I predict Black Friday/Christmas is going to be a huge bust.

Discussion in 'Economics' started by KINGOFSHORTS, Nov 22, 2009.

  1. With Credit Card companies sending to millions of consumers rate increases that will get their cards up to the 30+% range (on future purchases and existing balances) It will scare the shit out of the consumer.

    CC companies did the mailings right in time for the holidays for the increase notification (the majority kicking in mid december, the remainder in mid JAN 2010)

    Since Consumption requires easy cheap credit (Since industry is not rewarding employees for higher record productivity and pocketing the difference)

    2009 Holiday season will be the worst yet, making 2008 like a practice session.

    No analysts seem to be taking into consideration the huge credit cost increase being passed on to the consumer and the high unemployment fear + accelerated debt servicing that will take place due to increased fees/interest.
  2. You are forgetting that people are absolutely addicted to credit and, as long as they have it, they will use it without thinking of the consequences.

  3. You are looking at a rearview mirror.

    When the Average joe notices that the Interest expense on a (10K debt) Jumps from 108 dollars a month to 250 dollars a month and the fear of losing a job it will make for big changes.

    Think of it as a junky hitting rock bottom. American consumers are gonna hit rock bottom. As they look into their garages filled with shit they are paying off but not using and a 30K credit card bill that will now see interest cost jump from 325 to 750 bucks a month it will be all over.

    December 30,750
    Jan 31518
    feb 32306
    mar 33114.3867

    (2364) in interest payments in 4 months! How is that for putting a wet blanket on shoppertainment.
  4. PPT


    i agree, Black Friday will be horrible.

    work bonuses are done

    few years ago it was 10k, now "you're lucky you have a job".

    no equity from houses to buy crap

    CC limits reeled in

    the joneses aren't spending, so peer pressure is off

    it's a lot harder to sell your crappy used stuff, so makes it harder to buy new crap.

    2 years ago you could get 50-60% of what you paid. now maybe 30% or nothing.

    cash for clunkers probably also took money that might have been used for this friday.

    sell, sell, sell

  5. True, lots of folks who probably already had vehicles paid off now have a new debt to service and of course they probably did not expect this wallop of new interest hikes for the holidays.

    So now paying in additional monthly 750 dollar of interest payments (which will compound quickly) will probably make that cash for clunkers seem like a terrible deal for the average joe sixpack.
  6. Of a 66 mpg Subaru, no less.
  7. You give the average American WAYYYY too much credit (no pun intended) :D

  8. jnorty


    we know it won't be good but "will it be better than exected" is all crooked lieing wall street cares about. better than expected has sent wall street to a world record 70% run. This 8 month run has been a gov't backed run that will fail in the end
  9. People will still spend.

    Heck, last year this time there was far more fear than there is now, imo. On top of that, so far, the consumer has held up much better than most anyone predicted. I'm surprised myself.

    Don't forget, those 401Ks and IRAs have recovered nicely too so people feel a lot more wealthy than did just a few months ago.
  10. However, a lot more people were still employed last year at this time.
    #10     Nov 22, 2009