December 10, 2007
Give us your poor your weak ,your hungry your hudled masses and your sub prime lenders….consenious builds for government bailout for the sub prime mess far be it for me to rain on anyones parade but isnt this just warehousing bad loans similar to Japan did in the late 1980’s and is still paying the cost for this action to day ?....yikes!
Productivity remains strong ,employment hangs tuff and even gun toting Christmas shoppers cant keep the American Consumer away from the mall. However the drum beat on wall street continues to be negitve finding doom and gloom at every turn.
One componet so often left out of the consumer story is customer service and merchandising and lets face it many of the merchants suffering lack of consumer love are poorly stocked,badly merchandised ,and have awfull customer service. Failure to meet earning expectations is more a function of these facts than that somehow a given retailer has missed its mark due to the death of the consumer. The real question is an remains and is the cunsumer taped out or do some of these retailers just , “suck”?
Ho Ho Ho or Humbug for the market in December ? Since 1943 each time the month of November has ended with a negative return the year prior to an Election Year the Dow has had a positive return for the month of December gaining an average of 4.8%. When the Dow was down significantly in the month of November (1943, 1987 and 1991) it was followed by a strong December. So Ho Ho Ho I suspect.
So why all the talk of doom and gloom ? I will refer to my December 21st ,2006 comments,
“Many analysts seem surprised by the large increase in retail spending this Christmas season, not this blogger. One look at the age old “Christmas light “gauge gives you a clear indication that the economy is booming. The Christmas light gauge is a theory that’s says when people are flush with cash and spending they feel joy for the season, so the more out door Christmas lights you see house to house the more prosperous people feel about themselves and the economy . It seems a bit of a slow start this year but in the last few weeks people have been decking the halls with close to reckless abandon. Bottom line the more Christmas light you see the more prosperous people feel and the more they spend. Look for a big gain in Christmas retail sales.”
Again watch out for those Christmas lights the amount clearly indicate the direction of the economy.