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Everyone Is Asking: "If Chinese Consumption Is Rising, Why Are Its Malls Empty?" - Here Is The Answer
With China's official headline GDP number printing at decade lows, the positive spin on the increasingly negative data out of China has been that this is all a part of China's transition from an export-oriented to a consumption economy. However, there is a problem with this narrative: malls and shopping centers in China have been, and remain, increasingly empty suggesting that the narrative of the resurgent Chinese consumer - especially in the aftermath of the biggest stock market bubble burst since 2008 - is greatly exaggerated.
Case in point: Reuters asks this morning "why are malls closing if consumption is rising?"
Specifically, it looks at the Di Mei shopping center in downtown Shanghai which it finds "a surprisingly depressing place to shop."
The underground mall is located in one of the most shopping-mad cities in China, and yet it is run down and starved of customers."
"Sometimes I cannot sell even one dress in a day," said dress shop owner Ms Xu, who rents a space in Di Mei.
Rising vacancy rates and plummeting rents are increasingly common in Chinese malls and department stores, despite official data showing a sharp rebound in retail sales that helped the world's second-largest economy beat expectations in the third quarter.
It sure makes one wonder just how credible China's retail sales "data" are, especially since the government is far less willing to provide official commercial vacancy rates: "As growth in retail sales slows because of the country's lower GDP growth, and in cities where mall space is abundant, vacancy rates have risen substantially," said Moody's analyst Marie Lam in a research note.
One possible answer to this seeming conundrum is a well-known one: the transition to online shopping which however does not explain all the recent bearish commentary from China's premier online vendor Ali Baba, which recently tumbled below its IPO price after announcing the slowest revenue growth in three years.
There is another twist: the government is goosing retail sales by acting as a direct end-purchaser:
The answer to that apparent contradiction lies in the rising competition from online shopping and government purchases possibly boosting retail statistics. Add poorly managed properties into the equation and the empty malls aren't much of a surprise.
More importantly, the struggles of Chinese brick-and-mortar retailers amplify a policy conundrum; these malls, built to reap gains from rising consumption, are instead adding to China’s corporate debt problem, currently at 160 percent of GDP - twice as high as the United States.
Less foot traffic means cash flow of mall owners and developers are getting squeezed - a potential hazard for an economy growing at its slowest pace in decades.
Di Mei's owners are trying to refurbish, but it's unclear whether it will pay off, and others are just closing down. The Sunlight Store in Beijing, for example, is located in another prime pedestrian hub, but it closed its blinds this month, with manager Ni Guifang telling Reuters they are seeking greener pastures online.
"The sales were just OK, but the overall sales were on the downward trend," Ni said.
* * *
On the other hand, e-commerce sites continue to post double-digit growth rates, even as some moderation is evident. E-commerce leader Alibaba (BABA.N) is expected to report that sales growth slowed sharply in the second quarter - albeit to around 27 percent on-year, still a ripping pace.
There is another, potentially benign explanation: overcapacity - after all China's "ghost shopping malls" have been well-known for years.
China is currently the site of more than half the world's shopping mall construction, according to CBRE, a real estate firm, even though it appears that many of these malls will not produce good returns for their investors. A joint report by the China Chain Store Association and Deloitte showed that by the end of this year, the total number of China's new malls is projected to reach 4,000, a jump of over 40 percent from 2011.
This brings up two follow up problems: one is that this overcapacity will remain in place for years, leading to much less construction and expansion in the coming years: "Real estate analysts note that much of the surge in retail space construction came at the behest of local governments, who were rushing to push real estate development as part of attempts to stimulate the economy. The result has been malls built in haste and managed poorly."
An even bigger problem is that sooner or later, all these bad debt that was used to fund this construction scramble and which currently generates no cash flow, will have to be reclassified as non-performing sooner or later: "If you build it and they're not coming, that's a non-performing loan," said Tim Condon of ING.
As a reminder, China's non-performing debt is the one elephant in the room which nobody dares to touch, yet which CLSA briefly touched upon two weeks ago when it calculated that the real bad debt ratio in China is not 1.5% as per official "data" but really 8.1%. Needless to say, on $30 trillion in bank assets, this is a big problem.
But the one explanation that had not been provided, also happens to be the simplest one: Chinese consumers are simply not consuming! Luckily, we have insight into that as well, courtesy of the FT's Martin Sandbu:
As if on cue, the programmed slowdown in manufacturing, investment, and export growth is perfectly matched by a rise in domestic consumption, retail and services that leaves the total economy growth number just where the government said it would be. For example, industrial output is now reported to increase at 5.8 per cent, while the growth of the services share of GDP remains stable at 8.4 per cent.
