Morning Folks!!
It's the eve of December and December has always been a month reserved for reflection, rest, family, fun and looking to the next year and how it will unfold. The best way to do that is to look back at what i thought about things last year.So here is my post about 2009. I got some right, I got some wrong and some things are yet tounfold. I may have been a bit early on some of these things. But they are still coming. I still believe Sears will fold. Just the time may be off. When I said 'Your favorite restaurant will go out of business' I put a 'Maybe' in not to go too far off the ledge. Well, my favorite restaurant DID go out of business. How about yours? Are they holding on for dear life?
2010 is going to be really tough. Really unpredictable. Really a lot of turmoil. But there will also be opportunity the likes we have never seen before. Just keep your seat belt fastened, this ride is far from over and it will be the Christmas numbers that are the TRUE and FIRST indication of how things really are. Just don't fall for the 'Spin.' For example, yesterday I heard a report that foot traffic was way up over last year. Then went on to say that sales were down 8%. That is a HUGE number and in a moment I am going to show you how much worse. While the sales were down 8%, the hidden number is what they are buying. Or should I say what they are not buying. We are buying 'Gifts of necessity' as opposed to luxury gifts. That means we are buying things that we would have bought anyway and labeling a Christmas Gift. That is great actually. However the retailers don't know this is going on and it will mess up all their projections for 2010. Going to be an HORRIFIC first quarter in retail following a dismal Holiday season.
So there is an illusion that things are getting better. But it is nothing more than the eye of the storm passing overhead. The experts are clueless. What is coming is still coming.
Have a GREAT Day!
Rick Schwartz
Kevin
The only things people were buying were deeply discounted items. I’d bet most merchandise sold had very little profit margin if any.
So I wouldn’t put much weight in any of the retail sales figures being spewed out.
If a retailer can’t sell merchandise with a healthy profit margin they’re just playing a shell game with the numbers on the books.
Howard
Cyber Monday may well outsell Black Friday.
Robbie
If people thought 09 was tought 2010 is going to worse.
Hate say it, I really do but I think we havent seen the worst yet.
Just my two cents…
Ed Keay-Smith
Hi Rick,
Great post mate!
Yes I think that most people are living in denial thinking that the worst has past!! NOT BY A LONG SHOT!
You said that”The experts are clueless” and I agree that 98% of them are but there are a few that know what they are talking about.
One person who I think is very”switched on” is Peter Schiff from Euro Pacific Capital.
He has been talking about all of the things that have been happening in the world economy as far back as 2005 and has hundreds of YouTube videos to back him up.
He is currently running for US Senate 2010 http://schiffforsenate.com/ and if people have not seen any of his material they should check him out.
I am Australian so I can’t vote for him but I sure as heck would if I could.
People need to wake up and look at what the US Government and the FED Reserve are and have been doing over past few decades and make some changes.
Sorry about the rant but it needs to be said.
Cheers
Ed Keay-Smith
OzDomainer.com
soon to be expat
http://www.usdebtclock.org/
Morgan
Great post Rick and all very true! I can’t tell you the number of people who say to me”it’s great we are out of the recession!”
My response is usually to say,”well I’m forever an optimist…but this isn’t over yet!”
There have been a lot of”false positives” this year. Cash for clunkers made everyone think the auto market had been saved. The housing rebate also gave everyone the impression that the real estate market has stabilized.
With plenty of foreclosures that haven’t even hit the market yet and no rebate to entice sales in 2010, the real estate market will tumble again.
I’m always a glass half-full kind of guy but realism is paramount. You always tell it how it is and in times like these that is more important than ever.
advice
Yo..
Two tips:
1. Buy physical silver and gold that you can hold in your hand..the hedgies are requesting delivery on the contracts and do not trust paper..(this should be interesting) especially with 75-106 trillion in unfunded u.s. obligations
2. Buy solid names on sale..
ScottM
Absolutely correct Rick. As anyone who manufactures products for the consumer electronics industry can tell you for the most part the high-margin accessory and adjunct items are being ordered in record low quantities by the OEM’s this year. The exception is the high-price low-dollar margin items like LCD TV’s and computers, yes they are selling record quantities but the profits are low and retail prices are plummeting.
OEM’s are not making and the retailers are not buying any excess inventory or pipeline inventory for the profitable accessory items as they have in years past. If they run out and are out-of-stock so be it, that’s a chance they are willing to take. In their mindeset, better to run out and be back-ordered than be stuck with unsold or returned inventory that they then have to charge off or give away to the 99 Cents stores or Big Lots. That’s an indicator of their confidence in the retail sector and its growth for at least the next 1-2 quarters. None.
wanda
Having lived through a crisis in the corporate and structured debt markets, it seems that we’re entering the era of sovereign defaults. As John Waples says in the Times: “If over-borrowed Dubai can flirt with bankruptcy, then why not overborrowed Ireland, Greece, Iceland, ????
Altaf
Dubai announced that the Govt.are not responsible for any private business enrepreneurs in the country. Would that solve the econimic damage made with publishings by a journalist in BBC & CNN? It caused heavy fall in stocks that no buyers are in the DFM & ADX markets.The journalists could do any length of +-.
fat loss book
optimistic for 2010 Rick
RJ
Rick,
Logic has me agreeing with you 100%. Real unemployment is 17.5%, 1 in 8 americans are on food stamps, subsidized health insurance for unemployed runs out for most this month – this will squeeze whatever little spending power they had, foreclosures keep rising and looks like they are getting worse regardless of what the bogus / govt propped home sales numbers are saying.
I live in the NYC area. What puzzles me is
-Stock market nearly back to Pre-Lehman levels
-Urban malls in NYC suburbs seem to be full
-People seem to be spending on vcactions etc in this area.
-I have a few unemployed friends who seem to be doing ok because of day trading gains.
Does not add up.
Tax Liens
It is nothing more than the eye of the storm passing overhead. The experts are clueless. What is coming is still coming.
SEO Web Analytics
There is an illusion that things are getting better. But it is nothing more than the eye of the storm passing overhead. The experts are clueless. What is coming is still coming.