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20 Stunning Facts On The US Retail Apocalypse

Tyler Durden's picture




 

Submitted by Michael Snyder of The Economic Collapse blog,

If the U.S. economy is getting better, then why are major retail chains closing thousands of stores?  If we truly are in an "economic recovery", then why do sales figures continue to go down for large retailers all over the country?  Without a doubt, the rise of Internet retailing giants such as Amazon.com have had a huge impact.  Today, there are millions of Americans that actually prefer to shop online.  Personally, when I published my novel I made it solely available on Amazon.  But Internet shopping alone does not account for the great retail apocalypse that we are witnessing.  In fact, some retail experts estimate that the Internet has accounted for only about 20 percent of the decline that we are seeing.  Most of the rest of it can be accounted for by the slow, steady death of the middle class U.S. consumer.  Median household income has declined for five years in a row, but all of our bills just keep going up.  That means that the amount of disposable income that average Americans have continues to shrink, and that is really bad news for retailers.

And sadly, this is just the beginning.  Retail experts are projecting that the pace of store closings will actually accelerate over the course of the next decade.

So as you read this list below, please take note that things will soon get even worse.

The following are 20 facts about the great U.S. retail apocalypse that will blow your mind...

#1 As you read this article, approximately a billion square feet of retail space is sitting vacant in the United States.

#2 Last week, Radio Shack announced that it was going to close more than a thousand stores.

#3 Last week, Staples announced that it was going to close 225 stores.

#4 Same-store sales at Office Depot have declined for 13 quarters in a row.

#5 J.C. Penney has been dying for years, and it recently announced plans to close 33 more stores.

#6 J.C. Penney lost 586 million dollars during the second quarter of 2013 alone.

#7 Sears has closed about 300 stores since 2010, and CNN is reporting that Sears is "expected to shutter another 500 Sears and Kmart locations soon".

#8 Overall, sales numbers have declined at Sears for 27 quarters in a row.

#9 Target has announced that it is going to eliminate 475 jobs and not fill 700 positions that are currently empty.

#10 It is being projected that Aéropostale will close about 175 stores over the next couple of years.

#11 Macy's has announced that it is going to be closing five stores and eliminating 2,500 jobs.

#12 The Children’s Place has announced that it will be closing down 125 of its "weakest" stores by 2016.

#13 Best Buy recently shut down about 50 stores up in Canada.

#14 Video rental giant Blockbuster has completely shut down all of their stores.

#15 It is being projected that sales at U.S. supermarkets will decline by 1.7 percent this year even as the overall population continues to grow.

#16 McDonald's has reported that sales at established U.S. locations were down 3.3 percent in January.

#17 A home appliance chain known as "American TV" in the Midwest is going to be shutting down all 11 stores.

#18 Even Wal-Mart is struggling right now.  Just check out what one very prominent Wal-Mart executive recently admitted...

David Cheesewright, CEO of Walmart International was speaking at the same presentation, and he pointed out that Walmart would try to protect its market share in the US – where the company had just issued an earnings warning. But most of the growth would have to come from its units outside the US. I mean, via these share buybacks?

 

Alas, outside the US too, economies were limping along at best, and consumers were struggling and the operating environment was tough. "We're seeing economies under stress pretty much everywhere we operate," Cheesewright admitted.

#19 In a recent CNBC article entitled "Time to close Wal-Mart stores? Analysts think so", it was recommended that Wal-Mart should close approximately 100 "underperforming" supercenters in rural locations across America.

#20 Retail consultant Howard Davidowitz is projecting that up to half of all shopping malls in America may shut down within the next 15 to 20 years...

Within 15 to 20 years, retail consultant Howard Davidowitz expects as many as half of America's shopping malls to fail. He predicts that only upscale shopping centers with anchors like Saks Fifth Avenue and Neiman Marcus will survive.

So is there any hope that things will turn around?

Well, if the U.S. economy started producing large numbers of good paying middle class jobs there would definitely be cause for optimism.

Unfortunately, that is just not happening.

On Friday, we were told that the U.S. economy added 175,000 jobs during the month of February.

