I am not surprised about Macy's possibly going bankrupt

[TwixVoy]

Please forgive any ramblings in these comments of mine. I am up very late here and I am literally half passed out.

I can't say I'm surprised about Macy's. I don't think we will see them in bankruptcy this year though or even next year.

I expect retail to be in a death spiral for the next many years, but it will be more of a mass down sizing than major retailers going bankrupt.

At Target, for example, we did a TON of cost cutting. We got rid of tons of peoples positions. We cut energy costs. We slashed raises. Almost everything though was down very silently and gradually. Most employees outside of management were not even aware of it, and the public certainly was not aware of it.

When I left Target management corporate was essentially preparing every store in the company for a long term multi year down turn. There is even a plan in place that should be running this year and the next to rip out the express lanes at ALL the stores. The memo that came down to us from corporate said they were doing this to "prepare for the new average consumer that can only buy a few items at a time". Thus EVERY lane was going to be essentially an express lane.

I also find it interesting to see the signing they have deployed in the stores all over the place telling people what a great low cost value everything is. I never heard anything about that when I left the company earlier this year, but it just screams "desperate".

I still believe that we are *not* looking at an outright 1930's style deperession in the United States. What I expect to see happen is a more accelerated gradual decline in the standard of living effecting both the lower and middle class. It will be gradual enough that most Americans won't even see it happening.... but they will "feel" a little more pressure over time with out being fully are of what is happening. A frog in slowly heating water is the best example I can think of to describe the effect.

I can only see one thing that WOULD cause an outright sudden depression worse than the 1930's. That would be a series of events occur that result in our dollar losing most of its value and/or Asia pulling the plug on our imports of their goods. Should either of those events happen I believe we would be looking at mass civil unrest in short order. I think there is perhaps a 30% chance of either of those events happening.

But I am 100% sure with out a doubt in my mind we will experience a mass decline in our standard of living over the next several years. I believe that 10 years from now we will look back at 2007 as the year we began a decline in to being a poor country.

My best advice to people in general is to:

1. Pay off debt.

2. Be almost completely out of ANY investments in this country

3. DO have emergency plans in the back of your mind should the unlikely happen and we have a sudden collapse.

4. Own at least SOME physical gold. I would recommend $10,000-$20,000 worth at a minimum. This is easy to do by purchasing 10-20 1oz US gold eagles minted by the US treasury.

I don't know what specifically will happen, but as far as the general trends I see coming I am very sure at this point nothing will prevent it.

[vadawg]

1. problem with gold is, its not a great currency to work with at the street level

goods are better, or if you must have gold, use it to prepare an escape long before you need it.

[tularetom]

3. Thats right, how are you gonna use gold to buy commodities with?

Chip a chunk off your golden eagle and exchange it for a hamburger?

Very impractical.

[vadawg]

4. bud light and marlboros are probuably a better save for a rainy day...

[TwixVoy]

7. You won't use it to buy food with

Which is why I don't recommend putting all your assets in gold.

It is simply to safe guard your at least some of your WEALTH in the event of a complete dollar collapse. Then, YEARS later, you hopefully will be able to exchange it for a currency.

[vadawg]

8. okay were are you going to hide it, cause it had better be well hidden

and no one had better know about it... your better using that same cash to buy supplies or a way out of where you are, no point having 20g iin gold if you are hungry..

[TwixVoy]

11. You will keep your mouth shut about it

and you will put it some place only you have access to.

No one will come looking for something they don't know you have.

I have 20 1oz gold coins somewhere in the dry wall of my house. You think anyone is going to think to look there? You think I've told anyone I know in real life about it?

It will stay put for the next several years until I take it out. No one will have a clue it is there. Even my family does not know.

[vadawg]

14. lol how long do you think you will keep it hidden when you are hungry

the only way to survive when it gets real bad is to become as the wolf, be in a pack and look after your pack. Have you any idea of the number of people who hide valuables only to find that when it really matters they are worthless to them...

[TwixVoy]

16. Do you think that is all I have done?

Do you think my gold is my only plan? It is but one piece of my preparation.

I have done MUCH more. The gold is only to safe guard at least SOME wealth. I have other plans to provide my self with food and other needs.

[vadawg]

18. lol id give you a week if it all goes to shit, unless you have a large family group

theres a reason why mankind developed tribes etc, its much easier to survive in numbers than alone.

[Hawkeye-X]

21. My dad has some gold bullions

and was just showing me on eBay how much people are willing to spend for a stack of gold buillions.

$2,900 for like 20 coins (or something like that)

[vadawg]

23. nah jewelry is the best, gold chains and rings can be worn and kept safe

and can easily be traded for shit, but foodstuffs and weapons are best along with alcohol and smokes...

[vadawg]

12. meant to also say, pay of debt, hell know, if its as bad as you think

get as much debt as you can, get it all into casha nd buy shit you may need, having supplies of shit is much better than a clear conscience about debt, if its going to get as bad as you make out debt will be the least of your worries.

[TwixVoy]

15. I don't think it is so bad running your self in to debt is a good idea

As I said, we will likely experience a LONG gradual decline in our standard of living. Not another great depression.

