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Friday, November 30, 2012

The Contrived 'Cliff'

It really is amazing when one takes a step back from the 'reality' of the world that is presented in front of us which we are mere spectators,to observe how much of it is utterly contrived i.e. an artificial false appearance or quality.

We just experienced two utterly contrived events just within the last seven days -- 'Black Friday' and to a lesser extent 'Black Monday'.  

Both were over-hyped and exaggerated in importance via the clutter of 24/7 advertising, that one would think those who days held any specific meaning beyond buying shit we don't need with money we don't have while saving an additional 2% vs sales given at any other time of the year..

And we have some annual contrived events coming up in the near future.  We won't say Christmas is contrived unless one only embraces the secular commerciality of the day, but New Years Eve certainly is--  so much hype to celebrate an event that lasts mere seconds i.e. a 'ball' dropping...  
Then there's the Super Bowl -- God, don't get us started on that all day pageant of pomp and pompous patriotism glutted with horribly forgettable adverts at $2mil per minute...  and if lucky, some actual football is played in between!!

And amid all these annual contrivances, is a new one, specific to the moment called the 'fiscal cliff'.   Ooohh... sounds so scary... so daunting...   'We're heading over the fiscal cliff children... hold our hands tightly and let us pray...'

Please!

The United States is in debt.  Yes this is true... and we owe our creditors a lot of money.  But you know something?  We've owed our creditors for many decades...  Actually with the exception of a couple very short periods in US history, we've owed foreign creditors since our inception.

And its not really about how much one owes in this world..  Its about two things:  1)  Is there a cap on what a lender will lend? and 2) Is there a time a creditor will ever call in its debts?
And honestly, as history as shown regarding the US, the answers are 'No' and 'No'

Let us say that China decided tomorrow no longer to lend money to the US.. enough was enough... too risky etc...  What happens?   We don't mean in academic terms of proper money management, but reality-- what happens if the spigot of money is cut off to the US?

The entire world economy collapses and we're back to medieval times of bartering, exchanging skills for services, and dramatically localized economies.  The US would suffer most assuredly... BUT..  and this is Vital to understand..  China would too.  

And does any nation, as the saying goes, cut its nose off to spite its face?  In other words... if China would be economically Destroyed, causing utter chaos for its billion-plus people, would it be practical or prudent of them to stop lending to us?

Even in a growing, developing world economy, the US is still the #1 importer i.e Buyer of Chinese merchandise---  they make everything we used to, but we buy up everything that most of their populace still can't afford.
So you see how this is going to go..  We owe $16 Trillion to our creditors... Honestly, so what?  Shocking to write/say we know.. But true.

Everyone made a big deal in 1984 when Reagan expanded the US debt to its first Trillion.. then we passed the $5 Trillion mark..and the $10 and the $15.. and really, has any creditor called in their loans yet??

 If it was an individual who owed so much to others, or a small nation with a weak military like most of Eastern Europe, Africa and South America, then that entity would be in Severe trouble.

But if you're a large powerful nation who is the reserve currency and who's military budget is larger annually than the rest of the world combined, right or wrong, the rules do not equally apply.

A very recent example is Argentina who's finances are so bad and whose credit rating has dropped so precipitously within the last 6 mths to a year that even their leadership openly admits they will ultimately default on their debts...   And because Argentina is not part of the Eurozone, no one will make any sincere effort to prevent it...
Now the media pundits will do all they can to scare the people about the ramifications of us going over this proverbial 'cliff' but fortunately due to the distractions of the holidays, few will be bothered to be up all night worrying on it... unless you're filthy rich.

Taxes will be going up no matter if a resolution is reached or not... that's a certainty.  The question is how much of a percentage increase...  Well that like everything else is all relative.

According to the New York Times in an article written today, back in 1980 a person with an income of $300k paid 49% in taxes.  In 2010, someone making 300k paid 42.1%  Today that person is paying $20,700 less in taxes.

Someone making $22,000 back in 1980 paid 20.2% taxes... in 2010, they paid 19.4%.  That comes to $176 less in taxes.  So you see we've all been paying less (and in some cases FAR less today in taxes than a mere 30 years ago)  

And while to someone only making $22k, that $176 is a lot of $$, you can see how much in savings someone making 12x more per year has gotten to enjoy keeping while thumbing their noses at those making less..
And goodness knows how many millions of dollars the truly affluent have gotten away with not having to contribute to the upkeep and maintenance of this nation, all under the false guise that they are the Only job creators!

And while the stock market pretends it doesn't care what happens by writing headers such as "Fiscal Cliff Drama Won’t Write the Market’s Script" (Yahoo!)... its all hogwash.    Prior to Thanksgiving, the market spiked simply because both Obama and Rep House Leader John Boehner said talks were progressing.   

Then the market dropped by over 100pts early in the week because Senate Majority leader Harry Reid (D) said talks were slow...  Then it spiked on Wed because Obama said things looked positive...

