Earlier today I listened to a video on Bloomberg of an economist for a Japanese Bank who made comments to the effect, IIRC, that in the last couple of weeks of the calendar year there could be peculiar difficulties in the asset backed commercial paper market because some institutions would prefer not to show ABCP on their financial statement at year-end and that a great deal of the paper now have very short maturities, e.g. it rolls over every seven or nine days such that a great deal of paper could be maturing on each day during the last few weeks of the year. Sounded quite plausible to me.
Certainly the economy here in the UK seems to starting to nose dive. The housing market is tipping over and I hear first hand from people working in the City of London, that financial jobs are becoming uncertain, to say the least.
Risk,
Yep, for how many years has the financial press been telling us about the "global economy" and "new world order". Now that it's bad news, "er, nevermind that, we're on an island here".
I am wondering how long the ECB can continue to pump liquidity in 'piece meal' before it starts to weigh down the euro.
I've been waiting for that but expected a more 'decisive' and overt self-immolation on the part of our ECB friends across the Atlantic... this is sort of an accidental falling on their own knife.
dryfly:
the ECB's (like most of the Fed's) injections so far have been very short term and have been drained again.
Still, yes, the decoupling story has always been nonsense. The financial and economic crisis is US-centered but still global, just local results will vary.
Financial Times- "The latest data will knock European policymakers confidence that the eurozone can remain relatively immune from the US subprime mortgage crisis, although few economists expect a serious slump."
In other words, 'We're pumping billions of euros into the system just for the hell of it.
It seems that lending is slowing quite significantly. The rate of increase in outstanding mortgage debt YoY is 7.7% compared to 11.5% a year ago.
The leader is Germany, where outstanding balance of mortgages is dropping. Therefore, Germans are paying off their mortgages faster than taking new ones. This is interesting because there was no bubble in Germany but apparently higher interest rates create an incentive to reduce the debt. The debt in all the other countries is increasing but the rate of increase is slowing (second derivative of the outstanding debt is negative). The yearly increase of the debt stands at -24.7% (a difference of outstanding debt between Sep 2006 and 2007 compared to 9/2005-9/2006) compared to +11.6% a year ago and +29.8% two years ago. Last time the rate of increase was dropping was in 2002. Of all the euro countries the increase is positive only in Greece (+8.9%), Luxembourg (+89%), Austria (+77%), Slovenia (+17%) and Finland (+1.5%).
An interesting observation is the date when this indicator went negative:
whole euro area: 12/2006
Belgium: 11/2006
Germany: 01/2007
Ireland: 12/2006
Spain: 09/2006
France: 09/2007
Italy: 10/2006
The Netherlands: 07/2006
Portugal:03/2007
As far as I know, Spain and Ireland have ultra-bubble, France, Italy, The Netherlands, Portugal, and Finland - a "regular" bubble, Belgium a mild bubble, and Germany and Austria no bubble.
I'm not sure if these data cover all mortgages (or just hold by banks) and there is probably some noise in the data but the cooling of the market is indisputable and it started well before this infamous "credit crunch". It was probably both due to reaching affordability limits and due to higher interest rates.
Lending is getting tighter and tighter,'' said Mary Beth Fisher, an interest-rate strategist at UBS AG in Stamford, Connecticut.You're going into year-end and some volatile earnings reports, plus financial companies are writing down assets, so they're going to end up needing more capital for themselves and for their clients.''
NEW YORK - The nation's retailers had a robust start to the holiday shopping season, according to results announced Saturday by a national research group that tracks sales at retail outlets across the country.
According to ShopperTrak RCT Corp., which tracks sales at more than 50,000 retail outlets, total sales rose 8.3 percent to about $10.3 billion on Friday, the day after Thanksgiving, compared with $9.5 billion on the same day a year ago. ShopperTrak had expected an increase of no more than 4 percent to 5 percent...
(snip)
8.3%!!!!!
Even allowing for the fuzzy-wuzzy, loosey-goosey exclusion of same-store comparisons, and inclusion of inflated dollars...like, wow. Miss Market will buy a star with this news, come Monday.
"There's speculation in the market as to whether the dollar is in terminal decline,'' said Michael Klawitter, a currency analyst at Dresdner Kleinwort in Frankfurt.It's looking increasingly possible that the dollar will lose its status as the major transaction and reserve currency.''"
freddy p - are these the same folks that gave us a 19% increase on Black Friday last year? Somethin' like that. Only to see the final seasonal numbers way less - though still tolerably decent?
Which banks/lenders/developers are going to go bankrupt in Poland because of the reckless lending and the collapse of the RE market? I wouldn't mind to short them on the Warsaw Stock Exchange. Am I too late?
Recently, I talked to my sister in Warsaw. Apparently the lending over the last two years was just insane. Zero down, interest only, forty year mortgages, phony appraisals, etc. They beat Americans to the punch. My sister-in-law is trying to sell her apartment in Warsaw but prospective buyers can't get the mortgage. I guess party is over, the music has stopped and everybody is looking for a chair.
Dryfly, here's the ShopperTrak story and, yes, you are correct. It was ShopperTrak last year. I'm expecting Neil Cavuto to announce any moment now that Black Friday was up 743% from last year.
"According to ShopperTrak RCT Corp., which tracks sales at more than 50,000 retail outlets, total sales rose 8.3 percent to about $10.3 billion on Friday, the day after Thanksgiving, compared with $9.5 billion on the same day a year ago. ShopperTrak had expected an increase of no more than 4 percent to 5 percent..."