That sounds pretty good until you realize that it takes almost that many jobs each month just to keep up with population growth.

And according to CNS News, the number of unemployed Americans actually grew faster than the number of employed Americans in February...

The number of unemployed individuals 16 years and over increased by 223,000 in February, according to the Bureau of Labor Statistics (BLS).

 

In February, there were 10,459,000 unemployed individuals age 16 and over, which was up 223,000 from January, when there were 10,236,000 unemployed individuals.

Meanwhile, the labor force participation rate continues to sit at a 35 year low, and a staggering 70 percent of all Americans not in the labor force are below the age of 55.

That is outrageous.

And things look particularly depressing when you look at the labor force participation rate for men by themselves.

In 1950, the labor force participation rate for men was sitting at about 87 percent.  Today, it has dropped beneath 70 percent to a brand new all-time record low.

The truth is that there simply are not enough jobs for everyone anymore.

The chart posted below shows how the percentage of working age Americans that actually have a job has changed since the turn of the millennium.  As you can see, the employment-population ratio declined precipitously during the last recession, and it has stayed below 59 percent since late 2009...

Employment Population Ratio 2014

If we were going to have a "recovery", we should have had one by now.

Since there are not enough jobs, what is happening is that more highly educated workers are taking the jobs that were once occupied by less educated workers and bumping them out of the labor force entirely.  The following is an excerpt from a recent Bloomberg article...

Recent college graduates are ending up in more low-wage and part-time positions as it's become harder to find education-level appropriate jobs, according to a January study by the Federal Reserve Bank of New York.

 

The share of Americans ages 22 to 27 with at least a bachelor's degree in jobs that don't require that level of education was 44 percent in 2012, up from 34 percent in 2001, the study found.

Due to the fact that there are not enough middle class jobs to go around, the middle class has been steadily shrinking.

In 2008, 53 percent of all Americans considered themselves to be "middle class".  Today, only 44 percent of all Americans consider themselves to be "middle class".

That is a pretty significant shift in just six years, don't you think?

For much more on this, please see my previous article entitled "28 Signs That The Middle Class Is Heading Toward Extinction".

Despite what the politicians and the mainstream media are telling you, the truth is that something is fundamentally wrong with our economy.

On a gut level, most people realize this.

According to one recent survey, only 35 percent of all Americans say that they are better off financially than they were a year ago.  And according to a recent NBC News/Wall Street Journal poll, only 28 percent of all Americans believe that this country is moving in the right direction.

The frightening thing is that this is about as good as things are going to get.  The next great wave of the economic collapse is approaching, and when it strikes the plight of the middle class is going to get a whole lot worse.

 

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Mon, 03/10/2014 - 21:08 | 4532980 Freewheelin Franklin
Freewheelin Franklin's picture

Well, it takes what, at least 7 years for credit to "reset"? Sure, anyone with just about any credit can buy a new car at 18% interest, but you're not going to get an AMEX with a score of 550. Let's face it. The economy is largely driven by consumer credit (for good or bad). People using their check cards with what is left in their checking accounts after they pay their bills just ain't gonna cut it. And right now, banks do not have to rely on consumer credit for revenues. They got QE to the moon. And, on top of that, the people that do have good credit are not using it because of the uncertainty of the  future. They still don't know how much Obummercare is going to cost them in the long run. 

 

So, there you have it. Reckless consumers don't have credit, and creditworthy people aren't using it, and the banks don't give a shit either way. Besides, all this helps keep inflation low, so then can continue with massive liquidity injections for themselves. It would seem that monetary inflation doesn't just rob savers of future purchasing power, it robs the Middle Class and Working Class of jobs and wages. But at least they will have "free healthcare". Amirite? 

 

 

Mon, 03/10/2014 - 21:11 | 4532992 Bobby Bottles
Bobby Bottles's picture

Although I don't believe in the global recovery, these particular 20 facts only speak to the dominance of ecommerce and the major US retailers that cannot keep up with the changing tides of the retail industry. Eat or be eaten...these companies were eaten...the Blockbuster example alone should discredit this list altogether. Blockbuster didnt know that people may prefer to rent movies online! The WM example speaks to their slow adoption of ecommerce when their largest competitor is Amazon. A lot of people are behind! ZeroHedge doesn't even have a mobile friendly site or app for god sakes!

