Christmas sales as an economic indicator

One of the frustrating things about the so-called end of the Great Recession is the fact that the people who are recovering are not even remotely in my neighborhood. As most of my friends and regular readers know, I am a firm believer in developing one's own set of economic indicators---that way you don't have to rely on the boiled numbers that the government issues.

Here is a good indicator of the health of the economy: When did Christmas displays and music hit the stores? When did the merchants start slashing prices?

The earlier you see and hear Xmas stuff, the worst retailers believe the holiday shopping season is going to be. Of course, I believe that the stock holders are worried about their stock prices and dividends---and not in the least concerned about their employees---which means that even if consumers pony up money (from under what barrel I have no idea) and go hog-wild this shopping season, I am willing to bet that the money is going to stay in the pockets of the rich stockholders and not flow back to the rest of the economy.

The earlier you see price cutting (especially the fire sale level), the worst the holiday shopping is based on store reciepts. The fire sale level of prices indicate that a store is just trying to break even for the season, and that layoffs of regular employees is going to accompany the letting go of the seasonal help.

And this year is alarming on a couple of levels already. I saw Christmas stuff out before October 1st, and HR departments are actually hiring less seasonal help than normal.

Is it wrong to think that perhaps certain retail chains stockholders deserve a lump of coal for Christmas? Probably. We all know that only rich people can create jobs for the poor. *frowns*

A triad of depressing economic numbers

Here is a triad of depressing economic numbers.

According to the Economic Policy Institute, almost 25 percent of U.S. households now have zero net worth or negative net worth. And the percentage is growing, it was only 18.6 percent in 2007.

Food and various products sizes are shrinking, so that manufactors and suppliers do not have to admit that they are actually raising prices on goods.

The purchasing power of the US dollar has declined from a dollar in 1913 to a whole 4.6 cents in 2009 (American Institute of Economic Research).


And if you want to read twenty-five more depressing economic numbers, check out this article on PrisonPlanet.

Occult price index

I was just reading a blog (Luke Sidewalker) and realized that I do not remember the last time that someone mentioned the consumer price index on the news. Sidewalker, whose blog is mainly about picking up loose change, is starting a new monthly feature on his blog where he tracks the price changes of twenty items. He feels that this is a better indicator of inflation/deflation than using car and housing prices.

For those who took economics, this is a "price index" and the set of items that is tracked every month is referred to as a "basket". (Yes, I took a couple of economics classes over the past couple of years.)

Reading his list, and the suggestions of his readers, I realized not only do I gauge the state of the economy like this, but I have some weird things in my basket. Besides the normal milk, eggs, bread, cat food and printer ink, I also have occult books, candles and incense that I also buy on a regular basis.

I know that I am using them in my own personal index, besides complaining about the rising cost of cat food all summer, I think everyone has heard my complaints about the rising costs of occult books.

But it made me wonder what type of things would end up in a basket for an occult price index. What types of things do all occultists pay for on a regular basis? Incense? Candles? Tarot decks? Lodge dues? Virgin chickens?

The world may never know.

Personal economic indicators

This morning, I watched a video clip by Jim Jubak about creating your own economic indicators. This idea made perfect sense to me. When I was in the restaurant business, I could tell where the economy was headed based on the behavior of my customers.

It is because of that fact that I say that the economy has been in trouble for a long time. We only recently officially declared a recession. But from the ground floor, the recession has been here for a long time.

The economy started to look sluggish before 9/11. I was already cutting loose employees because sales were down. Then 9/11 happened; and in the space of an hour, the economy jumped to what it was going to be two years in the future. And from where I was sitting, it never actually recovered (official numbers say differently; my customers would have disagreed).

I was using this personal economic indicator, as well as the rent and house prices in my neighborhood, to time my own personal entry in the real estate market. I knew that based on those indicators that we were in a housing bubble. My wife and I brought our house when the prices softened.

Personally, I wanted to wait longer until the bubble broke, but I could not afford to. My rent was going to go way up if I stayed in my apartment another year; as it was the rent on two apartments (me and the wife were only engaged at the time and living in separate apartments) and the art studio was the same amount as the mortgage payment we ended up with.

And in hindsight, the timing was right (despite the fact that we currently have an upside down mortgage): little did I realize that the economy was going to go so far south that I was going to lose my job and end up in college to earn a degree while the economy recovered. Fortunately, we brought a house that we could afford if one of us had employment difficulties (though I admit that I thought it was going to be her and not me).

But those of us on the ground floor saw it coming. As Jubak points out the official numbers are boiled and diced (my description, not his) and become misleading and confusing. So I agree with him that we all need to develop our own set of economic indicators for investing and business purposes.