Black Friday: A Blue Housing Bubble Christmas?
What’s your prediction for the shopping turnout tomorrow and for the holiday season in general, in light of the housing bubble pop? “Black Friday, the unofficial start to the holiday shopping season when retailers hopefully see revenue move from the red to black. Wal-Mart, the world’s largest retailer, took perhaps the boldest move by launching its own version of Black Friday - on Nov. 2. The company slashed prices on a laptop computer, 50-inch plasma HD TV, toy car, HD DVDs and an HD-DVD player.”
“Retail experts say the calculated decision to target some of the most popular gifts demonstrates just how nervous retailers are as they enter a holiday season amid record-high oil prices, continual fallout from the home mortgage market and sagging consumer confidence.”
“‘There looks to be a bit of panic,’ said retail analyst Patty Edwards. Edwards said the concern first surfaced in August during talks with companies like Limited Brands, the parent of Victoria’s Secret and Bath and Body Works. Edwards said executives were worried that the mortgage mess would cut into consumers’ ability to access credit.”
“Consider that from 2000 to 2006, Clark County’s (WA) population grew by 19 percent. Home-building activity drives a number of retail categories. The housing market is drastically different this year. The county has issued 1,107 single-family home building permits through October, 20.3 percent fewer than a year ago.”
“The inventory of homes on the market grew to an 11.4-month supply by October, according to real-estate statistics. Those economic factors meant retailers entered the crucial part of the fiscal year with little momentum.”
“Eager and well-researched shoppers will be camping tonight in tents outside Bass Pro Shop in Clarksville (IN), lining up for a 4 a.m. opening at Kohl’s on Charlestown Road in New Albany and battling frigid temperatures at every other big-box store in the region in search of one thing Friday morning — bargains.”
“A weak housing market, credit crunch and increased energy costs are expected to create a pinch for many consumers, and could create even more of a frenzy for those hunting for deep bargains this year. ”
“‘There will be several thousand people in line well before 6 a.m.,’ said Amanda Trester, promotions manager for the Bass Pro Shop. Many of those shoppers won’t have far to go. The store is holding a camp-out in the parking lot and even offering tents on a first-come, first-served basis after the doors close tonight at 6 p.m.”
“‘It’s our jump-start on Black Friday shopping,’ Trester said.”
“Retailers are gearing up for the most eagerly anticipated shopping day, crossing their fingers that bargain-hunting masses will spend so much money the day after Thanksgiving the holiday season will be saved.”
“It’s an edgy time for stores as Americans worry about gasoline prices, mortgage payments, home values and credit-card debt.”
“Lowe’s Cos., the nation’s second-largest home improvement chain, slashed its earnings forecast Monday too, blaming a steep ‘decline in housing turnover, falling home prices in many markets and a near-record inventory of homes for sale.’”
“The weak housing market also took the blame when housewares chain Williams-Sonoma Inc. said last week that third-quarter profit fell 7.1%. Another chain, Ann Taylor Stores Corp., cited ‘ongoing macroeconomic uncertainty’ when it lowered its earnings expectations. Macy’s Inc. cut its fourth-quarter sales forecast by $100 million.”
“Although the day after Thanksgiving isn’t usually the busiest shopping day — that is the Saturday before Christmas — what’s known as Black Friday is closely watched by analysts and enjoyed by mobs of Americans.”
“‘I think you’re going to see a huge crowd on Black Friday but I just don’t think it will last long,’ Britt Beemer, chairman of America’s Research Group, said. ‘I think Black Friday will roar in like a lion and go out like a lamb.’”
HAPPY THANKSGIVING, BEN JONES!
Nah, my question is, who will be the first Black Friday shopper to be tramped in the doorway of a Walmart at 6 a.m. tomorrow? Bonus points: what was said tramplee there to buy and was it worth the $1,000 medical bill?
I gave all my xmas shopping money to the best company in America: Amazon. Every year, I save up all my purchases so they can book the sales in the fourth quarter and I can do my part to make their earnings good.
I have a family member that works for Wal-Mart. Last year an “associate” got their leg broken in the Black Friday melee.
I’m gonna see this movie - ‘What Would Jesus Buy’ on Black Friday —
http://www.wwjbmovie.com/
Would recommend my fellow NY’ers (or ‘friscans or angelinos) do the same.
i refuse to shop at wal-mart. Why? in a fit of cheapness, i took our older car there to get an oil change. Left the key with an associate only to find out when i returned 30 minutes later that the associate clocked out and went home. Grrrrr.. Took three hours to get the guy back with my key. Would still be there if i didn’t threaten to call 911 saying they stole my car.
In the Boston area, Kohl’s is starting their sale bonanza at 4 A.M. !
My son and I were at the UTC Westfield mall yesterday. We were duly impressed with the crowded parking lot, but strangely enough, there was very little foot traffic inside of Sears, especially in the large appliances department. I saw similar conditions when I bought a clothes dryer there this past Monday night. Maybe the foot traffic in departments that sell consumer durables will pick up again after Black Friday?
I wondered about the same thing — a lot of cars in the parking lot of the local mall, but few customers inside. And then I figured it out — a lot of the college students were parking at the mall, and taking the bus to school.
I have been in that same Sears stores at least a half-dozen times, and it has looked science-fiction-film-empty every time. IMO, I think the writing is on the wall for that Sears store, and the foreshadowing of its demise is the new Crate and Barrel store that completely hides Sears’ storefront from La Jolla Village Dr. & Towne Center. It reminds me of the empty Montgomery Wards stores in Michigan right before they went BK.
