Blog

Retail sales plunge in October

Thursday, November 6, 2008, 1:31 PM

At the local Old Navy store, in a big mall, a very strange thing was recently spotted... the floor space of the store has been cut in half, using fabric curtains hastily hung from the rafters.

When asked, the manager said, "We've downsized; this is how big the store is now."

Excuse me, but what?

What kind of a strategy is that?

All that saves is a small bit of inventory carrying cost and perhaps a couple of employees. But unless they renegotiated the lease rate, their fixed overhead burden just shot through the roof. 

Goodbye, profits.  Hello weird, unsettling shopping experience.

And now, in today's news, it is confirmed that this local anecdote is but a thread in a larger tapestry.

Retailers report steep sales declines in October
NEW YORK (AP) -- The nation's retailers saw their sales plummet last month to the weakest October level since at least 1969, as the financial crisis and mounting layoffs left shoppers too scared to shop.

According to the ICSC-Goldman Sachs index, sales fell 1 percent, the weakest October performance since at least 1969 when the index began. That compares to a 1 percent gain in September and well below the 1.8 percent average pace so far this fiscal year, which for retailers begins in February.

Excluding Wal-Mart, the October sales number was down 4.6 percent. The index is based on same-store sales, or sales at stores opened at least a year, which are considered a key indicator of a retailer's health.

Wal-Mart posted a 2.4 percent gain in same-store sales, better than the 1.6 gain projected by analysts surveyed by Thomson Reuters. Including fuel sales, same-store sales rose 2.5 percent.

Target Corp. -- which has lagged behind Wal-Mart because of its heavier emphasis on nonessentials -- posted a 4.8 percent drop, worse than the 2.8 percent decline that analysts had expected.

Costco, hurt by currency effects, reported a 1 percent decline in October, below the 3.6 percent gain Wall Street projected.

Among department stores, Penney reported a 13 percent drop in same-store sales at its department store business, worse than the 13.2 percent decline predicted. Macy's Inc. reported a 6.3 percent drop for October. No estimate from Thomson Reuters was available.

Luxury stores reported steep declines as affluent shoppers cut back on designer clothing. Nordstrom's 15.7 percent drop in same-store sales was worse than the 13.1 percent decline expected. Saks Inc. recorded a 16.6 percent drop, more than the 11.8 percent decrease predicted.

Gap Inc.'s 16 percent drop was worse than the 11.1 percent decline Wall Street had forecast. The retailer reaffirmed its profit outlook for the third quarter, however, as it focused on inventory control. Limited Brands Inc. reported a 9 percent drop in October, a bigger decline than the 7.2 percent analysts were expecting.

Even teens stayed away from malls. American Eagle Outfitters Inc. reported a steeper-than-expected 12 percent drop in same-store sales, while Abercrombie & Fitch Co. had a 20 percent drop.

To review: this is the worst drop in consumer retail spending since record-keeping began in 1969 (eclipsing even the worst of the '73-'74 results), and it cuts across all age and socioeconomic brackets. 

The fact that Wal-Mart is advancing here at the expense of everybody else tells us that money is very tight out there.  

I lay some of this at the feet of the DC geniuses that decided to use a Shock 'n Awe approach for ramming through the banker bailout bill.  In order to create the proper atmosphere, phrases such as "financial Armageddon" and "system collapse" were bandied about.

While this helped to get the public money flowing in time to assure that Wall Street bonuses could be delivered by Christmas, it certainly did not help the mood of the consumer, as evidenced by this shocking fall off in spending.

And still we have not officially admitted to ourselves that we are in a recession.

Bottom line:  Together with the fall in housing, commodity, and stock market prices, these consumer spending numbers tell us that this is not your average recession.  The speed and the depth of the drop-offs are unparalleled, and we need  to be aware that our economic system is being tested as never before. Conserve your resources; we've got a long way to go before this plays out.

Endorsed Financial Adviser Endorsed Financial Adviser

Looking for a financial adviser who sees the world through a similar lens as we do? Free consultation available.

