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Credit Card Data Reveals First Core Retail Sales Decline Since The Recession
While we await the government's retail sales data on December 11, the last official economic report the Fed will see before its December 16 FOMC decision, Bank of America has been kind enough to provide its own full-month credit card spending data.
And while a week ago the same Bank of America disclosed the first holiday spending decline since the recession, in today's follow up report BofA reveals that if one goes off actual credit card spending - which conveniently resolves the debate if one spends online or in brick and mortar stores as it is all funded by the same credit card - the picture is even more dire.
According to the bank's credit and debit card spending data, core retail sales (those excluding autos which are mostly non-revolving credit funded) just dropped by 0.2% in November, the first annual decline since the financial crisis!
At this point, BofA which recently laid out its bullish 2016 year-end forecast which sees the S&P rising almost as high as 2,300, and is thus conflicted from presenting a version of events that does not foot with its erroenous economic narrative, engages in a desperate attempt to cover up the ugly reality with the following verbiage, which ironically confirms that a Fed hike here would be a major policy error and lead to even more downside once it is digested by the market.
- Retail sales ex-autos are down 0.2% yoy. However, part of this weakness owes to a decline in prices. After controlling for deflation, real retail sales ex-autos are up 1.3% yoy in November, revealing a slowing trend but not an outright decline.
- Much of the decline in the deflator is due to the drop in gasoline prices. The most recent drop in oil prices could imply there is another leg lower in gasoline prices as well.
- Moreover, there are disinflationary pressures elsewhere, presumably reflecting pass-through from the stronger dollar, which could continue.
In other words, nominal spending down for the first time, and while "much" of the decline is due to gas prices, these are a tiny fraction of the overall spending basket. And then the punchline BofA throws in: "disinflationary pressures elsewhere."
To sum up: retail spending is now negative, and one can add deflation on top.
Can someone please explain to us again just what "data" the "data" dependent Fed is looking at, because we are lost...
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Disinflationary. You gotta love word(winston)smithing like that.
Mr. George Orwell, you have a call on line 2. Mr. Orwell, line 2 please.
Doubleplusungood stocksell.
Actually, the concept of selling stock would be written out of newspeak entirely, wouldn't it? Doubleplusungood unstockbuy.
It's called Deflation. It's what's for dinner.
Shit's slowing down.
People are moving to the safety of the dollar.
And selling everything else.
3 types of borrowers now:
1. Those who are maxed out and can't borrow any more (that's a lot of people)
2. Those who refuse to borrow/go into debt (that would be me and the other 4 people left in the country like me)
3. The government which can borrow endlessly but do nothing productive with the money
It's over Johnny. It's over.
Um then there are 6 of us to refuse to go into debt I will have you know.
Me too. Make it 7. If I can't pay for it, I don't buy it.
4. Corporations (using borrowed money to do stock-buybacks)
5. hedges and other funds that use OPM (Other People's Money) to make leveraged bets.
Personally, I'd temper the 'safety' aspect with a healthy dose of 'perceived'... The $USD has yet to be challenged on the field of play, and that challenge is but (1) foreign policy miscalculation away from reality, and our 'enemies' are keenly aware of our vulnerability.
Commodities on sale isle #9. Countries infused with debt in USD's are flooding the market in order to repay the debt in the respective countries' devalued currency.
Too bad the countries couldn't bundle the loans, rate them triple A, pump'em and sell'em to the IMF.
Sweet justice
Hey Bank of Amerika..
FUCK YOU!!!!
Merry christmas and all that too..
Fuck you from my family as well.
What's up with the stolen avatar?
Apparently they aren't including my ex-wive's cards in the survey.
They all say that Apple pay is the future. Swip your watch or iPhone 6s and go. My question is how much money do they load a month? Its like an ebt card right?
my qustion is how to get one without an iphone to swipe , and pay for it with?
christmas is a disaster so the fangs will go to the moon.
Amazon sells $1 for 50¢ and includes free shipping and returns. Retailers and mom and pops can't compete.
Of course they lose money with most sales and will only have losses to show. But their YoY sales will be double digits.
