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[energyi] 14/9/2007 03:00

Britons now owe a collective £3,345bn – more than the country's gross domestic product. This week, the Citizens Advice Bureau disclosed that debt cases have jumped by 20 per cent in the past year to a record high. Amid the difficulties, the British Retail Consortium warned that 2007 could be the hardest year for the £250bn-a-year retailing industry since 2000. According to a BRC report this month, retail sales grew by only 1.8 per cent in August as people cut back on buying furniture and homewares. Shoppers were becoming more cautious about committing to big purchases and heavy discounting was often needed to persuade them to buy, added the BRC.

Meanwhile, demand for consumer services, such as travel, leisure and personal care, fell this summer, said the Confederation of British Industry. "A combination of higher household borrowing costs and poor weather has put a dampener on consumers' spending over the last three months and on travel and leisure in particular," said the CBI's chief economist, Ian McCafferty. Some retailers will do well, regardless of any slowdown. John Lewis, for example, is expected to report strong figures to the City this morning. But many leading names have been experiencing difficulty. On Tuesday, JJB Sports forecast that its sales would be down by almost a third, which sent its share value plummeting.

City analysts looked to slash their predictions for French Connection after tough trading conditions in the summer when, according to its chairman and founder, Stephen Marks, "it went a bit pear-shaped". Next is quadrupling its marketing budget and planning its first TV advertising campaign to ensure customers keep visiting its shops. Yesterday, the nation's biggest household goods group, Home Retail, said profits at its Homebase DIY chain plunged because of poor weather this summer and warned about future trading. Other retailers are experiencing a squeeze because of the economic slowdown, the poor weather, rising costs and the popularity of online shopping, which is forecast to surge by 30 per cent to £44bn this year.

/more:

[energyi] 12/8/2007 07:33

REMOVING THE STIMULUS of rising MEW-ing



As you notice, through the 90s MEW stayed flat. Then we see a sudden quarterly jump in 2001. The tipping point started in the late 90s and early part of the decade because many people started jumping ship from technology investments when most seasoned investors realized that annualized gains of 35 to 40 percent were not going to last. They did what any smart gambler would do, they took their winnings off the table. But here come the stragglers, Joe and Susie public, and go tech crazy. No need to dive into that $7 trillion debacle, but suffice it to say that bubbles do pop. As you will notice from the chart, MEW jumped at a whopping 2 to 1 ratio over the following years. Keep in mind that the bull argument was that money that was extracted from the home was being used to pay off debt and not splurge on consumption. Let take a look at some data from the Fed

[energyi] 15/7/2007 22:47

===quote name='Realistbear' date='Jul 15 2007, 08:10 AM' post='698010']



In a stark sign of how deeply five interest rate rises have impacted on household budgets, Asda estimates that the disposable income of the average "Asda Family" in the autumn will be just £80 a month, compared to £146 in April.
===quote===

This is shocking!
It might be time to short those retailers!

[energyi] 16/4/2007 15:14

U.S. Retail Sales Climb 0.7%
By Jeff Bater and John McAuley
Word Count: 946
U.S. retail sales climbed in March above expectations and demand for the prior month was revised much higher, signaling consumer spending and the economy aren't as weak as believed.

Meanwhile, U.S. business inventories increased slightly more than expected during February even though dealers' supplies of unsold cars and parts shrank. A separate report showed manufacturing activity in the New York region ticked higher in April.

Retail sales increased 0.7% last month, after rising 0.5% in February, the Commerce Department said Monday. Originally, February sales were seen up 0.1%.

The 0.7% increase in overall retail sales during March was a surprise

[energyi] 25/3/2007 05:07

Shoppertrak reported a third week straight of bombed out and declining US retail sales. First in the week ending March 3, retail sales dropped a whopping 10.6%, largely explained away by bad weather, except March 10th wasn't much better at down 4.5%. Now perhaps it's the dog ate the homework?

CHICAGO - March 20, 2007 - ShopperTrak RCT Corporation's National Retail Sales Estimate™ (NRSE) today reported that retail sales for the week ending March 17 declined by 7.4 percent from the same period in 2006. This was the third consecutive week that retail performance has been weak compared to the previous year, with shopping activity adversely affected by tight budgets and gas prices that are dramatically higher than last spring's.