Learn More »
Read Our New Book "Prosper!"Read Our New Book

Prosper! is a "how to" guide for living well no matter what the future brings.

Learn More »

 

Related content

45 Comments

rlee's picture
rlee
Status: Silver Member (Offline)
Joined: Sep 18 2008
Posts: 148
Re: Retail sales plunge in October

And along comes the news of the potential for yet another "stimulus" payment so that people will rush to the malls for x-mas.  What I think will happen is that the American public is simply too used to having packages to open on x-mas morning, and while they may cut back, make no mistake that those packages will be there.

HOWEVER, they will not be wasting gas to get the stuff.  Too many internet retailers provide free shipping, and the means to price and compare without leaving the living room.

Hence the next big bubble - credit cards!

I'll be back later to say "I told you so!"

Bob 

LlB's picture
LlB
Status: Member (Offline)
Joined: Nov 5 2008
Posts: 1
Re: Retail sales plunge in October
[quote=cmartenson]

of this at the feet of the DC geniuses that decided to use a Shock 'n Awe approach for ramming through the banker bailout bill.  In order to create the proper atmosphere, phrases such as "financial Armageddon" and "system collapse" were bandied about.

[/quote]

Throwing money at a shrinking economy is like watching a train wreck. My hope is that many of you that understand this better than I (since I am new to this thought) might be inclined to add your voice to a new petition that requires congress to read bills before passing. 

 This quote from the Sunlight Foundation is insane: "The recently enacted Emergency Economic Stabilization Act of 2008 is a case in point. The Senate began consideration of the 451-page bill only 11 hours after it was first posted online. The Senate added 331 one new pages to the package that originally failed in the House, including multi-billion dollar tax measures and energy provisions. The House took up the bill 40 hours later."

Just go to http://bsd.sunlightfoundation.com/page/petition/ReadItFirst to see for yourself.

Lorna

rlee's picture
rlee
Status: Silver Member (Offline)
Joined: Sep 18 2008
Posts: 148
And they wonder why they're going under!

What?!  Use a curtain to make the store smaller?!

Where did they find this moron, and whose the putz that made him the manager of anything?  Too many businesses think that they can manage people to do what's needed to keep business afloat.  Look at Circuit City:  They got rid of senior sales associates and replaced them with unmotivated zit-faced, hormone-driven teenagers thinking they're saving the company money - and that was the start of the disaster.  You do not manage people, they should never be considered things for management.  You mange things, and you LEAD people.  The American business community has lost sight of service and market control, and the curtain hanger is a prime example of it.

rlee's picture
rlee
Status: Silver Member (Offline)
Joined: Sep 18 2008
Posts: 148
Re: Retail sales plunge in October
Good idea LIB, but don't forget to mandate that the bills are written without multi-syllable words so the elites in the beltway can understand what they're reading!
aczop's picture
aczop
Status: Member (Offline)
Joined: Sep 24 2008
Posts: 9
Re: Retail sales plunge in October
[quote]And still we have not officially admitted to ourselves that we are in a recession.[/quote]This might not be the best place to ask this question, but who makes the "official" decision of whether or not we are in a recession?  How will we know when it is "officially" a recession?  Or is it one of those things that is never "official" until looking back on it from the future?
lundsta's picture
lundsta
Status: Bronze Member (Offline)
Joined: Oct 13 2008
Posts: 89
Re: Retail sales plunge in October

The data collected from goverment agencies determines economic conditions. They look at this data:

1. GDP - Decline in 2 consecutive quarters defines a recession. A decline of 10% signals a depression.

2. Unemployment

3. Industrial production

4. Retail Sales

Remember that the government calculates and controls this data. Do you really believe that GDP declined only .3% last quarter? I would doubt it.....we all know better.

 

 

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Retail sales plunge in October

Good question raised here  http://www.financialsense.com/editorials/salinasprice/2008/1106.html

The US is on track to incur a fiscal deficit of $1 Trillion, perhaps much more, in this fiscal year. If the International Reserves are not growing, that means it will be impossible to fund that deficit. That would mean: monetary inflation in spades, in the US.

