Where Americans Splurged & Where They Cut Back in 13 Whiplash-Charts

Stimulus Fatigue sets in. Second month of declining retail sales in a row. But online sales eked out a new record, if barely.

By Wolf Richter for WOLF STREET.

Retail sales in November fell 1.1% from October, the second month in a row of declines, and they even fell with restaurants and bars removed from the total. Sales at nonstore retailers, the placeholder for ecommerce, eked out a new record. This is the second month now of what I called a month ago Stimulus Fatigue.

But wait… the Pandemic-induced switch from services – such as airline tickets, concert tickets, hotel bookings, and haircuts – to goods – such as food & beer at home, bicycles, and consumer electronics – is still on. In November, retail sales of $547 billion (seasonally adjusted) were still up 4.1% from November last year, according to the Census Bureau this morning. And for the 11-month period, they were essentially flat ($5.70 trillion), despite the collapse in March and April:

The metric of “retail sales” measures the sale of “goods” at various establishments and online. It doesn’t measure the sale of “services,” such as airline tickets, insurance, or healthcare services. During the Pandemic, consumers splurged on durable goods and food at home like never before, as free money flooded over them from the government, and as they cut back on other spending, such as plane tickets, payments on mortgages and student loans in forbearance, and on rent, protected by the eviction bans. A refinancing boom, triggered by record low mortgage interest rates, allowed consumers to extract cash from their homes and lower their mortgage payments.

Part of this money from the government, and money not spent, and money extracted from the home was spent on goods, and part of it was used to pay down credit cards, whose balances have plunged 10.3% from a year ago.

Sales at new & used auto dealers and parts stores, the largest category of retail sales, accounting for over 20% of total retail sales, fell 1.7% in November from October, to $113 billion (seasonally adjusted). But they were still up 5.9% from November last year and were flat for the 11-month period.

These sales are measured in dollars, and those dollar-sales were boosted by exploding prices of used vehicles (+11% year-over-year), and by a higher proportion of expensive vehicles in the mix among new vehicles, as the wealthy got wealthier during the crisis (“what crisis?”) and bought more expensive vehicles. But the number of new and used vehicles sold remains in a deep hole for the year – and November unit sales made that hole deeper:

Sales at ecommerce sites and other “non-store retailers” (mail-order operations, stalls, vending machines, etc.) in November ticked up 0.2% from October, to a record $87 billion, topping off a 29.2% spike since November last year. This is the second-largest category in retail sales, after auto and parts sales:

Sales at Food and Beverage Stores, the third largest category, rose 1.6% in November from October to $71 billion (seasonally adjusted) and are up 11.4% from a year ago, given how much consumption has switched to the home from restaurants, cafés, cafeterias, office coffee makers, office vending machines, and office tissue closets:

Sales at Restaurants & Bars fell 4.0% in November from October, to $53 billion (seasonally adjusted), and were down 19% from a year ago.

In late November, the spike in Covid infections began to hit restaurants with new restrictions and with once-again leery consumers choosing to eat at home rather than going out. By the end of November, the number of seated diners had plunged by 56% from a year earlier. Many of the new restrictions went into effect at the very end of November and in December, and are not yet reflected here:

Sales at general merchandise stores (minus department stores) ticked up 0.3% in November from October, to $53 billion, and are up 8.4% from a year ago. The brick-and-mortar stores of Walmart, Costco, and Target are in this category, but their booming ecommerce sales are not; they’re included in ecommerce sales:

Sales at department stores dropped 7.7% in November from October, to just $9.0 billion, and have plunged 19% year-over-year. For the 11-month period, they’re down 18%. The brick-and-mortar sales of Macy’s, Kohl’s, Nordstrom, J.C. Penney, etc. are in this category, but their ecommerce sales are not; they’re included in ecommerce.

The once iconic retail institution of department stores – in their heyday, many of them were locally owned – has been obviated by events including the internet. For Americans, department stores have outlived their usefulness. For mall landlords, they’ve turned into a nightmare. The #1 and # 2 mall landlords – Simon Property Group and Brookfield Property – have ganged up to buy J.C. Penney out of bankruptcy, apparently to control the decline of their malls.

Since the peak in December 2000, department store sales have collapsed by 55%, despite two decades of inflation and population growth, and the Pandemic has merely accelerated the process:

Sales at clothing and accessory stores fell 6.8% in November from October, to $18 billion, and were down 16% year-over-year. For the first 11 months of this year, sales were down 27% from the same period last year.

Sales have been wandering off to the internet years before the Pandemic. Americans were buying lots of clothes but figured out how to do so on the internet, with its choices of styles, sizes, colors, materials, and prices. And by 2018, growth at brick-and-mortar clothing and accessory stores had completely stalled.

Then came the Pandemic, and even people who didn’t want to buy clothes online, ended up buying them online, figuring out that it works just fine. And as people were working from home, they didn’t need to buy work clothes. Sales in November dropped to where they’d first been in 2007:

Sales at building materials, garden supply and equipment stores rose 1.1% in November from October, to a new record of $38 billion, and were up 19% year-over-year. Americans – contemplating staycations, backyard entertainment, work-from-home, and many other changes – have been sprucing up their homes, decks, and yards, and these stores have been booming:

Sales at gas stations – which include snacks, sodas, motor oil, and the like – fell 2.4% in November from October and were down 16% year-over-year. Sales at gas stations move not only with the quantity of fuel sold but also with the highly volatile price of fuel (average price of gasoline was down about 19% in November from a year ago, according to EIA data):

Sales at sporting goods, hobby, book and music stores ticked down 0.6% in November from October, to $7.8 billion, but are up 20% year-over-year. The booming ecommerce businesses that sell these goods, including Amazon, are not included here. This is just what’s left over in terms of sales at brick-and-mortar stores.

Sales at furniture and home furnishing stores fell 1.1% in November from October, to $10 billion, but were still up 3.6% year-over-year. Year-to-date, sales are down 6.6%. Ecommerce has for years been seriously eating into this category of brick-and-mortar stores. Wayfair, which sells nearly all of its furniture and furnishings online, has become the 8th largest ecommerce retailer, behind Best Buy and Target, according to eMarketer:

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

  149 comments for “Where Americans Splurged & Where They Cut Back in 13 Whiplash-Charts

  1. Alberta says:

    Sure glad I purchased my used vehicle a few years ago.

    Seems to me the price of a used vehicles would drop.

    Economists’ mathematical models may make sense in theory but don’t make sense from a human’s point of view.

    • Joe Saba says:

      kind of looking
      but you’re right – to high prices
      keeping $dollars dry
      if no deal then move on til there is one

    • Old School says:

      Yep. In some ways modern gov/Fed policy and individual interests are in total opposition. Waste vs prudence. Stimulus vs. savings. Elastic valued money vs. fixed value of money. Income tax vs. take home pay.

    • rip says:

      The worst job loss event in history and sales of new and used vehicles explode to the upside. MAKES NO SENSE.

  2. MonkeyBusiness says:

    Don’t worry more free money coming. Congress says so.

    The strong lives, the weak dies, Americans buy. That’s the truth of the world.

    • Randall Hooker says:

      Strong live, weak die.
      Strong get stronger and kill the weak.
      Fish eats Fish. But they do so to survive. Not to acquire.

      Then Strong fights Strong to get Stronger than Strong and a LOT of the weak die. Rinse and repeat.
      Are we in the 14th century again?
      I sincerely hope not.

      It is the “weak” that underpins our economy. As it did in the 14th century. When the little guy got squeezed everyone starved.
      Don’t forget that.