Are the retailers making any money? They can discount themselves into bankruptcy. I know,I know, they will make it up on volume
My view from here on the margin of North America is that the American citizen is the canary in the global coal mine of debt. The Canadian version of the ARM is the VIRM(variable interest rate mortgage). I know people who are just barely paying their mortgages now, and they believe their rates are not gong to change. Pity those folks when the VIRM turns.
"Who knows?" said Jay McIntosh, director of retail and consumer products at Ernst & Young's Chicago office. "Everything you hear about these days, they're all estimates. Nobody reports figures to the government or anything. I can pretty much tell you anything you want to hear."
"Is Black Friday really the busiest shopping day of the year?
Many experts say probably not "
Can someone explain how Schwarzenegger's deal with the servicers to freeze teaser rates on ARMs is going to work?
They sold those loans to investors, and now they are unilaterally declaring that they will reduce the contractual rates on the loans that the investors bought?
"Understanding conversion rate - the number of customers who entered the store and made a purchase - is one of the keys to profitable retailing. It's not enough to simply measure footfall. ShopperTrak converts raw data into business intelligence which enables local, regional and head office management to make significant and impactful changes in their sales performance," she said.
Combine shopper counts with existing retail business measures to give you the extra dimension to store performance measurement Shopper Traffic, Conversion Rate, Staff-to-Shopper Ratio
From ShopperTrak: Foot traffic data is perhaps the most accurate leading indicator of future sales. Page not found | ShopperTrak
From Shoppers Jam Stores, Seek Big Bargains Louise Jackson of Chesapeake, Va., arrived at the MacArthur Center, a mall in downtown Norfolk, Va., at 7:30 a.m., a half hour before it opened.
"We're just browsing, to see what's out here, to see if there's anything that would be worth it," she said. By 9:30 a.m., she hadn't bought anything, although she did place a pair of pants for herself on hold at Nordstrom. Her only shopping strategy was to keep an eye out for good deals. Breitbart.com
That ShopperTrak news is perfect. We'll get a nice bounce in the markets, which will be a great opportunity to reload on puts before the real numbers come out.
ShopperTrak sounds like it was invented by the editors of The Onion.
From ShopperTrak's website:
"ShopperTrak's embedded counting system, the "Orbit" customer traffic counter, is an inconspicuous, box-style device that records images with a built-in video sensor and determines whether the images not only are human or not, but also adult or child. Moreover, the resulting data is time stamped for detailed analysis"
Not sure how the "Orbit" can tell if thare are more people in stores (let alone whether those people are spending money) or whether it's just the same people walking around more. Fortunately, due to the "Orbit" technology, we know that these upbeat results aren't due to roving packs of children or dogs sneaking into the mall. I wonder how much "research" the holiday weekend skeleton crew at Bloomberg performed before running the ShopperTrak "newsflash"...
With regard to all the programs designed to help people get out of ARMS, there was a stark piece in a Boston publication (Boston.com) this week on how useless the attempts are:
"Eight states including Massachusetts have pledged almost $900 million this year to help borrowers replace unaffordable mortgages, but the states collectively have refinanced fewer than 100 people, a Globe survey found.
In Massachusetts, where the Patrick administration introduced a $250 million program in July as a "big piece" of its efforts to limit foreclosures, not a single loan has been refinanced."
"The vast majority of the applicants aren't eligible for refinancing. They have either fallen too far behind on their payments, have badly damaged credit, or simply owe more on their loans than the value of their homes, making refinancing effectively impossible."
Wow, who would have guessed any of this? Great piece worth a look. It would be funny if it wasn't so sad.
Apologies to hosts for hijacking this thread, but this is so precious:
From wikipedia, Mystery Shopping
"Mystery shopping is a tool used by market research companies to measure quality of retail service. These companies send mystery shoppers to 'act' as shoppers in return for some combination of cash, store credit, purchase discounts, or reimbursement for the goods or services purchased." Mystery shopping - Wikipedia, the free encyclopedia
I'm imagining all those "orbits" counting all those mystery shoppers!
So, ShopperTrak converts foot traffic measurements into dollar transaction volumes? I suppose they use some fancy algorithms based on past collected data. I wonder how accurate those numbers could be at economic infection points?
Footfalls echo in the memory
Down the passage which we did not take
Towards the door we never opened
Into the rose-garden. My words echo
Thus, in your mind. But to what purpose
Disturbing the dust on a bowl of rose-leaves
I do not know. Other echoes
Inhabit the garden. Shall we follow?
You know, I read through the whole thing and basically it was a very simple story wrapped in a complicated structure:
You had buyers buying something that was levered up at 15x. I couldn't see a difference between the CDPO and something like the common stock of Annally Mortgage Management. Difference being that NLY is common stock in a company that buys Treasuries and agency paper with borrowed money whereas a CDPO was a claim on AAA rated corporate debt purchased at 15x leverage. Sort of like an MREIT.
1x leverage with a 40bps vs. 15x leverage with a 3-5bps loss--both efficent paths to losing money.
Data from ShopperTrak showed Black Friday sales were down 0.9 percent from a year ago to $8 billion. ShopperTrak said sales in the South were particularly good with the Midwest coming in second. Major retailers will release November results later this week.
"With heavy discounting by non-mall retailers combined with the extended shopping season in 2005, consumers may not feel the pressure to shop early this holiday season," ShopperTrak said in a statement.
Sales grew 6% to $8.96 billion from the same day a year before, according to estimates from ShopperTrak RCT, a Chicago-based research group that tracks sales at 45,000 locatiions around the country.
The day after Thanksgiving, known as Black Friday to retailers, marks the traditional start of the holiday shopping season, and retailers and market participants often look to it as an indicator of how the season will shape up. ShopperTrak noted, however, that Black Friday results are not always a reliable gauge.
