Not the Time

In "Not So Good," I argued that the euphoria over this past weekend's alleged consumer spendfest was unwarranted because retailers' profits almost certainly did not keep pace with sales. But there are other things to consider, including the likelihood that the latter did not actually increase as much as claimed, as The Big Picture notes in "No, Black Friday Sales Were Not Up 16% (not even 6%)":

Let’s start with this whopper from an utterly breathless press release from the National Retail Federation:

“U.S. retail sales during Thanksgiving weekend climbed 16 percent to a record as shoppers flocked to stores earlier and spent more, according to the National Retail Federation.

Sales totaled $52.4 billion, and the average shopper spent $398.62 during the holiday weekend, up from $365.34 a year earlier, the Washington-based trade group said in a statement today, citing a survey conducted by BIGresearch. More than a third of that — an average of $150.53 — was spent online.”

No, retail sales did not climb 16%. Surveys where people forecast their own future spending are, as we have seen repeatedly in the past, pretty much worthless.

We actually have no idea just yet as to whether, and exactly how much, sales climbed. The data simply is not in yet. The most you can accurately say is according to some foot traffic measurements, more people appeared to be in stores on Black Friday 2011 than in 2010.

Another absurd example: Does any one actually believe “nearly one-quarter (24.4%) of Black Friday shoppers were at the stores by midnight on Black Friday”? Perhaps the NRF competing with the NAR for title of most ridiculous trade group.

Next up is ShopperTrak, who claimed a 6.6% gain in sales:

“Shoppers packed stores and spent money in record numbers on Black Friday, early surveys show, a phenomenon that analysts call a hopeful sign for the U.S economy after months of up-and-down consumer spending.

Black Friday sales were up 6.6 percent over last year and foot traffic in stores was up 5.1 percent, according to ShopperTrak, a Chicago-based research firm. The year-to-year spending increase was the greatest since 2007, the firm reported . . .”

What is the basis of that 6.6% gain? ShopperTrak “uses equipment installed in stores to measure traffic.” But that does not measure changes in window shoppers vs buyers from year to year, how much money and or credit people have, how large their holiday budgets are, or how much they are willing to spend. It is a very poor system for forecasting actual sales.

Then there is the distinct possibility that the Thanksgiving "splurge" might well have been the best we can hope for as far as the 2011 holiday selling season is concerned, if the following Oakland Tribune report, "California Ports Slump Ahead of Holiday Shopping Season," is any guide:

The Port of Oakland and other California ports have suffered a slump in volume in recent months -- an unsettling sign that could portend sluggish sales ahead of the crucial holiday shopping season.

The slowdown for imports suggests merchants curbed orders for overseas products due to fears of lackluster consumer demand. Despite reports of a busy Thanksgiving and Black Friday launch for Christmas sales, merchants may still have to grapple with feeble shopping activity in December.

At the ports of Oakland, Los Angeles and Long Beach, the year started out great. Month after month, volumes were up compared with the same month a year ago. Signs pointed to an improved economy. By midsummer, though, things began to go awry for the California ports as the volume of cargo began to sink.

"In January and February, we were up double digits," said Isaac Kos-Read, director of external affairs with the Port of Oakland. "That might have been due to inventory restocking and the expectation of a big improvement in the economy."

Whatever the reason for the surge early in the year, it didn't last. "All the talk for several months has been potential double-dip recession, economic weakness, economic uncertainty, no further stimulus," Kos-Read said. "Our imports are down, which would be a sign of weakness for the American economy."

The slump arrived in August and continued through September and October.

"Those months are our peak season, the run-up before the holiday season," said Lawrence Dunnigan, manager of business development with the Port of Oakland. "All of the imports are very soft this year."

Finally, I really wonder just how much extra discretionary spending we can expect to see at a time when 16 million children are living in poverty and no small number of Americans, as "60 Minutes" details in "Hard Times Generation: Families Living in Cars," are having a hard time surviving at all.

Simply put, now is not the time to fall for any sort of hope-driven nonsense about a consumer-led recovery.

Comments

[roger]

Orchestrated pandemonium to make people believe.
Selected scenes emphasizing the sensational,
manipulating statistics,well known tools of
the news media,sorry, to me it looks more like
desperation,the last tremors before the coming depression. Sorry, material reality is dogmatic.

