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Kohl's And The Rest Of The Retailers Are In Deep Trouble
Submitted by Jim Quinn of The Burning Platform
Kohl's And The Rest Of The Retailers Are In Deep Doo Doo
“Facts are stubborn things, but statistics are pliable.” ? Mark Twain
I never believe government manufactured numbers. They will always be adjusted, massaged, and manipulated to achieve a happy ending for the propagandists attempting to control and fleece the sheep. Yesterday, the government produced retail sales numbers for August that were weak and the corporate MSM propaganda machine immediately threw up bold headlines declaring how strong these numbers were. Positive stories were published on the interwebs and Wall Street hack economists were rolled out on CNBC, where the bubble headed bimbos and prostitutes for the status quo like Jim Cramer and Steve Liesman declared the recovery gaining strength. Woo Hoo.
If everyone else is whipping out that credit card, why aren’t you? Credit card debt has reached a new post recession high. They tell me consumer confidence is soaring. Forget about the 92 million working age Americans supposedly not in the labor force. Forget about real household income hovering at 1999 levels. Forget about median household net worth still 30% lower than 2007. Forget about what you see with your own two eyes in malls, strip centers and office parks as you motor around our suburban sprawl empire of debt. Those Store Closing, Space Available, and For Lease signs mean nothing.

I didn’t get a chance to peruse the commerce department drivel until this morning. They put out unadjusted data and adjusted data. Shockingly, the adjusted data is always rosier than the unadjusted data. I wonder why? I can understand the rationale for adjusting month to month data due to holidays and calendar events. But I still don’t trust the adjustments. There should not be a major difference when comparing year over year data. The adjusted data should reflect the same relationship to the unadjusted data on a year over year basis. Well guess what? It appears our friendly government drones may be pumping the current data to give the appearance of recovery. Here are my observations after taking a look at the government propaganda report:
- The unadjusted retail sales were only 3.2% higher than last August. Considering government reported inflation of 2%, that is a pretty shitty result. But have no fear. The “ADJUSTED” retail sales for August were 5.0% higher than last August. WTF? Guess which number gets reported to the sheep?
- Hysterically, your government drones consider lending deadbeats $40,000 for seven years with no money down to drive away with a GM deathtrap SUV as a retail sale. The billions in subprime auto loans led to an 8.8% YoY surge in “ADJUSTED” auto sales. It seems the unadjusted number only went up 5.3%.
- When you back out the Federal Reserve/Wall Street pumped auto sales, which will ultimately result in billions of written off bad debt (you’ll pick up the tab), unadjusted retail sales were only 2.7% higher than last August. With real inflation of 5% or more, real retail sales are negative on a year over year basis.
- Despite financing deals of 4 years with no interest, furniture and electronics retail sales were flat versus last August. If there really is a housing recovery and 2.1 million more Americans are employed versus last August how could these discretionary sales be flat, and negative on an inflation adjusted basis?
- Grocery store sales were up only 2.1% over last year. Even the government is reporting 2.7% food inflation in the last year. We all know it is closer to 10%, so people are actually reducing the amount of food they are buying. That is a sure sign of an economic recovery.
- Clothing store sales were flat and department store sales were negative versus last August. So much for the back to school storyline. I do believe August is back to school time. The Sears and JC Penney Bataan Death March trudges toward bankruptcy.
- What did surge was sales at restaurants and bars. They soared by 6.8% versus last August. We already know Darden, Yum Brands and McDonalds have reported dreadful results, so either the government is lying, soaring food prices are being passed on to customers, or people are so depressed by this awesome economic recovery they are drinking themselves into a stupor.
As a side note on the accuracy of this government data, in a previous role at IKEA, when I was a much younger man, I was responsible for filling out the monthly government retail surveys for the Census Bureau. The government drones collecting this data do not check it. They do not require proof that it is right. It is self reported by retailers across the country. Filling out this crap for the government was about as low on my priority list as whale shit. If I was really busy, I’d make the numbers up, scribble them on the form and put it in the mail. The numbers the government are accumulating are crap. And then they massage the crap. And then they publish the crap as if it means something. It’s nothing but crap.
When you see the headlines touting strong retail sales, you need to consider what you are actually seeing in the real world. RadioShack will be filing for bankruptcy within months. Wet Seal will follow. Sears is about two years from a bankruptcy filing. JC Penney’s turnaround is a sham. They continue to lose hundreds of millions every quarter and will be filing for bankruptcy within the next couple years. Target and Wal-Mart continue to post awful sales results and have stopped expanding. And as you drive around in your leased BMW, you see more Space Available signs than operating outlets in every strip center in America.
My anecdotal proof of this relentless slow motion retail trainwreck is twofold. We received our second 30% off discount coupon from Kohl’s in the last three weeks. We are so indifferent to these constant offers that we didn’t even use the first one. I have to wear dress clothes to work every day, so I went over to Kohl’s this morning when they opened at 8:00 am to get some dress shirts and pants.
The parking lot was an oasis of empty spots and there were maybe 5 customers in the entire store. I went to the mens’ section and was shocked to see about two dozen 60% to 80% off racks. There are usually two or three racks. The store was overflowing with summer merchandise. Summer is over. The store should have been overflowing with Fall merchandise. They are clearly in the midst of an inventory disaster. I found excellent dress shirts on the 70% off rack. Everything I bought was at least 50% off, even before my 30% coupon and another $10 menswear coupon.
I live in a relatively upscale suburban area and still this Kohl’s is an absolute disaster. Their gross margin is going to be hammered. Profits are going to implode. Kohl’s has always been a favorite retailer of the middle class. Decent quality at reasonable prices. Their comp store sales were between positive 5% and 15% for years, until the 2008 financial collapse. Their struggles since then coincide with the decline of middle class incomes and the fake jobs recovery. The fact that they are spiraling downward flies in the face of the propaganda being spewed by the government and media.There is no recovery for the average American.