"Because Black Friday isn't the greatest bellwether for the season's performance, retailers need to remain cautious, but undoubtedly this type of a season opening is a nice shot in the arm for the industry," said Bill Martin, co-founder of ShopperTrak.
Which banks/lenders/developers are going to go bankrupt in Poland because of the reckless lending and the collapse of the RE market? I wouldn't mind to short them on the Warsaw Stock Exchange. Am I too late?
Shorting individual stocks on Polish stock market is almost impossible. It was never easy to find shares to short but for some unknown reasons, currently the short sales volume <a href=http://www.kdpw.com.pl/statystyki/st_krotkas_arch_e.jsp" >completely froze. You can short futures but except for the index, only some of the largest companies are available and the volume is not great. Some lightly traded options are also available.
Developers have already fallen significantly, especially smaller and crappier ones. With banks, I have absolutely no idea which are the worst and what kind of losses are expected. The outstanding value of mortgages (roughly $40 billion) in the banking sector might be low enough for them to survive
Apparently the lending over the last two years was just insane. Zero down, interest only, forty year mortgages, phony appraisals, etc.
It was insane. Zero down and 40 years were popular but interest only was rare. Appraisals were phony indeed. I heard that frequently the selling price was the apprised value.
My sister-in-law is trying to sell her apartment in Warsaw but prospective buyers can't get the mortgage. I guess party is over
Well, the market hasn't collapsed, yet but it's getting tough indeed. I created a page tracking new housing ads and it pretty well correlates with the state of the market. The boom in 2006 was indeed unprecedented and the current rise in supply is incredible, too.
Just an observation of the recent posting. Like the markets, it appears that the discussion is very one sided. Now I understand that a site like this tends to attract more bears than bull but it seems to be about 100% these days, and that's different from even just a month or two ago.
I don't know a thing about shopper track but I would wager a large sum, that if I had video cameras in 50,000 stores, and historical sales data from those stores, I could produce a projected sales model with great accuracy.
My general theory of intermediate to long term investing is generally about understanding the consensus and figuring out where it might be wrong and what would the consequences be.
Right now, the consensus is getting pretty bleak in terms of economic performance. If the consensus is wrong in that things are going to be much worse than expected, then we are heading for something bordering on economic armegeddon. If on the other hand the forces of globalization and the entry of 2 billion people into what we call the first world carries the day, then there are some areas that are going to do very, very well, and are not priced for the outcome.
"In Columbus, Ohio, Theresa Johnston, a 47-year-old social worker, was shopping at the Big Lots discount chain because she had to, not because she wanted to.
Its a little embarrassing, actually. I dont like to be seen here, she said, planning to buy a set of 42 knives for $35. "
vader and vader's dad hit the Big Lots, Fri.
Yea, we both would like to move up to say Walmart, but we do what we can.
This one is even better, ready for the Nobel prize
"I'm really looking for the bargains this year because I'm losing my job; they're moving our plant to Mexico after the first of the year, so I have to be careful," said Tina Dillow of New Richmond, Ohio, who camped out at a Best Buy store near Cincinnati at 3 a.m. because of a great deal on a laptop."
energycon,
i am generally not shy about wagering, but unfortunately in this case it is not a bet we can reasonably take
sides upon, unless of course you have some video datafeeds....
i agree that forecasting is not an easy chore. i have been doing it in one form or another for near 18 years, and its a tough, but interesting way to earn a living. so far i have been fortunate.
i would wager that 30 days from today the DJIA or SP500 is higher than Friday's close. I am already long certain stuff so this would just be piling on....
What about HIGH stakes - like a post acknowledging the foresight of the other side of the wager - and though I think the history of how the end of year plays out is definitely on your side, we did end up with the days bracketing Thanksgiving down in toto this year(12 of 56 I believe).
Overall, I agree with your observation regarding a bearish slant here, but I believe it comes from an accurate assessment of current conditions. I was 100% long until July myself, and am near to intermediate bear waiting for some real blood in the streets before going long again.
energycon,
bragging rights are certainly nice but i think we should add just a bit of sauce to flavor the stew.
how about the loser sends a hundred bucks to the hosts via the tip jar?
this way, no hard feelings and the loser can probably claim a tax deduction, well sort of.
let me know
d
why would think that the shopper trac models would be strongly biased in the over-estimating of sales direction? if you had real time data correlating traffic to sales why would you think that all of a sudden the correlation would blow up and in the direction of decreasing sales vs. traffic. i know that someone upthread offered the idea that the model would be wrong at an inflection point, and certainly that would be true, but why would the inflection point be so sharp assuming that their models are getting continuous feeds?
d
I assume their model is based on incremental updates on actual conversion rates of observed shoppers - that is, after this weekend they will find out with everyone else what the actual spend was - and make any adjustments to their model after the fact. None of the information I have been able to find does not suggest that they get real time sales receipts or am I misunderstanding you?
i dont believe that they get real time sales receipts, otherwise they would just say so. i do believe that they get some kind of feedback from the stores that they operate in so that they can make refinements to the model. if they are on a say a monthly update cycle then their model should be pretty up to date. assuming they have some decent statistics they probably can sniff out trends pretty quickly given the size of the sample. if not they need better modelers....
d
The mark is the close as of last Friday - Dow 12,980 and S&P500 1,440 - and the close of the last trading day before or on December 24th. If either index closes above those marks, you collect your 'winnings' and our congenial hosts, theirs. Conversely etc.
Ordinarily, the odds of this wager would be long in your favor, but my thesis is that these are far from ordinary times...
