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Thursday, August 27, 2009


davidowitz on retail

back from a fitful two weeks in southeast alaska....

with thanks to pragmatic capitalist -- howard davidowitz hasn't changed his tune one bit.

"living standards will never be the same." cyclical upticks (such as the current one) will come from time to time on the back of stimulus, but won't last -- "we go right back into the tank," in davidowitz's words. pricing trends in retail indicate pervasive deflationary pressure. his incisive criticism of the obama administration and their projections for growth, revenue and funding capacity for health care expansion among other plans spares nothing.

is it possible to be more dire than davidowitz? "we are in the tank forever. as a country we're out of control. we're in a death spiral. ... we're non-functional." bright spots? extreme value/dollar stores, drugstores (including CVS), major food distributors, rent-to-buy, autozone, kohl's.

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Welcome back gm! Hope it was enjoyable.

I only got through half that video -- too much judgment and emotion for me to put much weight on the analysis, correct though it may be.

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he's a high-string character, hbl, no doubt. but there's probably not a better analyst of retail. the difficulty i have is that (with the help of blodget and task) he opines on things that may be well beyond his ken. how much is davidowitz really expected to know about government budget deficit financing and interest rate movements? the american consumer and therefore american retail is probably very much in the boat davidowitz assigns them, but i doubt he knows with any greater certainty than you or i about the macroeconomic impact thereof.

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I see you're hitting the ground running, GM--four posts in the last day! Hope your trip went well--any insights or personal anecdotes on the Alaskan cruise sitch? One of my personal peeves is that low interest rates are hurting consumer spending because the old people aren't getting much interest on their CD's. It's my impression that those Alaskan cruises are like old-folks homes. . . Any good stories?

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I actually didn't take a cruise, bwdik - though I did see a lot of cruisers in ketchikan when I overnighted there. My observation is that the boats must be ideal for folks with trouble walking, as two-thirds of ketchikan seemed to.

I'm lucky enough to have some family up there to show me around instead. Hardly roughing it, but caught some nice fish. Charter boat business is feeling it up there, as one would suspect. Locals also comment on the reduction of cruise traffic. Commercial fishing is having a bang-up year, though, with big catches and good prices.

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Thanks, GM. My wife works in industrial equipment and she has gone to Cordova AK to look at putting equipment in a new fish-processing facility there--agrees with your observation that commercial fishing is going well.

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