The real sceptics go much further — and they have good arguments on their side which the optimists do not convincingly address. As the FT’s new EM Squared service pointed out last week, there are important holes in the shift-to-services story. One is that too much of the services growth is accounted for by finance, which is tricky to measure at the best of times, and whose reported robustness after the third-quarter market mayhem is outright unbelievable. Another is that income and wage growth, which presumably should be powering the supposed consumption and services boom, is slowing.
And the chart which hammers China's hard landing home:
There is simply no way to spin the above data in a favorable light, which we hope also answers Reuters' original question on China's empty malls.
In fact, the only question after reading the above should be: "how long before China's consumption dysfunction leads to empty malls in the middle of the United States itself?"
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Silly. The Chinese shoppers are all at home buying cheap shit on eBay. (or is it AliBaba?)
The article I think has it correct. Why is GM doing well? Because .gov is buying a ton of cars.
Why is consumption of consumer goods going up but retail is down -- Chinese government is purchasing it.
Makes sense.
I'm still waiting for my Obama-promised black Escalade.
Ray-cyst.
I haven't been to a mall in probably 10 or more years.
Sorry, bitchez....that's just the way it is.
I got to the mall to go to the movies.
I go to Costco to buy toilet paper and some other non-perishable food items.
Other than that, I haven't been at one of the large malls around here more than tiwice a year. One of those times was yesterday afternoon. There were maybe 50 cars in a parking lot built for 2,000.
Malls don't sell precious phyzz bullion, food storage, water filtration, guns or ammo. I have no need for malls, and neither do all other sane people.
didn't anyone watch this?????????????????????????????????????????????????????????????
Been doin' this for over 8 years now....
http://www.zerohedge.com/news/2015-10-24/overstock-holds-3-months-food-1...
Maybe, just maybe, some of those Chinese 'consumers' are buying gold - at a rate of something like 200 tonnes per month -, rather than cheap Chinese crap.
And speaking of cheap Chinese crap, don't neglect to decorate your house for the the upcoming holiday season.
seriously recommended
https://www.youtube.com/watch?v=zU5GUYCK-l8
Listen to this a few times. Get this info down. This is the stuff that will change everything!!! Please share this SGTReport interview with everyone you know!!!!!
Of course when empty malls happens in China it is very bad and a good source of propaganda.
Did Rueters report this too?
http://www.zerohedge.com/news/2015-01-05/we-are-extremely-over-retailed-...
i generally hate people and in proportion to the quantity of them, this might be the mall for me.
They all wanted the bygone American lifestyle. They got it!
When was the last mall in America built? I think it was 2006.
they are biulding a ghost america to keep the slave hands moving. they should import our city residents many of them communist obama supporters and make a real go of it.
Reason mall is empty in China:
Wi bai tsu ma chi, deng xiao ping.
dunno what mall Reuters visited (amazing sample) but most in Beijing are pretty packed
I spend a lot of time in China. Actually, I just got back from dinner at the Mall at Xiao Zhai in Xi'an. My exact comment as I walked through the mall was "I can't believe this mall is packed on a Monday night".
So, don't conclude that what is happening at that Mall in Shanghai is being copy/pasted across China. It isn't.
And...yes, some Chinese are buying gold. Gold places are all over...however, Chinese buy a lot of cheap crap that is cheap. And they also buy a lot of cheap crap that is expensive (Luis Vutton, Gucci, YSL, I-Phone 6s, etc...it's all disposable pseudo wealth)
I've been living in China for a few years and travel a lot inside the country. I'm not seeing any empty malls. One failing mall in Shanghai is not a trend. Most of the mallls there are packed with high end people devouring luxury goods. Typical American Gloom and Doom Writer.
No, just typical American propaganda.
The sheeple who have never left their own state don't feel so bad about local walmart closures if you tell them the Chinese economy is deep in the shitter.
What are they going to do? Hop on a plane and go check it out for themselves?! Listen to non-American media?! Suddenly lose their sense of self exceptional superiority?!
Chinese shoppers are in Japan and most likely Korea etc.. buying quality products instead of made in china crap. Of course the news folks think its from the yen difference. I just got back from Japan and the yuan has depriciated and there are still flocks of Chinese shoppers jamming the airports. Crazy!!
http://www.eturbonews.com/62081/chinese-shoppers-flock-japan-take-advant...
Maybe, just maybe, some of those Chinese 'consumers' are buying gold.
I live in China. I went to the local mall, to see wall-to-wall gold shops. All empty... of customers. Ghost malls, and ghost gold. Get ready for deflation.