As long as the stock rises, who cares if a 20 year old company can make any money from operations.
This post made me hard.
Eh?
is what she said...
Let me help calm you down, Michelle Obama,Michelle Obama,Michelle Obama
Hope this helps
Paying cash.
ZHers complain when card debt is up, and when it's down. More people working + higher real incomes + lower revolving credit = goldilocks scenario to me.
But, you can't help mopes.
I use cash, and lemme tell you, the clerks look at me like I'm from another planet.
It is NOT common.
pods
Crock of shit,I pay cash the dopes in front of me take forever fumbling through the wallet looking for their card.
I see no cash out there.
I'm sure everyone is walking around with wads of cash to pay for things now LOL
Actually, retail sales
100 pieces of 10 dollars a piece. Total value is 1000 dollars.
If there are 4 more pieces unsold, 40 dollars extra is lost.
Now, when overall profitmargins in retail lies around 7 to 8% after all costs are deducted, and assuming all products are normall sold
They had 70 to 80 dollars of profit minus that 40 dollars.
So profits in a ideal situation where slashed by 50% when sales drops almost 4%.
Now, retail had a bigger problem in the last 5 years. To much inventory. And that amounted to about 10% of their entire intake.
Now those 10% was such a big problem that they decided to cut prices to get it all sold. And to get lower prices but maintain their bottom line
THEY DECIDED TO BUY MORE TO GET LOWER PRICES!!
result? Stores are overstocked and suppliers also are overstocked.
So in all, we're looking at a overall 12% loss in retail companies this year alone.
And the crisis still needs to really start.
And E-commerce? HA! A profitable E-commerce platform is so rare in this world, people wouldn't believe it! Margins are to low and their entire business model is build around scale. Once we'll be a big boy. Most aren't there but do apply the margins to compete with the exiting big boys.
In all, there's just to many sales channels and it's to easy to start a online store.
Online stores are worth shit because it's so easy to build and start one.
For 1000 euro's, you've got everything to have it running. Combined with X dock where you don't hold stock, that's all you need to start a bizz.
And then there's the tax problem, too many just don't pay taxes. And how do you compete with those companies?
And what can you do about it? If I start a .com site, my country can't claim my revenue as my business is on paper on the other side of the world.
Screw that.
I did my part. Just bought an LWRC IC in Flat dark earth.
For the children. And the economies.
Why is it that so many of these articles lean towards 'policy error' when speaking of raising rates? Rates should be at a minimum of 5% right now, if not considerably higher. Has the entire thing been skrewed up for so long that that proper alignment is no longer recognizable...?
J.P. Morgan analysts wrote that the three best leading indicators for recession have been credit spreads, the shape of the yield curve and profit margins.
Here are some signs of a coming recession.
1. Investors in high-yield bonds are expecting to see their first negative return since the start of the credit crisis in 2008.
http://www.marketwatch.com/story/deteriorating-junk-bonds-flash-warning-signs-for-stocks-2015-12-07?dist=afterbell
2. Factory orders continue to drop
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
3. Default risk spikes
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
4. M&A set record
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
5. Iron ore prices tumble
http://www.marketwatch.com/story/iron-ore-prices-keep-crashing-adding-to-global-growth-fears-2015-11-30
6. Baltic dry shipping index tumbles
http://www.marketwatch.com/story/shipping-index-falls-to-all-time-low-stoking-fears-about-global-growth-2015-11-19
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
Dude, your recommendations include this gem:
"6. IF (the market is) UP AND GOLD IS DOWN, BUY GOLD – Gold usually moves opposite of stocks, so buy gold or gold funds such as GLD which will move up when stocks crash."
So... how's that been working out for you? And while we're on the subject, GLD? ARE YOU OFF YOUR MEDS AGAIN KELLY?
The CEO of BoA, Mr. Moynihan, just yesterday said "in consumer spending... for the monmth of November 2015 versus the month of November 2014, it's a very strong 4% plus growth, even with about 1.25% down drop in gas."
To my eyes, either Zero Hedge is wrong, or Moynihan is wrong.