Awesome straight-talking article by Mac Slavo reproduced in full. ..Non-indented text, pictures and some emphasis is ours..
While most Americans understand that falling wages, job losses and contracting consumer credit leads to less spending, it seems that many economists just can’t figure out what happened to retail sales in December.
Some earlier reports and estimates this month suggested that December retail sales might have made a recovery over November, and, admittedly, we were surprised and in somewhat of a state of disbelief. However, on the same day we pointed out that December tax sales receipt were down, indicating that sales overall would be down.
Today we get the “official” numbers from the Commerce Department and they confirm the position we have held since the summer of 2009, that retail sales would be lackluster and below expectations.
“The Commerce Department said Thursday that retail sales declined 0.3 percent in December compared with November, much weaker than the 0.5 percent rise that economists had been expecting. Excluding autos, sales dropped by 0.2 percent, also weaker than the 0.3 percent rise analyst had forecast.
For the year, sales fell 6.2 percent, the biggest decline on government records that go back to 1992. The only other year that annual sales fell was in 2008, when they slipped by 0.5 percent.”
We assume anybody with the ability to perform basic mathematics and deductive reasoning probably came to the same conclusion we did months before the holiday season got into full swing. Of course, there are always exceptions, and as usual, it was the economists who didn’t see the depression coming in the first place, that expected sales numbers to outperform. Once again, they were wrong:
“…many economists, puzzled by the retail sales decline that follows reports from retailers of brighter holidays, cautioned that the December figures don’t necessarily signal a big consumer pullback and could be a blip.“
We’ve said it before, and we’ll say it again: When an economist says something, especially if they are employed by the federal government, believe exactly the opposite.
Dog ..See “Economics – it’s all Lies ! ”
In this case, that means that the December figures DO signal a big consumer pullback. This was the holiday shopping season, you know, the one they tout as the most important time of the year for retailers, where a majority of retailers earn 25% or more of their yearly sales and make or break their yearly numbers. This was the time of the year when consumers were supposed to be spending, because by all indications, the economy was recovering. If it is not a consumer pullback, what is it?
Just like the blip we saw the previous month? Or how about the blip in unemployment month over month for all of 2008 and 2009? There’s also that foreclosure blip, you know, where around 2.8 million people lost or were threatened with losing their home in 2009.
Here are some more blips to look for in coming months:
- Retailers will report lower retail sales numbers. In many cases this will lead to retail bankruptcies, probably for some major retailers as well as a host of smaller retail operations.
- Bankrupt retailers will pull of out their commercial real estate locations in droves, setting of the commercial real estate collapse. In fact, the CRE bubble is and has been collapsing, but most mainstream news outlets and economists refuse to discuss it. (See Detroit and Scottsdale as just a couple examples)
- The second wave of mortgage meltdowns will commence starting around April of this year and continue into 2011..
Dog – Derivatives in particular Credit Default Swaps on all of the above will cause further financial collapses and bring on “Meltdown 2.0 – The Finale”
- Credit card defaults will continue to mount as a broke consumer will need to begin choosing between paying essential bills like food, electric and gas instead of paying off debts incurred years ago during the credit bubble.
- Employment, though it may see a slight recovery due to Census hiring (BLIP!), will continue its downward spiral in 2010
But, these are just minor blips on a radar screen. Pay them no mind, because we all know that when you have a bunch of blips going off on a radar screen, the best thing to do is to assume it means nothing.
Author: Mac Slavo
Date: January 15th, 2010
Visit the Author’s Website: http://www.SHTFplan.com/