All meaningless bullshit words, really but the market dramatically went up or down based on those verbal breadcrumbs...  So to say the market doesn't care... that's kinda bullshit too...

The vermin who make their living on the trading floors want to make as much profit as humanly possible and pay as little stock dividends tax as possible on the millions and billions they rake in...  So they care...  
Good news is no matter what happens with the 'cliff', they Will be paying more and they won't be happy about it.. Will be quite entertaining actually to listen and watch them gripe over it in the coming weeks and months...

So ultimately this fiscal 'cliff' is a molehill.   One side will need to dramatically capitulate on their principles to get a deal done i.e. the Republicans. (Usually the party that wins the White House mere weeks ago, doesn't need to)

This will mean if an agreement is met, there will be some cuts but nothing remotely close to the savage slashing upon the poor to lower middle class which the Republicans had in store if Romney won.  And taxes will go up but if Obama keeps his word and doesn't raise taxes on those making less than $200k ($250k for a couple), then there's very little to fear from all this..

Oh the naysayers will say it will lead the US to a recession but think of it like this:  If the economy is good but you have no job, isn't that still a personal recession?   And if the economy is in recession but you still have employment, do you even feel or notice it?    
Its all words really--  we never truly left the 2007 recession but a group of academic assholes got together in 2009 and 'officially' declared it over for reasons of political pressure and expediency.  So if a "new" one was declared in 2013, so what??   Nothing in Reality would change-- only the facade of 'optimism'.

And a cliff falling would strengthen the US dollar's value which is a positive...

So best to enjoy your holiday season, don't get burdened with the day to day progress, and know no matter what happens (or doesn't happen)  it really doesn't matter.

Thursday, November 29, 2012

Confirming Steadfast Views

What is the difference between an opinion and a conviction?

Essentially, an opinion is a thought based on observation that allows for some room to be swayed in a different direction if opposing arguments make sense.    

A conviction is a firm-held belief based on observation, experience, is time-tested and not something that can be easily dissuaded.

An example of an opinion would be when we say 2013 will be a more difficult year financially for the nation than 2012.  We could be wrong.. we're open to being swayed.  But until then, we believe as we do.

An example of conviction would be when we say that capital-I professional Investors are evil to the core and a major reason why many of the problems afflicting the global economy have not been addressed.  We hold firm to that view and we're not going to suddenly doing a 180 because a Letter to the Editor argues otherwise.

We here at A&G give many opinions, and as stated before, if we're proven wrong or the other side makes a solid argument, we're open minded.  But we have convictions as well, and today we found two news articles today which absolutely 100% re-affirm our economic and political beliefs.
#1  We believe corporations like Investors to be evil, heartless entities with sociopathic tendencies which put Profit over people and thus deserve zero loyalty from those who are employed by them and No admiration by the greater public

"Hostess Brands Inc. plans to ask for a judge's approval Thursday to give its top executives bonuses totaling up to $1.8 million as part of its wind-down plans.  The maker of Twinkies, Ding Dongs and Ho Hos says the incentive pay is needed to retain the 19 managers during the liquidation process, which could take about a year...

The company's bankruptcy means loss of about 18,000 jobs."  (AP)

So let's really understand what happened here:  Hostess chose to enter bankruptcy for the second time in over a year rather than make a sincere effort to find common ground with its 2nd biggest union on a new contract.  

Why?   Because it was decided by the higher-ups that it would be far more profitable to completely end the Hostess brand, shut down all bakeries, lay off 18,000 workers, sell off the rights to its brands like Wonder and Twinkies to competitors and then seek Federal bankruptcy protection from creditors.
That's what happens when a business is taken over by a hedge fund; profiteers no different than Bain Capital. And that $1.8 million which the corporation is fighting for the right to give in bonuses to a few executives, will mean $1.8 mill less that Hostess has to pay back its creditors.  But what does it matter when these running it to the ground get first dibs on slicing apart the dead carcass.

It reminds us of what happened a few years ago with a Wal Mart store that was based somewhere in Georgia-- the employees wanted to organize into a union, which the corporation was steadfast against. So ultimately a vote was conducted and a good majority of people voted to unionize.

And what did Wal-Mart do in response?  The very next day the store was permanently closed, every worker laid off and all the inventory sent off to other stores.  The same action took place in Quebec in 2005 involving a local store there which voted to unionize 

That's how much Wal Mart valued its workers... 

And that's the overall mindset of corporations
#2  Sadly, the Republican Party has turned into a party full of heartless bastards with no care or concern for any person who is not wealthy or well-to-do, and the only reason they even bother with the middle class at all is because they make up a large voting base.  They've degenerated into the party of tax cuts for the wealthy and benefit slashing for everyone else.

Top Romney Adviser Brags About Losing Poor, Minority Voters To Obama (Yahoo News) -- " Mitt Romney can take some solace in his devastating loss on Nov. 6: at least he won the voters who really count.

