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alstry (35.49)

The Shutdown Continues

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December 16, 2008 – Comments (2)

 MINNEAPOLIS (AP) -- Best Buy Co. Inc. , the nation's biggest consumer electronics retailer, said Tuesday that its third-quarter profit sank 77 percent as it faced dramatic changes in consumer spending.

The company also said it will offer massive buyout packages to corporate employees while slashing spending in a bid to cut costs, news that the sent the retailer's stock soaring.

Executives called the past three months the "most challenging consumer environment" in the retailer's history.

"We believe that there has been a dramatic and potentially long-lasting change in consumer behavior as people adjust to the new realities of the marketplace," Chief Executive Brad Anderson said in a statement. "We also believe that customers will continue to reward those retailers who understand their needs and desires, and offer relevant solutions at fair prices. Yet we clearly recognize that these changes require us to make significant adjustments."

More and more losing their jobs.  I am talking to partners at major lawfirms and business is slowing.  Regardless how much money is printed...if there is rapidly slowing velocity, you might as well flush all those "new" dollars down the toilet.  Right now the vast majority of money printed is going to very few....VERY FEW!!!!  It takes spending by the many to increase velocity.

Demon....until velocity increases....Deflation continues.

2 Comments – Post Your Own

#1) On December 16, 2008 at 4:59 PM, DemonDoug (98.85) wrote:

hey al, I've re-evaluated my "inflation 100% in the bag" scenario.  This was borne out of my own research.  I noted that the yen monetary base increased by about 75% from 1990-2006 - and no one can argue that the yen has lost value due to inflation in that time.

But right now it's a big I don't know kind of thing.  It seems like the only thing left is to actually print and give out money.  And by that I mean digitally, all you'd have to do is just double everyone's accounts overnight in terms of cash (cd's, deposits) and keep the debts at the same level, presto, 100% inflation.   I do not put this out of the realm of possibility entirely, but continued deleveraging and asset price deflation will continue to put downward pressure as you've noted.

Overall, I'm admitting I'm confused, because there is a good case for both high inflation and sustained deflation.

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#2) On December 16, 2008 at 5:05 PM, alstry (35.49) wrote:

Demon,

You and I are now watching the same ball game.

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