Retail Sales Fall 9.8%
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To the surprise of only economists, Retail Sales plummeted in December 2008, falling for the 6th consecutive month. Sales dropped 2.7% on the month, and nearly 10% from the same period last year. If you didn’t know any better, you might think there was a recession or something going on (Its a mystery!).
If you recall back on December 1, we warned investors to ignore the nonsensical spin from, both the National Retail Federation and the International Council of Shopping Centers (ICSC).
November sales were also revised lower. Ex-Autos, sales fell 3.1% for the month. Health and personal care were the sole growth areas. Going ex-autos and ex-gasoline, sales fell 1.5%.
Here are the specific details:
• December 2008 Sales = $343.2 billion
• December 2008 Sales down 2.7% from November and down 9.8% percent versus December 2007
• 2008 total sales (12 months of calendar year) were essentially flat — down 0.1% percent from 2007, less than the margin of error.
• Total sales for the October through December 2008 holiday shopping period were down 7.7% from the same period a year ago.
• Gasoline stations sales were down 35.5% from December 2007, and off 15.9%;
• Auto sales were down 22.4% from last year.
• Sales were down 1.8% at furniture retailers; 2.5% at clothing stores; 1.0% at electronic stores; 2.2% at eating and drinking establishments; 0.4% at sporting goods, hobby and book stores; 1.3% at general merchandise stores; 1.4% at food and beverage stores; 2.9% at building material and garden supplies dealers; and 1.9% at mail order and Internet retailers.
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Previously:
Spinning Black Friday Retail Sales (December 1st, 2008)
http://www.ritholtz.com/blog/2008/12/spinning-black-friday-retail-sales/
December Retail Sales Ho Ho Hum (January 8th, 2009)
http://www.ritholtz.com/blog/2009/01/december-retail-sales-ho-ho-hum/
Sources:
ADVANCE MONTHLY SALES FOR RETAIL TRADE AND FOOD SERVICES
Census, December 2008
http://www.census.gov/marts/www/marts_current.html
http://www.census.gov/marts/www/marts_current.pdf
January 14th, 2009 at 10:03 am
i have never been more bullish on the markets for a trade then right now. i actually like this tape despite the retail sales figures.
January 14th, 2009 at 10:05 am
And yet the idiots on CNBC are somehow surprised by this. This is NO surprise. Many of us have been predicting what would play out in ‘09 for months now and most do not have the pedigree of these so-called “experts”. Ho hum. Wake me up when something happens that actually IS surprising.
Karen – get that case of wine ready. I’m heading out cheese shopping later today. Should be some great deals out there.
January 14th, 2009 at 10:09 am
Okay, I get to the new site by a link at the old Big Picture page. What’s prominent about the old site is a primetime locale for a link to buy “Bailout Nation”. I see on the new site here it’s banished to a lower down link under “Book Club”. If it were me I’d have a BIG honking ad for “Bailout Nation” atop of every page.
January 14th, 2009 at 10:17 am
Not saying these sales are good but ex-gasoline they are not apocalyptic. We are sitting at 850 which is a pretty important level. I am waiting to see the oil inventory numbers but will likely be adding to materials/energy positions today. This little run up in the $ will probably have run its course quite soon.
Jeff, I think you’ll find that a nutty manchego is excellent with a nice oaky Rioja. That downgrade of Spain caused the fall in the Euro and triggered a sell-off in my reflation stocks this week….
January 14th, 2009 at 10:20 am
@lb: My reflation stocks are getting clobbered as well but thankfully my short positions are more than making up for it. My only regret is I bailed too early on a bit on FAZ, although I still have a small position in it. The banks still haven’t faced reality and that carnage isn’t done. Thanks for the tip on cheese.
karen: Get that case of Rioja ready.
January 14th, 2009 at 10:31 am
The banks common stocks are complete dogshit, no surprise to anyone who visits TBP. I think even CNBC is coming around to the fact that the TARP was enacted in response to a solvency crisis, not a liquidity crisis.
As cash was hoarded and the $ strengthened in September and October, the Fed looked at a decline in money supply and realized that there was going to be currency depeletion – no money in the ATMs within weeks, no currency to use for weekly wages, without significant government intervention – a true financial freeze-up (I witnessed this in Argentina, 2001 but there was no TARP available there).
