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Thursday, July 7, 2011

Headlines aren't news

We live in a 24 hour headline news world.

W're bombarded with so much information, most of it useless and trivial, that there's no time to stop and 'smell the flowers' as it were... to actually read the content and context behind the header.

Take this AP headline from today:  'Retailers post strong June sales'

So on the face of it, everything looks rosy and good.. retailers are happy and thriving in this 'recovery' that we can thank our leaders for.

Except that's not what the article said. Let's break it down...

"Consumers who were enticed by warmer weather and deep discounts of up to 80 percent on summer merchandise went on a buying binge in June, helping many retailers deliver the most robust revenue gains for that month since 1999."

~ OK, what really caused the increase in shopping and consumption?  Well warm weather is always nice and pleasant.  But what made this June the best since 1999?  Hmm..  Maybe the 'deep discounts of up to 80%'. So, two questions:  What would make a store lower their prices that drastically and how can a business make a profit and survive selling merchandise at 80% off?


"But as the economy teeters back to life, the concern among analysts is that the strong revenue momentum for what is typically the second-biggest shopping month of the year may not continue into the back-to-school shopping season as stores face pressure to pass along higher costs for everything from clothing to food."

~  Notice the word choice-- 'teeters'.  Not roars back to life... Not strengthens..  no..  the economy 'teeters'   And what is the concern?  The momentum will not continue to back to school season.  And why?  Well its hard for companies to continually sell at up to 80% off and make it.   And stores will start passing higher costs onto everyone in the late summer.

So, the article is saying that the 'strong' June sales are a blip.

In fact the article gets glummer and glummer as it presents the facts concerning how everyday Americans are financially tapped out and the rest of 2011 does not look promising.  The article ends with this paragraph:

"In fact, consumer confidence has never been this low in the 24th month of a recovery, according to David A. Rosenberg, chief economist and investment strategist at the Toronto-based money management firm Gluskin Sheff. Historically at the two-year mark, confidence is at 94, not 58.5, which was recorded by The Conference Board's June survey."

~ Consumer confidence never been so low after month 24...  That doesn't sound like a recovery.  That shouldn't cause markets to rise and feelings of jubilation, should it?

All these paragraphs of doom and gloom in one AP article..  and what was the headline again?  Oh yes, I remember...

'Retailers post strong June sales'

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