Brick-and-mortar retailers are being taken out the back and shot.
With impeccable timing – the very morning that the Commerce Department would report crummy retail sales – Wal-Mart Stores rubbed salt on the wound. It disclosed in an SEC filing that it was “committed to growing,” as CEO Doug McMillon put it, but was “being disciplined about it.”
Corporate speak for shutting 154 stores in the US – its 102 Walmart Express stores, 23 Neighborhood Markets, 12 Supercenters, 7 stores in Puerto Rico, 6 discount centers, 4 Sam’s Club stores – and 115 stores internationally, for a total of 269 stores.
So this will “impact” 10,000 “associates” in the US and 6,000 internationally. Those folks will be given “priority” for open positions at other stores. If that doesn’t work out, they’re on their own with 60 days’ pay and “if eligible, severance.” They’re going to be looking for jobs just when other retailers are also whittling down their headcount.
The closures will hit Wal-Mart earnings to the tune of 20 cents to 22 cents per share, most of it in Q4, which it will report on February 18.
The SEC filing strategically coincided with the retail sales report the Commerce Department released this morning. Turns out, auto dealers, restaurants and bars, and online stores are kicking butt, while brick-and-mortar retailers are being taken out the back and shot.
Total retail and food services sales in December fell 0.1% from November to $448.1 billion. This brought the total for 2015 to $5.32 trillion, up 2.1% from 2014, the slowest growth since 2009. By comparison, from 2010 through 2014, retail sales grew 5.1% on average.
These estimates are adjusted for seasonal variation and holiday and trading day differences, but not for price changes. And despite rumors to the contrary, there were “price changes.” The Consumer Price Index for the 12 months through November rose 0.5%; without food and energy, it rose 2.0%. And if you bought a new vehicle recently, you were in for sticker shock.
Retail sales were largely propped up by soaring auto sales. Motor vehicle and parts dealers, by far the largest category of retailers with $1.1 trillion in sales for the year, account for 21% of total retail sales. While flat for December, sales for the year soared 7%.
But electronics and appliance retailers weren’t so lucky. Their sales dropped 3.8% in December, after dismal holiday sales, and are down 2.4% for 2015.
Just yesterday, Best Buy gave us a premonition when it complained in an earnings warning about poor demand for mobile phones and other electronics. Holiday sales in the US had fallen 1%, and sales for the quarter would shrink, it said. Internationally, Best Buy is facing a fiasco of rare proportions, with revenue expected to implode by 30% in the quarter due to terrible demand in Canada, where it has been shuttering many stores.
The good thing about the oil price plunge has been the decline in gasoline prices. So sales at gasoline stations fell 14.6% for the month and 19.4% for the year (in dollar terms, but not volume terms). Everyone has been hoping since late 2014 that this would get consumers to spend this extra money at, say, electronics and appliance retailers. For how well these hopes worked out, see Best Buy.
And sales at Department stores fell 2.1% for the month and 2.0% for the year. These stores, along with Big Box stores such as Best Buy, have a mega-problem that’s just going to get worse: in addition to a very tough retail environment and strung-out consumers, they also face the largest demographic in the US, the Millennials. They’re the Holy Grail. Everyone wants their growing dollars. But they have other things in mind and don’t feel like blowing their money at brick-and-mortar retailers.
They’re buying online. And it shows: non-store retail sales jumped 7.1% for the month and 6.3% for the year. They’re frugal when it comes to things like clothes. But they’re spending money on “experiences,” such as restaurants and bars: sales at food services and drinking establishments jumped 6.7% for the month and 8.1% for the year. And sales at sporting goods, hobby, book & music stores rose 7.6% for the month and 5.9% for the year.
Now all eyes are on auto sales. This category has kept retail sales from rolling over entirely. Last year was an all-time record year. These sales have been funded by aggressive lending with loosened underwriting, including to subprime customers. Loan terms and loan-to-value ratios have been extended to the point where bank regulators are fretting about them. This sort of lending goes in cycles. The economy has now reached the end of the credit cycle. As losses rise, credit tightens. And that will pull the rug out from auto sales. It hasn’t happened yet, but it will, and when it does, it will impact a lot more than just retail sales.