[obliviously]

2. What happened to "HOPE"!

[Lydia Leftcoast]

5. All midlevel department stores are in trouble

When I was a kid, they sold EVERYTHING, from appliances to stamps and coins for collectors. The big box stores drove them out of line after line of business.

Now they sell clothes and accessories almost exclusively, and how many clothes can one person buy, especially since when they're worried about money?

Not only that, every mail order company I have ever bought anything from is spamming me with announces of discounts, free shipping, pay later offers. I filter my e-mail, and I have three mailboxes for ads alone.

[Hawkeye-X]

22. Forward everything to gMail

and pull the gmail using their filters. I got rid of my annoying 'loan' spam and 419 spam that way.

[flvegan]

6. So your prior experience at Target and a suspect thought on a Macy's bky

should drive me to yank all my "investments in this country" and put "a minimum" of $20k into gold (I know, the irony)?

Okay then. I'll just go ahead and ignore that, okay?

[TwixVoy]

9. Go read my countless other posts

in which I go in to great detail about why I feel any investments in this country are going to go south over the next decade. Of course I am not making this recommendation based on two corporations.

Go ahead and invest in a nation that does not produce. I really don't care. Just don't complain when you lose all you have.

[A HERETIC I AM]

10. People and even nations have underestimated this country and its economy in the past.

You do so at your own peril.

[TwixVoy]

13. I have been in this country over 50 years

and this situation is more unique than any we have been in before. You clearly do not understand that.

Even in our worst of times in the past we at least PRODUCED. We were also not a nation of debtors.

A nation of broke debtors who no longer have a manufacturing base is doomed to failure.

IF instead of printing cash to give to the banks we started to PRODUCE again I might agree with you. Because we did not do that I am 100% certain with no doubt in my mind the fate our of nation.

[A HERETIC I AM]

25. "You clearly do not understand that."

Excuse me for a sec while I :spray:

All I said was it is a mistake to underestimate this country and its economy.

You're making an assumption of what I understand based on a simple sentence. You're free to disagree with my statement, but you really have no idea what I know. And please don't respond with some suggestion that I think everything is rosy and just fine. I am well aware of how bad things are and how bad they could possibly get. I read your OP with great interest up to the point where you began predicting the future and giving investment advice. Your insights on what is happening on the floor of Target are interesting but the prediction portion of your post, you have to admit, is pure speculation.

As far as this bullshit meme that we don't produce anything in this country, that certainly is going to be news to the tens of millions of Americans who will go to their manufacturing jobs on Monday.

[MercutioATC]

26. We've been working the squeezings of this country for about 2 decades.

It really depends on your horizon. Short-term or medium-term (3-5 year) investments? Play the market (if you know what you're doing).

Long-term? Silver, dry goods, and ammunition...or an escape plan.


All empires fall. Ours in in the process.

[flvegan]

17. Thank you for your concern.

I'll keep my complaints to myself should I make a bad call, despite your advice.

Considering I've been doing this for 30 years and was driving a paid-for $50k Porsche when I was 20 years old because of my market analysis, you'll forgive me if I don't give your empty threat much consideration.

But, keep on keeping on.

[Sherman A1]

45. While your "opinion" is based upon your experience in

retail management for Target. My opinion is based upon 36 years in Retail (Grocery & Hobby) and differs to some extent. I do agree that people should clean up their debts if they are able and stay somewhat liquid, but folks still have to be able to eat, so I think the whole gold thing is a little off base (but, whatever works for you), in that most folks can't dump 10 to 20K in gold.

Retail will be changing... It may be a surprise, but it always has been changing, just like everything else in life. There will be fewer outlets, there will be more internet sales, hopefully folks will buy less stuff that they really don't need and all.

Part of the reason for slowing sales in the aging of the baby boom we are past our years of acquiring lots of useless stuff and more into getting the kids through college, then looking for retirement, if we can. We have all the blenders and coffee pots we need for now, but will replace them as the break (well at least the coffee pot). A baby boomer will stop by to pick up probably fewer things at Target, because they need fewer things, because most of the stuff they have continues to work or wear just fine, hence your item count will be lower. Another part, of course is the Wal Mart effect on all retail (which is several volumes unto itself as we know).

Target may have done some internal "rightsizing" through the years, most chains have found ways to cut costs (mine is the same, at least for the worker bees), some of that is advancing technology which replaces workers, some of it is new ideas (a few of which actually work and others that are really dumb), some of it is just reflecting changing tastes in the the marketplace. This has always been the case in retail (or other business), it's either morph or die.

I don't see Macy's exiting the Marketplace entirely, I see them closing underperforming stores, consolidating and making modifications to reflect the realities of a changing market which is hopefully something that keeps most of their workers employed (although I suspect many will be hurt).

Retail has always changed and always will do so.

[Dan]

19. ahhh, but you forgot

Bush and Cheney left us an empire.... we have military might (on the Chinese credit card)...

[bridgit]

20. Me neither, 80+% of their Chinese stuff on the racks is over priced & mis-sized

[MercutioATC]

24. I'd recommend silver rather than gold, but otherwise you're spot on.

I'd also recommend having 3-6 months of food and necessities stocked and a PLAN.