I’ll leave you with this question: what is the significance of the drastic change in the growth-trend of International Reserves, from explosive growth, to the sudden beginning of a contraction?

Little off subject for this particular thread, but I guess bankrupt is BK?!? 

capesurvivor's picture
capesurvivor
Status: Platinum Member (Offline)
Joined: Sep 12 2008
Posts: 963
Re: Retail sales plunge in October

That exponential curve shows up everywhere.

 

SG

barrt's picture
barrt
Status: Silver Member (Offline)
Joined: Aug 25 2008
Posts: 171
Re: Retail sales plunge in October

my guess for the curtain in the shop story is that they didnt have any stock so put that up to hide the fact the store was empty, not to cut any costs

that chart above is a little confusing, what is it supposed to show? please elaborate

my other guess is that we will know when this whole disaster has bottomed out when you guys rise up and sack your congress. every single mess you/ we are in can be traced back to those gangsters

Poor Obama, i wouldnt want to be in his shoes for all the dollars in China

ashtonw's picture
ashtonw
Status: Member (Offline)
Joined: Aug 7 2008
Posts: 23
Re: Retail sales plunge in October
I said the exact same thing.  I just feel bad for him, because a lot of this will be blamed on him.
Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Retail sales plunge in October
Yeah, Deepcaster.com really pins a lot of this on the Fed cartell propping things up - just a hunch, if there is one iota(sp?) of truth to that I bet January 21 will be an ugly day for the market. I can hear CNBC now...
joe2baba's picture
joe2baba
Status: Martenson Brigade Member (Offline)
Joined: Jun 17 2008
Posts: 807
Re: Retail sales plunge in October

i cannot believe that people feel sorry for obama

i suggest you take a look at naomi klein's book shock doctrine.

OBAMA IS PART OF THE PROBLEM.

he got 4 times the money than mac from wall street.

the thug larry summers is on the short list for treas sec.

other names .....robert rubin, and geithner. WAKE UP WE ARE IN RUSSIA

OBAMA IS IN ON IT.

 check out his speech on the floor of the senate in favor of the bailout.

i am quite sure he read the whole bill.hahahahahahaha

if you have any sympathy save it for the people who really need it US.

GOD SAVE ME

change change change .......change of fools

joe2baba's picture
joe2baba
Status: Martenson Brigade Member (Offline)
Joined: Jun 17 2008
Posts: 807
Re: Retail sales plunge in October

i cannot believe that people feel sorry for obama

i suggest you take a look at naomi klein's book shock doctrine.

OBAMA IS PART OF THE PROBLEM.

he got 4 times the money than mac from wall street.

the thug larry summers is on the short list for treas sec.

other names .....robert rubin, and geithner. WAKE UP WE ARE IN RUSSIA

OBAMA IS IN ON IT.

 check out his speech on the floor of the senate in favor of the bailout.

i am quite sure he read the whole bill.hahahahahahaha

if you have any sympathy save it for the people who really need it US.

GOD SAVE ME

change change change .......change of fools

joe2baba's picture
joe2baba
Status: Martenson Brigade Member (Offline)
Joined: Jun 17 2008
Posts: 807
Re: Retail sales plunge in October

when your neighbor loses his job it is a recession

when you lose yours we will be in a depression

joe2baba's picture
joe2baba
Status: Martenson Brigade Member (Offline)
Joined: Jun 17 2008
Posts: 807
Re: Retail sales plunge in October

welcome lorna

that would be a good idea if it really mattered.

the bill was written pretty much a year ago.

most bills are written by lobbyists and handed to the 

thugs we elect. they pay them peanuts for the right to 

rape and pillage.

i take it you believe this was somehow an accident.

i will suggest once again you read naomi klein's book

shock doctrine. you will then understand completely what is happening.

then a quick look at chris's essential books list is in order. the creature from 

jekyll island and the long emergency are good places to start.

then i suggest you get a lot of prescriptions for prozac, valium,

and qualudes(do they still make them) 

there is a bright note alcohol is legal this time

bsm20's picture
bsm20
Status: Member (Offline)
Joined: Oct 8 2008
Posts: 22
Re: Retail sales plunge in October

quote:

This might not be the best place to ask this question, but who makes the "official" decision of whether or not we are in a recession?  How will we know when it is "officially" a recession?  Or is it one of those things that is never "official" until looking back on it from the future?

