collapseRetail sales this holiday season are setting up to be a disaster.  Already most retailers are advertising “pre-Black Friday” sales events.  Remember when holiday shopping didn’t begin, period, until the day after Thanksgiving?  Now retailers are going to cannibalize each other with massive discounting before Thanksgiving.
Anybody notice over the weekend that BMW is now offering $6500 price rebates?   The collapsing economy is affecting everyone, across all income demographics.

 

Submitted by PM Fund Manager Dave Kranzler, Investment Research Dynamics

Wall Street, fearful that consumers are running out of cash heading into the crucial Christmas retail season, are selling off retail stocks and everything else sensitive to consumer spending.  – New York Post

The retail sales report for October was much worse than expected.  Not only that, but the Government’s original estimates for retail sales in August and September were revised lower.  A colleague of mine said he was chatting with his brother, who is a tax advisor, this past weekend who said he doesn’t understand how the Government can say the economy is growing (Hillary Clinton recently gave the economy an “A”) because his clients are lowering their estimated tax payments.  Businesses lower their estimated tax payments when their business activity slows down.

In September the Fed released its Consumer Expectations survey which showed a collapse in consumer income and spending expectations.  This does not occur in an economic system which is experiencing growth.

The price of oil traded below $40 briefly this morning.  The propaganda machine would have you believe that OPEC is driving the price down to put the U.S. shale industry out of business.  This has to be one of the most idiotic rationalizations for a negative economic occurrence I’ve ever seen (that, and “the bad weather ate my homework”).   The price of oil is collapsing because demand for oil is collapsing.   Demand for oil is collapsing because economic activity globally, including and especially in the U.S., is collapsing.

Once again the Empire Fed Manufacturing survey for November continued to plunge deeper into negative territory.  It missed Wall Street analyst expectations once again by a wide margin.  The index fell to negative 10.74 vs the -6.34 forecast.  The average work week fell for the fourth straight week.   I have news for everyone, if the average work week falls, it means people are making less money.   Less money translates into a disaster for holiday sales.

Retail sales this holiday season are setting up to be a disaster.  Already most retailers are advertising “pre-Black Friday” sales events.  Remember when holiday shopping didn’t begin, period, until the day after Thanksgiving?  Now retailers are going to cannibalize each other with massive discounting before Thanksgiving.  Anybody notice over the weekend that BMW is now offering $6500 price rebates?   The collapsing economy is affecting everyone, across all income demographics.

Last week we saw the stocks of Macy’s, Nordstrom and Advance Auto Parts do cliff-dives after they announced their earnings.  I mentioned to a colleague that the Nordstrom’s report should be the most troubling for analysts.  Nordstrom in their investor conference call said that they began seeing an “unexplainable slowdown in sales in August in transactions across all formats, across all catagories and across all geographies that has yet to recover.”  

Nordstrom caters to the “keep up withe Jones’” middle class household who works hard to project an image of prosperity but uses credit cards, auto loans and home equity debt to keep the gerbil wheel spinning.

That game has hit a wall.

Amazon stock is down over 2% this morning without any meaningful news reported that would have triggered the selling.   But anyone who reads my AMAZON dot CON report will understand why AMZN is the most overvalued stock in the S&P 500 now:

USA Today:  Amazon breaks barrier: Now most costly stock  –  “The online retailer’s shares are now trading for 942 times diluted earnings over the past twelve months – making them most expensive in the Standard & Poor’s 500.”

Someone sent me a copy of Wall Street’s 2013 consensus analyst earnings estimates for Amazon in 2014/2015.  Back then Wall Street was forecasting that AMZN would earn $2.58/share in 2014.  The high-end estimate was $4.55.   AMZN reported  a 52 cent per share loss in 2014.  The consensus forecast for 2015 was $5.44 with $9.22 on the high-end.  On a trailing twelve month basis through Q3 2015, AMZN has reported earnings per share of 70 cents.

I believe Amazon stock is going to crash – it’s just a matter of time…

America The Beautiful 5 oz Silver Coins

    • According to the Fed’s mouthpiece, the Wall Street Journal, the meeting was called in order to hold a review of the government bond market.

      Simply stated, there was a hiccup about a year ago and now the banksters need to have an emergency top secret meeting in order to discuss how they might share information with each other. They are strictly dealing with a more or less routine event that can be ironed out at a low level by bureaucrats at any time.

      You can rest assured that the meeting has absolutely nothing to do whatsoever with the meltdown in commodities markets, the collapse of the BRICS nations, the shortage of physical precious metals, crashing stock markets, the break down in economies around the world, failing bond markets, derivative calls, and massive fiat currency printing.

      The fact that all this other stuff is going on at the same time is nothing more than an amazing coincidence!

  1. “I believe Amazon stock is going to crash – it’s just a matter of time…”

     

    So, Dave, does this mean that you are buying put options on AMZN or shorting it?  Those who have been saying what you are saying for the past 300 or so points have had their heads handed to them.  Yes, you WILL be right at some point because everything that goes up this strongly also comes down at some point.  But just when will that be?  No one knows.  Personally, I would MUCH rather shop on-line than face the mobs of shopper-zombies out there.

    • Ha Ha!   Just goes to show you that if you nail, screw, weld or glue two things together that have never been nailed, screwed, welded, or glued together before…  some schmuck will BUY IT!!!    And, generally there’ll be enough for profit!    LOL!  @andrew james that’s not a slight toward you, btw…  <grin>  but it’s nice to see the zombie economy adopt a signature product!  Those things are hideous!

  2. Americans are definitely not out of money.  Restaurants are packed, store parking lots are packed, new cars abound, new house being built.  I would really like to know who these Americans are that are not spending money.  They certainly are not the newest arrivals to America because they get FREE money courtesy of the US Taxpayer.

     

    I know I have cut way back and save much more than I used to.  Why buy anything now?  Wait long enough and you will be able to buy what you need for pennies on the dollar.

     

    Position yourself in cash a la Dent and PM a la Moloney and you will be fine.  Lead and food are also great investments for the future.

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