Rick Santelli comes out swinging and accuses Steve Liesman of Fighting Like a Girl

Rick Santelli was on a tear this morning and took the first swing at Steve "I can put a positive spin on anything" Liesman and when he swung back, Rick Santelli informs the planet that Steve fights like a girl. Rick's ire is raised at the 7:45 mark and the "fights like a girl" fireworks are around 10:15.

Enjoy the show! (the cackling in the background is ex-Federal Reserve Governor Frederic Mishkin).

Wall Street Haves versus Main Street Have Nots (Amborse Evans-Pritchard)

Deepening crisis traps America's have-nots

The Telegraph
By Ambrose Evans-Pritchard
More Ambrose Evans-Pritchard
1/09/2011

The US is drifting from a financial crisis to a deeper and more insidious social crisis. Self-congratulation by the US authorities that they have this time avoided a repeat of the 1930s is premature.

There is a telling detail in the US retail chain store data for December. Stephen Lewis from Monument Securities points out that luxury outlets saw an 8.1pc rise from a year ago, but discount stores catering to America’s poorer half rose just 1.2pc.

Tiffany’s, Nordstrom, and Saks Fifth Avenue are booming. Sales of Cadillac cars have jumped 35pc, while Porsche’s US sales are up 29pc.

Cartier and Louis Vuitton have helped boost the luxury goods stock index by almost 50pc since October. Yet Best Buy, Target, and Walmart have languished.

Such is the blighted fruit of Federal Reserve policy. The Fed no longer even denies that the purpose of its latest blast of bond purchases, or QE2, is to drive up Wall Street, perhaps because it has so signally failed to achieve its other purpose of driving down borrowing costs.

Yet surely Ben Bernanke’s `trickle down’ strategy risks corroding America’s ethic of solidarity long before it does much to help America’s poor.

The retail data can be quirky but it fits in with everything else we know. The numbers of people on food stamps have reached 43.2m, an all time-high of 14pc of the population. Recipients receive debit cards – not stamps -- currently worth about $140 a month under President Obama’s stimulus package.

The US Conference of Mayors said visits to soup kitchens are up 24pc this year. There are 643,000 people needing shelter each night.

Jobs data released on Friday was again shocking. The only the reason that headline unemployment fell to 9.4pc was that so many people dropped out of the system altogether.

The actual number of jobs contracted by 260,000 to 153,690,000. The “labour participation rate” for working-age men over 20 dropped to 73.6pc, the lowest the since the data series began in 1948. My guess is that this figure exceeds the average for the Great Depression (minus the cruellest year of 1932).

“Corporate America is in a V-shaped recovery,” said Robert Reich, a former labour secretary. “That’s great news for investors whose savings are mainly in stocks and bonds, and for executives and Wall Street traders. But most American workers are trapped in an L-shaped recovery.”

It is no surprise that America’s armed dissident movement has resurfaced. For a glimpse into this sub-culture, read Time Magazine’s “Locked and Loaded: The Secret World of Extreme Militias”.

Time’s reporters went underground with the 300-strong `Ohio Defence Force’, an eclectic posse of citizens who spend weekends with M16 assault rifles and an M60 machine gun training to defend their constitutional rights by guerrilla warfare.

As it happens, I spent some time with militia groups across the US at the tail end of the recession in the early 1990s. While the rallying cry then was gun control and encroachments on freedom, the movement was at root a primordial scream by blue-collar Americans left behind in the new global dispensation. That grievance is surely worse today.

The long-term unemployed (more than six months) have reached 42pc of the total, twice the peak of the early 1990s. Nothing like this has been seen since the World War Two. Continue Reading

Numerous retailers (TGT) and analysts pulled up short in December (warning: do not hug things w/horns)

You just gotta love analysts:

January 3rd Bloomberg :Target Corp., Macy’s Inc., J.C. Penney Co. and Family Dollar Stores Inc. advanced today after Citigroup Inc. recommended the shares as the economy continues to improve.  Deborah Weinswig, a retail analyst at Citigroup, said Target, the second-largest U.S. discount retailer, and the other companies will gain as “tailwinds will outweigh headwinds and translate to modest growth in spending.”

December 23, 2010 Forbes: Target Upgraded to 'Buy' at Wall Street Strategies: Retail giant Target Corp. on Wednesday caught a late-day upgrade from analysts at Wall Street Strategies.

The firm said it boosted its rating on TGT from "hold" to "buy" and raised its price target from $58 to $67. That new target implies a 12% upside to the stock's Wednesday closing price of $60.03. The analyst cited "favorable observations" on recent tours and from industry channel checks for the upgrade. Target shares were up eight cents at $60.11 in early trading Thursday.

December 21, 2010 American Banking News: analysts at Barclays Capital raised their price target on shares of Target Corp. from $65.00 to $80.00 in a research note to investors on Tuesday, December 21st. They now have an “overweight” rating on the stock.

December 5, 2010 American Banking News: Equities research analysts at Piper Jaffray (NYSE: PJC) boosted their price target on shares of Target Corp. (NYSE: TGT) from $62.00 to $66.00 in a research note to clients and investors on Friday.

And Now, A Dose of Reality

(Target closed -$4.01, Macy's closed -$1.00,

JC Penney closed -$.41 and -$1.04 since Monday)
The Wall Street Journal
By Miguel Bustillo and
Elizabeth Holmes
1/6/2011

The holiday shopping season finished weaker than it started for store chains ranging from Target Corp. to Gap Inc., thwarting hopes that leading retailers would raise profit forecasts from strong sales.

Many retailers reported December sales Thursday that missed company or analyst estimates, with discount and teen clothing chains posting particularly lackluster results. A Thomson-Reuters index of 28 leading retailers showed sales rose 3.1% at stores open at least a year, less than the expected 3.4%.

Several apparel retailers including Wet Seal Inc. and American Eagle Outfitters Inc. lowered earnings forecasts, with some citing high promotional discounting during the holidays as a drain on profits. That stoked investor fears that store chains paid a steep price to induce consumers to shop.

