Retailers, consumers gear up for ‘Cyber Monday’

There’s certainly something to be said for shopping online.

I mean, who in their right mind wants to get up at 4 a.m. and head over to the mall or local big-box store for some “deep discounts?” Well, as it turns out, plenty of people do. I’m just not one of them. I guess I didn’t inherit the “I’m-going-to-die-if-I-miss-this-hugely-important-sale” gene.

But I’m not alone because increasing numbers of shoppers are opting to do it online. In many cases, it makes a lot of sense. If you’re looking for a standard kind of item – like a fireplace poker or a bobblehead of Larry King, you pretty much know what you’ll be getting when the package arrives.

But there are some items you might be a little leery of buying online.

These would include such things as an extra-large, fur-lined smoking jacket (sizes likely do vary considerably), or an $1,100 custom Fender Stratocaster guitar. I play guitar, but I just couldn’t see buying one without actually sitting down and trying it out. The guitar that arrives at your door might end up sounding like a tightly strung banjo.

That would be great if you’re going to be playing Dixieland jazz, but bad if you have anything else in mind.

But I digress.

This Monday is “Cyber Monday” and lots of consumers are going to be out in force – or at least home or at work in force - to ferret out the best online deals. I have faith that many of them will. I might even be among them. You may be among them.

And we won’t have to listen to Barry Manilow on the overhead speaker crooning about the “Copacabana.” Sounds good to me.

Black Friday observations…

It’s Black Friday, and the malls were packed today.

I’ve never been to a mall so early. It was kind of surreal, like if people were walking on a freeway without any cars or something.

The thing that struck me though, is that for my generation, this is truly the mother of all  buyer’s markets.

It was striking to see good deals to be had across the board…cars, toys, clothes.

Call me naive, and a bit of a sucker for good promotions, but I think I might just finish up here at work and go join the frenzy.

Only thing is, according one economist I spoke to, that frenzy was limited to the morning.

I’m likely to find not much of a frenzy at all, and that seemed like part of the fun.

There were some other observations today. The Disney store was packed with people buying $7 dolls and Hannah Montana stuff. JCPenney was crowded with people buying the basics — socks, underwear, and some houseware.

But when I walked into Macy’s furniture department, you could hear a pin drop. Even in a local Wal-Mart, several people were looking at some pretty cool flat-screen TVs, but it didn’t look like anyone was buying.

Perhaps its all just another sign of an economy in which consumers really are just going back to basics — buying what they need, not what they want.

Anyway, I need a sweater, and I think I can get a second one free. So see you at the mall….

Word of the year…

Well, we’re probably a little tired of it. It’s been used, abused, interpreted, re-interpreted, misinterpreted…but here it is…Merriam-Webster’s online dictionary has deemed the word bailout as word of the year.

Hopefully, we’ll get to the point where we won’t need to use the word much any more, but from the looks of things, don’t close the dictionary on it…

Here’s a blurb from the Associated Press:

SPRINGFIELD, Mass. –  Everyone seems to want one, but apparently a lot of Americans aren’t sure exactly what a “bailout” is.

People looked it up so often on Merriam-Webster’s online dictionary that the Springfield-based publisher says “bailout” was an easy choice for its annual Word of the Year honor.

The rest of the list features other terms used at times of economic peril, “trepidation,” “precipice” and “turmoil.”

Several phrases from the presidential campaign also made the cut: “bipartisan,” “vet” — as in to appraise and evaluate — and, of course, “maverick.”

Building association hopes to kick-start housing industry

California has lost nearly 300,000 jobs as a result of the steady decline in new home production.

But the California Building Industry Association has a plan to help pump the industry back up. The association is proposing a tax credit for new-home buyers as a means of spurring more homebuying and – ultimately – more new-home construction.

But Michael Carney thinks this is clearly the wrong approach. Carney, executive director of the Real Estate Research Council of Southern California, said the last thing we need is more new homes.

“At this point we have an excess supply of houses,” he said. “We don’t need new home construction at this point — that will only force prices down further.”

As bad as I feel about all of those people who are out of work, I tend to agree with Carney. In October, home prices in Los Angeles County plummeted 32.2 percent to $366,520 compared with a year earlier.

And Carney figures prices are still heading down. Still, we often forget that these are real people affected by these job losses. They’re not just statistics.

California’s workers got the latest in a string of bad news with last week’s release of the state’s newest unemployment figures. Between September and October, California’s unemployment rate jumped from 7.7% to 8.2% – its highest rate in 14 years. There are now more out of work Californians than ever before.

For more on this …

Retailers banking on Black Friday

I’m not much of a shopper.

But if I was, I’d be out the door early come Friday because retailers are going to be angling for our business like never before.