Regional governments are/were forced to lend copiously to builders/manufacturers in order to meet growth targets set by the Chinese Communist government. Not unlike what we do here, however we just redefine numbers and report horse shit, rather than build stuff. Chinese people have a very long history of centrally planned horse shit. They understand that it's all a lie. They will use the lie in order to facilitate their own best outcomes (for their family). By and large they will retain their savings, not spend it. Most likely outcome is they will do whatever it takes to keep whatever wealth they have managed to accrue over this past 10-20 years (so spending is not in the cards).
I go to the mall, to see what movies run so I'd know what to PIRATE.
MWAHAHAHA !!!
This story deserved a broader context and deeper dive...consider:
http://econimica.blogspot.com/2015/10/explosion-of-china-shopping-centers-for.html
Why would a man go to a mall? Malls are for chicks.
Well, that's a reason to go, I guess. The only one.
The only black escalade you get is the one coming to pick up your guns and gold...
Yeah, you don't get the escallade, you get to ride in it on the way to the interrogation.
I'm waiting for my Obamaguns to be airdropped to me. Hopefull they don't miss and drop them in a war zone like Detroit, or Chicago.
They will drop you condoms instead. You will build IEDs (Inflatable exloding devices) to fight the drones.
Silly. The Chinese shoppers are all in United States, Australia and Canada.
Fuck you, Al Gore. ;)
Ah, those crafty Chinese, getting all that cement (6% of global emissions) work (ghost cities) done before Paris. CaChing! Al made billions on consulting fees fer sure fer shur ; )
Just ask for a Honky-pink Cadillac, and you'll be fine. Not rayciss.
It's only black on the outside, it has white interior...
Use your GPS locator on your Obamaphone. Its on the front seat of your Black Escalade. Find the phone, find the Escalade...
e-Scalade. fify
No point trying to sell stuff to people who have no munny. So yeah, it makes sense to sell to the one big customer that has lots of munny - gummint.
If you're lucky, you can wangle a deal where they make it compulsory for other people to buy the stuff you are selling ... eg Training Programs - "You must do this bullshit course or you can't have a job." But I digress ...
Luckily, that Overpriced-No-Access-To-Doctors Obamacare, is optional.
Over-priced? But imagine what a bargain it is if you're reeeeeeeaaallllly reeeealllly sick! You should look into it. It might pay more than a disability pension. The trick is to constantly have 3 or 4 injuries / ailments on the go at any one time ...
(No, I haven't looked into it. I'm not even in the right country. Just felt like throwing spanners (into the works). Or is it all Catch-22 insurance? (You're only insured if you're not sick.))
And all thanks to the devine supreme party leader who lives in the white peking duck palace on 1600 Pennsylvania avenue!!
I think it's becomming clear that every street should have a bronze statue covered in the last remaining gold in the vaults of the leader pointing to the future while protecting the children. How beautifull would that be right?!
The future has come and gone.
I don't understand this. You'd think with those buck an hour wages paid by Apple, they'd have plenty of money left over to live the good life.
The last move by governments before the great default is that they will all print themselves a bunch of fiat and then use it to try and prop up markets, short gold, and try to inflate away debt. This is where we are at in the cycle. We have just entered the end game.
I don't understand it either. I eat soooo much food and yet my slaves are still hungry! How much more food must I eat in order to stop my slaves from complaining about starving?
If only the slaves would borrow moar munny. Then they could buy moar things, and then they can borrow moar munny and buy even moar-er things...
you nailed it, having spent a fair amount of time in china, the weathy over there are the .1 percent. The middle class are the next .3 percent for the next 99.6 percent, its buck and hour making shit for apple or wallymart. Shanghai is an anomoly, where the middle class is maybe 5 percent of the population. get 50 miles out and it goes Pearl S Buck pretty quick.
I'm pretty sure your stats are way off. The poor in China don't have automobiles. Therefore your .3% for the middle class is suspect as China has an extraordinary number of cars on the road. Did you see the article about the 50 lane traffic jam in China? The poor in China ride BICYCLES. They don't drive cars.
China is manufacturing a huge number of cars every year for their "middle" class. They certainly aren't exporting them to Europe, US or Japan. They are for INTERNAL use.
Part of it might be that .gov is buying a ton of cars, but also that auto lenders (dealers and their financing arms) are pulling the same sub-prime crap that occurred in housing before. Got a pulse? Yes, you can finance a car...unwisely I might add. Who in their right mind would finance a car with a 72 month (or more) loan? If they had to plunk down the whole amount on the spot I would bet their decision would be different. And that doesn't even address the fact that all of this is nothing but future consumption pulled into the present.
There is no doubt that people are still living way beyond their means, and I have to agree with Roberts, "A majority of Americans live in a fake world created by propaganda. They are disconnected from reality."
I have five or six houses around me with Bernie Sanders for president signs in the yard....really? WTF people!!!