Many retailers are still owned by PE firms: Neiman Marcus, Albertsons, Safeway, J. Crew Group, 99 Cents Only Stores, Bon-Ton Stores, Claire Stores, and a slew of others. Exits were planned and IPOs were lined up, but the stock market got the jitters, and the IPO window closed on them. For these over-indebted, junk-rated brick-and-mortar retailers, it’s going to get much tougher. Read… Defaults and Restructuring Next for Retailers
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The stores have done it to themselves. Lack of assortment, and with Walmart, out-of-stocks on the “one” thing I went there to buy. Why buy a camera from Best Buy for $159 when I can get it from Amazon for $139? Heck I’ll buy it from Amazon if it’s the same price due to the convenience.
The new trend is offering warranties for everything. Look for this kind of cross-promotional activity to increase, instead of the real changes that need to take place – providing increased customer convenience and differentiation.
I work in online retail, and just had a meeting yesterday that got quite cagey when it became clear that the initiative being discussed was going to eliminate a few jobs.
No disagreement with anything you say, but a feature of what you describe = massive elimination of jobs that are not going to be replaced. Enjoy low prices & convenience to the hearts content, but at some point this will be reckoned with, one way or another.
For now we seem to be letting this run its course unhindered. The current mood seems to be that if someone got steamrolled by technology, they deserved it and shall be shown no pity. The bosses have us doing their bidding with merciless efficiency. It’s nice to save $$$ bux on an item, but the gains of this massive endeavors are all going to a small pool of privilege and wreaking havoc on the swaths at the bottom of the economic totem.
So instead of working for someone, you gave to be the boss, leveraging technology to its fullest extent to make a profit. Go build the next Uber or Amazon instead of complaining, and you are the goddamn winner.
This is absurd. We are looking at a massive, SOCIAL problem, and you are offering a solution that works for a few individuals. If you’ve been reading Wolf for any length of time, you know that profitless Amazon, Uber, and the like have “succeeded” by lawbreaking, tax evasion, and access to stupid amounts of free money. This is not a formula for a functional society.
i’m of the opinion we’ll someday see robots selling to robots. oh wait, uh……wall street.
“i’m of the opinion we’ll someday see robots selling to robots.”
Science fiction writer Fredrick Pohl prophecized this in his book “Midas World” way back when.
Also suggest reading “The Space Merchants”, by Pohl, the screenplay for which was bought for an enormous sum then buried by the studios.
It tells the story of a hypercapitalistic America in which money is at the root of everything. Far too subversive for cold war America.
Business Process Automation (BPO), is still, 20 years later, a core element of many “tech” value propositions. Uber isn’t a cab company. Amazon is not a retailer.
The automation of menial fulfillment tasks like getting stuff into a warehouse and then getting it into a box for shipment was what made Amazon. The process of insuring a car and connecting the person who wants to go from A to B with a car that’s also going from near A to near B made Uber. There are myriad of examples like that. Particularly in healthcare, BPO is having a tremendous impact. If you think nurses aren’t going the way of welders, you’re not paying attention.
And despite the fits and starts of over promise and under deliver in the AI space, there will pretty soon be a point where even an attorney will be automated away.
Then what? If it wasn’t for the feudalist attitude of the corporate commerce leadership, we’d build a society of thinkers and artists on all this BPO wealth.
Alas, instead, we’re building a divided society mega-rich along vast swaths of slum dwellers.
And so goes capitalism along it’s path of destruction of markets by way of pauperizing demand.
That’s not what made Amazon. The ability to evade sales taxes, access to stupid amounts of free money unavailable to brick & mortar competition, terrible wages and working conditions for the warehouse workforce, no enforcement of anti-trust, etc, etc has way more to do with it.
Uber is much the same. Had city and state attorney generals enforced the law on taxi service – which Uber is – we’d be looking at a different situation now. Just because your company has an “app” doesn’t change the fundamental nature of the business you operate.
