from Hit & Run http://reason.com/blog/2013/11/04/a-barton-hinkle-on-virginia
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GeTTiNG BaCK To ReaMiNG…
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Cramer On Blackberry: Buy At $12, “It’s A Coiled Spring”
Cramer On Blackberry: Buy At $12, "It's A Coiled Spring"
Holiday Spending “Hopes” Crumble As Income Gains Stagnate
But this year was supposed to be different… Early-year prospects for a revival in consumer spending quickly faded in the wake of the lagged impact of the $148 billion tax hike that began the year. As Bloomberg’s Joe Brusuelas notes in the following brief interview, combined with a slower pace of hiring and sluggish wage growth, the result will probably be another in a string of disappointing holiday shopping seasons. It is increasingly doubtful that consumers have the wherewithal to meet the ambitious National Retail Federation forecast for a 3.9% increase in holiday spending to $602.1 billion. Brusuelas believes a 2 to 2.5% increases appears closer to the mark given the economic and policy challenges in place this year.
Via Bloomberg Briefs,
First, starting Nov. 1 one-sixth, or about 48 million, of individuals receiving food stamps will see a net loss of almost $16 billion in transfer payments due to cuts in the Supplemental Nutrition Assistance Program (SNAP).
Those in the lower two quintile of income earners, which receive the bulk of U.S. SNAP payments, will probably transfer outlays on discretionary items like electronics and apparel to inelastic non-discretionary categories such food and utilities. Accordingly, large retail operations such as Krogers, Target and Wal-Mart have reduced their holiday shopping estimates. These reductions, in part, are being attributed to the reduction in SNAP payments, the impact of the government shutdown and overall tepid job and income growth, according to the retailers.
Second, recent fundamental data on manufacturing activity, durable goods orders and hiring slowed noticeably, even before the government shutdown, during the first three weeks of this quarter. With hiring during the past three months barely sufficient to meet demographic needs, and inflation-adjusted personal disposable income up a scant 0.9 percent on a year-ago basis, it is unsurprising that both topline retail sales and sales excluding autos, building materials and gasoline, which feeds into the calculation of GDP, have slowed since June of this year, reflecting a deceleration in overall economic activity.
Third, the inventory buildup among retailers is also somewhat troubling given the macroeconomic slowdown and probable fiscal restraint due to policy shifts and standoffs that have characterized the second half of the year. Retailers have increased their inventories by about 6 percent compared to year-ago levels, in contrast with a 5 percent decline in 2012 versus 2011 levels.
Given the well-recognized problems with the JC Penney inventory overhang from earlier in the year, retailers such as the Gap have already begun aggressive discounting. Many have annoucned plans to open stores on Thanksgiving in order to add another shopping day to the season. While that may help bolster sales, the severe discounting will compress margins and add to bottom line woes in the quarter.
Perhaps more troubling is the likelihood that the large inventory build will spill over into the first quarter next year. There is also likely to be a repeat performance of “fiscal follies” in Washington, creating an even greater drag on overall economic growth.
While firms that employ state-of-the-art inventory optimization, such as Wal-Mart, began pulling back on orders in mid-September to mitigate the slowdown in consumer demand, most firms in the supply chain do not have that ability. Carol Lapidus, the National Consumer Products Industry Leader at McGladrey (see the clip above) noted that middle market companies that sell into retail for 2014 are getting smaller. Given where the U.S. is in the business cycle, the opposite should be occurring, which should provide a sober note heading into what will probably be another difficult holiday shopping season.
Finally, an unusual confluence of calendar quirks will result in a net decline of five selling days compared to 2012 in between Thanksgiving and Christmas. In addition, with Hanukkah starting on Nov. 28, a portion of traditional holiday spending will probably be pulled forward into late November and early December, creating a scenario where retailers may be tempted into even greater discounting.
via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/RBzFKp5igjA/story01.htm Tyler Durden
Holiday Spending "Hopes" Crumble As Income Gains Stagnate
But this year was supposed to be different… Early-year prospects for a revival in consumer spending quickly faded in the wake of the lagged impact of the $148 billion tax hike that began the year. As Bloomberg’s Joe Brusuelas notes in the following brief interview, combined with a slower pace of hiring and sluggish wage growth, the result will probably be another in a string of disappointing holiday shopping seasons. It is increasingly doubtful that consumers have the wherewithal to meet the ambitious National Retail Federation forecast for a 3.9% increase in holiday spending to $602.1 billion. Brusuelas believes a 2 to 2.5% increases appears closer to the mark given the economic and policy challenges in place this year.
Via Bloomberg Briefs,
First, starting Nov. 1 one-sixth, or about 48 million, of individuals receiving food stamps will see a net loss of almost $16 billion in transfer payments due to cuts in the Supplemental Nutrition Assistance Program (SNAP).
Those in the lower two quintile of income earners, which receive the bulk of U.S. SNAP payments, will probably transfer outlays on discretionary items like electronics and apparel to inelastic non-discretionary categories such food and utilities. Accordingly, large retail operations such as Krogers, Target and Wal-Mart have reduced their holiday shopping estimates. These reductions, in part, are being attributed to the reduction in SNAP payments, the impact of the government shutdown and overall tepid job and income growth, according to the retailers.
Second, recent fundamental data on manufacturing activity, durable goods orders and hiring slowed noticeably, even before the government shutdown, during the first three weeks of this quarter. With hiring during the past three months barely sufficient to meet demographic needs, and inflation-adjusted personal disposable income up a scant 0.9 percent on a year-ago basis, it is unsurprising that both topline retail sales and sales excluding autos, building materials and gasoline, which feeds into the calculation of GDP, have slowed since June of this year, reflecting a deceleration in overall economic activity.
