Back when Baidu.com (NASD: BIDU) came public, we said that the it was the successful IPO that nobody wanted to happen. It was too strong, and the high price did little more than cement the idea that irrational exuberance was back in vogue.
A new round of monthly same-store sales numbers came out today, and--surprise!--they were really strong. Eerily strong, in the face of rising gas prices, interest rates, and debt levels. The profligate American consumer which, like Atlas, has held the economy on its back, may not be a hero, but a fool. It's not that people would like to see consumer stop spending, per se...but it would be nice to see that people are acting wisely, and engage in some rational prudence. These are the same-store sales gains that nobody wants to see, which according to the Wall St. Journal showed average growth of %3.7.
In fact it seems a lot of what was good news a year ago is making people queezy today. Few people would be cheering another %20 rise in home prices over the next year.
Here's David Jackson on the U.S. Consumer:
I just don’t get this. If you were told that it now costs more to buy a house than ever before, that more of your family was reaching retirement than ever before, that real retirement benefits will be cut when the Government indexes them to inflation rather than incomes, that medical costs continue to rise, and that tax cuts are over because of the budget deficit and that taxes may even rise in future, would you try to save more instead of less?
Let’s see how same store sales look in a couple of years’ time.
Indeed.
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