Still, the 2010 Christmas period finished with the strongest retail revenue growth since 2006, according to the International Council of Shopping Centers. It estimated that sales for November and December rose 3.8% compared to the year before.

Online sales also grew 12% to $32.6 billion, according to tracking firm comScore Inc., the highest total ever, as consumers continue shifting more shopping to websites instead of physical locations.

Terry Lundgren, chief executive of Macy's, said he saw plenty of reasons for optimism. Same-store sales at the department store chain rose a robust 4.6% for November and December combined.

"We've certainly seen growth occur and, I think, the consumer gaining more confidence about their income and their spending levels," he said in an interview.

While a blizzard in the Northeast and rainstorms in California appeared to take a late-month toll, retail economists and experts said the real culprit behind the weaker December sales was an avalanche of aggressive promotions in November. Those deals enticed consumers to shop earlier than usual and raised unrealistic expectations about consumer spending for the remainder of the year.

"There was a lot of hype and expectation after November that we were out of the water, and we are not," said David Bassuk of management consultancy AlixPartners LLP. "Promotions still rule the day right now and they are so deep that they are affecting profitability."

Mr. Bassuk said he was concerned that retail chains, particularly those selling clothing, may have overbought spring merchandise after the exuberant November, setting themselves up for trouble in 2011.

Sales at Target, widely viewed as one of the year's most resurgent retailers, rose just 0.9% at stores open at least a year, well below the company's estimate of a low to mid-single-digit increase. (concensus estimate of analysts was +4%).

Chief Executive Gregg Steinhafel also warned that less profitable items made up a greater-than-expected percentage of purchases. The company maintained its earnings forecast but Target's stock still fell 6.8% on Thursday, to $54.93, down $4.01, in 4 p.m. composite trading on the New York Stock Exchange. Keep Reading

Shhhh, don't wake buyers of XRT, rumor has it retail doubts persist

Retail Stocks Launched in 2010 and

Continued Their Gains into 2011.

Shhhh, don't wake the buyers of XRT,

they are dreaming of holiday-like sales

through April. Shhhh, just let them sleep.

The Wall Street Journal
By Kris Hudson
More Kris Hudson Articles
1/5/2011

U.S. malls and shopping centers continued their slow, fitful recovery from the recession in the fourth quarter, holding relatively steady in both vacancies and lease rates.

The second half of 2010 brought relief to retail landlords by ending the rising vacancies and falling lease rates of recent years. But the slow recovery, despite stronger retail sales, indicates that retailers generally remain hesitant about leasing new space.

"The sector appears to be meandering around," said Ryan Severino, an economist at real-estate research company Reis Inc., which tallies the vacancy and lease-rate data in the 80 largest U.S. markets.

"Without clear signs of a strong economic and labor-market recovery," he said, "we expect this trend to persist over the next couple of quarters until there is more clarity in the direction of the economy."

Malls in the fourth quarter posted a decline in vacancy of one-tenth of a percentage point to 8.7%, marking the second consecutive quarter of such declines for malls, according to Reis. However, those improvements came after the industry posted its highest vacancy rate of the past decade: 9% in last year's second quarter. The recent vacancy declines were the first for malls since the third quarter of 2007.

Meanwhile, lease rates at malls rose by two tenths of a percentage point to $38.79 per square foot per year. The slight gain was the first for malls since the third quarter of 2008.

The situation is similar for shopping centers, which are smaller centers typically anchored by a grocery store or big-box retailer with several small stores facing a common parking lot. Shopping centers tend to include more local, mom-and-pop tenants that are less financially stable than the national chains that populate malls.

Shopping-center vacancy held steady at 10.9% in the fourth quarter, unchanged for the third consecutive quarter, Reis said. That vacancy rate remains at the highest that Reis has tracked since 1991. What is more, net absorption for U.S. shopping centers in the quarter—the net amount of new space leased—amounted to just 92,000 square feet after a gain in the previous quarter of 474,000 square feet.

Lease rates at shopping centers remained relatively unchanged in the fourth quarter, declining to $16.56 per square foot per year from $16.58.

The slight recovery comes as recent gains in retail sales have spurred cautious optimism among retail landlords.

Retail-sales consultant Retail Metrics Inc. predicts that the 30 national retailers it tracks will this week post a 3.4% gain in sales for December at stores open for at least a year. That is atop a 3% gain for December 2009.

Overall, the National Retail Federation trade group forecasts that retail sales in November and December increased by 3.3% this year to $451 billion.

Drew Alexander, president and chief executive of Houston-based Weingarten Realty Investors, which owns 378 U.S. shopping centers, said his centers are losing fewer tenants than in previous years and adding more "frugal fashion" sellers like Ross Stores Inc. and TJX Cos. Inc.'s Marshalls. Other expanding retail categories include fast-casual eateries like Five Guys Burgers and Fries and self-pampering outposts like Massage Envy spas, he said,

"Things aren't perfect," Mr. Alexander said, "but they're clearly better."

However, Weingarten continues to scout for replacements for Blockbuster Inc. stores that are closing. It lost seven Blockbusters in the fourth quarter, leaving it with 29. Mr. Alexander expects to lose another eight to 10 this year. And many landlords still are filling spaces vacated by defunct retailers Circuit City Stores Inc., Linens 'N Things Inc., Mervyn's LLC and Steve & Barry's LLC.

California mall developer Rick Caruso posits that top-quality malls continue to outpace their more budget-focused peers. His Caruso Affiliated Inc. announced in December that it intends to expand its upscale, 500,000-square-foot Americana at Brand mall in Glendale, Calif., by up to 130,000 square feet this year.

Mr. Caruso said expanding retailers include fashion stores such as Forever 21 Inc. and Limited Brands Inc.'s Victoria's Secret as well as high-end electronics stores like Apple Inc. and Microsoft Corp. stores. Meanwhile, he expects store closures from the leading bookstore chains.

"If you have a good location with solid performance, you have great leasing opportunities," Mr. Caruso said.

