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Early Data Shows Strong Black Friday
Despite the turmoil and all the anecdotal reports of sluggish Black Friday sales, seems that the actual sales data told a different story. The AP is now reporting that Black Friday sales increased by 3% over last year. This happening despite the month-to-month decline of 3% that occurred in October.
http://www.sfgate.com/cgi-bin/articl...business&tsp=1
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The holiday shopping season got off to a surprisingly solid start, according to data released Saturday by a research firm. But the sales boost during the post-Thanksgiving shopathon came at the expense of profits as the nation's retailers had to slash prices to attract the crowds in a season that is expected to be the weakest in decades.
Might be the case of perception shaping reality here, since just about everybody I talked to indicated that the crowds were smaller than they remember from years past. But, if stores increased their sales, I wonder where these revenues came from. At the Best Buy store where my friend works, he indicated that they still had the doorbuster TVs in stock at midday, whereas in years past those sets would be gone within the first hour.
It could also be a case where the discounting cuts more broadly and deeper than in Black Fridays past. The enticements aren't limited to just a few doorbuster deals. For example, Carter's put their entire store at 50% off beginning on Tuesday and going through Saturday.
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My wife and I briefly stopped at one of the malls today. Although it had traffic it didn't look like Christmas shopping season and it was Saturday. We pulled right into a parking spot as another car was pulling out, normally we'd have to circle the parking lot a couple times.
Although a friend of mine was in line at American at 2:30 am Friday morning. He said he was about 20th in line. He was after and succeeded in landing a Sony bd-p350 for $178.00
If it was me I think I'd get my sleep and go to the place that sells them regularly for $199.00.
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Wooch, that may be the report, but that wasn't at all what the sales people at CC, BB, MicroCenter, and even Costco told me. Of course, that's all local to SoCal, but if the rich mucky-mucks here aren't buying, then the average Joe probably isn't buying either.
I haven't checked, but I also read that the big toy manufacturers and distributors (Mattel, Toys 'R' US, FAO, etc.) all came down on Friday. Granted, the market has been up-ish since Monday, so that may just have been a blip, but I'm not holding my breath. I am, however, hoping that Visa comes back up before the end of the season....
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Most people I know are buying off the internet instead of shopping at local stores.
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Quote:
Originally Posted by nightflier
Wooch, that may be the report, but that wasn't at all what the sales people at CC, BB, MicroCenter, and even Costco told me. Of course, that's all local to SoCal, but if the rich mucky-mucks here aren't buying, then the average Joe probably isn't buying either.
That was what I heard from the front lines as well, but when the sales got tallied up, they showed an increase. What you're observing is perception. What the cash register totals provide is the reality.
Considering how far retail sales fell during October and November, some analysts I read suspect that there was a lot of pent up demand that got brought out via the Black Friday discounts. A lot of purchases got deferred during those months, so it makes sense that discounting would entice consumers make purchases that they had wanted to make earlier.
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Originally Posted by blackraven
Most people I know are buying off the internet instead of shopping at local stores.
That might be what you're hearing, but on the whole, remote retailing (which includes online, catalog, phone order, mail order sales of all stripes) still accounts for less than 10% of retail sales. Internet sites always report big percentage growth numbers, but they're starting from a much smaller base.
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I just don't see how this early on that any report could be accurate. When it is all said and done I'd like to see how it really turned out, it will probably illuminate the path we are headed down economically( or not, just for the sake of uncertain wishey-washieness). The only thing I know for sure is I'm not going to be spending quite as much as I have in the past.
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Well Wooch, I know the investment world is living in fear of the prospect of consumers holding off buying today out of anticipation for yet even bigger price cuts tomorrow.
Consumers think they're smarter these days (and many are). They know in a tough economy that demand drops and exerts downward price pressure (ignoring supply adjustments of course).
What we're wondering is if buyers' wide-spread belief of a better price later can actually force retail's hand to lower prices even more now. This is a nasty recipe for deflation, which is devastating and brutally hard to get out of.
