Odd, isn't it, that you don't get any good news, even when the good news is, well, good news? Odd but important, because some of the good news we got is being colored as bad news, most notably the retail sales data. It is true that the manufacturing data was terrible and the skyrocketing bonds -- declines in yields -- are breathtaking, as is the collapse of minerals. But with the collapse in minerals is a collapse in gasoline, and I think that's one reason people shopped so heavily this weekend. And they did shop heavily this weekend, yet it is universally heralded as a gigantic barrel of sales bathed in red ink. We had to read over and over again that even though Friday was big, Saturday was terrible. Wide-open aisles at Wal-Mart (WMT - commentary - Cramer's Take) with no one in them. Until we read that a lot of the favored goods had been snapped up the day before. Or how about mall traffic way up, but purchases way down -- a story that I am sure will prove false.
The simple truth is that many people, including this guy, figured no one would show up and sales would be down big. Single-digit minimum, double-digit max. And the profitless case -- made elsewhere by Doug Kass -- shows that the expectations were really low anyway. My take is, why did any buyers come out at all? Was is that perhaps gasoline is so low that it feels like the old days? Was it perhaps that, like houses, when you lower the prices enough, people come out and buy? Whatever, a lot of inventory was moved, which means a lot of cash came in and a lot of merchandise came out. All good news.
How about real estate in general? We know that things are slow. But I just came back from a tour of what was ground zero for oversupply and underbought, the Inland Empire in California. I had spent plenty of time perusing the major neighborhoods from Palm Springs to Indio last year, and it was a disaster. Now most of the units looked sold and the desperate signs and road salesmen encouraging big price decreases as they hawked homes literally on the road were all gone.
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