Saturday, December 27, 2008

Bah! Humbug!

I hope everyone had a wonderful holiday! Just a quick note today.

It appears the holiday retail season was a complete bust(what a surprise). Some of the early numbers are starting to come out:


Quick Take:

It appears that big ticket items were practically ignored this year as the consumer continued to pull back. This shouldn't be a surprise given the credit situation in this country.

Speaking of credit, I am starting to ask myself something: Is there such a thing as "credit" in this country right now? I am starting to wonder! Ask any automaker their thoughts on this and they will respond with a resounding NO!

It appears we have just ended our 25 year spending binge folks.

The numbers tell you that our country now finally realizes its time to pay the piper. Expect the consumer to concentrate on paying off debt and hoarding cash in 2009 versus spending it. This is a frightening scenario considering that 70% of our economy is consumer driven.

This will do nothing but accelerate the massive deflation that we are now witnessing.

Isn't it amazing how quickly things have changed in a span of less than a year?

Everyone feared inflation and another lost decade like the 70's when oil spiked up to $147 earlier this year.

Today, we sit here with oil under $40 a barrel as the Fed attempts to prevent a lost decade from a deflationary debt spiral similiar to Japan in the 1990's by flooding the system with credit.

Hello Washington! Its not going to work! The consumer can no longer afford to borrow anymore! We have enough debt for now! Thanks anyway!

The numbers say it all folks, and the early signs as seen above tell you that deflation is clearly defeating the Fed's attempt to re inflate.

The sad conclusion that I am slowly coming to is that either scenario(inflation/deflation) is going to result in a lost decade or more for our countries economy.

Deflation will rule in 2009 in my opinion. However, down the road, inflation will rear its ugly head which will then trigger another downturn in the economy.

More on that later.

10 comments:

Growler said...

Hey Jeff,

Nice to hear from you.

Best,

G

Avl Guy said...

Happy Holidays from the land where we go from bone-rattling zero temps to cars crashing on ice, to blowing fog (only Chicago could have windy fog with extra thick chunks blowing within the general fog) to thunderstorms, to 60 degrees, to flooding...all in 48-60 hours!
Only ones with more unpredictable work environments than Chicago meteorologists would be Ben & Hank.

Hey Jeff, ur next blog going to point out that as soon as any part of the global economy acts like its recovering in 2010, oil futures are going to spike & snuff it out DOA?

Jeff said...

Growler

Thanks

Its great to be back.

Great to hear from you as well. I hope you had a great holiday.
j

Jeff said...

Avl

Happy holidays to you as well!

Yup

I will probably stay here on this blog and discuss it.

Its strange. "The Housing Time Bomb" has already pretty much happened so I am torn as to what to do next.

Should I just stay here since everyone is familiar with it or start a new blog on the markets going forward?

Any feedback would be appreciated. The traffic keeps steadily growing here and I get linked to more sites each week.

However, I kinda feel like the title of the blog is outdated now that housing is a disaster.

Perhaps I need to start another financial blog.

Oh and to answer your question Avl, yes, we will have the ultimate "headfake" recovery before once again crashing.

My inflation concern was very low until I did some research. Inflation is still very low on the radar for now, but its going to be a problem due to several factors down the line.

John Maynes said...

Only start a new blog if you can link from this one to the new one. I think it's not possible with the Google guys though. Your blog is a trademark by now. Giving it up would be really stupid. I can't believe you are even thinking about it.

Jeff said...

John

Thanks for the feedback.

I will be staying right here. Google has been very good to me.

If you search the name of the blog, Google has it at the top of their search engine.

Forbes has also been starting to hightlight my posts.

I don't think I am going anywhere!

John Maynes said...

You could sell this blog!!! ;-)

ART said...

No reason to move or to rename, TimeBomb will do fine, catchy enough.

Happy Holidays Everyone!

Joey said...

Jeff,

Congrats on gaining more traffic and recognition.

Not sure if you've had a chance to see this but I finally took the time to watch it in its full entirety today (after hearing good reviews).

www.chrismartenson.com

p.s. It's too much to have to punch in my google name everytime I post. So, let it known, my real name is Joey (LOL).

Jeff said...

Hi Joey

Thanks!

I have off tomorrow so I will check it out. Thanks for passing it along.

I have heard Chris is good.

J