Great analysis here from Howard Davidowitz who is one of the leading retail analysts on Wall St.
Howard brilliantly explains why we saw such a bump up in retail despite the continuing deterioration of the economy and consumer. Essentially Howard concludes that 70% of the consumers in this nation are dead as they remain jobless and on food stamps.
However, he explains that the other 30% of the consumers basically drive consumer spending overall, and they began spending once again this year after the capital markets recovered.
Nonetheless, Howard remains extremely bearish on retail and real estate adding that the key driver for retail sales was the huge rally in the markets which we all know is unsustainable.
Make sure you check out the last few minutes of the interview where he explains how the Fed is basically bankrupt if interest rates rise by 1%.
In summary: Howard still sees no economic recovery and remains pessimistic on the consumer moving forward. It's hard to think why anyone could come to a different conclusion when 70% of this nation is either unemployed, broke, or on food stamps.
Howard points to Wal Mart's poor performance versus other retailers as proof that the average consumer is suffering.
He also discusses the rising threat that online retailers like Amazon pose to brick and mortar retail stores. Stores will be forced to shrink and consolidate as online sales continue to soar. Davidowitz then brilliantly describes how this will have a catastrophic effect on the values of commercial real estate.
Great stuff below:
The markets are quiet but the US dollar is once again selling off hard today. It's been a rough few days for bucky:
This is something to take notice of as we head into the new year. Volume is light today so I don't read into it too much. Nonetheless, gold, crude, and silver are all surging on the drop.
The Bottom Line
I want to wish everyone a Happy New Year! Be safe if you decide to go out and play!