[CoffeeCat]

27. I appreciate your posts Twix Voy...

You always get me thinking and I always appreciate your insight. You were at Target when
everything went to hell--and your insight into retail is still very interesting and valuable.

I have always felt that the goings on at local stores--can be more revealing that most of the
MSM economic news--which seems to include a lot of "green shoots" hooey and statistic twisting.

I have shopped at Target--twice a week--for decades. I remember last fall, how the store was like a morgue.
Then, the wild sales started--with an extra 20 percent off all discounted clothes, shoes, etc. I knew these
promotions were unique. It was obvious these sales were due to excess inventory and lagging sales. Then, in
late spring, store traffic improved.

However, in the past month--Target has returned back to morgue-like status. I know my experience is just one
store, but activity at my Target has been a real bell weather. I've also noticed, as you mentioned, that
Target's marketing highlights their "low prices". This is repeated in their tv ads, weekly ads and also
in store displays and signs. They're also using more incentives to get people in the store...lots of "buy
x and get a $5 gift card" promotions. These gift-card promotions used to be rare, but now they have at
least 2 featured in each Sunday ad. My guess is that they're directly competing for Walmart shoppers, who
view Target as more expensive, especially for groceries.

You mentioned Macy's. Last week, they started a promotion where you purchase a $10 coupon for a $1 donation
to a charity. The $10 coupon is good for any item $10 or more. I know so many people who purchased 20,30 coupons,
and they're buying items close to $10 (t-shirts, mittens, clearance items, gloves, costume jewelry, etc.).
One of our local dept stores did this $10 off $10 promotion and I was told that it was a "desperation gimmick" by
someone in the marketing department. She told me they lost $40k in one day, because people were
paying pennies for items. However, they were willing to take the loss--because sales were so horrific. People
weren't shopping there and they needed people in the doors--with the hope that they would buy other things
or return soon. When I heard Macy's was doing the $10 coupon, I knew it meant the company isn't doing well.

One other thing I've noticed (sorry I'm rambling!) is that there has been a huge upsurge in bargain hunters. I
belong to a coupon club and also a national site where people post "good deals" they find at Target,
Walgreen's, Walmart, CVS, etc.) and everyone shares info and capitalizes on the great deals that are found. I've
been couponing/refunding for nearly a decade--and there are so many people doing these deals now that the shelves
are usually wiped out clean. This never used to happen. Everyone seems to be on a mad hunt for a deal and it's not
just people in coupon clubs bargain hunting any more.

I also agree with you about the "slow boil". I don't think most people realize that our "economic normal" was
propped up by people using credit cards and their homes as ATM machines. Incomes didn't cover the houses, cars,
vacations, furniture and stuff. Credit cards and home-equity loans supplemented our lifestyles. Now that home-equity
loans are rare and credit-card usage is drastically down--our authentic incomes are coming to light. People are
getting more honest about what they TRULY can afford. For many, this might mean downsizing--or a lower standard
of living. We were fooling ourselves before. It was all a lie.

The problems is--we're getting squeezed now. Without healthcare reform and with more employers dropping benefits
and healthcare--our incomes shrink even further. The unemployment situation leave most people willing to work
for less or accept pay cuts. Who is going to bug their boss for a raise when the threat of being out of a job
looms? The unemployment situation benefits corporations and shrinks incomes.

Your thoughts on preparedness are spot on. We don't have any gold. We are desperately attempting to increase
our cash stockpile and we do have stockpiles of goods. We endured a $1,000 monthly paycut for seven months, so
it was hard to shore up that stockpile (I'm a stay-at-home mom, so it was difficult), but we're working hard at it.

It's clear to me that we're in a downward spiral, contrary to what CNN tells us. Do you pay attention to the
BDI (Baltic Dry Index)? IMHO, it's one of the last untainted economic indicators. It measures the
demand for cargo ships that transport raw materials. If you look at the numbers, the BDI tanked with the
recession, then improved and now it's in a free fall again (totally in sync with my Target observations!).
Link to BDI graphs: http://investmenttools.com/futures/bdi_baltic_dry_index.htm

Thanks again for your thoughts and insight. With so much disinformation out there, it's so important that we talk
with each other, share knowledge and also tips on surviving the future.

[LeftyMom]

28. Wait a minute- a store level retail management job makes one an economics expert now?

Holy crap, I was promoted to assistant manager at Circuit City a few weeks after I turned eighteen, I had no idea I was such a goddamned prodigy. And to think I wasted my time going to college anyhow. But I guess my world class economics education at Casa de DIVX- the one I got in between lessons on how to sell a CD player and the best way to file the cell phone contracts- didn't adequately prepare me for The Collapse (TM.) To be totally fair, if the bright minds in Richmond had their shit figured out there wouldn't be a big empty store up the road, either.

Maybe they missed explaining that to me because I was busy running a register or checking in a shipment of CDs or something, so I need you to explain this one to me: if the economy is in the shitter, how is the average person, who is probably already hurting quite a bit, to simultaneously pay off their debts, prepare for disaster and buy twenty large or more worth of gold?

