Early Data Shows Strong Black Friday

[Woochifer]

First of all and idiot in office already threw money at anything. The incoming president is planning to create jobs by embarking on one of the largest infastructure rebuilding projects in 50 years. So maybe, you, should, watch the news more.

Given that the construction sector has been hit the hardest, infrastructure is one of the most sensible ways of generating economic activity and getting people back to work. In contrast, stimulus checks have always been an asinine idea because most of that money goes towards paying off personal debt (laudable pursuit, but one that does not stimulate the economy) or purchasing imported goods (nice for workers in China, but not here at home).

My point is, sure times are bad, more so for some than others, but what should they do? I think you have to say we just took a hard shot and now how do we battle back. You seem to say, well I just took a hard shot so let's roll over and die.

Even in bad times, a household still has to make retail purchases -- a point that seems to elude pix. October was generally regarded as a disastrous month for the retail sector. And what constituted a disaster? A 3% reduction in overall retail sales. It's a sobering number primarily because it's the biggest retail retraction in more than two decades. In absolute numbers, it's not huge. But, given how thin the margins are in retail, that's still enough to create a lot of pain for retailers. The danger lies in how it can setup a downward spiral effect that creates persistent sales declines in the months ahead.

What people are doing right now is shifting their priorities around, and deferring wherever they can. A 3% reduction in retail demand is not a fundamental change overall, but that reduction is not evenly distributed. For example, grocery stores sales went up as they always do, but electronics stores took a big hit (Best Buy reported an 18% sales decline).

In the short-term, no doubt things will get worse. I think the holiday season is salvagable primarily because of pent up demand from October and November masking any reductions in gift and discretionary spending, and because energy costs are way down right now. The real pain in the retail sector will likely start in January and February, especially if stores still have a lot of inventory that they didn't unload in December. At that point, I think consumers will do more reassessment of their shopping habits and you'll see more store closures.

If you're looking for a silver lining, the end of any recessionary cycle is usually accompanied by an upsurge in consumer spending. All in all though, retail growth is primarily a function of population and income growth. Shifts in consumer spending habits not driven by population and income usually take time.

[nightflier]

Oh please. Take these rants to another topic. And that last statement is rather offensive.

This is going to be a long post, but I have a lot to say about this. Tex, I know you don't like long posts, so just skip to the last sentence and you'll get the gist of it (and plenty to respond with, I'm sure).


Look, I was quoting D.L. Hughley, who was commenting on ABC after the first presidential debate. I certainly wasn't implying that the bar is low because the man is black, but what I was trying to say was that there is no chance in hell a black man would ever have been considered at any time before this. The fact is we are just too racist of a nation. Jesse Jackson a few elections back didn't have a snowball's chance of even getting the nomination. And let's not forget the widespread racially-motivated attacks against Obama for the last two months of the campaign. People were wearing T-Shirts sayin "N..., Please it's the White house" and the company that printed these was selling them like hotcakes and bragging about it. Let's call a spade a spade, shall we? There's a whole lot of folks who can't bring themselves to realize that times are changing and that their Jim Crow comfort zone is shrinking fast, so they see no other alternative than to let out their racism in the most public ways. How many attempts have there already been on the man? At least three serious ones (that we know of). Security is tighter than it has ever been at an inauguration. Even the most conservative people who hate everything he stands for are hoping nothing happens so that we don't look so friggin' bigotted to the rest of the world.

And as for the car analogy, I was referring to the sales of December, as people are trying to get a great deal on last year's model. December may not be the biggest traditional selling month of the year for car dealerships, but it certainly isn't the slowest either. But I was also referring to how the failure of our automakers impacts everything in our economy, for the thousands who will loose their jobs, to the fact that the American auto industry is in many ways how Americans identify themselves. It's a matter of national pride that we drive cars, new ones, powerful ones, fancy ones, and most of all, big gas-guzzling ones. Not doing that says something about how we are doing as a nation.

Economics? I had my share of classes in College, so I know a thing or two. I can tell you that the scariest thing to me is that credit card companies are canceling cards by the thousands because the loan crisis has now trickled down to everyday consumers. This means that we can't buy anymore. Sure, the banks got an influx of cash, but after this past year's dismal performance, they're hoarding it all. So businesses can't get credit, homebuyers and card buyers, can't get credit, but what is relevant to this discussion, people can't get credit for everyday purchases. If you have cards that are still active, you'll probably be notified to either stop using them or pay higher interest rates. I got a letter just like this last week.

And as far as Black Friday's numbers, I did a little research and it turns out that what sold was the door-buster deals, not the rest of the stuff. As a matter of fact, door-buster deals generally sold out, but those exist to get people in the stores where they'll then buy other stuff. This did not happen this year. As a matter of fact, the sales figures for the following two days were much lower than last year. This is horrible for retailers because now the consumers (the ones that still have cash) are only looking for door-buster prices and the retailers can't lower their prices to those levels. If they even have the stuff in inventory (because they can't get credit to buy it), they are in the tough position of having to sell less or sell things at smaller margins (which then reduces their ability to purchase more inventory, which reduces their profits even more, and so on).

Bottom line is, if you can find the electronics you absolutely need, you better buy them now, because chances are the stores will not replenish their inventories before x-mas. And next January, short of some drastic restructuring of the tax & wealth system in this country, things will be even more bearish. I keep hearing of a possible moratorium on home mortgage payments (to be added to the end of the term), which would be a godsend to this economy, but it's going to take some dino-sized cojones for any politician to pull that off. Right now, the single most important thing this incoming administration needs to do is unfreeze credit. If it does not succeed in doing that, we could see a permanent decline in the American economy, the kind of decline that will cause massive emigration (mostly by those who can still afford it - and thus taking their money with them) and the subsequent misery for those left behind, thus deepening the crisis.