That's the thesis anyway of top adviser Stuart Stevens, who penned an op-ed in the Washington Post on Wednesday arguing that by winning wealthier and whiter voters, Romney secured the moral victory over Obama.

"On Nov. 6, Mitt Romney carried the majority of every economic group except those with less than $50,000 a year in household income," Stevens wrote. "That means he carried the majority of middle-class voters...  The Republican Party has problems, but as we go forward, let's remember that any party that captures the majority of the middle class must be doing something right."
Stevens notably never mentioned jobs and unemployment in his op-ed, instead focusing on how Romney championed "the moral case for free enterprise and conservative economics"

Unfortunately for Romney, poor and minority votes counted just the same as the allegedly superior votes Stevens favored. The result was an electoral college blowout for the president powered by strong turnout and margins among young voters, Latinos, African Americans, and women."

We were always amazed how proudly Mitt Romney said during the campaign trail that he had no concern for the working and poor...  How brazen he was with his infamous '47 Percent' comment that stated that they were the people on government assistance and all for Obama and thus not worth courting... and yet put false ads in key battleground during the end of the campaign pretending he wanted to help the disadvantaged, which voters saw right through..

It really started about 12 months ago when every jackal of a Republican candidate to represent their party all tried to one-up each other to show who was going to cut the most that benefited average working Americans while lowering the most taxes on corporations and the affluent, all under the Lie of 'trickle down' economics.

And its sad.. and shameful.
This is not the Republican party of Lincoln... or Teddy Roosevelt... or even for that matter, Richard Nixon.  Its not the party of Reagan either because for all of his economic failings, he was the one who instituted the Social Security payroll tax to seek to ensure it would never go insolvent; something current Republicans hate like the plague.

The current Republican Party is a disgusting amalgam of Wall St big shots, the wealthy well-to-do and Tea Party loons who if they could get away with it, roll back every social and economic program to pre-FDR  i.e.  no Social Security, no Medicare, no unemployment benefits or food stamps... no government assistance of any kind... and the death of Unions.

And we are no Conservative-bashing blog by any means... We have skewered the President's policies (or lack there of) for the last 2+ years and had grave concerns over what a 2nd term would mean for this nation.

But the previous article just re-affirms that the current Republican Party is deeply out of touch with mainstream America and because of their insistence on being a one-track pony of tax cuts instead of being a party of genuine compassion and caring for All, they will find themselves out of Executive power for many elections to come.

Wednesday, November 28, 2012

Fixing the Student Loan Debt Crisis

We read an article today in the New York Times that student loan debt is rising and its not being paid back...

"The New York Fed calculates that 11 percent of student loans are now at least 90 days delinquent, with this rate now officially passing the "serious delinquency" rate for credit card debt for the first time...  It's worth mentioning, by the way, that student loan debt cannot be discharged in bankruptcy, while most other forms of debt can. One reason consumers have managed to shed so much debt is that lenders ended up writing off quite a bit after the financial crisis."

And unlike credit card debt which is written off by the lenders, student loan debt is ultimately a taxpayer burden when not paid.

Let's pretend government genuinely seeks to fix problems and not kick the can down the road for years if not generations so not to offend anyone and thus not get re-elected, how can this problem of student loan debt be fixed?

Here are some possible remedies we came up with..  they may not be popular or agreeable to some but we see the following as the most realistic way to combat this problem:
1)  Treat student loans as car loans or mortgages

What are the chances that an 18 year old with no real work experience, credit history or personal savings could walk into a bank and receive a loan to buy an automobile or home with no one co-signing?

How about Zero... None.

Yet that same person can receive tens of thousands of dollars annually to obtain something that isn't even tangible or physical.. a worthless piece of paper called a college degree that most employers don't value or respect since everyone has one.

So how to remedy this?  At least one parent has to co-sign on any student loan involving a person under the age of 21, making them as legally responsible as the naive, bright-eyed fawn who can't wait to spend four years drinking and doing recreational drugs with some classes in-between.
Now you have at least one parent who is going to be strictly making sure their son or daughter is taking school seriously and focused on studies since it is their wages and/or social security that can be garnished or vehicle/home taken because Bobbi or Billy don't take college serious or choose an un-hireable degree like Philosophy or English Lit.

And this all inter-connects to the rest of the remedies on the list...

2)  Set policies that curtail overspending for college

If a student who lives in Texas wishes to attend a college in California or Connecticut, that's fine-- the student loan will cover the cost of tuition and books.  But not room and board.  That expense you or your parents must come up with on your own.
Its bad enough that attending a public university as an out of state student means you're paying 2.5 to 3x more in annual tuition than a state run university at home, meaning you're obligated to be paying back 2.5 to 3x the debt you normally would, but room and board can add an additional five to ten thousand dollars annually to the cost... once again, which must be re-paid.

Another option is the 2 to 1 rule-- if you need $12,000 to attend college for a given year, the loan can only be for up to $8,000-- you or your parents must come up with the other $4k.