Ever Closer to a Failed Auction (Michael Pento)

Tuesday, December 28, 2010
Michael Pento
By: Michael Pento

Yesterday was a rather depressing day on the economic data front. The S and P/Case-Shiller home price index fell 0.8% in the month of October from the year ago period. Even more troubling was the MOM decline of 1.3%. 18 of 20 cities were down and the index is off 30% from its peak. The real estate sector has most assuredly resumed its decline. The progenitor and nucleus of the credit crisis was the overleveraged real estate market. Now that home prices are falling once again there will more homeowners underwater on their mortgages and the incentives to walk away from the loans will increase. This will cause a further increase in foreclosure activity and further downward pressure on home prices.

To make matters worse, an auction of five-year US bonds went poorly and the yield on the 10-year bellwether bond is back to 3.49%. That auction is just a taste of what’s ahead. Soaring borrowing costs are the future for U.S. sovereign debt issuance. We are fast approaching the day when the U.S. will either have to pay an astronomical interest rate on borrowed funds or be unable to issue the debt at all.

China, Russia, and Brazil have felt it necessary to raise interest rates as inflation is hurting the middle class and their economies. At lease those countries are dealing with the problem. The U.S. is not only ignoring inflation but actually doing everything in its power to encourage it. More and more debt, soaring commodity prices and massive money printing are the prescription our government has given us.

All this and they want you to believe that all is ok just because retail sales were up?

Michael Pento, Senior Economist at Euro Pacific Capital is a well-established specialist in the “Austrian School” of economics. He is a regular guest on CNBC, Bloomberg, Fox Business, and other national media outlets and his market analysis can be read in most major financial publications, including the Wall Street Journal. Prior to joining Euro Pacific, Michael worked for a boutique investment advisory firm to create ETFs and UITs that were sold throughout Wall Street. Earlier in his career, he worked on the floor of the NYSE.

40 square feet of retail space for every person in America

U.S. has 40 square feet of retail space for

every person in America...

MOST IN THE WORLD

By: Ann Zimmerman, Justin Lakhart and
Rachel Dodes
Wall Street Journal
12/28/10

American shoppers expanded their year-end purchases this holiday season by the biggest margin since the boom year of 2005, but retailers still face daunting challenges in the new year, from rising gasoline and cotton prices to an overabundance of stores.

U.S. retail sales, excluding automobiles, rose 5.5% between Nov. 5 and Dec. 24 compared with a year ago, according to MasterCard SpendingPulse, a unit of MasterCard Advisors that tracks sales by all types of payment.

Last year, sales rose 4.1% during the 50 day period, but those results were easy comparisons against the recession in 2008, when sales fell 6.1%.

"To sum up, the holiday season is a joyous one," said Sherif Mityas, a partner in the retail practice of A.T. Kearney, a global management consulting firm. "Consumers are looking to spend again. They are more confident than they had been."

The numbers were not reflective of a late December storm, which did not hit most of the East Coast until Christmas Day or later. The day after Christmas is traditionally one of the season's biggest shopping days but retailers are expecting that shoppers will simply delay their purchases, not abandon them.

Just how long retailers' confidence will last for shoppers and stores alike is the big question.

Couple of interesting Factoids

Over the past four quarters, consumer spending accounted for 68.6% of demand in the economy, up from 66.5% in 2007. The reason: With housing contributing less to the economy than at any time since World War II, and with businesses spending also down sharply, consumer spending is taking a larger piece of the overall pie.

Even if shoppers continue to loosen purse strings in the year ahead, the retail landscape is still littered with too many stores for all to prosper. The U.S. now has some 40 square feet of retail space for each person—the most per person in the world. Read on Garth

ShopperTrak: Retail sales down 4.1% (because of calendar shift, blizzard and Father's Day)

No Mention of potential foot traffic increases

in other parts of the country that

incurred sunshine.

CHICAGO – December 29, 2010 – ShopperTrak’s National Retail Sales Estimate (NRSE) today reported that total GAFO retail sales for Christmas week (week ending Dec. 25) slipped 4.1 percent compared to last year, while the company’s retail traffic index (SRTI) reported a strong 6.8 percent total U.S. foot traffic decline for the same period.

Although retail levels slowed last week, the 2010 calendar shift that placed Dec. 26 on a Sunday as opposed to a Saturday last year had the greatest impact on overall performance. By falling on a Sunday this year, Dec. 26 is not counted in the Christmas week performance, eliminating a day that finished third in sales and second in traffic in 2009 which was included in last year’s Christmas week data. This year ShopperTrak anticipates Dec. 26 will finish 10th in both sales and traffic.

“It seems the calendar was a bit unkind to retailers this year as the 2009 comparison week is particularly strong and a critical day in the season fell on a Sunday which created some unique challenges,” said Bill Martin, founder of ShopperTrak. “In some locations retailers didn’t have the ability to extend store hours on a Sunday due to various regulations, so there was a shorter window to move merchandise that day. Additionally, the beginning of some inclement weather in the Midwest, Northeast and South regions last week most likely influenced retailer’s levels as well.”

Because the 2010 calendar shift also provided a full week between Super Saturday and Christmas, Dec. 23 – a day ShopperTrak deems Father’s Day because of procrastinating male shoppers – saw strong returns and finished second behind Black Friday with $7.857 billion spent. Black Friday and Super Saturday accounted for $10.69 and $7.58 billion respectively. By comparison consumers spent $7.547 billion on Dec. 23, 2009, a day which also finished second behind Black Friday and ahead of Super Saturday.

