Tuesday, June 9, 2009

Sales – Still More Economic Cliff Diving…



No, not Redbull cliff diving... that’s supposed to be RedBOOK cliff diving! I swear good help is so hard to find (please click on your favorite sponsor when exiting this site, thank you!).

This morning’s Redbook and ICSC data got my curiosity up so off I went to the Fed to look for some sales data. There you can find all types of data, except of course, whatever it is that would make the most sense for them to chart, like the Redbook and ICSC data! They chart all types of other data though, like tobacco tax collections for every state, fuel taxes, gaming taxes, entertainment taxes, etc. And I did find a few interesting charts in regards to sales… let’s take a look.

We’ll start with the big picture Total Retail Sales presented in Year-Over-Year (yoy) percent change:



That chart only goes back to 1992, but you can see that since that time nothing comes close to the precipitous drop off in retail sales that is occurring now. Just yesterday I listened to a commentator completely deny that this recession was worse than other recent recessions, and he is just plain old incompetent or lying or most likely both. Oh, and there may also be a bit of being bought and paid-for in there too, so all three!

And for confirmation of the big picture sales trend, let’s examine yoy % change in Final Sales:



Note that chart goes all the way back to the end of WWII! It has NEVER been negative until now!!

Keeping with the big picture, if you are not selling things, what happens to your inventory? It goes UP! So let’s look at the chart of inventory to sales ratio:



Note the rise here. I’m certain it’s historic too, but the data only goes back to ’92. Note the “greenshoot” at the end, lol.

Now let’s take a look at Real Retail and Food Service sales:



There you can see that sales more than doubled since 1992 and the climb was uninterrupted until now. If you could zoom this back in time, I am certain that this curve would be the same parabolic ascent and collapse I’ve been noting in debt and all the other post WWII economic charts.

Here’s the same chart in yoy % change:



Now that’s cliff diving, aka parabolic collapse!

Okay, let’s look at Ecommerce in regards to retail sales:



While that curl at the end may not look THAT dramatic, note the broken uptrend, and also note that the growth has completely stopped. That becomes quite evident when we view the data on a yoy % change basis:



Notice that for the first time in history, Ecommerce is not only not growing, but it has gone NEGATIVE. Where is that in the mainstream media? Does the NDX reflect this data, or is it diverging from reality? The CNBS and Yahoo crowd need to go toke on some greenshoots, look over both charts, and maybe it’ll come to them – maybe.

Here’s a lovely chart of autos & light truck sales going back to 1975:



Note that in terms of raw units sold we are now back to the future in 1982!



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And if you think that this recession is not worse than the one in 1980/’82, let’s take a look at the same data for light vehicle sales in terms of yoy % change:



Look at that greenshoot! And it took that greenshoot just to get back to the rate of fall in 1980! Falling at 30 to 40%?? Of course that rate is not sustainable for long. But why would that type of free fall occur to begin with?

For that we go directly to the underlying CREDIT chart for total automobile credit outstanding:



Students who have Spent some Time with the Good Dr. Bartlett will instantly recognize that parabolic DEBT chart.

But a funny thing happened on the way to the bank… the FED (private central bankers) decided that even though this chart goes back to WWII, that it was evidently no longer necessary to report this data and thus this series was discontinued right at the peak of the tech bubble. I am CERTAIN that had this data been continued, this chart would reflect an even greater rise and now a parabolic collapse.

But I think there’s enough evidence right here to dispel any notion of “green shoots.” Credit grew with the backing of the shadow banking system in an exponential manner and that’s why all the economic charts became shaped like a parabola. Those exponential math moves ALWAYS collapse under their own weight as never ending growth is simply a fantasy of Keynesian morons and central bankers. The Keynesian morons can be forgiven for being stupid and not understanding math, while the central bankers know the math all too well and take full advantage.

Greenshoots or cliff diving? I let the charts decide, how ‘bout you?



Velvet Revolver, Fall to Pieces:


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