Hope the data holds up and people are spending at a reasonable pace at least.
We might not know until much later, and here's a case where perceptions might adversely influence reality...
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Quote:
Originally Posted by kexodusc
Well Wooch, I know the investment world is living in fear of the prospect of consumers holding off buying today out of anticipation for yet even bigger price cuts tomorrow.
Consumers think they're smarter these days (and many are). They know in a tough economy that demand drops and exerts downward price pressure (ignoring supply adjustments of course).
What we're wondering is if buyers' wide-spread belief of a better price later can actually force retail's hand to lower prices even more now. This is a nasty recipe for deflation, which is devastating and brutally hard to get out of.
Hope the data holds up and people are spending at a reasonable pace at least.
We might not know until much later, and here's a case where perceptions might adversely influence reality...
If they send me another "Economic Stimulus" check, I'll spend it at a reasonable pace, at the very least. :yesnod:
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Originally Posted by Rich-n-Texas
If they send me another "Economic Stimulus" check, I'll spend it at a reasonable pace, at the very least. :yesnod:
What happened to the last liberal redistribution of wealth you got? :D
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Quote:
Originally Posted by Rich-n-Texas
Knock it off knucklehead!!! :incazzato:
Mwa ha ha ha...I just said it cause I knew it would rib ya, buddy! You'll recall I avoided most of those kinds of discussions.
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Knock it off knucklehead!!! :incazzato:
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Oh BTW, for some reason (L.J.) my finances are looking a bit thin, so as another way to keep the pace up, and as a way of showing how much everybody appreciates my time and effort here, I'll take the BFD as a Christmas/belated 5K post gift.
Sound good lemme know. :thumbsup:
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Quote:
Originally Posted by mbbuchanan
I just don't see how this early on that any report could be accurate. When it is all said and done I'd like to see how it really turned out, it will probably illuminate the path we are headed down economically( or not, just for the sake of uncertain wishey-washieness). The only thing I know for sure is I'm not going to be spending quite as much as I have in the past.
Given that all retailers tally up their daily returns at the end of the day, how would a report on Black Friday sales not be accurate? The bigger picture is not how this Black Friday's sales measured up to years past. They went up, but that's not the point.
The real story yet to be determined is how the whole holiday shopping season measures up. Black Friday is an indicator of where the holiday season is headed, but it's not foolproof. 2003 had record breaking sales on Black Friday, but once the total sales were tallied up after Christmas, that year turned out no better than the year before.
This year's holiday season will likely lag behind last year. For one thing, there are five fewer shopping days between Thanksgiving and Christmas. Also, retailers had already anticipated the slowdown and cutback their orders. Given these conditions, retailers can only achieve year-to-year growth by maintaining higher price points. That will all depend on how far shoppers deplete store inventories over the next week or two. If sales are strong, then stores won't feel as much pressure to deepen the price cuts given that inventory levels are already low.
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Quote:
Given that all retailers tally up their daily returns at the end of the day, how would a report on Black Friday sales not be accurate?
Big-stores and major retailers were reporting, not smaller stores.Big electronic and department stores are not the only seller of goods and they are going to get their money one way or the other.
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Quote:
Originally Posted by kexodusc
Well Wooch, I know the investment world is living in fear of the prospect of consumers holding off buying today out of anticipation for yet even bigger price cuts tomorrow.
Consumers think they're smarter these days (and many are). They know in a tough economy that demand drops and exerts downward price pressure (ignoring supply adjustments of course).
What we're wondering is if buyers' wide-spread belief of a better price later can actually force retail's hand to lower prices even more now. This is a nasty recipe for deflation, which is devastating and brutally hard to get out of.
Hope the data holds up and people are spending at a reasonable pace at least.
We might not know until much later, and here's a case where perceptions might adversely influence reality...
I think that there's probably enough pent up retail demand to avert an all-out catastrophe, at least for the holiday season. People have to lay out a certain amount of retail spending just to maintain a household, and a lot of those purchases got deferred in October and November. If some of those deferred purchases are made in December, then that potentially makes up for reductions in gift spending and discretionary purchases.