Mon, 03/10/2014 - 21:17 | 4533012 CrashisOptimistic
CrashisOptimistic's picture

If you're reading ZH while on the move, you are not understanding a tenth of it.

Mon, 03/10/2014 - 21:19 | 4533020 Ifigenia
Ifigenia's picture

dont turn somebody wet dream to nightmare

Mon, 03/10/2014 - 21:35 | 4533064 Bobby Bottles
Bobby Bottles's picture

That makes zero sense (no pun intended)...Tablets are generally a stationary device and mobile content is consumed everywhere. Not to go ad hominem here but, you're clearly over the age of 40 and most likely 90. Millennials get their news via smartphone while sitting on the toilet...if you dont believe me just ask one! 

Mon, 03/10/2014 - 21:52 | 4533118 Stranded Observer
Stranded Observer's picture

You still don't get it.

Mon, 03/10/2014 - 21:56 | 4533128 BeetleBailey
BeetleBailey's picture

LOL!

Sure bud.

"Millenials"...get their "news"...what kind of news do they get?

The latest on Justa Beaver's latest runny dump?

Most "Millenials" I know and run into contact with in daily life get their "news" from jack-assed organizations like Yahoo, or the major MSM puke-em-ups. That and Rihanna's newst fucking tattoo....

Most of these dingbats couldn't find Iraq on a map....dumb as a chicken , self-absorbed, and certainly NOT "tuned in" to anything other than making the Almighty Fed Note debt slave day labor...

 

 

Mon, 03/10/2014 - 22:05 | 4533174 Bobby Bottles
Bobby Bottles's picture

Maybe it's because Zerohedge doesnt have an app or mobile friendly site so, millennials can't find the information. If the problem with this world is that nobody pays attention to the things that matter then, it's on us "informed" individuals to make that information easier to get. I'm right and my arguments are bulletproof...AND I'm a millennial :)

Tue, 03/11/2014 - 03:12 | 4533671 BeetleBailey
BeetleBailey's picture

"I'm right and my arguments are bulletproof...AND I'm a millennial :)"

 

You're moronic and your arguments are asinine

Tue, 03/11/2014 - 15:45 | 4535458 pavman
pavman's picture

You know, I used blockbuster online for years... until they charged me a $1 late fee on a free movie.  I then dropped them and switched to nextflix.  I warned the 12 year old I'd cancel my $20 a month subscription if she charged me $1.  Apparently she didn't know any better.  The irony is that they gave me a coupon for a free rental after that, but it was too late.  This was back in 2010 or so when they still had a chance.  They blew it big time.

 

Can't blame them, hard to see the future is.  But their business model was better...if they had only waived late fees all together.  Let's face, 3 movies @ a time, followed by 3 in-store rentals and then 3 more movies .... Netflix streaming sux because half the movies I want to see aren't streamed.

Mon, 03/10/2014 - 21:17 | 4533014 Ifigenia
Ifigenia's picture

If the U.S. economy is getting better, then why Victoria provoked Russia and fucked EU?

Mon, 03/10/2014 - 21:20 | 4533027 wanwer
wanwer's picture

Remember....Washington is BOOMING.  Do the math. Politicians, lobbyist, political consultants and citizens of D.C. are killing it. 

Mon, 03/10/2014 - 21:51 | 4533113 BeetleBailey
BeetleBailey's picture

Cor-fucking-RECT!

 

The first onslaught of Katusha rockets and bombing needs to take place in the DC Metro area....

 

The nation would run just fine....

 

The fucking-ass-sniffin-motherfucking-gubbermint teat suckin-LIARS!

Tue, 03/11/2014 - 16:18 | 4535588 Kobe Beef
Kobe Beef's picture

Wishing you and yours a Patriotic August 24th. This year it'll be the 200th anniversary. Happy Burn it Down Day!

