The apparent disconnect between store closings, the stock market, and the economy

#1
lawgator1

lawgator1

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#1
So yesterday Macy's stock climbs 17 % in one day when it announces that it is going to close 100 stores. I would like to discuss the economic and philosophical questions about "value" that we attach to that.

On the one hand, people working at 100 stores are about to get fired. Haven't seen the numbers, but what's that? At least 10,000 people, right? So it hurts them financially, at least for awhile. And it is another nick adding to the continued hemorrhaging of the middle class, which we just don't need.

So in a sense, when I heard this, I thought it was bad news for the economy.

But then of course, the stock goes up. Now I understand why, in that it means they are getting rid of 100 underperforming stores, but is no one taking account of the fact that this is a problem for the business model of brick and mortar retailers? I mean, the whole sector got a nice bump. For failure? For a long term problem?

Then I heard a guy on CNBC talking about how "over-stored" the US is, relative to the rest of the world. We have 7.3 feet of retail space for every person in the country. Japan and France have 1.7 sq ft. The UK has 1.3 sq ft.

Here's an article about it.

http://www.cnbc.com/2016/08/11/macys-finally-starts-addressing-the-overstored-retail-landscape.html

So what we have, it seems to me, is further confirmation of the shift in the economy, away from traditional models for sales, and towards the internet and technology. Good news for the investment class, but bad news for workers?

Is this what Trump is tapping into? I think it is. I think its the fear of the inevitable shift to new tech and industries that has this huge swath of millions of people just terribly depressed at their prospects 5 and 10 years from now.

I don't know. I guess its glee for some, disaster for others.
 
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#3
#3
any major shift in the stock market is bad news for someone. Coke buys Pepsi. Great news for Coke, terrible news for Pepsi. not something new with tech. and I bet this bump is only short term and you come back and look at their stock value a year + from now its lower than where it was before the 17% bump.
 
#4
#4
IPleadInsanity said:
Another chain closing stores because of Amazon/online sales. Nothing new here. Free market strikes again.
Click to expand...


That's my point. I'm just saying we the world has to adjust expectations for how to make a living, and to appreciate how many people are being marginalized by this process, even if our 401ks might be doing a little better because of it.

Trump is tapping into the other side of that equation.

Side note: I'd say at least 2/3 of the people I went to high school with went to work at a mall somewhere to do sales, either in the last summer of school or shortly after. Some moved on. Others did not. I, myself, worked retail at Christmas time at an electronics store. Not just that store, but that mall, are gone now. And the chain closed for good some years ago.

What are high school juniors and seniors going to do for jobs now? Fast food the last refuge? Ugh.
 
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#5
#5
lawgator1 said:
That's my point. I'm just saying we the world has to adjust expectations for how to make a living, and to appreciate how many people are being marginalized by this process, even if our 401ks might be doing a little better because of it.

Trump is tapping into the other side of that equation.

Side note: I'd say at least 2/3 of the people I went to high school with went to work at a mall somewhere to do sales, either in the last summer of school or shortly after. Some moved on. Others did not. I, myself, worked retail at Christmas time at an electronics store. Not just that store, but that mall, are gone now. And the chain closed for good some years ago.

What are high school juniors and seniors going to do for jobs now? Fast food the last refuge? Ugh.
Click to expand...
They can sell me drugs
 
#6
#6
lawgator1 said:
That's my point. I'm just saying we the world has to adjust expectations for how to make a living, and to appreciate how many people are being marginalized by this process, even if our 401ks might be doing a little better because of it.

Trump is tapping into the other side of that equation.

Side note: I'd say at least 2/3 of the people I went to high school with went to work at a mall somewhere to do sales, either in the last summer of school or shortly after. Some moved on. Others did not. I, myself, worked retail at Christmas time at an electronics store. Not just that store, but that mall, are gone now. And the chain closed for good some years ago.

What are high school juniors and seniors going to do for jobs now? Fast food the last refuge? Ugh.
Click to expand...

gas stations, hotels, any tourist situation. or heaven forbid they get out and work outside.
 
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#7
#7
"Over all for the latest quarter, Macy's reported a profit of $11 million, or 3 cents a share, down from $217 million, or 65 cents a share, a year earlier. Excluding impairments and other items, per-share profit fell to 54 cents from 94 cents."