My second data point happened on Thursday. An accident on the Turnpike forced me to take Lincoln Drive and Germantown Pike home from work (1 hour and 55 minutes of agony). I hadn’t taken this route in about six months. Germantown Pike winds through the Chestnut Hill section of Philly. This is an artsy fartsy area with boutique retail, chic outlets, and fancy restaurants. The upper middle class frequents the area. The retail stores were always open, occupied and busy.
Not anymore. I saw dozens of empty storefronts, Space Available, and For Lease signs. The open stores had no customers. The trendy eating establishments had few patrons. Even the yuppie latte drinking areas are beginning to crumble. Every office park I passed had Space Available signs in front. The amount of vacant retail and office space in this country is too vast to comprehend and is being under-reported by the real estate whores whose job it is to rent space. Ignoring the facts and the truth doesn’t change the facts and the truth.
Do you believe the government and the corporate media, or do you believe your own two eyes?
You can ignore the government reported happy talk. When retailers and restaurants report their actual sales and profits, the truth shall be revealed. It will set you free.
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Two wheels and I don't get along very well. I know how to operate the controls. That's quite a bit different from knowing how to ride.
Ah, but which one?
You aren't one of those simps paying an extra $30k for a Civic with a different badge (3-series...) are ya?
2008 750i
That's acceptable but the iL would have been better.
Just my opinion, of course, but Bangle made the back end of that car resemble a Dodge Stratus. (Not that there is anything wrong with resembling a Dodge Stratus, as they say.) Other than that, no complaints.
I have my eye on a E9 CSI 74....bought for cash.
RIPS
Good Eye Quinn. In Pittsburgh Kohl's was the same as described. Pittsburgh is a little different than Philly because it survives on UPMC and dying people. It should do quite well in the future.
Same here in California.
Went in last Saturday around noon (prime shopping hours?). For the first 5 to 10 minutes I was the only shopper in the entire menswear section. During the hour that I was there, there couldn't have been more than 5 or 6 other customers passing through that section.
This despite the 30% off and $10 off promotions...
What ever you do Dont shout FIRE
My gutter installer put it best. I have had a great couple of years because I am one of the few left in my area. He said most of his competition ended up working at Home Depot probably part time yet counted as having a full time job.
The fixed income crowd makes nothing. My 83 year old mother gets half what she used to, Then you have the unemployed, under employed and growing number of pensioneers let go from their jobs. If not for the Stock Market and Federal jobs/state which as provided wealth/income for the few the country would be a wreck.
My friends that used to sell goods at large Flea Markets and County Fairs say that market is dead. Many made their income that way. What is selling here is the funnel cakes, fresh lemonade and other food which is indicative of the overall economy.
States that drill such as Texas, Dakotas have seen a surge. Many states are not so lucky.
A large percentage of the population is actually moving up the income ladder too and would never show up at a county fair or flea market to buy anything. Just saying.
That's so ridiculous you should be embarrassed for posting that.
LOL, did you forget the sarc tag? Because only the top few percent are moving up the income ladder at the expense of everybody else.
Wait! Are you tellin' me it's all a fuckin' lie?
The best part is that Wall Street has pumped Kohl’s up to a 5 year high. The muppets will be left dead in the street again.
Meanwhile, in the real world their sales are flat over the last three years and profits have declined by 24%.
To make up for this dreadful performance the CEO has bought back 80 million shares of stock.
American retail at its finest.
Meh...we will be fine. Once the Fed gets done buying treasuries, they move into buying shirts and bedding by the billions from Kohls.
http://www.kohls.com/product/prd-1622904/nike-potential-performance-shorts-boys-8-20.jsp
We ain't buying shit.
Won't be long before people who ain't buying shit are labeled 'selfish', just as those evil hoarders of cash.
The 'evil hoarders' are actually evil 'anal retentive' money hoarders and the people that 'ain't buying shit' cannot afford to anymore. The ruling class is selfish whereas the 99% are just surviving, and cannot be labelled 'selfish' by anyone, ever. We all know who has the wealth, and where it was transfered to. Selfish is not a characterization that can be levied against Joe consumer if you take Joe consumer's disposable income from him through unemployment. Helicopter drops of cash are the only solution without any other form of economic intervention. One cannot expect Joe consumer to start printing his own bank notes like the FED does. If the FED does not work it gets paid no matter what. Joe consumer has no paycheque anymore, and is outlawed from printing money by a larger criminal cartel with legislative backing from more crooks at another level of a superstructure of even bigger hoarders. Sooner or later the whole damn house of cards topples due to design architecture that cannot withstand the sheer weight upon the edifice foundation. Presently, the 99% cannot spend or consume if they wanted to. Debt-to-savings ratios do not exist in an economy built on debt without savings. Selfish does not compute with unemployment/debt/unemployed/bankrupt/chapter11/part-time/temporary foreign workers/etc.
I did my part today by putting 4 new tires on my daughter's Audi.
Fucking quattro. No way to replace two at a time.
At least tire prices are down since the last time i bought tires for that car. About $30 cheaper per tire for the same Potenza all seasons.
Now i'm all salty for dropping $750.
$750.00 is pretty high for four tires IMHO, but you are a good father for
looking out for the safety of your children. An accident would have cost much more than $1000.00 so, you are actually saving money in the long run, and you are going into winter without worry for tire treads, and traction in slush n' snow. Keep up the good work!!
p.s. my dad helped me out with car costs when I was younger as do most dads IMHO. You will get a partial refund on Father's Day with that next sweater, tie, or box of chocolates.
non shopping terrorist. next you will try beheading a few chain stores.
I see much the same on the overbuilt West Coast with the exception of the Apple store, it is always busy. Stores are mostly empty and failing left and right, but ironically many times there seems to be a bigger fool available to sign a lease and try it again. If you sign a lease with a big mall owner, they own you, your soul, your first born, and everything else for 7 years. You will sign a personal guarantee and if your business fails you will not escape the wrath of their legal department. You will be forced to file for bankruptcy protection and they will still take everything you have. Probably the same applies for most shopping center property management firms. Large chains that close stores probably just write it off.
