Black Friday Bust?
The media is heavily pumping "Black Friday" - the day after Thanksgiving - this year as it typically does. This year, however, the screaming grows even louder that shoppers are spending, supposedly an indication that the U.S. economy is stronger than advertised. I've that sales are up anywhere from 6% to 16%+ over last year.
This is nonsense.
You can read a brief explanation from Barry Ritholz. There you'll read an explanation of why the so-called "results" reported are not based on reliable numbers.
In addition, consider these two rather obvious factors (when you bother to think about it):
First, more stores are offering "layaway" plans. This is an old form of credit that pre-dates credit cards. Basically, you don't have to pay for your purchase now. The terms vary based upon item and length of time you have to pay, but you get a long time to pay for your purchase. Traditionally, the store would "lay away" our purchase and you would pick it up once you paid. I don't know if they do that now, or simply let you take the stuff. But they do book the sale right away. So it shows as a sale even though they don't collect any money.
Second, many stores extended shopping hours. Some were even open Thursday (Thanksgiving) night. So they are counting as "Black Friday" sales items that were sold on Thursday.
And so the propaganda continues that everything is either OK or just starting to "turn around." If you think that, please do yourself a favor and find some evidence. This Black Friday reporting isn't reliable evidence. In fact, it's absolutely (and I suspect purposely) misleading.
One last thought:
I read some reports of rather steep discounts on consumer electronics, e.g., some flat-screen TVs. In one case the person interviewed camped outside the store for 32 hours before the doors opened. She said it was worth it because she wanted to "save money."
The purchase of a TV isn't anything people typically need. They just want the latest model. So they spend for it because. It's an indulgence. Maybe they spend money they don't really have. How is that good for the economy? People spend in an undisciplined manner, perhaps even getting deeper in debt, doesn't translate as positive news - at least in my view.
Even more important, the woman missed Thanksgiving. She gave up spending time with her family to buy a TV. How is that good? Of course, maybe she didn't have a family - I really don't know. What I do suspect, though, is that some - maybe many - people shortened their time with their families to run to the stores and buy items they probably don't really need, and which they may not have even really been in a position to afford.
All of this strikes me as bad news.
This is nonsense.
You can read a brief explanation from Barry Ritholz. There you'll read an explanation of why the so-called "results" reported are not based on reliable numbers.
In addition, consider these two rather obvious factors (when you bother to think about it):
First, more stores are offering "layaway" plans. This is an old form of credit that pre-dates credit cards. Basically, you don't have to pay for your purchase now. The terms vary based upon item and length of time you have to pay, but you get a long time to pay for your purchase. Traditionally, the store would "lay away" our purchase and you would pick it up once you paid. I don't know if they do that now, or simply let you take the stuff. But they do book the sale right away. So it shows as a sale even though they don't collect any money.
Second, many stores extended shopping hours. Some were even open Thursday (Thanksgiving) night. So they are counting as "Black Friday" sales items that were sold on Thursday.
And so the propaganda continues that everything is either OK or just starting to "turn around." If you think that, please do yourself a favor and find some evidence. This Black Friday reporting isn't reliable evidence. In fact, it's absolutely (and I suspect purposely) misleading.
One last thought:
I read some reports of rather steep discounts on consumer electronics, e.g., some flat-screen TVs. In one case the person interviewed camped outside the store for 32 hours before the doors opened. She said it was worth it because she wanted to "save money."
The purchase of a TV isn't anything people typically need. They just want the latest model. So they spend for it because. It's an indulgence. Maybe they spend money they don't really have. How is that good for the economy? People spend in an undisciplined manner, perhaps even getting deeper in debt, doesn't translate as positive news - at least in my view.
Even more important, the woman missed Thanksgiving. She gave up spending time with her family to buy a TV. How is that good? Of course, maybe she didn't have a family - I really don't know. What I do suspect, though, is that some - maybe many - people shortened their time with their families to run to the stores and buy items they probably don't really need, and which they may not have even really been in a position to afford.
All of this strikes me as bad news.
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