Switching gears, ShopperTrak also measured the impact of the blizzard which crippled the Northeast particularly on Dec. 26 and 27 strongly impacted retail traffic in the region and across the country. The company’s analysis shows because of the blizzard:

• On Dec. 26 total U.S. foot traffic was 11.2% below what it would have been expected if the blizzard had not hit the Northeast
• Northeast region foot traffic fell 6.1 percent on Dec. 26 while the other three regions (Midwest, South, West) had an average gain of 38.6 percent versus last year.
• On Dec. 27 total U.S. foot traffic was 13.9 percent below expectations had the blizzard not hit the Northeast.
• Northeast region foot traffic fell 42.9 percent on Dec. 27 compared to 2009, while the other regions averaged a 13.0 percent gain.
• Preliminary GAFO retail sales estimates for Dec. 26 and 27 combined are roughly $10 billion. Assuming a conservative 10 percent sales impact nationally for the blizzard, roughly $1 billion of retail spending was postponed during the two day period.

ShopperTrak Complete Press Release

Weekly "Seasonally Adjusted" Retail Sales (Int'l Council of Shopping Centers)

Dec 28 (Reuters) - The International Council of Shopping Centers and Goldman Sachs on Tuesday released the following seasonally adjusted weekly data on U.S. chain store retail sales.

Week Ending Index 1977 = 100

Week       Index      Year/Year    Weekly Change
Ending                      Change


Dec 25    513.4           4.8%            1.0
Dec 18    508.4           4.2               1.7
Dec 11    499.9           3.1               0.8
Dec 4      495.9           2.6              -2.1
Nov 27    506.6            3.5               0.5
Nov 20    503.9            2.8              -0.6
Nov 13    507.0            3.4              -0.1

National Retail Federation Raises Shopping Forecast to Up 3.3% versus 2.3%

Washington, December 14, 2010 – After a solid start to the holiday season, the National Retail Federation announced today that it is revising its forecast to 3.3* percent, up from 2.3 percent. The upward revision is due to improvement in a variety of economic indicators including stock market gains, recent income growth, savings built up during the recession - all giving consumers the capacity to spend.

According to the National Retail Federation, November retail industry sales (which exclude automobiles, gas stations, and restaurants) increased 0.8 percent seasonally adjusted over October and 6.8 percent unadjusted over last year.

“The start to the holiday season has surpassed all expectations,” said NRF President and CEO Matthew Shay. “While employment data is still a concern, we are starting to see improvement in other economic indicators that support an increase to our forecast. In order to sustain this momentum for retailers and the U.S. economy, there must be a renewed focus on jobs as we enter the new year.”

November retail sales released today by the U.S. Commerce Department show total retail sales (which include non-general merchandise categories such as autos, gasoline stations and restaurants) increased 0.8 percent seasonally adjusted over October and 9.2 percent unadjusted year-over-year.

“Consumers have not been suffering from a lack of spending power, they’ve just been missing the confidence to use it,” said NRF Chief Economist Jack Kleinhenz. “With noticeable improvement in key economic indicators combined with great deals on merchandise, consumers have certainly shown they shouldn’t be counted out this holiday season.”

Solid gains across the board indicate some pent up demand as consumers stocked up on items such as apparel, accessories and books and music. Sales at clothing and clothing accessory stores increased 2.7 percent seasonally adjusted over last month and a strong 9.6 percent unadjusted year-over-year. Sporting goods, hobby, book and music stores sales increased 2.3 percent seasonally adjusted month-to-month and 15.5 percent unadjusted year-over-year.

Health and personal care stores sales increased 0.9 seasonally adjusted over last October and 7.3 percent unadjusted over last year. General merchandise stores sales increased 1.3 percent seasonally adjusted over last month and 4.2 percent unadjusted year-over-year. NRF Report

U.S. Confidence in Economy Declines in Early December (Gallup)

Consumers are no more optimistic about

the U.S. economy in early December 2010

than they were at this time a year ago.

(Don't share with Wall Street as they have a really good gig

going with their sugar daddy, Ben Bernanke)

Gallup
by Dennis Jacobs
Chief Economist
12/14/10

PRINCETON, NJ -- Economic confidence is deteriorating sharply at the worst possible time for the nation's retailers. Gallup's Economic Confidence Index averaged -31 over the first two weeks of December, fully offsetting November's improvement, and essentially matching the monthly readings of -29 in October and -33 in September.

Consumers are no more optimistic about the U.S. economy in early December 2010 than they were at this time a year ago.

The Economic Confidence Index consists of two sets of ratings: one involving U.S. consumers' perceptions of current economic conditions and the other involving their economic outlook. The December estimate is based on more than 5,000 interviews conducted during the two weeks ending Dec. 12, 2010.

Percentage Rating the Economy "Poor" Worsens
Across Income Groups

During the first two weeks of December, 45% of Americans rated current economic conditions "poor" -- wiping out the improvement to 41% in November, and essentially matching the 44% of October. Consumers' ratings of current economic conditions deteriorated about equally among upper-income consumers (those making $90,000 or more a year) as well as middle- and lower-income Americans (those making less than $90,000).

Americans of All Incomes Less Optimistic
About Economy's Direction

Right now, consumers' expectations for the economy are substantially worse across income groups than they were during November, with 61% now saying the economy is getting worse. During the first two weeks of December, 58% of upper-income Americans and 62% of middle- and lower-income consumers said economic conditions are "getting worse" -- a worsening from 53% and 57%, respectively, in November.

Americans' Economic Optimism
Fading in Early December

Gallup's Economic Confidence Index suggests that the sharp improvement in economic confidence seen in November may be dissipating at the worst possible time for the nation's retailers. The sour reactions of many to the Federal Reserve's efforts to pour money into the economy -- so-called quantitative easing -- may have negatively affected the economic outlook of some consumers and investors. That might also be the case with the financial difficulties in Europe. If so, the statement of the Federal Open Market Committee on Tuesday afternoon, and the reaction to it, could be more important than usual.

More likely, the government's early December report of a surprisingly high unemployment rate for November may have increased consumer worries not only about jobs but also the direction of the U.S. economy. This despite Gallup's tracking data suggesting this government report may be overstated -- at least as far as what is really taking place in the job market right now.

It also might be the case that some Americans who had hoped for increased political harmony after the midterm elections are disappointed about the current battle over the proposed extension of the Bush tax cuts and the extension of emergency unemployment insurance, particularly when so many Americans tend to support both efforts.