Mon, 03/10/2014 - 21:23 | 4533040 The Most Intere...
The Most Interesting Frog in the World's picture

"So is there any hope that things will turn around?

Well, if the U.S. economy started producing large numbers of good paying middle class jobs there would definitely be cause for optimism."

 

NEVER EVER going to happen.  Wages will continue to stagnate and even drop further.  There is too much competition globally and within US borders.  Prices MUST come down.  The Feds policy to pursue inflation in the face of declining wages is sick and perverted.

Mon, 03/10/2014 - 21:41 | 4533084 TheMerryPrankster
TheMerryPrankster's picture

Jobs were built on an economy based on cheap oil, the cheap oil peaked in 2006 and we have been walking backwards every since.

Most people don't realize this isn't a normal Depression or banking crisis. Most people don't want to beleive the good old days are gone forever, so they pretend and extend. Living on debt or spending every cent they make on a treadmill of desire chasing a phantom carrot on a tv screen.

Its not coming back, Either learn to scale down while you have the means or it will be forced upon you as the undertow from the collapsing economy drags you under.

After 5 years of no recovery, this should be obvious but there are many who's biases don't allow them to see what is real.

Or perhaps they prefer to pretend the horror show economy is merely doomer porn and that CNN and Time magazine are reality and everything is gonna be peachy keen real soon now.

Mon, 03/10/2014 - 23:40 | 4533457 pursueliberty
pursueliberty's picture

I'm not scaling shit down due to others poor decisions.  I'm growing, investing in things I believe in, and making more money this year than last.  It might not buy as much as it once did, but I'll continue to try and make more.

 

I'm not against a great reset, but let me tell you this.  90% of this site has sat on the sideline, me included to a certain extent, due to this continued 7 years of doomer porn played on repeat like a GIF.

Mon, 03/10/2014 - 21:29 | 4533041 medium giraffe
medium giraffe's picture

Move profits to offshore tax shelter, dump liabilities in the US, repeat.  Because fuck you, that's why.

Mon, 03/10/2014 - 21:27 | 4533045 Bryan
Bryan's picture

I'd feel really good buying a hamburger at McDonalds that was cooked by a PhD graduate.  10+ years of business experience would be icing on that cake.  I bet it would taste extra yummy.

Mon, 03/10/2014 - 21:36 | 4533059 Whoa Dammit
Whoa Dammit's picture

There's nothing really to buy even if one did have disposable income. All the stores sell the exact same Chinese crap. The cloth used in clothes these days surely rivals that once found in the USSR. (it shrinks, it pills, and jeans are made of cold water wash un-denim) Shoes are mostly plastic and wide enough  for duck's feet. Zippers don't zip. Toasters don't toast. Even people who do have a little money  relucantly buy replacement items only when they must because there is nothing at the stores that anyone would want.

Mon, 03/10/2014 - 22:39 | 4533296 AurorusBorealus
AurorusBorealus's picture

You would not believe the prices and quality of clothes and textile products from Uruguay available here in South America.  I have several blankets, 2 pairs of jeans, sheets, and towels... all from Uruguay.  The quality is incredible and they sell for only a little more than the crap from China and the Phillipines.  Also, the shoe industry has really rebounded in Argentina and the quality is impoving dramatically as the price is dropping (in dollars).  As people catch on to this trend, look for quality textile products and leather products to start arriving from South America.  I would also suggest that this is a very good investment for any interested.

Tue, 03/11/2014 - 04:22 | 4533702 August
August's picture

>>>Shoes are mostly plastic and wide enough for duck's feet.

I have come to understand that spending $200+ bucks on decent shoes is not unwise. Frankly, I don't even remeber the last time I bought dress shoes, since the three pair I own don't seem to wear out.....  Support your local cobbler.

Mon, 03/10/2014 - 21:47 | 4533103 JamesBond
JamesBond's picture

so even a dollar store is too expensive now?

 

jb

Mon, 03/10/2014 - 21:50 | 4533107 moneybots
moneybots's picture

"So is there any hope that things will turn around?"