Increases in health care costs and insurance premiums have eaten any savings from lower gas prices, and more. So even without the shift toward online sales, retailers were going to be in trouble.
Also, has anyone else noticed that inventory management at places like Walmart and Target seems to have gotten worse? More items out of stock, and what is there is often a jumbled up mess.
What is this swipe at “progressive minimum wage wailers”? Walmart’s pay and scheduling practices are abominable. They’re as responsible as anything for the decimation of working class living standards in this country. It’s no joke to say that Walmart creates its own consumers – by destroying wage and benefit levels elsewhere, Walmart shoppers can’t afford to buy anywhere else. But the snake is swallowing its own tail: Walmart doesn’t pay its own employees enough to keep the whole economic contraption from falling apart.
Walmart workers deserve real wages, and full work weeks. You may be happy going back to the 1880’s for wages and working conditions. I don’t want to live in such a society.
Jim, you are confusing cause and effect.
Walmart can afford to pay such miserable wages because it has access to a large pool of labor desperate enough to work for such meager rewards. In short they are banking on the misery but they aren’t creating it.
I’ve been seeing this daily for the past decade: big box stores with ridiculously low wages have no problem not only finding people willing to work for them but easily replacing them when they are fired or quit.
Hell, the latest big box store that opened in the area only hired good looking young women under 25. That means there’s such a supply of people ready to work for literally any wage they can afford to be picky.
I don’t know if I said here before, but I’ve come to the conclusion we reached peak employment years back. No matter how much economic growth we get, the jobs aren’t coming back.
Manufacturers either outsourced or are investing in automation. Bars and restaurants may thrive but operate on such paper rice thin margins they need to savagely slash any expense, starting from personnel.
Wages may be miserable, but costs for employers have spiraled out of control. When I read about Obamacare, I may feel sorry fro my American friends, but I smile when comparing it to personnel costs here.
If I hire somebody for 2000€/month he or she will cost me an extra 1500€ in taxes, paperwork, compliance regulation etc. And this after the recent tax breaks that have been introduced in a desperate attempt to fight unemployment.
That’s why now everybody is using interinal labor. It usually ain’t worth anything, but it allows you to cut personnel costs considerably when you really need the people. Also if you aren’t happy you can simply tell the agency to send somebody else next time or change agency.
This is a downward spiral that has become self-feeding long ago. It won’t stop until a combination of decreased labor supply and more favorable business conditions take hold.
Actually, Walmart did create much of the misery it now exploits. Walmart pressured it’s suppliers to get the “China price”. This drove much of the outsourcing and off shoring of manufacturing jobs.
I totally agree with you on health car costs. Last year I was paying $320 a month for health insurance for a family of 3 with a 6,700 deductible and this year the same exact plan for 2016 increased to $450. There it goes all the extra money you save on gasoline
The writing was on the wall for all to read over one year ago. That “wall” being the global shipping/transport sector.
By sea – Baltic Dry Index has been in a downtrend for years and is now below 400 with no relief in sight.
By land – Inland waterway, road, rail or pipeline. All traffic down.
By air – Down, even high security shipments!
Yet, we have some of these “talking heads” still spouting/mouthing the establishment line of – Don’t worry, be happy. Everything is fine the economy is in recovery and happy days are here again! Amazing!
No surprise on Wally Mart and its declining sales not to mention past aggressive expansions in Cali.
Just shorted more AMZN as couldn’t find shares to short more TSLA. $10k question is that how did the internet retailers fare in Q4? My very old shorts on OSTK and FOSL (just even after years of loss) indicates that net and retails didn’t fare too well.
… And we’re just getting started.
Energy deflation is a bitch!
Without even considering debt deflation.
I prefer a much more terrifying explanation for the restaurant boom.
At the height of the Battle of Verdun, soldiers on leave from the front noticed restaurants in Paris (a mere 150 miles away, hence the nearest stop for those on short leave) were doing better business than ever. Those wanting to book a table were often turned away for lack of room and given a reservation two or three weeks into the future.