Re " ... with Bernie Sanders for president signs in the yard" :
Very good question. WTF would it take to get someone to put that sign in their yard? Its easy to assume they are idiots but, if you have the time and inclination, its more fruitful and more fun to assume they are normal people, somehow being leant on. What would it take to get close enough to any of those people so that they would give you a truthful answer? Granted, they could be useful idiots / young idealists who don't know how the world really works. My first thought would be that they are all employees / party members bullied / bribed into having those signs in their yard. If ever you get bored, try and find an answer. We'd like to know. Sorry I can't be of any assistance.
serious answer: I have several friends who are Sanders supporters. They are not young, nor irrational, nor below average intelligence. They do share a few traits: they get their news exclusively from: NPR, Huffington Post, NYTimes, and friends' posts on facebook. Furthermore, they **think** they are well informed and getting a broad range of opinions. They have no idea what the costs of Sanders' programs will be, nor do they see that as a problem. They are unaware of any troubles in the world of economics -- indeed they often share/repost trite messages on facebook about how great the Obama administration is, quoting fantastic low unemployment, etc etc...and are unaware of the juggling of these numbers, real unemployment (>20% by old methods), etc. They think arctic ice is gone and antarctic ice is nearly gone, temps have increased by ten degrees or so recently, and sea level is accelerating and endangering millions of people. They never check on any of these -- their world is false but self-consistent.
Nobody is "leaning on them". They are totally perplexed that anybody (like me) fails to see the world in the same way, and any conversations on any of these topics or similar ends with them shaking their heads and saying one of the following: 1) I've been brainwashed 2) I'm in the pay of big oil/finance/industry 3) I watch too much Fox News (despicable stuff, never watch it at all)
They are as dumbfounded by us as we are by them. The divide is big and growing bigger. I blame it on the media, and long for the days of Walter Cronkite.
Bernie, Don, Hitlary, Jeb, what diffetence does it make? Bring on moar free shit....one step closer to the end.
AC I wonder all the time how people I know maintain their belief system. When pressed they say either, any evidence contrary to their belief system is fake. "If its not in the WaPo, it didn't happen". Or "Shut up or you will miss chance at a good place at the feed trough.
In either case, they don't seem to me to be taking good care of or looking out for their progeny.
Malls around here, the nice ones, are typically packed on the weekends. BUT, when you pay attention to what people are carrying...men are empty handed...women have their purse and maybe a small bag or two...most often from places that sell fancy toiletries...
The most packed stores are places like "The Body Shop" and "Bath and Body Works" (sell overpriced soap and lotions) and kids/teen stores like Justice. Kohls absolutely rules around here...always packed...for the women in the family it's thier #1 destination for clothes.
Food venders are really killing it...the food courts are always packed with people paying $5 for a slice of shitty pizza (8 slices per pie = $40 for a crappy 16" pizza!).
Starbucks routinely has a line out the door. High $$$ vendors (Coach) are lucky to have anyone in the store. The Apple store is always packed too; not sure how much is being sold and how much is being "played with", but they crowd is always there.
I think the lack of bags means that everyone is shoplifting instead.
Does shoplifting still qualify as "consumption"?
I would have to consult Krugger on that one.
well it has to be replaced, so a big fat Krugman yes! Theft is as good as a hammer to the window.
Nah, go to the local retailers to 'look' at items. Then come home and shop on Amazon and get it for 20% less with free delivery.
"The Apple store is always packed too; not sure how much is being sold and how much is being "played with", but they crowd is always there."
Of course the Apple store is packed ... and everyone is buying. Folks realize that the Apple stores always have the best bargains in the industry.
Always a big line -- at the gun counter in Cabelas!
Found 22 caliber in stock at Gander Mountain yesterday. No limit. Only twenty cents a round...... I will boycot that store from here on out.
"I will boycot that store from here on out."
Yeah, I hate price gougers too. That's why I no longer visit Cheaper Than Dirt when I happen to be in Fort Worth.
blob
Gwailo Don't Pay
It's the escalators. Who would shop at a mall if you knew it could be your last outting?
https://duckduckgo.com/?q=chinese+escalator+accidents
interesting, i havent heard of this here. hard to believe they designed their own escalator system. why stop at our military secrets... unless they dont have a problem with accidental death there, hmmm
Production, investment, and exports are reducing GDP by 2-3%. Gov't spending is adding 1.4%. Consumers are contributing 3%. Inventories, profits, and depreciation are not accounted for the way they are in the West and Japan, which suggests as much as a hit of 2% to GDP. Deflator? Your guess is better than mine.
Moreover, the labor force has been contracting for three years running, and money supply, wages, and production data suggest that real productivity is no faster than 1%.