Recessions are officially declared by the National Bureau of Economic Research (NBER).  Generally, this takes at least 6 months or so after it is obvious to the entire world.  For example, in 2001, NBER called the recession in November, backdating it to March.  Of course, most people felt that, in the real world, it started even earlier.

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Retail sales plunge in October

Joe2baba:

 

http://video.google.com/videoplay?docid=-4231109320246838401

Thanks, I think Ambien has Valium in it Cool

tsneds's picture
tsneds
Status: Member (Offline)
Joined: Sep 23 2008
Posts: 7
Re: Retail sales plunge in October

I live in Japan so this is the headline I saw this morning in the Japan Times:

Toyota warns full-year profit may dive 74%

 Toyota warns that group operating profit for the full year to March will probably plunge nearly 74 percent as the global financial crisis slams auto sales in the United States and Europe.

http://search.japantimes.co.jp/mail/nb20081107a1.html


 

krogoth's picture
krogoth
Status: Platinum Member (Offline)
Joined: Aug 18 2008
Posts: 576
Re: Retail sales plunge in October

OK Chris has FINALLY gave us the indicator we have so patiently waited for. IF the Old Navy store has a curtain going down the middle, it's a recession. If a new curtain is put up cutting the remaining store in half, and also 1 cashier exists, we are in a depression.

 

 Thanks Chris Martenson

 

 

 

 

 

Ray Hewitt's picture
Ray Hewitt
Status: Gold Member (Offline)
Joined: Apr 5 2008
Posts: 458
Re: Retail sales plunge in October

This is one indication that government statistics are a flat out lie. Both unemployment and inflation are much worse than they would have you believe. At the root of this is the Keynesian economic ideology, popular in mainstream thought, that places emphasize on consumption while neglecting production. As a consequence, production went offshore and the credit ran out.

I fully expect the Obama Regime to work from Hoover's and Roosevlt's playbook. Considering how much bigger and more powerful government has gotten since those days, I estimate that this Depression will be at least twice as bad and last at least twice as long. They'll keep making the same mistakes, expecting a different result each time.Without a gold standard, there is no limit to how much money they can throw away. We should keep watch for signs inflation is going to take off again, probably not for at least a year.

blackrott's picture
blackrott
Status: Member (Offline)
Joined: Aug 2 2008
Posts: 20
Re: Retail sales plunge in October

We used to wrap our x-mas presents in newspaper.   I wonder if tree huggers do the same.  

James Wandler's picture
James Wandler
Status: Martenson Brigade Member (Offline)
Joined: Aug 12 2008
Posts: 219
Re: Retail sales plunge in October

[quote=aczop]This might not be the best place to ask this question, but who makes the "official" decision of whether or not we are in a recession?  How will we know when it is "officially" a recession?  Or is it one of those things that is never "official" until looking back on it from the future? [/quote]

Pretty hard to believe anything "official" when we can't have much confidence in the figures being produced anyway. 

Let's make an analogy to a roller coaster.  We've climbed on this roller coaster to the top of the ride with the housing bubble in 2005 and we've slowly been making our descent ever since then.  Things really picked up speed as we got hit with the credit crisis in mid 2007.  Since then things have gotten worse and worse.  Right now we are looking left and right at the current conditions around us and trying to figure out how bad things are - and yes they are bad.  But let's turn our attention to the front of the roller coaster and consider all of the deflation of the money supply still to play out along with the structural problems of the housing bubble and see that the problems stretch off into the distance down, down, down.  And look further and see that humanity will extrapolate the current conditions (downward direction) past what could otherwise be a bottom (just as a boom can outlast the fundamentals, so a crash can go beyond what is warranted). 

