Friday, Nov 21, 2008
Reading between lines it looks like DSG (dixons, pcworld etc) might go bump
reuters: DSG and M&S likely Christmas turkeys
"Much depends on how much confidence the suppliers have in the business and things could quickly unravel after Christmas," he said.
JP Morgan analysts are equally gloomy. "We expect the results to look very poor and give little support for those concerned about the group's prospects to survive the downturn intact," they said in a preview note.
Posted by mark @ 10:53 AM (570 views) Add Comment
6 Comments
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1. stillthinking said...
All of this retail calamity and all because of the fact that people are in debt.
However, we easily accept the lie that we are all in debt because of housing with credit card use. But UK housing in 1997 was predominantly owned by people in the UK, so the housing boom has been a mass transfer of wealth.
The problem is the people who have made huge amounts from offloading properties, these people are silent and keeping their heads down. They are the ones who are not spending. Asking people already in debt to continue is impossible. The people who need to start spending are those who have money.
For them, inflation in food, even the brief rise in fuel, is irrelevant because it is such a small part of their budget. All they can see is huge asset deflation.
There is no incentive for them to increase their spending in line with their wealth gains. So the next step must be the collapse of the retail sector, which will be apparent when they all do badly over what is the key period of Christmas trading.
The UK is starting to look locked-in to a spiral of decline and the root cause will be the rescuing of the banks. The Chancellor has attempted to make safe deposits which ultimately are not backed by debtors, who shortly won't even have jobs. Painful though it might have been, and also hugely unfair, not letting banks fail will do for us in the end.
Currently, the UK government can pretend that they haven't put any money into the banking system because they have 'rescued' the banks. Next year, unemployment and defaults/repossession will go sky high, at that point there will be no more deception because the government will really be paying money, which won't ever be returned into the banks.
The only way that they can get the money back is through taxation.
To cut a long story short, we are all, inevitably, going to get sucked into supporting the unsustainable profits of the housing boom. Our only hope is finding a quick bottom for housing.
2. stillthinking said...
Before I forget, the current aim of forcing the banks to lend has only one purpose. To deliberately inflate away both the debts of mortgage holders, and the savings of those who benefited from the boom.
Or as I mentioned before, to retrospectively alter the agreed purchase amounts of the boom, by altering the real value with inflation. This cannot be allowed to fail and so there is no unacceptable bottom for sterling and the government will certainly eventually monetise debt. The only reason our leaders are mouthing off about not letting sterling collapse is prevent mass panic currency flight from setting in amongst the savers. The gov. cannot proceed with outrageously inflationary policies at the same time as a sterling collapse, so they must sneakily inflate while people are still holding.
Facto non verba, and the deeds will be to inflate. Our only way out, in fact.
3. jack c said...
Timesonline November 13, 2008
DSG International, the owner of Currys and PC World, was at the centre of renewed concerns about deteriorating credit conditions yesterday as a big insurer reduced the cover it offers to guarantee that the electrical retailer’s suppliers will be paid.
business.timesonline.co.uk/tol/business/industry_sectors/retailing/article5142588.ece
4. stillthinking said...
No wonder Darling is going red in the face. The government can't reinflate on their own because they have account for it against future taxation. Without banks expanding lending the inflation plan goes nowhere. Not a bad deal though if it works, the UK population increases their nominal debt, but their real debt goes down.
I can't see many pensioners egging them on.
5. planning4acrash said...
Now, if the banks take over all the shops, game over. If We The People take them back, we can have exciting towns deep with culture and community with the "loss" of Clintons Cards.
6. Luckyjim said...
I will miss Dixons. Where am I going to try out the latest gizmos before buying them cheaper on the web ?