So while I'm sure that it's comforting to think happy thoughts and hope we can create enough happy thinking consumers to reverse this, the reality is that the amount of happy thinking that would be required isn't even comprehensible. From what I've read the government has already been funneling several trillions into the banking sector for the past year, and there's simply not enough happy thoughts to wipe that out. The tax-base in this country cannot support the expenses we have incurred by such a large margin that it would take 2-3 decades of unheard of surpluses just to break even.

Think the war is expensive? It's a drop in the bucket. And if you consider how much money is still being made by corporations that we need to stay solvent, it's also too expensive to give up. Sure we can shift it to Afghanistan (another place where we're sure to stay for decades, thus ensuring continued MIC profiteering), but it's just shifting the store to another neighborhood with the same quagmire potential. War on terror? That's the best kind - war without end. Orwell warned us and we didn't listen. And all the while human misery continues. The 4000-topping death toll from Iraq doesn't include injuries and suicides. I heard this one yesterday: 18 soldiers kill themselves each day X 365 days. That alone is more than the official toll. We can't keep filling the ranks if we can't afford to have kids, either. Am I deviating from the topic? Not if you consider how many vets will be coming home in the next decade with no jobs to return to. It's all related, and that's what really sucks. All the decisions of the outgoing administration combined to get us in this crap-hole - hence the reason I was thoroughly fed up with it, as an independent.

And this is also why economists look like death when they get out of their 8-hour marathon sessions with congressional leaders. Look, if the banks with all their advisors and research are still hoarding even the money they're getting from the government, that's a sign that maybe we as consumers should too. Of course millions of American already don't have any money to spend in the first place. Something like 7 in 10 homes are more than 3 months in arrears in payments. Likewise over 12% (not the 6% registered) of Americans are out of work. These people's door-buster deals are the basics - hence the reason the ones at the most "inexpensive" stores like Walmart and K-mart were the most attended. But after the door-buster deals were done, they went home.

Another way to look at this is that Americans can only afford to pay for items at cost. This leaves no room for businesses (even corporate raiders like Walmart and Costco), to eek out a profit, even in if they try to make it up in quantity and by putting every other mom & pop out of business. I'm sorry for not having any positive thoughts about this (and I'm about as bullish about the economy as they come), but the more I read about this the more of a hoarder I become. X-mas this year? Guess it's going to be just the TV I bought at Costco - nothing else. That was $950 and I'm even contemplating bringing it back. So I say this to Obama: better do something that's never been done before, because we're way beyond the creek with no paddles, even the boat is gone & we're neck deep in the dried river bed - the last thing we should be doing is also sticking our heads in the sand.

If not having happy thoughts keeps me from getting greenies, well that's the least of my worries right now. I'm more concerned about clothing my kids and putting food on the table. I call 'em as I see it and what I'm reading now, scares the crap out of me. I can only hope Obama does something big, really big, bigger than Roosevelt ever imagined, because the stakes are so much larger now. What he does here, will echo throughout the world.

...And thank God it's not McCain up there.

[Feanor]

Given that the construction sector has been hit the hardest, infrastructure is one of the most sensible ways of generating economic activity and getting people back to work. In contrast, stimulus checks have always been an asinine idea because most of that money goes towards paying off personal debt (laudable pursuit, but one that does not stimulate the economy) or purchasing imported goods (nice for workers in China, but not here at home).
...

If you're looking for a silver lining, the end of any recessionary cycle is usually accompanied by an upsurge in consumer spending. All in all though, retail growth is primarily a function of population and income growth. Shifts in consumer spending habits not driven by population and income usually take time.

A tax reduction? A tax credit in the mail? The poor will either buy imported goods or pay down debts -- and the rich invest abroad.

A stimulus based on consumer spending could be a big problem in that the underlying problem is the the consumers have been spending away beyond their means in recent decades. It's not simplistic to say this is why the current finacial crisis is called a credit crisis. If anyone's going to borrow now, it's got to be the government and they have got to spend it on direct job creation, e.g. infrastucture, which would be to make a problem into an opportunity.

In general, the US needs an interval of a few years during which demand is realigned from junky consumer crap, (say Blu-Ray players), to things that will boost the nation's mid- and long-term compeditiveness and help the environment. And consider this: tax increases aren't necessarily anti-stimulus in this realignment because we aren't relying on consumer demand or private business investment for the stimulus. The money is just as "spent", and perhaps much better spent, on infrastructure as on buying Blu-Rays or building shopping centers.

[Sir Terrence the Terrible]

Well, I do not know how all of retail did, but the month of November was a record sales month for Bluray players and discs. There has been a build up since the summer, but November player sales(and I do not have the exact figures yet, will have them this Wednesday) apparently were so good, that it equalled a complete quarter of sales from 2007 in a single month. Bluray disc sales are pushing replication capacity to its edge, with some titles representing over 25% of the total disc sales. I do not know what is going to happen in the future, but right now Bluray product sales are just blowing up huge, much to everyone surprise, and even during these trying economic times.

[Rich-n-Texas]

I'm doing my part to bolster BD sales. I just processed my Amazon shopping cart that contained "The Dark Night". $24 bucks + free shipping (I added a music CD to the order).