If America quits borrowing (read credit cards) and shopping, there is almost nothing else left. This economy is 75% gluttonous consumption fueled by near limitless debt. What will replace it? What happens when everyone has a dozen I-Phones? Do we really need more cars, houses, apartments, toys? Janet and the bankers are praying that low rates and easy money will keep the fools borrowing and buying. Nearly every time I go into a grocery store more than one person is using an EBT card and they have 5 kids in tow.
The ‘recovery’ is all a debt-fueled illusion. Create money and push stocks higher and higher. It seems a great many people are living one paycheck away from disaster or have no paycheck at all. But they all have the newest leased I-Phone. When the Fed can do no more and the markets tanks, there will be serious social unrest.
I do need a few more motorcycles in the garage. But, I buy used.
I buy salvage title wrecks--- do the paper work, rebuild and ride cheap-- got couple of 2004 Buells that I rebuilt from the ground up-- my kid is riding a R1100R that is a fixer upper ---done everthing from a 350 RD to a 900 SS duc ---It's a hobby--
Southern California here. It's a hodge podge. Pockets of booming wealth and mega-priced hot cake luxury homes (all cash sales to foreign middle level oligarchs) to strip mall hell with many vagancies and rapidly turning over businesses. In my area one strip mall owner doubled the rents or tried to. The Trader Joe's just shut down. I figure the mall owner considered them "trapped" there. The "Party Store" also left and moved literally across the street to another empty strip mall spot. Now the original strip mall is left with a Kohl's and a variety of crappy small "enterprises" (nails, pizza, etc.), except the "Halloween Store" has moved into the old Trader Joe's. That's not a sign of a good economy.....yet the upscale mall/strip zone a few miles away can't seem to expand fast enough, though it also is loaded with Kohl's, Target, Dick's, Nordstrom Rack and on and on.
You are in 91786. The only thing missing from your otherwise excellent post is mention of the Super Wal-Mart south of the 10 freeway and the concomitant EBT slugs infesting your area.
The Inland Empire is collapsing...
Another phenomenem is how retailers are stealing markets from eack other but with stagnant overall sales. Christmas Tree Shops now sells OTC pharmaceuticals. Home Depot into snack food. TJ Max into furniture. Walgreen into healthcare centers. A&P into liquor. Tractor Supply into apparel. many food stores into flowers and wedding arrangements l----and internet taking from everybody, especially large box stores. It seems there is an oversupply of consumer products available from foriegn suppliers but with waning demand from middleclass consumers driving retailers to scramble for sales and the Fed boxed into a corner with no more ammunition.
I see a push towards local goods where I live...especially with food. Wife and I love the Farmer's Market. Among other things, we were able to put up peach preserves. The canner is going to get a workout next weekend, too.
That's some market share theft I welcome.
Our chickens are really starting to produce, 12 hens and we are getting 7 or so eggs a day now, still a little on the small side but so tasty.
My wife uses the phrase, "Richer taste".
Good observation. I was in a Staples a few weeks ago and they have a huge display of snacks, drinks, nuts, etc. along with panels of "gift cards" to other retailers and restaurants. It's laid out along the directed pathway to checkout. This wasn't some incidental rack with some crap on it. More like an aisle in a 7-11 with crap on it. Can't see that outlet remaining for long -- the store has been almost empty the couple of visits I had to make.
The past three times I have been to Staples to buy a technology product, I've handed them the chit and they return from the back claiming they are out of stock. Methinks they are running the inventory very thin to conserve cash.
Chicago-Midwest here.
Menards (regional big-box home improvement to rival Home Depot,) has been incrementally expanding home consumables, like boxed and canned food. It's one thing to sell root beer (and Sprechers at that, hell yes!) but to expand to cat food specials? Um...
Alibaba sucks everything dry. Even California.
There's only so much balance sheet jujitsu that these zombie retailers can perform before they are buried. I would hate anyone to lose their job but at the same time, I can't wait to see 90% of retailers vanish and old strip malls and parking lots turned back into farm land.
It truly would be progress to see suburban/exurban strip malls torn down, the trash hauled off and farm land resurrected. Sadly, the decaying and toxic construction materials will just sit for years. I'd suggest, at a minimum, that the huge parking lots become ATV courses and keep those "hobbyists" off of wild lands and national forests.
Same goes for Macy's, JC Penny, Sears, Boscov's, etc.
I ask cashiers questions about how business is... I get honest answers and they are all the same: "It's really been slow lately". It's amazing what you can learn with simple small talk.
I've been wearing the same clothes to work for four years. Mix and match blouse/skirt/pants can produce about 20 different outfits. Finally decided to update when the post Labor Day sales were on at Macy's and Belk. I kid you not: I was the ONLY one in Belk at 10 am on a Saturday, and walked over to Macy's and was one of probably five customers.
Only four years?... you're stylin! -lol
Me?... I've been wearing the same clothes for 7-10 years. If the crotch of my jeans did not wear out, I'd go even longer. Jeans today are crap and only last 50% as long as the ones in the 80's and 90's.
Have you bought a pair of shoes lately?
Damn straight. Plastic and paper shoes. Real leather is hard to find and pricey too.
Yes, about 6 years ago. I have several pairs of sneaks and I alternate them... lasts a long time. Dress shoes last me over 10 years.
I have quite a few pair as well that I alternate and last fairly long. I've also realized it's not all that awful to wear a "dead man's shoes", meaning nice used ones on Ebay. Both dress shoes (like Bruno Magli) for $20-30 bucks and little worn (if at all) Danner or Red Wings for under a $100 and some of those will last a lifetime. However, there is a tremendous amount of horribly made footwear on the market these days. One has to be selective. China makes such wretched products unless the US owner rides their asses on quality control and few do.
I'm still rocking my Vasque Sundowners purchased in 1994.
My Redwing steel toes also hold up incredibly well
The only pair of shoes I bough from Kohl's lasted less than 3.
Fuck that tribe member and his POS merchandise.