@:

[energyi] 15/3/2007 04:32

(from Russ Winter):

"In an earlier post I mentioned that 4Q, 2006, mortgage equity extraction was nearly zip. The following chart illustrates the round trip this source of funds has taken. Repeated from yesterday are consumer demand deposit balances. If there is little money in the bank, nothing being extracted from home equity, large scale job layoffs in the real estate/mortgage/construction sector, and higher gasoline prices to pay, just how does Joe Ultra Light Sixpack maintain his spending habits? Compare the next two charts, any correlation?"


.
.......

...more:

[energyi] 12/1/2007 07:27

"As the chart above illustrates, the retailing sector has already been underperforming the S&P 500 for several years. This well-established downtrend probably reflects the pressures that many retailers endure: cut-throat competition, declining profit margins and cash-strapped consumers. If even the strongest of the nation's retailers are straining to boost profitability, what becomes of the weakest?

While a recession may signify little more than an inventory adjustment and a 30% stock correction for the Wal-Marts of the world, it represents a death knell for some specialty retailers counting on a critical mass of consumers continuing to overspend on very discretionary items.

Specialty retailers face a number of obstacles. First, lots of competition. There's a glut of specialty retailers. Second, fashions, fads and general consumer trends can change very quickly. If a retailer fails to anticipate one fashion trend, or allows the competition to poach customers with a slightly more appealing product, it could mean lights out in a hurry.

How did specialty retailing reach this point of saturation? The top reason is the incredibly easy credit conditions of the past generation. Consumers have been given every opportunity to overspend. At the same time, the retailers themselves, have availed themselves of easy credit. They secured low-cost bank loans and other forms of E-Z financing that enabled them to pursue overly optimistic strategies or expansion plans.
. .
Now, the E-Z credit tide should begin to reverse, or at least stagnate, favoring the retailers with the strongest balance sheets, best management teams, and most resilient product lines.

The housing boom that ended last year has been fueling much of the consumer spending of the last few years. But what happens now that the boom is over? Consumer spending that relies on ever-rising asset prices, like homes, is simply not sustainable over the long run. Since the housing boom promoted a "one-off spending boost," the profits of retailers that benefited the most from this boost should be viewed as artificially inflated.

The retailing business is about to become much more difficult, especially for sick pigeons"


...more:

[energyi] 05/1/2007 03:18

NET WORTH DISTRIBUTION matters- although some, like GaveKal, ignore this.
==================

Russ Winter blows apart the statistics underlying GaveKal's bullish arguments.

On StreetIQ discussion:

= =
Gave Kal's argument is that US consumers have a aggregate NetWorth of $54 Trillion- enough to keep spending.

Winter says that $54 Trillion is very unequally distributed:

(Assets of $67.1 tr. - $13.0 tr. Debt = $54.1 trillion NetWorth)
The Top 1% owns : 34.4%
Top 10% owns..... : 81.3%
Next 10% owns.... : 13.4%
Bottom 80% owns : 15.3%

It is the top.1% and the top.10% that hold most of the $40 Trilllion in financial assets.
The bottom 80% holds: $7 Trillion in property and only $1 Trillion in financial assets,
and the bottom 80% holds a high degree of mortgage debt against those real estate assets.

Here's the important part: the bottom 80% accounts for 60-70% of consumption.

THEY ARE going to be squeezed, and squeezed badly by a fall in real estate,
and their consumption is bound to decline dramatically.

Winter's article :
EXCERPT:
"The Bottom 80% owed 49.6% of US household debt in 2004. That group owes $6.45 trillion in debt versus $7.05 trillion of remaining and exaggerated housing equity. But a 10% drop in housing values would knock $1.35 trillion off of housing equity or 16% off of Bottom 80's $8.27 trillion net worth. There is considerable evidence that has already happened. Of course within the thin net worth, bottom 80% group, is a significant body of indebted Americans with no equity or net worth at all. In fact in 2004, 29.6% of US households (true Brazil Americans) had less than $10,000. The Bottom 40% owe about $1.35 trillion in debt."
= =

From "Too Many Billionaires":

[energyi] 05/1/2007 03:16

Let's see if JCP slides thru key support at about $76.

