With the Holidays Comes Reason to Have Confidence

If you listened to the talking heads last week, you knew that everyone was holding their breath waiting to find out just how bad black friday sales were going to be. If you listen to the so-called experts, there was no reason for hope and the holiday shopping season would only be the nail in the proverbial coffin.

I suspected that people were not listening to the experts and saw a reason to hope in this economy. As touchy feely as “hope” can be in an area that is defined tightly by the ink of black and white P&L reports, hope, faith and confidence is the driving force behind an economy. We win big because we feel like nothing can go wrong and so we buy, buy, buy and invest, invest, invest. We lose big because the air of an entire way of life is deflated beneath us taking our will and drive to win away.

It’s all about the feeling.

So when economists said that this holiday shopping season would be the worst on record, and that people just weren’t buying like they used to, we could take the prophets at their word, or change the future.

According to Reuters, online sales spiked from a year ago. Some reports used the word “dwarfed” to describe the upsurge and this morning, economists were trying to explain away how they were wrong by saying there was “pent up demand”.

Yes, there was. And the economists missed it. The prophets prophesied doom and were wrong! Mind you, these are the same folks who willingly peddled the economic concepts that buried the mortgage market in the past year.

Folks, I am not an economist. I am not a financial adviser. I know what I hear on a day to day basis talking to people like you and I. I know people are buying. Yes, they are being cautious. But they are buying.

In fact, I may buy a new car before the end of the year when the dealers are dying to make any deal they can. I’ll save some money, and still buy, buy, buy. Don’t buy the hype. This is not the end of the world and the longer we go, the closer we are to the end.

7 Replies to “With the Holidays Comes Reason to Have Confidence”

  1. Personally, it pisses me off that these morons are consistently and repeatedly wrong and yet still keep the moniker “expert”. If a doctor misdiagnosed patients regularly and gave the wrong treatment, they’d be driven out of medicine. If your mechanic regularly gave you repairs unrelated to your current problems, you’d fight them. And yet these economists – who are predominantly with troubled banks or hiding in academia – still have jobs…

    And it’d be nice if they actually worked under a set of assumptions that matched with the real world…

  2. Question: Does “hope” trump “debt”?

    It feels good to spend money, particularly at Christmas time. But I do think we have become a nation of over-consumers. That can only last so long before it catches up with us.

    Now, on the flip side, we are not all broke and destitute. If you have money now can be a great time to pick up some good deals, especially on stuff you were going to buy anyway. I just am not sure the average consumer is getting great deals yet. Which begs the question, if consumers were getting great deals (say 15% off) then they would have to be buying over 20% more (in the value of goods, not price) than they did last year in order to create a 3% increase in spending. Either that or they felt like they were getting good deals but were not.

    I know there are good deals to be had, but I think they are on recreational / luxury goods. Golf clubs and motorcycles are cheap right now. Kids toys are not.

    1. Great question. No I think people have to have a realistic outlook, but at the same time, AAPL stocks took a hit awhile ago on the guesstimates of economists that people would stop buying “bling” products and go with more economic deals. The report from Black Friday indcates that the iPod Touch was the hottest selling gadget on Amazon.com Friday, so obviously there is some kind of disconnect from reality.

  3. The iPod Touch is a really interesting example. For some people it is a luxury good that was on sale for the cheapest price ever. For others the iPod touch is a cheaper alternative for people who were thinking about buying an iPhone for a gift (in that there are no continuing service fees).

    But I do agree 110% that the economists have no idea what is going on.

  4. I appreciate your optimism, I will go a step further to say that actually to buy during uncertain times should be a well thought out process. Once you begin the purchase of anything based on feelings then you swell with the waves of the ups and downs.

    One thing our Pastor talks about that gives me the confidence is that when we steward our lives based not on our feelings but on a condition outside of them( for me that is faith) we have an ability to let go of the “obsession of doom”. Even as the harbingers of mounting news saids it’s all over, I can say with confidence, no it’s not.
    It was not over for my grandparents who lived on nothing…it’s all about perspective.

    So why not enjoy the season but remember your hope is not in anything you can purchase…

  5. It really is about perception, and it amazes me how people will hold their money and resources to wait and see what everyone else is doing! If I’m going to buy gifts for friends and family, I’m going to do it regardless of what everyone else is doing.
    The real trick is to see what the market does on Monday.

  6. Though am not in the US, I do understand the concept of “Black Friday” from my cousin who lives there. And I don’t have to see the reports on the sales to grasp the sunny side:) Without reservation, I can vouch that “good feeling and vibes” can see us through any tough period.

    Unless I read the predictions of the economic gurus, I don’t feel the pinch on recession. In fact, I kept wondering how this can be true, when I see shoppers with hand full of newly purchased items in shiny plastic bags in the crowded shopping malls. Now, I can see like minded people here.

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