Therefore, China's potential real GDP per capita is ~0%, which is the same for the US, EZ, and Japan since 2007-08.
70-75% of world real GDP per capita is trending at a secular rate of 0%: the new normal of secular stagnation of the debt-deflationary regime of the Long Wave, excerbated by Peak Oil, Limits to Growth, and the end of capitalism and globalization; not that there's anything wrong with that.
We are overbuilt too. We are about the same income wise as Germany, but have 4 times the retail space. Vacancy signs coming to a mall near you.
Rueters is zion.
I gotta wonder what kind of disinformation this is?
The "people" were suckered into the stock market...recent Chinese farmer quote at ZH; "Making money on stocks is a lot easier than farming". That was before the crash...
Now, the majority has had their wealth stolen via the "markets" and the thieves are paying $800,000 for crack shacks around the world in a desperate attempt to get the paper gains out of China and into something of substance.
Odd they're not choosing gold? Explain that? Why $800k into a crack house instead of gold?
Or at the very least, real estate one can grow something on.
Now you understand how to steal fertile land.
It's ironic to hear the NPR stooges talk about taxes this morning. It circles mostly aournd how to tax hard working 1099 american middle class more instead of focusing on taxing such bandits like house flippers or freeloadering foreigners buying mega-properties here tax-free, etc.
Why tax a house that's held less then 5 years? How about doing away with that $500k exemption for RE cap gains? How about taxing a foreign buyer a one-time 20% on their purchase here? Alot of countries do that already.
Instead, the left-wing progressives who want to expand the government, the FSA and spend moar and moar want to beat the broken donkey, the middle class. My guess is you will see moar cahs businesses like the Pakis have --convenience stores, little hotels, etc where alto goes unreported. from what I have read.
Barry and his buds hate the American middle class. I don't know why, but Reed, Piglosi and Barry dispise them.
That seems to be a theme with developed and "rich" Western countries.
Look at the Euro nations burdening their people with a new "refugee" subclass. All the better to fuck them over because they loathe their subjects.
It must be some sort of psychological self-destruct desire by those people.
When their hearts are just SO huge that they want to help the less fortunate foreigners to the detriment of their own indigenous population, they're f*cking stupid or just devious bastards fulfilling some agenda.
NYC real estate pimps have taken money laundering to an art form. The thing is, NYC can rip a new asshole into every foreign whale who purchases a flat, AND IT'S STILL GOOD VALUE for the purchaser, since it effectively launders the money. As NYC sees it, everyone wins. Except Dodd-Frank's money laundering provisions, which NYC has found a work-around for.
Why? That's simple. The middle class is self-sufficient, but not wealthy enough to be able to (or need to) buy the parasites off. Self-sufficient is BAD; no need for .gov, you see! And, not in the top 0.01% is also BAD - no need to pay off .gov parasites!
Remember, we're dealing with parasitic psychopaths. Wall Street, 1600 Pennsylvania, E. Capitol St. It doesn't matter. Self-serving vermin and filth; they run off (or nail-gun) anyone who isn't...
Because you can always eat the crack house, but you can't eat the gold.
Besides. It's good luck to keep the mall empty so the next owners can get a nice new mall that's never been used before.
That Mall, like China's economy (and the US come to think of it), is designed by Escher.
Escher is the first thing I thought of when I saw that picture.
Finally! The 'Great Reset" has begun!
Why buy shit you don't need?
What are, some kind of idiot? They're shiny.
And it is the brand-newbiest, mk III, fandangle I've ever seen in a month. AND it comes with zzzOS.27 software with new uber-coolio functionalities, some of it I might even use once this year!!!
Why you no buy shit?
Because it'll cost more pieces of funny money later, for the most part.
build it and they will cum
If only I did not pay property taxes too.
Mall traffic will pick up when the PBOC uses the malls as an outlet to distribute Yuan directly to the people.
They have no "Helicopter Wang"?
China is so rural overall gonna need a shitload of helicopters and pilots. The rural folk tend to not have financial services so yup dropping slingloads may be the option.
Just think how many Syrians, Libyans, Pakistanis, Afghanistanis, Egyptians, and other ME/Africans all those ghost cities and empty malls can house.
Get busy China, we can't let a good crisis go to waste.
The Chinese may be in trouble but they ain't stupid; the last thing they want are moar tearrists in their country.
Dude!
That's "xenophobic scapegoating" and rayciss!
What? You mean that people earning two dollars per hour can't afford to buy anything? Better lower their wages so costs go down and then they can afford to buy stuff. (errr, there was a little bit of sarcasm in that sentence. I thought I might need to point it out. Some people wouldn't notice.)
Simple solution. Sell stuff in countries where people get paid more. See! I'm a jeenee-us! Can I have a Noble eCONomics Prize now?