So if we are on a roller coaster without any brakes and we can see what is ahead of us...at what point do we state that we are in a depression?

I don't know about you but the wind is whistling through my hair pretty fast already.

Since I don't want to leave this post on a desperate note I'll refer to the good quote that joe2baba used:  "a recession is when other people lose their jobs and a depression is when you lose yours".  Even with widespread unemployment there will still be vast numbers of people that will have jobs.  And so for those working the impact of the depression will be that their living quarters at home will be more crowded from taking in other relatives who, hopefully, are keeping themselves busy upgrading skills, trying to be entrepreneurial with their available labor, doing work around the house, gardening in the backyard, etc.  There will still be many, many people working (although they may have taken pay cuts to keep their jobs).  Obviously without accumulated investment and savings or helpful neighbors this adjustment can be quite painful.

So my roller coaster analogy only addresses the relative performance (i.e. direction) of the economy (down) but doesn't tell us much about the economy's ABSOLUTE performance which might keep chugging along to some extent but at a much lower level.  And I'm optimistic that if people understand what is to come it can better help them make the adjustments that are needed.

All the best,

James

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Retail sales plunge in October
[quote=blackrott]

We used to wrap our x-mas presents in newspaper. I wonder if tree huggers do the same.

[/quote]

This tree hugger doesn't give presents.  You have to trust me that I love you.

Mike. 

ashtonw's picture
ashtonw
Status: Member (Offline)
Joined: Aug 7 2008
Posts: 23
Re: Retail sales plunge in October
I am just saying that people are going to blame basically everything on him, and I don't think he deserves it.  I personally think that no one can solve this, and I pity whoever has to be in charge of a failing country/world.
robk's picture
robk
Status: Member (Offline)
Joined: Aug 21 2008
Posts: 13
Re: Retail sales plunge in October

I heard that Obama asked for a recount this morning.

 

Laughing

 

Rob

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Retail sales plunge in October

[quote=ashtonw]I am just saying that people are going to blame basically everything on him, and I don't think he deserves it. I personally think that no one can solve this, and I pity whoever has to be in charge of a failing country/world. [/quote]

 

Well, he DID put his hand up.  And I refuse to believe he didn't know what was going on..... 

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Retail sales plunge in October

James705ca:

I like your ride analogy.

To all interested here is an article which I thought was very good. It relates to James's analogy of where we were, are and are going...

http://www.financialsense.com/fsu/editorials/laird/2008/1106.html 

Tough Sledding Ahead -

Surviving a coming USD collapse

by Christopher Laird, PrudentSquirrel.com | November 6, 2008

Print

 

Now that the US election is over, we get to think about the Future. And, no matter how you look at it, the entire world, the West particularly, is in for tough sledding financially. 

emdiaz's picture
emdiaz
Status: Bronze Member (Offline)
Joined: Oct 23 2008
Posts: 25
Re: Retail sales plunge in October

To all of you that know more than me,

    I am a single mom which just lost her job in the middle of finding the crash course. I am terrify of our future.  You can talk all about things that are happening but I need to know what to do. What are you doing to prepare for the future?  How do you think the future will be? How soon the future is future for you?

gregroberts's picture
gregroberts
Status: Diamond Member (Offline)
Joined: Oct 6 2008
Posts: 1024
Re: Retail sales plunge in October

Whatever you may think of Alex Jones is irrevalent in these videos, it's what Ron Paul says that is important, sounds like something nasty will hit the fan between Nov 15,2008 and Jan 21, 2009

Sorry, I posted the wrong link to the video, you have to scroll down a bit till you see a video box with The Alex Jones Show,  2012, and Ron Paul in it.

http://www.dailypaul.com/node

leo0648's picture
leo0648
Status: Bronze Member (Offline)
Joined: Oct 6 2008
Posts: 48
Re: Retail sales plunge in October

