retail implosion

RETAIL IMPLOSION
Television is a drug. It is a good drug, a soothing drug, a drug that only effects the mind and not the body. We can all leave healthy looking corpses. Your grey matter might be a puddled mass, but you won't lack all your teeth like you would from crack. I miss my favorite drug. Despite a dismal year when the writers strike caused nothing but reruns and reality shows so horrible that it forced even the most hopelessly addicted to turn away from the Benevolent Electronic Cyclops in disgust, I still feel pangs for the old habit. So thank goodness I can finely resist its allure. Perhaps in time I'll be lured back in. Or perhaps I might be able to discipline myself to only watch a small amount rather than allowing it to become a daily habit. But today, today was a glorious and wonderful time not to have a TV. Thank all the gods I was not forced to watch the national delusion that our New And Improved Hero was being crowned and would soon come to our rescue. It was embarrassing to be an American today. We presented to the world a unified message that we are complete morons and fools. We still believe in the Easter Bunny, the Tooth Fairy and Santa Claus. And we're almost three hundred years old. In the spirit of not joining this spectacle, here is today's article on financial doom and gloom.
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After the last economic downturn, millions of laid off workers were able to hitch their buggy to the real estate bubble and make a decent to great living sucking off people only too eager to spend a half million bucks for twenty grand worth of building materials on a desert lot. You've heard a dozen times how all the job growth since 9/11 was housing and defense. Well, the credit contraction has put an end to all that ( I'll devote an article in due time to the underlying math- in short financial institutions that were leveraged 5 to 1 debt to assets suddenly found themselves facing the nightmare of 100 to 1 due to the structured nature of derivative risk ). And there won't be another bubble to replace it this time. Plus, military spending doesn't seem to be working this time. Not only won't there be the ability to open construction businesses such as marble suppliers or interior decorators or the parasite businesses of home equity extraction such as boutique stores ( scrap booking, beads, candles, bath accessories ) or SUV sales, all those already in existence are quickly and surely going out of business.
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It is going to suck to be a landlord. It looks good now, as rental prices catch up and surpass housing prices. Or, as lack of credit allows a sort of "sub prime" rent. A premium on those with lower credit scores. Soon, however, as job losses accelerate and children move in with parents and geriatric parents move in with adult children and friends move in with friends, the pressure will be on landlords to fill suddenly empty units. Prices will fall ( or at least not accelerate with cost of living ). Retail landlords are in worse trouble. People will give up businesses from lack of customers much faster than they will change their domestic arrangements. They will have no choice. Without cash flow from sales and without any available credit to ease them through lack of sales, they will be forced to close.
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With retail businesses failing left and right, with the manufacturing sector gutted long ago and simply getting worse ( who would have thought that possible? ) and with financial pressure of extreme magnitude forcing all levels of government save the feds to cut back on salaries or workforce or both, who is going to be able to hire you when you are laid off? When I moved to Elko six months ago there were two kinds of jobs to be had. Minimum wage and minimum wage part time. And that was before things really started to go to hell, in an economy that was suffering less than others due to the mining, the then high price of beef and the yet to decline rail transport. Plus, housing had yet to either halt or decline in town ( the old story of retail paying a premium to attract workers was done and gone when I arrived ).
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In short, once you are laid off, panic. I can't see many if any jobs being created. And layoffs will accelerate. Our economy was propped up by easy credit. And that is over. You might want to assume the worse as far as jobs and plan accordingly.
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