Regardless, consumer spending does not reflect an improving economy at this point. Add in the recent decline in economic confidence, and Christmas sales may not meet the increasing expectations that followed the success of Black Friday week.

Gallup will publish its final estimate of Christmas spending later this week. Link to complete Gallup Report

Gallup: Spending Up Slightly in November, Matching Year Ago

Self-reported spending by lower and

middle income consumers back in

"new normal" range

 

by Dennis Jacobe, Chief Economist

Gallup

Gallup complete report and add'l charts

12/9/10

 

 

Over the first 11 months of 2009, spending remained in a fairly tight range of $59 to $67 before hitting $72 last December. From March through July of this year, Americans' spending generally ran slightly higher than it did in 2009. Since then, however, spending has averaged slightly below its 2009 comparables and now just matches that of a year ago.

 

 

Lower- and Middle-Income Spending Back in the

"New Normal" Range

Lower- and middle-income Americans' self-reported spending averaged $56 per day during November, up from $51 in October and September's $48. Spending by this group -- those making less than $90,000 a year -- was running below the 2009-2010 "new normal" monthly spending range of $52 to $64 during September and October, but returned to that range in November. Still, their spending continues to trail 2009 comparables.

 

Upper-Income Spending Matches That of a Year Ago

Upper-income Americans' spending averaged $120 per day in November -- not much different than the $123 and $118 of the previous two months, or the $117 of a year ago. Spending among this group making $90,000 or more annually remains at the upper end of the 2009-2010 "new normal" monthly spending range of $107 to $121 per day.

 

Commentary

At this point, Gallup's self-reported spending measure suggests that the 2009-2010 "new normal" spending trend continues unabated. Consumers are holding back -- matching their anemic spending of 2009, which trails far behind their deep recessionary spending of late 2008. While spending during Thanksgiving week seems to have increased -- averaging $79 per day -- during the first week of December, it fell back once again, to a $66 average. Consumers will have to open their pocketbooks a lot this month to match or exceed December 2009's $72 spending average.

 

The recent surge in gas prices -- up 10 cents last week alone -- could increase spending. It is a key element of Gallup's overall spending measure. But a significant increase in spending will depend on a change in attitudes among lower-, middle-, and upper-income consumers.

 

In this regard, the continued good performance of the stock market, coupled with a possible extension of the Bush tax cuts, may get upper-income consumers spending during the last few weeks of 2010. These consumers have the disposable income to spend, and could add a lot of Christmas cheer if they decide to open their wallets for the last few weeks of the holiday season.

 

At the same time, Gallup's measurements suggest that the job situation could be better than the government recently portrayed it. In turn, this could bolster lower- and middle-income spending that tends to depend on jobs. The proposed continuation of extended unemployment payments could also help.

 

Grandpa: could be better than governmentr recently displayed however a potential counter to "could be" is the non-seasonally adjusted initial jobless claims released 12/9/10.Seasonally adjusted reported at 421,000 when non-seasonally adjusted (a.k.a real people in lines, cloocked in at 582,007. We shall see...

 

Whether all the efforts -- ranging from those of the Federal Reserve to those of the president and Congress -- will actually help retailers in the next few weeks is yet to be seen. Regardless, the increased optimism they create could by itself lead consumer spending to be better than expected late this holiday season.



PRINCETON, NJ -- Overall self-reported daily consumer spending in stores, restaurants, gas stations, and online averaged $66 per day in November -- up slightly from $63 in October and $59 in September, and essentially matching the $67 of November 2009.

MI Sentiment just plain ugly for retailers

Nearly twice as many consumers reported

that their finances had worsened rather

than improved during the past year

(CNBC's Interpretation of MI Sentiment- 

Stronger than expected...naturally, as CNBC has yet

to see data that can't be twisted into a positive)

Reuters/University of Michigan Surveys of Consumers
12/10/10

The economic news heard by consumers about jobs grew significantly more favorable in November. Unfortunately, the favorable job news only had a small impact on how consumers expected the overall unemploy-ment rate to change in the year ahead. The majority of consumers anticipated the jobless rate to remain stuck at its current high level throughout the year ahead.

Given these expectations, it should be no surprise that half of consumers expected the slow pace of economic growth to remain largely unchanged during the year ahead. Importantly, the balance of consumers twice as frequently ex-pected some additional improvement rather than a worsening pace of economic growth during the year ahead.

Personal Finances Remain Dismal

The personal finances of consumers remained quite bleak in November. Nearly twice as many consumers reported that their finances had worsened rather than improved during the past year, with one-in-three reporting declines in household income. There has been some small improvement since the cyclical low point. Income gains were reported twice as frequently this November compared with a year ago, although the frequency of in-come gains have remained unchanged for the past 4 months.

The larger problem was that just 25% of all house-holds expected their finances to improve during the year ahead, down from 29% last November. The majority of households expected no income increase during the year ahead in November, for the 23rd consecutive month, an all-time record. Households with incomes above $75,000 held the same dismal outlook for their finances, showing no improvement in their financial expectations for the year ahead. Holiday sales will be based, more than ever, on the availability of discounts as consumers continue to cope with their dismal financial circumstances.

Surveys of Consumers chief economist, Richard Curtin

It is clearly too early to declare the November uptick in consumer confidence a turning point. It marks the third time that the Sentiment Index has reached this level since the cyclical low was recorded two years ago. In each of the prior rebounds, the gains as well as subsequent losses were mostly based on changing prospects for the economy.

Unfortunately, there has been no improvement in consumers’ financial prospect in the past two years. While consumers clearly believe that the recovery has gained some traction, most still think that the eco-nomic gains will be too small to improve their own job and income position anytime soon.”Complete report and prior reports

Grandpa predicts a retail stock reality check in January given the launch to 52+ week highs on many of these stocks and what could prove to be a major wake up call on the retail ETF-XRT. But hey, I am just a grandpa however I did not just fall off the turnip truck...“

U.S. Chain Store Sales fall 2.1% week ending 12/4/10 (oh...oh...Grinch Sighting)

Retail stocks have been on a tear in 2010 with many publically traded retailers up 30 to 60% YTD. The media and naturally CNBC have been giddy with the Black Friday Results as they would have you believe it is a clear indication of increased consumer confidence.