      If the “weak” (which is incredibly disrespectful of the people that put food on your plate) need a hand from all of us at times, then that is the insurance payment that the Strong must pay to get even stronger.

      Makes sense to me to invest in that type of insurance.

      • Mira says:

        Just incidental:
        The weak .. my daughter gave me a block of clay .. I watched several YouTube videos .. eg: African Pottery Forming & Firing.
        Cultures all over the world make clay pots & they use fire kilns.
        And I thought about climate change & sustainable activities on planet earth & those who are about pounding its importance into our psyche.
        It would cost nothing, not even a bean to GIVE a community solar panels .. storage batteries an electric kiln & the knowhow to service & maintain the equipment ..
        And trees to replant their land.
        The saving would be massive from every aspect.

        • Petunia says:

          This is really too funny. I thought trees came from seeds, not smaller trees. I thought solar panels and batteries came from unsustainable activities like mining. I thought kilns weren’t electric. I need to stop thinking so much and just pay my food insurance bill.

        • El Katz says:

          I’m not an engineer, but I question how many solar panels and batteries it would take to operate a single kiln. I did a random lookup… one requires 240V and 60 AMPS. Sounds like a lot to me, considering many SFR’s have 100 AMP service from a utility.

        • Paulo says:

          You can weld steel very briefly with battery power, but the idea of running a kiln for an 8-12 hour period and then once again for glazing is ludicrous.

          I am not an engineer, either. However, I do weld, know batteries and have run kilns.

          Solar panels are great for lighting and modest tasks. Batteries are made of non-renewable products. Cheaper to buy a big assed diesel generator.

      • Tanstaafl says:

        “Taxes are the price we pay for a civilized society” Oliver Wendell Holmes

        • Joe says:

          I can’t afford to be any more civilized than I am now.

        • Lisa_Hooker says:

          With current bank interest rates I need to become less civilized.

        • polecat says:

          Yeah, I agree. I’m back to flint-napping and spearshaft honing … in case I have to rely on my ‘inner stoneage’ wits!

          Hummm .. wonder what Mega-Moniedfauna tastes like??

      • Chris Herbert says:

        Money is not free, of course. But it can be doled out unfairly, which has been the underlying effect of neoliberal macro. Tax cuts get votes, because the promise is made while the repercussions, lousy government services, are ignored. New academic study, for the umpteenth time, shows neoliberal macro is bunkum. Who cares? American voters are “herd immune’ from intelligent discourse. The stimulus that went down to the masses worked very well. They spent some, they paid off some debt, they refinanced their mortgage. All good stuff. The rest, the majority of the stimulus, went to the creditor class. So we have asset price inflation. For now anyway.

      • Xabier says:

        You are a few centuries out, I’m afraid.

        It’s going to be the 3rd century, with glittering screens.

        The Romans had infinity swimming pools, in which the slaves never swam.

        Or maybe they did every now and then in the Saturnalia festival, which kept them happy?

        One can, in fact, push the mass of the people down and down, and it is mere sentiment to imagine that the powerful will be less so in consequence – a survey of history proves that. The lessons of history are bitter indeed.

        The French Revolution was begun by aristocrats and the prosperous, not the peasants.

        The steady growth of the middle class, living in towns, since the revival of commerce in the 9th-10th century is coming to a close – in fact it has been collapsing since the 1970’s. Legerdemain has kept the illusion up.

        Calling a skilled factory worker middle class -that absurd US habit, – was but a temporary blip.

        Very nice for all concerned, but it’s over.

        We are now in the early stages of the profound reshaping of our economies and societies, the abolition of ‘legacy’ structures and classes.

        And it’s all going to plan.

        Talking about the virtues of hard work, prudence, savings, real money, etc, is but a merry tune to cheer you while you walk past the graveyard.

        In the dark, the monsters are stirring……

    • Mira says:

      “Don’t worry, more free money coming ..”

      Isn’t that the truth .. Looking around in Australia, I can’t see how the free money can be allowed to dry up. To my mind, it’s going to have to go on indefinitely, many jobs have been lost forever, many jobs will change dramatically.
      Christine Lagarde, in a talk she gave recently tells that the young will have to embrace digital training to have a job in the near future.
      I wonder, do we actually have the robots to take over the menial tasks like cooking & cleaning & can we now build using a computer only .. virtual homes & office blocks.

      • No1 says:

        Free money… I haven’t gotten a cent of free money. The “free money” is just welfare over here.

      • Lisa_Hooker says:

        digital training == learning to type

        • polecat says:

          Learning to Hype … if your a digi-censor.

          and no, twas not referring to our gracious host, just Big SiliCON .. hand in gaunlet, with all the littleBig nepotists, e.i. Politicians!

    • Absur Ditty says:

      We need our $12,000 checks NOW

      • GirlInOC says:

        Co-sign (unironically)

      • rip says:

        The $12,000 is on the way. In fact, it’s going to be $15,600 because CONgress just agreed to another sham “extra $300 per week” to pay people to sit home and get high.

        • rip says:

          And, by the way, they’ll continue to stiff the landlord while collecting this “free” money.

    • CommonSensePatriot says:

      Strong live, weak die…

      If the “strong” made it so you personally weren’t able to eat, I don’t think you’d roll over and just die. So I don’t know why you would expect the poor to just accept their fate.

      If you don’t have resources as individuals, you’re much stronger as groups with a similar goal. If it’s might makes right, and money isn’t available, then physical violence is always free.

      So to protect yourself you’re going to need professionals in your area: cops. But they are going to be stretched thin if many places need protecting. So to save on resources the government will mandate a curfew. Maybe to protect your neighborhood from roving bands of dangerous poor people, they’ll enforce check points to verify you’re not on a list of suspected violent individuals. Sounds a bit like a police state right?

      So then how do you fix the mobs if they are poor and hungry? Well you said no more money, no more resources. They aren’t going to go away. So either you need the government to jail millions, and we don’t have the capacity for the people we already have in jail. We’ll need camps. We can’t just release people who’s ideologies are a threat to the state. Especially if they can’t get a job and return to being part of the poor roaming mobs. So what do we do? Do we “re-educate” them? Or maybe you’re thinking of a more “final solution”? After all, the strong live and the weak die and the US government is strong.

      Or maybe it goes a different way. Maybe the folks in the military don’t have money to eat. Maybe their families starve. They should just die right? Or maybe they take your money by force and give it to the people. Little known thing called the French Revolution happened along these lines. They weren’t very kind to the people who thought themselves strong.

      The third option is a whole lot more radical. How about we just fix the poverty so we don’t have to deal with either scenarios?

    • Frederick says:

      Bye bye US Dollar Hello Bitcoin, Gold and Silver

      • Lisa_Hooker says:

        Bye bye gold, silver, platinum, palladium, & vapor coins.
        Hello potatoes, cabbage, corn, wheat & rice.

        • polecat says:

          Don’t forget the fine occasionally brewed home beverage.

          think ‘barter futures’ ..

  3. Dave Kunkel says:

    Since this pandemic started, my local Home Depot here in Santa Clara has been packed! I’ve lived here for more than 40 years and I’ve never seen anything like it. It boggles the mind.

    • Joe Saba says:

      big gets to stay open, little guy goes bust in new montra
      and now the stimulus you used to pay bills PPP and such
      you get to also deduct from taxes even though it was free $$dollars

      • doug says:

        true that. Since Walmart was (is) a ‘grocery store’ they got to stay open and sell everything including lots of not groceries, like pants.
        The small shop pants purveyor was shut down.
        Big got to stay open. Little was told to leave quietly…

    • Marbles says:

      I have landscape contractors who rent space from me, that are booked into 2022.

