Archive for Business
The failure of the American consumer
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Before our eyes, and in spite of fixes to the international financial system, we are witnessing an epic demise of the American consumer. For the month of September, retail sales fell 1.2%, registering the largest sales drop in three years and the third consecutive monthly decline.
The decline was lead by auto sales (down 3.8%), furniture (down 2.3%), and clothing (down 2.3%). The result was double the consensus estimate and brought the annual retail sales growth into negative territory with a 1% decline.
Additional insight is provided by Philippa Dunne and Doug Henwood of the Liscio Report. Based on their surveys of sales tax receipts, the situation is deteriorating quickly. A few of their contacts remarked that tax receipts are "currently falling more sharply than they have in prior recessions (and from already recessionary levels), and comparisons continue to be to the 1990-91 recession, not 2001's more mild slump."
Another interesting observation is how growth in the International Council of Shopping Centers' sales categories have changed since retail sales peaked in 2006. Luxury stores have gone from year-over-year comparable store sales growth of nearly 7% to a negative 11% reading for September -- a swing of nearly 18%. Department and apparel stores have shown similar shifts. Meanwhile, discount stores and wholesalers remain buoyant. Obviously, a great consumer retrenchment is underway.
What's worrying is that we still don't know how the recent market selloff affected consumer spending. Based on work by the ISI Group in New York, things are likely to get much worse as we enter the critical holiday shopping season.
If stocks stay at currently depressed levels, the market component of consumers' wealth would be down nearly 36% year-over-year. When combined with an estimated 7.4% fall in house prices, this could drive total consumer net worth down by a record 13.5% for the fourth quarter. Such a hit to consumer wealth would cut total economic growth by 1.3%. Such a decline would help drive unemployment from the current 6.1% reading to ISI's dour 8.5% estimate as consumer spending dries up further.
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Can infrastructure projects ease coming recession?
Using options to prevent huge losses
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Fannie/Freddie rally won’t fix the market
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What if we all got money-smart?
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Basic Rules For Stock Trading
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Image via WikipediaDo you know that stock trading is different from investing in stocks? Stock trading demands you to actively participate in the market while there is no need to do so when you are investing in shares. You have to buy and sell at the right time to gain good profits.
Stock trading basics should give you an idea when to buy or sell the shares for short term gains. The leaders in the pricing of securities are sophisticated institutional investors who today account for over ninety percent of the trading volume on major security exchanges.
The institutions spend a big money to obtain the best analysis earlier than the others do. They consider that time is money. They value the time very much. However small individual investors like you and me cannot afford to have the resources that the big investors have. That indicates that the risk involved is higher for us than for the institutions.
We should be very careful when we invest in short term shares. We should not invest on stocks that may fail to perform well in the short term. We have one advantage that the institutions do not have. That is flexibility. We do not have any lock in period to sell our shares.
According to stock trading basics, we need to wait for the right opportunity to buy the shares. The buying opportunities come regularly and in an organized manner. You should study the price-earning ratio of a company before buying or selling.
This ratio gives us the value of the stock based on the earnings of the company. One of the stock trading basics is that this ratio is bound to be beneficial for a stock if the company has gone in for a beneficial inorganic expansion in the recent past.
Another often repeated stock trading rule is that you buy a stock when there is some positive news on the sector in which the company operates. This may be due to some favorable regulatory laws or due to some international economic upturns.
If you have to buy the shares as per some plan then you should buy the shares that are sure winners. These tips on share trading can certainly help you to get regular income from stock trading.You will be sure of making handsome profits.