Agreed on the general trend modeling, but do they treat Black Friday any differently? It would be interesting to be able to peel back the lid of the black box a bit...
Beyond the question of the accuracy of the Black Friday assessment, I wonder about demand being pulled forward for the holiday retail season if the US consumer is constrained (a big if granted). With the early and aggressive discounting for the opening it will be interesting to observe the follow through.
yes, its always fun to get to look at other peoples data and what they do with it.
i don't doubt that the US consumer is constrained. maybe a lot. but i don't believe that is the motive force for the future price of equities. if you look back thru time you will find that one of the good inverse equity indicators is ... drum roll... consumer confidence. buy lo sell high.... it tends to correlate with a lot of the other equity sentiment surveys which are at the moment at pretty decent bearish extremes. of course they can get more extreme, but mostly they don't.
I am not all doom and gloom, there is tons of resources in the US both human and material (and way more than during the depression.) Dealing with the misallocation of these resources to housing as wel as over deindustrialization and the need for a new energy policy are big challenges and we will see hard times, but we will overcome them.
david_in_ct, Since black friday is a different animal, maybe even a different species, than a normal shopping day, I would assume the empirical model favors prior black Friday bias. If we are at an economic inflection point, and I believe we are because of the recent retail deterioration as reported broadly and my own anecdotal data feeds, I think they will be off. It's doubtful however that we'll ever get the receipts to find out. We will see Nov sales figures, but this year has an additional shopping day in Now post black Friday so direct comparison needs seasonal adjustment.
Anyhow, my sense is we'll see flatish y/y sales, nominal, 1%-2%+. Less than consensus.
Also, re your gentlemens wager - this is a down year for a good many segments, financials topping the list. Prospects for the finanicals through Q1 don't look too good either. That implies some tax loss selling between now and Jan1, for the first time in 5 years. That alone should provide some increased volumes on the sell side. I like energyecon's position in this wager. Of course, that's what makes a market.
Somehow "derailing" seems to be the new phase...
Earlier today I listened to a video on Bloomberg of an economist for a Japanese Bank who made comments to the effect, IIRC, that in the last couple of weeks of the calendar year there could be peculiar difficulties in the asset backed commercial paper market because some institutions would prefer not to show ABCP on their financial statement at year-end and that a great deal of the paper now have very short maturities, e.g. it rolls over every seven or nine days such that a great deal of paper could be maturing on each day during the last few weeks of the year. Sounded quite plausible to me.
The cars are decoupled from the engine unfortunately their enertia will carry them to the crash site of the engine.
CR-
as spoken about previously on your blog, this whole decoupling story was a bunch of bullshit from the start.
God, I hate being right.
Certainly the economy here in the UK seems to starting to nose dive. The housing market is tipping over and I hear first hand from people working in the City of London, that financial jobs are becoming uncertain, to say the least.
Risk,
Yep, for how many years has the financial press been telling us about the "global economy" and "new world order". Now that it's bad news, "er, nevermind that, we're on an island here".
--
Debt is THE coupler, or connector, of the global economy. You can't have globalization without global coupling.
It IS the Debt, Stupid!
Jas
Thanks Jas, I almost forgot how stupid we all are for a minute there.
I am wondering how long the ECB can continue to pump liquidity in 'piece meal' before it starts to weigh down the euro.
I've been waiting for that but expected a more 'decisive' and overt self-immolation on the part of our ECB friends across the Atlantic... this is sort of an accidental falling on their own knife.
lama- "Thanks Jas, I almost forgot how stupid we all are for a minute there."
Priceless.
I understand that the British banks with subsidiaries in Dublin can avail themselves of the ECB's largesse. Thanks, Fritz and Jean-Claude.
dryfly:
the ECB's (like most of the Fed's) injections so far have been very short term and have been drained again.
Still, yes, the decoupling story has always been nonsense. The financial and economic crisis is US-centered but still global, just local results will vary.
Financial Times- "The latest data will knock European policymakers confidence that the eurozone can remain relatively immune from the US subprime mortgage crisis, although few economists expect a serious slump."
In other words, 'We're pumping billions of euros into the system just for the hell of it.
I crunched these data about lending for house purchases in euro area and the results are quite interesting.
It seems that lending is slowing quite significantly. The rate of increase in outstanding mortgage debt YoY is 7.7% compared to 11.5% a year ago.
The leader is Germany, where outstanding balance of mortgages is dropping. Therefore, Germans are paying off their mortgages faster than taking new ones. This is interesting because there was no bubble in Germany but apparently higher interest rates create an incentive to reduce the debt. The debt in all the other countries is increasing but the rate of increase is slowing (second derivative of the outstanding debt is negative). The yearly increase of the debt stands at -24.7% (a difference of outstanding debt between Sep 2006 and 2007 compared to 9/2005-9/2006) compared to +11.6% a year ago and +29.8% two years ago. Last time the rate of increase was dropping was in 2002. Of all the euro countries the increase is positive only in Greece (+8.9%), Luxembourg (+89%), Austria (+77%), Slovenia (+17%) and Finland (+1.5%).
An interesting observation is the date when this indicator went negative:
whole euro area: 12/2006
Belgium: 11/2006
Germany: 01/2007
Ireland: 12/2006
Spain: 09/2006
France: 09/2007
Italy: 10/2006
The Netherlands: 07/2006
Portugal:03/2007
As far as I know, Spain and Ireland have ultra-bubble, France, Italy, The Netherlands, Portugal, and Finland - a "regular" bubble, Belgium a mild bubble, and Germany and Austria no bubble.