And:

I WANT another stimulus check!!!

[Woochifer]

Look, I was quoting D.L. Hughley, who was commenting on ABC after the first presidential debate. I certainly wasn't implying that the bar is low because the man is black, but what I was trying to say was that there is no chance in hell a black man would ever have been considered at any time before this. The fact is we are just too racist of a nation. Jesse Jackson a few elections back didn't have a snowball's chance of even getting the nomination. And let's not forget the widespread racially-motivated attacks against Obama for the last two months of the campaign. People were wearing T-Shirts sayin "N..., Please it's the White house" and the company that printed these was selling them like hotcakes and bragging about it. Let's call a spade a spade, shall we? There's a whole lot of folks who can't bring themselves to realize that times are changing and that their Jim Crow comfort zone is shrinking fast, so they see no other alternative than to let out their racism in the most public ways. How many attempts have there already been on the man? At least three serious ones (that we know of). Security is tighter than it has ever been at an inauguration. Even the most conservative people who hate everything he stands for are hoping nothing happens so that we don't look so friggin' bigotted to the rest of the world.

And even in this context, I disagree with your sentiment. The lunatic fringe crowd that you're talking about is dwindling both in number and influence (for example, the average age of a Fox News viewer is in the upper-50s -- not exactly representative of the electorate as a whole). You're ignoring the fact that the millennial generation is the single biggest demographic group in U.S. history, and more than half of them have yet to reach voting age. Poll after poll shows that as a group they are by far the most socially and racially tolerant generation ever, and they are showing signs of becoming the most liberal voting bloc ever (the ones that could vote this year supported Obama by more than 2-1, and opposed Prop 8 by a similarly wide margin).

The economic collapse helped Obama because voters blamed it on Republicans. But, all that it did was turn a potentially close election into an Obama landslide. Even without the economy turning south the way that it did, Obama was polling well against the Republicans for most of the year.

And as for the car analogy, I was referring to the sales of December, as people are trying to get a great deal on last year's model. December may not be the biggest traditional selling month of the year for car dealerships, but it certainly isn't the slowest either. But I was also referring to how the failure of our automakers impacts everything in our economy, for the thousands who will loose their jobs, to the fact that the American auto industry is in many ways how Americans identify themselves. It's a matter of national pride that we drive cars, new ones, powerful ones, fancy ones, and most of all, big gas-guzzling ones. Not doing that says something about how we are doing as a nation.

The year end deals peak in August and September, which is also when the new model introductions bring new supply and new buyers into showrooms. December car sales are primarily a small niche that Lexus and other luxury car companies tapped into.

Economics? I had my share of classes in College, so I know a thing or two. I can tell you that the scariest thing to me is that credit card companies are canceling cards by the thousands because the loan crisis has now trickled down to everyday consumers. This means that we can't buy anymore. Sure, the banks got an influx of cash, but after this past year's dismal performance, they're hoarding it all. So businesses can't get credit, homebuyers and card buyers, can't get credit, but what is relevant to this discussion, people can't get credit for everyday purchases. If you have cards that are still active, you'll probably be notified to either stop using them or pay higher interest rates. I got a letter just like this last week.

That's definitely a point that can influence consumer behavior, but in actuality most retail purchases are made as certain percentage of income. On the average, retail purchases account for ~30-40% of income. The number can be much higher for lower income households, and much lower for upper income households.

The credit crunch will affect specific sectors more, like automobiles and electronics, but anything approaching a double digit plunge in retail demand is not something that happens overnight. You also need to consider that while credit is tightening, other areas have loosened up such as energy and housing costs.

And as far as Black Friday's numbers, I did a little research and it turns out that what sold was the door-buster deals, not the rest of the stuff. As a matter of fact, door-buster deals generally sold out, but those exist to get people in the stores where they'll then buy other stuff. This did not happen this year. As a matter of fact, the sales figures for the following two days were much lower than last year. This is horrible for retailers because now the consumers (the ones that still have cash) are only looking for door-buster prices and the retailers can't lower their prices to those levels. If they even have the stuff in inventory (because they can't get credit to buy it), they are in the tough position of having to sell less or sell things at smaller margins (which then reduces their ability to purchase more inventory, which reduces their profits even more, and so on).

It was more than just the doorbuster deals. Reports of sellouts are anecdotal. Bottomline is that discounting was more widespread because retailers were willing to pare down their margins in order to generate sales and unload inventory.

Also, the Saturday sales figures that I saw only had a 0.8% decline from 2007. Hardly what I would call "much lower than last year." Even so, retailers are expecting lower sales simply because they have less to sell, and many of them did not hire seasonal workers this year, so their costs are lower to begin with.

The danger for retailers is in this year's short shopping season, and consumers finishing up their holiday shopping early. Normally, close to half of the holiday shopping occurs during the final week before Christmas. That's really the make or break time. If retailers aren't unleashing massive new rounds of discounting during that week, then you'll know that they've successfully sold off enough inventory to avoid steep discounting. If you see deeper discounts over a broad range of products, then you'll know that the season is already in the tank and the retailer is just trying to cut their losses anyway possible.

So while I'm sure that it's comforting to think happy thoughts and hope we can create enough happy thinking consumers to reverse this, the reality is that the amount of happy thinking that would be required isn't even comprehensible. From what I've read the government has already been funneling several trillions into the banking sector for the past year, and there's simply not enough happy thoughts to wipe that out. The tax-base in this country cannot support the expenses we have incurred by such a large margin that it would take 2-3 decades of unheard of surpluses just to break even.