The ultimate goal is for the lendee to make Intelligent choices and to get rid once and for all of this la-di-da notion that one simply acquires whatever debt is necessary to get the degree, then worries about it all later, or even worse, assumes all will work itself out because a good paying job is simply waiting for them.

People seem to show more fiscally responsible decision making when it comes to buying a sweater or a box of cereal than they do picking what college to attend and ultimately pay for.
3)  Colleges & Universities Must change too...

You're at a cafeteria for lunch-- you pick up a tuna sandwich, chips and a drink.. but you're not allowed to pay for your order or leave..  In order to acquire what's on your tray, you need to also get a turkey sandwich, peanut butter & jelly, a bag of tortilla chips, yogurt and ice creme... Then you may pay... for All of the order...

Horrible right?  That's what colleges and universities do.

The days of forcing undergrad students to attend for 4 or more years while acquiring 120 credits via taking classes in fields that have nothing to do with one's major or interest needs to End as soon as possible.

If government had any care or concern for its younger citizens; the ones who attend school and are saddled with debt before turning 21, they'd pass a law that any institute of higher learning which accepts Fed backed loans or took Fed grants had to cut its requirements for graduation from 120 credits to 60, which is Plenty!  
It would work like this:  30 credits i.e. 10 courses in one's major and 30 credits in any other areas the student chose.  If someone was undecided on a major, he/she could continue taking courses without restriction but for those who did know their career path early on, they aren't punished in terms of time wasted and expense accrued.

4)  Adding culpability to the schools

How is it that if a person goes into a Wal Mart or Target, buys a product that turns out not to work or fails in some way, that the item can be returned, usually for a full refund, yet if you attend a college/university, obtain the degree and can't get hired for anything above stock clerk, you can't get a refund on the wasted education?

Imagine if the onus was put on the schools to ensure their students found gainful employment or have to be directly on the hook for the student loans taken out to acquire the original degree?
Perhaps they would take their 'career centers' much more seriously and dramatically expand upon job placement so that way students attending in a weakened market could have a fighting chance to get their foot in the door somewhere..

OR

Just like Surgeon General warnings on cigarette packs, Colleges and universities notify in big, bold letters that obtaining a degree does not guarantee in any way that you will find a job that will allow you to pay your bills, put savings away and build for a future, and that the student assumes All risks with the knowledge that obtaining student loans without the ability to repay will Destroy their financial lives irrevocably.

In summary, to fix the problem of student loan debts which now tops $1 trillion is a combination of restricting both who is able to acquire the loans and limiting the debt load upon the individual while making sure colleges can no longer trap and exploit students into paying more than they should while getting no assurances or protections that their degrees will truly improve their future.
It all comes down to one question ultimately-- does one view attending college as a right or a privilege?  If you see it as a right, then you believe nothing should be done to obstruct anyone from attending especially financially.  If you see it as a privilege like driving, then you believe attending is not 'open door' much like a car dealer is not required to sell you an automobile simply because you want one.

Tuesday, November 27, 2012

Outward 'confidence' to mask reality

~ Meow.. oh my God.. oh my God... Meoww..

There's certain truisms in the world which when uttered, all one can do is simply accept and nod.  A famous example is the saying that 'The only certainties to life is death and taxes'.

When it comes to finance and the stock market, one could easily say the only certainties to that hamster on a wheel-type life are that you will be constantly lied to in the finance media and you will never be advised to 'sell'.

We could come up with literally thousands upon thousands of examples but that would be boring both to write and for you to read, so let's focus only on recent headlines from today.
November consumer confidence hits more than four-year high (Reuters) -- "Consumer confidence rose to a four-and-a-half-year high in November as consumers became more optimistic about the outlook for the economy...

The Conference Board, an industry group, said its index of consumer attitudes rose to 73.7 up from an upwardly revised 73.1 the month before, its highest since February 2008. Economists had expected a reading of 73.0, according to a Reuters poll...

"Over the past few months, consumers have grown increasingly more upbeat about the current and expected state of the job market, and this turnaround in sentiment is helping to boost confidence," Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement."

Let's put aside the Fact that anyone who feels confident in this economy to buy a car or take on a mortgage on a new home is a utter, complete idiot who probably deserves the financial struggles he/she will be getting themselves into..

What does all that Conference Board gobbletygook mean in reality?
Let's start with the time line... the article states consumer confidence is higher now than more than 48 months ago i.e. November 2008.  That was weeks after all the shock and awe of the stock market crashing about with hundreds of millions of people not understanding how contrived, manipulated and Controlled it all was by the financial elite to get TARP in motion.

Wonder what consumer confidence was a year prior-- November 2007?