Norstorm has stayed strong, benefitting from its upscale customers

[energyi] 23/12/2006 01:40

Big 6 in '06: NardelliFri. Dec. 22 2006 |

Maria Bartiromo discusses what's dragging on Home Depot and the issue of executive compensation, with Bob Nardelli, Home Depot CEO

@:

[energyi] 20/12/2006 22:58

SPENDING MAY STAY STRONG - if MEW-ing stays strong

Which will break first??
====

[b]November lending highest ever, reports CML[/b]


20 December 2006

Gross lending hit an all time record of £33.1 billion in November according to the latest data from the Council of Mortgage Lenders. Lending was 9% higher than the October figure of £30.5 billion, and 19% higher than the £27.7 billion of lending in November last year. It was 0.2% higher than the previous record set in August of £33 billion.

The strength of lending has been fuelled by the number of households growing more quickly than the supply of available housing. This has pushed up annual house price growth to nearly 10% in the final quarter of this year, compared to between 3% and 5% at the beginning of the year. Strong growth in the London housing market coupled with robust buy-to-let demand have also contributed to November's record lending figure.

Commenting on today's data, CML Director General Michael Coogan said:
"The housing market is undoubtedly in robust shape as we move towards the New Year. Not only is today's lending figure the highest ever, our recently published forecasts suggests lending will beat our previous predictions for the coming two years.

"Looking ahead, mortgage lending looks set to remain seasonally strong over the winter months, reflecting a continuing high level of transactions and house price growth. As for 2007 as a whole, we expect to see gross lending total around £360 billion - another record breaking year."

[energyi] 20/12/2006 10:37

(According to Jonpo on GEI):

HMV profits warning
woolies profits warning

Game group? techniclly they just broke out to the upside I doubt they will have enogh Wii's though and no ps3 yet doesn't bode well
M+S ?p/e 20 richly valued IMHO

Topps tiles I did some textual analysis they used the word challenging at least 3/4 times.

this sector look like a gold en short op IMHO

@:

[energyi] 27/11/2006 16:54

[b]U.S. Stocks Fall on Dollar Slide, Oil's Gain; Wal-Mart Declines[/b]

By Michael Tsang and Nick Baker

Nov. 27 (Bloomberg) -- U.S. stocks slipped after a decline in the dollar for a fifth day underscored concern that growth in the world's largest economy is faltering.

Wal-Mart Stores Inc., the biggest retailer, slid after saying monthly sales fell for the first time in 10 years. Nokia Oyj, the biggest mobile-phone maker, retreated as a lower U.S. currency reduced the value of its dollar-denominated sales.

``The weakening dollar can show a potential lack of confidence among foreign investors in the U.S. economy,'' said Chuck Carlson, who oversees $110 million at Horizon Investment Services in Hammond, Indiana. Regarding Wal-Mart, Carlson said: ``If you're a big bellwether having some problems, that causes people to reconsider how strong the consumer is.''

An advance in oil prices also deepened concern higher energy costs will leave U.S. consumers with less to spend as the holiday shopping season gets under way.

The Standard & Poor's 500 Index fell 9.34, or 0.7 percent, to 1391.61 at 10:59 a.m. in New York. The Dow Jones Industrial Average declined 95.17, or 0.8 percent, to 12,185. The Nasdaq Composite Index lost 29.12, or 1.2 percent, to 2431.14.

The U.S. Dollar Index, which gauges the dollar's value against a currency basket including the euro, yen, Swiss franc, British pound, Canadian dollar and Swedish krona, declined to 83.25, the lowest since March 2005. The euro also advanced to the highest since March 2005 against the U.S. currency.

Wal-Mart slipped 86 cents, or 1.8 percent, to $47.04 for the biggest decline in the Dow average. The company on Nov. 25 said November sales at U.S. stores open at least a year fell 0.1 percent, lower than the company's forecast of unchanged sales. The merchant marked down toys, electronics, appliances and groceries, while cutting prices on generic drugs.

`Long Shadow'

The slowdown at Wal-Mart may ``cast a long shadow over earnings,'' Merrill Lynch & Co. wrote in a note to clients.

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