It’s unbelievable to me that Westfield is planning a $900 Million makeover to the UTC mall in the next few years. Apparently they either have complete confidence that housing and the economy will recover by the time they’re done with construction, or they are as clueless as the entire real estate and financial industrial complex throughout this entire Housing/Credit Bubble. At this point my vote is on ‘clueless’ because every day it’s becoming clearer to me that money, power and confidence do not always come with common sense.
BTW, I have been a lurker at this blog for about 6 months and have considered it the equivalent of at least 3 college credits in business common sense, especially from excellent analysis and comments by Professor Bear. Thanks for the great advice and encouragement to wait out this bubble and buy at the bottom.
Take my advice at your own risk. My crystal ball remains cloudy as always. However, I do have a good crap detector, and enjoy pointing out crap when I see it or hear it!
J_Cat I couldn’t agree more. I’ve also lurked on this blog for about the same time, and it is always informative and interesting to read.
I was born and raised in the east bay area (NorCal), and I could not believe the prices that single family dwellings rose to. My old house in suburbia got so outrageously expensive that I was frustrated by the fact that I could not afford to buy an average house that was built in the 1960’s in an average neighborhood on the far side of the bay area, even after enjoying some lucky gains in the stock market. (Well… I could probably “buy” it when they were throwing mortgage products at everyone with a pulse, but I just couldn’t, and still can’t reconcile the thought that I’d pay upwards of $700k for a tract house in the burbs.)
Excellent blog.
Sears is toast.they will be out of business in a couple years.The merger w/ the dinosaur kmart is a disaster.They have new competition that is more mainstream.There stores are old and they just are not cool anymore.
I still love their appliance products. Always have done well with Kenmore.
And their tool dept. although blog 2 days ago mentioned Lowes etc tools that were chinese made and were crap. Rely heavily on Consumer Reports for my guidance and then adjust ‘whim-0- meter’ accordingly.
I like their clothes, they have the best Women’s petite selection around.
Sears stores are dowdy and don’t sell much of anything anyone wants besides appliances and maybe a few electronics. It’s barely a step above walmart in terms of screaming children running around. I bought all my household appliances there; however, I bought them on line and had them delivered. They put a Sears in the Westfield Mall in Palm Desert and ruined the entire mall - the screaming children now are everywhere, so I know many people that avoid the mall completely.
I visit the local mall every day for lunch, and the place has lots of foot traffic but I see little shopping. I’ll be paying close attention tomorrow, but my observations correlate well with earning warnings issued by many of the retailers.
Yesterday flew on two American airlines flights. I purchased my ticket just 10 minutes before heading to the airport, and it was pretty cheap. Each flight had empty seats and there were no lines at the airport. My rental car was 1/3 the cost that I paid last year, so something is not passing the smell test. I was delayed and called the Hilton for a hotel room, and got offered a rate of $74. I thought everyone was out traveling and spending $$?
I’m thinking everyone stayed home. Would be interesting to see if sales of TV dinners spiked.
This is actually very interesting. Do you mind letting us know where did you fly from and where did you fly to? I’d also like to know if the same type of load is on the plane on your flight back.
I routinely fly from PHL or BWI to New England and the Southeast. Lately, flights that were almost always packed have lots of available seats. I don’t think it is seasonal. This week, I flew to Raleigh, rented a car and stayed at a hotel all on loyalty programs - no blackouts. The flights were about 2/3 full.
Went to Best buy in Mission Valley last week. PACKED with people in the aisles. Didn’t find what I wanted, grabbed a coke and NO ONE was in line to buy. Maybe too early but maybe a sign of what this holiday season may be…
In Kauai this week. Resale of homes down 56%. Beautiful place but who can afford $800k+ condos in North Coast???? Big Surprise!!! Californians who have bought as their second and 3rd homes!! Would love an analysis of this by the prophets on this thread!!
“Wal-Mart, the world’s largest retailer, took perhaps the boldest move by launching its own version of Black Friday - on Nov. 2. The company slashed prices on a laptop computer, 50-inch plasma HD TV, toy car, HD DVDs and an HD-DVD player.”
And in perhaps an ever bolder move, FB’s have been seen slashing into their veins, in search of Plasma…
50 ounces worth, is a nice down payment towards a 50-inch plasma HD TV~
“‘There looks to be a bit of panic,’ said retail analyst Patty Edwards.”
That looks to be a bit of understatement.
I don’t think the Yuppies and FB’s are tapped out just yet. Although, I think there will be plenty of purchase downsizing.
Happy Thanksgiving!!
I smell lots of refunds after xmas, cash refunds.
Do re mi the math…
“Eager and well-researched shoppers will be camping tonight in tents outside Bass Pro Shop in Clarksville (IN), lining up for a 4 a.m. opening at Kohl’s on Charlestown Road in New Albany and battling frigid temperatures at every other big-box store in the region in search of one thing Friday morning — bargains.”
Bass-O-Matic ‘07
That’s good Bass!
http://www.youtube.com/watch?v=a-sTX7Wd7PM
“‘I think you’re going to see a huge crowd on Black Friday but I just don’t think it will last long,’ Britt Beemer, chairman of America’s Research Group, said. ‘I think Black Friday will roar in like a lion and go out like a lamb.’”
I agree with this. Happy Thanksgiving to Ben and all bloggers.
“‘It’s our jump-start on Black Friday shopping,’ Trester said.”
http://www.youtube.com/watch?v=UVQKiqCZ9No
O.T.