Grandpa maintains those buying retailer stocks in December could very well be in for a rude awakening. When the retail community commences with Black Friday prior to Halloween and offers significant discounts 1 1/2 months prior to Christmas, I believe a measurable amount of the traditional December shopping volume was completed prior to December 1st. Time will tell however it will be "telling" sooner than late,r given 2.5 weeks until Christmas.

Not only were the week ending 12/4/10 chain store sales down 2.1% from week ending 11/27/10, the weekly change was negative 3 of the prior 4 reporting weeks. No, CNBC will not dig too deeply on this as Erin Burnett must keep the glass 1/2 full no matter the outcome to your portfolio. Just be careful out there.....XRT (retail ETF) is at all time highs since June 2006???...but hey, I am just the grandpa dude.

Dec 7 (Reuters) - The International Council of Shopping Centers and Goldman Sachs on Tuesday released the following seasonally adjusted weekly data on U.S. chain store retail sales.

Week Ending Index 1977 = 100 
Week Ending      Index             Year/Year Change          Weekly Change
Dec 4                  495.9                     2.6%                                -2.1%
Nov 27                 506.6                     3.5%                                 0.5
Nov 20                 503.9                     2.8%                                -0.6
Nov 13                 507.0                     3.4%                                -0.1

ICSC Research expects same-store sales for December to increase by 3.0 to 3.5 percent.The ICSC weekly U.S. retail chain store sales index is a joint publication between ICSC and Goldman Sachs Group Inc. It measures nominal same-store sales, excluding restaurant and vehicle demand, and represents about 75 retail chain stores. Link to ICSC

America's arrogant attitude on austerity, "not on our watch," just pass it along to the grandchildren

CNBC and every other media outlet is giddy with Black Friday shopping results, as citizens of Ireland are facing significant austerity measures as a trade off from their banking industry and government bailout.

While CNBC shares satellite images of cars parked in a retail mall lot, our neighbors in Ireland are experiencing thousands of public-sector jobs, rising taxes, cutting welfare and retirement benefits, and decreasing the minimum wage. Specifically, Ireland will be cutting 25,000 public sector jobs (10% of current workforce). Ireland accepts $113 billion bailout package 

The Irish are also faced with tax increases. One Dublin newspaper, the Irish Independent, estimated that the cost of the measures for a typical middle-class family earning $67,000 a year would be about $5,800 a year.

An older man placed blame for the crisis on the Cowen government, for failing to rein in the runaway property speculation that left Ireland’s banks with a mountain of bad debt now borne by the taxpayers. “The government has robbed us,” he said. “They’ve destroyed the country that we’ve built up over a number of years. They’ve just destroyed it.” Demonstrators in Ireland Protest Austerity Plan

While Ireland readies 25,000 public sector job cuts along with cutting retirement benefits and reducing minimum wages, President Obama announced today his plan to freeze federal government wages for 2 years which will allegedly save $2 billion during the current fiscal year.

The United States has an unprecedented $14 trillion of debt which does not include the unfunded social security and Medicare obligations nor the off balance sheet losses of Fannie and Freddie. Our grandchildren are faced with shouldering the greatest amount of debt on their shoulders of any generation and our President proposes a pay freeze.

In addition, congress is back in session to begin their horse trading on extending the Bush tax cuts. Did I mention job cuts, tax increases and a reduction of existing government programs and minimum wages in Ireland?

The arrogance and irresponsibility of America regarding fiscal responsibility is detestable. How dare the prior and current generation continue their self centered, consumptive and selfish way of life at the expense of our grandchildren. Our elected "representatives" continue to display their fiscal ineptness and many in America will stand in line for hours at the crack of dawn to purchase an electronic gadget.

What will it take for America to take action on behalf of grandchildren so the grandkids are not standing in line for hours at the crack of dawn for a loaf of bread?

Recent spending trends as well as some consumer attitudes are not particularly encouraging (Gallup)

It will be most interesting to see if CNBC will apply a positive spin on the recent consumer spending data results from Gallup. Unfortunately, Gallup shares a similar CNBC cheerleader perspective on the recently released initial jobless claims.

Both focus on the seasonally adjusted figure versus noting a 55,000 increase in non-seasonally adjusted claims. One can pretend all they want with government adjusted figures, however the reality is 55,000 more people filed initial jobless claims and we as consumers do not seasonally adjust our checkbook balance.

PRINCETON, NJ -- Self-reported daily consumer spending in stores, restaurants, gas stations, and online averaged $66 per day in the week ending Nov. 21 -- not much different than the $69 of the same week in 2009 -- but below the $74 comparable of the same week in 2008.

Although the outlook for Black Friday weekend is better than it was a year ago, at first glance, recent spending trends as well as some consumer attitudes are not particularly encouraging for Black Friday and Christmas holiday sales:

• Nine in 10 consumers say they continue to watch their spending closely -- essentially unchanged from the 89% of the same week in 2009.
• Seventy percent say they are cutting back on their weekly spending -- consistent with the 69% of 2009.
• Nineteen percent of Americans worry that they spent too much money "yesterday" -- also the same as in 2009.

However, despite the year-over-year comparables in actual consumer spending, there are some positives in consumer spending attitudes this month:

• Half (51%) of Americans say they feel able right now to make a major purchase, such as a car, appliance, or furniture -- up from 46% in the same week of 2009.
• About 6 in 10 (58%) say they feel pretty good about the amount of money they have to spend these days -- up from 54% in 2009.
• Americans say they will spend an average of $714 on Christmas gifts this year -- up sharply from the $638 they estimated in November 2009.