Admittedly, my wife thinks I'm a hopeless case but I have a number of shirts that are over 10 years old. Here's two truths - (1) when you're a man over a certain age no one (except possibly your wife) gives a shit what you wear and (2) if there is nothing wrong with a shirt why not keep wearing it.
I had a picture of the family in a little frame from about 15 years ago, I was embarrased to see I had on the same shirt I was wearing in the picture. Seemed odd.
I have a guy in my department who wears clothes that had to be made in the 1980's. He is 61 years old. Embarrassing as hell. I can't stand looking at him sometimes. Shirts that have elastic at the waist, WTF?
I bet he has no debt and a larger net worth than the entire rest of your department put together...so who is the embarrassment?
Callling Elvis, is anybody there? Oh yes. Right. Let me put on my hearing aid.
You are so right. Only the grannies will look at me....once in a while, and last week was a first: A patient said " I was expecting to see a younger doctor!"
So from now on, I will get clothes at goodwill.
Maybe Kohl's should issue 0.01% fixed rate credit cards...it's worked so well for banks and our economy. I wonder if they can talk our gub'mint into backing those loans?
Well really hard to see this considering I went to the fair or tried to and so many people it turned me off. So we went for a drive and I was looking everywhere was full and no space was left empty now maybe its because I live in Oklahoma City. But my ex business partner lives in Clearwater and he reports the same. The northeast which is where I was born has been dilapidated for decades and I often as a child thought when we passed the sign that read this is where America starts that it was a shithole and so happy we moved away when I was 5. Now Im sure you think I am one of the basement dwellers that don't have a clue of whats really going on. Thats not me I am conservative to a fault invested heavy in PM. And thats a whole other story. I do realize a lot of people must be hurting but after generations of people learning that you don't have to work and the govt cheese will take care of you. My feelings are those people will get whats coming and if you work you don't have to spend all you have made save for the bad days that will come as they always have. Im 46 yrs old and I get it Propaganda runs on both sides but all is not bad
You speak the truth - not everywhere is decaying. I travel frequently to Mountain View, CA. You may not have heard of it, but it is the home of Google and it is booming. They are building enormous new apartment complexes, Basically razing an entire block and constructing a block-sized apartment building in its place. The restaurants on Castro St are filled to capacity every night of the week with young dot-com 2.0 hipsters and children of dot-com 2.0 hipsters. If you live in Silicon Valley it's La Dolce Vita.
Even in a depression there are pockets of "boom". Obviously the energy sector is solid as are communications/internet/IT -- that's fundamental global infrastructure at this point. No doubt money is still flowing around Hollyweird as well. These anecdotal happy stories are very limited. Stagnation and contraction are occurring outside of those. When 50% of home sales are "all cash", you need to step back and think about that.
Exactly the same thing is going on in Ontario CANADA. For Lease is
the most popular storefront window _everywhere_. Since 2008
March 10th @ 11:00am Bear Stearns time the disposable income
normally used to buy 'stuff' has gone towards increased fuel prices,
interest payments, increased food prices, and government taxation
that never seems to abate. The trend has been demonstrated across the board so that every person in North America is well aware of the downturn. And every day the corporate shills announce on radio, and television , that things will improve next business quarter. So far we have had the exact same promise of improvement made for 24 business quarters without deviating from the corporate script of improving market 'fundamentals'. This is the first article I have seen on Z/H in that duration of time that tells it like it is. And there was no need to massage the data or propaganda. Clearly, America is now officially bankrupt and down for the count!
Welcome to the Central Planning Nightmare engineered by the functional illiterateii in the Investment Banking industry and the SEC.
Chalk another one up for the USA exceptionalists on Wall Street.
I read the doom and gloom on zerohedge and I can't relate to much of it. It's not that bad where i live - Minnesota. I don't see empty parking lots at malls. No doubt retail is overbuilt, we should lose some chain staore because of that. We do have an invisible poor. My daughter works as a cashier at a large discount grocery store and she told me over one third of the customers pay with an welfare card of some sort. It's called an EBT card in MN. In MN we pay off the poor rather than provide a better business climate that would give them jobs.
MN is a transplanted Al Shabaab,Somalian, fool's paradise.
The beheadings and the institution of sharia law are already gainng momentum.
How could you have been so stupid?
MN is a transplanted Al Shabaab,Somalian, fool's paradise.
The beheadings and the institution of sharia law are already gainng momentum.
How could you have been so stupid?
The largest population of Somali Muslims in the US is in the Twin Cities area of Minnesota.
The second largest is in the Columbus, Ohio area.
fucking lutheran social services. somebody should really knock some sense into those assholes..
BREAKING NEWS:
Ukraine Crisis | 146% PROOF of Russian Invasion of Ukrainehttps://www.youtube.com/watch?v=Bh_zQltv-BQ&list=UUdnB82ob_V7EXwwcCtB1vU...
The only cash flow holding up the system outside of oil and gas is government transfer payments and government employment directly or indirectly.
unless the republicans have a plan to balance the budget this spending can be funded indefinitely with printing money
why cant this go on for another 20 years?
We have a budget???
It can for 120 years.....but it won't matter for obvious reasons
Eventually the fuckers run out of fuckees and since it's all globalized, the fuckers will eventually be fucking with other fuckers. Two fuckers together does not make for a good deal. With all the CB and government meddling in markets who knows what is what anymore. Commercial RE should have imploded long ago but CB's have been rolling over debt and making even more debt available for developers, propping up REIT's etc. Many of the smarter developers don't have an appetite for it but there are those willing to step up and take it. Developers know individual commercial RE space is dead but there are those that buy into recovery meme thinking things are going to change in a few more years.
I don't think it is going to take 20 years for the recovery right around the corner meme to die.
Balancing any bodget is impossible. The RINO NeoCon amnesty Repubs are just as evil. McCain, Rubio, Flake, Alexander, Corker, Graham - they are no different then the Dems.