I posted this late last night and some of you wanted to know. Here it is.
Some of you wanted to know how my offer that I wrote about the other day worked out.
After making a million dollar offer, 15 day escrow and only a financing contingency, we did not get the property. It had six offers all together. (The original price was $999,000).
This was the house that needed around 4to500,000 work to make it nice and around $100,000 to make it livable. (only 2808 sq. ft. and no pool.)
I must say though, last year there would have been at least 15 offers on it.
I don’t know what it sold for yet.
I’ve been looking past few months here in Washington DC. Things still overpriced. RE agents will report back to me, as one did just yesterday that there were 3 offers. One would be buyer could not rent his place, one could not get financing, one was just a flakey 1st time buyer. So yes property still available. Hear this a lot from agents. Yes we got an offer. But would be buyer could not get financing. Who are these would be buyers ?
Since they couldnt get the financing, they are not ppl that do not read this site. They are ppl that cant afford the home, but looking to get in at this artificial bottom (believe it or not most layman still believe NARs’ pitch that things will pick up in the Spring). NAR SAYS MOST OF THE US IS IN GREAT SHAPE. All you have to do is check the foreclosure rate and inventory (DOM is misleading because unethical real estate agents just start it from zero when they feel like it). If these are on the rise, the question is not will prices fall but when. They are growing exponentially in all areas, even that between the coasts despite Yun’s misconceptions about the area. Also the mortgage crisis is real and is exerting downward pressure on prices in all areas. You can show NAR the facts, but you cant get them to tell the truth. Dont buy, and if you ever eventually do, always try to cut the realtors out whenever possible.
My guess is that all the activity will be on the specials (loss leaders?) — IOW, huge traffic but little if any profit. The big ticket items should suffer this year.
happy thanksgiving all, many thanks for all your wisdom.
I have heard friends say they are cutting back on the big stuff and are going to try to dazzle the kids with loads of cheapo things. In the end they will play with the boxes anyway.
Sheep thrills hanging with the sheerleaders?
no thanks…
“Although the day after Thanksgiving isn’t usually the busiest shopping day — that is the Saturday before Christmas — what’s known as Black Friday is closely watched by analysts and enjoyed by mobs of Americans.”
Happy Thanksgiving Day to Ben
from
Stanley Johnson
in 90274
located on mountain you see on pilot side of plane on a clear day about 20 minutes before you land coming from east to LAX for those of you in China or South Korea visiting Los Angeles.
Never under estimate American consumers recklessness and thoughtlessness. They will spend money on the stuff they do not need with the money they do not have as if there is no tomorrow.
instead of purchasing on black friday, mrs vozworth, and the two little voz’s shall engage in giving of spirit and action. blankets for the homeless, canned goods for the shelter.
a small price to pay of time and used things we no longer require, but others do.
however, the mass of public will engage in ravenous spending for useless gadgetry, how tiresome it has become to observe the spetacle of mindless consumption.
the global tsunami of systemic credit contraction resulting in wealth destruction will continue.
If all the major central banks inflate in unison, we would end up with a Weimar world.
There is absolutely NOTHING that would get me into a store tomorrow. NOTHING.
My local paper must have weighed 5 pounds today, totally cramed with advertisements. No thanks, I refuse to buy cheap trash. Got a hunch whatever the prices after Christmas they’ll be cheaper. Still trash though.
Ditto. The few things I THINK I want can wait until February. If sales are as slow as they are predicted to be the “sales” will still be there. Who knows, come February I’ll probably pass anyway.
i would be interested in how many cards get declined versus previous years
That would be an interesting statistic! I bet it is a hundred times more common than last year. No refresh post HELOC this year. At least not as many…
Hope everyone had a great gobble gobble day. Time to digest while watching my favorite college team.
Got popcorn?
Neil
“‘I think you’re going to see a huge crowd on Black Friday but I just don’t think it will last long,’ Britt Beemer, chairman of America’s Research Group, said. ‘I think Black Friday will roar in like a lion and go out like a lamb.’”
Here is the mall
And here are the sheeple
About to be sheared
By $7 an hour sales people
It always astonishes me when I see co-workers who have maybe 1/4 the family income literally spend 5x more than we do during Christmas. On extravagant gifts for the kids, decorations, food, etc etc. Then spend the next 6 months trying to pay off the credit card bills.
Luckily I’m married to a woman who is even more frugal than I am. I thank my luck every holiday season for that!
Think about it - guilt. “I may not be able to send them to private school or pay for dental work, but by God they are going to have a good Xmas!” is typical of the rationalizations the not so well off make for splurging. The rest of the year is so damn awful for them in the financial sense that it feels good to loosen up and blow cash (if even for a fleeting moment to these emotionally handicapped consumers).
A neighbor told me that her husband was from a lower (economic) class family so Christmas was a big deal. Maybe not a lot of splurges rest of the year.
OT I know, but does anyone here agree that these figures are possible?……….they were posted on Roubini’s blog………a bit frightening to say the least.
“Shangai down below 5000… I got a alarms all round in the screens and outta bed now
Markets are bad…my year end targets are as below”
US markets
************
DJIA 11,200
Nasdaq 2,162
S&P500 1,246
Asia markets
************
Nikkei 12,522
Topix 1,299.47
Hang Seng 23,991
European markets
****************
FTSE100 5,770.87
Currencies
**********
EUR/$ 1.5859
$/Y 101.02
£/$ 2.256
Commodities
*************
ICE Brent $105.10 a barrel
Copper downto $6,060 a tonne
Gold (100 OZ) up to $902
10-year govt bond yields
************************
US 3.89%
UK 4.40%
Germany 4.01%
Japan 1.44%
Possible? Most definitely. I’m sure it’ll be a bumpy ride down, though (which ought to make Tx very happy).
the 10 year US is almost at 3.89.