Third, the inventory buildup among retailers is also somewhat troubling given the macroeconomic slowdown and probable fiscal restraint due to policy shifts and standoffs that have characterized the second half of the year. Retailers have increased their inventories by about 6 percent compared to year-ago levels, in contrast with a 5 percent decline in 2012 versus 2011 levels.
Given the well-recognized problems with the JC Penney inventory overhang from earlier in the year, retailers such as the Gap have already begun aggressive discounting. Many have annoucned plans to open stores on Thanksgiving in order to add another shopping day to the season. While that may help bolster sales, the severe discounting will compress margins and add to bottom line woes in the quarter.
Perhaps more troubling is the likelihood that the large inventory build will spill over into the first quarter next year. There is also likely to be a repeat performance of “fiscal follies” in Washington, creating an even greater drag on overall economic growth.
While firms that employ state-of-the-art inventory optimization, such as Wal-Mart, began pulling back on orders in mid-September to mitigate the slowdown in consumer demand, most firms in the supply chain do not have that ability. Carol Lapidus, the National Consumer Products Industry Leader at McGladrey (see the clip above) noted that middle market companies that sell into retail for 2014 are getting smaller. Given where the U.S. is in the business cycle, the opposite should be occurring, which should provide a sober note heading into what will probably be another difficult holiday shopping season.
Finally, an unusual confluence of calendar quirks will result in a net decline of five selling days compared to 2012 in between Thanksgiving and Christmas. In addition, with Hanukkah starting on Nov. 28, a portion of traditional holiday spending will probably be pulled forward into late November and early December, creating a scenario where retailers may be tempted into even greater discounting.
via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/RBzFKp5igjA/story01.htm Tyler Durden
Southern Poverty Law Center Warns: “Far-Right Homophobes” Are Criticizing the TSA
You probably won’t be surprised to learn that
Mark Potok of the Southern Poverty Law Center jumped on the news
that the alleged gunman at last week’s Los Angeles Airport shooting
possessed “anti-government” literature. But you might be surprised
at how Potok describes
the critics of the TSA’s intrusive pat-downs:
The TSA, short for the Transportation Security
Administration, is an agency of the DHS charged with ensuring the
security of transportation, most notably air transportation.
Although it has not been widely singled out by Patriots, it has
been subjected to criticism by far-right homophobes, among others,
who have alleged that TSA agents engaging in hand searches are
really sexually groping travelers.
So: “far-right homophobes, among others.” Among others, yes.
from Hit & Run http://reason.com/blog/2013/11/04/southern-poverty-law-center-warns-far-ri
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Southern Poverty Law Center Warns: "Far-Right Homophobes" Are Criticizing the TSA
You probably won’t be surprised to learn that
Mark Potok of the Southern Poverty Law Center jumped on the news
that the alleged gunman at last week’s Los Angeles Airport shooting
possessed “anti-government” literature. But you might be surprised
at how Potok describes
the critics of the TSA’s intrusive pat-downs:
The TSA, short for the Transportation Security
Administration, is an agency of the DHS charged with ensuring the
security of transportation, most notably air transportation.
Although it has not been widely singled out by Patriots, it has
been subjected to criticism by far-right homophobes, among others,
who have alleged that TSA agents engaging in hand searches are
really sexually groping travelers.
So: “far-right homophobes, among others.” Among others, yes.
from Hit & Run http://reason.com/blog/2013/11/04/southern-poverty-law-center-warns-far-ri
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A.M. Links: Drone Strike Against Pakistan Taliban Leader Killed Peace Process Says Interior Minister, European Agencies Cooperated on Mass Surveillance, Toronto Mayor Wants Cops to Release Alleged Crack Video
- Pakistan’s interior minister
says the killing of the leader of the Pakistani Taliban has
effectively ended the attempt at a peace process in the country.
Meanwhile,
according to a new book on the Obama Administration, President
Obama bragged to aides that he was “really good at killing
people”. - The intelligence services of France, Germany, Spain and Sweden
have
reportedly been working together with the United Kingdom’s GCHQ
on developing methods to conduct mass surveillance of Internet and
telephone communications. GCHQ and the NSA have been criticized for
those practices in part by some of the political leaders in the
European countries whose intelligence services they have been
cooperating with. - The White House and top lawmakers in Congress continue to
reject calls for clemency for Edward Snowden, whose disclosures
have revealed the breadth of the NSA’s mass surveillance
programs. - John Kerry
went to Egypt to tell Egyptians that democracy brings
stability, which brings jobs, as part of his call for the violence
in the country to stop. Meanwhile, the former president, Mohammed
Morsi, claimed
in front of the court where he is on trial that the case against
him was illegitimate as he remained the country’s legitimate
president. - The White House
denies Barack Obama considered dumping Joe Biden as his running
mate for the 2012 election. - Rep. Mike Michaud, who is running for governor of Maine in
2014, has come out
as gay. - Paul Ciancia has been
charged with the murder of a TSA agent in last week’s shooting
at the Los Angeles International Airport. - An attorney for the mayor of Toronto has called on
the city’s police department to release a video alleged to show
Mayor Bob Ford smoking crack. His attorney says it shows no such
thing.
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from Hit & Run http://reason.com/blog/2013/11/04/am-links-drone-strike-against-pakistan-t
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