The losses in the retail sector as a whole are not big, compared to other sectors. The issue is with the thin margins in the retail sector. But, shoring up retail is not going to lift the economy, since it depends almost entirely on population and income growth. It's about either direct investment in activities that get people back to work, or monetary adjustments that provide greater flexibility for growing businesses.

Of course millions of American already don't have any money to spend in the first place. Something like 7 in 10 homes are more than 3 months in arrears in payments. Likewise over 12% (not the 6% registered) of Americans are out of work.

7 in 10 three-months behind? And you talk about others having "happy thoughts"? That figure's just flat out wrong, given that less than 1 in 10 mortgage holders are even one-month behind right now. 10% of mortgages one-month behind is already a bad figure, but 7 in 10 would imply that close to 70 million homes are on the verge of foreclosure. The actual number of projected foreclosures for 2008 is closer to 2.2 million, which in itself is a disastrous number, but nowhere near 70 million.

[Woochifer]

A stimulus based on consumer spending could be a big problem in that the underlying problem is the the consumers have been spending away beyond their means in recent decades. It's not simplistic to say this is why the current finacial crisis is called a credit crisis. If anyone's going to borrow now, it's got to be the government and they have got to spend it on direct job creation, e.g. infrastucture, which would be to make a problem into an opportunity.

Infrastructure investment also makes the economy more competitive. I agree with the notion of direct job creation, especially given how many construction workers are unemployed right now. Like I said elsewhere, retail is a function of population and income. If you want to maximize an economic stimulus, you invest it in areas that can either create wealth in the long run (i.e., technology, research, etc.) or otherwise make an economy more competitive (i.e., infrastructure modernization).

In general, the US needs an interval of a few years during which demand is realigned from junky consumer crap, (say Blu-Ray players), to things that will boost the nation's mid- and long-term compeditiveness and help the environment. And consider this: tax increases aren't necessarily anti-stimulus in this realignment because we aren't relying on consumer demand or private business investment for the stimulus. The money is just as "spent", and perhaps much better spent, on infrastructure as on buying Blu-Rays or building shopping centers.

In actuality, consumer spending does not vary all that much from year to year. What does vary is where that spending goes. It represents 2/3 of the economy, but it's the other 1/3 of the economy that actually generates the most high value added activity and wealth. That high value added activity is what needs the most investment.

[Woochifer]

Well, I do not know how all of retail did, but the month of November was a record sales month for Bluray players and discs. There has been a build up since the summer, but November player sales(and I do not have the exact figures yet, will have them this Wednesday) apparently were so good, that it equalled a complete quarter of sales from 2007 in a single month. Bluray disc sales are pushing replication capacity to its edge, with some titles representing over 25% of the total disc sales. I do not know what is going to happen in the future, but right now Bluray product sales are just blowing up huge, much to everyone surprise, and even during these trying economic times.

Amid the negativity from the tech press, it looks like Blu-ray's going to be this holiday season's big winner. I posted another thread indicating that the Samsung BD-P1500 is currently the #1 consumer electronics item on Amazon -- outselling the Apple iPods, all digital cameras, and all other audio/video products.

I think the signs of Blu-ray's ascendancy is with the disc sales and their increasing market share. Consider that Casino Royale was the first BD title to sell over 100,000 copies, and that only happened last year. Iron Man was the first title to break 500,000, and now The Dark Knight is poised to sell over 1 million copies. Bill Hunt pointed out that The Matrix was the first DVD title to sell over 1 million copies, and that occurred in 1999, close to three years after the DVD format's introduction. Right now, Blu-ray's barely two years old.

The remaining issue I think that might still stumble the Blu-ray format is disc pricing. The CE manufacturers have already lowered the hardware price points, but the BD disc prices cannot stay at current levels if the studios are serious about growing the format.

Even though Blu-ray list prices are comparable to special edition DVDs, and their list prices are now within about $5-$7 of a movie-only DVD release, retailers do not treat Blu-ray as a loss leader like they do with DVD. I just saw that Circuit City will sell The Dark Knight DVD for $15, and charge $27 for the Blu-ray version. A lot of this is on the retailers, but the studios also have some control over wholesale pricing and the MAP (minimum advertised price) agreements.

[Sir Terrence the Terrible]

Amid the negativity from the tech press, it looks like Blu-ray's going to be this holiday season's big winner. I posted another thread indicating that the Samsung BD-P1500 is currently the #1 consumer electronics item on Amazon -- outselling the Apple iPods, all digital cameras, and all other audio/video products.

The funny thing is, while the quality challenged Samsung player is doing so well, It looks like all players, with the exception of the high end are all doing very well.

I think the signs of Blu-ray's ascendancy is with the disc sales and their increasing market share. Consider that Casino Royale was the first BD title to sell over 100,000 copies, and that only happened last year. Iron Man was the first title to break 500,000, and now The Dark Knight is poised to sell over 1 million copies. Bill Hunt pointed out that The Matrix was the first DVD title to sell over 1 million copies, and that occurred in 1999, close to three years after the DVD format's introduction. Right now, Blu-ray's barely two years old.

Iron Man is pretty close to a million now, and still going strong. Warner is shipping over a million copies of TDK to cover advance orders already placed. This titles should reach a couple million in sales before it is all said and done. All of Disney's titles are doing extremely well at this point. However Disney is not suffering the same DVD sales decline the other studio are. We have actually increased our DVD sales over the last four years or so, Bluray is just gravy right now.