Hmmm … at 12,000 I win a pizza. At 11,000 it bumps up to a curry buffet. The bet is three months old and my buddy had been confident of winning until this week. Meanwhile, he has lost beaucoup curry dinners in bad trades while I remain in cash and metals.
The Xmas Holiday - or how to flog a dead horse.
This shopping season should be dismal. The American consumer has been tapped out for a long time. The housing market, which conveniently turned into an ATM to tap, has been tapped out. Analysts have noted that consumers have once again turned to credit cards, since the home has been scrubbed clean of any equity.
But it’s much worse than that.
We have been at a negative savings rate for decades. Worse: our consumption has been above income. I think that’s been going on for a while. It’s so serious, it’s an economic impossibility. It’s considered to be impossible to do. I recall my lower level economics classes, it was one of the first things we learned when we studied consumption.
“Rule”, or “law” of economics: A consumer cannot spend more than he has. Guess what? We did it anyway!
Xmas.
This year, though, I think we’re going to see the bottom. Expect a lot of hype. Also, expect inflated figures about sales, outright lies. I’m expecting car dealerships to make a dealwith the shopping malls. Take all their cars, park ‘em in the parking lot to make it look PACKED. Expect parades, elephants, trained monkeys with just one message “BUY”.
This year, though, I think we’re going to see the bottom.
I doubt it. People will spend less on xmas where they have been tapped out all year… this year has only been paper pain. Wait until unemployment reaches 8% or higher.
RE: This shopping season should be dismal.
Confidence in EVERYTHING dropping like a stone.
At T-Day dinner, my brother’s somewht dim-wit GF left me dumbfounded when she said to me, “things don’t look too good out there at the moment. Rather stunned, I replied, “Yup.”
And this is someone who is tuned into nothing else but her equestrian pursuits.
From the exchange I’ve come to the conclusion J6P is starting to “get it”.
I was thinking the same thing bogus sales figures and the news will jump on it saying everything is OK .
Well, I think the turnout/spend levels will be about the same as last year. Until things REALLY crash, I don’t think people will notice that there is a big problem and maybe they should show a little self restraint
I tend to agree! I’m a pretty impartial observer to the Chr-stmas spend-beyond-your-means phenomenon (because I’m Jewish! It’s always been a “foreign custom to me).
I don’t think any of these how-much-a-month folks want to admit to their inlaws/neighbors/kids that they’re broke! They’ll continue to spend, with “faith” that the Government will bail them out, if J-sus doesn’t.
I concur, I am sure we will see a slight decrease in spending but Christmas spending has never been a good reflection of ones finances. I think next year will be the first Christmas that is bad. This will be due to all the foreclosures, credit tightening and the consumer realizing that the future holds more negatives than positives. Christmas spending is a lagging indicator not a leading
“‘I think you’re going to see a huge crowd on Black Friday but I just don’t think it will last long,’ Britt Beemer, chairman of America’s Research Group, said. ‘I think Black Friday will roar in like a lion and go out like a lamb.’”
I know a regional manager of Wal-mart. The inside source says that most big retailers are pessimistic about Christmas sales. But there is an expectation that Wal-mart will do well, by cannibalizing others.
It will be very interesting.
In general things are beginning go sour in a big way, just as many predicted on this blog nearly two years ago. MSM had no clue at the time.
RE: I think you’re going to see a huge crowd on Black Friday
The idiot lemmings of this country wouldn’t have a clue of what else to do. They’re like the rat in the maze. The day after Thanksgiving they are “programmed” to head to a mall in search of that illusive piece of cheese.
By rights, you’d think tomorrow they’d all be in a gym somewhere, running the tread-mill or hoisting some weights to work off all that stuffing and pecan pie they ate the day before.
hd74man,
ROTFL,
Oh… Americans need to hit the gym, but that’s too logical.
Instead they’ll hit the mall, window shop, and stand in line at Cinnabon. They’re also programed to gain that 7 pounds a year.
Got popcorn?
Neil
It is not my idea of fun to shop, but to try to park in those lots…perhaps a root canal would be more fun, hangnail…
‘’Britt Beemer, chairman of America’s Research Group, said. ‘I think Black Friday will roar in like a lion and go out like a lamb.’”
I adore the thought, but I deplore the boring phraseology. I already complained about this two weeks ago, on this blog. Posters on THIS blog use exciting language, so let’s spread some better terms. Especially those of us who know lambs, and have experienced their noisy and excitable ways. I’ve never met a lion, I admit, but I know plenty of lambs, and just try to make them ‘go out’ anywhere—they’re like freakin’ inner city kindergartners on meth. They can jump right over you. They can scribble on the ceiling, with extendable arms. They’re like goats, only littler, and that means they can weasel into the smallest corner and then spring out on you. You have to be alert.
Interestingly, lambs grow up to be the most manageable of creatures, called ‘sheep’, while baby goats grow up to be the smartest, cunningest, trickiest creatures ever, called ‘goats’. Just like Satan, and they even have a beard! And they like to climb on cars! And eat trees!
Anyway, my point is: let’s start some better aphorisms.