 "A key barometer of consumer sentiment dropped for a fourth consecutive month, sending the index near its lowest level in two years.  Rising gasoline prices, falling home sales and unstable financial markets have weighed on consumers' spending, the Conference Board reported.  The New York-based Conference Board said Tuesday that its Consumer Confidence Index fell to 87.3" (CNN/Money  Nov 27. 2007)

Think about that...for all the hype and hoopla that confidence today is at 73.7, its still 13.6 points Lower than it was 5 years ago and that was after four consecutive months of dropping!
And what were the reasons... the rationales for the continued drop back then?   'Rising gasoline prices, falling home sales and unstable financial markets...'   Hmmm.. are any of those things fixed?  Gas prices in 2007 were around $2 a gallon.. now we pay on average about $4.  Home prices have not stabilized one bit and oh sure the markets have risen artificially since 2009 but stable?  No.

And really think about this one: On November 27, 2007, the Dow closed at 12,958.  As of 12:30p, November 27, 2012, the Dow is at 12,970.   After FIVE Years of manipulation, trickery, deception, and other Federal Reserve EVIL, the stock market in Five Years has risen by TWELVE points!

So nothing has changed, and people have NO right to feel any confidence in anything right now other than they've been continually 'conned' into thinking things have improved so that you and yours will feel good enough about things to spend frivolously like in the good ole' days.
Out of curiosity, what was consumer confidence back in November, 2006?

"The Conference Board’s Consumer Confidence Index fell by 2.2 index points to 102.9 in November. This index has fluctuated between 100 and 110 for the last twelve months." (AP- November 28, 2006)

 So in simple math, 102.9 (2006) - 73.7 (2012) = a 29.8 point Drop in confidence.

When the number is over 100, it is supposed to be indicative of a vibrant, bustling economy where people feel good about consumption because they feel equally good about replenishing via employment, the money they spend...

And Reuters has the Audacity.. the Gall to treat 73.7 confidence as something to celebrate?  And millions upon millions who read that headline and don't do the research we did, don't have a clue as to perspective!

Sickening...
~ This guy's feeling go good about the economy he's splurging on a whole bottle of Tanqueray Gin to dull the pain

Here's a second example of outright media deception written today...

Home prices: Biggest rise in more than 2 years (CNN/Money) -- In another sign of a housing market rebound, home prices posted the biggest percentage gain in more than two years in the third quarter, according to the closely followed S&P/Case-Shiller index.

The 3.6% increase from a year earlier is more than three times the rise in the previous quarter and was the biggest jump in prices since the second quarter of 2010...

This latest rise comes as the housing market has shown numerous other signs of recovery in recent months. The rebound is spurred by a combination of record low mortgage rates, an improving jobs market and a drop in foreclosures to a five-year low, reducing the supply of distressed homes available..."
The lies in this article are so rampant, its enough to make one who truly understands what's going on utterly mad with fury as to how easily Duped and propagandized people are into believing 'good' news because they are so Desperate to hear some!

Of course housing will rise-- people need a place to live and with population always expanding, it can not contract forever, even in the worst of times...

But the question is, why home prices?  Simple really... its not that home values are stabilizing and naturally rising as a healthy housing market would.  Its rising due to Inflation and more specifically dollar devaluation.
We've explained this concept 100 times and will briefly do so again.  That complete bastard, Fed Chair Ben Bernanke has purposely and intentionally lowered the value i.e. purchasing power of the US dollar by overprinting with the goals of both artificially inflating the stock market for Investors' benefit and so what we repay to our creditors is less in value than what we borrowed.

Now physical items like clothing, gasoline and homes.. they have value...

And to make this example very simple and easy to understand, let us say 1 US dollar equals the weight of 1 lb of coinage and it takes 1000lbs of coin to acquire a home.  Thus in this simple example, a home could be purchased for $1,000.

Now let's say the dollar has been devalued 10% so that instead of $1 equaling 1 lb of coinage, it now represents 90% of that original weight value...  Well the home still requires 1000 lbs to be sold to a buyer but because your dollar is worth less, now you need to come up with an additional $100 to make up that 10% difference... the home is now sold at $1,100.
~ "Hey I think we're getting good at this game..."

And That is what the financial media is 'celebrating' when writing that article-- celebrating that buyers are paying more than they should because the currency used to make the sale continues to weaken!

And when the media says 'housing', what does that mean really?  Yes it means 'homes' but it also means something else more generally-- dwellings for people to live in.  And that means the 'A' word which is Apartments... And that means the 'R' word, which is Renting.. and that indicates an economy where actual ownership is out of reach for many millions of people.

If you think of it in terms of the classic film "Its a Wonderful Life" and put aside the Christmas aspects a moment to focus on the actual plot, it means more and more rental property "Pottersvilles" are springing up because even with low interest rates, many people are forever deprived of the opportunity to own due to higher minimum down payments, higher closing costs, weak credit and/or increased wage scrutiny.
And there's few to none 'Bailey Building & Loan' businesses anymore to compete with the 'Too Big to Fail' banks that should have been allowed or Forced to crash in 2008.

Its just infuriating how deeply and consistently the media lies to paint a narrative that all is well.  If it was even remotely true, we wouldn't need to be in existence anymore.. But its not true.. not by a long shot.