The remaining issue I think that might still stumble the Blu-ray format is disc pricing. The CE manufacturers have already lowered the hardware price points, but the BD disc prices cannot stay at current levels if the studios are serious about growing the format.

Even though Blu-ray list prices are comparable to special edition DVDs, and their list prices are now within about $5-$7 of a movie-only DVD release, retailers do not treat Blu-ray as a loss leader like they do with DVD. I just saw that Circuit City will sell The Dark Knight DVD for $15, and charge $27 for the Blu-ray version. A lot of this is on the retailers, but the studios also have some control over wholesale pricing and the MAP (minimum advertised price) agreements.

Wooch, people have found out about Amazon where the typical price of a disc is closer to $20 rather than the pricing structure of a brick and motar. The DVD will not have a digital copy, but the bluray will though. I have about 500 bluray's now. Putting aside the review copies I have received, I have paid an average of about $22 per disc. On Black Friday I bought about 15 blurays, and paid an average of $15 for each.

They are still building replication lines to meet demand, so the cost of discs is probably going to remain pretty stable or may drop just a bit through 2009. After that, I see the price dropping to about DVD levels, as the infrastructure will be pretty built out by then.

[Woochifer]

Iron Man is pretty close to a million now, and still going strong. Warner is shipping over a million copies of TDK to cover advance orders already placed. This titles should reach a couple million in sales before it is all said and done. All of Disney's titles are doing extremely well at this point. However Disney is not suffering the same DVD sales decline the other studio are. We have actually increased our DVD sales over the last four years or so, Bluray is just gravy right now.

I have a feeling that The Dark Knight will be in short supply after tomorrow. Seems like a huge groundswell among Blu-ray player owners for that title.

For Disney, I would guess that it doesn't hurt having Pixar in the stable! Wall-E was my second BD purchase (after Blade Runner).

Wooch, people have found out about Amazon where the typical price of a disc is closer to $20 rather than the pricing structure of a brick and motar. The DVD will not have a digital copy, but the bluray will though. I have about 500 bluray's now. Putting aside the review copies I have received, I have paid an average of about $22 per disc. On Black Friday I bought about 15 blurays, and paid an average of $15 for each.

They are still building replication lines to meet demand, so the cost of discs is probably going to remain pretty stable or may drop just a bit through 2009. After that, I see the price dropping to about DVD levels, as the infrastructure will be pretty built out by then.

I'm kinda old school in that I don't like to deal with mail order! For price on new releases, I now go to Fry's (selling The Dark Knight for $24, which matches Amazon). Otherwise, I'll look at BB, CC, or Target if they have some exclusive bonus or collectible casing (the exclusive "transformable" DVD case at Target for Transformers is one of the coolest things ever to sit on my media shelf!).

I also tried to support certain stores where people I knew worked. Not going down to SoCal as much as before, but I used to save many of my DVD purchases for the DVD Planet store down in Huntington Beach. They supposedly have the largest DVD title selection of any B&M store (thumbing through their bins, I can always find some obscure gem that I never knew about), and their pricing is very reasonable (not the lowest on the week of release, but their regular prices are generally lower than other stores). I like to try and do my part to keep the lights on at places like that, since comparable stores around the Bay Area like Laser City in SF and Cinema Laserland in San Jose have closed in recent years.

But, even Amazon can only discount so much when studios issue Blu-ray titles like Independence Day with a $40 list price. This is ridiculous, given that the DVD version in its various special edition incarnations had its list price reduced to below $20 ages ago, and the BD version doesn't provide anything new aside from higher resolution.

[Mr Peabody]

I have not heard anything about credit cards being cancelled. I still get offers in the mail for them. They are also trying to get people to sign up for department store credit cards as you walk through.

I was out yesterday doing a bit of shopping and it was interesting. First the crowds were not there. I was looking for clothes for my girls. We went to a couple stores and could not find what we were looking for. It did seem the stores were holding back on restocking. We ended up at a mall. Granted this malls traffic has been going down but it was dead. Sears looked like they had some stuff on sale but I think it was one of those deals were they mark it up to mark it down because the prices weren't that great. Macy's I think isn't aware of a recession, after I saw a couple price tags I ran out of there. The Kids Gap had some stuff discounted but a sweater was $45.00, for a little girl? Kids grow, maybe for my wife. Anyway I was about to give up when we wondered into a shop that sold kids clothes. I felt sorry for them and felt like I should have bought more. Their stuff was discounted from the discounts. I bought a couple nice sweaters there and only spent a total of $25.00.

[Worf101]

There are some intractable "nuts" in this economic meltdown that I see no answer for and perhaps some of you folks can help me see my way thru them.

1. I don't consider myself a rampant consumer. I just upgraded my HT system for the first time in 8 years. My computer's almost 5 years old. I have NO joneses to keep up with... I wish America and the world could "get off" the consumer gerbil treadmill. But the flip of this is that our world economy is based on consumerism remaining at post WWII levels. Consumer less or resonably and the engine sputters and halts... mass unemployment... what's the answer.

2. Corporations with more power than nations. Do as we say or you people starve from lack of work. I see this first hand as millions and millions of taxpayer dollars are given to private companies to induce them to locate or relocate in my State. Sometimes some smart individual does the math and in one case the state was paying about 1 million in tax breaks or outrught investment for each permanent job created. This model is unsustainable.

3. Unrealistic levels of growth. The Chinese are begining to see that everything must cool, but new workers need jobs, no growth, no new jobs, no jobs.... unrest.

