years ago.
And the only thing the Fed can think to do to prevent the whole thing falling down is…lower rates. It’s starting to look like positive feedback, where the outcome must be to create input that’ll eventually further destroy the outcome.
The problem is easy credit — the “money supply”. And, naturally, here in Credit Nation they’ll spend right to the bitter end, jamming malls and stores. Especially during Black Friday, the religion of commerce, even if it’s selling at or below cost.
Consider AP what it is, a broken clock.
Around noonish- I already heard reports that the business was “down.” I was trying to figure out how they were getting such up-to-the minute reports on sales.
crap…the ONLY reason I’m up this early is because I broke my own rule and stood outside a store this morning (JoAnn’s Fabric) because they had one particular item that one of my daughter’s has been wanting and the item was more than 50% off (her sisters and I are purchasing it together but I ended up elected to stand outside the store at 6:30am!!)
Carin, most major retailers have an enormous super-integrated data warehouse. All of the databases everywhere in the corporation are designed to work together simultaneously and all information at every level of the company is formatted consistently so they can make apples to apples comparisons everywhere. If the CEO wanted to know when a particular pack of gum sold, he could know as soon as the transaction’s complete.
Wal Mart probably has the best data warehouse in the world. Other than buying power, the biggest reason things are cheap there is that they combine current and historical information better than anyone else. Wal Mart stores rarely run out of anything, but they also rarely stock anything more than what they will actually sell.
My daughter works for a major finincial planning – investment company and ahe is convinced that we will have to raise taxes or risk either the collapse of the credit markets or a crisis in our ability to finance our national debt.
I confess I don’t know enough to argue with her.
BJ – Tell her raising taxes would be bad for her business and that Paul Krugman couldn’t find his ass with both hands. She shouldn’t read him.
Sean – I assumed that stores had pretty sophisticated systems, but – in the middle of the busiest shopping day of the year, the media is able to collect and anaylse data by noon?
And, black friday is about deals. People are saving hundreds of dollars (often) on big ticket items. Not exactly the formula for profits.
The NY Times style manual embraces the word “but” to throw cold water on good news stories about the economy, Iraq and pretty much anything they can think of related to Bush. For example, their take on the holiday shopping season might read “Holiday shopping trends started out surprising strong on Friday, but overall are expected to be weaker than normal due to persistent weakness in the housing sector and anemic wage and job growth.”
Yeah, I think Laura Ingraham has a term for that kind of person.
The oil bubble is every bit as unsustainable as the housing bubble was. This is why the media pimps pain-at-the-pump in such a way as to inure people to high gas prices instead of to encourage carpooling and tire pressure checking and trip-chaining and home insulating and all the endless sorts of stories it runs when oil prices rise during a Democratic administration.
No. For now you’ll get endless stories about some hippie doofus who runs his car on cooking oil and you’ll hear the word “inelastic” a lot and also endless discussion of fuels like biodiesel and ethanol, significant use of which is safely in the future. But it’s all whistling past the graveyard. Bubbles burst.
If I thought people were more rational, I’d move all my investment to nuclear power concerns right now.
Cuz when push comes to shove, the pushy get shoved.
“Despite Economy, Malls and Stores Jammed”
I guess the AP forgot to add “Women and minorities hardest hit”.
Oh sorry, that would be the NYT version of the headline.
Daley – you are wise in the Way of Krugman.
Tribune Entertainment likes to use “even though” as in their ace White House Reporter Sabrina “Even Though” Fang, who can NOT get through a piece without saying something like “President Bush welcomed torture victims of the Saddam regime to the White House today, EVEN THOUGH images from a Russian pornographic web site alleged to be from Abu Ghraib continue to circulate on the Internet…”
“And, black friday is about deals. People are saving hundreds of dollars (often) on big ticket items. Not exactly the formula for profits.”
These deals are loss leaders. Wholesalers create specials, either on purpose, calling them special make ups, or by having excess inventory they wish to move. This is usually sold close to cost, and the retailer may do the same thing, passing the savings on to consumers. What both the wholesaler and retailer are hoping is that buyers will pick up more than just the special. I’ve worked a few grand openings for clients who have door buster deals at grand openings, but they make decent money on everything else the folk pick up on their way to the register. Or during return visits. The special deals are more than made up for by other sales. (There is no free lunch.)
My favorite example is a woman who came in to buy a $200 bike on special for $100. After studying the bike, she decided it didn’t fit her needs, bought a different bike at full retail, as well as two more bikes for her kids, a rack for the car, helmets, and tons of other accessories. Total tab, $2000.
This is all an issue because Uncle Sugar can’t live within his means. We turn that around, we have the problem licked.
Only way to do that is raise taxes and/or cut spending. Cost of which isn’t something the public is going to accept.
Yet.