It also helps that the lower gas prices might further loosen the purse strings for retail purchases. Between my wife and I, we're back down to a combined $40 a week for gas, whereas we were over $100 a week just two months ago.
I think the factor that might avert a deflationary cycle in the short term is simply lower inventories. Retailers had already planned for reduced inventory, and once the financial crisis hit, they canceled their remaining holiday orders. Because of how quickly the market conditions deteriorated in October and November, retailers shifted a lot of the holiday discounting early. The pricing they have in effect right now is what would normally occur in mid-December. If retail inventories get depleted more quickly, then the stores won't feel as much pressure to launch a more aggressive round of discounting.
The real catastrophe in retailing though might still happen in the early part of next year. With the new unemployment numbers and rumors buzzing about major layoff announcements early next year, I suspect that consumers will really start cutting back in January. Depending on inventory levels, that would be where any deflationary cycle begins.
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Quote:
Originally Posted by mbbuchanan
Big-stores and major retailers were reporting, not smaller stores.Big electronic and department stores are not the only seller of goods and they are going to get their money one way or the other.
Like it or not, the major retailers generate the vast majority of retail sales, and are a very good indicator as to the direction of the retail market in general. Many "smaller stores" are owned major retailers and participate in the same data reporting. If you say that they "are going to get their money one way or the other" then how does that explain the 18% drop in year-to-year sales that Best Buy experienced in October? Retailers were hammered hard in October and November, which makes the Black Friday numbers surprising (or not so surprising according to the analysts who expected Black Friday to be an outlet for pent up demand that got deferred for the last two month). Keep in mind that this is ONE DAY, and that same AP report mentions that retailers' profit margins are getting sacrificed to maintain the sales levels.
If the data reporting for this year's Black Friday was done the same way as last year, then why would the reported 3% increase somehow constitute an "inaccurate" finding? The only way for it to be inaccurate would be if last year's numbers included a different universe of store types than this year's.
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Looks like kex is psychic too!! Another one tearing hole in the time-space continuum (posts 10 & 11 are reversed)
Anyway, pay no attention to me. It's the day before my bosses Christmas party and I'm stoked. On Topic: He pumped $290. into the economy with his liquor purchase. :thumbsup:
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AT&T had big layoffs today as well as about 3 other companies, I haven't heard the news tonight to see how the auto companies turned out but this has to have people hanging on to their money wondering if they could be next.
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Well Wooch, it certainly isn't looking good for the economy as a whole. Black Friday was maybe not a dud (although I still have a hard time accepting that given how the local economy's been doing), but x-mas shopping isn't the only thing that makes up the Consumer Price Index.
One example that comes to mind is the automakers. Even if the automakers get their socialist check (I'm throwing Tex a bone, here) from uncle Sam, they will still be laying off tens of thousands and selling very little. Not only will year-end auto sales suck, but they are likely to stay low throughout next year, and that will have it's share of impact on the economy. Then there's the foreclosure numbers, the cost of this assinine nonsense war in Iraq, the huge expense of corporate welfare (aka socialism - Tex, are you there?), and the fact that our schools are putting out stunted grads, and you've got a recipe for several years of economic muck.
This morning Bush blamed the unemployment numbers on the savings & loan, oops, Freudian slip... I mean the housing crisis. Huh? Now how does that work? Isn't this the kind of disinformation and obfuscation that got us into this mess? The fact that nobody is questioning this nonsense tells me that we're headed for more economic misery because people don't want to accept that we're up sh*t creek.
So Wooch, what you're saying is that the retailers set their expectations so low this year, that what we saw this past weekend could still be passed off as an improvement? That's kind of like saying to a couch-potato that he will gain weight if he does nothing so when his weight stays the same, he'll actually be pleasantly surprized. Let's tell all our children to get D's and then we can celebrate when they pass with a C. Let's cut more social programs, that way we can throw more money at the few that are left. Let's boycott international treaties, then we can make a big deal when we sign an insignificant one. Let's send more troops to Iraq, so that the percentage of deaths & injuries seems lower. Let's set the presidential bar so low that even a black man named Hussein can get elected.