Comml real estate has gone big into building apartments. Locally - more small strip malls. There is this one area that with a 2.0 mile radius is probably 12 fast food to casual dining places with 4 more coming on line. Add in casual places with a waitress and you add at least 5 to 7 more. If it wasn't for EBT and endless govt money - I bet only 4 or 5 would survive.
why cant this go on for another 20 years?
Here's why - our current system of ever expanding welfare payments and welfare rolls depends on the middle class to produce enough wealth such that part of it can be siphoned off by the government for transfer payments. The govt cannot simply "print" the money it needs for welfare payments. The banks would never allow it, because it would debase their main asset - money. The problem comes because in order to fund the ever expanding welfare system you have to squeeze the middle class more and more which slowly but steadily kills the middle class. Either they get downsized and join the welfare rolls or they just get frustrated with being a tax donkey and voluntarily drop out of the system. No middle class means no welfare payments.
"...around 70 percent of American families are receiving more from the government than they are paying in."
http://www.forbes.com/sites/jeffreydorfman/2013/12/19/romney-was-wrong-a...
This will not go on. Imagine the fun when the EBT cards are no longer auto-charged up each month, that day when the SHTF.
Very telling how you forgot to mention the 5 trillion wasted on fakes "war on terror". Keep on spreading dissinformation.
And another multple trillion wasted on the "war on drugs". Millions of people incarcerated for non-violent crimes at a cost of roughly $50,000 a year each. How about the 5 million federal employees sucking up massive wages and golden benefits?
Never ceases to amaze me how small minded posters scream and cry about the poor fools getting their lousy couple of hundred a month in food stamps while ignoring the trillions raked off the ecomomy by the banks, the health cartel, military-industrial complex, corrupt federal government and so forth.
Well Binko, just keep in mind that these things are not mutally exclusive. On Sunday I bitch about the SNAP mob, Mondays are to rail against the Joos, Tuesday is for Corzine and Dimon, Wednesdays it's "fuck Bernanke" and granny Yellen. Finally on Thursday I can take a break before working myself up for the weekend complaints about the price of gold and the NWO. Geez, I forgot to include Lockheed and Boing in there.
That is not strictly true. Money is just digits. Real wealth is goods. Real things. As long as someone or something produces the goods, the government can pay for it with printing. The problem comes when the goods are not produced in your own country.
You forget the most important step: it isn't taxing the middle class. It is taking the BUSINESS for the redistrubution (they are the easiest target; business fees, liscence, et al), who then build all those redistribution costs into their product cost. Seriously what does an iphone really cost? A dvd? Ad infinitum...
Hey! I just read this over at the guy's website.
Pretty good article!
Thanks for spreading the info, Tyler(s).
But sales of private jets are up, housing has never been in a bigger bubble and we get to see wall street pay themselves record bonuses with the trillions we printed for them!
The boomer generation has so much unused furniture, clothes they haven't worn and tools their dumping to downsize and reduce costs for retirement stores will have problems for at least another decade.
Go to craigslist and there is great furniture cheap or free. Boomers have to get rid of their junk and it's just starting.
I've donated 80% of all clothing. ....I have enough to last till you know when. I'll not buy much for the future.
But I am not a slave to fashion
Put very simply, if this article holds true then the US sounds very much like it is the same mierta as Spain.
Spain is a lovely country with great people, and I've no doubt the US is too (met plenty of yanks, generally positive experience, have rellies over there, really should visit). Sadly, Spain is economically utterly bolloxed though, by the same merry folk who are doing you guys over, so the self same signs but multiplied by your way bigger economy cannot be a good thing.
spain is a lovely country wasted on its people.
We've even got completely empty dead malls in our area.
Even more shocking, they're still building new ones. I will never understand retail or commercial real estate.
We still have some new malls that have recently filled by 50% the last 3 years. Washington and Wall Street hype has enticed people to open businesses that are only surviving. A couple of storefronts vacated in the new strip mall.
Plenty of vacant malls these days.
Over the last 6 years banks/financial/education/health corporations and schools have taken over technology shuttered buildings.
The people building them obviously don't understand retail or commercial RE either.
As a former general contractor and real estate investor, let me tell you that it takes years, YEARS, of skulduggerous, violent politicl sledgehammery, bribing of zoning boards, bureaucrats, and other nefarious government shadowy moneysuckers and mitigating semi-crooks to get a building project off the ground and out of the clutches of those black-hearted bastards. It takes so long from project inception to project activation that the viability of a commercial project can turn upside-down, while you are building it.
I left the business 20 years ago. With the Ovomitic ilk and a lashing tail of increasing satanic filth spreading abroad, I can't even imagine the soul-staining darkness into which one would have to sink in order to actually see a project liftoff nowadays. Our own involutional descent into antichristian cultural devolution has broughtthis upon us.
Congratulations to the progressive jihadists who have brought the greatest nation in the known history of the world to its destruction.
Enjoy the fruit of your labors. Explain this to your own grandchildren.
who, whooo
Bossman 1967
Regarding your fair experience. When I mentioned Fairs it was about hard good sales. For example in Georgia at our largest fair the traffic was huge but no body was buying. So yes some of our county fairs are packed to buy food, do thrill rides, pet the animals but people that are selling, jewelry, wood products. shirts, ornamentals are not profiting nearly like they used to. I went to 6 fairs last year to talk with the vendors and most all (except food) were furious for having to pay to exhibit when sales were awful.
Also your Oklahoma is home to the Fracking industry. You guys are really Fracked and probably making a lot of money. I am still not sure about the evironmental impact to water tables and earthquakes but for now fracking is helping many economys.
The fault in the logic presented here is believing retail in America exists to sell product to American consumers. It simply does not.
Retail exists as a storage depository to create fictitious revenue in order to increase the perceived value of the corporation's shares. Real sales at Kohl's may be terrible but through accounting tricks, inventory adjustments, share buybacks, and flat out lies the numbers will be reported as nothing but positive. The result, fueled by cheap money from the Fed, is a surge in the stock price.
Is it any wonder that almost all of an executive's compensation is made from equity shares. Do you think any company could pay a CEO anywhere close to what they receive from selling shares out of actual sales? Plus the fact that most CEOs and Directors today are paying themselves millions by having the company they helm purchase the shares they hold. Insanity of pristine clarity.
