What will the Fed do Wednesday?
There are other things, but that’s the big meeting this week where all the bankers will look at their phones on Wednesday. And speaking of…
The Economy and the News
We still have a bag of mixed messages:
New home sales were up – great for builders, good for the economy, and bad for Fed Rate Busters.
Durable goods orders were up, but not so much when you take out transportation costs.
Retail inventories are up, meaning folks aren’t buying as much – bad for retailers, good for Fed Rate Busters.
There were two big bugaboos:
The Gross Domestic Product for Q1 was revised down from 2.6% to…
1.1%. Ugh.
“Hey honey, you know that 2.6% raise I was going to get? Well, things didn’t go as well as the company hoped, and the boss brought it down to 1.1%.”
Let’s hope the boss doesn’t want us to repay 1.1% in Q3.
The Core Personal Consumption Index – PCE – dropped from 4.7% year over year to…
4.6%. Ugh – not much of a drop.
And that’s after you take out fuel and food costs.
The Fed is still looking for 2%.
It’s not rocket science to predict that rates will increase this week. Double ugh.
Under the category of Retail Isn’t Getting Any Easier…
Bed, Bath, and Beyond is going to the Great Retail Beyond, and joining other well-known names:
Circuit City and Linen & Things are gone altogether.
Believe it or not, Toys R Us is still around, but only as a website.
Check it out: They have a May the 4th Be With You sale this week.
Sears has about 8 stores left in the country that are primarily furniture and appliance stores.
Nostalgia Alert: In the 60’s and 70’s, a kid could get lost in the Sears Catalog (today’s version of a website) looking at all the pictures of toys.
My dad, no doubt, went through the Craftsman section.
It was two inches thick and had glossy, full-color paper. I could not avoid longing for the pool tables listed in the catalog.
Even Sears Outlet is gone, bought by American Freight.
There is one Sears store in Southern California: Whittier. One.
Now, there’s a conversation starter at your next mixer. You can probably get a free drink off of that question.
Bed, Bath, and Beyond started with two stores in 1971, in New York.
Do you know why inventory was stacked to the ceiling? The two guys that started it didn’t have enough money to decorate the supporting pillars and beams. So they stacked the inventory.
It went public in 1992 and grew to 1,550 stores; they have since been closing stores.
They also have 120 Buybuy Baby stores.
It’s a chapter 11 liquidation, unless someone comes to their rescue.
In a somewhat related topic…
In the 1980s, there were about 2,500 malls in America.
We are down to 700.
Even the Sherman Oaks Galleria, aka Ridgemont Mall, was closed in 1999, and remodeled into an open-air concept that features mostly offices.
If they ever did a remake of Fast Times at Ridgemont High, where would all the kids hang out?
The lesson here is if you are going to be in retail, you had better know your market.
Heck, if you are going to be in business, you had better know your market.
But markets change and you must be ready to change too.
Who was Luther H. Story?
Private First Class Luther Story served in the Korean War.
On September 1, 1950, three enemy divisions broke through the 9th Infantry.
Company A was being surrounded when Pfc. Story unleashed deadly fire, killing or wounding over 100 of the enemy.
The Company Commander ordered a withdrawal. Pfc. Story stayed behind and, because of his wounds, realized he would slow the progress of the retreat. When he was last seen, he was firing every weapon available and fighting off another hostile assault.
This, of course, is an abbreviated version. The whole narrative can be seen here.
I mention this because his remains were returned this past week after recently being identified, coinciding with the visit of the South Korean President. In a joint statement from the White House and the Republic of Korea:
“The supreme sacrifice and heroism of Corporal Luther Story is illustrative of the freedom, security, and prosperity the South Korean people have today.”
It’s good to see the Korean people have not forgotten the sacrifice by the United States.
While Memorial Day is still four weeks away, heroic feats like this are worth noting.
Finally…
May 14th is Mother’s Day. You have less than two weeks to set yourself up for success.
And, of course, this week is May 4th. So…
May the Fourth Be With You.