And when you dear reader peruse your local newspaper or watch your local TV news as they talk on positive signs for the economy, be skeptical... very skeptical..  Nothing positive can happen until actual fiscal policy is put in place by the President and passed by Congress.

Everything else is a con game in the hopes that empty optimism can turn into a self-fulfilling prophesy

Sunday, November 25, 2012

Truth/Fiction of Black Friday '12

Well we're back after a long weekend... lets just delve in..

Here's how the Associated Press described Black Friday in an article re-printed in tens of thousands of newspapers across the globe and another tens of thousands of national & local TV news outlets:

Holiday shopping season off to record start -- "It's estimated that U.S. shoppers hit stores and websites at record numbers over the Thanksgiving weekend, according to a survey released by the National Retail Federation on Sunday...

All told, a record 247 million shoppers visited stores and websites over the four-day weekend starting on Thanksgiving, up 9.2 percent of last year, according to a survey of 4,000 shoppers that was conducted by research firm BIGinsight for the trade group. Americans spent more too: The average holiday shopper spent $423 over the entire weekend, up from $398. Total spending over the four-day weekend totaled $59.1 billion, up 12.8 percent from 2011."

Hmm.. Oh really?

We beg to differ...
Black Friday actually saw sales Drop by nearly 2% compared to 2011. This occurred despite a 3.5% increase in retail foot traffic and a 1% increase in US population compared to last year  (source: ShopperTrak)

But let's say for argument sake, AP is correct...  where did all these people get the money to purchase items from?     The national savings rate is 3.3% -- the lowest its been in Three years, and average hourly wages have risen at the lowest pace since the recession really took off in late 2008.

Of course there's credit cards-- buy now and pay later, or never i.e. default.

And its funny how no one who artificially inflates the exuberance of Black Friday as akin to a National Event ever takes into consideration that 'R' word...

Returns...
And speaking of which, did you know it is more difficult, and more importantly,  more privacy invasive now then Ever before when it comes to making returns on purchases?

From CBS 5- San Francisco:  "When you make a return this holiday season you may have to hand over more than just your receipt, as retailers try to prevent repeated returns.

“I was required to provide them a copy of my driver’s license, where they actually took the information and scanned it into their database,” said a shopper who asked to be identified only as Leslie.

According to the National Retail Federation, 62 percent of retailers have ID requirements. Among those who have similar policies for returns are The Finish Line, Home Depot, Target and more. So where does your information go? Likely it’s being stored on The Retail Equation, a service which tracks how often you bring stuff back"
Sure glad there's no such thing as 'Big Brother'... Wheww~

Cough~

So why doesn't the news media ever cover Black Friday honestly?

Well, how do you think they make their money?  Yes-- advertising.  And who is spending the bulk of advertiser dollars on TV and newspaper ads during this time of year?   Yes-- the very same companies that the writers brag upon as thriving, bustling stores.  And what would happen if the media portrayed Black Friday as a negative, or gave information that dissuaded people from shopping?  Yes-- less ads.

'You caress my mumblies... I caress your jumblies'

So many suckers and fools kill themselves (and sometimes others) to get a good 'deal' when quite often the best deals are anytime But the day after Thanksgiving:
From WSJ:   "After crunching two to six years' worth of pricing data for a number of typical holiday gifts, The Wall Street Journal has turned up the best times to go deal hunting — and they almost never involve standing in the freezing cold all night.

 It turns out that gifts from Barbie dolls to watches to blenders are often priced below Black Friday levels at various times throughout the year, even during the holiday season, and their prices follow different trajectories as the remaining shopping days tick down.

Watches and jewelry, typical last-minute quarry for well-heeled shoppers, get more expensive as the season progresses, according to Decide Inc., the consumer-price research firm that gathered and analyzed the data for this article. Blenders, which might sit around for months if they aren't bought in the holiday window, get much cheaper at the end..."

As for HDTV's, they're Always discounted the cheapest right before the Super Bowl, um.. we mean.. 'Big Game'.. Nudge.. Wink..  (That's our little homage to all the retailers who advertise before the Super Bowl but don't want to pay licensing fees for the right to use that term, so they "cleverly" refer to it as 'Big Game')
And remember what we wrote in our last posting... many, many stores offered Black Friday 'sales' and promotions which were Exactly the same ones as offered other times of the year (Macy's, Yankee Candle, Modell's, etc..) and some offering the Exact same sales as offered the other 51 weeks of the year (CVS, Kohls, etc..)

But we don't want to end this post on a downer so we'll share what was probably the Best and Only genuinely good deal out there on Friday and it took place at all places, Office Max--

A $50 iTunes Gift card could be purchased for $35 i.e. a 30% off savings without any requirement to buy other things or receiving store 'bonus bucks' like some of the pharmacies like CVS and Rite Aid do.

