Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
VR and Gaming Becomes the Metaverse - 7th Dec 21
How to Read Your Smart Meter - Economy 7, Day and Night Rate Readings SMETS2 EDF - 7th Dec 21
For Profit or for Loss: 4 Tips for Selling ASX Shares - 7th Dec 21
INTEL Bargain Teck Stocks Trading at 15.5% Discount Sale - 7th Dec 21
US Bonds Yield Curve is not currently an inflationist’s friend - 7th Dec 21
Omicron COVID Variant-Possible Strong Stock Market INDU & TRAN Rally - 7th Dec 21
The New Tech That Could Take Tesla To $2 Trillion - 7th Dec 21
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Will Christmas Shopping Revive the U.S. Economy?

Economics / US Economy Nov 19, 2010 - 03:50 AM GMT

By: Danny_Schechter

Economics

Best Financial Markets Analysis ArticleFunny how, back in 1929, we had a black Thursday and then a Black Friday as the market crashed, plunging the country into a depression. Now we have every retailer in every mall in America on their knees praying for a prosperous black Friday the day after Thanksgiving,


If you read this argument before, it’s because I have been making it since 2007, year in and year out.  That’s on account of the reality that our economy is driven more by consumption than production, and most consuming takes place during the holidays.

So once again we are being asked to join a global ritual even if we are broke.

Get in gear people, and get your wallets back to the mall: do your duty for Santa and Wall Street. It will be difficult for the economic recovery to make much headway without a pick-up in consumer spending as it accounts for two-thirds of the economy.

Here’s the scenario as this Thanksgiving rolls around. Once again the economy is in deep doo-doo with unemployment high, millions on food stamps, and millions more facing foreclosures. The big banks seem to have “recovered;” most Americans haven’t.

Nevertheless, Christmas is for the shopping, a time to feign merriment through gift gifting, to spend what you don’t have. And the process will be “stimulated” and we will be guilted and mesemerized in our own homes by a non-stop electronic sellathon as TV advertising goes into hyperspeed.

Local TV channels will soon start hyping the “action” at the local malls announcing plans to “go live” without mentioning that they are doing it to attract more advertising, or as part of the deal they already have with sponsors to add news time to ad time.

If the past is any guide, we will be told how packed the parking lots are—and they will, thanks to the hype, probably be packed. Part of the reason is the deep discounting and special sales –what are called “lost leaders” to get customers into the store even if you have to bribe them to come. All night sales are the latest marketing shtick.

What happened last year was that most consumers only bought the sales items and left most of the other goods untouched. No wonder, a number of malls are now in foreclosure.

At the same time, all we hear publically from business is optimism, including the use of the term “surge” that has been used so deceptively in Iraq and Afghanistan.

Example news boilerplate: “Some e-retailers expect a strong surge in Thanksgiving weekend sales”
“Having already unleashed a flurry of deals, discounts and other incentives, web retailers are looking for strong sales the day after Thanksgiving, one of the busiest online shopping days of the year. And unlike last year, when the tough economy reined in spending, many retailers believe this Friday after Thanksgiving, often referred to as Black Friday, will deliver significantly higher web sales.”

Higher until the credit card bills come and the returns start when folks realize they can’t afford what they bought. Almost every year, after Christmas, the credit card companies report sales described at the time as “historic”  became  in the end “disappointing” or didn’t “didn’t live up to expectations.”
   
But consumption requires people with money to spend or with credit cards that are not tapped out. This is no longer a sure thing especially as unemployment benefits run out and discretionary income freezes.

Quiet as its kept, banks are in many cases as tapped out as their customers. And at long last, some are being probed for criminal conduct. Reuters reports: “The Federal Deposit Insurance Corp (FDIC) is conducting about 50 criminal investigations at U.S. banks that have failed since the start of the financial crisis, the Wall Street Journal said.

The FDIC, which is responsible for dealing with bank failures, is probing former executives, directors and employees at failed U.S. banks and is taking efforts to punish alleged recklessness, fraud and other criminal behavior, the Journal said.”

This is just the tip of the iceberg. Paul Farrell offers 15 reasons on Marketwatch about how the people behind the economic collapse continue to get away with it.

Here are 5 of them.

“1. Gross denial of any moral damage caused by their rampant greed
2. Narcissistic egomaniacs with secret 'God complexes'
Today, all of Wall Street is dual diagnosed: They're morally blind money addicts who believe they're "God's chosen." AA would say: They haven't "bottomed," won't recover from their disease till a disaster hits, with another market meltdown and the "Great Depression 2." Then maybe they'll "quit playing God."

3. Paranoid obsessives about secrecy, guilt and non-disclosure
4. Power-hungry need to control government using Trojan Horses
5. Borderline personalities who regularly ignore conflicts of interest”
He goes on with an indictment that clearly suggests nothing has really changed when it comes to the folks who are making money and sucking in bonuses when others aren’t.

(This is the reason I an others have launched a “Jailout campaign” with a national petition calling for more prosecutions and incarcerations of wrong doers. See newsdissector.com/blog.)

So we go back to square one: A distorted and troubled economy. A population addicted to buying things. A manipulated media. And, many signs of deeper trouble ahead as wars are escalated and extended while the Congress is paralyzed along parochial and partisan lines.

The resurgent Republicans will not be ringing jingle bells but playing Scrooge this year. Many consumers will not be able to shop until they drop this year because they have already dropped to new lows.

Unfortunately, a feast followed by days at the mall will not change any of this, and remember, if you will, the price our first Americans paid so that we could stuff ourselves on the road to national obesity.

Happy Thanksgiving.

News Dissector Danny Schechters film and book Disinformation. For more information, Http://www.plunderhecrimeofourtime.com.

    News Dissector Danny Schechter has made a film and written a book on the “Crime Of Our Time.” (News Dissector.com/plunder.) Comments to dissector@mediachannel.org

    © 2010 Copyright Danny Schechter - All Rights Reserved

    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in