Emdiaz,

 I am a college student, so I don't have much money.  But what I do have in savings is going towards guns, ammo, gold, silver, and non perishable food.  I am a mechanical engineering student, so their are still jobs available, but even our field is getting tougher to find a job.  If I do get a job and can afford a home, it will be out in the country with plenty of farming land.

joemanc's picture
joemanc
Status: Martenson Brigade Member (Offline)
Joined: Aug 16 2008
Posts: 834
Re: Retail sales plunge in October

I would definitely recommend you listen to the audio clips that gregroberts posted. Ron Paul is one of the few who speaks the truth. He does have a bodyguard. In this clip, I have never heard him be so frank about what is about to happen. We have always heard the rumors about a New World Order, well, it's here. One of the things he mentions is the new currency, Amero? This scares me. Because we're not going to get 1 for 1 for our dollar, no way. So if you have 10K in the bank, you may only have 5K with the new currency.

Chris - Would love to hear your thoughts on the big meeting of world leaders in DC next weekend to discuss Bretton Woods II.

gregroberts's picture
gregroberts
Status: Diamond Member (Offline)
Joined: Oct 6 2008
Posts: 1024
Re: Retail sales plunge in October

Joemanc,

 You mentioned the Amero, you can buy them here...

http://www.amerocurrency.com/buyameros.html

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Retail sales plunge in October

GregRoberts:

 

Good clip. Paul, to me, is a real straight shooter. The url to the clip is http://www.youtube.com/watch?v=uqN2EKuXX2g 

I'm going to look and post later what the redenomination meant to Mexicans and Argentinians with gold or silver...

From a fundamental aspect, I can see it wiping clean a lot of our national debt. I don't see how it will help the economy from a consumer standpoint as the debt just gets redenominated as well.

From an empirestical/world government aspect - this sucks! I think the sheepal mentality won't object... 

bkern's picture
bkern
Status: Member (Offline)
Joined: Sep 8 2008
Posts: 1
Re: Retail sales plunge in October

Chris,

I'm in the retail side of real estate and I'm starting to see landlord's MUCH more willing to renogiate lease rates and terms. I'm in the process of renogiating a few for some tenants right now. The landlord's do not want to lose any tenants right now since the market is obviously stagnant and finding a replacement would be very tough. 

--Brian

Ray Hewitt's picture
Ray Hewitt
Status: Gold Member (Offline)
Joined: Apr 5 2008
Posts: 458
Warren Buffet a loser

Warren Buffett's investment firm Berkshire Hathaway reports huge losses

Berkshire Hathaway, the investment firm run by Warren Buffett, the world’s richest man reported a 77 per cent drop in third-quarter profits, as a $1.01 billion loss on derivatives and other investments combined with sharply reduced results from its operations across the board.

The group announced net earnings of $1.06 billion, it’s fourth straight quarterly decline, down from $4.55 billion the year earlier as so-called operating earnings on its insurance underwriting business plummeted by 83 per cent.

I lost all respect for him when he started shilling for the Wall Street crooks. His cult of stockholders are due for some serious loses.

joe2baba's picture
joe2baba
Status: Martenson Brigade Member (Offline)
Joined: Jun 17 2008
Posts: 807
Re: Retail sales plunge in October

think outside the box they need all kinds of engineers in dubai

hey it is the new world order take advantage of it. you can live insome very nice places

with an enginerering degree. middle eastern women are very nice

joe2baba's picture
joe2baba
Status: Martenson Brigade Member (Offline)
Joined: Jun 17 2008
Posts: 807
Re: Retail sales plunge in October

ashtonw

i think you are missing the point here.

there is nothing to solve if you wish to have something solved you will have to do it yourself.