Readers of TBP or Mish will realize that this situation was an inevitable consequence of fractional reserve banking and the bursting of the housing bubble. Nice discussion this morning with Chris Whelan and Jamie Galbraith – even the hapless Kernen is FINALLY beginning to get the message, dim-wit that he is. Galbraith stated quite clearly that MORE intervention will be required to prevent a deflationary spiral. He is correct.
January 14th, 2009 at 10:34 am
@leftback: You win a cigar. Strip out gas-related noise and sales are what should be expected and priced in. But go figure.
Sad but not surprised that in addition to CNBC and others, the Ghost-of-the-WSJ has jumped full bore into the “end is nigh” frenzy. No more restrained, cogent financial journalism to be found there.
January 14th, 2009 at 10:37 am
Agreed this isn’t news. In fact, I thought it was already priced in. Yesterday, I chuckled when I saw the Andy Tabbo threw up his hands in confusion. He said he’s out of the market as of today. I’m in his boat.
Hey Mannwich – I’m starting to see movement in the MPLS real estate market. A lot of new places coming onto the market. Haven’t seen that in 8 months…
January 14th, 2009 at 10:39 am
@albnyc & lb: But why is gas sales still WAY down at these low levels? What happened to “Mustard Seeds”? Looks like they ain’t making mustard with them. This should be a concern too, no?
Speaking of retail: During this next leg down, the final holdouts who didn’t sell on the last leg down will be selling now. The good news is that will mean we’ll be getting closer to THE true bottom but by the time that happens, there might not be many who will care.
January 14th, 2009 at 10:42 am
@TrickStyle: Quite a few places on the market in my neighborhood (SW Mpls) for a long time here now, as nobody buys in the winter (can you blame them when temps are 20 below outside?). The time for you to get serious and maybe get some deals will be starting later this month and Feb/March, as there will be tons of “new” (many that were on the market but were pulled back) listings from people who are dying to sell but realize nothing moves now and are hoping they can sell in the spring/early summer when things thaw out and people realize that we don’t actually live on the North Pole.
January 14th, 2009 at 10:54 am
@Manwich: No mustard seeds are being planted yet. Ground still frozen. Consumers/households are taking savings from falling prices to reflate their balance sheets (savings/debt repayment.) That needs to happen and low prices and falling retail sales suggest that households are acting rationally — at least those which have money to save v. spend.
January 14th, 2009 at 10:56 am
So Larry Kudlow was wrong again? Go figure. How many times can a so-called “pundit” and “expert” be wrong in the span of a year and still have a job? In this country, apparently a lot.
January 14th, 2009 at 10:58 am
@ Mannwich and Trick Style:
Sorry, lads, but if you look outside right now you’ll discover that you actually DO live on the North Pole.
January 14th, 2009 at 11:04 am
Thanks for the reminder, lb. Can I go back down to South Beach now? What a brutal week so far. My glasses had a coating of ice on them as I shoveled the driveway yesterday. Couldn’t even see through them. Needless to say, I’m hoping our next move will be to a relatively “warm” or warm-ER climate. Would love to keep a place here for the summers/fall though. Can’t beat the weather here then but it’s way too short!
January 14th, 2009 at 11:04 am
Larry Kudlow was largely and deservedly ignored before he reincarnated himself on TV. When the dust settles, we can only hope to go back to that future.
January 14th, 2009 at 11:15 am
After reviewing December’s sales figures, Texas economist, Phil Gramm, blamed whiny consumers for their recessive behavior.
January 14th, 2009 at 11:21 am
Right on. How can these numbers be a surprise. You don’t need to be an “expert” to realize that people are pulling back to extremes.
The largest decline year to year since WWII probably will continue
January 14th, 2009 at 11:21 am
Hate to say it, but it’s been in the 80s this week in L.A.!
We get the free-falling home prices, you get the free-falling temperatures.
It’s a hell of a trade.
Do we re-test 750 here?
January 14th, 2009 at 11:26 am
Today’s action will probably accelerate and accentuate the drive towards reflationary intervention. The $ looks to have hit short-term resistance here.