I know retail sales are a scam. I've proved it by living it. The reported numbers fail every logic test. Let's take Nike for example. Supposedly the largest footwear company in the world. At many stores Nike represents over 60% of the shoe rack and over 60% of apparel. At Foot Locker the numbers are closer to 85%. It should stand to reason that if Nike represents over 60% of the retail shelf space, you should see Nike shoes and apparel on 60% of the people walking around. But you don't.
One reason why Nike must pay an athlete almost 1/4 of a billion dollars to wear their products is the products are horrible. Wearing Nike is actually a liability. A professional athlete is far more likely to receive a career threatening injury in Nike equipment than almost any other product available. Ask professional catchers how well the Nike mask protects them. Every catcher who wears a Nike mask has received multiple concussions that could have been prevented had they used better product.
That is why the stock market is not allowed to go down and interest rates to go up. Retail sales are a function of being able to use cheap debt to channel stuff inventory that will never be sold, so corporations can fake revenue to goose EPS and pay executives lavish compensation packages made out of fictitious equity.
The mirage disappears when the free money stops. Just like it did in 2007. Real consumption never chaged. In fact from 2007-2009 real companies that produce real goods of value and didn't rely on Wall Street to make payroll never had it better.
Funny, I recall a related exchange with the really well-informed owner of one of Chicago's first running shoe stores (in the '70s). New Balance was relatively new to the market, and I bought a pair, but the interesting part of the chat was that I asked him why he didn't carry Reebok, which was also new, at least to the American market. He replied (I'm paraphrasing) "They're made of garment-quality leather, so they feel soft and comfortable when you try them on, but offer very little support and will not be at all durable."
This was, in retrospect, interesting on several levels. His refusal to sell a product that he didn't believe in, but would have made him money, is now, sadly, anachronistic. And while his assessment of the product was accurate, the marketing dollars spent by Reebok trumped their poor quality, much like NIKE and so many other subsequent, successful company models.
JQ,
I'll take a minute from my coffee fueled Sunday Am to bring you up to speed on Kohl's.
1st, no one pays sticker at Kohl's. The reason is sticker is an easy 30% above market....always. If you don't use the 30% postcard from your mailbox, you aren't even close to paying comparable retail. Their marketing plan is IDENTICAL to BB and Beyond. So one always starts a 30% off and goes from there....amd even then Kohl's margin is JUST FINE!
Now, I'm not a retail cheerleader, infact, I see decimation even at the WMT retail level, but if you're thinking of shorting Kohl's, maybe think again.
Exactly right. I have been in there a couple of times when I needed a cheap suit and casual clothes, after going to other retailers first. The clearance discounted price was the retail price at other stores that carried the same line of clothes. I don't go there anymore. Why would I?
I visited Kohl's just once, in Santa Fe. Filthy, dirty, dark, with nothing worth buying or even looking at.
nice. very nice. tell it like it is. excellent piece.
sometimes they wear us down with their same shit different day MSM meme which gets us to stop talking about how horrible things in this country are and getting worse.
they use a constant onslaught of bullshit fake numbers like the ones you astutely observed and reported.
the sheeple are happy.
America is continuing its rapid decline into a similar fate as the Roman empire.
I haven't bought any new clothes in years, when I did, I went to Sierra Trading Post and bought discontinued and/or clothes with small defects like stitiching etc.
Sierra Trading Post is really good.
The Ruins of Detroit going nationwide!
Careful now, that's my home-shithole you're talkin about. ;)
speaking of Detroit and GM, how are things going for that company? in law just got a job at the Millford proving grounds. Hired on the basis of a videoconference interview and on line resume only.
A Milford man?
Will the Radio Shack bankruptcy be the Lehman moment?
Will my TRS-80 finally become a collectors item?
Better to dig out your old Radio Shack CB radio for community defense.
Where am I gonna go to get the stuff to etch my own printed circuit boards??
Just buy breadboards and solder on the leads.
The author of the article lost me when he said he buys "men's dress clothes" at Kohl's. Seriously? Kohl's is a great place to buy casual clothes for your 1 to 5 year old kids. But adult clothes? That selection is for a fairly low income consumer.
Kohls is like family dollar, but with higher prices.
Low quality.
Kohl's is like JC Penny but 40% more in prices. Target is 10x better than Kohls. I used to shop a bit at Target but Hope & change cut out all shopping. F em. Dayton-Hudson (Target) is another Minnesota Democrat family like Kohls. Mark Dayton gov of Minnesota. After Target's 110 million name customer data breah, they have been sucking. F em too.
I wonder how many of those dying strip malls were built using tax payer money via "Public/Private Partnerships"?
Almost two years ago during a television interview on Bloomberg, Harvard economist Steven Roach put a retail sales consultant in her place who was crowing about strong retail growth. Roach pointed out that after discounting for inflation growth in retail sales compared to past years is mostly an illusion.
At the time I wish he had gone to the next step and pointed out that what little growth does exist is built on a foundation of demand from huge government deficit spending. This continues today with no end in site. More on this subject in the article below.
http://brucewilds.blogspot.com/2014/09/consumers-are-facing-protracted-w...
Some excellent posts here today.
Agree that boomers are un-stuffing but they seem to be hitting the road for short trips. I am not seeing hotel prices drop and often see several that are full and not taking reservations. And interesting trend for boomers.
Rise of the mega-stores-- definitely seeing that as every retailer tries to sell every product. Hurts small business guys who cannot survive selling similar products - though there are some creative niches.
For lease - a lot of this is location, location, location. Still some boom areas but many more blight areas are showing up. Definitely see the effects where a big employer moves out due to insane tax policies.
Yup. Retil is going the way of the DoDo
A large part of this article is focused on the fact we cannot trust the numbers being put out by the government or the media. An interesting book that I picked up at a garage sale years ago gives an eye opening tour through the twist and turns of math abuse and innumeracy, this is before we even begin to look at outright fraud. The book "200% of nothing" by A. K. Dewney goes into how percentage pumping and irrational ratios can be used to make and reinforce a point that has little validity.
