Where's all that rightwing dumbass loon glee over "Black Friday?????"

Last weekend, after retailers reported a modest bump in sales because
of customers shopping for steeply-discoutned goods, the rightwingers
on alt.politics started telling us that the economy was in great shape
and we had nothing to worry about.

One of our resident loons posted an article about the Black Friday
results with a headline that read something like (not an exact
quote): "Shoppers on Black Friday give the big middle finger to
Buckwheat Obama." You all know who he is.

Well, now sales figures are in for November and it's the worst
November in 30 years.

Who's getting the big finger now, assholes??? I'll tell you who:
REAGANOMICS, George Bush I, George Bush II, "Foreclosure Phil" Gramm,
and the rest of the rightwingers, that's who.



http://www.washingtonpost.com/wp-dyn/content/article/2008/12/04/AR2008120404347.html?nav=hcmodule


Retailers Report a Crisis in All Aisles
November Sales Slump as Shoppers Stow Credit Cards

By Ylan Q. Mui
Washington Post Staff Writer
Friday, December 5, 2008; A01



Retailers posted the worst November sales in more than 30 years
yesterday, as holiday shopping not only failed to lift the economy but
showed that the financial crisis is further distressing everyday
consumers.

About 30 major companies -- including Macy's, Abercrombie & Fitch and
Target -- posted sales declines at established stores. Overall, retail
sales in November fell 2.7 percent compared with the same month last
year, marking the second consecutive negative month, according to the
International Council of Shopping Centers, a trade group.

And American consumers, whose spending accounts for the bulk of the
economy and who have powered the nation out of previous recessions,
are turning away from their most potent tool: credit cards. The recent
tightening of consumer credit has shoppers leaving their plastic at
home -- and sending retailers into a tailspin.

According to an analysis by Citi Investment Research, the constriction
in lending that began earlier this year points to at least a 5 percent
decline in consumer spending on goods during the heart of the holiday
season. A Consumer Reports survey showed more than half of shoppers
intend to rely less on credit this Christmas. One retailer, Circuit
City, has already blamed the meltdown in credit for sending it into
bankruptcy protection last month.

"If you're a retailer right now, you see the contraction in consumer
debt as a problem," said Jerry Welch, former chief executive of FAO
Schwarz and now head of prepaid card service nFinanse. "There's no way
you can be a retailer and look out and see people being maxed out on
their credit cards and think it's good for you."

Credit card charges enjoyed annual double-digit growth from 2004 to
2006, according to the Nilson Report, which tracks consumer payment
systems. But last year, annual growth slowed to 8 percent. This year,
credit purchases are expected to rise only 3.3 percent as the
recession lashes shoppers.

Consumers say they are putting away the plastic for several reasons.
Some are buried under debt -- delinquencies have reached record highs.
Or they have been hit by recent increases in interest rates and
reduced limits, eroding their spending power. Many who have access to
credit are afraid to use it, spooked by the rising unemployment rate
and falling home values. Those scenarios have broad implications for
retailers who have relied on consumers' easy access to credit to
finance sales, particularly of high-priced discretionary items such as
flat-panel TVs or stainless steel appliances.

Circuit City blamed tightened credit for decimating sales when it
filed for bankruptcy protection in November. The nation's second-
largest electronics retailer, which is based in Richmond, said 75
percent of its transactions are typically made on credit cards. As
people scaled back on credit card purchases, sales plummeted.

That set off a vicious cycle that begins and ends with consumers:
Declining sales made vendors wonder whether the company would have
enough cash to make inventory payments. They in turn tightened lending
to Circuit City, limiting its ability to buy merchandise to stock its
shelves. Poor inventory turned off even more shoppers, further hurting
sales. The New York Stock Exchange notified the Securities and
Exchange Commission yesterday it planned to stop listing Circuit
City's shares as of Dec. 15. The company's stock has fallen to 19
cents.

Circuit City is not the only retailer in pain. Lowe's, the home
improvement chain, said that cash, check and debit transactions grew
during its third quarter. Meanwhile, use of its branded credit card
dropped 1 percent, with a similar reduction in all credit card use.
The shift is affecting how its customers shop and what they buy.

The average purchase is down 2 percent, the company said. Shoppers are
still spending on inexpensive do-it-yourself projects -- paint sales,
for example, have remained strong -- but big-ticket purchases that
generally require financing, such as kitchen cabinets, have dropped
off.

At Target, shoppers are trading down from steak to chicken or buying
part of a bedding set rather than the whole package. Executives said
credit card transactions in stores began to decrease for the first
time in many years during the second quarter.

"I expect that trend to continue for a while," chief financial officer
Douglas Scovanner said recently.

Retailers issuing their own credit cards have their own problems.
Lowe's, which issues its branded card through GE Capital, said it has
had to reduce limits and increase the cut-off credit score on new
applications to guard against rising default rates. When it does so,
it is also limiting its customers' ability to buy.

Earnings at Target's beleaguered credit card division fell by $167
million during the third quarter, dragging down the company's profit
with it.

One way retailers have responded to the credit crunch is to discount
and promote items earlier than in previous years, hoping it would
encourage shoppers to spread their purchases over a longer time,
retail experts said. At Sears, the department store chain reinstituted
a layaway program after a 20-year hiatus. Best Buy's recent
streamlining of its financing programs helped boost sales during the
first half of the year as customers saw credit from other sources dry
up, the company said.

The Federal Reserve has announced steps that it hopes will alleviate
the pain. It will create a program to buy as much as $200 billion in
securities backed by student, auto and credit card loans to help jump-
start those markets. The program is not expected to begin until
February, too late to help retailers facing a Grinch of a Christmas.

Perhaps the larger problem for retailers is that even those who have
access to credit are not using it.

"The bottom line is that consumers are genuinely concerned about their
personal financial health and they are cutting back voluntarily," said
Kimberly Greenberger, an economist at Citi Investment Research.

A recent survey by Consumer Reports said about 21 percent of shoppers
this holiday season plan to use cash, and more than half said they
will rely less on credit. The trend is particularly evident in people
ages 18 to 34, who have been among the heaviest users of credit.

Consumer advocates say the credit crunch could be a good thing if
consumers learn to spend within their means and retailers adjust to
that new reality. The average revolving credit card debt per household
has spiked 138 percent over the past 20 years to $6,528 from $2,739,
adjusted for inflation, according to consulting firm Innovest
Strategic Value Advisors. The shift to cash is forcing many shoppers
to take a hard look at their budgets.

"Cash and debit are self-regulatory and self-control methods," said
Adam Levin, cofounder of Credit.com and former consumer affairs
director for New Jersey. "It's tougher to hand over $100 than it is to
just hand over your credit card."

Author and blogger Devra Renner, 41, of Centreville instituted a
"credit card exorcism" in her household after her bank cut back the
home-equity line of credit for her kitchen remodel this spring. The
family is still paying off the appliances. The last personal charge on
her MasterCard was $3.69 at Starbucks nearly two months ago.

She has talked to her 8- and 12-year-old children about the sacrifices
the family will make as they celebrate Hanukkah. Renner is thinking
about getting a few presents for the entire family, rather than
something for everyone on each of the holiday's eight nights.

Renner said she figured now was as good a time as any to begin living
without credit cards. Her husband, who is in the military, hopes to
retire soon, which will be another hit to their budget.

"When will we welcome them back into our lives?" she said. "You know,
I don't even know if we will."

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