 

No.

Mon, 03/10/2014 - 23:37 | 4533442 tickhound
tickhound's picture

It's a convergence of too many factors of our socio-economic model... Any one of them could tip things over. It's a collision, really.

It's not about humans and civilization. It's even less about growth than it used to be. It's all about consumption. And everything is geared toward this end... Including every solution we are presented with. And if we have to subsidize it, we do it... But only in the meantime of course, until we figure out a way to consume back to a par level.

And let us ignore the inevitability of walmart going automaton. Let's pretend I didn't even bring up that nightmare. Cuz if consumption is half subsidy already.... Geez. Wonder how many corporations will be left after that wave of consolidations? That will influence what you think SHOULD be your life. That influence what you think your choices are.

If you think your vote has little meaning now, wait until only 5 corporations make everything.

Mon, 03/10/2014 - 21:52 | 4533120 yogibear
yogibear's picture

Welcome to the turd world US indebted consuming zombies.

Become a debt slave to the TBTF bailed out banksters, which you will be paying off for decades. The banksters show their thanks by loading you down with debt for a sub-par education.

Eventually the banksters with the help of the government steal the rest of your retirement savings,

Mon, 03/10/2014 - 22:00 | 4533141 Stuck on Zero
Stuck on Zero's picture

A billion square feet?  Isn't retail space something like $500/sq ft. That's half a trillion dollars of empty space.  Wheww.

 

Mon, 03/10/2014 - 22:58 | 4533349 andrewp111
andrewp111's picture

It is only 36 sq miles - about 1/100,000 of the USA's land area.

Mon, 03/10/2014 - 22:00 | 4533143 moneybots
moneybots's picture

"Meanwhile, the labor force participation rate continues to sit at a 35 year low, and a staggering 70 percent of all Americans not in the labor force are below the age of 55."

 

Where are all these 55 and aboves that are supposed to all still be working?  Best way to cut cost is get rid of the highest paid workers.

 

Mon, 03/10/2014 - 22:34 | 4533279 cynicalskeptic
cynicalskeptic's picture

They can't afford to retire and are going to hold on for dear life.  Age discrimination suits can scare employers into keeping people on.

Nonetheless you're seeing serious efforts to cut back older workers.  Employers just have to be very careful in how they do it.

Mon, 03/10/2014 - 22:37 | 4533292 cynicalskeptic
cynicalskeptic's picture

If you REALLY wanted to make a difference you'd be axing all the high paid execs that made this mess.  But that won't happen.  Lots of JPMoprgan Chase employees pissed over minimum COLA - or NONE at all - raises while Jamie pulls in millions.

Hell, if you reduced CEO compensation to the ratios seen in the 60's you could afford to employ THOUSANDS of more US workers.  But those at the top would rather ship work overseas or work people her to death and keep their inflated incomes.

Mon, 03/10/2014 - 22:02 | 4533152 10mm
10mm's picture

Welcome to the 70 's mo fu's

Mon, 03/10/2014 - 22:03 | 4533161 Georgia_Boy
Georgia_Boy's picture

So less than 6 in 10 Americans of working age even have any kind of job? Damn, why is it never me that has all this free time? Think of all the extra friends I could have, the time just hanging out at coffeeshops, how I could finally finish learning spanish, I could think of all kinds of things I would do instead of spending every day in that office in front of that computer!

Mon, 03/10/2014 - 22:05 | 4533171 _SILENCER
_SILENCER's picture

Jesus Fucking Christ on a goddamned roller skate, that's depressing....not the article, Snyder's a scarecrow mostly, but the comments. You cats are right. We're truly are fucked...right in the pulsating mud tunnel, fucked like a hairless twink in Cellblock D.

I'm old enough to remember the good old days of quality American products, China was a ghost, and everyone made fun of "Made In Japan". Now all we export is military power and drone strikes.

But as long as the petrodollar lives, I guess we just stagger on. Soon as our PTB pals figure out how to charge everyone for zero point energy, evertything will be better.