Sadly this practice has become far to common in modern society. Aided by super fast modern methods of communication facts are seldom checked, "if you saw it on the internet" it has to be true. The article below delves into how figures are manipulated and how the truth can quickly be buried by those who choose to mislead us.
http://brucewilds.blogspot.com/2013/09/200-of-nothing.html
I get all my ironical t-shirts at Kohl's around this time of year. $2.99-$4.99 for fitted American Apparel is still kind of high, but it beats even TJ Maxx.
the internet has destroyed retail.
sad
yes, and not just because of online shopping, but the internet provides daily entertainment for a very low cost--about 2 dollars day when you include the cost of a computer and internet provider. That two dollars a day is much lower than the corporations were getting prior to when the internet did not exist or was not as widely used.
Of course kids use their phones for socializing instead of meeting at the mall or wherever. Again, less money spent.
Nope, the retail is simply morphing into something else. Mom and pop on main street should have seen the Wally Worlds coming decades and set out in search of a new life. One day soon, kids will discover that their dumbass parents ate the government cheese and swallowed the propaganda and sent them to a snob university to join a snob fraternity to major in worthless shit categorized as the humanities. One day about 25 years from now they will teach their kids to learn everything they can that will enable them to provide for others that are willing to buy, trade, or barter on IOUs outside the government to survive.
Most of us are playing an even more myopic dangerous game than mom and pop by staying in the sheeple pen to be sheared to feed the parasites. When we starve with a tiger, the tiger starves last. BOOK IT !!!!
If international retailers are going bankrupt, and Wally World is sucking pond water, the tiger's stomach is starting to growl. Taxes are drying up, but I suppose they can print that additional shortfall, too. No problem, Mon.
Yeah retail is you go try the shoes on and check your smartphone for the cheapest price online.
it is a showroom.
Why do people even bother writing these articles when a single chart can tell you everything and more?
http://upload.wikimedia.org/wikipedia/commons/thumb/f/fe/EROI_-_Ratio_of...
It's not rocket science, it's thermodynamics. A society built-out for the greatest cheap energy boom, by many orders of magnitude, in history is proving problematic not to mention idiotic now that the peak has passed? Such preposterous pessimism!
Kohl's is a barely upscale Wal-Mart for clothes, near as I can figure. They only made it out here to Los Angeles a few years ago, and I still don't get their concept, some kind of niche/marginal deal at the low end, I guess. I use Ross for that!
I also thought Target numbers were actually rather better this quarter.
The thing is there are two trends mixing and I don't see how anybody can separate the numbers accurately, first the nature of retail is changing due to the Interwebs, and second the economy is mostly sucking.
Yet the Woodland Hills mega-mall is filled to overflowing every weekend (though some of that is for the air conditioning this time of year) and seems to pull from every demographic. I assume these mobs are buying something. And the LA freeways are double-stuffed with cars, and for the most part pretty nice cars, pretty new cars.
If things were better, I don't think we could stand it.
The Kohl's concept is, pay a little more here, and you won't be shopping with the lower lower class at Walmart or the upper lower class at Target.
Last time I shopped at Target, they gave me directions to the nearest Walmart. Guess they don't want me to shop at Target.
On a recent alternate route to my warehouse near the Atlanta Airport I could not believe the state of the strip malls that line the highway; not because the merchants had gone out of business, but because the merchants who had gone out of business were Vietnameese and Hispanics that replaced the earlier merchants who had gone out of business 4-5 years ago! What can be happening to the American Dream when good, hard-working immigrants can no longer stay in business. On the other hand there have been several store closings in our upscale Forum shopping mall, most notably Coldwater Creek, a large women's retailer. Office and warehousing are a joke - all those technology companies have been vaporized and the only one making money is the landscaping company keeping up appearances. The only one spending money that I can think of is my friend who is VP of Commercial Leasing at Bank of America. Go figure!
Bet shops are doing just fine in Georgetown
And Georgetown is financed by the government.
The Georgetown I live close to would be a fucking ghost town if it wasn't for the Toyota plant there.
Here in the Sacramento suburbs things are still reasonably good. Long after most of the big box retailers, car lots and home builders have gone out of business, the state government offices will still be swarming with bureaucrats.
The State of California is currently looking for 12 air pollution specialists, 11 air resources engineers (I'm sure there's a difference) 4 assistant directors of diatetics, 43 information systems anaylsts, 3 environmental planners, 182 governmental program analysts, 32 attorneys, 16 equipment operators, 8 landscape maintenance workers, 3 Catholic chaplains (WTF), 31 clinical social workers for correctional facilities, 28 coastal program analysts, 25 custodians, 26 cook supervisors for prisons, 17 employment program representatives, etc, etc.
I could go on and on, but I need to go to my local farmers market/swap meet where I do almost all of my shopping.
See the job opportunities here: https://forms.spb.ca.gov/bulletins/showall.cfm
Well Manhattan and Brooklyn are fucking bubbles beyond belief. Every restuartant filled with patrons paying $15 for a fucking Martini and retail opeing everywhere. Teardowns on smaller buildings with Condos going up with starting prices of 3 milion. Every square inch of Manhattan is thriving. Ask anyone here. Hey I have a stabilized apartment in a building where 6 million dollars apartments have bidding wars and there is a new Lululemon opening on every other block. The new Starbucks. How long can this last?
"How long can this last?"
As long as Yellen says keep printing and William Dudley of the NY Fed pushes for his member banksters to use the money to bid stocks up.
The taper is BS/jaw flapping. They'll keep buying treasuires to keep rates low.
