November 5, 2006 at 8:31 AM #7839powaysellerParticipant
“Retail sales in October rose the least in four months, as consumers held off on spending ahead of the holiday season. Wal-Mart Stores Inc. forecast its worst sales in more than 10 years….”The news from Wal-Mart is definitely discouraging,” Perkins said. “They are going to be very price-aggressive. And it is going to have an effect on everyone. It is going to force other retailers to cut their prices, which in turn will squeeze their profit margins.”
Still, Perkins said he believes shoppers will regain their stride during the holiday shopping season. ” link
It seems like retail sales are definitely slowing. Growth cyles end with a slower rate of growth before turning negative. For example, growth rate will go from 10% to 6% to 2% and then to -1% -3%, etc. Obviously negative growth is a contraction or reversal. Reversals happen gradually like this, so we need to look for the rate of increase to slow from its peak, just as is happening now. Joseph Ellis explains this very well in Ahead of the Curve, and that’s where I learned about this.
OTOH, lending guidelines are still easy and folks are spending their equity, so a real slowdown is still not here. I wonder how quickly this will change when the state regulated lenders have to comply with new exotic lending guidelines.
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