VHeadline commentarist and money market expert Fred Cederholm writes: I've been thinking about expectations. Actually I've been thinking about the end of year holidays, the weather, retailing, the Obama transition, and the bailouts. Normally at this time of the calendar, I am caught up in holiday shopping, social events, and sundry festivities.'The Christmas season of 2008 is finding me (and my Scottish Terrier Mac II) pretty much in a forced hibernation: Thinking about the year that was and the year to be earlier than usual.
- At least I am getting a running start on my last column for 2008 and my first column for 2009!
I am also working on some writings for a special supplement on the economy which will be published in January.
You see while winter did not "officially" begin until Sunday, December 21, we have been bogged down in near record cold, slush, and snow for a full three weeks now! Last Saturday's storm menu of wet slush, followed by freezing rain, followed by powdery snow left us with a three layered mess that has proven highly difficult to deal with and remove. My garage door is fused in a four inch winter mortar of ice and frozen slush. I don't expect to be getting out the PT Cruiser anytime soon.
This is a make or break selling season for many retailers. Roughly 40% of their sales for the entire year occur during the last two months of the calendar. In 2008 they have been hit by a double whammy. Our economy as a whole has been plagued by the dislocation(s) of the unwinding of a plethora of financial crises, job insecurities, and debt burdens. The weather of recent weeks has compounded these problems. It's not that the merchants have NOT been trying to get the public out to the stores and malls to shop and spend.
We have witnessed a tsunami of pre-holiday sales unseen in a generation. These began with enticements of 20, 30, 40, and even 50% off sales which began to escalate this year at Halloween time. The newspaper ad supplements have been enough to incite even me to head out to buy. However like so many others, I decided to wait until the last minute (or rather the last weekend before Christmas) to venture out to "power shop" -- then… Mother Nature came thru with a wave of inclement weather to nix that.
Looks like I will be giving holiday cards with checks enclosed this year. That will be doing little to help the local merchants' pre-holiday sales. I am probably not alone in this shopping deferral.
Preliminary figures suggest retailing is already down 6 to 8% over last year in the pre-holiday sales. These are based upon gross dollars and do not reflect the impact that the 20, 30, 40, 50% or more discounts will have on the bottom lines of the merchants. Assuming the weather improves, I expect a sales boomlet AFTER Christmas and New Years.
Will this be enough to stem the tide for them?
The News since the election in November has seen a coverage of a president-elect's administration unprecedented in our history. We've seen a transparency in their statements on the state of our economy that does not bode well for the storms gathering for 2009, 2010, and beyond. Obama, Biden, and company are treading a tightrope right now.
It is to their advantage NOT to sugarcoat what looms on the horizon --giving them an out that whatever happens was already in progress BEFORE they took the helm.
Yet, too dismal a presentation will scare an already economy weary and dollar shocked public!
Their recent statements bear witness how the costs of "the fix" are escalating from BILLIONS to TRILLIONS. This is on top of the gargantuan costs of bailouts, guarantees, infusions, and loans already made effective and public in the waning months of the Bush administration.
The Federal government is already looking at record deficits as are virtually every state and major city across the nation. Congress itself is actually beginning to question and stall on the largesse and generosity of Uncle $ugar in doling out the remaining $350 BILLION of the pre-approved TARP monies. (That did not stop them from letting their automatic pay raises of $4,600 each from taking effect.)
Fred Cederholm
asklet@rochelle.net
Venezuela is facing the most difficult period of its history with honest reporters crippled by sectarianism on top of rampant corruption within the administration and beyond, aided and abetted by criminal forces in the US and Spanish governments which cannot accept the sovereignty of the Venezuelan people to decide over their own future.
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