I'm not sure if these data cover all mortgages (or just hold by banks) and there is probably some noise in the data but the cooling of the market is indisputable and it started well before this infamous "credit crunch". It was probably both due to reaching affordability limits and due to higher interest rates.
In other words, 'We're pumping billions of euros into the system just for the hell of it.'
But mom, everybody's doing it!
decoupled...? recoupled...?
I don't intend to minimize the continued role of US markets in the global economy, but I hope we don't miss the change that is occurring.
The mechanism for coupling is moving from US dominance of the global economy to the increasing integration of the global economy.
If we think that "coupling" is a sign of continued US dominance we will likely overplay our hand and misjudge our economic growth/recovery strategies.
~
Lending is getting tighter and tighter,'' said Mary Beth Fisher, an interest-rate strategist at UBS AG in Stamford, Connecticut.You're going into year-end and some volatile earnings reports, plus financial companies are writing down assets, so they're going to end up needing more capital for themselves and for their clients.''
Asset-Backed Commercial Paper Falls for 15th Week (Update1) - Bloomberg.com
It's like methadone without the beneficial withdrawal effects.
Jas is, of course, correct: globalization and coupling are the same thing.
You want decoupling? You got it:
By ANNE D'INNOCENZIO, AP Business Writer
NEW YORK - The nation's retailers had a robust start to the holiday shopping season, according to results announced Saturday by a national research group that tracks sales at retail outlets across the country.
According to ShopperTrak RCT Corp., which tracks sales at more than 50,000 retail outlets, total sales rose 8.3 percent to about $10.3 billion on Friday, the day after Thanksgiving, compared with $9.5 billion on the same day a year ago. ShopperTrak had expected an increase of no more than 4 percent to 5 percent...
(snip)
8.3%!!!!!
Even allowing for the fuzzy-wuzzy, loosey-goosey exclusion of same-store comparisons, and inclusion of inflated dollars...like, wow. Miss Market will buy a star with this news, come Monday.
"There's speculation in the market as to whether the dollar is in terminal decline,'' said Michael Klawitter, a currency analyst at Dresdner Kleinwort in Frankfurt.It's looking increasingly possible that the dollar will lose its status as the major transaction and reserve currency.''"
http://www.bloomberg.com/apps/news?pid=20601087&sid=asNknz89TSZM&refer=home
Ruh Oh
freddyinp'town, link, por favor :}
freddy p - are these the same folks that gave us a 19% increase on Black Friday last year? Somethin' like that. Only to see the final seasonal numbers way less - though still tolerably decent?
Just askin'...
Poszi,
Which banks/lenders/developers are going to go bankrupt in Poland because of the reckless lending and the collapse of the RE market? I wouldn't mind to short them on the Warsaw Stock Exchange. Am I too late?
Recently, I talked to my sister in Warsaw. Apparently the lending over the last two years was just insane. Zero down, interest only, forty year mortgages, phony appraisals, etc. They beat Americans to the punch. My sister-in-law is trying to sell her apartment in Warsaw but prospective buyers can't get the mortgage. I guess party is over, the music has stopped and everybody is looking for a chair.
Dryfly, here's the ShopperTrak story and, yes, you are correct. It was ShopperTrak last year. I'm expecting Neil Cavuto to announce any moment now that Black Friday was up 743% from last year.
U.S. Sales Rose 8.3% Day After Thanksgiving, ShopperTrak Says - Bloomberg.com
i saw a similar story frontpaged on bloomberg
U.S. Sales Rose 8.3% Day After Thanksgiving, ShopperTrak Says - Bloomberg.com
of course, no mention of helpful information like dryfly asked for
Conjure Bag may be off today, but mp still beat me to the draw.
"According to ShopperTrak RCT Corp., which tracks sales at more than 50,000 retail outlets, total sales rose 8.3 percent to about $10.3 billion on Friday, the day after Thanksgiving, compared with $9.5 billion on the same day a year ago. ShopperTrak had expected an increase of no more than 4 percent to 5 percent..."
Are the retailers making any money? They can discount themselves into bankruptcy. I know,I know, they will make it up on volume
My view from here on the margin of North America is that the American citizen is the canary in the global coal mine of debt. The Canadian version of the ARM is the VIRM(variable interest rate mortgage). I know people who are just barely paying their mortgages now, and they believe their rates are not gong to change. Pity those folks when the VIRM turns.
"ShopperTrak measures foot traffic in shopping centers and malls using more than 45,000 video devices"
Hmmmm, how can you get dollar transaction measurements using video cameras? Strange.
Is ShopperTrak a side business that David Lereah opened up to complement his NAR and authoring gigs?
Re: ShopperTrak and Black Friday Sales Estimates
"Who knows?" said Jay McIntosh, director of retail and consumer products at Ernst & Young's Chicago office. "Everything you hear about these days, they're all estimates. Nobody reports figures to the government or anything. I can pretty much tell you anything you want to hear."
"Is Black Friday really the busiest shopping day of the year?
Many experts say probably not "
ERROR: The requested URL could not be retrieved
Can someone explain how Schwarzenegger's deal with the servicers to freeze teaser rates on ARMs is going to work?
They sold those loans to investors, and now they are unilaterally declaring that they will reduce the contractual rates on the loans that the investors bought?
W.C. Varones Blog: Please explain
From the ShopperTrak website:
Client testimonial
Marketing fluff
Anthony:
What the mass media in the UK say about American economy ? Do they render any objective analysis?
energyecon, you beat me to it!
From ShopperTrak:
Foot traffic data is perhaps the most accurate leading indicator of future sales.
Page not found | ShopperTrak
From Shoppers Jam Stores, Seek Big Bargains
Louise Jackson of Chesapeake, Va., arrived at the MacArthur Center, a mall in downtown Norfolk, Va., at 7:30 a.m., a half hour before it opened.
