I'll still wait for data rather than anecdote.

Rob Dawg writes:
I'll still wait for data rather than anecdote.
Rob Dawg | Homepage | 11.30.08 - 3:17 pm | #

Killjoy.

The news will be bad. The question is how bad?

hey tj thanks for that city data link in the last thread. sweet info.

Lemme see here... my anecdotal evidence. Very large convention/resort/tourist destination close to house. Very large "discount" mall close to house, including food court, restaurants, and movie complex. Lots of attendant hotels/restaurants congregated around resort/mall. Friday night traffic - slightly above normal (I mean like dead of June normal). Couple of checks Saturday same. Just out now, same, and factor in a very large church that normally would account for half the restaurant volume around noonish. Previous, let's say four years, it took me an hour just to get out of my neighborhood and onto the freeway.

One trip up the highway an exit or two, which is the "not-so-good" part of town but safe enough during the day, Kmart lot was about 70% full Sat. afternoon. Not much action on the rest of the strip (mostly strip malls, auto dealers dead too though).

Now, the part of town where I work the mall there was probably crowded like normal. Six-figure incomes not hit yet - next year is their turn.

Black Friday e-commerce spending edges up 1%
But ComScore report shows overall holiday sales down so far this year

Black Friday e-commerce spending reported edging up 1% - MarketWatch

tg,

My thanks also for that city info in the last thread.

I got a kick of the data for 'estimated median house or condo value 2007' and for '2008 home sales median.'

2008 median was literally 48% to 55% of 2007 median in the three zip codes. Just about right for the High Desert portion of the so-called Inland Empire.

Was in Vegas over Thanksgiving. Very busy, although it's been a while since I've been to Vegas for Thanksgiving so maybe it was less busy than usual. Lots of shoppers in low-to-middle priced shops although the high end shops seemed pretty dead. Never seen much business in those shops anyway though; I always figured they were mostly for ambiance.

Fair Economist, I was also there most of this past week. You can tell Vegas is in trouble when they want a lowroller like me to stay in one of Harrah's properties for free.

Didn't do any shopping, Black Friday or otherwise.

OT- I'm wondering what that guy spamming at financial blogspot did with all his money. I figure he should own about a quarter of the world by now. I'm thinking he's got a wife who spends it as fast as he makes it and a serious heroin problem (otherwise he could get real clients and not troll the internet.) Maybe he also has huge medical bills after totaling the car he bought from that BMW spammer, who recently made enough to buy one but not enough to buy two or three.

I really cannot believe that that there is any question here. Holiday sales will be down, period.

Boomers have to be one of the biggest groups that spend in terms of total dollars. You do not lose 30-40% of your net worth and/or lose your job (or have a family member lose their job) and continue spending as you have in the past.

Not gonna happen.

I'll still wait for data rather than anecdote.

How refreshingly rational. Sometimes I worry that the blogosphere is beginning to resemble the main stream media, which would rather get the story out than get it right.

The 3% figure being bandied about is based on ShopTrak, which only measures foot traffic and then extrapolates that into actual sales based on a MODEL.

Hmm, mark to model, where have I heard that one before?

Maybe Black Friday shopping is sparse this year. And maybe the consumer is maxed out.

But could it be that we all have everthying already? Maybe we're shopped out because we just can't fit another thing in our homes.

And maybe that "stuff" saturation just happens to coincide with a bad economy. ???

Pavel, do what I do about offensive material: use the ultimate screener. When you see a keyword that riles you, hit the down arrow and keep scrolling. Works every time.

If credit card companies are lowering peoples credit limits and raising their interest rates that would have a direct effect on how much people will buy this christmas season.
If it were up to the individual shopper, they wouldn't buy less. The credit card companies are the ones putting the stop to their spending.

Sunday, November 30, 2008
End of daze

'We did it to the world' Mom said.

I was a bit taken back. Dad had said much the same a couple of weeks ago.
Although such commentary is the lingua franca of the blogosphere, Mom and Dad probably have never read a blog. They are very conservative, middle class and have been ,ever since I was indoctrinated by the educational system, usually on the other side of the aisle vis-a-vis laying blame at America's feet.
To hear them speak like the radicalized of the late 19th century was surprising and illuminating.

Socioeconomics or socio-economics is the study of the relationship between economic activity and social life. Are we headed into a depression because we think we are or do we think we are heading into a depression because we are? Socioeconomics says the former is culpable.

Reflecting on the ideological swath of America that shares my parent's views how might the socioeconomic pendulum swing back to marching prosperity?

What pray tell offers redemption for our sins?

The answer I believe, is pennance, or that is perceived pennance.

At the end of daze, once we collectively feel we have served our pennance, the mood will shift.