Here, I’ll offer one, and then I must go start the stuffing. I’m using mushrooms I found in the woods.
–‘I think Black Friday will come busting in like a badger with a mission and waddle out like some sort of peaceful duck, such as a widgeon, those seem calm, when I feed them bread crumbs.’
I think Black Friday will wander in like lost kitten and stagger out like a drunken elephant.
Okay, that’s what I mean. Colorful, vivid phrases.
Careful of those stray mushrooms that you found in the woods or it certainly WILL be a Black Friday Olympiagal
If they’re morels, soak ‘em first. Unless you like free “crunchy” protein.
Olympiagal …Happy Thanksgiving to you ,Ben ,and the rest of the gang ,
Olympiagal
I was going to say that if your not a writer ,than I command you to be one . I don’t care what you write about ,it could be about anything …..I think you could even make a business topic come alive .
Anyway ,I’m going to spend money for Christmas because the grandkids are counting on it . I won’t go out and shop on Black Friday or wait in lines ,and I don’t care if I spend more to avoid getting up early ………that’s nuts .
…or a psychedelic friday
Walmart should do okay as the people who usually shop at midrange places may show up there and make up for any lack of business. The really high end stuff will always do okay. It’s the places in the middle that, I think, are going to take the biggest hit - the usual realm of the horribly tapped out middle-class consumers.
Rich Aren’t Different
I think this is the reflection of the “weak hands” with HELOC’s no longer in the game of reaching for the appearance of wealth. Many who were either flush with cash due HELOC’s or benefited from the rising RE market with large paychecks (RE agents, mortgage brokers, etc) are no longer “acting rich”. We will see many of those individuals step down their purchases so luxury goods will suffer along with everyone else. In the old days the thought was do you want to make a fast nickle or slow dime. In the early 2000’s people were making fast dimes as well. I believe this recession will “TRICKLE UP” through the population. Also as the recession gains momentum it will his discretionary spending harder than the staples.
I’ve noticed that not a single one of my many Lexus-owner friends or acquaintances has acquired a new one in several years. Guess it must just be the vaunted reliability. One of my buddies nearly had a heart attack when he had to replace the tires on his SC-460 — something like $2,200 for four tires and they won’t last 20K miles - more like 12-14K.
Factories might eat a lot of the cost increase in the basic automobiles, but I bet the owners of these prizes are going to get hosed when the parts they need are priced in relation to the fallen dollar. Happened big-time in the 1970s dollar crash, but then the basic car prices for imports rose a lot, too. Assembled-in-U.S. doesn’t mean the parts are made here.
Well I got the paper and looked at all the sale advertisments…I found nothing really worthwhile to stand in line for at 4 in the morning..I will make the retailers sweat and wait till it gets much closer to christmas for anything I need not want….
“What’s your prediction for the shopping turnout tomorrow and for the holiday season in general, in light of the housing bubble pop?”
I helped a friend run her booth at a fundraising shopfest two weeks ago. She said her sales the first day were NINE times last years, and she hit new record sales numbers on all subsequent days. I was happy for my friend’s success, of course, but shocked - really shocked - to hear those numbers.
So based on that, I’m too freaked out to badmouth retail just yet.
She had a retail “booth?” The description makes it sound like something bargain-hunters might flock to, in order to not have to buy in a regular retail establishment. Unless she was selling stuff that was no particular bargain, are you convinced there is an indicator there about store sales?
test
It’s a little late in the day, but a very Happy Thanksgiving to Ben and all who post and read here. May the Lord bless you all!!!
On another note…..d@mn Lions…….
Sittin’ on the farm here you couldn’t pay me enough to get up and shop. Kohl’s and others who are opening at 4AM are insane. Even worse are the stores that are open today. Even less consideration shown for employees IMHO.
My daughter wants me to take her to a mall sometime tomorrow for some hooded sweatshirt thing at a store called Hollister, but it’s a 50 mile round trip to the nearest mall. No thanks dearie, look online.
RE: On another note…..d@mn Lions…….
My brother’s a huge Packer’s fan.
For a time there, he was vociferiously distraught…just to let you know.
As stated before my husband and I only buy for the kids. We will buy them one expensive gift like an ipod that they have asked for all year and the rest small stuff..however we do not buy items that are not necessary throughout the year….they have to learn to wait for what they want…not the American way of instant gratification….by charging it…also we pay cash only…we don’t “finance” Christmas…
Get them the new flash Zune. Much better. And you won’t be supporting that stock-option-backdating CEO, and his board member Al Gore.
Wow, talk about a waste of money. That is like substituting ground beef for steak. The value is in the integration, not the hardware specs.
It’s well known that Steve Jobs pays people to infest blogs with “fanboys”. I never thought he’d get down to blogs like this!
hell i wouldn’t install itunes or zune software. Both are DRM infected garbage that’ll slow your system to a crawl. Get a no name mp3 player and rip cd’s. You’ll have (vastly) better sound quality and you’ll keep your civil liberties DRM free.
Amen and halelujah! I use a Creative Zen, and rip CDs to MP3. Don’t have to worry about being locked out of my music in the future.
My expectations. (Yawn) The usual sound bites and hype from the economy spin meisters:
1. “We are not as disappointed as we thought we might be.”
2. “It appears the US consumer is still strong/hanging in/resilient.” (Take your pick)
3. “Traffic has been very impressive.”
4. “Consumers are being careful but snapping up the many bargains out there which will probably mean that the holiday period will not be the disaster a lot of people predicted.”
5. “Now is a good time to buy.”