You can have Obutthole's Nobel Drone Your Ass Prize after he pulls it out his arse.
Will that do?
And don't worry about it being encrusted with shit.
You can always polish that turd until its real shiney.
Actually, the problem truly is wage inflation in China. I'm not joking, the chinese are overpaid compared to other slave labor nations and "work" is shifting out of China.
"Wages in China have doubled in the past five years, clearly outpacing the increase in productivity"
"I have no doubt that my salary will rise faster than the rate of inflation, making me more affluent by the year," he said. Since joining his company in 2013, he has bought a Skoda sedan, taken on a mortgage for a 90-sq.-meter apartment, and married his childhood sweetheart. Earlier this month, 500 friends attended his wedding party in his hometown, the mining city of Fushun."
I have "no doubt" therefore I shall borrow every last penny I can get to live my dream...what could possibly go wrong?
http://asia.nikkei.com/magazine/20150514-Asia-s-wage-inflation/On-the-Co...
https://www.rt.com/news/319727-saudi-prince-drug-arrest/
His big mistake? He tried to bypass the Central International Airlines. They do like their cut of the action.
Takes a lot of crank to keep ISIS fighting on.
The Chinese consumers are consuming gold and saving money, they are not yet reliant on the mall for spiritual fufillment.
Do they shit gold as well?
Don't need to buy food if your boss pays you a bowl of rice per day ...
What? Wrong country? ...
Q. "if why are malls closing if consumption is rising?"
A "if because they have money spent on English classes instead."
"...have been, and remain, increasingly empty"
Tyler, I know this is a blog, but could you ask your writers to at least try to make some sense?
That is easy to answer.
They bought online.
Haven't you see alibaba, globalsource, aliexpress, phonechina, chinatrade, and a gazillion more.
Dude, you really that idiot? I bought from pinset, fresh food, send goods, buy daily groceries, send money, from online dude.
It is CHEAPER, FAST, and the most important thing? I can do it while i worked in my office, or? At my home.
Geez... Where have you been dude??
I bought a pig in a poke. I know it was a pig becoz I heard it squeak.
You mean squeal.
Floors, coffins, and chairs squeak.
Poetic licence. You really think I bought a pig? ...
You didn't? Aww man. I thought it was just a little pig...
Prodigious savers makes...for empty malls
Poverty makes...for empty malls.
With America's official headline GDP number printing at decade lows, the positive spin on the increasingly negative data out of America has been that this is all a part of America's transition from an export-oriented to a consumption economy. However, there is a problem with this narrative: malls and shopping centers in America have been, and remain, increasingly empty suggesting that the narrative of the resurgent American consumer - especially in the aftermath of the biggest stock market bubble burst since 2008 - is greatly exaggerated.
Case in point: Reuters asks this morning "if why are malls closing if consumption is rising?"
Specifically, it looks at any shopping center in downtown America which it finds "a surprisingly depressing place to shop."
The underground mall is located in one of the most shopping-mad cities in America, and yet it is run down and starved of customers."
"Sometimes I cannot sell even one dress in a day," said dress shop owner Ms Xu, who rents a space in some mall in America.
Rising vacancy rates and plummeting rents are increasingly common in American malls and department stores, despite official data showing a sharp rebound in retail sales that helped the world's second-largest economy beat expectations in the third quarter.
It sure makes one wonder just how credible America's retail sales "data" are, especially since the government is far less willing to provide official commercial vacancy rates: "As growth in retail sales slows because of the country's lower GDP growth, and in cities where mall space is abundant, vacancy rates have risen substantially," said Moody's analyst Marie Lam in a research note.
One possible answer to this seeming conundrum is a well-known one: the transition to online shopping, but there is another twist: the government is goosing retail sales by acting as a direct end-purchaser:
The answer to that apparent contradiction lies in the rising competition from online shopping and government purchases possibly boosting retail statistics. Add poorly managed properties into the equation and the empty malls aren't much of a surprise.
... Etc. etc.
Good analysis, Arthur. It's bleak when some Dollar-Type stores can't make it since those things are not things people normally buy on line so those sales may be very informative.
My friend moved from Toronto to Houston and opened a dollar store thingy. I don't know the area there but he's going out of business and will close after Christmas. He's an experienced entrepeneur and has had many different small businesses but told me he has never seen the economy so bad, meaning broke consumers.
Anectdotal, yes, but telling.
crude oil chart tells that story. still an oil town
mists capitalist world don't tell their government a basic truth.
Capitalist economies are boom and bust economies. They have to just let the bust run its way and then growth will follow. It is the organic and healthy way. They are trying to avoid a storm, but are creating conditions for a hurricane which sooner or later will bring way more devastation.