[Says a lot about all of us]

"It is no measure of health to be well adjusted to a profoundly sick society."
-Jiddu Krishnamurti

[Who says our priorities are F@#k up...not these 3]

I think these guys were doing the shopping....

Why Some Failed Institutions Always Foreclose; The Reason: FDIC Sponsored Fraud; Who Benefits: George Soros, John Paulson, Michael Dell

As much as $11 billion is set to go straight into the hands of the desperately needy: George Soros, John Paulson, Michael Dell, and Christopher Flowers. The regulators and the investors parasites declined to comment.

http://globaleconomicanalysis.blogspot.com/2011/11/why-some-failed-institutions-always.html

[The people living in cars are not part of the ruling elite]

Treasury Secretary Henry Paulson Tipped Off Prominent Hedge Funds Regarding Fannie Mae While Telling the US Senate and General Public a Different Story

I have on numerous occasions made the claim that Henry Paulson is guilty of coercion and fraud. For those actions, he should be arrested and criminally tried.

However, the latest disclosure in which hedge funds say they were tipped off by Paulson while he told Congress and reporters blatant lies is allegedly not even criminal behavior.

Who Was at the Meeting?

Mindich, a former chief strategy officer of New York- based Goldman Sachs, started Eton Park in 2004
Daniel Stern of Reservoir Capital Group
Singh, a former head of Goldman’s proprietary-trading desk, also began his fund in 2004, in partnership with private- equity firm Texas Pacific Group Ltd.
Frank Brosens, founder and principal of Taconic Capital Advisors LP, who worked at Goldman as an arbitrageur and who was a protege of Robert Rubin, who went on to become Treasury secretary.
Non-Goldman Sachs alumni who attended included short seller James Chanos of Kynikos Associates Ltd., who helped uncover the Enron Corp. accounting fraud;
GSO Capital Partners LP co-founder Bennett Goodman, who sold his firm to Blackstone Group LP (BX) in early 2008;
Roger Altman, chairman and founder of New York investment bank Evercore Partners Inc. (EVR);
Steven Rattner, a co-founder of private-equity firm Quadrangle Group LLC, who went on to serve as head of the U.S. government’s Automotive Task Force.

What did PIMCO know and When?

Anyone who says they do not remember a meeting like that is a liar. Anyone who says "no comment" is indeed commenting and the possible interpretation is not pretty. So what else did Paulson say?

I would like to know who Paulson talked to outside the meeting.

http://globaleconomicanalysis.blogspot.com/2011/11/treasury-secretary-henry-paulson-tipped.html

[Our downfall]

Hank Paulson’s Secret: Of Course the System Is Rigged

This is an important reminder that we don’t have a meritocracy. We don’t have a fair or free market. Many of the people at the very top with all the wealth are not now making incredibly more money than regular Americans because they are super genius Galtian “job creators.”

Many of these people are making huge sums of money, because we have a system rigged for them, by them. A well trained gorilla could become insanely rich if it had the triple benefit of the Treasury Secretary giving it incredibly useful insider information, the Fed giving it effective interest free loans, and the special carried interest tax loophole so it paid a lower tax rate than a school teacher.

If our top government officials showered regular Americans with even one tenth of the favoritism they have shown to Wall Street, I doubt we would have people protesting in the streets right now.

http://fdlaction.firedoglake.com/2011/11/29/hank-paulsons-secret-of-course-the-system-is-rigged/

[We're all just discards in a plutocracy]

Dylan Ratigan: To Eric Holder – A Simple Way To Prosecute Bank Crimes

Eric Holder and various US Attorneys around the country aren’t
prosecuting bank foreclosures on active duty troops, even though they
know it is happening. Bank regulators know about the problem. Congress
knows about the problem. Certainly, the Pentagon knows about the
problem. Where are the prosecutions? Is there an internal policy that
certain crimes are not to be prosecuted? Isn’t that something the public
should be aware of?

As Congressman Miller put it, “The continued failure to pursue
criminal charges in the face of flagrant violations of the criminal law
is destroying Americans’ faith in their government and democracy. In a
democracy, no one is too big to prosecute.”

http://www.nakedcapitalism.com/2011/11/dylan-ratigan-to-eric-holder-%E2%80%93-a-simple-way-to-prosecute-bank-crimes.html