      • Frederick says:

        He may well be back in Mexico before that if he’s smart

      • Lisa_Hooker says:

        Booked or paid?

        • Marbles says:

          Frederick & Lisa, the biggest contractor is ex FBI, and the next is Spanish origin. Been there for years. I imagine mostly booked, and that can change, but they are both pretty solid.

    • Shiloh1 says:

      That Nick The Greek restaurant guy in NY simply has to move his operations into a Home Depot or an Amazon warehouse. What’s he griping about?

    • Cas127 says:

      “It boggles the mind.”

      Hmm.. It may be that homeowners are scared witless about maintaining/increasing their home value in the face of C19 impact…without realizing that interest rate movements absolutely dwarf almost anything an individual homeowner can do to his house, in terms of price impact.

      • RightNYer says:

        More likely, they have some extra money because they haven’t traveled or gone to restaurants, and being the good Americans they are, they have to spend that money burning a hole in their pockets.

        • Argus says:

          That’s exactly what’s been happening in my neck of the woods on Vancouver Island. Instead of holidaying in Mexico or going on a cruise, people have spruced up their yards and stores selling hot tubs can’t keep up with the demand.

        • Nate says:

          And prices will skyrocket in the year(s) ahead, so covert that cash earning nothing into product that may cost 25% more in a year–you just made 25% tax free interest on your money.
          Also, supply chain disruption is already here, so the stuff may not be available for any price.

        • RightNYer says:

          Nate, assuming you actually NEED that stuff. If you don’t, and assuming you can’t easily resell it, you haven’t earned anything.

          Argus, it’s just crazy to me that people see a lack of spending in one area as a REQUIREMENT to spend more in others. It’s really a sickness that infests the entire Western world.

        • Thomas Roberts says:


          In some areas the price of houses will skyrocket and in others plummet. No one knows where people are going to want to live in the near future. Also a big question, that will vary by house is whether the money put into renovations will hold their value. Delayed basic maintenance probably would. A deck might. Yard stuff and other decorative stuff that requires effort to upkeep, probably won’t.

          As to where to stick that money. In the bank might be a worthy option for a couple years. Gold and silver are shaping up for now. Warren Buffet seems to think just keeping a pile of money in the bank is a worthwhile option for now.

        • Cas127 says:

          I don’t know that replacing the gutters or tearing out the bathroom is on a par with Vegas vacations or steak dinners in terms of recreational enjoyment for 90% of American homeowners (who are usually P.O.’ed about the Old Manse falling apart and pain-in-the-a upkeep).

          Have lawn mower sales boomed as Americans fill the empty space in their heart left by no mall visits…with cutting the grass?

          Maybe…but I’ll bet on panic.

        • Cas127 says:

          “It’s really a sickness that infests the entire Western world.”

          Mindless buying is the foundation of the entire self storage industry…buying things you don’t use…with money you don’t have…and paying to keep them.

        • Serge says:

          Having a reliable car is as important as your house upkeep. Price inflation in tires and oil is ridiculous. You’d think with less driving, prices would drop. Feels good to have new tires on the car, an oil change, new brakes etc.

          If you’ve lived in the same place for twenty years, odds are you aint going anywhere new. Put your basement to good use. Might end up trading goods in a few years, like a European trade fair. Think of the sportsmen that bought a case of ammo a few years ago. Do they regret not having the cash they used to buy it? What is the value of a case of nails you paid ten bucks for versus the forty it now costs vs the interest on your savings?
          From last August in Canada. Prices haven’t dropped seasonally either, to the moon…
          “The latest price list shows SPF (spruce, pine, fir) two-by-four boards at a “mindboggling” record level of US$760 per thousand board feet, up $82 on the week, according to Kevin Mason, managing director of ERA Forest Products Research.”

          You can of course, leave your cash in the bank, slowly eroding in value, as an unsecured creditor, subject to who knows what kind of upcoming wealth tax, bank bail ins, etc.

        • polecat says:

          Better to spend that meager lucre on the homestead, than to instead fly infected to some ephemerally touristed charted isle, no?

    • Xabier says:

      When you can’t buy from small stores, or leave your apartment, you simply must go to the large chain ones, online or physically.

      All part of the plan, no accident at all.

      But yes, crazy.

    • El Katz says:

      Our local Ace Hardware is packed as well. Used to be able to walk up to a cashier and check out. Not anymore. 4 cashiers and a line of 6 is the new norm – even at 7 AM (which used to be the dead zone).

      Went to a single outlet local plywood / hardwood purveyor. Usually just a slow steady stream of customers. Nope. Lines at checkout, along with the steady stream. Both contractors and weekend warriors.

      So, it’s not only the “bigs”. It could simply be the market segment.

  4. Greg says:

    Hi Wolf,
    Are you still short S&P 500? With Fed’s relentless support and election behind, the market really seems correction proof now. What (other than some other black swan event) can stop markets continued climb? Isn’t safer now if not to be long, but at least not short?

    • Wolf Richter says:

      “Safer”??? I don’t trade stocks long or short if I want something “safer.” These are bets with risks. I have plenty of “safer” stuff, including Forever stamps, which are a hedge against inflation ?

      • Skara says:

        I am still short on the S&P right there with out, although I must confess it is getting rather painful at this stage with the relentless march upwards. Fed has destroyed price discovery and who knows how much more they will inflate this bubble. I still believe it will end in tears for many, but when exactly —- who knows?

    • RightNYer says:

      When you think it’s correction proof is usually when you know you’re at or nearing a top. I heard people saying this in 2008, in January of 2018, in December of 2018, and in February of 2020.

    • Yellen Into The Void says:

      Black swan event? Like a year long pandemic featuring lock-downs, business closures, travel restrictions, zoom schooling, eviction and mortgage moratoriums? We hit an all time high with that one.

      • Cas127 says:

        In the current environment, if the Fed did a tiny unexpected taper of 25 bps, the stock market would have a stroke and drop 30%…everybody on the inside knows the market is currently founded upon a giant pile of Fed bullsh*t and has algos primed and ready.

        *Pre* pandemic the SP 500 fell 20% in Fall 2018 after a pathetic 1% hike over the preceding year.

        The geniuses at the Fed have created a crack addict economy that will collapse at anything other than ZIRP.

        • They frontloaded this market for at least five years. Interest rates can rise (within reason) without harming the recovery. The algos are primed as you say, to buy every dip. There is a shortage of investment paper relative to money. Share buybacks may run concurrently with issuance of new stock, which guarantees the buyers rising prices forever. Yellen wanted the Fed to buy stocks but if they are buying their own, why? Headline “Fed gives market green light for 2021”. If money is electricity there is no advantage in excess supply. If there is a consumer recession the supply changes. Encouraging people to spend money they acquired surreptiously isn’t hard at all. The old “sweat money” is dead as is the concern with the whims of a discretionary consumer. We are hear to consume; all the good, bad and indifferent products which are offered.

        • RightNYer says:

          Ambrose, I actually disagree. The algos are not primed to buy every dip, they’re primed to front run individual investors. So they’ll only buy the dip if they think they can flip it shortly thereafter. If they think individual investors will sell, causing prices to drop, they’ll front run that too.

        • Cas127 says:

          “Interest rates can rise (within reason) without harming the recovery”

          With regard to the equity mkt, I think that the Fall 2018 collapse is a definitive, extremely recent refutation of that.

          And that was before today’s even more idiot valuations.

    • Young Buck says:

      Guys, Im a millennial robin hood trader and I need some advice. /S

      But really can someone explain, in simpleton terms, why its better to trade options of an underlying stock you’re trying to short vs buying a leveraged ETF of that stock. Example would be puts on SPY vs buying SPXU.