NONE of this is an accident. NONE of these people are fools or idiots. this is a well orchestrated campaign.

they know exactly what they are doing. and everything they do is benefiting certain individuals and institutions. particularly sachs and morgan and the other folks who gave birth to the creature. i am no economist but if i can read the dollar crisis and know what is going to happen then i would think people much smarter than me would also be able to figure it out.

the blame he will get is for being part of the next phase of the plan. 

if you want a glimpse of the future that is your/our future read orlovs book and naomi klein "the shock doctrine"

jim kuntsler's long emergency should prove quite enlightening. if you voted for bo i am sorry. you missed a great chance to vote third party and  send a message to the corporate party.

oh btw you have heard he is not going to raise taxes on the top 5% didnt you.........so much for campaign promises.

gee i cant wait for my national healthcare to kick in. and for the troops to leave iraq. and heck my new solar panels and windmill should be real nice. thank god the polar bears are now safe.

change change change .........change of fools

joe2baba's picture
joe2baba
Status: Martenson Brigade Member (Offline)
Joined: Jun 17 2008
Posts: 807
Re: Retail sales plunge in October
gee can i take your place in line to be in his shoes. he just got a new house. i would paint it but that's ok. a new jet, a helicopter , camp david,  an unlimited expense account. and of course a new puppy. and i would not mind having all the dollars in china either. but hey that is just me
Denny Johnson's picture
Denny Johnson
Status: Gold Member (Offline)
Joined: Aug 13 2008
Posts: 348
Re: Retail sales plunge in October
[quote=joe2baba]

oh btw you have heard he is not going to raise taxes on the top 5% didnt you.........so much for campaign promises.

[/quote]

Can you reference that, please?

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Retail sales plunge in October

Sad, to get the word out a seperate division could be opened: The Martenson Psychic:

Actually, this isn't sad this is a pathetic article. 

 

In Troubling Economic Times, Consumers Flock to Online Psychics 

http://www.wired.com/science/discoveries/news/2008/11/psychic_economy 

Katrina Spears, a self-described internet medium, was running errands Sept. 30, the day the Dow plummeted 770 points.

"When I got home that day, I had messages from 30 clients," Spears says.

While it doesn't take a psychic to see that tough times lay ahead for the economy, online practitioners of the divination arts say they're seeing a marked sift in the questions posed by their clientele, with anxious consumers increasingly asking what's in store for them financially in the months ahead. Believers who normally seek psychics for advice on a cheating spouse are now asking whether a pink slip is in their future, and internet psychics across the board saw a spike in traffic in the days following the initial market crash. 

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Retail sales plunge in October

Thought this was interesting

Paying the piper for U.S. Gov’t Bailouts:
$2.7 TRILLION 

in loans and commitments — and more to come!
TARP $700 billion
Bear Stearns $29 billion
Detroit Big Three $25 billion
AIG $123 billion
Fannie and Freddie $200 billion
Mortgage-backed secs. $144 billion
FHA Rescue bill $300 billion
JPM for Lehman $87 billion
Fed’s TAF program $200 billion
Commercial paper $50 billion
Fed currency swaps $740 billion
Total: $2.7 trillion

 

Ray Hewitt's picture
Ray Hewitt
Status: Gold Member (Offline)
Joined: Apr 5 2008
Posts: 458
Re: Retail sales plunge in October

In reference to Davos #41, how does the Fed do it? Karl Denninger explains:

The Fed is essentially kiting and praying that the clock doesn't run out on them - or worse, that someone doesn't hold up the funds "somewhere" long enough to disrupt the chain.  In a "kiting" scheme the crook deposits a check into Bank #1 from Bank #2 (which is in fact no good!), then draws the funds on Bank #1 and deposits them in Bank #2 to make the check good that they wrote.  This is illegal, by the way, if you're an "ordinary Joe", as you are effectively counterfeiting the money (it doesn't exist in both places at once!) during the time of the float.

But wait!  Isn't counterfeiting of credit the entire nexus of the last five years of "financial innovation"? 

Yep.

And now we have The Fed continuing the game but on a global grand scale, taking the excess leverage that everyone else had and consolidating it on its own balance sheet.  Where we had a few investment banks running at 30:1 leverage, we now have our Fed running at fifty to one! 

