Guardian UK: Empty malls send dollar tumbling

[marmar]

Rising prices and anxiety cause surprise drop in US retail sales
Treasury secretary berates banks and demands changes in market practices
Andrew Clark in New York
The Guardian, Friday March 14 2008


American consumers are steering clear of shopping centres, as home repossessions and surging household bills hit them in the wallet, according to dismal high-street spending figures that sent the dollar and Wall Street stocks tumbling yesterday.

As the treasury secretary, Henry Paulson, attacked banks for creating obscure financial instruments that exacerbate market turmoil, analysts reacted gloomily to a 0.6% drop in February retail sales - far worse than the widely forecast 0.2% rise.

Mark Vitner, senior economist at the US bank Wachovia, said soaring oil and food prices were leaving shoppers with little spending money. "High gasoline prices have pushed consumers to breaking point," he said, adding that a recession had become undeniable.

"Once the economy slides into recession, my experience from history is that things tend to get worse faster than anybody's expecting," he said.

Scores of major shopping chains, including Wal-Mart, Nordstrom and Abercrombie & Fitch, have reported disappointing takings so far this year. Even luxury boutiques such as Tiffany are suffering from the downturn.

Dean Maki, chief US economist at Barclays Capital, said: "We're seeing softer spending in the first quarter. Inflation is rising significantly, especially for oil and food. On top of that, the softer labour market is holding back income growth."

Pessimism is taking root in boardrooms: a Duke University survey of 475 chief financial officers found the worst level of sentiment in the study's six-year history: 54% believe the US is already in recession and a further 24% think there is a high risk of one shortly.

The Wall Street Journal's economic forecasting survey showed 71% of respondents putting the US in recession, and 48% of the 55 responses said a 2008 recession would be worse than the last two. ........(more)

The complete piece is at: http://www.guardian.co.uk/business/2008/mar/14/useconomy.usa

[Fresh_Start]

1. Omigod, Tiffany's had disappointing sales

next thing we'll hear is that the luxury yacht market is off.
What will people do if they can't have their baubles or yachts?

[OhioChick]

2. I Went to Target Yesterday...

Just to pick up a few necessities. The store was nearly empty in an eerie sort of way.

[HCE SuiGeneris]

7. I see this eerie quiet in EVERY mall I have been to in the last 6

months. The difference now is that many of the stores and restaurants are actually closed within the structures. This is in the Phoenix and Tucson areas.

[GreenPartyVoter]

8. They are putting a new mall in about 40 minutes from us. I still can't believe the

population is there to even support that.

[0007]

3. Legalized prostitution then throw junior & his little dick out of office.

[AlCzervik]

4. i went to Kohl's last friday at around 4:00pm and the place was empty and they were

having a huge sale.

[DJ13]

5. I love how they paint this crisis as happening because Americans........

.......cant spend money because they cant borrow money instead of the fact that people were only borrowing money because US businesses stopped increasing workers pay 5 years ago.

The answer isnt to once again increasing our borrowing capability, its to pay us enough to be able to afford to live without borrowing money.

[Vincardog]

6. Pessimism is taking root in boardrooms: Are those the same boardrooms that voted to send our jobs

overseas?
The same boardrooms that have been plotting to renege on our pensions and health care agreements?
Is there some pain that is beginning to trickle up to the economic parasites?
Where did I leave the worlds tiniest violin?

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[GreenPartyVoter]

9. If I could rec a reply, you'd have it!