Wow, I'm depressed.

Da Worfster

[Feanor]

There are some intractable "nuts" in this economic meltdown that I see no answer for and perhaps some of you folks can help me see my way thru them.

1. I don't consider myself a rampant consumer. I just upgraded my HT system for the first time in 8 years. My computer's almost 5 years old. I have NO joneses to keep up with... I wish America and the world could "get off" the consumer gerbil treadmill. But the flip of this is that our world economy is based on consumerism remaining at post WWII levels. Consumer less or resonably and the engine sputters and halts... mass unemployment... what's the answer.

2. Corporations with more power than nations. Do as we say or you people starve from lack of work. I see this first hand as millions and millions of taxpayer dollars are given to private companies to induce them to locate or relocate in my State. Sometimes some smart individual does the math and in one case the state was paying about 1 million in tax breaks or outrught investment for each permanent job created. This model is unsustainable.

3. Unrealistic levels of growth. The Chinese are begining to see that everything must cool, but new workers need jobs, no growth, no new jobs, no jobs.... unrest.

Wow, I'm depressed.

Da Worfster

Lurking behind all of this is if FACT that if we continue to rely on continuous expansion of consumer demand on the world-wide scale, we'll destroy the planet. (And then have nowhere to live.)

Read Jared Diamond's book, Collapse, and see what happens when societies -- with particular blame on the wealthy and ruling classes -- over exploit their environments or fail to respond to climate change.

[pixelthis]

Lurking behind all of this is if FACT that if we continue to rely on continuous expansion of consumer demand on the world-wide scale, we'll destroy the planet. (And then have nowhere to live.)

Read Jared Diamond's book, Collapse, and see what happens when societies -- with particular blame on the wealthy and ruling classes -- over exploit their environments or fail to respond to climate change.

MORE "GREEN" BS.
You are confusing village econ with global econ.
There is an unlimited universe of resources out there, enough on this planet alone to last centuries.

[Feanor]

MORE "GREEN" BS.
You are confusing village econ with global econ.
There is an unlimited universe of resources out there, enough on this planet alone to last centuries.

WRONG AGAIN ...

[nightflier]

Wooch,

I transposed the numbers on the home loans reference. 3 out of 10 home mortgages are in arrears according to cbsmarketwatch.com. That means 7 out of 10 are still keeping up. Of course, that's just one source. I've also seen the 10% figure elsewhere, but let's just agree that it's somewhere in between.

What is becoming increasingly obvious is that the kind of consumerism that we've experienced (and that Pix seems to think is unlimited) is actually not sustainable. If I can put in my 2c for a movie that people should see it's Flow: For Love of Water (http://www.imdb.com/title/tt1149583/). It's a documentary, but one that is pretty damning, as far as I'm concerned. Water is something we all take for granted but it's a very scarce resource and one who's shortage is a perfect example of over-consumerism and waste, especially here in the US.

I took the day off yesterday to do some x-mas shopping (w/o wife and kids), and while it was a weekday, I did notice how empty the stores were, that is, of people. The shelves were all well stocked. I asked people who work there what they thought of the season and after a little prodding everyone unanimously agreed that it was horrible. I mentioned that Black Friday sales were up according to some reports and they almost all responded with the same type of answer: that may be, but not in my store.

Now I don't know where these positive figures are coming from, but they are not the reality for people here in the OC. And if people with all their disposable cash aren't spending here, then I have to think it's much worse elsewhere. In the past I used to see people lug multiple cartloads to their SUVs on the weekends at our local Costco, Target, BB. and Ikea stores. Well not so much this year. I think when all is said and done this season, it will be much worse than a few early reports suggested. People just aren't spending so much this year, even if they are still buying a few BR movies.

[Woochifer]

I transposed the numbers on the home loans reference. 3 out of 10 home mortgages are in arrears according to cbsmarketwatch.com. That means 7 out of 10 are still keeping up. Of course, that's just one source. I've also seen the 10% figure elsewhere, but let's just agree that it's somewhere in between.

Regardless of the number of mortgages in danger of defaulting, 2.2 million homes were actually foreclosed on in 2008. That equates to over $400 billion of bad debt that the banks and other investors will have to account for.

The only numbers I've seen expressed in terms of 3 in 10 are for the gimmicky adjustable rate loans, and those make up a small percentage of the overall mortgage market.

What is becoming increasingly obvious is that the kind of consumerism that we've experienced (and that Pix seems to think is unlimited) is actually not sustainable.

I agree that there's a limit, but in actuality consumer spending is pretty stable from year to year as a percentage of income. The variable is where that spending goes, when it occurs, and where peoples' income levels are. Declines in the retail sector I think are more a function of declining real dollar incomes (net loss in dollar wages since 2000, loss of home equity, declining stock portfolio values). As income declines, consumer spending behavior changes drastically. Spending in categories like groceries, household supplies, and gasoline do not vary much as income increases. But, for retail categories like electronics and cars, the spending changes a lot as income increases.

I took the day off yesterday to do some x-mas shopping (w/o wife and kids), and while it was a weekday, I did notice how empty the stores were, that is, of people. The shelves were all well stocked. I asked people who work there what they thought of the season and after a little prodding everyone unanimously agreed that it was horrible. I mentioned that Black Friday sales were up according to some reports and they almost all responded with the same type of answer: that may be, but not in my store.