"We're just browsing, to see what's out here, to see if there's anything that would be worth it," she said. By 9:30 a.m., she hadn't bought anything, although she did place a pair of pants for herself on hold at Nordstrom. Her only shopping strategy was to keep an eye out for good deals.
Breitbart.com
Best regards,
That ShopperTrak news is perfect. We'll get a nice bounce in the markets, which will be a great opportunity to reload on puts before the real numbers come out.
ShopperTrak sounds like it was invented by the editors of The Onion.
From ShopperTrak's website:
"ShopperTrak's embedded counting system, the "Orbit" customer traffic counter, is an inconspicuous, box-style device that records images with a built-in video sensor and determines whether the images not only are human or not, but also adult or child. Moreover, the resulting data is time stamped for detailed analysis"
Not sure how the "Orbit" can tell if thare are more people in stores (let alone whether those people are spending money) or whether it's just the same people walking around more. Fortunately, due to the "Orbit" technology, we know that these upbeat results aren't due to roving packs of children or dogs sneaking into the mall. I wonder how much "research" the holiday weekend skeleton crew at Bloomberg performed before running the ShopperTrak "newsflash"...
With regard to all the programs designed to help people get out of ARMS, there was a stark piece in a Boston publication (Boston.com) this week on how useless the attempts are:
"Eight states including Massachusetts have pledged almost $900 million this year to help borrowers replace unaffordable mortgages, but the states collectively have refinanced fewer than 100 people, a Globe survey found.
In Massachusetts, where the Patrick administration introduced a $250 million program in July as a "big piece" of its efforts to limit foreclosures, not a single loan has been refinanced."
"The vast majority of the applicants aren't eligible for refinancing. They have either fallen too far behind on their payments, have badly damaged credit, or simply owe more on their loans than the value of their homes, making refinancing effectively impossible."
Wow, who would have guessed any of this? Great piece worth a look. It would be funny if it wasn't so sad.
So their sales figures are all 'mark to model' - what could be more apropos that that?!
Apologies to hosts for hijacking this thread, but this is so precious:
From wikipedia, Mystery Shopping
"Mystery shopping is a tool used by market research companies to measure quality of retail service. These companies send mystery shoppers to 'act' as shoppers in return for some combination of cash, store credit, purchase discounts, or reimbursement for the goods or services purchased."
Mystery shopping - Wikipedia, the free encyclopedia
I'm imagining all those "orbits" counting all those mystery shoppers!
Best regards,
So, ShopperTrak converts foot traffic measurements into dollar transaction volumes? I suppose they use some fancy algorithms based on past collected data. I wonder how accurate those numbers could be at economic infection points?
tj- "We'll get a nice bounce in the markets, which will be a great opportunity to reload on puts before the real numbers come out."
Devious, very devious. Have you and Conjure Bag been channeling?
barely: economic infection or inflection points? True, the economy in the States has a flu, or is it gastroenteritis from too much turkey?
barely-
I think ShopperTrack securitizes the data and sells tranches of love to our government.
...although she did place a pair of pants for herself on hold at Nordstrom
Wow, doesn't sound like a confident consumer to me.
Isn't this all about currency?
The ECB simply is trying to smooth out the slide of the dollar.
"economic infection or inflection points?"
Sounds like a Freudian sip to me.
Freudian "sip", mp?
re:
ShopperTrack
It's not enough to simply measure footfall
They should have asked T.S. Eliot:
Footfalls echo in the memory
Down the passage which we did not take
Towards the door we never opened
Into the rose-garden. My words echo
Thus, in your mind. But to what purpose
Disturbing the dust on a bowl of rose-leaves
I do not know. Other echoes
Inhabit the garden. Shall we follow?
Wasteland - T.S. Eliot
Eliot, T. S. 1922. The Waste Land
-K
re: CPDO
You know, I read through the whole thing and basically it was a very simple story wrapped in a complicated structure:
You had buyers buying something that was levered up at 15x. I couldn't see a difference between the CDPO and something like the common stock of Annally Mortgage Management. Difference being that NLY is common stock in a company that buys Treasuries and agency paper with borrowed money whereas a CDPO was a claim on AAA rated corporate debt purchased at 15x leverage. Sort of like an MREIT.
1x leverage with a 40bps vs. 15x leverage with a 3-5bps loss--both efficent paths to losing money.
Did those 'Orbit" boxes count all those CR readers out looking to see how the day was shaping up? Could have skewed those numbers.
Conjure's Deep Thought for Saturday:
Salisbury steaks and taters keep 50% of America running. Mushroom gravy is extra.
Here is a grab sample of ShopperTrak factoids from the last three Black Fridays:
Black Friday 2004
[snip]
ShopperTrak estimated that retail sales on Black Friday jumped 10.8% year-over-year to reach $8 billion, reported the Wall Street Journal.
[snip]
Black Friday 2005
[snip]
Data from ShopperTrak showed Black Friday sales were down 0.9 percent from a year ago to $8 billion. ShopperTrak said sales in the South were particularly good with the Midwest coming in second. Major retailers will release November results later this week.
"With heavy discounting by non-mall retailers combined with the extended shopping season in 2005, consumers may not feel the pressure to shop early this holiday season," ShopperTrak said in a statement.
[snip]
Black Friday 2006
[snip]
Sales grew 6% to $8.96 billion from the same day a year before, according to estimates from ShopperTrak RCT, a Chicago-based research group that tracks sales at 45,000 locatiions around the country.
