The National Retail Federation threw some cold water on the holiday:
WASHINGTON--(BUSINESS WIRE)--The National Retail Federation today released its 2009 holiday forecast, projecting holiday retail industry sales to decline one percent this year to $437.6 billion.* While this number falls significantly below the ten-year average of 3.39 percent holiday season growth, the decline is not expected to be as dramatic as last year’s 3.4 percent drop in holiday retail sales nor as severe as the 3.0 percent decline in annual retail industry sales expected for all of 2009.**
No, really? Gee, who saw this coming?
On the Pearl River Delta, China's major export base, orders at many shoemakers were already low as the situation has gone from bad to worse. According to China Business News, a European customer's sudden cancellation of an order for original high-end shoes at an unnamed company might cause that company's bankruptcy as it has already bought materials and entered production.
And what foreshadowed this report? Why this Ticker and the article that spawned it.....
Remember, this is the time when Christmas goods are on the way. You can't order something from China, have it produced, and then have it sent in a ship in a week. Uh uh. Those goods have been ordered now, they are in the pipeline for delivery now, or they're not coming.
They're not coming.
Flat to down 1% is insanely optimistic folks.
"Hoofs on the ground" say its even worse than that.
The facts are that in order to get product here you have to order it and it has to be manufactured. There is simply nothing to indicate that final demand, which is the ultimate arbiter of whether the economy is turning around, has begun to swing upward.
The problem remains clogged credit systems, which cannot be unclogged until the defaulted debt and fraudulently-inflated asset valuations are recognized for what they are and written down to actual value, forcing those defaults through the system and clearing the excessive debt load.
But every action our government has taken thus far has been hell-bent to do exactly the opposite - "extend and pretend" - in the hope that a magical fairy will appear and make it possible for borrowing to restart.
The error in this approach is that credit demand requires that there first be an unpledged asset that one can post as security.
But most of the assets are not only encumbered, they're underwater.