Re-test of 750? Not today. I don’t think a (corrected) sales drop of -1.5% represents “pulling back to extremes”. Not to say that it can’t happen, but it has not happened yet. There have been a lot of distortions in these figures due to gasoline, both on the way up and on the way down. I’m not saying retail is doing great but it’s their debt that is killing the weaker retailers. Just my opinion.
January 14th, 2009 at 11:35 am
BR offered :
Sales were down 1.8% at furniture retailers; 2.5% at clothing stores; 1.0% at electronic stores; 2.2% at eating and drinking establishments; 0.4% at sporting goods, hobby and book stores; 1.3% at general merchandise stores; 1.4% at food and beverage stores; 2.9% at building material and garden supplies dealers; and 1.9% at mail order and Internet retailers.
observation:
——————————–
Sales ex gas and autos were down 1.5%. Please note that most of the above numbers exceed 1.5%. Mathematically speaking, some numbers must have done substantially better than -1.5% in order for the average to offset some of the dismal numbers quoted in the story. This same thing happened last month. Either these numbers are phony to some extent, or this is only half of the story.
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BR: Its weighted by total dollar volume. So a big seller (in $) like cars off 22% offsets a lot
January 14th, 2009 at 11:46 am
I don’t think this data has caught anyone here by surprise, but I wonder to what effect the deep discounts on merchandise this holiday season has on this number? I wonder what Visa/MC has to say about sales volume ie: number of transactions. The malls appeared just as busy this year as last, only everything was 50% off.
I carefully added to some positions in commodities, materials, energy and emerging markets, probably less than 10% of my overall capital – I sold out all of my positions last Tuesday in anticipation of the ADP/BIS data and earnings this week. But with all the stimulus….errr printing going on, it’s just as risky to be in cash. About 50% of my capital is fixed income split between bank pref shares, and term deposits with some cash stashed for expenses in case I join the line of unemployed.
January 14th, 2009 at 11:47 am
To the surprise of only economists, the first-time claims number tomorrow will be a doozy too.
January 14th, 2009 at 11:51 am
Also, and please excuse my ignorance, when you look at the Unadjusted Dec vs Nov numbers, almost every December number is larger than November. However, the adjusted numbers are a little smaller. So the actual number are better, but the altered numbers are smaller. WTF???
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BR: Seasonal adjustments should make the bigger months pre-holiday smaller and the non-holiday months bigger. The idea is to pull out the regular annual cycle . . .
January 14th, 2009 at 11:58 am
@dead hobo
Darn it! I forgot tomorrow is Thursday, I’m already up a bit maybe I should cut and run now buy in tomorrow lol…yes the initial claims is probably going to be a doozy, I think Feb will be worse as employers let go of people they held onto because of the holiday season.
January 14th, 2009 at 11:59 am
sorry should have been directed @rww
January 14th, 2009 at 12:02 pm
Here is an interesting observation:
I live in the SF Bay Area where there has always been a steady supply of salvage people combing through the trash and recycling bins. It is always the same people and it is daily. There are different people for different materials (aluminum cans, metals, glass, and cardboard). Most travel on modified bicycles or on foot but the cardboard guys always have pickup trucks. The pickup are so regular that my warehouse no longer breaks down our cardboard boxes or put them in the recycling bin, we just put it next to the bin and it will be gone by the end of the day. About three weeks ago the cardboard salvagers stopped coming. I have not noticed changes in the other salvage activity.
I wonder if this is due to a sudden decrease in the price of the raw materials or a decline in the demand for cardboard boxes, or both.
Just an observation I wanted to share.
January 14th, 2009 at 12:09 pm
“About three weeks ago the cardboard salvagers stopped coming”
I think they were rehired in the mortgage department at Wells Fargo…
January 14th, 2009 at 12:11 pm
@LB
Or they finally completed their new home under the freeway and no longer need our building materials.
January 14th, 2009 at 12:12 pm
To make a point, I’m not saying that government statistics are fantasy. I’m just saying they don’t appear to be worth crap. Anyone with a brain stem would know that things have slowed down. However, these numbers don’t add up and the adjustments don’t make sense. Can somebody with expert knowledge of how they are collected and refined vouch for them? If so, please provide a brief explanation as to why I should believe you.