Game theorists have modeled behavior under negative externalities where choosing the same action creates a cost rather than a benefit. The generic term for this class of game is anti-coordination game. The best-known example of a 2-player anti-coordination game is the game of Chicken.

This game of Chicken is with ourselves.

Or as Citizen Harrison says ' to get through this we have to go through this.

George Kalogridis writes:
"They are now offering most of their home sale listings, as 6 month rentals, so they can bring the houses back on the market for spring sales."

That's not what I see here in Santa Monica. The shortest lease I've seen on a SFH rental is 9 months, and almost everyone is asking for a standard 1 year lease. And the prices are NUTS! How about a nice 5/5/3 for $14,500 per month, and no pets allowed? Can you say s-t-u-c-k f-l-i-p-p-e-r, boys and girls?

rich - Why would smart money go long long-duration bonds? If the inflation picks up and/or demand for UST debt drops, these bonds will hurt big time. I would have thought smart money would prefer short-term bonds, hence the yield curve might actually steepen, not flatten, no?

2007 Holiday Sales days 31

2008 Holiday Sales days 27

Outsider writes:
"But could it be that we all have everthying already? Maybe we're shopped out because we just can't fit another thing in our homes."

I had everything I needed years ago, and I am really bad at throwing things away. My personal project for early December is packing the stuff I no longer need off to a charity so that I can get out from under my clutter.

I'll do my part for the economy by investing in my businesses, not by purchasing more "stuff" to clutter up my life.

sril writes:
2007: Thanksgiving was 29th
2008: It was 27th.

~~~~~

No Thanksgiving was on the 22 in 2007. Thanksgiving is on the third Thursday of November, not the last.

Here's my stab ... Would it be because interest rates will stay low for much longer than most expect (like 2-3 years) as the the debt deflation continues to burn? And more money behind them will follow eventually, so they get the benefit of a push-up in prices when the rest of the herd abandons the stock market? US Dollar would continue to stay strong for awhile as deleveraging happens (3.5 debt/gdp will take awhile to unwind)?

@MrM writes:
rich - Why would smart money go long long-duration bonds? If the inflation picks up and/or demand for UST debt drops, these bonds will hurt big time. I would have thought smart money would prefer short-term bonds, hence the yield curve might actually steepen, not flatten, no?
MrM | 11.30.08 - 5:10 pm | #

Rich "If money keeps piling into 10-year treasuries, it's a very bad sign for the stock market. "

I've heard many people argue this point, and the other take has been that it is not a reflection of anything related to the economy but more a direct reflection that fixed income demand right now is running to its safest place, currently seen as treasuries. I personally know that cash and it's low return is fine by me as opposed to trying to chase a higher yield in corporates or munis and possibly getting ruined.

I also don't believe we are close to inflation. Decreasing home prices, retailers cutting as much as possible, energy prices dramatically decreased, and services prices under pressure. As a bonus, add in increasing unemployment, decreasing wages, wealth effect, and our buffet of "going out of business" sales.

Time to Re-Leverage

Are the Fed repo fails driving up the price of treasuries ?
Or the other way around - strong demand for Ts pushes down the yield. However, investors do not care about add'l bps of yield: they are concerned about non getting their Ts back because of the counterparty credit risk. Ts are viewed as the only safe place to be.

GiezCubed

How fast will the tipping point between deflation and inflation play out ?

months years days ... ?

BB repeatedly said that he is more concerned about deflation than inflation. So the trip from deflation to hyperinflation can be rather short.

It's a bond bubble, and it shall burst too.

~~~~~~~~~~

Estimate of the time ?

What signs should I be looking for ?

Comrade Bear (tj & the bear) & MrM

The banks are going to have to put their off balance sheet assets on the books Jan 1 ...

Consequences ?

Well, it's a bond "bubble", but for a very different reason. I don't know how you'd characterize bubbles that are based on fear rather than optimism.

But, I suspect they last longer because of the nature of the instruments that are bought to characterize them. My sense is that the bond market is too large in the US relative to equities (traded on any market). So eventually, we'll see a lot of defaults and the capital structure of the entire market will shift over the next five years to redistribute this currently lopsided claim structure on cash flows back to equities.

Then, we'll start growing again. The thing that worries me the most is that bondholders are so reluctant to default anyone and exchange their "guaranteed" returns for equity, that this process will take a long time.

See also: Japan

Investors have demanded more bonds over the last ten years. This could possibly be a result of the age demographics of investors/savers. At any rate, debt-based claims have been what Wall Street has provided to meet this demand. We're now coming to the end of that cycle in the form of a Treasury "bubble".

Anybody have a link to the diposition of the rule that would have had banks put all theirr assets on the balance sheet Jan 1, 2009 ?