Further, Gallup data also show the economic backdrop for consumer spending is improving:

• During the week ending Nov. 21, 41% of Americans rated current economic perceptions "poor," compared with 48% during the same week in 2009
• Gallup's U.S. unemployment rate, without seasonal adjustment, fell to 9.2% in mid-November
• Gallup's Job Creation Index stands at +12 for the same week, with 30% of employees reporting their companies are hiring and 18% saying they are letting people go -- much better than the +1 of 2009, when 24% of employers were hiring and 23% firing, and consistent with the most recent drop in unemployment claims to 407,000 -- the lowest level since July 2008. Gallop Report

Another Guess at Black Friday Retail Sales National Retail Federation

“As retailers look ahead to the first few weeks

of December, it will be important for them to

keep momentum going with savings

and incentives that holiday shoppers

simply can’t pass up.”

National Retail Federation

Washington, November 28, 2010 – With one of the biggest shopping days of the year under their belts, retailers have reason to smile. According to a National Retail Federation survey conducted over the weekend by BIGresearch, more shoppers visited stores and websites over Black Friday weekend – and spent more – than a year ago.

According to the survey, 212 million shoppers visited stores and websites over Black Friday weekend*, up from 195 million last year. People also spent more, with the average shopper this weekend spending $365.34, up from last year’s $343.31. Total spending reached an estimated $45.0 billion.

“While Black Friday weekend is not always an indicator of holiday season performance, retailers should be encouraged that a focus on value and discretionary gifts has shoppers in the spirit to spend,” said Matthew Shay, NRF President and CEO. “As retailers look ahead to the first few weeks of December, it will be important for them to keep momentum going with savings and incentives that holiday shoppers simply can’t pass up.”

If it seems like Black Friday gets earlier every year, that’s because it is. Many retailers opened their doors earlier than ever, and eager shoppers followed suit. According to the survey, the number of people who began their Black Friday shopping at midnight tripled this year from 3.3 percent last year to 9.5 percent in 2010. In fact, by 4 a.m. nearly one-fourth (24.0%) of Black Friday shoppers were already at the stores. Thanksgiving Day openings have also been a boon to the industry, as the number of people who shop on Thanksgiving – both online and in stores - has doubled over the past five years, from 10.3 million in 2005 to 22.3 million in 2010.


After a holiday season of blue jeans and coffeemakers, shoppers demonstrated that they were in the mood to purchase more discretionary gifts this year. The number of people who purchased jewelry over the weekend rose substantially, from 11.7 percent last year to 14.3 percent this year. Additionally, more people purchased gift cards, toys and books and electronic entertainment than a year ago.

“It’s certainly encouraging to see an increase in traffic and sales from the four-day holiday weekend, however, consumers still have concerns about the economy, jobs, and paying down debt,” said Phil Rist, EVP, BIGresearch. “It was the consumers’ search for deals and bargains that drove the weekend traffic rather than their confidence in the economy.”

While shoppers seemed focused on getting good deals, items of strong value seemed to win out over the absolute lowest prices. According to the survey, both department stores (52.0% this year vs. 49.4% last year) and clothing stores (24.4% vs. 22.9%) saw healthy increases in traffic, while the percentage of people who shopped at discounters declined 7.2 percent, from 43.2 percent last year to 40.3 percent this year. As retailers leverage their websites to offer Black Friday prices to shoppers who don’t want to fight crowds, the percentage of people who shopped online this weekend rose a healthy 15.2 percent, from 28.5 percent last year to 33.6 percent this year – a strong sign heading into Cyber Monday. NRF Report

Black Friday sales little changed even though CNBC did their very best to hype retail activity

CNBC did their very best to hype retail activity on Black Friday. Live interviews with shoppers, video clips of mall-ites carrying bags albeit CNBC personalities were not granted a peek into bags.

CNBC even displayed satellite images of a mall parking lot comparing car counts for a three year period. Of course there is no way to definitively determine if the count resulting from the painstaking process of placing red dots on cars reflected actual shoppers or an increase in "park-and-ride" vehicles.

In true WWE Smackdown fashion, CNBC attempts to whip viewers into a state of frenzy anticipating the best Black Friday in years. As with Smackdown, the promotional fanfare does not live up to the results.

By Dan Hart and Ian Thomson

Nov. 27 (Bloomberg) -- Black Friday sales were little changed, rising 0.3 percent, from last year, as U.S. retailers’ efforts to lure customers by opening early failed, ShopperTrak said.

The early holiday sales and promotions boosted sales and traffic for the first two weeks of this month through Nov. 13 by 6.1 percent and 6.2 percent, respectively, ShopperTrak said in a statement on its Website.

Shoppers nationwide spent $10.69 billion yesterday, Bill Martin, founder of Chicago-based research firm ShopperTrak, said in the statement. Black Friday is the day after Thanksgiving Day in the U.S. and the traditional beginning of holiday season buying.

Hundreds of people lined up at individual stores across the U.S. to take advantage of special deals as they face down a slow economic recovery. Sears Holdings Corp. and Toys “R” Us Inc. started their Black Friday “doorbuster” sales on Thanksgiving Day to attract consumers after two years of dampened shopping enthusiasm since the recession.

Sears, the largest U.S. department-store chain, opened at 7 a.m. with bargains that included a 58-inch Panasonic Corp. high- definition plasma television for $1,044, 55 percent off its list price of $2,299.

Open on Thanksgiving

Toys “R” Us, the world’s biggest toy retailer, opened earlier this year to accommodate customers who said they wanted to shop after Thanksgiving dinner, said Chief Executive Officer Jerry Storch. Employees at the chain’s Times Square store in New York handed out Santa hats to about 1,500 shoppers queued outside before the opening, spokeswoman Jennifer Albano said.

In 2009, Black Friday spending rose 0.5 percent to $10.66 billion, compared with a year earlier, according to ShopperTrak.

Analysts’ estimates for the holiday season’s aggregate sales vary from little changed to increases of as much as 4.5 percent. The Washington-based National Retail Federation forecasts a gain of 2.3 percent to $447.1 billion after an uptick of 0.4 percent last year and a 3.9 percent drop in 2008.

