Tuesday, November 11, 2008

More Signs of Economic Trouble

I can't believe the number of emails I am getting from major online retailers, chain bookstores, bricks and mortar retailers, gift specialty stores etc offering HUGE discounts if I buy right now.  40% is about average, but some were going as high as 70% off.  I'm used to four or five a week but right now it's more like four or five a day.

I know the holiday shopping season is approaching and retailers are facing some tough times, but this stuff looks more like stores looking to raise cash and drop inventories.  Print ads in this weekend's paper seemed to mirror the trend.

To me, a rather casual observer of all things economic, this looks like a sign that the consumer economy of the United States is bracing for a major tailspin which will dwarf the problems in the housing market.  We don't really manufacture anything here in the US anymore, except cars, and our economy is services and retail-centric.  Most folks don't make things, they sell things or take care of people in one way or another. 

Thus, these signs that retailers are girding their loins for lean times could be the harbinger of an impending economic disaster that could be years in correcting.

It's easy to throw money at major mortgage lenders and Wall Street firms to steady those markets a bit.  It's a lot harder to bailout tens of thousands of small regional and local stores and dozens of major chains.  I'm not sure where all this is going, but I have to admit I am more than a bit scared.


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