The day after Thanksgiving, known as Black Friday to retailers, marks the traditional start of the holiday shopping season, and retailers and market participants often look to it as an indicator of how the season will shape up. ShopperTrak noted, however, that Black Friday results are not always a reliable gauge.
"Because Black Friday isn't the greatest bellwether for the season's performance, retailers need to remain cautious, but undoubtedly this type of a season opening is a nice shot in the arm for the industry," said Bill Martin, co-founder of ShopperTrak.
[snip]
Which banks/lenders/developers are going to go bankrupt in Poland because of the reckless lending and the collapse of the RE market? I wouldn't mind to short them on the Warsaw Stock Exchange. Am I too late?
Shorting individual stocks on Polish stock market is almost impossible. It was never easy to find shares to short but for some unknown reasons, currently the short sales volume <a href=http://www.kdpw.com.pl/statystyki/st_krotkas_arch_e.jsp" >completely froze. You can short futures but except for the index, only some of the largest companies are available and the volume is not great. Some lightly traded options are also available.
Developers have already fallen significantly, especially smaller and crappier ones. With banks, I have absolutely no idea which are the worst and what kind of losses are expected. The outstanding value of mortgages (roughly $40 billion) in the banking sector might be low enough for them to survive
Apparently the lending over the last two years was just insane. Zero down, interest only, forty year mortgages, phony appraisals, etc.
It was insane. Zero down and 40 years were popular but interest only was rare. Appraisals were phony indeed. I heard that frequently the selling price was the apprised value.
My sister-in-law is trying to sell her apartment in Warsaw but prospective buyers can't get the mortgage. I guess party is over
Well, the market hasn't collapsed, yet but it's getting tough indeed. I created a page tracking new housing ads and it pretty well correlates with the state of the market. The boom in 2006 was indeed unprecedented and the current rise in supply is incredible, too.
Poszi,
Thanks. I'll stick to shorting EEM.
Dziekuje. Do uslyszenia
This black friday article isn't so positive.
Talk about everybody being subprime now. I just saw Trichet down at the payday advance.
Talk about everybody being subprime now. I just saw Trichet down at the payday advance.
Was he in line ahead of you?
Just an observation of the recent posting. Like the markets, it appears that the discussion is very one sided. Now I understand that a site like this tends to attract more bears than bull but it seems to be about 100% these days, and that's different from even just a month or two ago.
I don't know a thing about shopper track but I would wager a large sum, that if I had video cameras in 50,000 stores, and historical sales data from those stores, I could produce a projected sales model with great accuracy.
My general theory of intermediate to long term investing is generally about understanding the consensus and figuring out where it might be wrong and what would the consequences be.
Right now, the consensus is getting pretty bleak in terms of economic performance. If the consensus is wrong in that things are going to be much worse than expected, then we are heading for something bordering on economic armegeddon. If on the other hand the forces of globalization and the entry of 2 billion people into what we call the first world carries the day, then there are some areas that are going to do very, very well, and are not priced for the outcome.
dissident
"In Columbus, Ohio, Theresa Johnston, a 47-year-old social worker, was shopping at the Big Lots discount chain because she had to, not because she wanted to.
Its a little embarrassing, actually. I dont like to be seen here, she said, planning to buy a set of 42 knives for $35. "
vader and vader's dad hit the Big Lots, Fri.
Yea, we both would like to move up to say Walmart, but we do what we can.
vader,
Same quote jumped out at me! More...
Before this, I shopped mostly at Macys and some at J. C. Penney, so shopping at Big Lots is, like, two big steps down for me, she said.
This sums it up nicely:
People are cheaping out and sticking with the essentials
Have the pundits considered that shoppers are rewarding themselves for the restraint they've shown of late?
Also: BF is a very social shopping day and who wants to spoil the fun (you can always return it later.)
Sign after Christmas: "Will trade store credit for food."
Vader,
This one is even better, ready for the Nobel prize
"I'm really looking for the bargains this year because I'm losing my job; they're moving our plant to Mexico after the first of the year, so I have to be careful," said Tina Dillow of New Richmond, Ohio, who camped out at a Best Buy store near Cincinnati at 3 a.m. because of a great deal on a laptop."
sdtfs: Talk about everybody being subprime now. I just saw Trichet down at the payday advance.
Was he in line ahead of you?
Yeah, times are little lean right now. My financial advisor suggested I put everything in NEW because the whole subprime issue was just a hangnail.
or
Yeah, I was Western Union'ing money to your mom!
david,
ALL of my models are accurate - its those damn FORECASTS that give me heartburn - care to offer odds on that wager?
energycon,
i am generally not shy about wagering, but unfortunately in this case it is not a bet we can reasonably take
sides upon, unless of course you have some video datafeeds....
i agree that forecasting is not an easy chore. i have been doing it in one form or another for near 18 years, and its a tough, but interesting way to earn a living. so far i have been fortunate.
i would wager that 30 days from today the DJIA or SP500 is higher than Friday's close. I am already long certain stuff so this would just be piling on....
"total sales rose 8.3 percent to about $10.3 billion on Friday, the day after Thanksgiving, compared with $9.5 billion on the same day a year ago"
WELL THE DOLLAR NOW ....is NOT THE SAME DOLLAR THAT WE HAD LAST YEAR.... IT LOST LOT OF VALUE ...
ITS TIME WE REALISE THIS
hmmmm,
What about HIGH stakes - like a post acknowledging the foresight of the other side of the wager - and though I think the history of how the end of year plays out is definitely on your side, we did end up with the days bracketing Thanksgiving down in toto this year(12 of 56 I believe).
