Economists thought the consumer was heading toward the exits. Actually, based on new data, he left the building.
According to Reuters, the Mastercard Advisors service reported that "Overall September apparel sales fell 5.5 percent from a year ago, with women’s apparel down 9.1 percent. Furniture sales sank 13.3 percent, the worst decline since 2003, while electronics and appliance sales tumbled 13.8 percent."
Douglas A. McIntyre
The latest theory about Big Oil is that it will be brought down by falling oil prices. Shares in companies such as Exxon (XOM) and BP (BP) will be battered beyond recognition. Until recently they made new highs almost every month.
Some of the share prices for companies in the industry are already in sharp decline.
According to The Wall Street Journal, "The stock drops are driven by concerns that a world-wide recession will bring an end to the high oil prices that have been the primary driver behind these companies’ record earnings."
The Fed is not done proposing, and perhaps implementing, radical plans to save the economy.
The latest installment in the agency’s heroics is a program for to buy commercial paper from non-financial companies and municipalities. It they default, the Fed might own the local fire and police departments with liens on their guns and hoses.
Yesterday, a poll by CNN/Opinion Research Corp showed that six out of ten Americans believe that the US economy will sink into a depression. The people who conducted the survey made sure to define a “depression” is before getting answers.
The list: 25% unemployment rate; widespread bank failures; and millions of Americans homeless and unable to feed their families. Even with that litany of horrors, people were willing to bet things will get that desperate.
According to Reuters, Bank of America (BAC) reported weak earnings and cut its dividend.
Reuters reports that Wells Fargo (WFC) and Citigroup (C) agreed to drop litigation for now and negotiate over a deal to buy Wachovia (WB).
Reuters reports that members of the Fed are divided on a rate cut.
Markets in Asia were mixed and Europe opened higher.
The Nikkei fell 3% to 10,156. Canon, a major exporter, fell. Honda (HMC) and Toyota (TM) were both down about 5%.
Hong Kong was closed for a holiday. The Shanghai Composite fell .7% to 2,156.
In Europe, the major markets in the UK, Germany, and France opened higher by 1.5% to 3%.
Data from Reuters.
Douglas A. McIntyre
| Today’s top tickerspy Indexes | |
| Domestic Telecom ... | +2.6% |
| Stem Cell Stocks | +2.3% |
| Pain Management S... | +2.1% |
| Ethanol and Biofu... | +1.9% |
| Savings and Loan ... | +1.8% |
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