Retail in a State of “Anarchy” as Consumers Retreat
January 14th, 2008If consumer stocks bounce on the latest Fed confetti shredder action, let’s all work together to draw up a target list of the most succulent pigs to short/buy puts on to profit from a whipsaw back down. My logic is that the rate cuts will cause more inflation, making things more difficult for consumers.
—Helicopter Ben About to Shift the Confetti Shredder Into Afterburner
“Paging Helicopter Ben: We need a sucker bounce out there so we can short some pigs from higher up. Thank you.”
Via: Reuters:
U.S. chain stores, reeling from the slowest holiday shopping season in five years, got some more bad news on Sunday: 2008 will not be any better and could see changes that may shift the retail playing field forever.
As the National Retail Federation kicked off its annual convention in New York, two retail consultants offered negative outlooks for the U.S. retail industry, which has seen consumers pull back amid higher gasoline and food prices, a credit crunch and a prolonged housing market decline.
“It’s anarchy,” said Wendy Liebmann, chief executive of WSL Strategic Retail, frequently repeating the word she used to sum up the latest results of her company’s bi-annual shopper study.
“Americans cannot control the big things such as oil prices, falling home values, mortgage costs and rising property taxes, so they want to control the small things,” Liebmann said. “They are watching what they spend on everything.”
Liebmann said most shoppers were making fewer weekly shopping trips and spending significantly less on discretionary items such as home appliances and decor, fashion accessories, electronics, perfume, computers and software.
The only two categories getting a larger share of consumers’ wallets are food and pet supplies, Liebmann said, noting however, that food prices have increased.
…most shoppers were making fewer weekly shopping trips and spending significantly less on discretionary items such as home appliances and decor, fashion accessories, electronics, perfume, computers and software
Hmmm…looks like anarchy to me! Less conspicuous consumption, less eventual land fill.
Somehow it seems they always leave out the added expense of the high interest charges on many people’s credit cards. This is killing the goose that laid the golden egg, don’t you think?
my favorite, from last year, is HOG (harley davidson) i am short that from 74.9. i very rarely trade equities at all. i am an index trader. However, there are just so many flying pigs right now, that how can one resist:
DIS from > 36
HOG from > 50
HTZ from > 25
AMZN from > 95
all of these noted could be shorted on any price > that posted
cybele
Anarchy, humm.
All that money people are trying to save.
Beware CD’s.
Let’s lock in all those savers (suckers saving in US dollars) into our less than 5 percent for a year or more.
Suckers are born every minute.
Don’t be one of them.
Next month – they’ll be begging us to put our money in their CD’s at twice the rate they offer now.
Yew watch.
As a person that works in retail(furniture store manager), I keep expecting the shoe to drop. And…it hasn’t. The last month or so is up over the same period last year.A lot. The stores near ours(for example Best Buy)are selling a lot. I don’t know if people are just ignoring the warning signs, or things just aren’t that bad for many people. I keep waiting for the crash, and maybe it isn’t coming. Maybe it will just be a long slow fall.
@dagobaz
Short HOG.
I LOVE IT.
@ seanx38
>>>Maybe it will just be a long slow fall.
In the beginning stages, the onset of collapse varies according to people’s ability to avoid reality. People who are overextended and spending thousands of dollars on furniture are clinically nuts. Their properties might even be in foreclosure.
I don’t know where you live, but use this to see how many distressed properties are in your town:
http://www.realtytrac.com/
In the middle, you’ll see: “Search Foreclosures by State!”
Go for it. It’s shocking.
I’ve looked at the collapse of organizations that ranged in size from a household to various sizes of corporations, to states, to empires/superpowers. What I find, without exception, is an almost unbelievable state of denial. In short: People will pretend that things are going fine, until the game of “make believe” smacks into a wall.
Regarding Kevin’s point on collapse: I’ve always found this passage from Microsoft Encarta’s write-up on the Dark Ages/Middle Ages fascinating. This particular bit of text dates back at least 12 years to Encarta ’94, but you can also find it online:
http://uk.encarta.msn.com/encyclopedia_761578474/Middle_Ages.html
“No one definitive event marks the end of antiquity and the beginning of the Middle Ages. Neither the sack of Rome by the Goths under Alaric I in 410 nor the deposition in 476 of Romulus Augustulus, the last Roman emperor in the West, impressed their contemporaries as epoch-making catastrophes. Rather, by the end of the 5th century the culmination of several long-term trends—most notably a severe economic dislocation and the invasions and settlement of the various Germanic tribes within the borders of the Western Empire—had changed the face of Rome.”
Both Joseph Tainter’s _Collapse of Complex Societies_ (1988, ISBN 052138673X) and Jared Diamond’s more recent _Collapse: How Societies Choose to Fail Or Succeed_ (2005, ISBN 0143036556) mention this phenonemon, that societies on the brink of collapse often continue going full-bore until they implode, and in fact cannot contemplate or implement changes that would save their civilization.