Tonight, bourbon. And titties. Proper American distraction.

Mon, 03/10/2014 - 22:09 | 4533186 nakki
nakki's picture

There will be no recovery until we hit a rock bottom. Wall st and the banks are pure junkies never allowed to hit rock bottom. Same can be said of every nation under the sun. All of Europe, fucked! Japan land of the setting sun. China ghost towns tell you all you need to now about consumption beyond reality. So we're all in the same mass delution. Consumption can only last so long. Ressesion and depressions are necessary. Just like the junkie who has to hit rock bottom so do the debtor nations of the world. One way or the other a big reset is coming.

Mon, 03/10/2014 - 22:35 | 4533285 yellowsub
yellowsub's picture

How about luxury retail?  They seem to weather the down turn better last time around too.

Mon, 03/10/2014 - 22:40 | 4533299 cynicalskeptic
cynicalskeptic's picture

The VERY wealthy are still spending though not so blatantly.  But you're never going to sell as many Bentleys as you can Corollas or F-150's.

You're seeing a shift in marketing for the upscale market in lots of areas BECAUSE they still have money.  The middle class is broke, underwater in houses and footing the bill for overpriced colleges for their kids, while trying to pay down 21% interest credit cards.

Mon, 03/10/2014 - 22:44 | 4533308 I Write Code
I Write Code's picture

Internet shopping alone does not account for the great retail apocalypse that we are witnessing.

No, but mostly, when you consider secondary issues.

First I agree that the decline in average incomes impacts retail, but certainly so does Internet shopping.  More to the point people spend priority bucks on smart phones, Internet connections, cable and Netflix and iTunes, that used to be a constant stream of revenue.

But the big box stores like Target and Walmart have heavily impacted the fancier malls for twenty years now.  So when everyone loses a little traffic the malls take it double-hard.  People are no longer in the habit of shopping for entertainment, at least not shopping in brick and mortar stores.  Another incremental decline in junk.

Finally there's China, that makes everything cheaper, bless their hearts, but that too impacts retail totals.  And just maybe there's a tad less planned obsolescence anymore.  Maybe need a new Obama law that stuff should self-destruct after three years, kind of like he's done to the whole country, yes, that would be his perfect legacy.

That's just off the top of my head, with some thought there might be some other factors too.

Mon, 03/10/2014 - 23:06 | 4533375 drendebe10
drendebe10's picture

Everyone stand up n give a round of ovation to the arrigant narcissistic pathological lying illegal aluen kenyan sociopath for having the wookie buy 17K dresses to support the economy.

Mon, 03/10/2014 - 23:32 | 4533440 TrustbutVerify
TrustbutVerify's picture

Its a negative feedback loop...people feel pinched in the wallet and they buy cheaper foreign goods - albeit at this point, fewer of them. Its what's been going on for decades.  Problem is...they're putting themselves out of work when they do so.  

Down and down we go! 

Mon, 03/10/2014 - 23:36 | 4533447 Parth
Parth's picture

People have too much stuff already. That's why mostly. The country is overextended on credit and not much is needed in an average household. Truly look around your humble abode and find out how much you can put on ebay or craigslist. That's what's happening besides internet shopping etc etc. we are recycling thru the net. The new retail space is your home. I myself have sold a set of golf clubs, crockpot, rotisserie, toaster, massager, etc in the lasts few weeks. So someone did not buy that from the stores.

Mon, 03/10/2014 - 23:41 | 4533461 earl swagger
earl swagger's picture

Brand awareness, especially with the middle class, is alive & well. Outlet malls , phone apps, & brand direct "company stores" will replace department stores.

Aspirational Luxury is everywhere..See new Mercedes FWD 2.0.

Sears has a chance: Hardware & Appliance.. on line & Outlet Stores.

Walmart's merchandising (4 isles of greeting cards), out of stock, and poor customer service will relegate Walmart to low margin/high volume food & gas.

JCP, done.

Radio Shack, done. (See Apple co Store or ATT)

Samsung Company Store.. likely replaces Best Buy.