  5. endeavor says:

    Excess consumption is a long established fact of life here since auto loans dropped from high teens to 2.9% under Volker. American became cash flow jugglers. Of course, they are surprised when they can’t retire and support themselves. I’ve read an article about digital currency that one of the proposed benefits would be a ceiling on consumption spending for each person with a debt to income limit. It really would be a brave new world.

    • rip says:

      Auto loans are not 2.9% for most people. You may be surprised to hear that there are people paying close to 20% TODAY.

  6. Yort says:

    Few notes from hearing the Fed speak today:

    1. Fed fears what they have termed “Fiscal Dominance” (J-Pow term spoken today) where basically the govt forces fed to give money to every cause without bound. I think the Fed will reap what they sow…and thus I expect retail sales to pick up over 2021 with each and every “free check” sent to voters, as it will work in both “increasing GDP” and ultimately “Good Inflation” (oxymoron IMO)…

    2. Fed J-Pow does not live in the “real world”. Note J-Pow is worth tens of millions, and he does not have “real people” problems. J-Pow quote “Housing prices are not at a level of concern” when asked if the median price being in the $300k range is troubling. At another point, J-Pow stated “Property taxes do not move very much year by year”. My own property taxes increse 8% to 110% per year depending on location and property type. Yet J-Pow is another clueless elite who will keep keep printing money for both the market elites and also stimulus to consumers as a consolation prize (which flows to corporate earnings and thus higher stock prices). Retail sales are going to experience constant “Whiplash” as long as the fed and treasury have immunity to destroy the USD. And as we buy most our “Stuff” from other countries, destroying the value of the USD might create the Fed wish of “healthy inflation” (oxymoron…can anyone ever say with a straight face “healthy stealth tax”???)…

    3. We currently hae a $3.1 Trillion budget deficit, -1.3% real yields, and yet Fed thinks “asset prices are a little high”, yet also thinks asset prices are “justified by risk free rate (equity risk premium)”. Folks, the Fed is out of control, and in cahoots with the Treasury and govt. This is going to be a multi-year spending spree for everyone on Earth if this continues. Scott Minerd predicted “$400,000 bitcoin price” today on Bloomberg…yes inflation is coming when measured in falling USD nominal values, and I think the monkey biz we are seeing right now with M1 going up $800 Billion in two weeks with M2 dropping…something is happenning that nobody seems to talk about or even understand. Stock up 20% YTD, yet M1 up over 50%…so even stocks can not keep up with the money stock. The financial system has entered a phase of energy-time uncertaintly, and the outcome is impossible to predict.

    Yet perhaps financial mechanics approximate quantum mechanics and thus we can all get “Something from Nothing” and thus this current phase of financial mechanics was “inevitable”??? I’m trying to be glass have full…HA

    Per the Internet”

    Quantum mechanics tells us that “nothing” is inherently unstable, so the initial leap from nothing to something may have been inevitable…

    • Wolf Richter says:

      “Scott Minerd predicted “$400,000 bitcoin price” today…”

      Minerd is hyping his own trade, talking his book… Guggenheim took a position in Bitcoin. Look what kind of media attention he got with that. And bitcoin jumped. Guggenheim will be trying to make it go up by hook or crook before they dump it. These hype mongers are part of the problem.

      • keppered says:

        What about the other parts of the yort thesis? The final statement in particular?

        • Wolf Richter says:

          The comment is very good and has much to agree with. I just wanted to clarify that one point concerning Minerd.

          I’ve been contacted by his firm (asset manager, hedge fund, and PE firm Guggenheim) a number of times. One of their partners was trying to get me to alter my coverage, apparently to be supportive of their book. These people know how to work the media for their financial benefit. I finally had to tell them get off my back, in kind of nasty terms. That’s why I felt compelled to clarify yort’s point.

        • keppered says:

          Hello Mr. Richter,
          Thank you for having me aboard.

      • Millie Brown says:

        Putting your money where your mouth is is conviction, not shilling. A shill is someone who promotes their product but does not buy their product. An example, Bitcoin.com’s Rodger Ver was selling his creation, Bitcoin cash, and didn’t charge a fee but if you wanted Bitcoin he charged a fee. In that situation he is holding Bitcoin and selling Bitcoin cash.

      • nick kelly says:

        ‘One method in philosophy is to remain simple minded’
        Don’t remember who said it but…forget all the speculation about what BC IS, and let’s think about what we know it ISN’T. (Sorry for caps, should be in italics)

        BC is classified as a cryptocurrency. But things aren’t what we call them, they are what they are. And one thing we know about BC is…it’s not a currency. To be a currency, something has to be used as one: it has to be currently and generally accepted as a means of exchange. This means that, except for a very narrow class of exceptions, it can’t also be an investment vehicle. Nothing can be.

        A guy wants 10K US$ for a car. Suppose by happy unlikely accident both he and buyer are BC bulls. Great, but they would need to be almost identically bullish. If the seller thinks BC is going up 10% next month and the buyer thinks 20%, unless someone caves, there can’t be a deal. The BC is worth less to the first party than the second.
        What is being attempted is barter, and barter is very inefficient. Even when it works, an adjustment in a currency is often needed to close the gap. Currency being something they don’t have to ‘like’ equally.

        But aren’t there US$ bulls and bears? For trading desks trading hundreds of millions to clip a thousand here and there, yes, but to trade in cars you don’t need to have a position or even a care about dollar-yen, etc.

        This ‘acid test’ also partly eliminates most of the pieces of paper floating around the world. The ruble, currently worth just under 2 US cents is only a currency in Russia because it’s illegal to use anything else. Before Italy joined the Euro, the lira had long been unacceptable in large transactions like real estate, but ok for a pizza.

        There is a continuum in currencies, but BC isn’t on it. Even in rubles or back then in lira, for large legal transactions there would be a third- party intermediary, to protect both buyer and seller.

        The whole selling point of BC is that there is no intermediary. And as I pointed out in a letter in the Globe and Mail, BC doesn’t belong to you, it ‘belongs’ to your computer. In that letter I said was dangerous to be an open BC bull, it was like saying you have gold at home. Sure enough, since then there have been BC holdups, where at gunpoint the BC is transferred.

        At least dollars have serial numbers.

        • Cas127 says:

          “is only a currency in * because it’s illegal to use anything else.”

          Coming soon to a grotesquely mis governed 50 state union near you.

          Actually, legal compulsion is the core of MMT’ers economic fascism/totalitarianism.

          But in a country that has failed to make much of a dent in the drug trade for decades (and has made recent sizeable capitulations to it…) I don’t think the latent fiat Nazis would be very successful in practice.

        • Millie Brown says:

          Nick, how do you feel about gift cards and airline miles? Banks used to issue individual bank notes before the Fed. After the Fed there was no reason and no benefit to have individual bank notes. Fast forward to modern time and we have corporations issuing unlimited gift card liabilities. That’s the modern bank note. All Bitcoin is is a ledger, a common denominator, to compare all those liabilities against. You don’t have to own Bitcoin to know where it compares against any other liability. It’s free to look at the price of Bitcoin.

          Airlines are now attempting to securitize their customers airline miles. So I’m happy to use Bitcoin as a ruler.

        • Lisa_Hooker says:

          The magic “number” of the Bitcoin IS the serial number. Duh. It’s only “worth” something when someone will trade with you. That varies a lot, and often. A store of dreams not value. Hope is not a viable strategy.

    • RightNYer says:

      He’s another idiot who thinks low interest rates help new homebuyers, without acknowledging that sellers just raise the prices to compensate. It benefits his generation who already owns homes, not younger people.

