Mastercard has a retail data service that releases spending trends of their payment network card customers. Some September data-points released today:
-No category was positive year-over-year
-Apparel down 5.5%. Women’s apparel down 9.1%. Men’s down 2.4%
-Footwear down 1.4%
-Department stores down 7.7%
-Furniture sales down 13.3%
-Electronics and appliances down 13.8%
-Hotels down 4.9%
-E-commerce sales down 8.4%
I have this funny feeling that same-store sales data that is going to be released tomorrow is going to be weak. Just a hunch.
CNN polled over 1000 Americans over the weekend and found that 60% believe a Depression is likely. They defined depression as 25% unemployment rate, widespread bank failures, and millions of American family unable to house and feed their families.
21% said depression is “very likely” and 38% said “somewhat likely”. 29% said “not very likely” and 13% “not likely at all”. Other findings are 84% believe economic conditions are somewhat or very poor and 53% think very poor.
Herman Miller showed off their latest office chair creation to Fortune. It costs $1595 and is the successor to the legendary Aeron (launched in 1994) that generated $1.5 billion in revenue for the company. Selling a $1600 chair in this environment? Good luck with that.
A friend of mine sent me this. There is nothing new under sun. Human nature always sways between greed and fear.
A major economic reversal began in Europe and reached the United States in the fall of 1873. The signal event on this side of the Atlantic was the failure of Jay Cooke and Company, the country’s preeminent investment banking concern. The firm was the principal backer of the Northern Pacific Railroad and had handled most of the government’s wartime loans.
Cooke’s fall touched off a series of events that encompassed the entire nation. The New York Stock Exchange was closed for 10 days. Credit dried up, foreclosures were common and banks failed. Factories closed their doors, costing thousands of workers’ jobs. The volume of destitute people soon overwhelmed the abilities of charities to function. Most of the major railroads failed.
The public tended to blame President Grant and Congress for mishandling the economy. The causes were much broader, however. The postwar period was one of frenetic, unregulated growth with the government playing no role in curbing abuses. More than any other single event, the extreme overbuilding of the nation’s railroad system laid the groundwork of the Panic and the depression that followed. Recovery was not realized until 1878.
In addition to the ruined fortunes of many Americans, there developed from the Panic of 1873 bitter antagonism between workers and the leaders of banking and manufacturing. This tension would erupt into the labor unrest that marked the following decades.
Sound familiar?
Courtesy of our Federal Government, September 2008 was the worst month for equity long/short hedge-funds in history.
Fund September YTD
Maverick -19.5% -21.2%
TCI -15% -26%
Greenlight -12.8% -16.4%
Lone Cypress -14.7% -26.5%
Third Point -11% -18.4
Atticus European -15.8% -43.5%
Atticus Global -2.8% -27.2%
Citadel -15% -18%
Sources: Bloomberg, FT, WSJ
LA Times obtained a letter from the Governor of California to Treasury Secretary Paulson.
California Gov. Arnold Schwarzenegger, alarmed by the ongoing national financial crisis, warned Treasury Secretary Henry M. Paulson on Thursday that the state might need an emergency loan of as much as $7 billion from the federal government within weeks. The warning comes as California is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent.
I think this news is been under-covered by the press and has huge ramifications for the markets. When your largest state economy’s government is on the brink of insolvency, that is a total disaster. At least The Fly can have a sense of humor in this environment:
By the way, I do not want my tax dollars going to the California Fat Cats. I understand the Governator needs $7 billion from the U.S. government, or else face potential default. Keep in mind, the whole country is in a mess because of the assholes who speculated in California. I say, let California burn to the ground. Let them secede from the Union and figure out a way to stop homeless men from getting foreclosed on their 750k dollar homes.
Immediately, I implore you, call up your local Congressman and demand they “say no” to the California fat cats. Us Main Streeters should not have to bear the burden of those ricockulous assholes.