January 14th, 2009 at 12:13 pm
Buy the banks. Go to where the gov’t will protect.
1) Metals & Miners = Junk
2) Energy = Junk
Buying XLF here, and down from here.
January 14th, 2009 at 12:15 pm
@dead hobo: You’re right. This is merely consistent with other government statistics, especially the jobs/unemployment data. They’re not to be taken all that seriously.
January 14th, 2009 at 12:15 pm
JB
Just this morning I was wondering where you went to or if I just was overlooking your posts.
January 14th, 2009 at 12:21 pm
Mannwich,
Put up or shut up. Why should I believe these numbers? Just because the feel right and match the expectations of the group? Because they came from the government? Take a look at them and apply some critical thinking. There’s something wrong with them. And it is even worse when the distortions are amplified by AP writers who only repeat the headline numbers.
January 14th, 2009 at 12:22 pm
I’d be careful with the financials. O may come in and scrap the whole program altogether and nationalize them (wiping out common equity and many debt holders). Not touching them with a ten foot pole but am being cautious on shorting them too. Too much uncertainty there and the financials have more carnage in them.
January 14th, 2009 at 12:23 pm
@dead hobo: I completely agree with you. I don’t really trust them either, especially since they’re constantly being revised anyway. My point was/is that I agree with you here. I guess that point didn’t come across?
January 14th, 2009 at 12:24 pm
That’s why I want them now. If you believe the gov’t will nationalize then say good bye to the stock market forever because no one would have confidence again to buy any stock if that were to happen.
The indexes run about 20-30% financials.
It should be something that never happens. I look for a Fed or other gov’t move to start buying equities.
January 14th, 2009 at 12:24 pm
@ JB, welcome back, we missed you – but you are bonkers on this one.
Debt is the place to be right now in the capital structure – not common stock in the banks.
If C was a dog they would shoot it.
I would rather have energy, metals, miners and JNK than go anywhere near C.
DILUTION, JB…. which is not to say the govt might not engineer a squeeze.
January 14th, 2009 at 12:26 pm
Either that or they buy the junk to get it away from the banks. It has to happen in some form. The banks are insolvent.
That’s why you’d buy them now.
January 14th, 2009 at 12:28 pm
Metals and miners took out big loans they can not afford to pay at current pricing rates LB.
January 14th, 2009 at 12:28 pm
At some point, common equity holders could get wiped out in the financials. You may end up being right here but I’m not touching them. This madness is going to end someday with some very drastic action.
January 14th, 2009 at 12:29 pm
leftback,
Add energy services to the list if you have a time horizon of maybe 6 to 12+ months. Oil prices may have been a scam last year, but people still use the stuff and holes still need to be drilled. The only way this sector could go much lower (assuming away another hedge fund closeout sale) would be if Area 51 revealed how to power automobiles using alien technology and old chewing gum.
January 14th, 2009 at 12:30 pm
Mannwich:
The retail sales are what most of us thought. I have stated this several times, but this particular recession has bothered me from the onset in its global nature. When economists look at the US picture, I am now sure that there is still to little attention being paid to the synchronous nature of the worldwide downturn. As I posted yesterday, this is a momentum thingeee…it is easy to stop a compact car when it runs into a wall, but it is a different thing entirely if the wall is hit by a semi. It is indeed a see-saw of hope versus reality, and a really fat kid is sitting on the reality side..
January 14th, 2009 at 12:32 pm
@JB
I partially agree on putting your money on the banks, the government will protect them -but I gotta agree more leftback. The debt side is where it’s at. I bought prefs in Canadian Banks and i’m up between 10%-25% while the commons are down the same percentage over the same period. The government isn’t doing anything to protect the dollar, why NOT invest in energy, materials, commodities???
January 14th, 2009 at 12:33 pm
When the game gets too tough for the gov’t they change the rules – ALWAYS.
I’m thinking something like eliminating mark to market for 10 years but each year you have to bring 10% of that off the balance sheets back onto the balance sheet. This gives you 10 years to get rid of the junk. Prolly this and some more money thrown at the problem.
This should be the third and final big downturn in the market. I had figured originally on people picking up stock again around 820 S&P. Perhaps it will be worse but I still have is as the final crash.