      And the comment from him about the risk free premium supporting asset prices is equally idiotic, given that HIS actions are the reason for basically no interest on risk free assets.

      • Yort says:

        I agree. J-Pow said markets are not expensive due to the Equity Risk Premium dynamics in relation to interest rates, which J-Pow controls 100%. J-Pow admitted he has made the stock market the only game in town. J-Pow, per public disclosure rules, owns over $50 million in long only index funds, including the IWM small caps. J-Pow is getting rich off his scheme. This may explain why he turns a blind eye to the fact that only the top 10%, and really the top 1%, are being helped by the Fed pumping the stock market daily. The only reason this works is 99% of the population is clueless and actually think an never endind Fed bull markets is helping them somehow. Per Bloomberg article, if you have a $420,000 IRA, you are in the top 2% of Americans. Good luck living on $420,000 IRA in retirement once J_Pow has destroyed the value of the dollar in 5-10 years. With interest rates so low, a 3% withdrawal rate is maximum (for 30 years) so can even the tippy top 2% (wanna-be elites) survive on $12,600 per year???

        Yet 10 years from now, J-Pow will be worth hundreds of millions via his stock market inflation scheme…and will have safely created a dynasty trust for his own family.

        J-Pow is the epitome of “Political Elite”…and his brilliance is getting the majority to worship him as some kind of hero of the wage and debt slaves…

  7. Martha Careful says:

    The pandemic is a multi-generational global tsunami, which makes economic data fairly meaningless; it helps to look at all this as non-linear and ponder the idea that most things will return to some normalized form. However, the economic landscape has been re-shaped by all the dynamics shifting around.

    I’ve been looking at 5-year Treasury TIPS related to other rates and nothing makes sense, going back 50+ years, e.g., are we headed towards deflationary trends, as stocks and housing explode in value?

    All the excess bubble crazy stuff may lay the groundwork for some new period of hyper growth, or, things get torn apart and a very ugly recession unfolds — or both occur with hyper-stagflation, or neither occur and we float along for 20 years down a river of doubt …

    • Heinz says:

      Stagflation and lower average standards of living seem the likely short-medium outcome.

      This, despite all the machinations and false bravado from elite mandarins performing kabuki theater in DC and especially in the Eccles building, where financial priests at the Fed study animal entrails to divine interest rates and QE measures.

      Natural law (the Way of the Tao is Reversal) eventually asserts itself despite human hubris. Humans will be taught some humility, for sure. Cry me a river.

      • keppered says:

        Stagflation and lower average standards of living seem the likely short-medium outcome”
        I can only hope this as I am a hard working and frugal peon.
        More then likely:
        Stagflation and lower average standards of living seem the likely long-rest of my life outcome.

        • Millie Brown says:

          Worse case scenario 30 more years of austerity. Best case scenario solidarity over the next 5.

    • WES says:

      The past that you looked at is financial repression so naturally nothing ages sense.

  8. MiTurn says:

    “The #1 and # 2 mall landlords – Simon Property Group and Brookfield Property – have ganged up to buy J.C. Penney out of bankruptcy, apparently to control the decline of their malls.”

    Was this wise? Sounds like throwing good money after bad (or bad after worse).

    Where I live malls have taken a beating. Anymore they all seem low-rent and mostly empty — well past their due date. No maintenance, cheap signage, etc.

    And they creep me out.

    • Jeremy Wolff says:

      I walked through my childhood mall a few weeks ago. The upkeep was great and all the spaces were rented. However, I still wondered why I ever came there. Shopping online and spending the afternoon outside or at home is a way more enjoyable use of time.

      • char says:

        Malls are not for old men. Never has been

      • Still can’t wrap my head about that phrase “childhood mall.” Sentimentality exists in myriad forms, for the objects, not the ritual of shopping. Now I wonder if today’s political extremists are drinking the Kool Aid of their youth?

    • Wolf Richter says:

      I think they’re just trying to manage the decline of their malls. And from that point of view, it makes sense. If a mall loses an anchor, and cannot replace it, the mall dies fairly quickly. If they can keep the anchor, the mall dies more slowly. That’s a huge difference. It gives them some time to kick the can down the empty parking lot.

      • MiTurn says:

        “It gives them some time to kick the can down the empty parking lot.”

        Thanks Wolf; I figured as much. These mall property owners are in a tough spot, and Covid doesn’t help. Effectively, most everyone is learning to not only shop online, but to be comfortable doing so — as you inferred in your article about buying clothes online. Malls might support specialty stores, but not the old anchor stores (unless, I suppose, it’s a Walmart).

        I suppose the mall owners are hoping for a hail mary…

        • char says:

          The mall part of Walmart will kill it as it exist today. People will loose the habit to drive to Walmart if they don’t use the mall part of Walmart. It increases the profitability of closer supermarkets and lowers it from big but more distant Walmarts

      • Michael Gorback says:

        Walmart (and perhaps other brick and mortar retailers) needs to capitalize on a market that’s been sitting in their parking lots for years – RV camping. Currently they allow parking for 24 hrs. Good for business as the RV crowd will stock up there.

        I say put in electric and water hookups (optional for a fee), charge a very low parking rate, offer shower and toilet facilities (which many vehicles don’t have). A laundromat wouldn’t hurt either. Most RVs don’t have laundry facilities.

        Just the showers would draw business because a lot of RV travelers used to buy national chain gym memberships so they’d have a place to shower. Now that many gyms are closed there’s a niche to exploit.

        Capture a longer-term crowd. Put non-income-generating parking property to work, plus the added steady stream of shoppers. If they’re already parked in your lot you’re the closest source of everything from food to cell phones.

        A lot of people try to park for free by “stealth camping”, often illegally, on public or private property. They still need to buy food and other supplies. Charge them a small fee and capture their retail business. Beats having a cop rapping on your van window at 3 a.m.

        Considering the number of people buying RVs as a primary residence now, you can’t beat the rent at $2/night.

        Might be a problem with zoning, but a little baksheesh in these troubling times and the increased sales tax revenues are strong inducements for the town council.

        • keppered says:

          I think there is a huge disconnect on what is a brick and mortar store and what is not?
          The term Brick -n- Morter originally (and still does) refer to a locally owned enterprise.
          So your point is not entirely goofy it is just a bit a misconception to the realities of a B-n-M and a Discounter at large.

        • roddy6667 says:

          Many towns and cities have banned RV’s in Walmart parking lots. It attracts a lot of people who are living out of their camper because they can’t afford to rent. Sketchy crowd.

        • Dan Romig says:

          And the road becomes my bride
          I have stripped of all but pride, so in her I do confide
          And she keeps me satisfied, gives me all I need

          Only knowledge will I save, to the game you stay a slave
          Rover, wanderer, nomad, vagabond
          Call me what you will

          But I’ll take my time anywhere
          Free to speak my mind anywhere
          And I’ll redefine anywhere

          Anywhere I roam, where I lay my head is home
          And the earth becomes my throne


          My sister has put in her retirement papers and will finish teaching at St Paul public schools at the end of this year. Her goal is to find a nice used RV for around $100k and travel across America next summer.

          “Oh hon, there’s a WalMart. What do ya say? Let’s stop and camp out for the night!” somehow, just doesn’t roll off the tongue.

        • Heinz says:

          Homeless vehicle camping might be in our future for lots of Americans, as cost of housing continues to be unaffordable for many people, with no respite in sight due to asset bubbles lofting ever higher.

          I watched an interesting DW documentary about homelessness in US. It highlighted a homeless car park facility in San Diego.

