Banana Republic and J-Crew seem to be having literally non-stop sales; the day after one ends, another sale notice appears in my mailbox. And the gimmicks are getting more complicated--a 20% discount is disguised by promising $10 off for every $50 you spend. Also, some of their sale items have been there for months. Hardly surprising, since Gap Inc reports sales declines. Can I haul out the "R word" yet? Please? Please?
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"Can I haul out the "R word" yet? Please? Please?"
is that supposed to be snippet from an interchange between "hungry young journo" and their "bottom-line focused editor/censor"?
They aren't the only ones, although I will say that it happens even in good times. I've never in my life been into a Macy's, for example, without almost everything in the store being discounted off the "regular price." I've never seen anything the regular price.
Bed, Bath, & Beyond is also notorious. They flood mailboxes with 20% of coupons, and honor them even when expired. I've never paid "full price" for anything there.
Can I haul out the "R word" yet? Please? Please?
We're likely to be in one, I agree. Still think it's too early to claim that we're already in one until the present indicators industrial production numbers turn negative in addition to the leading ones. (Wouldn't surprise me if they did, though.)
You only haul out the "R Word" if Hollister, Abercrombie & Fitch, and American Eagle stores are also doing badly.
(Who the hell shops at Gap, Banana Republic and J-Crew anymore? What year is this, 1997?)
Who are you aspiring to be, Paul Krugman?
It occurs to me that this may be due to changes in fashion, even if the stores that Xmas mentioned. People may not want such products. Think disappearing middlemarket, herd-like behaviour of teenagers, etc.
Of course, it could also be that they produce crap that only appeals to teenagers at stupid prices.
People who want pants with a 36 inch inseam . . .
The Conference Board reported that the LEI actually increased in March, Greg Mankiw points out that industrial production has been strong and anyone can see that the stock market has risen 7.5% in the last 6 weeks.
I'm not saying there's no recession. But all the prophesies of doom (from the blogger here, among many others) have little justification. Housing prices have declined, people feel poorer and have been cutting back on consumption somewhat. Meanwhile businesses have cut back their investment. So certainly growth has slowed (and indeed GDP per capita growth has been negative).
But there is every reason to believe that this will be but a mild downturn, perhaps not even technically a recession. The worst of the credit problems might already be over. And the fundamentals of the economy are sound.
As long as government doesn't interfere too much, the natural creative forces of the free market will kick in again and growth will return.
There are too many Chicken Littles around these days, and not enough sensible observers of the economic scene. Newsflash: the sky is not falling.
Bed, Bath, & Beyond is also notorious. They flood mailboxes with 20% of coupons, and honor them even when expired. I've never paid "full price" for anything there.
My favorite was when a relation produced a coupon that the BB&B computer system refused to accept. A glance at the date on the coupon showed that it was almost five years old, and the barcode was apparently long since purged from the system. The clerk just keyed in the discount manually.
Kohl's Department Stores are nearly the same way. You have to have their store card to get the sale coupons, but thereafter it's one coupon gimick after another, and if the coupon gives the system any grief, the clerks have an astonishing amount of discretion to override the system and enter the discount code. You would think they would at least need a shfit manger's key to be plugged into the machine or something.
No offense, rwe, but that reads like a Sunday School homily. "The worst of the credit problems might already be over"? "...the fundamentals of the economy are sound"? And "the natural creative forces of the free market will kick in again and growth will return"? Have you got something anlytical that leads you into this, or just the free-market scriptures and a rose-colored fishbowl?
Mind you, I'm not saying I want a recession or that we've actually entered the technical definition of a recession either; I'm also just an observer. But there are many signs pointing to the need of a significant economic correction, and right now appearances are pointing to a high probability of a recession (recent bubble crash leading into a credit crunch, slowing consumer spending), although if so, it will probably be nothing so bad as a Krugman(R)-brand Bushcession.
rwe,
take a peek at: http://globaleconomicanalysis.blogspot.com/2008/04/case-for-l-shaped-recession.html
as far as this: The worst of the credit problems might already be over. -is concerned, it isn't true, but keep praying..
Mark,
Nouriel Roubini is a bright guy, but his forecasting record is nothing to be proud of. He's been prophesying doom as long as I can remember. Besides, I'm surprised at you. My own optimism derives principally from my belief in the ability of markets to correct on their own. I thought that was a belief you shared.
So why the pessimism? And why is Megan McArdle so pessimistic? She's supposed to be a capitalist too.
House prices have fallen, but that is no catastrophe. It is a necessary correction. And consumers are retrenching, but that's a good thing. Reduced consumption means increased saving.
We have not had even a single qaurter of negative growth, yet every other day I hear someone comparing the present circumstances to the great Depression. Maybe not enough people are taking their Prozac.
rwe,
two things: 1.) that link was arguing against Roubini's take, 2.) "As long as government doesn't interfere too much, the natural creative forces of the free market will kick in again and growth will return."-rwe, we've already seen massive gov't interference, and we're going to get more, and more, and more....
rwe, and other Grasshoppers about,
this: http://www.prudentbear.com/index.php/CreditBubbleBulletinHome
and, this, also, is a good reference point, along with: www.financialsense.com
There are always bears, they sound sagacious in downturns and uncertain times, and run on their calls for the rest of their careers (people are STILL basing their advice on calling 87 right... dude 21 years ago! if you were really that much of a genius, you'd have a new tag line!). Bulls (Kudlow, for example) sound ridiculous at best, and simpleminded in questionable circumstances. Pessimism and cynicism always appear more intelligent, especially to outsiders and critics. Our innate sense of caution (or at least respect for cautious voices) enhances the credibility of bears.
An optimist has to get everything in their prediction right to be lionised, while a critic only needs one thing to have occurred. There are lots of ways to credibly call a failure (underperformance, poor roi, lost opportunities...) while it's harder to salvage elements of success. Following perma bears is, however, a bad idea. Despite your cynicism, an optimistic perspective is more likely to be broadly correct.
more, to the point:
http://globaleconomicanalysis.blogspot.com/2008/04/vacancies-soar-in-commercial-real.html
http://globaleconomicanalysis.blogspot.com/2008/04/shopping-center-economic-model-is.html
"an optimistic perspective is more likely to be broadly correct."
as long as your optimism doesn't gainsay Gravity..
"Can I haul out the "R word" yet? Please? Please?"
By "R word" are you referring to recovery? Because by the time a recession is official, it will probably already be over.