[vadawg]

29. lol i was thinking that as well, but not the economics part but the survival part

i figured that retail management must make you do courses and the store he worked in was in downtown Sarajevo....

[tammywammy]

32. Hey! I was store manager of a coffee shop

I supposed that means I have a Ph.D in Economics now.


In all honesty, I'm 29, my money is in various mutual funds, cause they'll go back up. I told my financial advisor here's my money, I'll be back in 30 years. He laughed too.

[vadawg]

33. PHD in economics nothing, we need you to join our survivalist compound

the skills you will have learned in the coffeehouses of the big cities will be invaluable.. we cant pay you in money but you can have all the toilet paper you may need...

[tammywammy]

39. Well it was a few years ago that I did that

And now I'm a job that pays more (yea! and the checks don't bounce!). I like your idea of a compound, but I don't think that will pay my mortgage every month. ;)

[vadawg]

40. theres not gonna be no mortgages anymore, you can build a bunker in the compound

to call your new home lol toilet paper believe it or not is pretty valuable once a society starts to break down...

[Dreamer Tatum]

30. Maybe you can explain a few things for me

How do you have a company that reported positive EPS in its last SEC filing going bankrupt?

Why, if Macy's is in imminent danger of bankruptcy, are they paying dividends to shareholders?

How do you explain M's current ratio of 1.42, which means it's within safe range of paying its liabilities for at least the next 12 months?


Even if you have information that points to the imminent demis of M (which I presume you've used to short M's shares), on what basis do you suggest that ALL investment be removed from the United States, when foreign capital continues to flow into the US?

How did you arrive at your recommendation to hold $10-$20K in gold, and how do you reconcile your advice to take money out of the US with your advice to buy American gold?

I suspect you are correct, however: not only do you not know specifically what will happen, but I strongly suspect you don't know GENERALLY what will happen.

[TwixVoy]

49. LOL

Where did I say they were in imminent danger? If you bother to read my post you would see I said I did NOT see a Macy's bankruptcy this year or next, just massive downsizing. It was in response to the media reports (which you obviously don't read) which suggested a future Macy's bankruptcy.

I'm glad you trust your Yahoo market news numbers.

When I first came to DU (before the economic crisis was realized by 99% of Americans) I posted about the fact the sales numbers at Target stores had fallen off a cliff nationwide. I was told the same BS by people like you. "Oh gee the numbers they report to wall street are fine! You don't know what you're talking about". At that same time I moved all equities in my 401K to bonds. I dumped all my T Rowe Price mutual funds invested in US markets. I took ZERO hit from the financial crisis on Wall Street. How many Americans were smart enough to do that? I have a feeling you still haven't recovered all your losses. If you believe Wall Street numbers you are a fool.

A week before WAMU went under there was a message from the CEO posted on the wamu.com front page LITERALLY telling people that everything with WAMU was fine and not to worry. People such as your self probably believed that and bought WAMU stock. After all if a company reports something it must be true huh?

"How did you arrive at your recommendation to hold $10-$20K in gold, and how do you reconcile your advice to take money out of the US with your advice to buy American gold?"

LOL ROFL "American Gold". Hey can you pull out the periodic table of the elements for me and point out BOTH "gold" and "American gold" for me? I wasn't aware there were two elemental versions of gold. You've just demonstrated a gross lack of understanding right here. You should have figured out gold was a element (and there are no "versions" of it like "american") back in high school.

"but I strongly suspect you don't know GENERALLY what will happen."

And I strongly suspect you don't GENERALLY ever do your homework in school. Obviously that has carried over to later parts of life.

[Dreamer Tatum]

54. Oh man

You really, truly have this coming, but I'm still sorry to clobber you over the head with it: I have a PhD in economics with a concentration in finance and econometrics. You're in retail sales. I have more credibility than you, even if you don't think so.

Not only did I not take a hit during the downturn, but I made a modest return, and I didn't do it by burying hard assets in a jar in my backyard, like you did. I also managed to avoid the OTHER DU hysterias (do you remember when there was no food left in the world because Costco rationed bags of rice? Do you remember when people were cashing in their penny jars to buy Euros? I do...it was hilarious. Wonder why we don't hear from those people much anymore...guess they're too busy counting their millions).

Would you like a little Irony McNugget? That gold you have buried in the backyard next to Fido's bones? It's been outperformed in the last calendar year by...Target stock. I will venture that Target stock has also outperformed the sacks of beans and rice you've stockpiled to hedge against the fall of the US economy, foretold by someone who thought the store looked a little slow one day.

I don't know what to say about your disdain for corporate financial data. All I can say is that the data I look at was reported to the SEC by people who personally guarantee its accuracy under Sarbanes/Oxley, whereas you look at...what, exactly? How many people are in the aisles one day?

If you want respect for your financial acumen, you will need to appear less like a soothsaying chicken with a severed head. I would still love to know the reason for your sage advice to take all money out of the US, immediately.

And if the End is Near, why the hell would you pay off all debt? Are you going to care what Experian thinks about you when you're swinging your bag of gold around to protect your sacks of beans and rice?

