As consumers keep walking away from mortgages, paying off credit cards and cutting down on Shopertainment. The days of people buying a new flatscreen TV every year, blowing thousands on bottle service, buying 90 dollar sneakers made in china for a 1.50 ,etc.. is coming to an end it seems slowly but surely. It makes sense if the future jobs for the millenials will Be service based McJobs paying minimum wage, demand for goods will plummet. If people get to 1950's level of borrowing and consuming, you can expect massive deflation. Those 90 dollar sneakers made in china for 1.50 will have to sell for 4 dollars a pair.
shoot, I just ordered some New Balances at $114.95 but the shipping was free... nobody else makes narrow shoes that light and comfortable... when it's all about $4 shoes will they all be the D widths or what?
Guess down 11%+ Think about it 150 dollar jeans made in china for 2 dollars cost. Thats a wide spread. Yes your Made in China New Balance will sell but 7 dollars maybe VS 4 for the regular Nikes etc.. But remember Credit expansion is gone, consumers deleveraging and that means cost of goods and services will have to go to realistic levels. You can no longer underpay and expect your employees to use credit/leverage to buy your goods and somehow you get to keep a fat margin, that is not sustainable long term. http://money.cnn.com/magazines/fortune/fortune_archive/2006/05/01/8375455/index.htm