          In this facility homeless but mostly working people (often doing menial work to survive) have a safe place to park their vehicles (cars and vans– didn’t see any RVs) for night (it is gated), and have communal dining and bathroom amenities provided.

          They sleep in their vehicles, which are essentially their tiny house.

          Of course this would work year-round in sunny SoCal– not so much in other places like Minneapolis in winter.

          But it beats living in your van down by the river.

        • Petunia says:

          I think your idea is a good one, which is why it may never be implemented. Systems that run efficiently are bad at supporting fraud.

          Anyway, I always wondered why they didn’t put food stores, drug stores, medical offices, and a post office at the mall. These stores draw a lot of foot traffic. But what do I know, I’m only a consumer wasting gas running all over town.

        • Harrold says:

          Mall rent was always too high for post offices, medical offices, drug stores, etc.

          You could rent space in a strip mall for a year for much less than one months rent at an indoor mall.

        • Petunia says:


          I expected someone to reply as you did, saying landlords can get more rent from other types of businesses. This only re-enforces my view that mall owners don’t understand the business they’re in. Those lower rent payers can drive the traffic to the higher margin stores, a loss leader. There has never been a time I walked into a mall and didn’t spend more than I intended. If I had needed to go more often, I would have spent more.

          It’s too bad most landlords no longer understand their business. They spend their time juggling valuations and taxes and leave the real money on the table.

        • rip says:

          “It attracts a lot of people who are living out of their camper because they can’t afford to rent. Sketchy crowd.”

          Pretty sketchy statement if you ask me. You are passing judgment on a vast swatch of the population who are getting destroyed by Jerome Powell through no fault of their own.

      • polecat says:

        Sure, trying to soften the blow as it were. I get it, beats a chaotic denouement. But eventually, the Ferryman will dock at the mall entrance .. to exact payment before dropping anchor.

    • Paulo says:

      Agree. The shopping experience of malls has always made me sick and depressed. I most often wait out in the parking lot when my wife goes in. Online, with curb pickup or even no fee Canada Post delivery is fantastic for our family. Parcel delivery by Canada Post is also very quick, letters not so great, go figure.

      However, you have to do your research and don’t have returning a wrong purchase as an option. If you have to start sending crap back you might as well go shopping in person and make a decision before making a mistake.

    • keppered says:

      I’m not so sure the Corporate Malls are dead MiTurn,
      from my vantage point I am seeing a massive restructuring with incredibly sweet futures. That is after the current thievery comes to fruition.

      • MiTurn says:


        I’m sure Simon Property Group and Brookfield Property are looking for investors! Here’s your opportunity to get in cheap…

  9. Brant Lee says:

    Pres Biden says the best is yet to come from the gov. I don’t know what all will be in the stim bills, but maybe some will go to folks who honestly need it. No use griping about “taxpayer money”, any debt level actually manageable stopped about 2002. AND the same fine politicians are STILL in office for the most part.
    The pandemic will keep detaching most American livelihood into ever-lower standards in its own cruel way, with the approval and help of corporations, banks, and government.

    • Petunia says:

      They are paying off their buddies to the tune of $900B, you get $600 and the bill for the $900B.

  10. Randall Hooker says:

    It is the “weak” that underpins our economy. As it did in the 14th century. When the little guy got squeezed everyone starved.
    Don’t forget that.

    If the “weak” (which is incredibly disrespectful of the people that put food on your plate) need a hand from all of us at times, then that is the insurance payment that the Strong must pay to get even stronger.

    Makes sense to me to invest in that type of insurance.

  11. Michael Gorback says:

    I’m just sitting here month after month watching in awe as the value of my car is going UP.

    • Absur Ditty says:

      @Michael Gorback

      Ya, Americans aren’t used to seeing the market value of used cars go up. So far, that phenomena has been limited to advanced nations like Argentina.

      That is the genius of the government making your car value go up. Isn’t it awesome? When the do the next round of stimulus the market value of used clothing will also go up and it will lift the poor into a world of prosperity like never before. Imagine when you can sell a used t-shirt on ebay for $1,000. It’s so easy to cure poverty and make everyone rich! What are we waiting for! Biden, since Congress is being so stingy just use that executive pen and start writing checks!

    • Dan Romig says:

      There’s a low miles (5k) 2016 Porsche Cayman GT4 at the local dealer. It was $95k new & asking price is $92k. Hell of a sports car!

      My hunch is that if I bought it and only put a few miles on it, it would not go down much at all in a couple years. That was one of the factors that tipped my to buy my 2016 M4 this May. It’s current value is the same as I paid, and I’ve enjoyed it for a summer & fall.

  12. Mira says:

    Regarding auto sales .. are EV’s sales higher than petrol guzzlers ??
    In Australia electric lawn mowers are considered better value than the humble 2stroke guzzler .. will they be outlawed any day soon.
    Is there a feeling of impending doom in the air regarding a drying up of oil supply throughout the world ??

  13. Mira says:

    10 years ago & longer .. I suggested that solar panels become a substantial supplier to the power supplies of our nation.
    And I went on & on about it ..
    = solar panels on private homes & commercial buildings where ever possible with storage batteries to feed excess back to the grid.
    I was greeted with a resounding .. “Ha ha ha ah ha ha ha.”
    Today the Australian power supply industry is asking home owners to employ at least 1 storage battery to replenish supplies at the power company.
    If power companies had made the purchase of solar panels & storage batteries an electricity supply plan / like a mobile phone plan .. it would have gone down like a silky chocolate drink & today the power companies would be laughing.
    What is it about some that they must wait till the 11th hour.

    • Mira says:

      Just the 2 gadgets that = my NBN connection cost an extra $60.00 per quarter .. Der !!

      • Fat Chewer. says:

        Mira, most of these people are from North America. They don’t know what NBN is. NBN is a corrupted scheme that really presents the excesses of our political overlords the he Liberal/National Party coalition (LNP). It began back in the time of Kevin Rudd of the then ruling Australian Labor Party (ALP) around 2007, who had the idea to give Australians a full Fibre to the Node internet service called the National Broadband Network (NBN). Everyone thought it was a grand idea and Rudd was elected in a landslide. That is, everyone except good ol’ Unky Rupert Murdoch who needs no introduction. Soon after the election, Prince Rupreckt’s accountants ran the numbers and realised that the new network was going to make his old Coaxial cable network obsolete. That’s when Australian politics died. Murdoch, in his fury, proceeded to destroy every new incoming Prime minister who didn’t agree with his now hardline policies. I am not sure why I have to use the word policy in relation to the acts of a newshound. Are you? Anyway, it should go without saying that the NBN was nobbled, and is now an expensive and dysfunctional white elephant. The original cost came in at something in the order of $40 billion, and since then is on the way to tripling that number and it’s one of the slowest unreliable so called high speed fibre optic networks in the world. The very same LNP were the ones who made us all so outraged because $40 odd billion was expensive in one of the world’s richest countries. That would be because the vast majority of the network is in fact Murdoch’s Coaxial cable network with a few extra nodes to connect to the upstream fibre. Naturally, it didn’t work as everyone expected it to and the shit hit the fan. Murdoch negotiated a compensation payout for all this rude creative destruction biting him and just that alone probably exceeds the outrageous $40 billion of the original costings. Not to mention that since the original rollout was cancelled, all of the planning and enabling had to be done all over again at huge taxpayer expense.

        As an aside, Kevin Rudd saved Australia from the worst of the GFC with a timely and appropriate stimulus package that was lauded and emulated all over the world. He was one of our greatest Prime Ministers.

