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Thread: weekend commentary - Consumer Comfort Index

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    Default weekend commentary - Consumer Comfort Index

    (snip)" NEW YORK, Oct 23 (Reuters) - The confidence of American consumers fell to a six-week low in the latest week as higher gasoline prices and credit concerns continued to erode the economic outlook, a poll showed on Tuesday.

    The ABC News/Washington Post Consumer Comfort Index fell to -17 in the latest week from -13 in the previous period. The measure ranges from -100 to +100; its 2007 average is -8 and the 2007 low, hit in August, is -20.

    "Gasoline prices rose by six cents to $2.82 per gallon, and the subprime loan fallout continues to shake the stock, credit and housing markets alike," the news outlets said in a statement.

    The three components of the ABC/Washington Post index were lower compared with the previous week.

    Americans' positive views on the national economy and on the buying climate both fell 2 percentage points, to 34 percent, and views on their personal finances were off 3 percentage points, to 56 percent.

    Confidence measures are generally viewed as a barometer of consumer spending, which accounts for two-thirds of the U.S. economy. However, economists note that consumers do not always act in accordance with their statements to surveys."(snip)


    The US 'consumer' is notoriously short-sighted. Thus the short term spike in oil / heating oil / gasoline prices draws red flag attention. However, there is lots of other data which indicates that US consumers are being forced to reallocate a stagnant or declining amount of after-tax dollars earned (thanks to tiny raises and big state and local tax increases) away from 'discretionary' spending in order to continue funding 'necessary' spending.

    (snip)" Since April, when investors voiced optimism that the housing slide had been contained, shares of the country's biggest department store chains have fallen by about 30 percent.

    With the sagging prices, investors have rendered a harsh judgment on the coming holiday shopping season, predicting that consumers will severely cut back on spending.

    The gloom since April 20 has been spread evenly across the big chains: shares of J. C. Penney are down 33 percent, Macy's by 27 percent, Kohl's by 28 percent and Sears by 28 percent.

    Robert J. Barbera, the chief economist of the Investment Technology Group, said, “The conventional wisdom of a year ago was that we would have a soft landing in housing.” But today, he said, “the stock market message is a hard landing for housing, with clear damage to consumer discretionary spending.”(snip)

    (snip)" Economic slowdowns traditionally hurt stores catering to a less affluent customer base, like Wal-Mart and Target. But in a reversal, those discount chains have not done as poorly as department stores.

    “The problems have crept up the consumer food chain,” said Bill Dreher, an analyst at Deutsche Bank Securities.

    Behind the falling stock prices are slipping sales at stores.

    After a strong performance early this year, sales at department stores open at least a year have fallen three of the last six months, according to Deutsche Bank.

    The stores have blamed a variety of factors, like an unseasonably warm August and September, which hurt back-to-school clothing sales, and poor sales of household goods, tied to the slowing housing market.

    Sales at Macy's and J. C. Penney have fallen five of the last six months. Kohl's sales have fallen four of the last six. "(snip)


    remember ladies that lap dances clearly fall in the category of 'discretionary' spending ! The data showing that 'middle class' stores i.e. Penneys & Macy's have been hit by larger cutbacks in customer spending than the 'working class' stores i.e. WalMart and Target will probably directly translate into similar cutbacks in spending by 'middle class' strip club customers.

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    Default Re: weekend commentary - Consumer Comfort Index

    Melonie, you are so right. Oh, did I notice a drop in the "discretionary" spending by the customers. We are in the midst of a "busy" football season which usually brings a decent crowd during home games. The number of people coming to the club thatv travel to watch their teams play is shockingly smaller than in the previous years. Even the traveling businessmen are just sitting there watching and not spending.
    I keep waiting for the stock market to go down, but it's not happening... I guess they still have a few strings to pull...

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    Default Re: weekend commentary - Consumer Comfort Index

    ^^^ as to the US stock market 'manipulations' continuing, whenever the FED prints up a fresh batch of US dollars the stock markets are the first place that those dollars wind up. Check out the data at - and yes they're talking about a net of $38 BILLION for the week. Since the recent rule changes, the Fed Open Market Operations has been facilitating a 'scheme' whereby toxic mortgage backed debt can now be 'traded in' for real dollars. There's also increasing Fed action re Securities Lending. But by far the biggest mover is the expectation that the Fed will cut interest rates again next week, which will devalue the dollar even further / increase the price of oil, food, gold etc. even further, but will increase stock share prices.

    As to a decrease in 'discretionary' spending, there are all sorts of statistics out there which have so far evaded the attention of mainstream media in 'connecting the dots'. A biggie was just released ...



    (snip)"New car registrations fell 15.3 percent in Orange County in the third quarter of this year, the Orange County Automobile Dealers Association reports.