Actually, it's the 4th Thursday, not the third. But you're right that Black Friday was 11/23 last year and 11/28 this year.
Assume Crash Positions!

~~~~

half right anyway ... or is that worse than 100% wrong ? lol

Today at church my pastor gave a message on tithing. He ended it by giving 3 numbers: 0, 9, and 107.

0 because no one has lost any money in the bank failures due to FDIC insurance.
9 because unemployment is projected to only be 9% next year, compared to 25% during the depression.
107 because the new Bond has taken in $107M so far.

I really doubt that no one lost any money in the bank failures (although he has a point in that savings have not been depleted). I also doubt that unemployment will be limited to 9% next year.

I didn't say anything to him about it when I saw him... but I do think he was being a bit pollyannish. He isn't the type that uses the Internet too much so I can't fault him.

Oh, I've wanted to mention that businesses that are able to survive are having these same discussions about inflation and the future market demand for their products, how much to depreciate the real value of their goods, how much they can get away with, etc.

So, everyone is feeling some stress for the first time in a long time and having to do some very intense consideration. Probably a good thing, though.

thoreau devotee:

Here's the pdf of Andrew Lahde's "farewell address."

http://www.bankersball.com/pub/wp-content/uploads/andrew-lahde-letter.pdf

I'll take half right over all wrong any day of the week.
Assume Crash Positions!

~~~~~

got the date right but got the rule wrong !

Basel Too and citizen energyecon

thanks very much. you guys are menschs for answering so promptly.

best

energyecon - nicely succinct, thankyou.

Seems to me to be a measure of market fear that 10-y T bonds are trading well under even the stated core inlfation rate, let alone the real rate. Again, data constraints and lags are a problem. But lockup in bonds does suggest real lack of confidence in other value-holding instruments.

Add to that CDS spreads on US T-bills blowing out and it's yet another measure of bond market confusion, fracture, and visceral behaviour. That is, vs rational, because perhaps that's not possible on the information available and the collapse of trust required to conclude the trades.

C

I'll take half right over all wrong any day of the week.
Assume Crash Positions!

Hmmmm, how about Schiff? Right about the US economy and losing money big time?

"mmckinl writes:
It wouldn't surprise me if Thanksgiving is moved to the 3rd Thursday next year as a means to improve year end sales figures. "

FDR tried it and actually did it. Public backlash eventually pushed it back to the 4th Thursday.

Compliance Week: Compliance Week: Sign In

All I could find on the FASB ruling putting off balance sheet assets back on the balance sheet ...

Still not decided as far as I can tell.

Anybody have subsequent info ?

A.Q. can't destroy this country, but if we're not careful we can destroy it ourselves.
Pavel Chichikov | 11.30.08 - 6:11 pm | #

No one can destroy Christmas except Christians. Don't you agree?

And the actual prediction from ShopperTrak : traffic up, sales basically flat. My translation : yikes! Net loss on the loss leaders, other discounts, and inflation for the 4Q 2008 and net for FY 2008.

\t

ShopperTrak Predicts 9.9 Percent Retail Traffic Decrease for 2008 Holiday Season

Slight 0.1 Percent Sales Increase Expected During Same Period

CHICAGO – November 19, 2008 - ShopperTrak RCT today predicted that the upcoming holiday season may not be merry and bright for all, as retailers will most likely feel the sting of a lagging economy and lowered consumer confidence during this critical shopping period. According to the company’s Retail Traffic Index (SRTI), total U.S. foot traffic during the 2008 holiday season is expected to decline a dramatic 9.9 percent as compared to last year, while the company’s National Retail Sales Estimate (NRSE) is forecasting a slight 0.1 percent increase – both record lows.

As 2008 progressed, ShopperTrak, the world’s leading provider of retail intelligence solutions and services, closely monitored traffic data culled from more than 50,000 mall and retail locations to determine expected 2008 holiday shopping performance. Late in the year, retailers experienced what the company describes as a perfect storm, as gasoline prices continued to rise, the financial markets collapsed and the presidential election distracted consumers and slowed shopping late in year – a pattern ShopperTrak has seen in each national election since 2002.

“Due to numerous factors that retailers can’t control, 2008 has been a challenging year and it seems this pattern will continue throughout the crucial holiday shopping season,” said Bill Martin, co-founder of ShopperTrak. “Currently we’re anticipating the lowest retail sales and total U.S. traffic numbers we’ve seen since we started compiling this data in 2001, which will most likely leave retailers scrambling to entice consumers into their stores early and often during the holidays,” said Bill Martin, co-founder of ShopperTrak.

