Thursday, May 8, 2008

I'm not buying it

Wal-mart came out with numbers and the CNBC gang had their collective orgasm. Same store sales were up 3.2% YOY. Walmart predicted 1-3% increases. Woo hoo! Recession's over. Let's all go out and buy that new 90" plasma.

Except looking deeper at the numbers, the increase in sales came primarily from food and drug sales. Hmmm, I wonder what that means. Oh yeah I know, it's freaking inflation in food and drugs that's responsible. That's not a good sign for WalMart or anyone else. Growing your sales through inflation is a sure sign of 3rd Worldness. If Zimbabwe retailers were to report, their sales are up 10,000% YOY.

A very basic examples: Last year WalMart sold 100 cans of peaches at $1, revenue of $100. This year it sold 92 cans at $1.12, revenue of $103. 3% increase in sales. Just browsing a top line report you'd think hey cool, revenues were up 3%. Economy must be doing well. All this talk of recession is jibber jabber doom and gloom pessimism. Fine. Except ask yourself what's a better situation for the economy; 92 cans of or 100 cans being consumed?

Walmart has also joined a growing number of retailers offering incentives for people to cash their stimulus check onsite. Just something odd about a retailer cashing checks sent to the masses by the federal government. Odd isn't the word. Disgusting is more like it. You know where this used to happen? In the Eastern Block. The government employed everyone. The government also owned all the stores. So the government paid people to go buy things in its own stores. We're not too far away from that. And the brain trust of Nancy Pelosi, Harry Reid and Jorge W. is now bringing up the idea of a stimulus part deux later in the summer.

Don't you just love election years?

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