Hey wait a minute, this is how we do things in this country, huh?
OK, Agent Smith, can I have my blue pill now?
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NF, you are out of line with the "black man named Husane" thing. The fact that Barack got as far as he did shows no bar was lowered. One might have thought that, when Bush got elected. The fact that it's not Jessie Jackson or Fred Thompson shows that not just any knucklehead can get elected.
Maybe the road to recovery is partly in the hands of us. Instead of forecasting doom and gloom, walking around with our tales between our legs, we need to do what we can to help. And, when I figure that out, I will post for all to see. I know a few here have helped, they have gone Blu. Of course, it took great prices on good machines to do it but it got done.
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It would be nice if some people around here could get over the November 4 results or at least wait until someone is actual in the job setting policy before bashing them based on party line biases............
In any case after the news of this week I'd like to hope that sales on Black Friday were up. This is a consumer driven economy and any sign that those people who do have money are willing to spend it is good sign. My wife works in retail at a discount clothing store and overall business has been strong these last couple of weeks. They are however getting ready to make additional discounts now so that people will continue to come in and shop so they are operating on an even thinner margin despite their continued success.
If we could stop having a different bottle seemingly falling off the shelve each week causing turmoil in the market maybe we can start to get through this mess. It seems at this point everyone is in a reactive mode based on the last piece of bad news.
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Good point, maybe we should quit watching the news. It does seem like people can't get the bad economy out of their mind because if not every week, sometimes every day there is a major headline of something else happening to worsen the situation. You can't get excited about the stock market surge because it's followed by a just as large plunge. I think it's important to keep as positive of an attitude as we can though. Where's that American spirit? Everyone's assignment this weekend is to watch at least one John Wayne movie and a couple episodes of Star Trek :)
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Originally Posted by Mr Peabody
Good point, maybe we should quit watching the news. It does seem like people can't get the bad economy out of their mind because if not every week, sometimes every day there is a major headline of something else happening to worsen the situation. You can't get excited about the stock market surge because it's followed by a just as large plunge. I think it's important to keep as positive of an attitude as we can though. Where's that American spirit? Everyone's assignment this weekend is to watch at least one John Wayne movie and a couple episodes of Star Trek :)
YEAH, that will help.
Tell me, just how did we become a nation of such fools that we actually beleive
that something will happen if we just wish it?
500,000 jobs were lost last month, that is HUGE.
And if you work for a car company are you going to go out and splurge?
As for "pent up demand" that doesnt mean jack if you dont have the coin to satisfy the demand.
I have a "pent up demand" for a new Porsch and a new Mac amp, doesnt mean its gonna happen anytime soon.
Wooch's problem is that hes' been cooking the books for uncle sugar for so long
that he has lost touch with reality.
And now we have this idiot in office that is going to throw money at anything that moves.
Only problem is you dont go on a spending spree when you're broke.
WHICH WE ARE.
We dont even have any industrial base, its been moved off-shore.
Wanna know the future? LOOK AT THE PAST, AT germany between the wars, or more recently Argentina.
ONLY in such a large economy its gonna be at least ten times worse.
But heres the position mr P, if you insist on denying reality.
The tiger is gonna keep thinking you're a happy meal, even if you refuse to beleive he exists.:1:
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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.
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.
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Quote:
Originally Posted by nightflier
Well Wooch, it certainly isn't looking good for the economy as a whole. Black Friday was maybe not a dud (although I still have a hard time accepting that given how the local economy's been doing), but x-mas shopping isn't the only thing that makes up the Consumer Price Index.
CPI is a measure of inflation, not sales or demand. Get your terminology straight.
Like I said, Black Friday is but ONE DAY. It's quite easy to see how Black Friday went fine this year given how much discounting occurred and how many purchases got deferred from October and November.