Honestly, it was the first time we've Ever seen iTunes cards sold anywhere for better than $20% off.

To give comparison, Target was selling a $60 pack of iTunes cards for $50 which comes to a savings of 18%.  Rite Aid was selling at $25 card for $25 but you get $5 back to use to buy other things at the store, which really isn't much of a savings at all.. And they limited purchases to 1 per customer.
There was no limit on purchases at OfficeMax so one could have bought 50 cards for themselves, for gifts to others and/or to re-sell at a 'discount' via eBay and other outlets, and still make a little profit.  And there was No line because few to none knew about it.  We quietly walked in mid-day.. bought some and didn't even wait in line to do so..

So a big Yay! to OfficeMax for having the only True sale for Friday, and let no one say our posts always end on a down note

Friday, November 23, 2012

A Black Friday rant

We hope everyone who celebrated Thanksgiving yesterday had a lovely one... and time, like the albatross around our necks, moves on...

And today is 'Black Friday'...

It used to be just simply 'Friday' but then around 15 years ago, the word 'Black' was added to represent supposedly the first day of the year that retailers would be in the "black" as opposed to being in the 'red' which means essentially more money going out (product, salaries, etc..) than what's being taken in.

We remember when this concept of 'Black Friday' was first introduced in the mid 1990s.  It had an organic quality-- just seeming to develop and expand on its own.  Don't get us wrong-- for many decades people have always gone shopping the day after Thanksgiving for special deals and values while jump starting the holiday season.

What changed was that it developed by retailers into an 'Event'...  A store that normally would open for shoppers at 9 or 10am would instead open its doors at 6a.   And instead of just having good sales, what was needed now to draw in masses of customers was blockbuster specials.
And Black Friday quickly grew in interest as every year, more and more people would stand outside and wait to buy DVD players, computers and televisions.

And once the stores had the public hooked, something interesting happened-- the quality of the sales decreased-- Dramatically.  And once 6a wasn't a big deal any more to open a store, the new time was midnight, and now this year at Target and others, 9p... on Thursday.

And Black Friday changed dramatically in itself..  From simply another shopping day to event to what is now treated by merchants via their advertising as a holiday in itself.  In other words we've gone from using Black Friday as a means to get a jump start on Christmas shopping, to now treating Black Friday as a 'holiday' in itself that one has to prepare for.

Thanksgiving to retailers is now simply a nuisance where people dare to put family over shopping.

And as we said before, the Black Friday "sales" are really pretend sales.

For instance, Yankee Candle's big sale is if you buy 2 candles, you get 2 free.  OK, that is a good value... Problem is that's the Same promotion running for the last 3 weeks.  If you were on Yankee Candle's mailing list, you would have received the coupons via email.
CVS Pharmacy is advertising that everything regular price is 25%.   OK, that's nice..  but the thing is if you subscribe to their mailing list, you will receive 25% off regular priced merchandise.... Weekly.

Bed Bath & Beyond is pushing their 20% off  and 'Save $5 off a $15 or more purchase' coupons off any regularly priced merchandise as if they are rare things to behold.  All you have to do is get on their mailing list and you will receive those promotions monthly.

Kohls department stores has promotions where you can save up to 30% on purchases... One of our staff is on the Kohl's email list and we're told with no exaggeration that they send out email coupons every single day i.e. a never-ending sale!

 TGI Friday's restaurant is offering 'Buy 1 entree, get 1 Free' which once again, is a Standard, run of the mill promotion that they send to those on their email lists.

If you go on Applestore.com, you will see the annual one-time-only sale on Apple brand products... a 'Whopping' 8% off... I guess some people see "sale" differently than others..
On and on..   For every genuine deal a store has which is meant as a front door blockbuster deal, there are thousands upon thousands of items at a multitude of stores which are nothing more than standard, run of the mill discounts with a shiny 'Black Friday' ribbon.

And people will shop and spend and charge for things they really don't need to buy for people who in all likelihood will turn around and return/exchange.   And they will put themselves further into debt so that they can have one special day of joy and/or pre-recession normalcy while forgetting that there is a Dec 26th..and 27th..and 28th...

And all the ignorant financial pundits will look at the crowds of people and the dramatic uptick on cred card use, and thus all will be misconstrued as the example of a bustling economy, which of course it isn't.

And Black Friday leads to Cyber Monday.. another modern contrived 'holiday' which has taken a life of its own followed by at least 28 shopping days till Christmas...

Its enough to make one go 'Bah Humbug!'


Tuesday, November 20, 2012

Complete & Concise History of Thanksgiving


Since we find the thought of writing about soulless Investors making money off a fixed stock market utterly distasteful as Thanksgiving approaches, instead we thought we'd share a complete yet concise history of the holiday from Puritan times to the present.   This was written by us in 2010 but for the occasion, we're reposting for others to enjoy and share...
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December 4, 1619-- 38 English settlers arrived at Berkely Hundred which comprised about 8,000 acres on the north bank of the James River, about 20 miles upstream from Jamestown, Virginia where the first permanent settlement had been established in 1607.  The group's charter required that the day of arrival be observed yearly as a "day of thanksgiving" to God.