McDonalds adversely selected for $1 drinks, then drive to Jack in the Box for .97 Breakfast Jack...

Middle class well versed in Brands, and every adverse selection tactic in the book..

Mon, 03/10/2014 - 23:50 | 4533475 Spungo
Spungo's picture

This looks like 20 possible dips to buy.

Tue, 03/11/2014 - 07:58 | 4533837 Jethro
Jethro's picture

Jim Cramer?

Tue, 03/11/2014 - 00:15 | 4533517 kellycriterion
kellycriterion's picture

I have a dollar store idea. Have a few folding chairs and tables. Put in a Kool Aid bar. Throw in complementary crackers and an odd jobs bulletin board. Shoppers can chat, socialize, take a break if fatigued.

Just because most Americans circumstances are reduced doesn't mean we can't have gracious living.

Wed, 03/12/2014 - 17:55 | 4540532 mkkby
mkkby's picture

You'll have homeless people camping out. Ever been to a library lately?  That's all you see is bums sitting around sleeping.

Tue, 03/11/2014 - 00:52 | 4533570 ReligiousAtheist1
ReligiousAtheist1's picture

Excellent Article

Tue, 03/11/2014 - 00:59 | 4533579 pitz
pitz's picture

Too many H-1B's taking the jobs from American tech talent.  Time to deport them all and return bargaining and purchasing power to the millions of unemployed or underemployed US citizen scientists who are submitting their resumes at many tens of thousands per week, to US tech  firms that simply are throwing them in the garbage. 

Tue, 03/11/2014 - 01:48 | 4533614 sixoseven
sixoseven's picture

We have a consumer economy funding a lot of crap retail of Americans in the 'middle class' who buy a lot of crap with their disposable income. All that's going on here is that the disposable income is drying up and Americans are going to have to stop buying crap. All the crap stores are going out of business because Americans are stopping being crap consumers. This means that American garages won't be piled up with crap and can actually be used to park two cars, because nobody's going to be able to afford three. 

The mall is going away. So what? We will stop buying SUVs and minivans and filling them up with crap from the big crap filled malls. Instead, we'll shop online and UPS and FedEx will have the large vehicles. It will all be more efficient anyway.

Same thing with crap junk food. Suddenly, when you have a choice between potatoes and Hot Pockets, you won't spend crap money on crap food. Same thing with designer clothes, $200 sunglasses, and all those crap products that pretend to be tools, like Swiffer. WTF is a Swiffer but a disposable mop. What? It's the old razorblade trick and 'middle class' Americans are thinking they are getting their kitchen floor "3x cleaner"! Yeah right. Broom. Mop. Duster. Buy once keep for 5 years. Simple. That's the way the American economy will shrink. People will start to think twice about expensive non-necessary bullshit and not buy it. American Giant is the wave of the future. Smart, durable goods. No more kitchen remodeling. No more drive mowers. No more craft beer. No more $75 sandals.  No more disposable income for disposable consumer goods. NO MORE HIPSTERS!

Tue, 03/11/2014 - 01:56 | 4533622 Kreditanstalt
Kreditanstalt's picture

For this economy to work, we have to spend money borrowed on credit and we have to spend it on frivolous stuff that allows the highest profit margins, the lowest quality and which we don't really NEED.

You know, salad shooters, poodle groomers, RV salesmen, nail salons, Sunglass Hut, Chinese-made particleboard furniture, and electric toothbrushes...

No one will make a killing if we buy in thrift stores, eat home cooked meals and drive used cars paid for with cash.

Tue, 03/11/2014 - 10:38 | 4534177 Uncle Remus
Uncle Remus's picture

."No one will make a killing if we buy in thrift stores, eat home cooked meals and drive used cars paid for with cash."

Going Galt in place.

Tue, 03/11/2014 - 01:53 | 4533619 Kreditanstalt
Kreditanstalt's picture

SOME Americans, particularly technical staff, middle-management, government & unionized employees and resource industry grunt labor, are doing very well, thank you!

They are hogging all the jobs and salary.  If living standards are doomed to fall, shouldn't salaries be dropping for the big spenders too?