[TwixVoy]

55. Bull shit

PHD in economics. LOL Look how many PHDs in economics didn't see this coming.

You have ZERO credibility to me until you SHOW ME a POST from you PRIOR to the down turn telling people it is coming. Otherwise you were as blind sided as the local fry cook. I have a DATED track record here of calling the down turn when 99% of the country thought we were going to see DOW 20,000. SHOW the goods or you are full of shit.

And actually I don't work in retail anymore. I am a field technician for a major telecom. I practice what I preach. I got the hell out of retail because the writing was on the wall. Retail will be hell for anyone in the coming years.

[Dreamer Tatum]

56. You have the power to check the data yourself

Gold vs TGT, 2008-2009. But you won't, as we all know.

And I really hate to shatter your ideals, but someone working in retail is neither necessary nor sufficient for expertise in securities performance of the retail sector. People acting on whatever claims you made whenever you made them would have been as informed as people rushing out to buy oil futures every time a Beverly Hillbillies rerun comes on.

In point of fact, the retail SECTOR has outperformed gold in 2009. That means that you could have taken your pieces of eight, traded them for bad old American dollars, purchased index futures, sold those futures last week for more of those bad old American dollars, and you could have purchased many MORE pieces of eight than you had when you started.

I don't post stock tips because people would find them boring, and I'm not licensed to provide financial advice (people who are inexperienced and unlicensed tend to do what you suggest, i.e., shit one's pants in a frothy, bean-hoarding panic).

And in any event, 99% of the people didn't forecast a Dow 20,000. But don't let facts bother you now...they clearly haven't bugged you so far.

Is your telecom going to survive the Armageddon you see coming? Whew...glad to know we'll at least have phones.

[opihimoimoi]

31. What ever happened to solving for viable solutions? are we that dumb we paralyze ourselves with

inaction and ineptness?

We are missing the larger picture and seem to embrace moot and minutiae instead

[vixengrl]

34. I don't know if I'd look at a Macy's bankruptcy as part of a larger economic

issue, but more of a trend we've been seeing happening with "old-school" retailers going bust. Gimbels? Wanamakers? Mays? Gone. Macy's is one of a definitely dying breed, but the death throes of this kind of retailer have been going on for something like twenty years. There seems to be lots of different factors behind it--

1) Sales people vs. "associates". The better sort of department store needs to have actual salespeople, people who know the lines, know the customers, and know how to move product. These people will probably want to be full-time, be paid a living wage, and have some kind of benefits. Also, management would probably want to keep them at the store they are established in.

Or, they could hire an 18-year old part-timer who doesn't need benefits and doesn't care if they move from store to store. They can stock shelves and ring customers up--what more do you want? This isn't to put down the teens and twenty-somethings who take retail McJobs--I was one of them! But what works perfectly well in a Walmart or a Staples might not work as well at a store selling $300 cookware, $200 sheets and $1000 bridal gowns. If I'm thinking about dropping a few hundred on a designer wool suit, I want the person waiting on me to say, "You know, with your build you should get the size 18 and we can get the waist taken in. For a little extra...." Used to be you could get that kind of service. Not many places have in house alterations or even wrapping any more. (And seriously, I'd pay extra for things like that and I'm not even loaded. Trimming down staff and staff wages is penny-wise and dollar-foolish if it sacrifices service that could mean sales. They think they are competing with Wallyworld--they don't get that they have a totally different market.)

2) Disposable goods and disposable culture. Inventory is a huge concern for brick and mortar stores. Buyers have to have a pretty good feel for what is going to sell and what will appeal to their particular customer base. Sometimes an appeal is trendy, sometimes it's regional, but culturally speaking, it seems like trends move in and out on a faster basis. Things just can't sit in a store without being sold. Also, things aren't made as well as they once were. People will pay considerably or quality, or they might pay a bit more to look fashionable--but if they aren't getting quality and they are only going to be fashionable for a minute--why bother? Might as well get a knock-off from H&M or do like I do--brand-whore for cents on the dollar at Marshalls or TJMaxx. Old school department stores were created when cars were new and people weren't even a fifteen minute drive to a mall were they could get anything they wanted for cheap, mostly because malls didn't exist yet. There has simply been a whole shift in shopping values. (Big department storasauruses seems to have started to die out in the mid-eighties as the malls rose up. Now, I know about dead malls and ghost malls in PA and NJ--since the late '90's--I blame the internet.)

3) Low Lower Lowest deep discounted bargain prices! Daily! If not more so! It's just impossible for retail stores to not sell at retail prices. There has to be a profit and even though stores have changed how they staff (puny), display (big box--stacked higher and deeper and cheaper) (oh, and internal thought, didn't I just say that both puny staff and big inventories were part of the problem?), they also have to make the customer think they are somehow saving money by buying shit they don't need.

