Juggling Dynamite

If America is the most ‘over-stored’ country in the world, Canada is not far behind. All the US retailers opened stores through Canada the past decade as households buried themselves in debt. And then there are all the REITs and other investors who tripled down on retail space since 2008 in the hunt for yield.  The income received will be paid for by capital losses as the correcting phase unfolds.  No free lunch.

Jan Kniffen, J Rogers Kniffen WWE, provides his outlook on the retail sector and talks about likely changes in the space down the road, including consolidation of malls. Here is a direct video link.

The much followed indicator of the US economy –the retail sector, is hemorrhaging–down more than 4% today on news of a rising tide of chapter 11 filings and store closures. Long-time, independent retail analyst Howard Davidowitz, outlined the real world factors driving consolidation in the sector in this clip last Christmas eve.  Howard gets to the meat of the matter around the 2:20 minute mark.

Davidowitz & Associates Founder and Chairman Howard Davidowitz discusses U.S. retailing. Here is a direct video link.

QE helped to drive stock prices and debt levels up for a while longer, but since it didn’t increase wages, this has made the mean reversion to follow in retail and asset prices, all that much greater.

Shares of the vampire squid itself, shown here since 2007, are back below where they started 8 long years ago.  And that’s assuming dividends were reinvested.  If Goldman is the self-proclaimed ‘best of the best’, they can’t mean for investors.

Of course, Goldman executives cashed out billions for themselves while directing public policy through relentless government/regulatory influence and funding that enabled them to break laws and siphon out profits.  Apparently, it’s good to be the head of the squid.  For everyone else though… not so much. Squid in a coalmine for the rest of the market?  It was in 2008 and 2010.