6. “Mortgage rates have never been lower.”
Ooooops! Sorry. Those last 2 sound bites are from the other b.s artists play book.”
First things first, I am thankful for this BLOG! Thank you, Ben Jones. I was inspired to buy puts on CFC, FNM, FRE, LEN, SPF, WCI and others last spring and am now cashing in enough for not only my black Friday purchases but trips to Europe and Thailand as well as early retirement.
Having said that, I will do the same Black Friday circuit as last year and will report here what I notice about the crowds. I thought they were somewhat lighter than portrayed by media last year but now my area in Ventura County, CA has been impacted by layoffs at Amgen and Countrywide, as well as the equity ATM shutoff valve.
Awaiting Bubble Rubble,
I have a co-worker who is going to wait out for the Best Buy in Oxnard to open so he can buy a desktop and laptop computers with celeron processors. I don’t know it does not make sense to me.
Same or better than last year. As some one on this blog pointed out before, Christmas shopping is more about showing off than anything else. People will cut on everything else before they cut back on gifts and admit they are broke. Besides, if you know you’re going down, might as well go in a blaze of glory (or gift wrap).
Hi..my name is mikey and I have a serious pumpkin pie addiction.
***Happy Thanksgoblin Everyone***
yeah, I know what you mean..
I have a turkey baster full of gravy dangling from a vein..
I’ll be Jonesin’ for hit of sweet potato by 2 AM.
As long as the credit cards are still accepted the compulsive shopping will continue unabated. For many people shopping is their comfort — sort of like chocolate. Bad news makes people scared, and many would rather not know. For example, a good lady friend hasn’t read the last few issues of the Economist magazine because of the recent uptick in the volume of bad news. The Friday shopping mall bash will happen because people need the boost despite the added debt load.
I really appreciate the keen insight that abounds here, and hopefully I haven’t pi$$ed-off too many; it’s not deep.
Happy Thanksgiving Ben et al.!
I suspect that Thanksgiving was pretty sober at many homes. Complaints about housing prices down, stock market down, airfares up, gasoline prices up, food prices up. We’re getting deflation in the things that people own and inflation in things people have to buy. Just the opposite of the past decade. It’ll be ugly.
I suspect that people will buy, but only on things deeply discounted for the most part. So sales will be solid, but profits and margins down. Walmart will probably do well as people move down to discounters to save money over full-priced places such as Nordstrom’s. And Thanksgiving sales may be soft, as the Walmart’s of the world “front ran” the day by discounting early in November on many items.
I expect a bounce in the stock market as we’re oversold, and perhaps a rally on any pre-emptive rate cut. It might happen on Tuesday, as that’s when COMEX options expire. The Fed isn’t dumb, and they now like to cut when it is most likely to juice the market by squeezing the shorts. I’m slightly short the market, but expect to short more on any rally of substance. I don’t see us going above 1490 on the S&P again, so a 5% maximum rally is the most the bulls can hope for.
Best short out there at the moment is the GBP. The UK housing collapse is just getting ready to burst.
JMHO
Just received a note from a South African friend who is a broker there. Seems they had a credit bubble too! Will report on it in more detail tomorrow or on the weekend.
URP!
Pardon me…..
Ditto.. URP.
OT but todays food related.
working out faithfully, took measurements this morning..
No way am I going near a tape measure now..
Urp and groaaan.
Thank goodness for Ben and this site. I am learning more from ya’ll.
Thank you.
Regarding Black Friday…
The sheople will be out in full force chasing the crapola “bargains” with their already maxed out plastic.
If there is any one thing that you can bank on, it’s Black Friday shopping. I don’t think it will be enough to put the retailers where they want to be, because it is never enough.
As for me, I’m going to work, finish up some documents and other related Friday work. I have lunch plans with a friend and an early departure planned. I might even head North for a weekend away from it all.
I’ll be at the malls tomorrow, for coffee and to watch. Might buy some things if I feel like it, but most BF deals can be found online, where I can avoid the lines.
2 quick notes:
- When at malls, don’t look at the number of people, look at the number of people carrying shopping bags (i.e. actually buying). You’ll find that it’s a fairly small percentage.
- For what it’s worth, there were around 40 people waiting in line outside Best Buy at 6pm at Chandler mall. I don’t remember any good deals there, these must be the die hards??
“…these must be the die hards??”
Or the dumb hards.
Assuming they have a good deal in mind, I admire them. Nothing like getting something cheap and having to suffer for it, it builds character. I used to be hardcore like that, but my time isn’t worth it today.
A picture of a waterfall for Y’all
http://quotes.ino.com/chart/?s=NYBOT_DX&v=s
Been watching that myself. Who’s selling? Gold and Oil moving as well
What is that chart, and why did the bottom drop out at 8pm?
Here ya go GS…………this is probably clearer.
http://quotes.ino.com/chart/?s=FOREX_USDJPY
Good one. So is my hunch correct that the latest $US carnage in the FOREX market is directly tied to disclosure of Japanese bank subprime hits?
Does anyone believe the Fed governors who hint they are done cutting rates?
Dollar Falls Below 108 Yen as Debt Losses May Spur Fed Rate Cut
By Ron Harui
Nov. 23 (Bloomberg) — The dollar dropped below 108 yen for the first time since 2005 and fell to a record low against the euro on speculation deepening U.S. credit-market losses will prompt the Federal Reserve to cut interest rates.