Think about it: the longest and bloodiest battle in history a few hours train ride away and people were obsessed with dining out…
Now to get back to retail sales. One could understand the past shopping season was bad from the lack of triumphal headlines. In an age when every minuscule, highly manipulated increase in sales is hailed as a victory on par with Midway, silence means not even seasonal adjustments could work their magic.
I don’t really know about the US, but here the only retailer doing good business is Amazon. The only way to even remotely compete with them is to open an eBay store, pay good money for visibility and thrash one’s margins by dropping prices and offering fast shipping at the same price as Amazon (meaning zero for Prime subscribers). If it ain’t on Amazon or eBay, people just won’t buy it.
Just how bad things at retail level are can be gauged by Stihl, the power equipment manufacturer. Stihl has long implemented a strict policy of minimal discounts on their products. This year it was lifted, but not for professional grade equipment, like forestry saws.
They slashed prices savagely on their “homeowner” lines, meaning the bottom line of products they have manufactured in China. To give an example the MS170 chainsaw has gone from €250 to €199. Granted, that saw is now closer to its real value and Stihl is still making a killing on it, but Stihl never cut prices before, not even in 2009.
What does it mean? That homeowners aren’t buying or, if they are buying, they buy those eBay Specials I get a good laugh out of: two chainsaws for €120, shipping included.
I may be just a simple country boy without a lick of sense, but when a company that never cut prices in its entire history starts doing it, and just on products aimed at homeowners, it means something is seriously broken in the retail market.
I can only tell you that we spent our Xmas budget on Star Wars at the IMAX and Christmas Eve dinner out. We wanted to have a family experience instead of stuff we didn’t need. The theater was sold out and would be for the rest of the month. The restaurant was packed and many Canadians were there in force.
As far as retail, I had to drive out of my area to a third Best Buy to buy the only smart watch I could find. Inventories seemed low on everything. An item I ordered two week before Xmas on Amazon, arrived two days before Xmas, and it was listed as one of only two in stock. Inventories seemed low there as well. I could have predicted the bad Xmas sales on my limited shopping.
but why would you even want to purchase a smart watch…seriously
I go one better to stick it to be he mega corps, pirate the movie for free and cook a healthy dinner at home from locally sourced food. ;)
The watch wasn’t for me but it is really cool. I want one too.
Asus smart watch, highly recommended.
Over regulation, poor management, etc., are all factors that contribute to this news. However, the one inescapable conclusion is that in our consumption only economy we are missing one critical ingredient; the consumers. Middle American job growth has all but vanished for the middle class since the crash of ’08. Those jobs lost since ’08 have been replaced by low paying positions such as those being cut by Walmart now. What has not changed is the consumer debt these now unemployed and underemployed individuals still hold. The American middle class can no longer purchase all the exports China (for one) wants to send our way. Witness the dramatic slowdown in the Chinese economy and the steady crash (notwithstanding Chinese government controls over trading) of its stock market. Take note of the crash in the Baltic Dry and the cratering of oil prices (Yes, I know the Saudi’s are recklessly pumping oil but even if this were not the case there is still a real drop in demand for oil). Anyone notice the crash in copper prices? The global economy is in a recession/depression. In reality, the crash of ’08 never ended. CB’s just kept pumping liquidity into the credit markets and in the process effectively kicked the can down the road. The next crash will be worse than the last just as the last crash was worse than the one before it. Anyone see a trend? Debt spending to fuel consumption is a brain dead substitution for sound economic and monetary (Is there any difference between the two these days?) policies. I am genuinely concerned that we are in jeopardy of our credit based economy completely seizing up. With that comes an interruption of the supply chain for energy and food. Social unrest is guaranteed to follow. My advise: store up food and water and keep your powder dry. Things are about to get very, very ugly.
Incomes are down with everyone I know and expenses keep going up. The cheap gas prices don’t make up for other increases and lost income. We only buy what we really need and try to hold out as long as possible. The idiots on TV think we are saving the extra gas money. Those people have no idea what is really going on in the economy. My savings amount to the money in my wallet I haven’t spent yet. That’s the real story of the missing demand.
” The idiots on TV think we are saving the extra gas money.”
Those living in ivory towers do usually have a disconnect with reality.
