Tuesday, April 14, 2009

A look at the US retail sales

A "shocking" drop in US retail sales was announced this morning and is starting to inspire doubt that perhaps the recession/depression may not quite be over yet. Looking through the numbers, there aren't very many big surprises with auto and electronics being hurt the most on a percentage basis, and general drops across the board. One surprise is that comparing Mar 09 to Mar 08, we're looking at slight increases in health/personal care and essentially flat numbers in the "hobby"section - depression inspired austerity hasn't fully hit in those sectors but we would expect them to eventually join the rest of the pack. Of course, these are very small numbers of the overall total so the effect is minimal.

Another interesting note was the market reaction to the news release; stock futures fell while Treasuries slightly rose, almost on news release indicating that much of this hasn't been priced into the market yet. This could serve as an indicator of what future negative "unexpected" shocks could do to the market, despite the proclamations on CNBC that most/all of this has already been priced in and we only have room to go up at this point. This release was far from shocking as most smart money was not buying the consensus 0.3% increase in retail sales. 

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Anonymous said...

With the Treasury backstopping banks, the Fed printing, Congress spending trillions, sure we're going to see some forward momentum.

It is shocking that Wall St participants aren't walking around stunned and enormously concerned about our financial future.

These enormous market interventions as we suspect will not be without consequence.

Should the economy continue to deteriorate, what then? Do we have the ability to borrow ever more trillions to sustain a clearly broken financial system.

It has been proven that we cannot earn our way out of the hole. It is the height of stupidity to think that we can borrow our way out without massive reorganization.

Anonymous said...

huge miss (even way below the -0.2 low est) and mkt not down much. either mostly priced in or people still way underinvested.

LongOverdhue said...

If I'm not mistaken, I think I remember last month you guys hinting that when those "good news" came out that in April we'll be getting "shocking" dops. Let me know if i'm wrong. A lot of my thoughts have been reaffirmed by your blog. I find your website very helpful.

Cornelius said...

LongOverdue, you're right.

Annon @ 10:33 - I wouldn't characterize this as a "huge" miss by any means. For a consensus number, there wasn't a lot of confidence out there.

Anonymous said...


This is very dangerous for REITs indeed, because this reaffirms thinking that a major shift/sea change has happened in retail spending.

The data confirms this, we are not returning to previous levels. This will be decimating for retailers that are barely hanging on currently. Trust me.

Disclosure: Long srs and willing to buy it blind in the $30s.

Anonymous said...

GoldmanSachs666 is a dis-info site put up by Goldman, to tell us all the obvious facts, that we already know, thereby distracting us from the real conspiracy of GS crashing the market in 08!
Here is how I see it.
1. GS shorts the ABX(subprime) in 07. Makes a Billion or 2. Sends a ripple in the markets.
2. GS men at the Exchanges raise margin requirements forcing massive liquidation in JULy 07, not to mention cornering the oil market.
3. GS men at the SEC raise margin in 08, lower regulation increasingly over entire tenure.
4. There man Hank Paulson took Lehman in the other room, executation style. That really got things rolling (downhill)
5. Then, GS influence at Mood'yS(warren buffet) slashed AIG rating forcing them to find Billlions overnigth,
6.Then Hank Pauslon shows up with his $700 Billion ransome note. After stock markets crash around the world for 10 days, congress gives the big five banks their money.
7. Jim Cramer, former partner of GS, after watching the market crash for 10 days, tells America to sell everything. If we see a rally this year, you know Cramer is in on it
8. Rubin was a trojan horse on Citi's Board, encouraging them to get long and heavy in realestate.
9. AIG and Citi were made fall guys from the beginning, "to big to fail" was the plot
10. It's possible that GS even inflitrated Freddie and Fannie. It's obvious IndyMAc was a front to push liars loans.