        He became grist for the Murdoch mill. This is how the world should work according to our new god Prince Rupwrecked.

        • Fat Chewer. says:

          You have no idea how much of the slimy inbred political machinations of the LNP and Murdoch I left out. Now, since the NBN was Labor’s pet, Murdoch kept destroying successive Labor Prime ministers (actually it went Rudd-Gillard-Rudd when Rudd made a comeback after Gillard had the entire force of the LNP and News Corp destroy her) until finally he got a Liberal called Tony Abbott whose Communications minister was Malcolm Turnbull. Turnbull was a dot com millionaire who knew a thing or two about network infrastructure and proceeded to use this knowledge to cover over the nobbling of the NBN while Abbott screamed about Labor’s $40 billion costings. This worked well, but you may remember Tony Abbott, otherwise known as Australia’s worst prime minister. Hes the guy that introduced Australian knighthoods and gave the very first knighthood to Prince Phillip, the Queen’s Consort. He then proceeded to eat a raw onion on camera as if it were an apple and once he was asked a question that he could answer, but just didn’t want to, so he just stared at the reporter as if he was apoplectic about being asked the question. Soon enough the darling of the “progressive” moderate Liberals, a certain Mr Turnbull overthrew Abbott which a four year old could have achieved. Turnbull wanted action on climate change which is, of course, Murdoch and News Corp’s pet hate, so it was goodbye Turnbull as News Corp then turned on him. We have now seen a procession of idiots destroying our country since.

          Then recently, Rudd and Turnbull have teamed up against Murdoch but since Murdoch now owns what’s left of Australia’s print media, you wouldn’t know it from reading the news.

        • Fat Chewer. says:

          I also didn’t give enough kudos to Julia Gillard who led Australia through possibly our most turbulent period after the downfall of Rudd quite skillfully. I won’t sicken you with the details of the campaign against her, suffice to say she handled herself with great dignity and stayed true to Rudd’s legacy as much as possible with the entire conservative side of politics engaging the most disgusting and disturbing vomit Australia has ever seen, aided and abetted by Murdoch and News Corp.

    • keppered says:

      There insolvent except for the thievery.
      Plenty of that to go around for the scoundrels

  14. Mira says:

    Has everyone had the chimney sweep around .. Santa’s on his way !!

  15. Whatsthepoint says:

    Sorry for wandering slightly OT, but when I see the $ dropping 15% since March vs. the £ – while staring Brexit in the face – I gotta wonder WTF is up. Normally it would have dropped….

  16. apollinejass says:

    great post wolf street

  17. Sir.PiratePapirus says:

    I disagree with the call of 400,000USD bitcoin completely. Shows they know nothing about what they are talking about. I on the other hand using my years of experience and calculations think 400,005.55USD is the accurate price, or 907,829USD ….one or the other…. Btw my book has just come out you can buy it on Amazing.con it will teach you how to become a successful trader like me, and calculate stuff.

  18. Micheal Engel says:

    1) Covid 19 shutdown few regional casinos, but the global stock market casino is open.
    2) For most investors the stock markets is a casino, but not for wall
    street market makers.
    3) What stopped Jan 2018 top.
    4) Why three sling shots by wall street tops.
    5) There is there, in the stratosphere, anything that can stop : Jeff Bezus, Ilan, Billy boy, Zuk and banjo WB from playing their type of music.
    6) Wrong.
    7) Three Lazers block SPX.
    8) Two block NDX.
    9) Wall street might give it another shot.
    10) But SPX & NDX might still be blocked and the Nasdaq can dropped
    below 2000 high, to Lazer #1, for support.

    • Young says:

      This will all end when Jeff Bezus become the ultimate winner of the monopoly and declares himself JeZus.

      • polecat says:

        He doesn’t exactly exude warmth and humbleness though ..
        from my liliputian view. And he ain’t no Gallagher, either!

        Plenty of er, grimm examples, of which he’$ in fine company, to be sure.

  19. Q says:

    Hi Wolf,

    Fed has committed to pumping more money. U not intending to cut your shorts till S&P hits 4,000?

  20. historicus says:

    These trends seem unsustainable….
    Where is it written that all charts must move from low left to upper right?
    This is clearly a manage affair…conducted by committee…with a self authored mandate to not just provide a fertile environment, but to also make sure it happens, always, regardless of consequence.

    • Old School says:

      Population growth and productivity growth usually give you a long term up and to the right trend. As those run out we have doubled down on debt to keep it going. That’s about played out. Got to pull the next rabbit out of the hat.

      • historicus says:

        let me play devil’s advocate..
        Population growth drops off…..a reason for more stimulus
        Productivity drops off….a reason for more stimulus
        Population growth continues….more money needed for an expanding economy
        Productivity continues to improve….room for more stimulus as this tamps down inflation
        There is always a reason to pump, and it seems never a reason to retrieve the stimulus. Inflation will be denied at first, then embraced and welcomed as a good sign of economic activity. Only when it gets out of control will the Fed limp in with 1/4 pt raises.
        The financial history of this nation until 2008 was that Fed Funds equaled or exceeded inflation. Dictates from unelected and unaccountable central bankers have changed all of that.
        Hayek said that central planners intentionally harm one group to the benefit of another. And the holders of dollars have been hammered for 12 years. First to help assuage the 2008 crisis. Now to assuage the COVID crisis. But, even when times were stellar, the Fed kept up with QEs and massive REPO accomodations.

        • GabrielGalvez says:

          Your factual population growth or shrinkage numbers are irrelevant with as Mexico, Central, South America and the Caribbean’s surplus population pours into the U.S. BidenHarris’ “Immigration reform”, will be another amnesty, along with these:
          1. Immigration and Reform Control Act (IRCA), 1986: A blanket amnesty for some 2.7 million illegal aliens
          2. Section 245(i) Amnesty, 1994: A temporary rolling amnesty for 578,000 illegal aliens
          3. Section 245(i) Extension Amnesty, 1997: An extension of the rolling amnesty created in 1994
          4. Nicaraguan Adjustment and Central American Relief Act (NACARA) Amnesty, 1997: An amnesty for close to one million illegal aliens from Central America
          5. Haitian Refugee Immigration Fairness Act Amnesty (HRIFA), 1998: An amnesty for 125,000 illegal aliens from Haiti
          6. Late Amnesty, 2000: An amnesty for some illegal aliens who claim they should have been amnestied under the 1986 IRCA amnesty, an estimated 400,000 illegal aliens
          7. LIFE Act Amnesty, 2000: A reinstatement of the rolling Section 245(i) amnesty, an estimated 900,000 illegal aliens


          This is why so many legal immigrants who saw their efforts mocked voted for Trump.

  21. Anthony says:

    What many people don’t get, is that if the true unemployment rate is between 10 million and 20 million, eventually the true price of virtually everything must drop if millions can’t afford to buy stuff…it’s very simple really,,,

    • historicus says:

      and the Fed will pump
      and the markets will rise….rise away from those who dont have the money to get in, or ever will, under this arrangement.
      Sell your business, put it in stocks, and put your feet up.

      • rip says:

        Your comment is why I am expecting a crash at any moment. Everybody thinks it’s a can’t lose proposition. If the FED is omnipotent, then why did they even allow the market to fall below 20k? Probably because they’re NOT, that’s why. A crash is coming. I look forward to laughing as millions get burned.

  22. Lance Manly says:

    The .4% downward revision for Oct. was classic volatility in the preliminary retail sales figures.

    Continuing claims all programs jumped by 1.6M for the week ending Nov 28th according to the DOL report today. That’s brutal. And they face the end of the CARES act programs next week. I think some retailers are going to have a bunch of junk they need to unload because the Christmas season flopped.

