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alstry (< 20)

Amazing Quotes Today



April 17, 2008 – Comments (3)

"I've been in business in 39 years," [Chief Executive Mike Ullman] said. "I don't think I've seen anything as unpredictable. Our entire business is soft because of lack of traffic. We can't give much guidance because there's no visibility."

CEO of J.C. Penny

“Outlook, 4.5 to 5% full year losses trending higher as we get through the rest of the year and probably a little bit of an effect of slowing card spend which is what we've seen in the past couple of weeks.”

JP Morgan's CC today

“With the traditional home buying season now well underway, we have not seen the bump in sales activity that we normally would this time of year.”

President of NAHB


Based on the above and the Fed's beige book, it is clear that things have slowed materially over the past few weeks.  When consumer's are burdened with debt, and credit is taken away, discretionary spending does not slow, it simply stops.  America is now beginning to feel the effects when banks stop lending money after years of giving it away cheaply. 

More homes getting foreclosed than selling.  Retail traffic slowing so much experienced executives can't make forecasts.  Boat sales fall off a cliff.....ect.....we will see what Harley reports tomorrow.

As sales slow dramatically, businesses scale back or shut down forcing further slowdowns.  It is a vicious cycle that accellerates with each contraction.  Defaults beget more defaults as contraction stimulates further contraction.

The greater the leverage the more violent the contractions.  The more violent the contractions, the quicker the deterioration.

We are now starting to see some amazing numbers.  MarineMax reported quarterly same store sales declines of 28% with March worse than that.  We saw a number of retailers report very weak March numbers.  Based on recent credit card receipts and JC Penny's comments today, it appears deterioration accelerated in April.

Expect lots of layoff announcements soon if this trend continues.


3 Comments – Post Your Own

#1) On April 17, 2008 at 1:10 AM, alstry (< 20) wrote:

More slowing Tonight:

HONG KONG (MarketWatch) -- Industrial materials maker Asahi Glass Co. will suspend output at five plants in North America until December and sell one glass fabrication line, reducing production by 40% as the firm struggles to cope with an inventory glut amid the sharp drop off in demand for home construction materials. Tokyo-based Asahi said it will take a special loss of 13.5 billion yen ($132.5 million) in the June-ending fiscal quarter to account for the restructuring, the company said in a statement posted on its web site Thursday. Asahi said it will refocus its operations on developing business in solar cell glass, automotive applications and other value-added products, the statement said. "The continued decline in the housing market in North America ... has created a serious oversupply situation," the company said in the statement.


(MarketWatch) -- A slowing U.S. economy, flat global sales and stronger yen are expected to combine to cut Toyota Motor Corp's net operating profit by at least 22% during its current business year, according to a media report Thursday.

(MarketWatch) -- Hino Motors Ltd, a unit of the Toyota Group, will shutter its truck assembly plant in California, becoming the first Japanese truck maker to shutter a U.S. assembly line in recent times, according to a media report Thursday.

Much of America's purchases over the past five years was based on credit.  While prices kept climbing, many incomes were falling.  Kill credit and kill business in America.

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#2) On April 17, 2008 at 1:11 AM, abitare (29.87) wrote:

We are aligned in thinking.

FYI - For more quotes take a look at abitareperfect Depression vs Housing bubble

I think HOG will get hit. I also think Borders bookstore will go BK.  

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#3) On April 17, 2008 at 7:05 AM, alstry (< 20) wrote:

VIENNA (MarketWatch) -- Merrill Lynch said it is planning to cut headcount from year-end levels by about 4,000 employees, or 10% of its workforce......

Continental Airlines also stated its cutting back.

More and more firms are announcing 10% staff cuts.  With 5% of America already unemployed, its not a stretch that we will be above 10% unemployment by summer especially as more service sector and government losses are announced. 

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