Of course, it never helps when the only "solution"s being tried are:
1. Lend people money.
and
2. Steal people's money so they are forced to borrow what you stole.
Everything is awesome.
Malls are crowded as shit here in Houston, of course no one is really buying shit. Maybe its just guys trying to catch a glimpse of some hot pussy or women window shopping.
This gal did A nice summary of stores and malls closing across America. Retail stores are getting slaughtered, especially in smaller towns.
https://www.youtube.com/watch?v=HJoF-JJg7NQ
When I was in Dallas awhile back I saw some Garland Mall all boarded up and then in Austin, Texas I read that Highland Mall shut down. The Highland Mall had become a hangout for diverse gangs and the article said they actually had police on hoirseback for awhile trying to control the violence there but failed.
When you have to be worried about bein gshot for your tennis shoes when you walk out of the mall, it's no wonder they shut down. Add to that crime the broke middle class and moar will shut down I predict.
I read a couple of relatively new Staples shut down in Houston.
The gal's video is good. Thnx.
That austin mall died an ugly death and is now a community college, acc
Free daycare for children grown older
china has figured out the same thing as the maggots here. they don't need a real underlying economy.
Mabye they're ghost malls, and never had people to begin with
Aaawwwrr!! Sirry me! I folgot to buy sum peopre to put in the marr!
Little Kim Jong-un will show them how to do it. The trick there is that no one will be allowed to buy anything, any way. Just for show for the tourists. A perfectly balanced economy-- nothing moves.
eBay, Amazon, and a host of other, more pleasant online shopping options will win the day. Most of the people going to malls are kids with little to no disposable income, looking for the social experience. Add into that mix the inherent risk of being around a bunch of people and you've got a recipe for malls being a really bad financial investment.
-Argenta
nazi russkies attack those who protest against criminal czar putin:
https://youtu.be/5Sbdh81gusA
Failed Russian propaganda about the situation in Syria: wrong Syrian in a talk show.https://youtu.be/5Sbdh81gusA
Pray, what has your copy/paste tripe got to do with Chinese shopping malls??
I'm in Malaysia right now. A couple of months ago I went into a big mall to buy some groceries and a couple of t-shirts. There's a japanese clothing store called uniqlo which has fairly cheap stuff. And while i'm there I notice that around one fifth of the store is dedicated to selling their brand of thermal clothing, longjohns, ski pants, thermal pants etc. Here is a country next to the equator with daytime temps always around 88F, nighttime lows around 75F. the average person can't afford to travel and a water heater is something you have to buy seprately for your home because you can shower in the tap water fairly comfortably. Corporate marketiing fail. The chinese malls have a lot of that going on too. Endless stores with goods that people just don't want to buy, usually with two or three salespeople standing around doing nothing. Chinese people go to malls to window shop and to eat.
Malaysian malls have excellent food courts, very low prices.The highlands in both Peninsular Malaysia and Borneo very very cold. That is the place where some years back the famous Thai silk king, the American Jim Thomson disappeared
A good article. We had some fun driving around in the yuppy part of town last week counting all the For Lease signs. There were lots, and this is in the trendy, upscale part of town where everyone wants to be. It was at the high-end shopping park filled with custom jewelry stores, high-end clothiers and organic bistros. In the bad parts, it's a blighted wasteland.
Clearly there is a schizophrenic disconnect between official data and economic reality on the ground. This is true in China, here, and in other industrialized nations. Obviously, governments are fudging the numbers, and to date, there has been no official admission that the world is in recession.
It's an ill omen to be sure. For me, that begs the question, if they have a recession, but no one admits it, does it still hurt?
Shopping malls are awesome. Where else can a guy go to stare at women with big tits in tight tops?
Been lucky enough to pick up a few of these sluts too.
I spent some time over there in old PRC for the Bejing olympics. About 3 weeks, Shaghai, Bejing and Hong Kong. If the malls are stalling then there is a really, really big problem becasue these cities are like one massive shopping mall. 60 story buildings all mall, walk down the street, mostly retail. If Chinese don't start "consuming" their crap this then the SS China is going down, hard.
I had the answer a long time ago:
Population China approx 1300 million.
Pop. US approx 300 million.
Pretend 300 million Chinese are US and pay them US wages. Still got a billion low-paid producers. Now the 300 mill can afford to buy the crap that the other billion produce...
I'm on a roll tonight. Can I get another Nobell eCONomics prize?
... I don't understand why no-one elses thinks of these things! It all seems so obvious! ;P
US shopping malls have been in a huge decline for over ten years. I think there are several reasons, and I'm sure they all apply in China as well.
1. Online shopping, of course.
2. The great mass of consumers has only marginal spending power anyway, and today they spend it all on cable TV and smart phones and extras for online gaming.