During the Indian Massacre of 1622, nine of the settlers at Berkeley Hundreds were killed, as well as about a third of the entire population of the Virginia Colony. The remaining colonists withdrew to Jamestown and other more secure points.
1621--  The modern Thanksgiving holiday traces its origins from a celebration at the Plymouth Plantation, where the Plymouth settlers held a harvest feast after a successful growing season. This was continued in later years, first as an impromptu religious observance, and later as a civil tradition.

The Pilgrims were taught by the Indians how to catch eel and grow corn. Additionally the Wampanoag Indian leader Massasoithad caused food stores to be donated to the fledgling colony during the first winter when supplies brought from England were insufficient. The Pilgrims set apart a day to celebrate at Plymouth immediately after their first harvest.
1630-- Massachusetts Bay Colony (consisting mainly of Puritan Christians) celebrated Thanksgiving for the first time, and frequently thereafter until about 1680, when it became an annual festival in that colony; and Connecticut as early as 1639 and annually after 1647, except in 1675. Charlestown, Mass, held the first recorded Thanksgiving observance June 29, 1671 by proclamation of the town's governing council.
1777-- The First National Proclamation of Thanksgiving was given by the Continental Congress commemorating the surrender of British General Burgoyne at Battle of Saratoga. During the 18th century individual colonies commonly observed days of thanksgiving throughout each year. We might not recognize a traditional Thanksgiving Day from that period, as it was not a day marked by plentiful food and drink as is today's custom, but rather a day set aside for prayer and fasting.
October 3, 1789-- George Washington created the first Thanksgiving Day designated by the national government of the United States, and again proclaimed a Thanksgiving in 1795. President John Adams declared Thanksgivings in 1798 and 1799. No Thanksgiving proclamations were issued by Thomas Jefferson but James Madison, the 4th President, renewed the tradition in 1814, in response to resolutions of Congress, at the close of the War of 1812. Madison also declared the holiday twice in 1815; however, none of these were celebrated in autumn.
 ~ "Thanksgiving In Camp"- Winslow Homer

November, 1863-- In the middle of the Civil War, Lincoln prompted by a series of editorials written by Sarah Josepha Hale proclaimed a national Thanksgiving Day, to be celebrated on the final Thursday in November 1863 and since then, has been observed annually in the United States.

During the second half of the 19th century, Thanksgiving traditions in America varied from region to region. A traditional New England Thanksgiving, for example, consisted of a raffle held on Thanksgiving eve (in which the prizes were mainly geese or turkeys), a shooting match on Thanksgiving morning (in which  turkeys and chickens were used as targets), church services, and then the traditional feast which consisted of some familiar Thanksgiving staples such as turkey and pumpkin pie, and some not-so-familiar dishes such as pigeon pie.

In New York City, people would dress up in fanciful masks and costumes and roam the streets in merry-making mobs. By the end of the century these mobs had morphed into "ragamuffin parades" comprised mostly of costumed children, and by the 20th century the tradition had mostly vanished.
1939--  Lincoln's successors as president followed his example of annually declaring the final Thursday in November to be Thanksgiving. But in 1939, FDR broke with this tradition. November had five Thursdays that year (instead of the usual four), and Roosevelt declared the fourth Thursday as Thanksgiving rather than the fifth one.
With the country still in the midst of Great Depression,  Roosevelt thought an earlier Thanksgiving would give merchants a longer period to sell goods before Christmas. Increasing profits and spending during this period, Roosevelt hoped, would help bring the country out of the Depression. At the time, advertising goods for Christmas before Thanksgiving was considered inappropriate. Fred Lazarus, Jr, founder of the Federated Department Stores (later Macy's & also currently Bloomingdales), is credited with convincing Roosevelt to push Thanksgiving back a week to expand the shopping season.
Republicans decried the change, calling it an affront to the memory of Lincoln. People began referring to Nov. 30 as the "Republican Thanksgiving" and Nov. 23 as the "Democratic Thanksgiving" or "Franksgiving." Many localities had made a tradition of celebrating on the last Thursday, and many football teams had a tradition of playing their final games of the season on Thanksgiving; with their schedules set well in advance, they could not change.

Since a presidential declaration of Thanksgiving Day was not legally binding, Roosevelt's change was widely disregarded. Twenty-three states went along with Roosevelt's recommendation, 22 did not, and some, like Texas could not decide and took both days as government holidays.
 October 6, 1941-- Congress passed a joint resolution in 1941 fixing the traditional last-Thursday date for the holiday beginning in 1942.  In '40 and '41, years in which November had four Thursdays, Roosevelt had declared the third one as Thanksgiving and as in 1939, some states went along with the change while others retained the traditional last-Thursday date.  After 1941, Thanksgiving became a matter of federal law.