Amazing Quotes Today
"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.