Never mind the happy talkers saying there's a bottom in to the recession. They are still stuck in lala land. Out in the real world the data points keep piling up. Last year it was a cold call from a garage offering last minute car servicing in the week before Xmas; now this. Plunge in retail sales sign of belt-tightening.
Nope. But the placatory talk wont stop.
We can be convinced that we can grow infinitely, but somehow the obverse of that is unthinkable.
Car saleyards suffered most, down 11.4 per cent on the previous quarter, but even excluding the automotive sector sales volumes were down 1.2 per cent, double the previous record fall.
"Anything discretionary or housing-related or exposed to tourism saw volumes contract sharply," ASB economist Jane Turner said.
The peak shrink had a great piece a while back on saying goodbye to a word, the word was discretionary.
Appliance retailers saw 5.6 per cent less go out the door
Last Xmas these guys were telling us to buy up now because in 09 prices were going to rise. But they haven't because none of these businesses have any pricing power. None.
They sneered when we criticised them for wasting money before, I suppose we'll have to refrain from returning the sneers now.
Stephens said. "The long overdue correction to a more sustainable level of spending, financed by income rather than debt, is under way."
Right there is the biggest problem, our actual income was only ever able to support an economy half the size of the one we have had, which means that half the economic activity, taxes, businesses and jobs, perhaps more, are toast. Unfortunately, you wont hear any of those words from any of our pollies any time soon. Reality is still on the back burner.
A really telling data point is that, although prices of petrol fell in the quarter, fuel sales volumes also fell. NZ is at least as car-oriented as the US, we have more cars than people in this country. When a drop in fuel price doesn't send us back behind the wheel, its because there has been a vicious bite in the back pocket and we can't afford to sit down.
And things are even worse in Australia where, in NSW alone, over 200 hotels are in breach of their banking covenants and about to be sold up. If Aussies can't support their pubs, the system is on life support.
Described variously as "nasty", "ugly" and "a shocker", the March quarter's plunge in retail sales activity is seen as the clearest evidence yet that New Zealanders are making the painful adjustment towards living within their means.
In real terms retail sales shrank 2.9 per cent, twice as much as economists had expected and twice as much as the previous record fall.
Whoa, you mean the people on the TV telling us its almost over were out by 100%? Wait, I'm sure I have a surprised look around here for that. In real terms retail sales shrank 2.9 per cent, twice as much as economists had expected and twice as much as the previous record fall.
Nope. But the placatory talk wont stop.
Treasury Secretary John Whitehead in a speech yesterday said: "We believe New Zealand is in its sixth quarter of recession now and there is likely to be at least one more before we get some tentative growth at the end of the year."
See how they package hope? Good times are almost here, just ONE more quarter and it will start to come right. After years of 'growth', a single quarter's downturn was simply a blip in the trend, even 2 quarters. But by then we'll have had 7 quarters down, at what point does THAT become the trend?We can be convinced that we can grow infinitely, but somehow the obverse of that is unthinkable.
Car saleyards suffered most, down 11.4 per cent on the previous quarter, but even excluding the automotive sector sales volumes were down 1.2 per cent, double the previous record fall.
"Anything discretionary or housing-related or exposed to tourism saw volumes contract sharply," ASB economist Jane Turner said.
Appliance retailers saw 5.6 per cent less go out the door
In all of the 24 store types Statistics New Zealand divides retailers into, only six recorded positive real growth. That included the largest, supermarkets and grocery stores, where sales were up 1.9 per cent on the previous quarter.
Of course, we are buying the raw ingredients and making food ourselves.Westpac economist Dominick Stephens said. "It seems increasingly likely that most of the cash from tax cuts and lower interest rates will be saved rather than spent."
Indeed, thrift suiddenly looks a lot better than it used to. And those of use who have practised it our whole lives are looking a lot better too. My biggest problem is that I still have to live in a society full of people who were spending money they didn't have to massage their egos. Egos that are now in serious pain.They sneered when we criticised them for wasting money before, I suppose we'll have to refrain from returning the sneers now.
Stephens said. "The long overdue correction to a more sustainable level of spending, financed by income rather than debt, is under way."
A really telling data point is that, although prices of petrol fell in the quarter, fuel sales volumes also fell. NZ is at least as car-oriented as the US, we have more cars than people in this country. When a drop in fuel price doesn't send us back behind the wheel, its because there has been a vicious bite in the back pocket and we can't afford to sit down.
And things are even worse in Australia where, in NSW alone, over 200 hotels are in breach of their banking covenants and about to be sold up. If Aussies can't support their pubs, the system is on life support.
>Never mind the happy talkers saying there's a bottom in to the recession. They are still stuck in lala land.
guess that's me, then. not sure what's going on down-under, but i was alerted to the first major breakthroughs/breakouts happening in the uk mid-january. about 2 months earlier than i predicted. since then, it's stayed pretty much on track, factoring in the faux-bounce i included for the early move.
we're not out of the downstream effects (they'll keep following-through for up to 6mths), but the back is broken of the creditcrunch and all the current signals are green. credit is starting to become available again, liquidity has returned to key markets, sentiment at the margin has turned.
Posted by: Saltation | May 18, 2009 at 10:13 AM