Retail Accountability?
Forget New Hampshire Pollsters -- if you want to see some poor professional work, have a look at those who cover retail sales for a living.
I'm not naming names, but Cheese N Crackers! how many analysts, pundits and others totally shit the bed when it came to this year's holiday sales?
Forget forecasting next month -- how about understanding what is going oon RIGHT NOW? Or if that's too complex, how about what happened last month?
Credit card debt turned up, the home ATM turned down, inflation was rampant, real income gains non-existent, the job market mediocre. On top of that, we had much higher prices for daily requirements like Food and Energy -- and still, there was total denial about how healthy retail is.
Now, the MSM tells us Americans Cut Back Sharply on Spending. Really? You don't say!
Those of us who are reality-based and paid even the slightest attention saw this coming a long time ago.
~~~
With December Retail Sales a minute from release, let's ask this question: Who really blew it this year on Retail? What commentary was off base, ugly or just plain wrong?
Source:
Americans Cut Back Sharply on Spending
MICHAEL BARBARO and LOUIS UCHITELLE
NYT, January 14, 2008
http://www.nytimes.com/2008/01/14/business/14spend.html
Tuesday, January 15, 2008 | 08:29 AM | Permalink
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Comments
It is frightening when you consider credit card debt just hit $935.7 billion . . . that's nearly a TRILLION dollars!
Well, I'm sure it is "contained", being "watched" by our concerned officials in Washington... besides, if Fannie and Freddie can help rescue the subslime, why not the car loans... and surely the govt can figure out a way to help those victimized credit card borrowers.
Posted by: Strasser | Jan 15, 2008 8:49:13 AM
Negative talk is traitorous!! You made baby Jesus cry by not shopping!! The war on Christmas continues-we all know the true meaning of Christmas is buying cheap platic crap!!
The excuse of the decade--No-one could have predicted.
You think this year was bad, wait until next year.
Posted by: Neal | Jan 15, 2008 8:54:03 AM
In other news; tax cuts lead to huge deficits and home values don't grow at 20% a year.
Posted by: edhopper | Jan 15, 2008 9:08:24 AM
Goldilocks = patriotism. There is nothing wrong with the economy that a good supply side tax cut won't fix. Interest rates are a) too high b) too low c) just right. There is no limit to up. Democrats cause the problems.
L.K.
Posted by: cinefoz | Jan 15, 2008 9:12:07 AM
Brian Wesbury says retail sales are fine...critics focus on wrong metrics!! Just read it on his web site commentary. :)
Posted by: glenn_in_ma | Jan 15, 2008 9:24:55 AM
Brian Wesbury refuses to believe the titanic sank too.
Posted by: Stuart | Jan 15, 2008 9:32:22 AM
When you drink the Kool-aid, you never see "it" coming.
Posted by: Marcus Aurelius | Jan 15, 2008 9:36:10 AM
Posted by: cinefoz | Jan 15, 2008 9:12:07 AM
________________
Everything GWB and his cronies touch turns to shit. It might take a while, and he might only brush it with the sleeve of his jacket as he passes, but it will turn to shit.
We should elect one of the Republican doofuses currently running. I'm sure they'll straighten things out.
Posted by: Marcus Aurelius | Jan 15, 2008 9:41:11 AM
I'll tell you one thing....The markets did
- not
Posted by: SINGER | Jan 15, 2008 9:43:23 AM
And Brian Wesbury is also member in good standing of the Flat Earth Society.
His dorm buddy in college was Baghdad Bob.
Posted by: Francois | Jan 15, 2008 9:47:11 AM
they stopped spending? really? didn't consumer debt rise to an all time high recently?
cc debt is going through the roof. it seems like they're spending MORE money but on less stuff. (inflation is a bitch, ain't it?)
Posted by: m3 | Jan 15, 2008 9:47:18 AM
Barry,
I would expect nothing less from the "professional" mainstream journalists covering retail.
It doesn't matter what field you want to consider — economics and finance, domestic politics, international relations, the military, constitutional law, energy, sports, technology — a large percentage of the alleged journalists covering these topics have proven themselves to be lazy, uninformed, craven, and most of all, just plain stupid. And one consistent attribute the worst of them share is a blind contempt for and complete ignorance of the internet and blogosphere.
I know there is a huge amount of crap on the internet, but there's also a huge amount of hard, valuable information, and tremendous insight there, too. The best of the bloggers out there (such as BP) do more in one morning of blogging —and adds more value— than your average journalist lightweight does in a month.
Posted by: bluestatedon | Jan 15, 2008 9:48:44 AM
"Even wealthier consumers, who were seen as invulnerable to rising gasoline prices and falling home values, are feeling the squeeze. "
Hmmm, I guess the bonuses at Merrill and Citigroup aren't looking so good this year?
Posted by: Steve | Jan 15, 2008 10:14:29 AM
S&P breaks out below 1400. A trend? I hope so. I'm still waiting for S&P 1360, more or less, and supporting drops in Brazil, South Korea, and Hong Kong. When Brazil and Hong Kong break down, this will be a positive signal for an approaching bottom. Then ... will it keep going down or will it be a base for a rise?