In 2007’s holiday shopping season, retail sales posted a 2.5 percent increase, while total U.S. traffic fell 2.7 percent as compared to 2006. This year, ShopperTrak’s NRSE and SRTI indices are forecasting a 12.1 percent total U.S. foot traffic decline and a 0.6 percent retail sales decrease in November. In December, the company anticipates an 8.1 percent total U.S. foot traffic decline and a 0.6 percent retail sales increase respectively.

“The 2007 holiday shopping season was the longest possible, with 32 calendar days between Thanksgiving and Christmas, which spurred shopping early for Black Friday weekend followed by a bit of a lag until procrastinating shoppers saved the season during the weekend just prior to Christmas,” said Mr. Martin. “The 2008 calendar shift means there will be a much shorter season, with only 27 days between Thanksgiving and Christmas, effectively eliminating one full shopping weekend. This means retailers should see some strength earlier in the season on Black Friday due to pent up demand, but also means procrastinators may be caught by surprise late in year, especially during the last shopping weekend just prior to Christmas that contains Super Saturday, December 19 – 21.”

Interestingly, 2008 closely represents 2002, which had a shortened 27-day holiday shopping period, was a recession year, and also contained a national election. According to ShopperTrak, during 2002:

* Enclosed mall traffic averaged a 2.8 percent year-over-year decline each week in the month preceding the election.
* During election week, traffic declined 2.2 percent as compared to 2001
* In the weeks following the 2002 election, enclosed mall traffic remained in the doldrums, averaging a 3.9 percent year-over-year decrease all the way through the holiday shopping season

“Our historical data suggests that during election years consumer shopping slows in the weeks leading up to and immediately following an election,” said Mr. Martin. “If the correlation between 2002 remains true, this is yet another stong factor that could influence fewer visits to malls and retail outlets, negatively impacting sales.”

The full list of ShopperTrak’s predicted top traffic days, which will account for nearly 35-38 percent of all traffic during the holiday season, is as follows:
Rank\tDay of Week \tDate
1 \tBlack Friday \tNov. 28, 2008
2 \tSuper Saturday \tDec. 20, 2008
3 \tFriday \tDec. 26, 2008
4 \tTuesday \tDec. 23, 2008
5 \tSaturday \tDec. 13, 2008
6 \tMonday \tDec. 22, 2008
7 \tSunday \tDec. 21, 2008
8 \tFriday \tDec. 19, 2008
9 \tSaturday \tDec. 27, 2008
10 \t(Black) Saturday \tNov. 29, 2008

The SRTI is generated from a carefully drawn sample of more than 50,000 retail and enclosed mall locations throughout the United States. The product is a set of six calculated indices for select segments of the retail industry that compare current week mall or store traffic to a baseline traffic figure from a fixed week on the NRF calendar. The SRTI is priced by individual segment.

Developed by ShopperTrak, the NRSE provides a nationwide benchmark of retail sales. It is derived from the U.S. Commerce Department's GAFO (general merchandise, apparel, furniture, sporting goods, electronics, hobby, books and other related store sales) statistic, as well as ShopperTrak's proprietary industry intelligence on shopper movement and sales statistics. This gives retailers, investors and policy makers the most accurate and timely information on consumer trends available today.

A privately held entity, ShopperTrak leverages 20 years of retail expertise to be the industry's authority for information and analysis of the movement of shoppers in retail environments. ShopperTrak's cutting-edge shopper tracking products and indices offer retail intelligence solutions that enable companies to better understand retail trends and the impact of store and staff performance on company revenues. With more than 45,000 units installed in the world's best known retail outlets and malls, the company's solutions also provide a proven means for retailers to gauge labor efficiencies, advertising and marketing efforts, store design and remodeling programs, merchandise changes, associate training programs, and other budget-intensive strategic initiatives. For more information visit ShopperTrak | Retail Intelligence | Mall Traffic Analysis | People Counters | Casino Retail Analysis | Foot Traffic Analysis.

EDITOR'S NOTE: The data contained within this news release is the property of ShopperTrak RCT Corporation and may be reprinted, published or broadcast, provided proper credit is given to the National Retail Sales Estimate (NRSE), Retail Traffic Index (SRTI) and ShopperTrak RCT Corporation as the supplier of the information. Please contact Aaron Martin at 312-943-9100 if you have any questions concerning the use of this data.

I worry about any trade group's statistical accuracy. NRF is only one letter different than NRA.

joel | 11.30.08 - 11:29 pm |

I made this same decision a few years ago. Surprisingly, the kids didn't notice that they only got $50 of stuff from me rather than $200. I think my adult siblings were also relieved at the cut back in spending.

I focused more on getting quality things rather than "everything" they might want. Again, surprisingly, the last two years have given me some of my happiest holiday memories and the children feel the same way.