That's an unbelievable drop.
 
#8
#8
lawgator1 said:
What are high school juniors and seniors going to do for jobs now? Fast food the last refuge? Ugh.
Click to expand...

fat chance when people are trying to raise minimum wage to $15 an hour. Who the F wants to hire untrained new workers for low skill jobs at $15 an hour?
 
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#9
#9
LG, you are blaming market forces and getting snared in economic fallacy again. What happened to the poor workers that made buggy whips and other tack? Should we live like the Amish and do everything by hand so everyone could be employed? What is good for the investor class is good for everyone. Savings and investment is essential for the creation of wealth for everyone. Do you have a paralegal or secretary? How many legal secretaries were given pink slips when you evil lawdogs learned to copy and paste?
 
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#10
#10
Twice he used this line. Must have gotten the talking points email.

Is this what Trump is tapping into?
Click to expand...

Trump is tapping into the other side of that equation.
Click to expand...

$100 says that in some fashion these lines will be in a headline or top story today or tomorrow.
 
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#11
#11
Ernest T. Vol said:
LG, you are blaming market forces and getting snared in economic fallacy again. What happened to the poor workers that made buggy whips and other tack? Should we live like the Amish and do everything by hand so everyone could be employed? What is good for the investor class is good for everyone. Savings and investment is essential for the creation of wealth for everyone. Do you have a paralegal or secretary? How many legal secretaries were given pink slips when you evil lawdogs learned to copy and paste?
Click to expand...


No, no, you misunderstand. Or I'm not being clear.

The shift in the economy is the inevitable consequence of inevitable advances in technology. That is neither inherently good or bad. It just is.

How we view the consequences of that to our economy, still based on consumerism, and how we gauge the economy, does raise qualitative issues.
 
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#13
#13
lawgator1 said:
No, no, you misunderstand. Or I'm not being clear.

The shift in the economy is the inevitable consequence of inevitable advances in technology. That is neither inherently good or bad. It just is.

How we view the consequences of that to our economy, still based on consumerism, and how we gauge the economy, does raise qualitative issues.
Click to expand...

And regulation, don't forget how over regulation has played a part in manufacture flight.
 
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#16
#16
lawgator1 said:
So yesterday Macy's stock climbs 17 % in one day when it announces that it is going to close 100 stores. I would like to discuss the economic and philosophical questions about "value" that we attach to that.

On the one hand, people working at 100 stores are about to get fired. Haven't seen the numbers, but what's that? At least 10,000 people, right? So it hurts them financially, at least for awhile. And it is another nick adding to the continued hemorrhaging of the middle class, which we just don't need.

So in a sense, when I heard this, I thought it was bad news for the economy.

But then of course, the stock goes up. Now I understand why, in that it means they are getting rid of 100 underperforming stores, but is no one taking account of the fact that this is a problem for the business model of brick and mortar retailers? I mean, the whole sector got a nice bump. For failure? For a long term problem?

Then I heard a guy on CNBC talking about how "over-stored" the US is, relative to the rest of the world. We have 7.3 feet of retail space for every person in the country. Japan and France have 1.7 sq ft. The UK has 1.3 sq ft.

Here's an article about it.

http://www.cnbc.com/2016/08/11/macys-finally-starts-addressing-the-overstored-retail-landscape.html

So what we have, it seems to me, is further confirmation of the shift in the economy, away from traditional models for sales, and towards the internet and technology. Good news for the investment class, but bad news for workers?

Is this what Trump is tapping into? I think it is. I think its the fear of the inevitable shift to new tech and industries that has this huge swath of millions of people just terribly depressed at their prospects 5 and 10 years from now.

I don't know. I guess its glee for some, disaster for others.
Click to expand...

Seems to me to be an example of how the world is evolving into one where we interact virtually via technology with limited actual face to face contact. That seems to be the way my kids, co-workers etc (not to forget to mention my friends here on Vol Nation) prefer to do stuff. No one wants to talk to someone in real life any more. We prefer the safety of the screen.