Malls, department stores and retail shops are facing a challenging holiday season, but falling gasoline prices and pent-up consumer demand may ultimately play in their favor on “Black Friday,” one of nation’s busiest shopping days of the year.

The National Retail Federation’s preliminary Black Friday shopping survey estimates that as many as 128 million people will shop this Friday, Saturday or Sunday. That’s down from from the 135 million people who said they would or may shop over Black Friday weekend last year.

But considering all the economic fallout we’ve endured this year, that doesn’t sound too bad.

Doug McMillon of Sam’s Club is expecting even better results.

“In the past few weeks, people have been waiting for (Black) Friday and the prices that they’re going to see between now and Christmas,” Doug McMillon, who heads Sam’s Club, the warehouse club division of discount retail behemoth Wal-Mart Stores Inc (nyse: WMTnews - people ), told Reuters in an interview.

Lot of homes…

It must be a good time to buy a home…

Dolores Conway, an associate professor at USC’s Lusk Center for Real Estate, told me she knew of an investor who recently bought 1,000 homes in the north San Diego and Orange County areas, in order to rent them out.

Wow. That’s a lot of homes.

 

 

 

Obama names nominees for economic team

If there’s one thing all of us need right now, it’s some certainty.

With the nation’s credit markets tight, home foreclosures on the rise and U.S. automakers reaching for a handout, it doesn’t take a rocket scientist to realize we’re in some deep … well, you know. 

But President-elect Barack Obama offered some sense of forward motion Monday when he announced several key members of the economic team he plans to bring to the White House.

Chief among those picks are Timothy Geithner, president of the Federal Reserve Bank of New York, who has been tapped as his Treasury Secretary nominee, and former Harvard President Lawrence Summer, who would become director of the National Economic Council.

The upshot?

“I think there is a calming effect,” said Jack Kyser, senior vice president and chief economist for the Los Angeles County Economic Development Corp. “We saw how the markets reacted when it was announced that Geithner would be Treasury secretary. He’s got some heavy-duty people on board and that shows he’s not going to mess around.”

Paul Ashworth, US economist at Capital Economics, says Geithner is the “right man for the job at hand, both in terms of technical experience and profile,” according to a story posted on BBC News.

Victim of its own success…

It’s interesting how a business can become a victim of its own success.

In a sense, that seems to be what happened to IndyMac.

Much of the lender’s success was driven by so-called Alt-A loans, adjustable interest rate loans that were risky by market standards because many were issued to borrowers with questionable credit.

But when those borrowers began defaulting, and the market for investors who bought those loans dried up… IndyMac went down the tubes.

Of course, there’s nothing new there. Everybody by now knows IndyMac’s demise.

But Evan Wagner, spokesman for what after the FDIC stepped in is IndyMac Federal Bank, told me that IndyMac might not have been able to survive in a kind of “new world” of banking.

It had become so driven by the unique loans it was giving that it might not have been able to operate in a world of fewer banks.

“IndyMac had to become a conventional lender very quickly…and the margins were so much thinner,” he said.

  

 

 

 

 

Musing on the word ‘bailout’

Dominic Ng, the president, CEO and chairman of East-West Bancorp Inc., had an interesting take on the semantics of “bailout” versus “rescue.”

Basically, one man’s “rescue” is another’s bailout.

In a recent conversation on a story I was doing about his Pasadena-based bank’s application for $316 million in funds from the Treasury’s Troubled Assets Relief Program, he said what many, including myself, call a “bailout” of the banking industry is misplaced wording.

The program, in which the Treasury is injecting up to $250 billion into the nation’s banks, is actually an investment, he said, because the government will ultimately “make a killing” off the preferred stocks it has purchased in these banks — which are among the relatively healthiest around.

He said he understands how it can be perceived as unfair that the government is “bailing” out banks rather than homeowners.

But in effect, the injections of federal money into banks will ultimately calm the market, he said.

“The confusion is that people think that the Treasury is spending money to rescue these banks, instead of just investing at the right time,” he said. “It seems like the administration is bailing people out…”

But it’s truly a “bailout” when that money can’t grow, he said. When the economy emerges from the doldrums, the government — and hence the taxpayers — will get a nice return, he said.

 

 

 

 

 

 

 

 

  

 

 

 

Charitable giving…

People still give to charity, even during recessions.

Here are some more tidbits and numbers I couldn’t squeeze into a story on charitable giving…The data is courtesy of the Center on Philanthropy at Indiana University.

Giving has been between 1.7 percent and 2.4 percent  of gross domestic product since 1955.

In, 2007, estimated total giving of $306.4 billion was 2.1 percent of GDP.

Before adjusting for inflation, charitable giving has increased in all years except 1987 since 1956.

The center’s conclusion — in a recently released study – was that financial conditions impact charitable donations, but most households still give even during times of recession.