The currency headed for its biggest weekly decline against the euro in a year as traders raised bets that the Fed will lower borrowing costs on Dec. 11. The yen headed for a weekly gain against the dollar as concern turmoil in credit markets will slow global growth spurred investors to sell higher-yielding assets bought with money borrowed in Japan.
“Dollar weakness is going to continue,” said Stephen Halmarick, co-head of economic and market analysis in Sydney at Citigroup Australia, a unit of the largest U.S. bank by assets. “The U.S. economy is going to underperform and the Fed is going to be easing.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=a0laKyoaB_0U&refer=home
I am wondering whether markets are becoming more responsive to news than they were during the conundrum (which, all recent recent financial news suggests, lies on its death bed nearby where the symbiosis lies dying)? That might offer a welcome sign that an era of malinvestment due to the absence of risk premiums may be coming to a close.
Japanese banks suffer 230 bln yen in subprime losses: report
By Chris Oliver
Last Update: 9:59 PM ET Nov 22, 2007
HONG KONG (MarketWatch) — Japanese financial institutions have had to write down about 230 billion yen ($2.13 billion) on holdings linked to the U.S. subprime mortgage market, according to reports. Japan’s financial regulator, the Financial Services Agency, released the figure late Thursday saying it represented losses suffered by major and regional banks, credit associations and credit cooperatives as of Sept. 30, the Nikkei News reported in its Friday morning edition.
http://www.marketwatch.com/news/story/japanese-banks-suffer-230-bln/story.aspx?guid=%7B38BEEA92%2D62C0%2D44B3%2DB519%2DD2A64F6DF6C1%7D&dist=hplatest
The current exchange rate from yen to $US is 107.78 or so.
1.2 trillion yen / (107.78 yen / $US) = $11.1 bn (I checked my math to make sure).
So how big was the Japanese subprime loss: $2.13 bn (as reported by MarketWatch) or $11.1 bn (TimesOnLine)?
And BTW, when does the first half end in Japan? If their first half ends in July (like ours), then if I understand the article linked below, this loss does not even reflect the effects of the credit crunch…
November 23, 2007
Sub-prime crisis takes £5.3bn toll on Japan’s banks
Leo Lewis
Profits in the Japanese banking sector have taken a 1.2 trillion yen (£5.3 billion) hit from the US sub-prime mortgage crisis and the country’s central bank has said that worse turmoil may be on the horizon.
The first estimate of the damage wrought by sub-prime was prepared by Japan’s Financial Services Agency and follows grim first-half earnings figures from Japan’s largest bank, Mitsubishi UFJ Financial Group.
http://business.timesonline.co.uk/tol/business/economics/article2926165.ece
Already time to update my calculation again:
1.2 trillion yen / (107.65 yen / $) = $11.14 bn
The size of the Japanese subprime hit is growing by millions of $US per minute!
Is it about time to change the name of the U.S. one cent coin to the Yennie?
Huh. P’Bear. I’ve checked your math. Checked mine too.
HOW IS THIS GOING TO END WELL?
Good night Irene.
Leigh
P.S. You scare me more than I scare myself (there is a complement in there somewhere).
I always find the Black Friday news reports stupid and insipid (both the national news and the local yokels). They might as well run the exact same news report year after year after year.
They start off by showing the sheeple stampeding into a Wal-Mart somewhere. Then they show big crowds at the mall, with lots of video of credit cards being swiped and cash registers cha-ching-ing. Then they ask a handful of mall shoppers what they’re buying this year (what new piece of crap du jure is hot this year), and a couple of toddlers are asked what they want Santa going to bring them. Then the meathead reporter declares that “people are definitely buying this year!”. If it’s the business reporter, they confidently add that “American retailers should have a very merry Christmas!”.
Oh really …. gimme a break. How can you possibly determine 4Q or annual profitability without *possibly* knowing the sales volume, or even more importantly: PROFITS?!? The whole business is an exercise in mindless stupidity and sheeple herding.
Me personally, I’m going to be an anti-consumer tomorrow. I’m not going to buy a damn thing (not even a newspaper, a sandwich or a gallon of gas). Instead, I’m going to the bank, withdrawing $100k, and opening a trading account for foreign currencies, so I profit from the dollar’s day-by-day geometric shrinking.
I’m not a bah-humbug …. I’m just sick of watching people buying crap they don’t need and obviously can’t afford — and then badgering the government to rescue them from their own mindlessness. I might as well start profiting from it, huh? (Any suggestions to that end would be much appreciated, and possibly rewarded with a cheap domestic ale ….. )
People buying things they don’t need - who cares? it’s their money, if they want to blow it, more power to them.
People buying things they can’t afford - totally different, obviously stupid, and they’ll pay for it in the end with a bad credit score, no money, difficult marriage, etc.
George told us to shop.
Hi Jim!
Harump…welcome to the 15th Non Consumer Day (IIRC) don’t spend nuthin! Day where folks declare they are madder than hey, and they will not be crushed by those who desire said crushing!
Yeah…insipid indeed! Buy more of what we do NOT want or need?
Ya just can’t make this stuff up!
Wink,
Leigh
P.S. Donation time (note to self: Ben runs great blog, those for which I am greatful).
I think that people are waiting in lines and thronging stores to buy loss leaders, but if they don’t get that bargain they will not buy anything else.
I’m going to do all of my shopping online. Funny someone just talked about celebrating the day by opening a foreign currency account, I just threw some money into an emerging markets fund.
I Saw Mommy Dissing Santa Claus
http://www.thestreet.com/s/i-saw-mommy-dissing-santa/university/knowledge-at-wharton/10391228.html?puc=_tscfoc
Was at Thanksgiving at in-laws.
