MarquisdeLafayett's  Instablog

Good afternoon , today we will discuss secondary effects  from the results of increased joblessness and decreased credit on our nations retailers .

As all of you are now aware Octobers job’s report has continued a downward trend that has resulted in millions of Americans becoming unemployed . While many In the media and certain academic circles  subscribe to and predict a coming economic recovery , those of us who believe that unemployment has become a leading indicator rather than a lagging indicator will not be  swayed from our belief before we see a net gain in jobs . Until that  time we can expect the economic conditions of unemployed individuals to deteriorate to new lows .

I want those of you reading this and still employed to ponder the situation of the hopeless . While unemployment benefits have been extended time and time again , for most of us it would not be possible to maintain a new car , house payment , food shopping , spending on the kids etc with the limited income from unemployment pay . With no ability to generate income from work  , the unemployed in this nation have already turned to making money in the only way they have left , by selling their belongings at yard sales or the road side .  There is virtually no suburb  without at least one yard sale these days , and while the items that are sold are generally low budget  and not highly sought after , that trend will change as people grow more desperate and thus more willing to part with their most prized possessions which they still , even now are trying to maintain . While we have all lived with EBAY for the last few years , it’s never become a force that could possibly overwhelm brick and mortal sales ,but that may soon change  ..

Consumer spending has already changed drastically in this country as has consumer product perception … take for example the exodus of shoppers from high end stores to the likes of TJ Max and ROSS … the trading down of Target to wal-mart and the switch between premium coffee offered by star bucks to the more economical fare served by McDonalds . It’s not that far of a leap in assumption that with spenders more constrained than ever ( from lack of credit , fear of losing their jobs etc ) people will begin to shop the second hand market much more frequently .

In short , joe blow will go out and either find on Ebay or in the streets the $ 1,500  fifty two inch LCD TV he wanted for 500 dollars used, rather than buying it new .

As more and more desperate individuals dump their consumer products , asset prices ( tv’s , cars , ipods etc ) will be hammered down in all categories . After a time this will become what we call a negative economic cycle , Right now with retail desperate for sales they won’t be able to suffer the loss of so many consumers to the secondary market , more stores will close , more people will lose their jobs and the asset deflation will continue .

Yard sales ….. The retail killer ………………………( third effects , loss of state taxes )

Marq