3. Success of big box stores like Target and WalMart, generally competitors to malls and not tenants.
4. Increase in price of basic rent and food means even less discretionary income for the malls.
5. Increased urban congestion means merely shopping at a mall is unpleasant. So you need to make the mall a "destination". This is not news. But "destinations" support theaters and restaurants, not conventional retailers.
In the 1950s the mall was a triumph of western civilization! Today it's just a congestion point.
But under Presidentress Hildabeast every citizen will be required to spend at least four hours a month in each of the two malls closest to your home or workplace, or you will have to pay a "tax" of 5% of your annual income, or one internal organ, at the government's choice.
6. People realize that there's no need to buy crap becoz in two weeks it will be broken, just like the crap they've already got. Once they realized that it was impossible to buy crap that doesn't break, it sorta took the motivation out of spending.
4b. Trippling of health care costs under ObamaCare (ACA) ... means even less discretionary income for the malls
Pot calling the kettle black?
http://www.zerohedge.com/news/2015-01-05/we-are-extremely-over-retailed-...
Bottom line is that this world has become de-polarized in EVERY way, shape, form, process and interaction.
And what I mean by this is that it has become IMPOSSIBLE to actually figure out what true "reality" is because we live in a world that is saturated with lies, spin-doctors, dishonesty....where "the truth" is no longer the "standard" and "foundation" of reality. We see glaring examples in the personages of Hillary Clinton and Barak Obama. They are serial liars and purposely manipulate "the truth" with self-enhanced, self-centered, untrue "realities.
So, the "herd mentally" has taken over so many people....who say to themselves, "Hey, it's OK to lie, EVERYONE is doing it".
How freaked-up is that? What's happened to people of principle? Oh, they are out there, but the numbers, the bad ones, keep climbing up the front face of the bell-curve of truth.
That said, throw the Chinese into this roller-coaster and no wonder it is truly semi-impossible to get a handle of the truth and what is truly going on. It is VERY hard to fix, repair, correct and move forward towards honest solutions, if we are all living in a lake of lies.
http://www.theliberist.com
Bottom line is that this world has become de-polarized in EVERY way, shape, form, process and interaction. The flag of "truth" is flapping in wind, driven by a gale of lies, lies, lies and more lies.
And what I mean by this is that it has become IMPOSSIBLE to actually figure out what true "reality" is because we live in a world that is saturated with lies, spin-doctors, dishonesty....where "the truth" is no longer the "standard" and "foundation" of reality. We see glaring examples in the personages of Hillary Clinton and Barak Obama. They are serial liars and purposely manipulate "the truth" with self-enhanced, self-centered, untrue "realities.
So, the "herd mentally" has taken over so many people....who say to themselves, "Hey, it's OK to lie, EVERYONE is doing it".
How freaked-up is that? What's happened to people of principle? Oh, they are out there, but the numbers, the bad ones, keep climbing up the front face of the bell-curve of truth.
That said, throw the Chinese into this roller-coaster and no wonder it is truly semi-impossible to get a handle on the truth and what is truly going on. It is VERY hard to fix, repair, correct and move forward towards honest solutions, if we are all living in a lake of lies.
http://www.theliberist.com
"how long before China's consumption dysfunction leads to empty malls in the middle of the United States itself?"
Isn't this backwards?
I wolked vely hald to ploduce things fol you to buy! You said you wourd plovide lich customels fol me! Whele ale the lich customels you plomised???
Now I vely pool, even though I wolk hald, because no-one plovides lich customels fol me!
Possibly..Chinese money went into the stock market and housing market...both down...yes I could say the Chinese malls got mauled.
This article is bullshit. If they do follow up fact checking they will find that the people they interviewed don't exist. Or won't exist soon anyway.
There are plenty of newer malls on the Pudong side of Shanghai and they are always crowded. In my frequent mall shopping experiences in Shanghai I find that the typical mall shopper in Shanghai is a girl in her 20's or early 30's. Guys don't do a lot of mall shopping except to wait outside the dressing room while the girl tries on the clothes to give his opinion. Before the girls are married the boyfriend (or sugar daddy in my case) pays, after marriage the woman is in charge of the money so they buy 24K yellow gold instead of clothes.
I'd expect that to be the case in the most economically sound (for now) area of China just as I'd expect that in the most economically sound areas of the US, but that's not the big picture here nor, I'd suspect, the big picture there.
I used to hate going shopping with my Chinese girlfriend. She had money, didn't work and would spend hours meticulously inspecting merchandise in malls. Needless to say things didn't work out with us. I eventually married a low maintenance American woman and I couldn't be happier.
You think Chinese women are difficult to shop with? Try a Russian woman.....