Like I said, anecdotes reflect perception more than reality. The cash register tally is objective arbiter of sales totals. And it's not just "some" reports that showed year-to-year Black Friday sales increases, it's all of them. The reports I read ranged from 3% to 7% increases.

But, again Black Friday alone is not always an accurate barometer on how the rest of the holiday shopping season will go. This year, you had heavy discounting across the board, a lot of pent up demand from deferred purchases dating back to October, and retailers willing to write-down their profit margins in order to move inventory. That equates to a sales increase for ONE DAY, which is all that this thread was about.

Now I don't know where these positive figures are coming from, but they are not the reality for people here in the OC.

Positive figures were coming directly from the actual sales totals. For the "people" that you mention, you have it reversed -- what they are telling you is more perception than reality, unless they are citing the actual sales totals for their store. Retail employees on the floor at places like Best Buy typically aren't in the loop on the daily register totals, unless their manager shares that info (and even then, it's often quoted as a percentage of goal/budget, rather than as an actual sales total).

And if people with all their disposable cash aren't spending here, then I have to think it's much worse elsewhere.

The Black Friday reports showed increases in all regions of the country. For the days since Black Friday, we'll wait and see how the sales figures sift out. They're bound to be down from last year simply because of lower store inventories. The only question is how much discounting will be needed to move the remaining inventory.

In the past I used to see people lug multiple cartloads to their SUVs on the weekends at our local Costco, Target, BB. and Ikea stores. Well not so much this year. I think when all is said and done this season, it will be much worse than a few early reports suggested. People just aren't spending so much this year, even if they are still buying a few BR movies.

And that's what I've been seeing over the past week as well. I went to a Best Buy last Friday night, and at 8pm the store was a ghost town. Could be that this is a new store and they've diluted the market (there are two other Best Buys within 5 miles of that store). Won't know how Best Buy and the electronics sector did as a whole until they report their December sales figures.

In contrast, the local Costco is just as heinously crowded as ever. Then again, it's that way all year round.

[pixelthis]

WRONG AGAIN ...

They have enough oil off of the shore of Brazil to last fifteen years, and that is only the first of many deep drill wells that are ongoing.
Oil shale is plentifull, as is oil sands.
We dont live in a economy that uses oil, we live in a carbon based economy,
one that uses carbon for everything, practically.
But we have coal alone enough to last for centuries.
AND why do you think everybody , including INDIA, has plans for going to the moon?
Because there is enough helium3 on the surface to last millions of years.
One shuttle bay full of helium3 will supply the USA'S energy needs for a year.
With your attitude we never would have left the caves, because it would have cost too much.
JUST BECAUSE YOUR "GREEN" ASS IS TOO LAZY TO GET OFF OF THE COUCH
DOESNT MEAN OTHERS ARENT.
You are the one that is "wrong", along with Malthus and other naysayers who would limit human growth for their own agenda.

[nightflier]

In contrast, the local Costco is just as heinously crowded as ever. Then again, it's that way all year round.

They're probably looking to buy another one of those $950 plasmas, LOL.

By the way our local Costco is also still well-attended, but people aren't buying more than one cart at a time, generally. It also looks like they are purchasing more consumables there than durable goods. I clearly remember, this time last year, how much of a zoo it was. People were hauling everything from gallon-sized peanut jars to TVs to their SUVs in multiple carts at a time. This year, it's usually less, although the number of people is still high.

At Target (of all places) I ran into a former employee of CC. We used to chat quite a bit when he was still working there. He actually had been in the business since he started at Silo. Anyhow, he said that he left CC because the product lines were getting watered down with mediocre stuff. CC used to carry some nice brands, but now it's pretty much down to a few. Now this guy is not the most approachable fella, so I don't know if that's the only reason he left CC, but he does have a point.

Inventory at all retailers has dwindled to a few known names. At what B&M store can anyone by Harman Kardon anymore? Even online resellers are doing this. Remember the days when Audio Advisor stocked YBA and Perreaux gear? Or even more recently when Magnolia stocked AudioQuest & Sonus gear? This lack of choice also may contribute to a lack of interest. Sure they don't have the money for it, but not having the selection and not being able to see what the more exotic stuff looks & sounds like, has got to be a factor too.

Now back to Pix's comments about oil. There is one big problem with deep oil reserves off the coasts of Brazil and other places (Madagascar, Cote D'Ivoire, etc.) and that is that this is expensive to extract. Likewise for oil in sand drifts - very expensive to extract. Now if the price of oil is $100+ a barrel, that's feasible, but now now. It's an inverse relations that does not work when the economy world-wide is in shambles. I'm fairly certain that Opec will raise prices after the Dec. 17th meeting, but this is probably going to be a slow increase over time. There is just too much pressure from every Western consumer nation to do otherwise. This is also why speculative green technology funds have been hammered, because while there is a future in the technologies, the profits are too far off and that distant horizon isn't immune to various other events that could alter or extend returns. Simply put, it's too risky right now.

And while we may be a carbon-consuming society, that does not change the fact that we are also a carbon-based life form who's makeup is mostly water. The kind of cavalier attitude that Pix is suggesting is not in tune with the changes we are seeing all around us. Fortunately, we have a new president who is aware of that, finally.