Actually, emerging markets are still growing (everyone but China maybe) however the cheap cash from western banks has all but dried up, leading to a cash crunch. People are willing to work and shop, but if Hey can’t get a job, not much hope in becoming a good consumer.
Everyone but China? The two biggest EMs, Brazil and Russia, are both in a deep recession … that’s “negative” growth. Venezuela’s economy is toast. Central Asia is seeing one country after another devaluing their currencies because their economies (based on oil) have caught the blues too. Let’s not even talk about the Middle East. The EMs have some very serious problems, and they have foreign currency denominated debt that they need to service with their own plunging currencies … a classic recipe for a debt crisis or a financial crisis. Happened many times before.
“The next crash will be worse than the last just as the last crash was worse than the one before it.”
Steve Keen’s model supports your hypothesis that the next crash will be worse than the last:
Millennials hate brick and mortar. Actually , they like to pay for everything on-line without any human interaction.
They are more economical because they have less money. It is not rocket science. They save time and money by buying online. So they do.
My son speaks to people around the world without ever leaving the house. So why not expand his horizons. We do it here as well.
Amazon is supposed to be eating the lunch of these retailers, but Amazon doesn’t have what amounts to a profit margin. Plus they employ thousands of temp seasonal older gypsy workers who live in RVs while working at distribution centers. It’s such a desperate economy that being a low wage seasonal warehouse grunt living in an RV is a viable career choice.
Any company is only worth the sum total of their customer base. If your customers are mostly broke/subprime, what’s your company worth? What’s your business plan, hoping they get even more broke?
Unlike companies that buyback their stock because they don’t know how to grow their business, Amazon plows all the money back in. You can see it in their steady expansion over the years. The margins may be small but the enterprise is growing fast.
In modern business, that’s the only way to stay relevant long term. You have to become the behemoth, or you will be lunch.
All the smart leaders are doing it. They buy everyone they can, just to minimize competition, and once big enough, they get into just about every business vertical there is.
Wall-e had it right. It’s all leading towards Big’n’Large. The one corporate entity that employs everyone, governs everything and sells everything to everyone.
Incidentally, a totally homogeneous society might just be able to implement world peace…
Simple really. No wage increases for the minimum wage people in the U.S. , no increases in social security for the retired. No inflation they say…. Yet one only need look at food, healthcare, insurances taxes (those annual property wonders for anyone who owns a home. Where did they go down?
Sure I can drop insurances, try going without food unless you’re dieting.
Yeah, the country doesn’t work to well these days. Where are all these NEW (and improved) jobs???
In Silicon valley. Get some education and go become the top developer for Apple or Google, or join a VC firm, or open a hedge fund and short the retailer stocks. Smart jobs and big money do not come knocking at your door.
More nonsense. In a country with a population of 300 million, how many “top developers” are there going to be, whether at Apple, Google, or any other company? And who says those developer jobs will stay in the US? Plenty of brilliant Indians and Chinese who can do the same work. As for hedge funds and shorting: this is rentier behavior at its worst. Go read Michael Hudson’s “Killing the Host.” You’re proposing individual solutions, that will work for a very small segment of the population, while the rest of the country (and world) sinks into penury. Not a way forward. Unless you live in Lake Wobegon, where all the children are above average.
No need for a country of 300 million. Evolution will take its own course. Leechers and moochers (those who are unfit to survive) will die. Yes, Indians are brilliant. Guess what? Russians, Americans, Japanese are too. Putting a label is irrelevant. If you are not smart enough to innovate, deliver and make profit, the world does not need you.
Pretty cool. I can sit back and watch someone make my arguments for me. It helps keep my blood pressure down. And I really do like the reference to Wobegon too.
Ah I get it, Mary is one of those ayn rand types, who view society as nothing more than their own personal fulfillment funhouse, lacking all semblance of empathy…of course, with enough of these people running the show, revolution is inevitable…or perhaps she is just a Trump voter?
Ewwww, Mary’s a disciple of the church of Lil’ Davy Rockefeller. Never fear Mary, if you’re not eaten alive by one of your fellow disciples a revolution will usually come along and put an end to your ideas of evolution. At that time the many will decide who among the few are useless eaters, usually all of them.
