Recession mindset takes toll on retail sales

[GarthChapman]

The headline got you to read the article, didn`t it. It got me to...Recession mindset takes toll on retail sales Then the opening sentence goes like this, crafted to get you to read on by raising your emotion coeffient yet higher:
Fear of job loss is ushering in a new era of frugality, as some retailers saw a sharp decline in pre-Christmas sales and consumer confidence plunged to its lowest level in 26 years.

And to further buttress the case being made by the article, more paragraphs like this:
The monthly consumer confidence index by the Conference Board of Canada fell for a third month in a row to its lowest level since the deep recession of 1982, with half of respondents saying they expect there will be fewer jobs in their communities six months from now, and more than a quarter saying their families are worse off than they were six months ago.Consumers are caught in a “very negative downward cycle of a psychology of recession,” Glen Hodgson, the Ottawa think tank`s chief economist, told a news conference yesterday.

And at the end, you read this and think "ok, I feel a bit better now"
Confidence will start to return as the majority of Canadians realize that they are keeping their jobs.

“When that starts to happen, you`ll see a change in attitude,” Mr. Hodgson said


Kind of Pavlovian, don`t you think?


Here is the link to the entire article
http://business.theglobeandmail.com/servle...y/Business/home

 

[rymac]

I guess what you believe becomes your reality.

I haven`t lost my job, none of my family members have lost their jobs, in fact my brother recently got a very good job at Transcanada. I wouldn`t have thought this was more than a correction if I didn`t see the national headlines.

 

[CalvinPeters]

Interesting spin, isnt it!

Where I live by West Hills...there is nothing but traffic as people have been shopping, shopping, oh yeah, and shopping some more for the the last two weeks...I have hated trying to drive anywhere with all the traffic. I suspect that there will be a lot of happy children at Christmas this year, despite what the newspapers say.

I will personally go into another Christmas feeling blessed with all the abundance that I could want. (maybe even more sometimes!) Happy kid...happy life...but hey, that is just MY spin!

Merry Christmas Garth! and to all the other Optimists out there! Cheers!

 

[invst4profit]

The only way to know for sure how people are spending this Xmas is to see the total numbers the stores post in January. The numbers will tell the real story.

Until then I will remain neutral.

 

[Jack]

Come on, guys.
This isn`t a "mindset" thing. Just because you personally may not have been affected by the economic slowdown, doesn`t mean that it`s just a figment of our imaginations or a media creation. People`s net worths have been crushed by the TSX`s collapse; this means pension funds, this means retirement savings, everything. These are real dollars.

Employment figures might not look like they`ve changed much, but this lags the economic cycle by 6 - 12 months anyway. Given that things really started to go bad in October, one might think that April of `09 is perhaps when we`ll see some more tangible effects of the global economic slowdown. This would make sense, as some of the headlines that you should watch around that time are huge declines in revenue YOY from Big Oil, as the WTI`s collapse will have a significant adverse effect on their 4Q08 and 1Q09 income statements (and, thus, the all-important EPS). Lower demand and a lower WTI price will be great alibi`s to help get some of the blood off their hands after what will probably be announcements involving layoffs, halted production, whatever.

 

[GarthChapman]

QUOTE (Jack @ Dec 23 2008, 07:29 PM) Come on, guys.
This isn`t a "mindset" thing. Just because you personally may not have been affected by the economic slowdown, doesn`t mean that it`s just a figment of our imaginations or a media creation. People`s net worths have been crushed by the TSX`s collapse; this means pension funds, this means retirement savings, everything. These are real dollars.

Employment figures might not look like they`ve changed much, but this lags the economic cycle by 6 - 12 months anyway. Given that things really started to go bad in October, one might think that April of `09 is perhaps when we`ll see some more tangible effects of the global economic slowdown. This would make sense, as some of the headlines that you should watch around that time are huge declines in revenue YOY from Big Oil, as the WTI`s collapse will have a significant adverse effect on their 4Q08 and 1Q09 income statements (and, thus, the all-important EPS). Lower demand and a lower WTI price will be great alibi`s to help get some of the blood off their hands after what will probably be announcements involving layoffs, halted production, whatever.

My point was to illustrate how the news is spun to us - in both directions. Good news is as over-hyped as bad news.

In other words, what the media overplays tends to exagerate the effects of what is going on as we all also over-react and overplay what is going on.

In terms of the example article I used, a point made is that the mood created by the media helps to make it into a self-fulfilling prophecy. And then later, once the emotion is largely gone from consumers and business people alike, we all start to act more rationally and things tend to balance out a bit.

 

[CalvinPeters]

Jack, I have PERSONALLY lost a lot of my personal net worth in the last 12 months. I expect to lose more in 2009. I think the core differance between me and you is I feel that all these problems have OPPORTUNITY written all over them. I have commented in other posts about dollar cost averaging, so my overall exposure in Real Estate is actually going down with all these new aquisitions. That lessens my exposure. I will continue to buy all the way down and all the way back again. I should think, that even though you think that is a foolish move...that I will look somewhat less foolish in a few years.

Oh, and despite what the media and majority of other sources of negative influence say(no shortage of that even here, Jack) I continue to feel absolutly blessed with abundance. The really wealthy people that I know all consider themselves to be really fortunate. We all have the knowledge to be able to not only make money in these markets, but set ourselves up for the rest of our lives. This particular market will guarantee that. (what an OPPORTUNITY!)

Networth is dynamic...always changing. Draw a graph over a 20 year period of my networth growth and you will see dips and valleys...but the trend is always up. I intend to keep it that way through astute aquisition and management. If you are worried about the sky falling, buy a helmet and carry on. This to...shall pass.

As a last point on this thread, Garth...are I alluded to, there is opportunity given in all the spin. I personally think it is easier to make money with all these wild, overcorrections, but again, that depends on my spin, doesnt it! (grin)

Have a good Christmans, play safe.