Posted by: cinefoz | Jan 15, 2008 10:15:54 AM
whoa hold on their chief, some of us saw it coming. I wrote on my blog on Dec 14, Jan 10 and Jan 14 that retail sales would suck.
I love Neal's post here (2nd post) I've had two comments on my blog just like that, but they are serious. Both were business owners and both said the same thing. Don't talk negative 'cause it's the negative talk that causes recessions.
If only I had that kind of power.
Posted by: Michael Donnelly | Jan 15, 2008 10:18:41 AM
"Negative talk is traitorous!! You made baby Jesus cry by not shopping!!"
OMFG that is awesome. GWB might not be dumb enough to say that on national TV but you can tell by looking behind his beady little eyes that he's thinking it.
Posted by: Brett | Jan 15, 2008 10:23:29 AM
i agree with the theory "Negative talk leads to cut in consumer spending, and brings recession"
recession is a part self fulfilled theory.
bears have been screaming that the end of the world is coming...if we were to believe then and act accordingly, we will be in a depression....
its simple:
1. you hear bad news
2. you get worried, start planning for bad times, cut down spending
3. cut down spending leads to bad business, business cuts down spending and jobs
4. lay offs leads to more bad sentiments, more spending cut
5. more lay offs
the cycle goes on till there is nothing more to cut down on.
Posted by: techy2468 | Jan 15, 2008 10:55:23 AM
No one could have predicted how lame the MSM would become after giant conglomerates started buying it up.
Except all of those people who were screaming about it, of course. But they weren't on staff at the MSM, so they were completely ignored.
Posted by: dark1p | Jan 15, 2008 11:03:55 AM
If I hear "kitchen sink" quarter again.......
they have such short memories, they said that the last 3 quarters....
more bottom catching by the usual suspects....
I thought yesterday was the bottom.
Not that it couldn't be the kitchen sink quarter.
Posted by: Eric Davis | Jan 15, 2008 11:05:27 AM
Bob Pisani just reported that people aren't paying back their debt as fast as people thought. That's the problem, the vast majority people analyzing and tracking this didn't think. They didn't think one bit. Like lemmings they just regurgitated whatever would work their own books. The people that actually thought about it, got their butts off the kool aid desk and did some detailed objective analysis, predicted it as a certainty.
Posted by: Stuart | Jan 15, 2008 11:07:27 AM
techy-
step away from the keyboard
People (wrongly or rightly) do not stop spending just because they hear a recession is coming. There is enough information to tell them what is coming-because the financial acumen of our collective country SUCKS they can ignore or engage. It is a choice to analyze that information and adjust accordingly or continue the bad practice of replacing debt with new piles of money.
You have your cause and effect backwards.
Just because you say the sun will rise in the west does not make it so. But I'm sure there would be a group of people sitting on the bluffs (here in SD) waiting for it to happen.
Ciao
MS
Posted by: michael schumacher | Jan 15, 2008 11:12:51 AM
I remember watching CNBC the week before Christmas and listening to one of the talking heads say "Although the numbers don't seem very good so far, I've taken an informal poll of people at parties, and no one is done with their Christmas shopping yet, so it seems people are just waiting until the last minute this year."
I thought, "This woman really is part of the problem.". The media as a whole, but certainly the TV-business-news stations seem to have lost all ability to objectively interpret and then report on the facts.
Posted by: sundevilsf | Jan 15, 2008 11:19:49 AM
Brian Wesbury was also bullish in 2000. If Wall Street were truly driven by free market principals they supposedly espouse, he'd be pushing a broom. This is what a cartel will get you. Pervasive incompetence.
Posted by: BDG123 | Jan 15, 2008 11:21:10 AM
edhopper,
"In other news; tax cuts profligate spending lead to huge deficits and home values don't grow at 20% a year."
There, fixed that for you.
Posted by: Pool Shark | Jan 15, 2008 11:23:29 AM
Techy2468, you do have a bit of a point. Unfortunately, it doesn't start that way.
The media most often reflects the positions of the 'experts', especially those in government and the financial establishment. Until recently, the message being pumped out was that everything would be fine, messes would be contained, the economy is creating jobs, etc. Meanwhile, the people down the street discovered that they had to drop the price on their house $50,000 in order to unload it, and word spread. People got nervous. The price of gas, food, heating, medical care and education went through the roof, and family budgets were adjusted accordingly. Maybe some people knew folks who got laid off and ended up working at Burger King or Wal-Mart. And so on.
The thing is, 99% of Americans don't pay much attention to financial or economic news. Most people don't read newspapers (or anything else). The vast majority don't watch CNBC. The negative news reports -- when they finally start showing up -- only confirm what a lot of middle-class and poorer people already know: things aren't so hot. The MSM (which is the only media most people get any information from, such as it is) is an incredibly lagging indicator of what's going on in people's lives and the mass psychological mood.
So, yes, negative reports can make negativity worse in that they tend to validate the turn in psychology and further increase awareness. But people don't pull in their spending horns because they hear bears on TV. They do it because they realize they can't actually afford a lot of stuff anymore. And they tend to be heading in that direction long before they encounter 'gloom and doom' on the MSM. By that time, even the big-money financial guys and government people like Paulson (er...one and the same?) are spouting reality.
Posted by: dark1p | Jan 15, 2008 11:24:58 AM