And AS I SAID BEFORE, Black Friday does not always predict how the overall holiday shopping season will go. 2003 had a record-breaking Black Friday and mediocre sales the rest of December. This year could very well go the other way around.
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Originally Posted by nightflier
One example that comes to mind is the automakers. Even if the automakers get their socialist check (I'm throwing Tex a bone, here) from uncle Sam, they will still be laying off tens of thousands and selling very little. Not only will year-end auto sales suck, but they are likely to stay low throughout next year, and that will have it's share of impact on the economy. Then there's the foreclosure numbers, the cost of this assinine nonsense war in Iraq, the huge expense of corporate welfare (aka socialism - Tex, are you there?), and the fact that our schools are putting out stunted grads, and you've got a recipe for several years of economic muck.
Bad example and a whole lot of off-topic tangents. The auto industry is the single largest retail segment, but it is not a sector that depends on seasonal shopping. Despite what those Lexus and Mercedes commercials try to tell you, the holiday season is not critical to a dealership's bottom line since December isn't even the peak month.
For specialty retailers and general merchandisers though, the holiday season alone can account for upwards of 30% or more of a retailer's annual sales. The term "black Friday" came about because it was the symbolic day where a retail store goes into the profitability for the year.
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Originally Posted by nightflier
So Wooch, what you're saying is that the retailers set their expectations so low this year, that what we saw this past weekend could still be passed off as an improvement? That's kind of like saying to a couch-potato that he will gain weight if he does nothing so when his weight stays the same, he'll actually be pleasantly surprized.
Did you ever study economics or run a retail business (both of my parents owned small businesses where I helped them manage their inventory)? What you call low expectations, the retailers call survival. It has nothing to do with "passing off as an improvement," it has to do with doing everything necessary to generate revenue and reduce their inventories.
The retailers have already pulled back their orders, so they have less product to sell this year than they did last year. For them, the task between now and the end of the year is to maximize the revenue that they get out of that inventory. Normally, they hold back the big price reductions until the very end of the holiday shopping season. This year, they are front loading them because steeper price cuts at the end of the holiday season would be more disastrous for the bottom line. If consumer demand holds up enough to avoid fire sales later on this month, then it will be better than expected because it means fewer bankruptcies in January.
The fact of the matter is that Black Friday sales showed a gain from last year. But, that has to be taken within the context of all of the declines that occurred earlier.
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Originally Posted by nightflier
Let's tell all our children to get D's and then we can celebrate when they pass with a C. Let's cut more social programs, that way we can throw more money at the few that are left. Let's boycott international treaties, then we can make a big deal when we sign an insignificant one. Let's send more troops to Iraq, so that the percentage of deaths & injuries seems lower. Let's set the presidential bar so low that even a black man named Hussein can get elected.
Oh please. Take these rants to another topic. And that last statement is rather offensive.
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Originally Posted by Mr Peabody
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).
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Originally Posted by Mr Peabody
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.
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Heads in the sand?
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Originally Posted by Woochifer
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.
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I thinks so too
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Originally Posted by Woochifer
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).
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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.
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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.
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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!!! :yesnod:
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Originally Posted by nightflier
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.
Quote:
Originally Posted by nightflier
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.
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Originally Posted by nightflier
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.
Quote:
Originally Posted by nightflier
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.
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Originally Posted by nightflier
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.
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Originally Posted by nightflier
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.
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Quote:
Originally Posted by Feanor
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).
Quote:
Originally Posted by Feanor
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.
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Quote:
Originally Posted by 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.
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.
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Quote:
Originally Posted by Woochifer
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.
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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.
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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.
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Quote:
Originally Posted by Sir Terrence the Terrible
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).
Quote:
Originally Posted by Sir Terrence the Terrible
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.
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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.
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The ultimate dilemma...
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
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Right on, and ...
Quote:
Originally Posted by 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
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.
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Quote:
Originally Posted by Feanor
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.:1:
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Ah, Pix
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Originally Posted by pixelthis
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.:1:
WRONG AGAIN ... :ciappa:
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