[kexodusc]

Now back to Pix's comments about oil. There is one big problem with deep oil reserves off the coasts of Brazil and other places (Madagascar, Cote D'Ivoire, etc.) and that is that this is expensive to extract. Likewise for oil in sand drifts - very expensive to extract. Now if the price of oil is $100+ a barrel, that's feasible, but now now. It's an inverse relations that does not work when the economy world-wide is in shambles. I'm fairly certain that Opec will raise prices after the Dec. 17th meeting, but this is probably going to be a slow increase over time. There is just too much pressure from every Western consumer nation to do otherwise. This is also why speculative green technology funds have been hammered, because while there is a future in the technologies, the profits are too far off and that distant horizon isn't immune to various other events that could alter or extend returns. Simply put, it's too risky right now.

And while we may be a carbon-consuming society, that does not change the fact that we are also a carbon-based life form who's makeup is mostly water. The kind of cavalier attitude that Pix is suggesting is not in tune with the changes we are seeing all around us. Fortunately, we have a new president who is aware of that, finally.

Bang on...much of the reason for the current price drop is that demand in emerging markets in Asia et al has slowed to snail's pace, boosting supplies short term while demand is waning. There's a saying in my industry though, "the best cure for low oil prices is low oil prices". There will be less drilling at current crude prices, less oil sold, this will eventually lead to reduced supplies and greater relative demand.

Just a matter of time.

[pixelthis]

They're probably looking to buy another one of those $950 plasmas, LOL.

By the way our local Costco is also still well-attended, but people aren't buying more than one cart at a time, generally. It also looks like they are purchasing more consumables there than durable goods. I clearly remember, this time last year, how much of a zoo it was. People were hauling everything from gallon-sized peanut jars to TVs to their SUVs in multiple carts at a time. This year, it's usually less, although the number of people is still high.

At Target (of all places) I ran into a former employee of CC. We used to chat quite a bit when he was still working there. He actually had been in the business since he started at Silo. Anyhow, he said that he left CC because the product lines were getting watered down with mediocre stuff. CC used to carry some nice brands, but now it's pretty much down to a few. Now this guy is not the most approachable fella, so I don't know if that's the only reason he left CC, but he does have a point.

Inventory at all retailers has dwindled to a few known names. At what B&M store can anyone by Harman Kardon anymore? Even online resellers are doing this. Remember the days when Audio Advisor stocked YBA and Perreaux gear? Or even more recently when Magnolia stocked AudioQuest & Sonus gear? This lack of choice also may contribute to a lack of interest. Sure they don't have the money for it, but not having the selection and not being able to see what the more exotic stuff looks & sounds like, has got to be a factor too.

Now back to Pix's comments about oil. There is one big problem with deep oil reserves off the coasts of Brazil and other places (Madagascar, Cote D'Ivoire, etc.) and that is that this is expensive to extract. Likewise for oil in sand drifts - very expensive to extract. Now if the price of oil is $100+ a barrel, that's feasible, but now now. It's an inverse relations that does not work when the economy world-wide is in shambles. I'm fairly certain that Opec will raise prices after the Dec. 17th meeting, but this is probably going to be a slow increase over time. There is just too much pressure from every Western consumer nation to do otherwise. This is also why speculative green technology funds have been hammered, because while there is a future in the technologies, the profits are too far off and that distant horizon isn't immune to various other events that could alter or extend returns. Simply put, it's too risky right now.

And while we may be a carbon-consuming society, that does not change the fact that we are also a carbon-based life form who's makeup is mostly water. The kind of cavalier attitude that Pix is suggesting is not in tune with the changes we are seeing all around us. Fortunately, we have a new president who is aware of that, finally.

The whole "green" movement is nothing more than an exercise in hubris, kept going by propagandists who prey on a generation who werent taught science in school.
AND THEY ARE SHAMELESS, but what really gets me is they are destroying the classics in order to create propaganda for their "cause".
I dont even bother to watch "remakes" of sci-fi classics because they are usually nothing more than green propaganda, like the current piece of tripe, the day the earth stood still, about us being destroyed , evidently because the rock we live on is worth more than the sentient species that inhabits it.
"GREEN" ADVOCATES TEND TO LIVE IN LARGE CITIES, and think that the rest of the world is one large city, when its mostly empty.
Heres the "facts", we need carbon, because almost everything we do and make uses carbon in some fashion.
AND its lucky that we have such large reserves, and they ARE large.
And there is plenty more in the solar system, several gas giants full as a matter of fact.
Five thousand volcanoes put out more gases in one year than the human race has put out in its entire history.
The whole green movement is just a justification for the biggest transfer of wealh in history,
from those that have to those that do not. Its just the latest attempt by collectivists
to take from those that have and do to those who dont have and dont...work that is.
AND that is ALL that it is.

[nightflier]

Pix, you're confusing a whole lot of different generalizations and stereotypical attributes into a collective mess. In the end, it doesn't further your argument. Suffice it to say that there is enough scientific evidence behind the green movement to support the claims made by their adherents. Let's remember that many who support the green movement are also scientists. Those who oppose it are either financially vested in doing so, or just plain uneducated.

[Rich-n-Texas]

Pix, you're confusing a whole lot of different generalizations and stereotypical attributes into a collective mess. In the end, it doesn't further your argument...

You better hurry and put a copyright logo on this post, else I'll use it every time he responds to one of my posts.

("collective mess") ROFLMAO!

[GMichael]

You better hurry and put a copyright logo on this post, else I'll use it every time he responds to one of my posts.

("collective mess") ROFLMAO!

I think that we all should just make this our signature.

Originally Posted by nightflier
Pix, you're confusing a whole lot of different generalizations and stereotypical attributes into a collective mess. In the end, it doesn't further your argument...

[Rich-n-Texas]

I'm doing my part.