Mary, Mary Quite Contrary: Do your cold analytical powers reckon on how many guns American’s have. A low achiever with an AR-15 will most likely take away you high achiever’s stuff. Better learn a little humility and perhaps a little humanity. Those characteristics might be more vital to your future prospects than being a top producer or hedge fund manager. Some, perhaps many, people who have played the game forced upon them by the powers that be aren’t just going to sit around and watch their families die off for your convenience. By the way, prepared properly, you probably taste like chicken.
I actually went to a Walmart xmas party over the holidays. At that time, Walmart was extended credit cards to all their employees (managers were actively encouraging all employees to apply). Not sure of limits or terms, but my read is that they KNEW they were going to close the store, they passed out cheap credit to employees (who probably shouldn’t have it) to goose sales, and I SUSPECT Walmart will be first in line to draft some of that severance pay when their bills aren’t paid in time.
The alternative theory is that they passed out credit to goose sales … but not to customers – just employees.
I would also SUSPECT they did that at other stores. It would be most curious to establish if they did this at ALL stores or JUST the stores that were closed less than a month later.
If anyone knows someone who got one of those cards, maybe you can get a redacted copy of the credit terms and share with Wolf. The terms could simply include a basic clause that goes “credit depends upon employment – balance due in full immediately upon termination and may be withheld from pay” or something equivalent.
Would be curious to see if that thesis proves out or not.
OK from SF newspaper website – dumb cities raising min wage may be the culprit:
“In Oakland, employees and city officials expressed shock, and some speculated that the city’s minimum wage law played a part in the decision to shutter the store there.
The Walmart in San Jose, which also boosted the minimum wage, will also shut down.
The two stores in San Leandro, which has no minimum wage law that supersedes the state’s minimum wage law, will remain open.”
Walmart has always closed stores in places that unionize or in any way try to raise wages or benefits. If you go to any big city with a large unionized work force like New York City, you will see there was never a Walmart there.
Yep – Wally mart closed the Pico Rivera (south LA) store due to lengthy plumbing work just as the unions closed in. Those who had job no longer have a job thanks to SEIU and demand for better pay even though Wally mart was paying market rate for not so skilled folks.
San Leandro is also the cheapest place in the Bay Area. Most of what’s left of the working class is there.
I find it endlessly depressing that Walmart bought out one of the most promising shopping chains here in Africa about two years back at the height of the market, the end result is sadly too predictable.
How about dumb COUNTRY letting Walmart get away with paying such low wages that employees need to be on food stamps to survive?
Walmart is a welfare queen, if ever there was, sucking up resources while decimating any semblance of a sustainable economy. It’s the largest employer in the country now. Working people need to push back whenever, wherever possible. And that includes pushing for higher minimum wage laws anywhere and everywhere.
The CULPRIT is Walmart.
And Walmart is one of the biggest gainers from ebt spending as they even stay open past midnight at the end of the month in order to let people spend the money on their ebt cards the moment they’re regenerated.
Walmart is not the culprit. The culprit are idiotic voters who can’t tell top from left.
Walmart tried to get a foothold in Germany and immediately failed because labor laws there actually have teeth because the local and national government doesn’t care if you provide jobs if those jobs aren’t worth anything.
If the USA could ever figure out how to govern beyond a 3-year cycle, and take the long view, this huge nation with amazing resources wouldn’t be in the mess they’re in now.
Watch CNBC and FOX and you know exactly what I mean. The American citizen doesn’t even have access to journalism anymore. All they get is propaganda.
why keep a store open when it loses money? let those newly unemployed go to their elected reps for a job.
and i’m a registered democrat.
How do you know the store was losing money? As someone noted above, Walmart closes stores whenever there’s a hint of a successful unionization drive, or a legal requirement to pay higher wages. Given the billions accumulated by the Walton heirs, it’s more likely that the stores were making money – and would have still made money even with higher wages. The Waltons move to crush any organizing, or legal move, that might diminish their ability to rake in ALL the dough.