NYC changed from a mixed economy to one of the world's rich oligarchial playgrounds as has London. It's really no longer a livable place unless you are one of the "masters of the universe". Of course, the remnants of normal human beings like yourself are there only because of rent-stabilized or controlled apartments. You are a dying breed. Long gone are the days of artist colonies, funky dance companies, experimental theater, and on and on and on. What is truly sad has been the architectural destruction that you describe. Manhattan was a fascinating mix of the huge and the small, the quaint brownstones, walk up flats. Sunlight is now at a premium. The wealthy are sucking the life out of it.
How long can this last? Until it doesn't. It can last a lot longer than anyone can afford to short it.
The economy is a machine. The inputs are energy and raw materials, and a certain amount of labor, the product output keeps everything and everyone going, and another output stream is pure waste, some of which is recycled. Financial flows are just the juice that moves through the plumbing in the machine's inner workings, and the Central Banks and Governments can always keep the juice flowing as long as the inputs keep flowing and there is a place to dump the waste. My best bet for the machine siezing up will be the most critical input - energy - is disrupted by geopolitical events. Until then, the rich will continue to party.
I'm surprised retail is dying. Steve Liesman told me that higher food and energy prices cause people to buy more clothes. He's on TV, so it must be true.
If Jim Quinn says it, I believe it!
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Listen. In the agency, this is called "HAIR IN THE SOUP".
"Did somebody put some hair in his soup?" means shut up when at the conference table, and you have been talking too much.
Every phone call starts with, "listen". lol
Radio Shack has been a zombie for years. Why hasn't it died yet?
Target Stores are in big touble. They have been blaming the security breech of credit card numbers for all of it. Well, yes, that hurt, badly. But before the breech trade was trending lower, time has passed since the credit card trouble, and the trend is still lower. Losses are piling up. Heda Quarters did some serious firings a half year ago. The new head of Target says his new ideas, which are just warmed up old ideas. Nothing he has said or plans to do is going to bring one single customer with lots of spendable money through the doors. More layoffs coming and expansion is a joke. Losses are eating away at the corporate structure. When all you can do to stave off losses is fire people and beging the thought of store closings, well, you are fucked.
Why is Target screwed? Because the articles of ZH about wages, job growth, labor force participation, part time work etc. etc. have all been right.
What retail bosses can't seem to get through their heads is that "Only customers with good paying jobs make good consumers".
You gotta have disposable income, leverage is just not a viable consumtion enabler any more. Jobs, jobs, jobs. That is all this is about. Jobs are in China. Productivity growth means fewer openings and 100% of the income gains from it go to management and stockholders, none goes to labor.
Nothing a little financial engineering and more regulations that harm SMEs to prop up entrenched interests with de facto moats couldn't help.
And NOBODY in the entire political landscape is talking about the economy, jobs, wages etc. The economy was generally always front and center yet in Obama's latest ISIS address he at the end mentions that the Economy is doing great. Yes there are pockets of strength but by in large No. If the stock market was not propped up with buy backs and Fed, the economy and housing would collapse. The political dialogue is immigration, terrorism, Russia, etc. i have never seen anything like it. Guess, I have never lived during a depression. Thanks for your post.
They don't talk about it because there is nothing they can do. The high end consumers are floating the entire economy - and they don't shop in places like Walmart, Target, or Kohls. The Fed is indirectly pumping all that cash to the high end consumers. When the financial markets stop going up, look out below. The next financial implosion will be the most epic collapse ever.
I remember 2008 after Lehman fell. Interstate highways that were normally clogged with traffic were totally empty on weekends. There were no semi trucks on the road. It was really eerie. Traffic and trucks started coming back in the 1st quarter of 2009. Imagine what it would be like if it didn't come back.
This happened in L.A. when gas hit 4.25/gallon the summer of 2007. There is a video I have somewhere of a drive I took south on the I-5. South of San Clemente there were no cars behind me or in front of me and none across the freeway, as far as I could see. The road was literally empty.
I have never seen that in North America, except perhaps the mountain west, at night.
I used to shop at Target but since the data breah and hope and change - I rarely go in there ever. Their food was okay but Aldi/Trader Joes is better and cheaper.
Target is Dayton-Hudson from Minnesota like Kohl's and Democrats like Kohls. Mark Dayton is the gov of Minn. His two prime platforms were gay marriage and a new stadium for the Vikings. They sure love bailing out billionaire NFL owners. What a joke. Target can shove their data breah up their arses and Kohls is a total joke.
Two Dem companies and I hope they croak.
Herb Kohl... a feckless sassy potted plant bitch of a senator, living high on the public trough and on daddy's money besides. Good riddance to Kohl's and their plastic clothes. Another great brand, back in the day.
Walked into the kohl's here in Albuquerque in Coronado mall...I thought I was in KMart...but since I have not been in a KMart in 10+ years maybe it's even worse...junk...was looking for men's dress shirts...got a gig and need some new stuff my dress shirts are 15+ years old and show it but what I saw today look REALLY cheap.
You think that's bad, try Walmart. Holy crap talk about cheap! And look at how the price of 100% cotton has taken off! And here in Fairfield County we have (supposedly) a new Bass Pro Shop going up in the last place that needs another boat vendor.
I haven't bought certain items (like shoes) in Wal Mart for many years. Walmart shoes are real cheap, but every pair I bought seemed to disintegrate within a few weeks. Complete crap.
dupe deleted
Now I know why Quinn is always in a foul mood. Living in Philly will do that to you.
He's actually a real asshole, he never misses a chance to be a prick.
Well, even in bad times folks do need to eat and shop. That will never go away.
Still, I think the American economy is one big illusion. Just go to any big grocery store or mall. There is no way, no freaking way that people are buying all that stuff.
I think we are going to watch in amazement as it all implodes in the coming years.
Retail stores are dying? Is it possible the economy is much worse than the government says, and people are finding out they can get by on less Chinese made, self destructing, trash? Is it possible the sheep are realizing stuff does not make you happy?
Where exactly?? maybe in some areas of rural arkansas or in central NY State (that large area between Albany & Buffalo), but it seems that things area booming at least from Washington DC north here in the northeast... Go figure, people in North Jersey, Westchester County & Long Island are still paying $700,000 + for a starter home with annual property taxes of $10,000.....