Naturally, sometimes the customer does need things. No one gets married in a $12 silk dupioni clearance item shift dress they bought on-line unless they are some sort of oddball getting married in Las Vegas after a red-eye flight because they wanted to do it all in a hurry and cheap (I just worked that in because my wedding anniversary is today and that's how I did it seven years ago.) People need good winter coats that might actually last a few winters. People who only wear suits to graduations and weddings and funerals need a good suit that will look good and last a few years--and they will pay for that. People want a signature handbag that is the final one they will buy for awhile. People need to have a set of the "good dishes" for company. Every cook should have a nice stockpot that they shouldn't worry about when simmering ox-tails on the stove all day. A new home should have a dining room suite that isn't put-together junk but might last thirty-forty Thanksgivings.

These stores used to provide that--quality and service people would pay for, but if they don't? People have funny-looking wedding pictures and peacoats from Old Navy that fall apart in the wash and a closet full of shitty-looking cheap pleather purses, and wear chinos and polos to semi-formal events and have buffet-style suppers on Chinette and burnt-up pots that go in the recycling bin after a year and Ikea furniture. Good department stores used to save us from such mediocracy. Until they didn't anymore.

4) Layaway vs. store credit cards. If fashion changes in a minute and you can get a card, you aren't waiting. The big department stores actually kind of started the "store card" mess. I hate store cards. I wouldn't have a Sears card except my husband got it when we needed a fridge and wanted the discount. Basically, I don't understand why stores ever decided to go into being card-issuers. At least if someone defaulted on a layaway, you could still sell the item. I would bet that, the terms of store cards being what they are, they have exactly two kinds of customers--people who sign up to get a discount, and pay off the balance during the introductory 0% APR, and never use the card again, and people who are crazy shopaholics who max the thing out and then default. Buying the store's merchandise. Why was this a good idea again?

Anyway, retail has been in a death-spiral that comes from incredibly stupid management. When I was in retail, I referred to low-level management as "leading the clowns and following the elephants." We had shipments of stock that were corporate's idea of "seasonal" which basically meant stuff we were not going to move, and oddly, we barely got things that we were supposed to have in stock for ads. We had to somehow schedule part-timers who didn't really care to work evenings or weekends (or who called out if scheduled--very nice to be the floor manager and a cashier with a long line--and a delivery at the backdoor), while not giving overtime to full-timers whose budgetary ends only really met at fifty hours a week. I don't think it's the economy, I think it's about how consumer-culture needs a wake-up call, and how the American economy still hasn't recognized that the shift from industry to service jobs means a shift also has to take place in how these businesses operate, and what considerations these businesses should be looking for--

Retail businesses should love the idea of a public option for health care, for example, and anything else that minimizes their costs. But also, they should recognize the need for a shift in how salaries are handled--livable for "associates", and less padded for CEO's. (I read where a Walmart upper management-typre made something like 1000 times what a regular person who wears a name-tag makes. That's freaking nuts. What they hell does he do to make that--never sleep?)

Regarding the situations in which our economy ould go utterly pear-shaped--Asian countries probably won't find any good reason not to let us buy their goods with the money they lent us. I'd like to think we could outsmart them, stop buying their stuff, and pay off our debts. They might call our gov't's marker though--except....

Um, we actually are good for it. Outside of Republicans who might bitch about the deficit and pretend we aren't, we are. And those Repukes should be rounded up for treason. The reason we are is that we are actually really good at capitalism, which is like basketball--imagine the US as seven foot tall and most other countries are five-something. Our natural resources, our ability to just make and sell crap, is astonishing. If we corrected certain inefficiencies regarding our defense budget and made a timely structural change regarding our tax base, we could totally be back on track.

As for the dollar losing value--well, the biggest devaluator was the profligate spending and borrowing of the Bush years--and even though the Fed printed up some money to cover parts of our gimormous tab, part of the good thing about Obama's finincial team is Paul Volker--total inflation-hawk. He's on it. What the financial anarchists who busted up our banking system oppose is governmental interference, I guess not realizing that the only thing that ever kept us afloat was government intereference in the form of the Fed and the World Bank we sort of run tilting the table. (I said "anarchists"--the Wall street suits are more in need of a sound cannon than the G20 protestors, says me.)

All corporations occasionally say they need to tighten the belts--I take it with a grain of saltpeter. In my experience, cutting corners may not mean anything about the economy--it just means the PTB want to be sure of making payroll--for the officers and the shareholders. It's an indicator that you're being screwed, not necessarily that the company is (even if they are screwing themselves, long-term, by the ways I outlined.) I don't think we're ready for the gold, barter, and bust economy just yet. Actually, I've been hopeful lately.

But paying off debt and having plans is still a good idea--just in case. I don't know too many people who can go put 10K into gold (it's not recognizably fungible--ever take a Krugerand to Kmart and try to negotiate it--awkward. Maybe in the postcollapsalistic economy, when goods and services will have measurable values in the weight of old-people fillings and signifying jewelry, and vendors will have scales, not cash registers. But not quite now.)

Anyway, I think the catastrophe could be averted by businesses not being run quite as much by greedy schmucks and the government actually deciding to regulate instead of delegate. But I'm an optimist. I think we might have, with people like Michael Moore putting .02 in, a setting for a change. Maybe we're ready for an end to the Freidman/Rand/Greendspan ideas. I'd like to hope.

[earth mom]

43. The reason stores have their own credit cards is because they really care more aboutthe credit cards

instead of the goods they are selling.