The Fed is running what amounts to a gigantic kiting scheme where it borrows $500 billion (the "supplemental Treasury program") from various foreign and domestic sources then loans that money out to the same domestic and foreign sources who settle those trades!

As further evidence of this game we have an enormous number of "fails to deliver" in Treasuries.  Why would there be a fail to deliver unless the person who sold it doesn't have it?  That's the essence of a kiting scheme - you're effectively counterfeiting, because you're writing a draft that you can't settle.  This is showing up in the Treasury market, where "fails" reached an aggregate five trillion dollars in October.

If you or I pulled this game we'd be under indictment.  Yet this is the essence of the various programs that Treasury and The Fed has put into place - primary dealers take down Treasury supply yet they are, in no small part, recipients of these various alphabet soup financing programs.

That is the definition of kiting folks.  Go look it up.

http://market-ticker.denninger.net/, Nov. 8

Maenad's picture
Maenad
Status: Bronze Member (Offline)
Joined: Oct 18 2008
Posts: 43
Re: Retail sales plunge in October

Hi Emdiaz,

I probably don't know more than you but what I have been thinking is that cottage industry like you see on Etsy will help people like us make it through. In fact I think the whole DIY craze could well turn overpriced hobbies into useful skills.

Since a lot of companies whose existence people take for granted will probably fold, there will be surprise shortages. With fuel affecting the cost and frequency of transporting goods supply may be disrupted or even stop altogether. It will certainly increase costs.

Learning how to make useful things by hand (or at least fix them) means you don't have to buy replacements and you won't be left high and dry. It also means that you can use this to barter with neighours and friends who have been left high and dry. I recently bought a sewing machine and am learning to use it. My geek friends are having children now so I imagine I could sew children's clothes in exchange for getting my computer fixed. I already make Xmas gifts instead of buying them.

I would like to stock up on fabrics but I don't even have the money for that at the moment so I'm heavily into researching how to reconstruct second hand clothes and repurpose and recycle other objects that would normally be thrown away. There is an enormous amount of tutorials and information on the internet in this field. I have hundreds of links that I've saved here just over the last few months.  

I imagine what you could do is buy equipment now (preferably with a no-interest loan from family) while such things are at a relatively reasonable price, build up your stock, and then sell goods through Etsy and/or Ebay when the USD. The lower doller means your prices are more attractive to overseas buyers. 

 

Maenad 

Mike Donnelly's picture
Mike Donnelly
Status: Member (Offline)
Joined: Nov 11 2008
Posts: 1
Re: Retail sales plunge in October

Chris, can you get a photo of that Old Navy store, that would be tremendous.

 

Thanks, Mike

Jedimomma's picture
Jedimomma
Status: Member (Offline)
Joined: Nov 12 2008
Posts: 1
Re: Retail sales plunge in October

Hi Emdiaz,

 It's scary, isn't it?  My husband and I have been working through a lot of this stuff, him for years, myself for about one year now.  It takes time to find your way and figure out what to do to respond, but it is important to take some time and work through things at your own pace and find your way.  The Crash Course is obviously an incredible resource for everyone, and I'm glad it's helped you understand our situation, even if that is scary.   On the topic of "what should I do?" I think there's quite a bit available in the forum section here on "Chapter 20"--check the menu bar at the top.

 The other site that I frequent is http://www.sharonastyk.com.  Her blog does deal with macro-level issues like the national economy, debt, global crisis, etc..  However, her focus is much more on how to get through the crisis in your own situation--e.g., how to apply real, deep conservation measures to save money and be more sustainable; how to grow and preserve foods; and so on.  But more than anything else, she writes wonderful thinkpieces that help us reassess what it means to live a lower-money, lower-energy lifestyle, and understand that these changes, while difficult, can be very beneficial to us for our health, our sanity, and our overall society.  I heartily recommend you check out her writings, and see if those help you situate yourself at all.  The commenters are very friendly, and will also help you on your way.

I hope it's okay to plug this other blog on here--it's been such a great resource for me, as well as the Crash Course.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments