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Heading Into The Holiday Season, The US Consumer Is Worse Off Than Last Year

Tyler Durden's picture




 

As so often happens, one of the biggest surprises of the recent period of broad economic weakness, has been the American consumer, who always somehow manages to come through (or so the official econometric authorities make us believe) and cross a chasm of economic stagnation with shopping bags full of stuff. But while the "consumer" (or his department of truth proxy) has sourced the US economic dynamo in the past several months as Europe imploded, and thus served as a supporting brace for the latest incarnation of the US decoupling thesis (where not just Europe, but also the economies of Japan and China have been deteriorating rapidly), the reality is that unless European problems are promptly fixed (which they won't be) the last ditch global economic support pillar, the US consumer, is about to roll over, because as Bank of America explains, "heading into the holiday shopping season; most [consumer statistics] measures are no better than they were last year. In fact, many are worse." And in what may be news to JP Morgan, "With home prices continuing to decline, a wealth driven consumption binge looks unlikely." In other words, while for now the bottom had managed not to fall off the global economy as the tapped out US consumer spent their last dollar to avoid a worldwide re-depression, if European problems are not rapidly resolved, and by that we mean well before the Thanksgiving sales begin, not even "record" corporate profits (which incidentally are rolling over and are purely at the expense of consumption capacity), will do much to prevent the market from finally catching up to reality.

Bank of America explains further:

One of the surprises in the recent data has been the resilience of the US consumer. Auto sales continue to trend higher as Japan-related supply-chain disruptions fade. The back-to-school shopping season was strong, with a 5.5% year-over-year gain in chain-store sales in September. A strong back-to-school season implies a strong holiday season. Unfortunately, we do not believe the recent strength in consumption is sustainable and remain cautious on consumers as we head into the holiday season. We expect real consumption to run just 2.0% annualized in Q4, barely keeping up with the growth in the overall economy.

 

Households face very tight budgets. Since hitting a nearby peak of 5.3% in June, the savings rate has declined 0.8ppt to 4.5%, the lowest level since December 2009. Over this period, real income growth has been weak; indeed, real disposable income is lower today than it was heading into 2011. And, while consumer price inflation receded recently, there has been limited follow through to real incomes since wage growth has also declined. The bottom-line is that there is a limit to how much households will be able to draw down their savings to finance spending. Table 1 summarizes several consumer statistics heading into the holiday shopping season; most measures are no better than they were last year. In fact, many are worse.

 

Meanwhile, consumers are still recovering from the wealth shock of 2008-09. On the one hand, consumers have made progress in repairing their balance sheet. The debt-to-income ratio has dropped to mid-2000 levels. However, net worth has barely recovered from its lows. In fact, nearly all the improvement in wealth has been driven by price appreciation in the stock market. The value of real estate assets has actually declined since the recession has ended. A home is the principal asset on the balance sheet of the average consumer. With home prices continuing to decline, a wealth driven consumption binge looks unlikely.

 

Policy dysfunction in Washington is adding to the laundry-list of concerns. Last year’s tax compromise included a one-year payroll tax cut and extension of jobless benefits for 2011. However, similar to last year’s tax debate, the debate over the fate of these policies will likely undercut consumer sentiment and economic activity. The risk of higher taxes next year might be having a negative impact on consumption now. Together, the expiration of the payroll tax cut and the failure to extend jobless benefits will hit personal income by roughly $130bn next year.

And if there is one thing that is absolutely certain this year, in addition to death and taxes, is that if there is something that congress and the senate can disagree on, it is everything. Kiss any fiscal stimulus extensions goodbye into 2012.

 

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Sat, 10/22/2011 - 18:30 | 1800546 LeonardoFibonacci
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Why that is impossible as Jamie Dimon, Lloyd Blankfein and all the rest of those bastards are raking in big bucks and will buy new toys.  They are all a bunch of SOB's!  Enough said.  Middle class America will wake up and these guys will feel very unsafe!

Sat, 10/22/2011 - 18:50 | 1800556 Quixotic_Not
Quixotic_Not's picture

OWS: The Perestroika Deception Develops a Face

In recent weeks, every American has watched with morbid curiosity as swarms of hate-filled, sputtering communist loons and Hippie-wannabees have taken to the streets, shutting down cities and leaving a path of destruction wherever they go.  Although many Americans disagree with the stated agenda of these radicals, most think them harmless, dismissing their acts as pathetic attempts to resurrect the failed social movements of the sixties.

But this group of determined radicals is not to be laughed at.  Lisa Fithian, the primary OWS organizer, is an unrepentant communist and proponent of government and economic destabilization as a means of achieving totalitarian centralization along communist lines.  Writing for a socialist rag, Fithian once stated, “I have no issue with property destruction…We’re in a society where property is idolized, so a lot of people don’t get it yet that it doesn’t really matter.”

While this should shock Americans (and would, if the facts were being reported) this is nothing new.  This is just the latest tactic in a long-term strategy that has been quietly moving forward for decades.  I am speaking of a high-level strategy designed to thwart American resistance to communist infiltration known as “Perestroika.”

http://patriotstatesman.com/2011/10/ows-the-perestroika-deception-develo...

Sat, 10/22/2011 - 18:56 | 1800594 APC
APC's picture

Is this a joke?  Hate filled, sputtering communist loons?  Man, someone just doesn't get it, or enjoys 'getting' it, from behind.

Sat, 10/22/2011 - 19:36 | 1800686 AldousHuxley
AldousHuxley's picture

Fed = central planning = communism = corruption

 

US consumer is nothing without easy credit. Americans finding out net worth is more important than any made in china stuff you have.

 

 

Sat, 10/22/2011 - 19:50 | 1800719 whstlblwr
whstlblwr's picture

It's right, watch out for the communist, and don't go to protest because they will infiltrate your mind. Freak.

Tell it to New Hampshire.

"What I Learned At Occupy New Hampshire
by Dan Kervick 10/16/2011 - 12:23 am

Well, not much really.
There were about 350 people there. That was good.
But here's the bad news:
One of the apparent leaders and key organizers is a Ron Paul guy. He's a Republican state rep. He was there with his Ron Paul sign and a megaphone. He is also, I think, the moderator of the discussion forum on the Occupy New Hampshire web site.
This was something close to my worst nightmare. I have absolutely no interest in being part of a movement that is some sort of junior version of the Tea Party, and it depresses me that what I had hoped was the awakening of a progressive movement is so incoherent and unsure of itself as to include these radical right crackpots under their tent. If the Occupy movement is not able to develop even enough coherence to kick these guys to the curb, it's not something I'm going to be able to participate in. I've had enough of laissez faire - and at bottom, that's what these guys are all about.

Sat, 10/22/2011 - 22:51 | 1801089 mfoste1
mfoste1's picture

What social conditions are most favorable for a dictatorship? high unemployment, rising inflation, social unrest, political disillusionment? hmmmmm this sounds exactly like the US right now.....i was listening to a jewish holocaust survivor being interviewed today. She said that obamas rise and hitlers rise are following the exact same path. She was very frightened, and even more so by the fact that people in america are completely blind to this. She spoke of how obama speaks to rally the people with false hopes and promises just as hitler did, and how obama promised change and how he tells people to seize their future(whatever the fuck that means).I cant help but agree with her.  I mean what better time to take control when people are much poorer and looking for help and hope anywhere. Obama is trying to do this now. He has entered war without congressional approval, he now can kill any american citizen who he deems a threat. I suspect the next step will be to extend the length of presidential term for as long as one is "reelected" the can remain in the seat. I am not joking.  I  mean  people, WAKE THE FUCK UP!!!!! . America must not allow this man to be reelected, he is evil. The future truly is at stake.........

Sat, 10/22/2011 - 23:29 | 1801171 UP Forester
UP Forester's picture

Gee, after reading Shirer's Rise and Fall of the Third Reich a year or two ago, the rise part was eerily similar.

Only thing is, it didn't come about in years, but decades.

 

Also, Mussolini on Fascism:

www.fordham.edu/halsal/mod/mussolini-fascism.asp

 

Scary.

Sun, 10/23/2011 - 00:28 | 1801236 Wannabee
Wannabee's picture

Tell the repubs to quit putting these moronic clowns on the big stage and the big O will be a one timer. RP excluded.

Sat, 10/22/2011 - 19:05 | 1800610 LeonardoFibonacci
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Look the rich are living hard times: "i'd like more soup sir"

 

http://online.wsj.com/article/SB1000142405297020434610457663898163162740...

Sat, 10/22/2011 - 19:41 | 1800700 merchantratereview
merchantratereview's picture

Written as though I am supposed to feel sorry for these creeps.

Sat, 10/22/2011 - 19:10 | 1800587 Shocker
Shocker's picture

No Way the Consumer is kicking A, Its definitely pretty sad when most of an economy is based off people buying stuff.

The consumer is hurting and this holiday season is not going to be much better, unless stuff changes

 

 

Sat, 10/22/2011 - 19:21 | 1800644 Hedge Fund of One
Hedge Fund of One's picture

It's sad that an economy is based on people buying stuff only if they reduce/quit their buying. It is efficient to produce only what people want to buy. It is a problem if the economy is built on making stuff that people don't buy. It is reality that they increase/decrease their buying in cycles. We are in a down/sad cycle now. At some point, that will reach equilibrium and increase again.

Sun, 10/23/2011 - 09:11 | 1801554 Chief KnocAHoma
Sat, 10/22/2011 - 18:32 | 1800548 bob_dabolina
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Holidays aren't about money, cool cars, fancy electronic gadgetry, huge meals (with all trimmings), brand new clothes, and other such shallow and vain niceties. 

It's about being thankful for having great politicians, a flawless monetary system, and an increasingly unified electorate. We were given the best gift of all, The Federal Reserve Bank, around Christmas time 1913 and we should be thankful for all the price stability it has generated since.

Sat, 10/22/2011 - 18:32 | 1800550 I am Jobe
I am Jobe's picture

Top Ramen Bitchezzzz.

Sat, 10/22/2011 - 19:42 | 1800705 AldousHuxley
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you know  you have inflation when SPAM is $3.50.

Some higher quality asian ramen go for $5 these days.

 

Ramen for middle class, poor just get sugar water.

Sat, 10/22/2011 - 19:54 | 1800724 Caviar Emptor
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One large tomato at Whole Foods: $2. One pint ice cream: $9.98

Sun, 10/23/2011 - 11:27 | 1801805 jd1123
jd1123's picture

Wow, you got ripped off. If that's what you're paying for food, I have a great deal on some subprime CDOs for you.

Sat, 10/22/2011 - 23:31 | 1801176 UP Forester
UP Forester's picture

Nah.  The poor get water flavored with Rumsfeld's genetically modified E. coli shit:  Aspartame.

Sun, 10/23/2011 - 11:33 | 1801822 jd1123
jd1123's picture

"Hey, if you want me to take a dump in a box and mark it guaranteed, I will. I got spare time."

Sun, 10/23/2011 - 12:07 | 1801932 TheMerryPrankster
TheMerryPrankster's picture

sugar water plus yeast = booze

The distance from the bottom to the middle is only a small step, but the distance between the middle and the top is a widening chasm.

In an environment predicated on growth, even merely standing still will hasten collapse. The economy has been dead in the water for 3 years, how long can it totter? It is unlikely to fall forward as there are no engines of growth, so the only direction is backwards.

Disentegration seems to be the future, undoing unholy alliances, discarding trade agreements, rending the social fabric.

Invest in an illusion or invest in survival, that is the only choice gong forward.

Sat, 10/22/2011 - 18:33 | 1800552 Snakeeyes
Snakeeyes's picture

Like wages falling at about a 5% rate after inflation?

http://confoundedinterest.wordpress.com

Add Bernanke/Greenspan to the list of Grinches for holiday spending.

Sat, 10/22/2011 - 19:24 | 1800652 Caviar Emptor
Caviar Emptor's picture

Real Median INcome fell 9.8% from December, 2007 to now. Remarkably, he decline accelerated during the "recovery". (Hint: it's biflation erosion)

http://www.sentierresearch.com/pressreleases/SentierResearch_PressReleas...

Sat, 10/22/2011 - 18:35 | 1800555 Snakeeyes
Snakeeyes's picture

Like wages falling at about a 5% rate after inflation?

http://confoundedinterest.wordpress.com

Add Bernanke/Greenspan to the list of Grinches for holiday spending.

Sat, 10/22/2011 - 18:35 | 1800558 X.inf.capt
X.inf.capt's picture

yep...

now the bankers cant spend any money, either...

no bonuses for them, so it must be getting bad...

NOW ITS AN EMERGENCY!

Sat, 10/22/2011 - 18:36 | 1800560 Unprepared
Unprepared's picture

One you go BAC, you never come black*

 

*black as in black Friday

Sat, 10/22/2011 - 18:40 | 1800565 Little John
Little John's picture

cute

Sat, 10/22/2011 - 18:42 | 1800567 LeonardoFibonacci
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To top all off another black guy wants to be president with his 999 or 666 bullshit.  Man the forefathers must be rolling in their graves.  Welcome to African economics, Zimbabwe economics!

 

http://www.youtube.com/watch?v=UtMC7bjOlIg

Sat, 10/22/2011 - 18:49 | 1800576 Unprepared
Unprepared's picture

You mean Heil McCain?

Sat, 10/22/2011 - 19:00 | 1800601 Bob
Bob's picture

Nein, nein, nein!?

Sat, 10/22/2011 - 19:47 | 1800714 AldousHuxley
AldousHuxley's picture

You know shit's real bad when WASPS don't want the top job.

 

Mormon, blacks, woman as candidates.....

 

Elect Cain if you want the entire nation to get a diarrhea from his 9.99 shitty pizza with fake sausages.

Sun, 10/23/2011 - 12:13 | 1801946 TheMerryPrankster
TheMerryPrankster's picture

Proxies are cheaper than actually running for office, especially with its attendant publicity and the spotlight on personal lives and activities.

Why spend a billion dollars to run for president, when you can buy his influence for a few hundred thousand dollars?

How to split the black vote? Run a black man against a black man. Brilliant manipulation of a rigged system.

I think I'll write in Bill Cosby, if we're going to have a black president, I'd rather have one who has some insight and has lived in the world long enough to know what life is truly like.

Sat, 10/22/2011 - 19:24 | 1800651 Hedge Fund of One
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McCain?

Sat, 10/22/2011 - 23:33 | 1801181 UP Forester
UP Forester's picture

Clinton.

Sat, 10/22/2011 - 18:50 | 1800580 Hohum
Hohum's picture

The slave-owning forefathers rolled over in their graves with the passage of the 13th Amendment.

Sat, 10/22/2011 - 19:55 | 1800727 AldousHuxley
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13th amendment was passed in 1865, but most people are still slaves......debt/wage slaves.

 

Forefathers approved 13th once their decendents became northern state factory owning industrialists who needed cheap labor.

 

 

Sat, 10/22/2011 - 18:43 | 1800568 SoNH80
SoNH80's picture

Merry Winter Solstice Consumption Binge!  HO, HO, HO (cue "A Christmas Story" Dept. Store Santa tapping Ralphie on the forehead, pushing him down the long slide).  Or, if you prefer, Happy Judeo-Historical Winter Solstice Consumption Binge Proxy!  Mazel tov!

Sat, 10/22/2011 - 18:50 | 1800579 Uchtdorf
Uchtdorf's picture

Hail, Saturnalia!

Sat, 10/22/2011 - 18:51 | 1800581 Zgangsta
Zgangsta's picture

Americans won't (can't) stop buying things for Christmas.  They'll just ring up a higer credit card/layaway debt than usual.

Sun, 10/23/2011 - 13:25 | 1802145 -Michelle-
-Michelle-'s picture

You can't ring up higher credit card debt if your credit card has been maxed out paying the electric bill.  And layaway isn't debt; it's prepayment.

Americans will stop buying things for Christmas.  I predict news stories about the overwhelming demand for the Salvation Army Angel Tree program.

Sat, 10/22/2011 - 19:00 | 1800600 buzzsaw99
buzzsaw99's picture

i hate the way those fudge packers talk about bad shit as if it is good shit:

 

We expect real consumption to run just 2.0% annualized in Q4, barely keeping up with the growth in the overall economy...

 

actually means: prices for everything have blown sky high but nominal economic activity has barely budged.

 

The bottom-line is that there is a limit to how much households will be able to draw down their savings to finance spending...

 

actually means: people are tapped frikken out!

 

On the one hand, consumers have made progress in repairing their balance sheet...

 

Actually means: Deadbeats are defaulting en masse but foreclosures are eliminating the free rent stimulus.

Sat, 10/22/2011 - 19:00 | 1800602 Sokhmate
Sokhmate's picture

Don't misunderestimate the american consumer.

Sun, 10/23/2011 - 12:21 | 1801962 TheMerryPrankster
TheMerryPrankster's picture

The story will be told with an 'unexpectedly higher use of gift cards' - the x variable that can be manipulated to represent whatever number they need.

Gift cards are a gift to the government and the corporations, they are vast tool of manipulation. Say your sales are down 10%, you create sufficient gift card entries to represent an amount of 15% of you sales, now you are up 5% and the cards will never be cashed in or used, so your lie will never impact your bottom line.

Gift cards.

Sat, 10/22/2011 - 19:02 | 1800605 LookingWithAmazement
LookingWithAmazement's picture

You will see that holiday shopping season will return "better than expected" sales. After all, the US economy is not in recession, performing better than expected and a climbing dollar makes imports cheaper. So. You know the rest of my story. same as ever. Merry holiday season.

Sat, 10/22/2011 - 19:56 | 1800731 earleflorida
earleflorida's picture

news flash: illegal immigrants returning home, "and cartman don't like it",... ~ 10% -15% consumer gone south of the border, with remaining legals & barely legal quite resourceful and creative, especially when you don't have anything except empty dreams - walmart/ target/ and big retail will suffer

jmo

Got Coal?

Sat, 10/22/2011 - 22:41 | 1801085 AldousHuxley
AldousHuxley's picture

illegal immigrants don't shop at walmart. They got some Mexican supermaketo that caters to illegals all in Spanish.

Univision will also suffer.

Sat, 10/22/2011 - 22:58 | 1801114 ceilidh_trail
ceilidh_trail's picture

Anecdotal, but, I see lots of illegals in the Walmarts and Meijers in greater cincinnati and hendersonville. nc areas.

Sun, 10/23/2011 - 14:50 | 1802339 earleflorida
earleflorida's picture

* ever so slightly off topic, but with some good meat still on the bone for a delicious soup-ish dinner for this evening fireside-chat, discussing where we've been, and concerning how we got here in the first place?

bush #41 & clinton's push hard for 'nafta' with hillary's 'ark' walton connection-connections and bowties the accord - unions are busted and all off-shoring begins a mass exodus -

"all system full steam ahead - go - , says the red-white-blue arrow"

walmart give ultimatum to u.s. vendors,... cut your prices or we go south - some vendors renege and go out of business, while most others capitulate and bow to their new master, moving methodically off shore or south of the border -                   

clinton /hillary & bush #43 pass 'cafta', and 'gatt' opening up the southsea passage to china via their membership into the wto -

obama -  gives away 's.korea,panama, and columbia' 'fta' with nothing in it for the u.s. - we have no say-so on the panama canal which should draw the public's curiosity, but -

summary: walmart has been the genesis and sole enabler that has laid america to waste,... china has been the great beneficiary of the treason perpetuated upon the american proletariat by its politicians and "u.s./mnc's" who owe no-allegiance to democracy other than their wallets - be it in yuan, dollars, or euro's!   

jmo

Sat, 10/22/2011 - 19:07 | 1800614 dust to dust
dust to dust's picture

 Give a gift that keeps on giving. A SILVER EAGLE. Gave that exchange at a PARTY among friends about five years ago. NOW its a snowball effect among friends. A beautiful piece of SILVER and it increased in value. Get the word out NOW.

Sat, 10/22/2011 - 19:21 | 1800638 RobotTrader
RobotTrader's picture

The U.S. Consumer is stronger than ever.

Thanks to many living "mortgage free" for 2+ years.

Any wonder why the XRT is hands down outperforming virtually every sectors except for XLU?

http://chart.finance.yahoo.com/z?s=SPY&t=1y&q=l&l=on&z=l&c=XRT&a=v&p=s&l...

Just listened to Tom Keene interview with Dana Telsey, noting the cool stuff that is going to be popular over Xmas this year:

She's expecting a huge "Black Friday" this year.

Not only that, the retailers have been so scared, none of them stocked up very much this year, so price cutting will be minimal.

Could be a blockbuster season for the top retailers, especially the leaders like Macy's, Limited, etc.

 

Sat, 10/22/2011 - 19:28 | 1800664 buzzsaw99
buzzsaw99's picture

last time i was in bbby it was stacked to the rafters. other than that i hate to agree but do. black friday will be the same as usual. online shopping will probably be better than ever.

Sat, 10/22/2011 - 20:40 | 1800819 surf0766
surf0766's picture

One wonders if another sampling method change is already in the works like last year.

Sat, 10/22/2011 - 22:57 | 1801111 JMT
JMT's picture

Shopping at Best Buy is somewhere between shopping on a Cheesey Used Car Lot & a Pretentious Nightclub that thinks it is cool but is full of Jersey Shore and Bridge & Tunnel (as they call them in Manhattan) Douchebags

Sun, 10/23/2011 - 12:54 | 1802075 TheMerryPrankster
TheMerryPrankster's picture

Bestbuy is merely Amazon.com's showroom. you go to bestbuy to touch it and then order from Amazon.

Sun, 10/23/2011 - 13:57 | 1802238 -Michelle-
-Michelle-'s picture

That's exactly what we did last time we needed something electronic.  Walked into Best Buy, immediately got the hard sell from a "salesman" for a Best Buy card.  When we explained that we don't use credit, he tried to give us a financial course on how much better it is to use credit instead of paying cash.

Then he asked us what preschool our kids were in.  I said we had them at home.  He told us how awesome his son's Head Start program was.

At that point, my husband and I bid the store farewell and went home to order what we wanted at Amazon.

Sat, 10/22/2011 - 19:55 | 1800729 kito
kito's picture

robo---stupid comment to say the consumer is stronger than ever. retailers have downsized, closed hundreds of stores, and they havent stocked up for at least 2 years. if the consumer is stronger than ever, why are stores still closing robo? do retailers close 10, 20, 30 percent of their stores when things are great robo, when the consumer is stronger than ever????  there is no way that overall gross holiday sales will be anywhere near total sales during the early/middle of the decade. stick to your near perfect hindsight calls robo. 

Sat, 10/22/2011 - 21:17 | 1800895 Pure Evil
Pure Evil's picture

It gets pretty bad when even the dollar store down the street is closing.

40% OFF and everything must go.

I guess the American penchant for worthless shit from china is drawing to a close.

Sat, 10/22/2011 - 19:55 | 1800730 Everybodys All ...
Everybodys All American's picture

Your charts are totally worthless. It's all about the EU crisis and what impact this has on the dollar. Nothing else matters. Dollar gets stronger and the market goes down. Dollar gets weaker and the market goes up. EU says they have a solution and the dollar gets weaker and the market goes up. EU says they have no f'n clue and the dollar gets stronger and the market goes down.

All the other CNbs is just not that important.

Sun, 10/23/2011 - 01:03 | 1801292 Hephasteus
Hephasteus's picture

Ya it's going to be awesome cause like everybody will buying like mad. So the liquidators won't have as much worthless crap to offload when they hit american apparel.

Buh Bye American Apparel.

Sat, 10/22/2011 - 19:52 | 1800659 Caviar Emptor
Caviar Emptor's picture

Notice the absence of holiday TV advertising? Usually by now you'd be bombared every 5 minutes. 

Truth is that retailers already suffered a very poor back-to-school season, which is taken as an advance indicator for holiday shopping. So they've cut their advertising budgets and are bracing. Already many reports of cut-throat doorbuster discounts. 

Sat, 10/22/2011 - 21:23 | 1800916 Pure Evil
Pure Evil's picture

Walmart has joined the ranks of Kmart in allowing shoppers to put items on lay-a-way.

Although, I have to wonder if the 5.5% year-over-year gain in chain-store sales in September is more of a result in schools putting more of a burden in purchasing school supplies on the parents of students due to lost revenue in property taxes.

Sun, 10/23/2011 - 11:56 | 1801901 Prometheus418
Prometheus418's picture

It's true enough that the schools are doing that, but that has little to do with the doubling of prices for most items.  School is getting expensive to a stupid extent- at this point, they are extorting at least an extra $100 a month from my household, all school-year long- and that's after paying property taxes.  Demands are constant for nonsense items like t-shirts to tie-dye, wigs, sunglasses, activity fees, snacks, and all other kinds of shit that has nothing at all to do with education.

And if you don't play along, the kids are the ones who get punished because they're not "participating."  

Sun, 10/23/2011 - 11:48 | 1801871 Prometheus418
Prometheus418's picture

Poor back to school season was no surprise.  I've got three school-age kids, and this year, while my income increased 3%, the cost of basic school supplies literally doubled across the board compared to last year.  Clothing was even worse, in many cases.

Euro crash with attendant prolonged spike in the USD that lasts long enough to drive the price of oil and imports down is one of the only things that will make black Friday work out the way retailers hope it will. 

That being said, don't underestimate the strength of US normalcy bias- while it makes no sense at all, there's still a very real chance that this actually could be a banner year for the retail holliday season.  People have been actually deprived for a couple of years, and the Christmas season is one that is beat into America so deeply that it is almost a part of our collective DNA.  If people are going to go full retard, tis the season for it.

If that happens, though, expect a desolate 1Q in 2012.  There's no room for a spending spree in most budgets, and if people do it, they will be in financial lock-down mode for a while when the hangover hits. 

Sun, 10/23/2011 - 14:56 | 1802358 earleflorida
earleflorida's picture

i wonder how long before the pangs of hunger set the reality body clock to panic mode?

Sat, 10/22/2011 - 19:36 | 1800685 kito
kito's picture

tyler is a medium--hes channeling the dead by quoting bank of america

Sat, 10/22/2011 - 19:38 | 1800690 JustACitizen
JustACitizen's picture

"All is well!!!"

See - you just have to believe...

Thank God the holidays are really about family and friends...love is not constrained by income.

"F" the elite and their lackeys in the media.

Sat, 10/22/2011 - 21:22 | 1800911 Van Halen
Van Halen's picture

I'm just glad we have a president in office who knows he's made the right choices.

http://biggovernment.com/sberry/2011/10/21/president-obama-ive-made-all-...

Sat, 10/22/2011 - 19:51 | 1800715 Caviar Emptor
Caviar Emptor's picture

Keep in mind: at the heart of the crisis is the battle bewteen Bullshitters and Regular Citizens. For the last 30 years, Bullshitters had their way, racking up huge national debts while claiming to "shrink government", increasing centralized power and globalization while preaching "government is the problem". 

The most prolific of the Bullshitters by far were the Banksters: claiming to be creating an "ownership society" while actually not only blowing a housing bubble, but tossing the debt hot potato over to retirement funds, municipal governments and other patsy investors. 

The Bullshitters, having made their billions managed to bullshit their way into making trillions through the crisis and bailouts, claiming to have once again saved the world from its crazy self. 

So when you hear that all is well with the economy (latest meme: "It's stabilized, not great but stable") are you going to be a patsy again and believe them? :-) You decide

Sat, 10/22/2011 - 20:18 | 1800752 dust to dust
dust to dust's picture

 Let US call it a devaluatoin of the US Federal Reserve DOLLAR, NOTE . FIAT not good. Tough to BUY a cup of commodities.  

Sun, 10/23/2011 - 12:31 | 1801989 TheMerryPrankster
TheMerryPrankster's picture

What is the true value of an illusion. A bit of paper backed by a promise can never have any absolute value other than zero.

It is the smoke and mirrors that become important for they create the illusion of the value of the promise.

Since all currency is currently fiat, it is a battle of promises, a theater of illusions being played on the world stage.

Sat, 10/22/2011 - 20:24 | 1800777 slewie the pi-rat
slewie the pi-rat's picture

the morgue = grinch

Sat, 10/22/2011 - 21:09 | 1800875 Sunshine n Lollipops
Sunshine n Lollipops's picture

And America = Whoville.

Sat, 10/22/2011 - 23:08 | 1801134 mayhem_korner
mayhem_korner's picture

 

 

Whoville was happy, with or without their jing-tinglers.  Maybe there is a lesson in there, no?  Maybe, Christmas means just a little bit more.

Sat, 10/22/2011 - 20:26 | 1800780 Justaman
Justaman's picture

Happy Holidays bitchez!

Sat, 10/22/2011 - 21:20 | 1800904 Van Halen
Van Halen's picture

Last year, the US consumer was worse off than the year before. This year, the US consumer is worse off than last year. And next year they'll be worse off than this year. Obama and the Liberals clap their hands with glee: everything is going according to plan.

Sat, 10/22/2011 - 21:22 | 1800912 krispkritter
krispkritter's picture

2011 Holiday Season: Poor: Silent Fright, Mostly Blight, We know we're screwed, And it ain't right... Main Street: Ho Ho Ho-ly Shit We're Out of Money! Wall Street: Dashing through their blow, A bunch of Ho's to lay, Over the Poor we mow, Laughing all the way... ZH: Silver Bulls, Silver Bulls, Bernanke Says Things are Fine But We Know They're Shitty... 

Sat, 10/22/2011 - 21:37 | 1800958 stunner21
stunner21's picture

Walmart brought back Lay-a-way. All is good now.

Sat, 10/22/2011 - 22:50 | 1801101 JMT
JMT's picture

Not so fast

http://www.consumerindexes.com/history.html

Uh, consumer spending is zooming into the stratosphere according to the consumer metrics index.

This year black friday may break records both in store & on line --- over 75% of people plan to shop and will probably spend at least a few grand each over the now 4 day shopping period.

I can only speak for the Boston area (actually most of Massachusetts east of I 495) that things seem great here. Bars & restaurants are packed, the malls are packed during weeknights, recruiters & hiring managers complain that they have so many job openings but either receive very few applications or no one is qualified.

Sun, 10/23/2011 - 01:07 | 1801296 Hephasteus
Hephasteus's picture

Let's see boston industry. College Bubble.

You are so fucked man....

Sun, 10/23/2011 - 15:06 | 1802382 earleflorida
earleflorida's picture

boston, and boston only, has always  done well - that's it - i spend summer's on cape cod and it's destitute, as is the rest of this politically corrupt, and pathetic,... 'too-the-gills', commonwealth! 

you gotta remember that patrick [gov] is a close friend of barry,... so?   

Sat, 10/22/2011 - 22:59 | 1801117 mayhem_korner
mayhem_korner's picture

 

 

Maybe this year folks will focus on Christmas instead of stuff.

Sat, 10/22/2011 - 23:02 | 1801121 JMT
JMT's picture

Christmas or as everyone calls it "The Holidays"???

Sat, 10/22/2011 - 23:06 | 1801128 mayhem_korner
mayhem_korner's picture

 

 

Maybe folks should take a closer look at that, no?

 

Where I live suffers from the same erosion of buying power as everyplace else, yet we are doubling to 500 the number of Christmas packages being sent across the globe.  And they aren't holiday packages, the #1 focus is the Scriptures and the Gospel.

Sat, 10/22/2011 - 23:01 | 1801119 SilverIsKing
SilverIsKing's picture

Let's just be grateful that the troops will be home to usher in the New Year and usher us all into FEMA camps.

Sat, 10/22/2011 - 23:50 | 1801199 A Lunatic
A Lunatic's picture

Will there be turkey and stuffing at these camps?

Sun, 10/23/2011 - 04:24 | 1801438 Incubus
Incubus's picture

plenty of turkeys, yeah. 

Sun, 10/23/2011 - 12:34 | 1802003 TheMerryPrankster
TheMerryPrankster's picture

They will serve cranberries with the solyent green.

Sun, 10/23/2011 - 15:10 | 1802395 earleflorida
earleflorida's picture

do you think i can join or come along?

my doctor says i'm grossly obese, and  very insecure,... 

Sat, 10/22/2011 - 23:33 | 1801180 reader2010
reader2010's picture

I thought Jim Rogers likes to say this is the Chinese century now. Like it or not. So we American "Consumers" are no longer fucking revelent. 

Sun, 10/23/2011 - 04:23 | 1801435 Incubus
Incubus's picture

Yes.  Good way to put it:  Americans are no longer relevant.

 

This is us throwing a tantrum.

 

This is the rest of the world not giving a fuck.

 

/sadstory

Sun, 10/23/2011 - 12:42 | 1802036 TheMerryPrankster
TheMerryPrankster's picture

So why is the huan pegged to the dollar? China is still a dream, a proxy that everyone plants their illusions upon and makes it whatever they dream it to be.

China still has a very large populaton living in poverty, China has many more single men, than single women. China has as many problems as it does positives.

The U.S. is an empire in crisis, much like the USSR in the early 80's or England in the 40's, and for frosting on the cake this ball of confusion has the most nuclear weapons in the world and the largest defense budget and forces.

I wouldn't hang all my economic hopes on China and though the American centric world view is shifting, there is a butt load of nukes that will keep everyone's attention in the US direction.

Sun, 10/23/2011 - 01:17 | 1801317 Grand Supercycle
Grand Supercycle's picture

SP500 weekly chart shows megaphone wedge and looks bullish.

Market consensus became clearer on Friday so back to the original bullish analysis and SP500 weekly chart reverts to bullish/neutral.

More info:
http://stockmarket618.wordpress.com

Sun, 10/23/2011 - 10:53 | 1801679 RiverRoad
RiverRoad's picture

Ah, but there will surely be a little "something" to sweeten the pot just prior to the elections in November.  Count on it.

Sun, 10/23/2011 - 11:37 | 1801836 goat
goat's picture

I don't know what to buy the baby jesus this year....

Sun, 10/23/2011 - 15:16 | 1802403 earleflorida
earleflorida's picture

i just spit up my tea,... ya gotta stop this - just can't stop laughing, before my chair breaks,... 

Sun, 10/23/2011 - 12:29 | 1801984 Snakeeyes
Snakeeyes's picture

If we use the Shadow Government Statistics measure of inflation, real GDP actually fell -5.5% for Q3, not up +2.5%.

 

This Week’s Reports: 3Q Real GDP Expected to Grow at +2.5%! (Or Is It Down -5.5%?), Case-Shiller Up +0.2%! (Or Is It Down -0.8%?)

 

http://confoundedinterest.wordpress.com/

Sun, 10/23/2011 - 15:08 | 1802386 mhjhnsn
mhjhnsn's picture

Well, of course.  Bernanke and Geithner and Obama are keeping interest rates low to help their friends in the banks and hedge fund classes, and anyone trying to save, like 50M baby boomers and their 401(k)s and pensions, can't get a decent, safe return to even keep up with inflation.  They have to save even more because their health and age means they can't put off retirement forever. It all shows up in the confidence surveys, and anemic consumer demand.

The more the Fed and the govt do, the worse they make things for "the other 99%."  The demonstartors belong in Washington, at the White House, Capitol, Treasury and Fed.  Sure, Wall Street is a bunch of crooks, but they always have been and always will be; in the end, they just respond to the incentives the government gives them.

Mon, 10/24/2011 - 10:24 | 1804162 Shizzmoney
Shizzmoney's picture

Someone wanted to bet me that retailers' stock will have their best XMAS season EVER this year.....I should take other side.

I say the big box stores lose out, while online sites like Amazon, which can sells at warehouse prices, cutting consumer's portion of paying for sales people/retail staff, reap HUGE profits (esp since most also dont pay state tax on Amazon purchases). 

Factory orders from CHina are down too, even the labor slaves i nthe East know they aren't making as much for their wage slave counterparts in the West.

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