  23. Martha Careful says:

    I’m suddenly pondering Volker and our inverse relationship with our extremist Powell; not sure if the puzzle pieces connect, but it’s entertaining to think about super high interest rates and ZIRP.

    ” The monetary policies of the Federal Reserve board, led by Volcker, were widely credited with curbing the rate of inflation and expectations that inflation would continue. US inflation, which peaked at 14.8 percent in March 1980, fell below 3 percent by 1983.[22][23] The Federal Reserve board led by Volcker raised the federal funds rate, which had averaged 11.2% in 1979, to a peak of 20% in June 1981. The prime rate rose to 21.5% in 1981 as well, which helped lead to the 1980–1982 recession,[24″

    • historicus says:

      and if Fed Funds went back to where they were just 10 months ago, the market would plummet.
      Then the Fed would print more money.
      This market could not handle 1.5% fed funds.

  24. vinyl1 says:

    You can buy services over and over again. Go out to the restaurant today, then go again tomorrow. See a show on Saturday, see another show next week.

    But goods? Once you buy all the goods you need, you’re set for a while. Get a new car, redo your kitchen, buy sheets and towels….now what? You’re set for a couple of years.

    • historicus says:

      True enough. The manufacturing from the Pacific Rim has plowed hard goods into this nation / economy. How many TV sets do you need, iphones, clothes, etc.
      But take a look at some charts..
      Health care
      College tuition
      Car mechanic charges
      and of course all the things the rich people / stock market riders want..
      condos in FL AZ TX, private jet rates up 40%, fine dining like the “French Laundry” (ha)….

    • RightNYer says:

      Exactly. From my vantage point, all we’ve done is frontloaded 2021 and some of 2022 “stuff” consumption.

      • historicus says:

        We are beyond digging into 2021…we are a decade out…
        stealing from the future to fluff the present is the game of central bankers.

    • Heinz says:

      Many people will continue to buy stuff until they run out of storage space in closets, garage, attic, and even a U-Store-It bin. Acquisitive pack rats, they are.

      Then they have a garage sale to reclaim some space and start all over again.

      Rinse and repeat.

    • rip says:

      How many new cars do you need when you don’t even have to drive it because you don’t go to the office anymore?

  25. Retail sales of all varieties are highly dependent upon current & future income prospects as well as consumers’ confidence in the stability of that income stream out into the future. We pretty much have seen a sugar high in retail spending from the dual effects of the Pandemic and Government Stimulus/Backstops so there is no reasonable expectation that the same phenomenon’s in retail category shifts will continue to the extent that they did in 2020 as consumers enter an even more uncertain 2021.

    Brick & Mortar will continue its decline, gasoline sales will stay depressed as the work-from-home shift continues to save companies money, used and new auto sales are going to suffer anew until prices adjust lower, many restaurants will never come back, and so on. But the year-to-year comparisons are going to be less positive for the 2020 categories that saw almost 20% increases from 2019 YTD. The income crunch is really going to hit in 2021, despite the policies of the Biden administration with Janet Yellen printing at Treasury. The Golden Goose is going to be laying much smaller eggs in 2021.

    Plus if a lot of dough was already spent on Durable Goods in 2020, these items should at least last for a couple of years, even if they were made in Wuhan, China! Americans need to start hunkering down. When someone is shooting at you, you do not stand up in the foxhole. Most Americans are getting the picture of the economic and financial mess created by the Covid Lockdowns, and they know that things don’t look that great for the Nation as a whole for the next several years.

    • Bobber says:

      Nice comment, but it’s premised on slow progress against COVID. If the vaccines are successful enough that people start gathering again, the economy could go gangbusters for a while just to get back to pre-COVID numbers. Maybe 2022/2023 is the time when SHTF.

      However, things could deteriorate a lot sooner than that because trade deficits and a dropping USD drop are looking ominous. The USD value is what breaks when Powell the Money Printer gets too ambitious. With $120B money being printed per month and the USD in a downward trend and ballooning trade deficits, I think Powell will get the inflation he’s been provoking, and then some. The Fed and its policies may opening up a period of severe market resets and unrest.

      Of course, this is what happens when you use all your firepower to suppress small recessions for decades. You bring on a big one that cannot be controlled.

      • RightNYer says:

        Bobber, even with fast progress, it doesn’t change the fact that at least six months of this year will be “distanced” for a lot of people, and that incomes are going to be down for quite a lot of people. The nonsense about “pent up demand” is just that, nonsense. Sure, people will travel again and go back to restaurants, but they’re not going to make up for everything they DIDN’T do during COVID times.

      • Bobber, M1 just shot up again over the last two weeks a la November, 2019 and the Dollar Index, DXY, sunk today to 89.74 without a bottom in sight yet. SOMETHING IS AFOOT, aside from the currency market dumping the Greenback because the Weimar Fed, U.S. style, is determined to use inflation to TRY to dig us out of this DEBT TRAP they can take a bow for greatly assisting in creating. Looks like the doo=doo is starting to hit the fan.

        • polecat says:

          “doo=doo is starting to hit the fan.”

          With regard to these Supreme bankster creatures .. think QE ‘acid for blood’ as their defense mechanism. You don’t dare Stop It!
          It’s gonna leave a lot of melted societal corridors to wade through.

  26. Yort says:

    Retail “Whiplash” explained:

    Dec 17, 2020 Bloomberg:

    Every State in U.S. Saw Personal Incomes Drop in Third Quarter (2020)

    Future April 17, 2021 Bloomberg:

    Personal Savings “Glut” reaches 30% 1st Quarter 2021 (via stimulus)

    Future July 17, 2021 Bloomberg:

    Every State in U.S. Saw Personal Incomes Drop in Second Quarter (2021)

    Rinse, Repeat…”Best Recession Ever!!!”

    • rip says:

      You should have included a picture of the FED’s balance sheet along with the national debt. Consequences are forthcoming.

  27. MonkeyBusiness says:

    McDonald’s has just raised the price of the McChicken from 1 to 1.39. Inflation was already here with a bag of Cheetos rising year after year. But hei I am now officially calling my inflation index the McCheetosh Index!!!

  28. Anon1970 says:

    I ordered a Schwinn 270 exercise bike in July and had to wait two months for delivery. A friend helped me put it together but it did not work initially owing to manufacturing defects. After two visits from the company’s rep, I had a fully usable bike by the end of November. The retail price has gone up by $50 from the manufacturer, but the prices are even higher at Amazon 3rd party sellers, which I suggest you avoid. The big loser was my gym where I canceled my membership and the big winners have been exercise bike manufacturers. The bike has room for a tablet and is blue tooth capable. Earlier this week, I watched a 2019 Christmas concert from Dresden Cathedral on my tablet, with the sound coming through my stereo equipment. Verdict: I am now very satisfied with my purchase.

  29. Swamp Creature says:

    Housing prices in Washington DC are going through the roof at a time when the whole city is shutting down due to the Covid-19 spikes in the area and the possibility of riots like Portland and Seattle. Something doesn’t compute. The entire downtown business district is 50% boarded up. Possibly due to fear of riots. All the resturants and most small businesses are closed. Most government offices are empty due to WFH and sidewalk vendors have disappeared. Most tourist sites are closed and tourists are practically non-existent. Homeless tents are popping up everywhere, even in expensive neigborhoods. I’ve never seen the city in worse shape than it is today. It is depressing just to go down there, which I have to do every other day. The only activity is construction and road repairs.

    I wonder if Powell who works down there at the Fed notices any of the things I’ve noticed.

Comments are closed.