Retailers Beginning To Tell A More Positive Story

I think the retail sector gains are an oversold bounce. I think you have investors taking up the slack as many smaller investors have sold off everything left and decided to get out of the market. Best Buy in particular as well as many others may be enjoying the prospects of less competition due to bankruptcy. With no Circuit City, people may be looking for competitors with which they are not familiar or simply shopping Best Buy with less comparisons. It may less an indication of sector health than a result of the same low confidence among a smaller group of retailers. I haven't checked, but maybe the increases are among those retailers that are expected to "win" (i.e. not go bankrupt) at the expense of the remaining retailers. The retailers in the RTH ETF may be mostly those picked as winners, while other retailers may be down much more as those chosen as most likely to fail. (Hey, maybe I should pick a few losers and take out some CDSs! :) ) The comments above indicate the other pressure against retail spending, the reduced availability and higher cost of credit, trends that appear to be continuing. Add that to the fear of income loss created by increased unemployment, and you have a recipe for continued hardship among retailers.

Got an interesting letter from First Bankcard company who with we've held a credit card for over twenty years. We have not carried a balance for the past ten yrs but use it for online purchases and other small purchases. The letter read that we had been "selected for inclusion in a new pricing initiative". What that meant was they were raising the APR to 17.9%, a significant increase. My husband called the company demanding to know the exact reason for the rate change since we've been in such good standing with the company for so many years. He was told that we really weren't "selected", in fact, ALL credit card holders were receiving this same letter and rate change. At my husband's request and threat to close the acct, they allowed us to keep our current low rate. It makes no economic sense to punish those of us who have kept our records clean. Seems like these companies are going to put themselves out of business by doing so.

The trend looks good but how will the impact from credit card companies tightening up the credit play out in the long run. Today I became a victim of one of the bailed out credit card companies. As with most that have recently canceled their credit cards because of excessive rate increases for no reason I too had to make that decision. What does this mean to me and others like me, fewer purchases! I had already cut back quite a bit but now will cut back even more. So much for the politicians stimulus plan. To bad attorneys have not figured out how to file suite against the CC companies that have created a negative impact on all us hard working pay on time folks that just took it on the chin.

The trend looks good but how will the impact from credit card companies tightening up the credit play out in the long run. Today I became a victim of one of the bailed out credit card companies. As with most that have recently canceled their credit cards because of excessive rate increases for no reason I to had to make that decision. What does this mean to me and others like me, fewer purchases! I had already cut back quite a bit but now will cut back even more. So much for the politicians stimulus plan. To bad attorneys have not figured out how to file suite against the CC companies that have created a negative impact on all us hard working pay on time folks that just took it on the chin.

This is definitly a good leading economic indicator. It supports the facts alaways known, that 90% consumers,regarding the general public,are financially responsible. Thanks Brian