Depression has set in for SIL. She’s upside-down on her sub-prime, I/O, ARM that is currently at 8%, but will be resetting to 11-12% next Oct. Oh… 6 months of intrest pre-pay penalty if she refi’s early.
She’s out on the far edge of Mesa and $3+ gas is kicking her in the teeth.
Her husband works as a luggage thrower for an airline. He said that yesterday saw half the passenger count of last year.
FIL is hurting too. He sells big trucks. Business is not good.
Chirstmas will be pretty low key this year.
I think tomorrow will be a good day for retailers in general.
I think the bottom rung of consumers will go out and try to get their hands on as many of the loss leaders as possible. This will be their Christmas spending for the season. They will get a lot of cheap junk at Walmart, Dollar General and the other discounters. Most will use small limit credit cards, but a few will pay cash. Not a lot of available money here, but when added up together it is some pretty big numbers. These people will blow their load in one day, and will be done for the season.
The people that are sinking fast will figure what is another couple of thousand on the credit cards? Might as well give the kids one more good memory in the house, before the Bankruptcy and foreclosure. There isn’t much difference between filing bankruptcy on 20k in credit cards as opposed to 22k, so go crazy. Get it while you can, because once you start missing payments the cards will get shut off. Spend, spend, spend it while you can, and they will for one last Christmas.
Those that are pretty responsible with their money will do the same as always. If they are big on Black Friday, they will still hit the stores. If they don’t usually participate, then this year will probably be no different. I think a lot of retailers are nervous enough, that there will truly be some pretty good deals on high ticket items tomorrow if you are willing to fight the crowds. Not my choice, but hey there are millions out there that really enjoy the hunt for the best deal.
After tomorrow, I think sales will be tepid at best. But will probably be good enough to match the very gloomy outlooks, which will be spun into sounding like the season was a smashing success.
Next year, I see people using their concern for the environment as the excuse to cut back on their irresponsible consumption patterns. It certainly won’t be that they have to dial back the thermostat to save money, it will be to save the environment. They won’t brown bag their lunch to save money, it will be to start eating better and lose weight. They won’t be cooking at home again to save money, it will be to re-connect with their family and start eating healthier. Many will probably even plant a small garden if they have the space, again not to save money, but to avoid pesticides.
Many magazines, television news shows and books will cover these topics to help people that are cutting back feel better about cutting back, because the pain will start to really hit by next summer.
I am just thankful that I am not sitting in a house with negative equity and a payment about to increase beyond the point that it is affordable.
Here’s my prediction: the masses of consumerian Androids will descend upon the shopping malls and stores of Amurika and they will use anything they can to pay for stuff. Credit cards? No problem. Maxed out on the Happy Meals on the CC? You can give the cashier cash (but most Amuricans don’t have any money). No money or CC? Write a check if you know how to write (most people don’t). Nothing in that checking account? Well there’s no law that says you have to use FRNs, you can use gold, silver, platinum, copper, dental floss, liquid cheese, gravel, toilet seats, arcade tokens, bolts, nuts, potato chips, anything you can stick in a cashier drawer. Walmart (currently set to merge with Haliburton) plans on having sales of 90% off…wow that’s why there’s all kinds of tents in the parking lot…kind of looks like a squatter city. The economy does the best on Black Friday, the USA only has 1% inflation and unemployment is -3% because King Kahuna in the DOL said so. We have the housing collapse under control, if the houses get too small or ornery we’ll import them from China or Kazakhstan or Walmartistan (breakaway province of Afghanistan). Yes, Peak Oil is real and because of that oil will go to $200052854389024 per barrel and we’d better get that wind powered car program set up and start running our factories/Walmarts/Mcdonalds on cow methane and French fry oil. George Bush is going to be President for life, he has an approval rating of 100% and he wants to set up a Department of Religious Affairs (escort service for the Religious Duh right). Dick Cheney will marry Larry Craig, the Dow Jones goes to either 39999 or -10384, gold will go to $.50 per oz, Vermont will become a seperate country and make its citizens become Nazi Greens, GM and Ford will merge and create the Ford Corvette (blows up at 50mph), Toyota will make an SUV that gets 2 mpg and is a hybrid (runs on gasoline and cow methane directly), Al Gore becomes an astronaut and dances in space, Britney Spears is sent to Mars (and comes back with Martians), demonic toilet paper runs amok on the coastlines, the Confederate states throw out the turducken and replace it with the MeowWooftweet (a parrot stuffed into a cat’s butt stuffed into a dog) and Ben Jones wins the lotto!
Hahahaha….
Report from South Coast Plaza in Costa Mesa, which I’m watching thanks to having to go to $#%# work today in the office complex across the street: Parking lot’s full and traffic’s backup up at the entrances. Apparently at least somebody’s still got some money.
Just an update on my Black Friday experience. I did the same circuit as last year, Target, Staples, Toys R Us and this year I added Linens and Things and a computer store. I went about an hour later this year than last so didn’t start until 8am. The crowd size this year was less than half of what I saw last year starting at 7. There were some good deals and most of them were NOT flying off the shelves. This year I only had to listen to one woman doing the cell phone bragging about her “bargains” when last year it was much more common. This year I did not have to guard my cart at Target because the bargain items were still plentiful on the shelves.
I should note that this and one of the days after xmass are the ONLY days I go to stores to buy things and generally buy stuff online the rest of the year. Just my two cents.