The projections coincide with a rebound in U.S. consumer spending this year as the economy began adding jobs. Consumer spending, which accounts for about 70 percent of the nation’s economy, increased at a 2.8 percent annual rate in the third quarter, according to the Commerce Department. That was the fastest since the final three months of 2006.

Assciated Press notes:

Comparatively, sales on Black Friday 2009 increased 0.5 percent

versus Black Friday 2008, with 10.66 billion dollars spent.

AP Article

November Christmas Spending Estimate Outlook Exceeds 2009 however...

A Relatively High 34% Will Spend "Less"

on Gifts This Year

(probably has something to do with employment and

the no inflation increases in food, medical, tuition, fuel, clothing...)

By Lydia Saad
Gallup
11/15/10

PRINCETON, NJ -- Americans currently predict they will spend $714 on Christmas gifts this year -- well exceeding the $638 they forecast in November a year ago for the 2009 holiday season, but still trailing the pre-recessionary November forecasts recorded over most of the last decade.



The findings are from a Gallup poll conducted Nov. 4-7, 2010, in which respondents were asked to predict the total amount they will spend on Christmas gifts this year. The current forecast is nearly identical to Americans' October prediction of $715.

According to Gallup modeling, if the figure holds at this level through December, that would point to a roughly 2% year-over-year increase in holiday sales. Further, if consumers' spending estimate increases between November and December, as it typically does, actual retail sales could improve by closer to 4%, similar to the long-term average.

A Relatively High 34% Will Spend "Less" on Gifts This Year

Although the majority of Americans, 52%, say they will spend the same on gifts this year as in 2009, roughly a third of Americans, 34%, say they will spend less, compared with 12% saying they will spend more. That 22-percentage-point gap is nearly double the average 13-point difference between these figures over the past 20 years -- providing a note of caution to Americans' dollar spending forecast.

The current gap contrasts with a 39-point gap found in November 2008, amid the turmoil of the global economic collapse. However, in periods of relative economic prosperity, such as from 1995 through 2000, the figures were about even. Link to report with charts

All excited about October 2010 retail sales, thank God for Seasonal Adjustments

Unlike the Census Bureau and every other U.S. Government reporting agency, we consumers do not seasonally adjust our spending. If we can't afford the winter coat, we do not buy it, regardless of weather conditions nor what we did or did not purchase last month or last year.

CNBC and other self-proclaimed financial news venues are giddy about the October 2010 retail sales report beating expectations. The following is a recap of several line items from the Census Bureau report noting the difference between seasonally adjusted figures and not adjusted (a.k.a. what was really spent): Retail Report

• $373.103 billion total seasonally adjusted retail sales
• $363.390 billion total not adjusted retail sales ($9.7 billion that never hit the retailers' cash registers)
• $67.005 billion total seasonally adjusted motor vehicle and parts dealers
• $62.230 billion total not adjusted sales ($4.775 billion that never hit the dealers' accounts or parts stores)
• $30.872 billion total seasonally adjusted non-store retailers
• $29.551 billion total not adjusted sales ($1.321 billion never hitting the register)
• $51.083 billion total seasonally adjusted general merchandise store
• $49.860 billion total not adjusted sales ($1.223 billion that never hit the register)
• $8.647 billion total seasonally adjusted electronics and appliance stores
• $7.512 billion total not adjusted sales ($1.135 billion that never saw an i-pad)
• $24.451 billion total seasonally adjusted building material, garden equip. and supplies dealers
• $23.864 billion total not adjusted sales ($587 million that never hit Home Depot)
• $18.186 billion total seasonally adjusted clothing and clothing accessories
• $17.647 billion total not adjusted sales ($539 million that never hit Macy's and peers)

Granted, several line items were actually seasonally adjusted down from the "not adjusted figure" however on a net basis, $19+ billion never left the consumer's pocket.

Consumer Spending in October is Anemic (Gallup)

Spending averaging $62 per day in October

-- up from September, but down from a year ago

By Dennis Jacobs
10//29/10

PRINCETON, NJ -- Americans' self-reported spending in stores, restaurants, gas stations, and online averaged $62 per day during the first four weeks of October. That figure is up from $59 in September and is about the same as the $63 figure from August. From a broader perspective, spending remains in the 2009-2010 new normal monthly average range of $59 to $72 and is far below the 2008 recessionary spending range of $81 to $114.

Weekly Self-Reported Spending Up From 2010 Lows

Gallup's consumer spending measure over the last two weeks (ending Oct. 17 and Oct. 24) has averaged $67 per day and $65 per day, respectively, slightly higher than the estimate for all of October to date. The increase is likely a result of Halloween shopping, given that in the past, Gallup has seen increases in spending during the second half of October.

The latest weekly figures are also up from late September, which saw some of the lowest spending weeks of 2010. Over the past four weeks, spending has averaged slightly below year-ago levels.

Another Tough Christmas for Retailers

While spending is up slightly in October from September, year-over-year comparisons are not encouraging, with spending remaining in the new normal range established in 2009 and continuing into 2010. In turn, this is consistent with Gallup's October Christmas spending estimate that suggests another anemic holiday season for the nation's retailers.

Continued high underemployment, at 10.0% on a not-seasonally adjusted basis, also suggests another weak Christmas spending season, as Americans who are unemployed or fearing job loss tend to spend less, even around the holidays. Further, the increasing cost of gas and other commodities may limit the ability of many Americans to spend in other areas.

While retailers may be able to encourage consumer buying with aggressive discounting, they will do so at the cost of reducing their margins. At the same time, even as consumers enjoy price discounting, they may experience a reduced selection of goods as retailers try to keep their inventories lean.

There could be better news ahead, perhaps if the Federal Reserve acts next week to promote economic growth and/or if the results of the midterm elections make some consumers feel better. Regardless, until there is an indication of significant change, Gallup's data suggest another anemic holiday sales season ahead. Gallup