So, moving consumer goods from manufacturer to consumer is evolving into less time in an actual store and more time behind a screen. You have factories filling orders taken online, truckers delivering to distribution warehouses, picker/packers filling order via tablet computers, UPS deliveries scheduled and accomplished online with no interaction between people.

Online gaming, social networking, live streaming of sports and entertainment are all just logical progressions of this evolution.

Where does it all lead? Well space exploration, of course...
 
#18
#18
lawgator1 said:
No, no, you misunderstand. Or I'm not being clear.

The shift in the economy is the inevitable consequence of inevitable advances in technology. That is neither inherently good or bad. It just is.

How we view the consequences of that to our economy, still based on consumerism, and how we gauge the economy, does raise qualitative issues.
Click to expand...

Free markets are what they are. You almost had it right in your first paragraph but had speak of "qualitative" issues in the second. In other words, you and the left presume to "know better" about what market forces should be allowed.
 
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#21
#21
hog88 said:
And regulation, don't forget how over regulation has played a part in manufacture flight.
Click to expand...


Oh sure, some. Cheaper labor is a big part of it, too.


VolnJC said:
Ruby Tuesday's is also closing 100s of stores
Click to expand...

tumscalcium said:
Do they have 100s of stores to close?
Click to expand...

Have to agree there. No big loss. The salad bar concept was a good one, and as I recall they were on the leading edge of that. But last two times I have been to one, it was mediocre, at best.
 
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#22
#22
lawgator1 said:
So yesterday Macy's stock climbs 17 % in one day when it announces that it is going to close 100 stores. I would like to discuss the economic and philosophical questions about "value" that we attach to that.

On the one hand, people working at 100 stores are about to get fired. Haven't seen the numbers, but what's that? At least 10,000 people, right? So it hurts them financially, at least for awhile. And it is another nick adding to the continued hemorrhaging of the middle class, which we just don't need.

So in a sense, when I heard this, I thought it was bad news for the economy.

But then of course, the stock goes up. Now I understand why, in that it means they are getting rid of 100 underperforming stores, but is no one taking account of the fact that this is a problem for the business model of brick and mortar retailers? I mean, the whole sector got a nice bump. For failure? For a long term problem?

Then I heard a guy on CNBC talking about how "over-stored" the US is, relative to the rest of the world. We have 7.3 feet of retail space for every person in the country. Japan and France have 1.7 sq ft. The UK has 1.3 sq ft.

Here's an article about it.

http://www.cnbc.com/2016/08/11/macys-finally-starts-addressing-the-overstored-retail-landscape.html

So what we have, it seems to me, is further confirmation of the shift in the economy, away from traditional models for sales, and towards the internet and technology. Good news for the investment class, but bad news for workers?

Is this what Trump is tapping into? I think it is. I think its the fear of the inevitable shift to new tech and industries that has this huge swath of millions of people just terribly depressed at their prospects 5 and 10 years from now.

I don't know. I guess its glee for some, disaster for others.
Click to expand...

I'm not very good at economics but I think I agree..I don't know where the manufacturing jobs of the future will be...How do you compete with other countries who work cheaper?
I'm also for the 15 dollar minimum wage if it would end things like earned income credits. I think transferring the costs of this population will get them off the govt. payroll...and companies will absorb it better thru competition...maybe some of the business owners could weigh in and offer a better opinion.
 
#23
#23
Ernest T. Vol said:
Free markets are what they are. You almost had it right in your first paragraph but had speak of "qualitative" issues in the second. In other words, you and the left presume to "know better" about what market forces should be allowed.
Click to expand...


I wish this had not taken a partisan bent, though I suppose I invited that a bit. I'd point out that Trump certainly is weighing in on it. Both sides are.

And at any rate, I'm not talking about the fate of one politician or another. The issues created by this change are much longer term and are bigger than one party or another.
 
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#25
#25
lawgator1 said:
Oh sure, some. Cheaper labor is a big part of it, too.






Have to agree there. No big loss. The salad bar concept was a good one, and as I recall they were on the leading edge of that. But last two times I have been to one, it was mediocre, at best.
Click to expand...

Please do your part to save these jobs by visiting Ruby Tuesday everyday and leaving 200% tips to the workers about to lose their jobs.
 
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