January 14th, 2009 at 12:36 pm
Energy, metals and mining should be cut in third from where they are now.
January 14th, 2009 at 12:37 pm
Chart XOM against bbl oil for example.
January 14th, 2009 at 12:37 pm
Someone please refresh my memory:
If Retail Sales Fall 9.8%, is that before inflation (CPI) is accounted for?
In other words, after say 3% inflation, did Retail Sales Fall 12.8% ?
January 14th, 2009 at 12:39 pm
Retails should be not including inflation #’s.
9.8% isn’t a big deal at all. In fact I think it’s a non event. The retailers did it to themselves by panicking and lowering the prices. It was totally a self inflicted wound. Margins are going to suck.
January 14th, 2009 at 12:40 pm
@ JB. I set aside one last aliquot of cash that I will only use if there is a massive crash or dribble into the 600s.
The debt problems of the miners are largely priced in and can be avoided if you pick your spots.
@ dead hobo. Agreed on oil services, I picked up WFT.
Oil will rise again, it’s cold out there, and they ain’t making any more of the stuff.
January 14th, 2009 at 12:43 pm
LB keep in mind oil’s historical average is around $20 bbl even including inflation.
January 14th, 2009 at 12:45 pm
JB…
Retail sales have fallen for 6 months in a row. I would give you this to mull over:
http://www.ritholtz.com/blog/2009/01/retail-sales-fall-98/#comments
January 14th, 2009 at 12:47 pm
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aEHH0YaHS8Xs
this is it…
January 14th, 2009 at 12:49 pm
Bruce, I call it normalization of the system.
Sales for the last few years shouldn’t have been up so much. So once you back all that out we are only so far back to 2003-4. Hardly a depression type scenario and thus not much to worry about.
January 14th, 2009 at 12:50 pm
It’s no big deal. Consumer spending is only 70% of GDP.
January 14th, 2009 at 12:51 pm
@JB: When you factor in how much many of these retails levered up since that time, it may not be a “depression scenario” (although not sure how you define one) but it sure is a pretty grim one with some scary-looking balance sheets laden with debt. The shakeout in retail is only beginning. The usual suspects (Wal Mart, Costco, etc.) will hang in there and do just fine but there will be an enormous sea change overall in retail that goes far beyond ‘03/’04.
January 14th, 2009 at 12:54 pm
Ok…I guess we’ll just disagree about that…we’ll know by July if this recession is something worse. We can rehash this again then. I know you have been upbeat about the economy before you quit blogging, and I hope you do well in 2009.
January 14th, 2009 at 12:54 pm
Retail sales had an usual shift this year from 4Q to 1Q from what I see so far. Maybe is was a media panic about bank failures and depression.
Laden with debt and able to refinance at a low rate. This works for just about all companies but energy and metals because the pricing spreads are so much larger.
January 14th, 2009 at 12:57 pm
@JB: Or maybe people have stopped jacking up their credit cards to buy crap from China they don’t need.
January 14th, 2009 at 12:58 pm
Media panic? Uh, ……no. The Leismans and Kudlows have been uniformily upbeat. So have most stockbrokers interviewed on TV…there have been very few Roubinis in the world until very recently..
January 14th, 2009 at 12:58 pm
We will see enormous economic and social changes in the next few years. But you have to understand that a lot of this is already priced in to many many stocks. What we are seeing is a shake-out of those who have been swimming naked in the retail, technology and other industries. Those companies with sound balance sheets will not only survive but thrive as their competitors are removed, even if there is zero rebound in demand. Darwinsim.
January 14th, 2009 at 1:03 pm
JB:
I still wonder if you are really Cinefoz come to play Devil’s advocate with the realists in the room but I do have something else that Forbes posts that I think will be of interest to you over the next few months. I expect these numbers to double by July.
http://www.forbes.com/2008/11/17/layoff-tracker-unemployement-lead-cx_kk_1118tracker.html?partner=yahootix
January 14th, 2009 at 1:03 pm
@lb: I completely agree. The strong (Wal Mart, Costco, McD, Apple, etc.) will not only survive, but thrive, assuming continued strong management of their business. The weak AND mediocre are going to get crushed and that’s just starting.