In other words, the stores exist FOR the credit cards.

All that interest is what matters-NOT the merchandise.

[Sherman A1]

46. Agreed & Well Said

You have hit multiple nails right on the head. Retail has been changing for a very long time.

[LuckyLib]

62. Best analysis of the culture of the retail world here. The boomers have grown up,

The disposable culture is in full swing and most of us want no part of it. Products are crap, service is even worse, we're buying the minimum. Imported crap overflows from one store to the next outlet at increasingly lower prices to move it. Meanwhile, I had a great pair of shoes resoled last week, cost me $15.

[vixengrl]

63. While you had the soles of good shoes done for $15,

many others would have bought crappy replacement shoes at just over that price. The sense that things should last is somewhat gone--cars are kept for little longer than it takes to pay them off. We like cheap, but forget how good products can be when you are willing to pay the little extra for service and quality.

[Touchdown]

35. I like Macy's. I buy my Levi's there.

Too bad. You can usually find things there pretty much the same price as you can at discount/specialty stores. I've never seen anything in Bed Bath & Beyond that Macy's didn't match in price.

I got a good deal on luggage too!

[vadawg]

36. never seen or been in one, so i got no idea what they sell

[Touchdown]

37. Been to Penney's, Sears, Dillards, May Co.?

You've seen it then. Typical dept store. Always walk in on the second floor, to avoid the stink of the cologne aisles on the first.

[vadawg]

38. okay got it now, i thought it was something unique or special

[earth mom]

41. Booze, Cigarettes and Ammo are probably better to barter with than gold. nt

[Nikki Stone1]

42. For those who think that someone in Retail cannot have useful economic insight:

Retail is the front line. Sales are the front line. It is people on the front lines that see the fluctuations, the trends, and how things are going. Wall Street has been lying to us for quite some time now. Networks like CNBC talk up the market and blow smoke up our asses, but retail workers, if they watch carefully, can read the signs.

Whether you agree with purchasing gold or not--and I think gold will double in value before this is all over--protecting what you have is a good idea right now. Nothing is stable and we are going into uncharted economic territory as a nation.

[Fumesucker]

44. Goodwill took over the Circuit City that closed in my town..

I was there yesterday for the first time, busiest retail in town by a considerable margin.

I think that says something about the state of the economy.

[Celebration]

47. Recommending this

Mostly for the Macy's coupon information and the links to the Baltic Dry Index Charts.

Gold in the drywall? Not so much, but I do think he'll make some money on it.

So, thank you OP!!

Oh and retail being on the front lines??? Yup.

[patrice]

48. : - ((((((((

[blue_onyx]

50. I disagree

I don't think we are in "a decline in to being a poor country." Our previous level of consumption was unsustainable. It was based on buying things with credit. We will see a decline in consumption but I think it will be a good thing.

"I don't think we will see them in bankruptcy this year though or even next year."

I think if Macy's can make it through the first half of next year, it will survive. This holiday shopping season will likely be even worst than last year. Unemployment is higher and people have even less money after fighting to survive this recession. I worry we may see some stores that were struggling to survive pushed over the edge after a second bad holiday season.

[Arkana]

51. Me either.

They're having sales at an almost impossible clip there.

[tjwash]

52. You forgot "move to a 6 X 12 log cabin in Montana and write out paranoid screeds against society"

Sorry...I think I'll remain a productive member of our society, and try my best to contribute and do what I can to assist in trying to undo the damage done in the last 30 years of runaway deregulation, rather than hunkering down and praying for the apocalypse.

And how the fuck do you go from "macy's is in financial trouble" to "OMG BUY GOLD GUNS AND STOCK UP FOR THE COLLAPSE OF CVILIZATION!!!11!"?? I swear...the extreme fringes of the left and the right have gone so bat-shit nutty in the last 10 years that they have both stretched their relative ends all the way around to the point that they are standing together and holding hands.

[Ikonoklast]

53. Higher-end retail is in trouble.

But the deep discounters like Dollar General are doing gangbusters business, and have been for the last two years. They are not only surviving, but thriving.

That's where the money is being spent. Lots of it.

http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20090210005455&newsLang=en

http://online.wsj.com/article/BT-CO-20090910-707937.html

You aren't looking at the entire picture, only one segment of the retail market, and it is skewing your perspective.


Target made money selling the very same things everyone else sold, for a slight premium, appealing to people that wouldn't get caught dead shopping in a WalMart. That was their largest attraction, being modestly upscale from their major competition.

That business model is a failing one in this economy, just like a highly leveraged and overextended Macy's.

But money is still being spent and profits earned in the retail sector.

[Thickasabrick]

57. Twix, what about savings accounts? I'm out of investments but I

don't want to turn it all into gold.

[A HERETIC I AM]

61. You didn't ask me, but if you'll indulge me, answer me a few questions.

You asked Twix;

"what about savings accounts?"

Then you said "I'm out of investments but I don't want to turn it all into gold."

So what are you looking for, exactly?