The whole concept of companies growing sales and profits forever and every quarter is Ridiculous! It’s NOT possible. Sales will drop eventually. You can’t fake sales growth or cook the books on sales for the long term. You can fake profitability for a long time by lying, stealing, cheating and BBQ’ing your books but eventually the whole scam will fail.
It’s falling apart now. But I guess the top top money earners have made their money and can position themselves to take advantage as the economy falls apart.
The US is toast this year. Obama can say that he saved the US with bailouts and created tons of jobs. The new president in 2016/2017 can say the economic mess is because of Obama and that it will take time to turn the economy around. It’s a bigger mess than Obama let on. New President will say It’s not my fault. Meanwhile many will suffer.
has any eight year presidency ended well? nixon? reagan? clinton? bush?
they’re all in cahoots, and we’re along for the ride.
might as well read a book.
yes …….I and mine will suffer! you all need to realize there is no savior,……not hillary, not bernie,. not the donald,….no one!
I would like to propose this idea. Since 2008, my opinion is that during all this time, maybe a lot of people have come to the understanding that you can have a decent life without all this mad rat race. One can get by while driving a Chevy and not a brand new BMW every two years. Why try to impress people who you don’t know, who don’t know you, who really don’t care and you may not even like if you did know them! No, your kid does not have to have Old Navy clothes or they will ” just die!” One doesn’t have to live in a Mcmanson. I drive an older car and as long as it stays safe, every month that goes by is one less month that
I am not a payment slave to the bank! Hopefully, some people are waking up to the fact that you just don’t need it all.
As far as walley mart goes, three weeks have passed and no one bothers to reorder the Progresso chicken with wild rice soup! It took a month to refill the Kraft small bottle of graded cheese! I think that a snail could do a better job of restocking the shelves!
Slightly off-topic, but, I see the Goodwill shop down the street has “50% off” on the signage. Sort of an off radar economic indicator.
Laf! You may well have made a significant discovery, but how to monetize it would be the next question.
This will not end well. The simularities between the current auto loan market and the housing market in late 2006 are striking. The difference however is that vehicles always depreciate in calue except for a few rare exceptions. If the auto market is the only thing propping up the current economic numbers then there is extreme cause for concern. We will end up once again with people getting away with not paying their loans and the car will not be repossessed because the outstanding would have to be written off as a loss with crazy 84 month terms. The value of second hand vehicles will crash and inventories of new vehicles will soar just like the last time around with airfields full of vehicles. This is a concerning time indeed….
well, just think how cheap all those depreciating new autos are going to be once THAT subprime deflation ball gets rolling……of course, at that point we’ll all be cutting out holes in the floor boards, using our feet for locomotion ala Fred Flintstone,….. cause we’ll all be too poor to buy the gas!
The top 15,000 Financial institutions within US; wether they be primarily domestic or international is almost irrelevent, can only logisticly provide a satifactory life style for the wants and needs of around 30-40% of the top achievers within our populace.
Toda it is only among those within that grouping can we find a form of stratified class structuring, and it is based upon positioning of oneself through both education and intellectual capabilities, and while assuredly economic incentives will continue to be part of the stratification it will not be as prominent a definer of status as our old wealth/poverty ratio of have and have nots.
Approximately 60% of tomorrow’s population will be but menial husbanded labor forces, whose only use will be to provide the “maintenance services”
needed by the top 30% group.
We have already begun such a process with our sustainable citys and especially can we see this process in motion by observing the “Gentrification” of city and its closer cores areas.
We are in process of revamping all of our education and its not just in lower grades as even the majors have become economic institutions where education is sold by following buisness and governments not just present but projected needs of future.
The millenials for all their selfie ways are not very effecient and while they claim superior knowledge they fail from one institution after another or find slots as part time semi skilled among now millions of worldwide mobile peoples of sme and greater value.
The innovative minds will be in demand as lways but they but follow the overall lanning of superiors.
The schools are already classifying students as to who will the limited resources be expended upon, not for their beefits but for a far different economic and social ordring than we hae had in past and now see rotting away before our very eyes.