Tue, 03/11/2014 - 02:20 | 4533638 pitz
pitz's picture

Haven't heard of many "technical staff" doing very well.  

Tue, 03/11/2014 - 02:47 | 4533660 kurt
kurt's picture

Wrong enemies. Big Retail has been defeated by Big Petroleum. Track the recession and the price of gasoline. One tank at a bloated time left retail and went to...smoke.

Tue, 03/11/2014 - 02:41 | 4533656 boeing747
boeing747's picture

How are 'Banana Republic' stores doing? and Kohl's, Bed&Beyond, Big Lots and CVS, Payless?

Tue, 03/11/2014 - 04:02 | 4533696 mumbo_jumbo
mumbo_jumbo's picture

"Median household income has declined for five years in a row"

 

LOL what planet are you on pal?? my income and all in my industry has gone no where for 30 fucking years!!  LOL.

wake the fuck up America, where does the first dollar come from to pay the policeman? the fireman? the teacher? the government drone??

PRODUCTION of products world markets wanna buy, no where else.

Tue, 03/11/2014 - 06:44 | 4533768 22winmag
22winmag's picture

Pockyclypse for sure!

Tue, 03/11/2014 - 06:44 | 4533769 22winmag
22winmag's picture

FU Golfer in Chief and all you limousine communists!

Tue, 03/11/2014 - 10:23 | 4534139 novictim
novictim's picture

People are broke.  

This is the inevitable outcome of our economic system.  A few ultimately win the vast majority of wealth and the majority eventually are driven into poverty.  

Tue, 03/11/2014 - 10:36 | 4534167 novictim
novictim's picture

Meanwhile, our politicians and shills for the status quo make comments about "job training", "innovation", "belt titghtening" (that belt is gonna get REAL tight).  They blabber about magical new inventions with zeal and a pure lack of historical context.

Meanwhile, libertarians are waiting for the invisible hand to give them a hand-out.  Magic is the solution?  Really?

How can you play the stock market and not understand the flaw in our capitalist system?

How can you think you can offshore AMAZON, COMCAST/TIMEWARNER call centers, in way of an example, to foreign capitals year after year and still maintain CONSUMER SPENDING?

What magical principle is it that says that when you cut jobs and import foreign H1B Visa holders to gut skilled worker pay you then SUDDENLY get an equal of greater compensation in new jobs and inventions and higher pay?

---

Errr...or is this just due to the weather?  LOL

Wed, 03/12/2014 - 03:29 | 4537596 Kobe Beef
Kobe Beef's picture

It's due to systematically maligned incentives. Executives are incentivized to hire cheap labor. Politicians are incentivized to make it legal. Workers are incentivized to keep their heads down, lest they be next, or go along with the hopes of moving into the executive class.

Wed, 03/12/2014 - 10:23 | 4538455 novictim
novictim's picture

If you don't hire the cheapest labor then someone else will.  That is capitalism.

Was that what you meant?  I agree.

Tue, 03/11/2014 - 15:59 | 4535470 pavman
pavman's picture

The irony of all of this is that I was looking to rent space last year, but the landlords still think the lease market is upscale.  Places with 4+ vacancies wanting $20 - 25 a sq foot (with passthroughs).  WTF.  They'll be lucky to get $15 when its all said and done.

And these property taxes aren't dropping.  Good luck with that.

 

Oh and I'm not broke; I'm sitting on a big bucket of cash.  The problem is I'm cheap, and I know the value (or lack thereof) of what I'm getting.  I'd rather pay labor more and landlords less, and I believe that's what the market is demanding right now, but the landlords are slow like home owners who think their turd is a mansion.  When the SfHTF we'll see it all shake out; hopefully this time it'll be the right correlation between rent and demand.

 

In all reality its much less risky for me to buy and sell in the stockino than lock myself/business into a 3 year lease with ridiculously high yearly bumps.  F' dat. Why would anyone in their right mind sign up for these ridiculous lease rates with these outrageous conditions (triple net no less) and get nothing much in return?!

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