    Year-to-date registrations have fallen 9.8 percent in Orange County, compared to a nationwide drop of 3.2 percent through September, the auto dealers report.

    For all of 2007, the auto dealers forecast a 7.9 percent drop in sales, following a 6.1 percent drop in sales in 2006. The dealers expect sales to fall in 2008 by 1.7 percent, before rebounding in 2009.

    At the end of last year, the group forecast a 2 percent drop in new vehicle registrations for 2007. The mid-year forecast in June predicted a 4.4 percent drop in sales.

    The peak year for new vehicle sales in Orange County was 2004, when 197,041 new vehicles were registered. This year, the figure is expected to fall to 168,250.

    Auto sales are a major source of sales tax and a key indicator of consumer spending sentiment."(snip)

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    Default Re: weekend commentary - Consumer Comfort Index

    Interesting thread, but statistics can be flawed.

    1) Gas prices going up 6c/gal. Negative, but not catostophic. For someone that buys 50-80 gal. of gas per mo. translates into $3-$4.80 per mo. less discretionary income. Thats 1 less drink, (or 3-5 less stage tips/mo, essentially chunk change). Of course, the ripple effects on economy (lots of goods move, highter delivery costs) transcend the effect on individual household, not to mention numerous recessions followed large gas price hikes, but

    2) You cite lower car sales. Economy is partially driven by automotive sales. While I'll go 7 yrs between car purchases, I won't go 7 yrs without visiting stripclub

    3) Upon receiving layoff notice (actually full time to "on call" status) on Tue, I went to SC for "attitude adjustment" on Fri.

    While the big picture landscape changes, dancers can have bad, and good shifts in any economy.

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    Featured Member minnow's Avatar
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    Default Re: weekend commentary - Consumer Comfort Index

    post oops- above #3 incident happened over 20 yrs ago, current full time$$ still going...

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    Default Re: weekend commentary - Consumer Comfort Index

    if you invest a few minutes to turn over some logical 'rocks', you find the same thing happening in other market segments ...

    (snip)"Investors don't find Ruby Tuesday to be a gem.

    Plummeting earnings combined with lowered guidance prompted investors to say goodbye to Ruby Tuesday (nyse: RT - news - people ) on Thursday. Shares of the semi-upscale chain fell $2.57, or 13.7%, to close at $16.23.

    One reason: as consumers get pinched, they're opting for cheaper food. This budget-conscious preference lead Ruby Tuesday to announce tumbling earnings and lowered guidance that sunk its stock.

    Ruby Tuesday's first-quarter net income fell 48.6% to $11.1 million, or 21 cents per share from $21.6 million, or 37 cents per share, a year ago. Analysts polled by Thomson Financial expected earnings per share of 22 cents.

    Ruby Tuesday said it now expects to earn $1.01 to $1.13 per share in fiscal 2008. In July, the company predicted fiscal 2008 earnings of $1.59 to $1.67 per share.

    The company blamed slipping same-restaurant sales and remodeling costs for the lowered earnings guidance. Ruby Tuesday expects same-restaurant sales to slip 3.0% to 5.0% in fiscal 2008. The company is changing its store layouts and menus in an effort to spice up its attractiveness to eaters."(snip)

    (snip)"During the first-quarter, Ruby Tuesday's total operating costs jumped 7.2% to $323.9 from $302.2 million, a year ago. Restaurants are contending with rising prices for ingredients like chicken. (See: "Pricey Meals For Chickens Cost Sanderson")

    Economic strains--like lower home values, higher energy costs, and less jobs--are mounting on the consumer. Tighter budgets can push eaters to cheaper meals like those from McDonald's (nyse: MCD - news - people ) (See: "Investors Take A Bite Of McDonald's")

    Ruby Tuesday's dismal guidance helped sink shares of other casual dining operators Thursday. Shares of Darden Restaurants (nyse: DRI - news - people ) fell 98 cents, or 2.2%, to $43.52. Darden operates chains like Red Lobster and Olive Garden. Shares of the Cheesecake Factory (nasdaq: CAKE - news - people ) fell 65 cents, or 2.7%, to $23.72. Shares of Landry's Restaurants (nyse: LNY - news - people ) fell $1.12, or 3.9%, to $27.85."(snip) from


    In the world of exotic dancers, strapped consumers deciding to make a 'downscale' cost saving substitution means they are now sitting two tables back and watching a free stage show without buying any private dances ... or it means they are now expecting dancers to provide 'extras' at no extra cost after their $20 basic private dance purchase ... or it means they are renting a porn CD, joining a porn website, or buying a pay per view porn movie instead of going out to a strip club at all.
    Last edited by Melonie; 10-27-2007 at 04:52 PM.

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