Safety? Are you looking to just simply make sure your money doesn't go backwards? Or is it a modest return, i.e. a small amount of interest? Do you want to at least out pace inflation or is that not important to you?
How long are you willing to put this money aside for?
Is this money you want to be able to access in short order, should it be necessary or is this money part of your retirement/long term savings? Is the sum large enough that any interest it might earn would represent a tax burden that might concern you? (Say over $100,000, for instance)

The short answer to your question is, savings accounts are just fine. If they are covered by the FDIC, they are insured and you can get your money on demand. The problem is, these days a typical savings account pays diddly squat in interest.

If you are "out of investments" one could assume you are risk averse and don't want anything to do with the stock market. If you are looking to make at least a modest interest rate, aren't too worried about the tax consequences and want to make sure you'll get your money back then you should consider US Treasury Bonds. Treasuries are issued in maturities from as short as 30 days to as long as 30 years and you WILL get your money back. As with any bond however, the shorter the maturity, the lower the risk and as a consequence, the lower the yield, so if you think the world economy is going to collapse in the next two years, 6 month to 1 year Treasuries might be for you. If you have a bit more confidence in the American people (like I do) then you can consider longer term paper. Check out this page from Treasury Direct for more information on these securities. You can buy them directly from that website, from an online broker or from a brick and mortar broker in your town and perhaps even from your bank, if they employ a registered representative.

If you have a larger sum and the thought of having to pay income tax on interest earned bothers you, you could look into Municipal Bonds. In spite of the difficulties the State of California is currently experiencing, not every municipality or state is in financial dire straits. Your profile says you live in North Carolina. I am not a tax expert, but as a general rule, in order to buy a muni bond and not have to pay income tax on the interest earned, it typically has to be from the state in which you reside. The exception to this rule is if you reside in one of the 7 states that have no state income tax (AK, FL, NV, SD, TX, WA, WY.) So, in short, if you buy Muni Bonds from your home state, you pay no tax on the interest earned. You can find muni bonds with maturities ranging from as short as 2 years out to 30 years and in some cases even longer. Before you do so it would behoove you to learn a little about how bonds work, how they are priced, the difference between a discount, par and premium bond, what "coupon" rate is and how it relates to yield etc. In this case, Google is your friend.

You have options with your cash. That is all I am saying. Please do not take anything I wrote as investment "advice". It isn't. I am only trying to open a window for you to look through. It is important for you to do your own research, talk to knowledgeable people you trust and make your own decisions.

Good luck.

[Thickasabrick]

64. Thank you! I am so glad you mentioned Bonds because I was

looking into that and that weekly Bond "ladder". I also like that you don't have to pay state income tax on that (I don't think). And yes, I am basically totally out of the stock market and I kinda miss checking it everyday...but at least I don't have to worry about it anymore, although I really think I should have waited a little longer.

[Taverner]

58. I agree with every suggestion EXCEPT the gold

Gold is always a bad investment decision

If we ever get to the point where all paper currency is worthless, people won't be able to buy the gold off you or trade it for anything...

In the end, gold is just a rock, just as money is just paper

[lonestarnot]

66. True that.

[kath]

59. I noticed the elimination of the express lanes when I was in my local SuperTarget 2 days ago.

REALLY pissed me off.
They have few enough lanes open as it is. This being a SuperTarget, many people buy groceries there (prices are good) and are checking out with a pretty BIG order (contrary to your comments that management said that people are only buying a few items at a time). To have to wait behind several of them when I only have a few items is infuriating.

I avoid WalMart like the plague, and am glad we have the SuperTarget here. But they're really pissing me off lately with the long waits at the checkout, which were bad enough even BEFORE the elimination of the express lanes.
Crap.

[ArbustoBuster]

60. Your opinions 1 and 4 are at odds with each other.

If you think the economy is collapsing enough to need you to have gold instead of cash, then you don't care about your debts. Your debts will be dollar-denominated and therefore worthless. We'll each be able to pay off our mortgages with a new one-trillion-dollar bill and get enough change to buy a Coke.

[lonestarnot]

65. Too late to R

[TexasObserver]

67. Your investment advice is bad.

You are giving bad investment advice, and worse, it appears you're heavily influenced by far right wing thinkers.

1. Stop telling everyone to pay off their debt. This is terrible advice to many people. A person with $50,000 in cash and a $50,000 low interest mortgage should rarely be told to use their cash to pay off that debt. Sometimes carrying debt is the smart thing to do, and keeping some available cash is always a smart thing to do.

2. Stop telling people to get out of any investment in this country. That's something Glenn Beck would be expected to say. We're 8 months into Democratic rule and you're agreeing with the far right wingers who say there's no future in America under Obama and Democrats.

3. Stop telling people to have a plan for a complete collapse. Anything you might plan would be woefully inadequate, even if a collapse did occur, which it isn't. This meme that the economy is going to collapse and utter chaos will follow is another Alex Jones fear based theme.

4. Do not own GOLD. Are you completely bereft of good sense? You want people to own and hold $10,000 or more in gold? Keeping that kind of gold is dangerous.


Your screeds attempting to "warn" others sound exactly like the nonsense all the rightwingers send each other in emails every day.

Why do you think you are qualified to give others comprehensive investment advice?