reply to post by KaginD
Hmm ... hmm hmm hmm... well .. let me put it this way:
Not all about a fat man in a red suit bringing joy to all the little kid in the World.. Santa also keeps most Americans employed! No, no .. not
elves. More like middle class people working, managing, producing for, stocking, shipping in stores that aim all year for Christmas.
When I was a wee lil lad Christmas began after Thanks Giving.. we all had our food, went to bed, woke up and went shopping. We don't do that any
more.. more because I hate people in stores, but also because it's not that 'kick off day' any more. I now see Christmas trees pop up in July..
and Eventually I have no doubt we will end Christmas in January to begin it again in April! Anyways. Sure, 50k people might pack into a Wallmart for
$20 dvd players that will break in 6 months, but every year the amount of money per person being spent has decreased as our dollar fell. Not only
that, but spending growth compared to spender growth (growth of population able to spend) has been negative for several years..
Now.. we have this "Crisis" "Recesion" "Credit Squeeze" but I think George Bush said it best when he said "Uhh ..uh .. the bank's just aren't
Credit lines are RETRACTING .. meaning that Mr. Joe Smith who has a 10k VISA with 6k in debt on it is counting on that 4k to buy all lil kiddies
useless plastic crap in December. But the bank cuts Mr. Joe Smith's credit line from 10k to 7k.. Now his card is quite nearly maxed out, kiddies get
no plastic crap and Joe needs to use his health insurance to get Anti-Depressants (now covered by health insurance thanks to the bail out?) because he
will continuously default on his card because of floating due dates.
All those poor(er) "middle class" people who pretend to live the life they really ought not have, and take out new Sears, Macy's and Walmart cards
every holiday won't be getting that new piece of plastic to buy useless crap with because not only is credit being retracted, it is not being
extended, renewed, or given out in any way.
Since most American's have a negative savings, have more debt than yearly income, and cannot afford a 4k shopping trip to buy this useless crap ..
the Economy is in for well .. what could be compared to a nuclear bomb being packed into the NYSE.
ANY ONE NOTICE BERNAKE PLEADING CONGRESS TO GET A STIMULUS PACKAGE OUT TO THE PEOPLE? ... No purchasing power. No economy.
Thing is, even if it was approved, and we where all sent checks for another $600 .. it wouldn't get to our mail boxes until February.
This is what will happen, and I believe the guy may not be to far off:
December will come.. stores will report November Sales results form Same Store Sales. It will be low. Lower then last year, lower then expected..
Another report will show that even while in some instances sales increased, profit did not because shoppers sought bargins, not quality items at
The markets will get jittery .. more volatility.. more big losses.
Christmas comes and goes, the December Same Store Sales report comes out.. Christmas was an utter failure.. many stores that rely on Christmas as 50%+
of their income will declare massive losses, stocks will fold as the largest retailers in the country take a massive hit.. Some Feds expect 30%+ of
all major retail stores to close by next Feb. Stock market will take a massive tumble..
America's GDP puts a MASSIVE reliance on Same Store Sales.. (stores open for business at least one year) .. if Christmas fails and we don't spend
our selves red like usual.. our GDP will plummet as well, our Treasuries will look even more shakier and foreign debt purchases will drop (again)
Unemployment will likewise be rising increasingly fast for several reason, two of which are:
Deflation.. as the currency deflates (prices of goods come down, like oil for instance) causes prices of goods across the market to come down ..
currency rises against other currencies making imports cheaper. Result? Companies that produce and sell at a loss will lay off workers to balance
This creates a two fold problem, rising unemployment equals less buying power and lower prices means lower revenue.
Drop in Buying Power: As the credit freeze strikes the consumer and buying power drops, per above, unemployment rises.
As unemployment rises, more people will default on home that have Loan To Value ratios of under 20% .. meaning a weak Christmas could put the housing
market by next June into complete tailspin, causing prices to collapse once more and negative equity to increase at an alarming rate..
Could this all bring the DOW and S&P down that low?
That depends on the severity of the problem..
Which we have no way of knowing until January...
Personally I see dark times ahead, how dark I do not know.
Ironic.. a season of joy, family, food, closeness and celebration.. a season of sacrifice and love .. decides the fate of our economy.
I guess this is God's ironic way of chastising us for bastardizing it.
[edit on 10/20/2008 by Rockpuck]