Overall, I agree with your observation regarding a bearish slant here, but I believe it comes from an accurate assessment of current conditions. I was 100% long until July myself, and am near to intermediate bear waiting for some real blood in the streets before going long again.
Dr. Dan,
It's not even dollars, it is a modeling assumption transforming body count from video mining software into sales.
energycon,
bragging rights are certainly nice but i think we should add just a bit of sauce to flavor the stew.
how about the loser sends a hundred bucks to the hosts via the tip jar?
this way, no hard feelings and the loser can probably claim a tax deduction, well sort of.
let me know
d
why would think that the shopper trac models would be strongly biased in the over-estimating of sales direction? if you had real time data correlating traffic to sales why would you think that all of a sudden the correlation would blow up and in the direction of decreasing sales vs. traffic. i know that someone upthread offered the idea that the model would be wrong at an inflection point, and certainly that would be true, but why would the inflection point be so sharp assuming that their models are getting continuous feeds?
d
david,
That sounds like an excellent idea! Deal!
Let see, how long would I have to unwind an investment loss?
Done!
david,
I assume their model is based on incremental updates on actual conversion rates of observed shoppers - that is, after this weekend they will find out with everyone else what the actual spend was - and make any adjustments to their model after the fact. None of the information I have been able to find does not suggest that they get real time sales receipts or am I misunderstanding you?
re unwinding,
i think here, we are dealing with a level 1 transaction...
i will leave it to the hosts to supply the collection pressure...
d
i dont believe that they get real time sales receipts, otherwise they would just say so. i do believe that they get some kind of feedback from the stores that they operate in so that they can make refinements to the model. if they are on a say a monthly update cycle then their model should be pretty up to date. assuming they have some decent statistics they probably can sniff out trends pretty quickly given the size of the sample. if not they need better modelers....
d
The mark is the close as of last Friday - Dow 12,980 and S&P500 1,440 - and the close of the last trading day before or on December 24th. If either index closes above those marks, you collect your 'winnings' and our congenial hosts, theirs. Conversely etc.
Ordinarily, the odds of this wager would be long in your favor, but my thesis is that these are far from ordinary times...
energycon,
your choice, DJIA or SP500?
d
david,
Agreed on the general trend modeling, but do they treat Black Friday any differently? It would be interesting to be able to peel back the lid of the black box a bit...
Beyond the question of the accuracy of the Black Friday assessment, I wonder about demand being pulled forward for the holiday retail season if the US consumer is constrained (a big if granted). With the early and aggressive discounting for the opening it will be interesting to observe the follow through.
If I can name my poison, I suppose I will take the S&P500.
yes, its always fun to get to look at other peoples data and what they do with it.
i don't doubt that the US consumer is constrained. maybe a lot. but i don't believe that is the motive force for the future price of equities. if you look back thru time you will find that one of the good inverse equity indicators is ... drum roll... consumer confidence. buy lo sell high.... it tends to correlate with a lot of the other equity sentiment surveys which are at the moment at pretty decent bearish extremes. of course they can get more extreme, but mostly they don't.
david,
Time will tell - this just doesn't seem like blood in the streets capitulation to me yet - and it sure doesn't seem like 'mostly' to me either.
e-con,
yes, time has a way of sorting things out.
bon soir
d
. I was 100% long until July myself, and am near to intermediate bear waiting for some real blood in the streets before going long again.
Take note, O-joe/Seb/etc.: we aren't all doom-and-gloom nutters. Some of us actually think there may be a real credit problem.
Cheers,
prat
david will roll snake eyes.
I am not all doom and gloom, there is tons of resources in the US both human and material (and way more than during the depression.) Dealing with the misallocation of these resources to housing as wel as over deindustrialization and the need for a new energy policy are big challenges and we will see hard times, but we will overcome them.
david_in_ct, Since black friday is a different animal, maybe even a different species, than a normal shopping day, I would assume the empirical model favors prior black Friday bias. If we are at an economic inflection point, and I believe we are because of the recent retail deterioration as reported broadly and my own anecdotal data feeds, I think they will be off. It's doubtful however that we'll ever get the receipts to find out. We will see Nov sales figures, but this year has an additional shopping day in Now post black Friday so direct comparison needs seasonal adjustment.
Anyhow, my sense is we'll see flatish y/y sales, nominal, 1%-2%+. Less than consensus.
Also, re your gentlemens wager - this is a down year for a good many segments, financials topping the list. Prospects for the finanicals through Q1 don't look too good either. That implies some tax loss selling between now and Jan1, for the first time in 5 years. That alone should provide some increased volumes on the sell side. I like energyecon's position in this wager. Of course, that's what makes a market.
I'm shocked, CR, shocked, to find that gambling is going on in this establishment.
"Your winnings, Mr. Risk."
Its a little embarrassing, actually. I dont like to be seen here, she said, planning to buy a set of 42 knives for $35. "
My gracious days, woman, what in heaven's name are you going to do with 42 knives?
The circus life is a difficult one.
Nervous Rex:
ROFL... that made me guffaw, and it wasn't pretty.
It sometimes takes a twisted mind to see the true logic of life.
What can she possibly do with 42 knives???
it is like a bas-relief of American life...
a 3 person family living in 4,000 ft home.
20' x 20' master bedrooms
King beds
supersize meals
and yes, I like most Americans are guilty of at least one rediculous overcompensation...
I, like most Americans, AM guilty.
I are smart.
Nervous Rex:
ROFL... that made me guffaw, and it wasn't pretty.
It sometimes takes a twisted mind to see the true logic of life.
What can she possibly do with 42 knives???
Yearning,
If your last name is Borden, quite a lot. Note: Big Lots had not received pending ax shipment due to lead paint issues.