January 14th, 2009 at 1:03 pm
No one watches Kudlow. But they did see that PBS depression special and all other mainstream media. CNBC and Bloomberg are not mainstream media whom the public frequently watch.
January 14th, 2009 at 1:07 pm
@JB: Are you really Phil Gramm?
January 14th, 2009 at 1:17 pm
JB,
Like everyone else here I wondered where you went. It was 20 million posts from you and then you just went away for what seemed like a month. Welcome back.
Now about your call on the banks, I think I’ll pass but good luck with it. I suppose I understand what you are saying, I just don’t agree with it. Hope you make some gains though. I’m rooting for everyone.
Not sure if you saw it but Meryl Witmer actually made a few compelling arguments for Discover Financial, not sure if that fits what you are looking for but it might be worth looking at for a trade.
January 14th, 2009 at 1:20 pm
Color me sceptical but the notion that retail sales fell only 1.5% sans gas and autos sounds like an understatement. I know a guy in Mall management and the universal word from his tenants which include all the big names was dire. The notion that this was all due to price cutting affecting rev seems a stretch. Electronics only down 1%? It’s true all these retailers are loaded with debt and that’s what’s taking them down but if this was anything other than manageable down blip which many here seem to be suggesting why would these guys be in such distress. When the big retailers report we’re going to see huge revenue declines for the quarter.
January 14th, 2009 at 1:26 pm
@leftback 12:40
Aren’t heating oil and nymex crude two different commodities.
January 14th, 2009 at 1:32 pm
John Borchers Says:
January 14th, 2009 at 12:49 pm
Bruce, I call it normalization of the system.
Sales for the last few years shouldn’t have been up so much. So once you back all that out we are only so far back to 2003-4. Hardly a depression type scenario and thus not much to worry about
There is a grain of truth in this but that’s all. What for example is the “natural” level of auto sales. It’s as sure as hell not 17 million units a year. Probably more like 13-14 million but at the moment the market is annualizing at around 10 million and therefore quite a lot to worry about. Particularly when you put this in the context of the extent of corporate leveraging which means you have a lot of weak companies out there and not just in retail who are going to go tits up. This in turn puts more downward pressure on retails and before you know where you are autos are annualizing at 8 million. We’re in a very dangerous situation.
January 14th, 2009 at 1:32 pm
Barry,
Once again, if you really look at the numbers, they are much worse than reported. Here’s why:
http://briefing.com/Investor/Public/Calendars/EconomicReleases/retail.htm
If you look at the declines, the headline number may be 9.8% for the last 12 months, but the numbers show that Oct, Nov, Dec. all added together is 8.2% (!)..
This means, of c0urse, that of the yearly decline 8.2/9.8 is 84%….so 84 per cent of the decline was in the last 3 months…this is much more worrisome.
January 14th, 2009 at 1:34 pm
Otto:
I very much agree with you.
JB is actully Donald Luskin.
January 14th, 2009 at 1:35 pm
Deleveraging = D-Train. Nothing new here. Been saying this since at least the middle of last year. Nothing to see here. Move along please.
January 14th, 2009 at 1:47 pm
And business sales are now down 9% in two months…
http://www.rttnews.com/CorpInfo/EconomicCalendar.aspx
Momentum….
January 14th, 2009 at 1:50 pm
Don Lus was never short.
My early posts from 07 called for depression.
January 14th, 2009 at 1:55 pm
@JB: Fair enough, but you’ve changed your mind several times (often in the same day) since then if I recall correctly. Changing one’s mind is fine and shows flexibility but it seems you’ve been all over the map so as to ensure that you can claim being “right” no matter what happens. Sounds eerily familiar to some pundits out there…….
January 14th, 2009 at 1:55 pm
Dennis Kneale looking for that “silver lining”. I’m sold. Recession over. Time to party.
January 14th, 2009 at 2:01 pm
I think would be a good time for Al Dunlop “Chainsaw Al” to revive his carreer, there is a lot of trimming that needs to be done.
January 14th, 2009 at 2:03 pm
Bruce, everyone needs to listen to Davidowitz so I am reposting your link:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aEHH0YaHS8Xs
He has been right on from the start
January 14th, 2009 at 2:04 pm
Clear and about 60 here in Houston. Pretty much the same for the rest of the week
While in the car just now, I got a brief dose of Rush as I changed channels. He was criticizing Obama’s dinner with someone, saying the Obama should have invited a real conservative to dinner. So, I suppose Larry isn’t even a conservative anymore. Has anyone noticed that in Larry’s picture on those “personality” commercials they’ve been running on CNBC, Larry looks smashed.
I sure hope this allows me to get a good deal on the big screen I have my eye on. I realized Sunday why Best Buy had raised prices on them the end of last week: Superbowl coming up. All those guys in pickups will run out an spend a grand they don’t have to impress their buddies for one day. Suppose I’ll have to wait til Feb. for my deal.
January 14th, 2009 at 2:16 pm
ottovbvs Says: “Color me sceptical but the notion that retail sales fell only 1.5% sans gas and autos sounds like an understatement. I know a guy in Mall management and the universal word from his tenants which include all the big names was dire.”
I’m sure it varies industry by industry, but I know big department sales cut deals when they buy were they are guaranteed a certain profit margin on what they purchase. So after all the cut backs, they then get to invoice their suppliers for an loss below that guarantee. What this amounts to is shifting the real problems out a month or two when these invoices become due and post due…
January 14th, 2009 at 2:19 pm
@Tranchefoot:
“Aren’t heating oil and nymex crude two different commodities.”
Well, yes, but you can’t get one without the other, my friend.
[Insert the usual jokes about the "crack spread" here]
Cue ribald laughter around TBP Nation…
@ Mike: I think Rush and Bill O’ would consider Larry a bit limp for their tastes.
January 14th, 2009 at 2:56 pm
BR,
Thank you for your explanations.
However, I am still a little confused in a broader context. You have railed about various government statistics as being of poor quality. In your opinion, which have reasonable value as stated, which are somewhat useful, and which are total crap? If you have time, please provide a brief explanation as to why you believe as you do. (this might make a good feature piece)
I will accept your evaluation and move forward from that point.
Thank you.
January 14th, 2009 at 4:31 pm
Mike in Nola Says:
January 14th, 2009 at 2:04 pm
While in the car just now, I got a brief dose of Rush as I changed channels. He was criticizing Obama’s dinner with someone, saying the Obama should have invited a real conservative to dinner.
Apparently, George Will had a dinner for all “respectable” conservative pundits like Kristol and Brooks to meet Obama and Rush didn’t get invited so Rush is pissed because he was considered not respectable, lower class or something.
January 14th, 2009 at 4:32 pm
He wasn’t invited because there was no Vicodin at the party…
January 14th, 2009 at 4:35 pm
Outlier Says:
January 14th, 2009 at 2:16 pm
I’m sure it varies industry by industry, but I know big department sales cut deals when they buy were they are guaranteed a certain profit margin on what they purchase. So after all the cut backs, they then get to invoice their suppliers for an loss below that guarantee. What this amounts to is shifting the real problems out a month or two when these invoices become due and post due…
Maybe but some of those numbers were goofy like Electronics -1%. And your talking about margins not revenue declines which I expect to be in double figures versus the same period 2007.
January 14th, 2009 at 4:41 pm
Bruce N Tennessee Says:
Smart move by Obama though. These guys love the idea of access and he can give it or take it away. And it’s hard to be too shitty when you’ve shared a martini with someone.
You also make a great point about the concentration of retail declines in the last few months of the year. The full year for auto sales is around 13 million but in the last three months they were retailing well under a million units a month.
January 14th, 2009 at 5:25 pm
Otto:
I think the first quarter will be not fugly…but fubar. Interesting day at the salt mine. I am as busy as I have ever been in my life, but I am not sure what the future holds. Should be an interesting year…
January 14th, 2009 at 6:34 pm
@ jason… I heard on the news about a week ago that the price for recycle cardboard/corrugated is down about 80%. I’m feeling to lazy now to look for the links though.
January 14th, 2009 at 9:53 pm
not too busy to not post from 12:30 to 1:37 though right Bruce? Maybe it was lunch break. I’d like to think when I say I was as busy as I had been in my life I wouldn’t have time for this, but then I run my own biz.
sorry man, I’m being a jerk. I enjoy your posts so I don’t mind if you are doing it at work.