Liberal blogger Mark Kleiman happily tells us to expect nothing but bad economic news in the future based on a negative Reuter's mention of Wal-mart's CEO's comments concerning the economy. Reuter leads off with "Economists and politicians giddy about prospects for U.S. economic growth got a dousing of cold water on Thursday from Wal-Mart Stores Inc. " We can expect Prof Klugman to jump on this bandwagon soon.
CEO Lee was actually quoted as saying "I don't think consumer spending is slowing, but I also don't see the strength that many of you in the investment community appear to see." A perpetual political pessimist like Kleiman and Reuter's fair and balanced reporter sees this statement as a totally negative 'the glass is half empty' statement while the optimist will see it as a confirmation of Wal-Mart's strong results continuing since their business is dependent on consumer spending. Certainly the economy has been sluggish in previous quarters, but if major elements in the economy like consumer spending, housing, and capital expenditures are all rapidly improving how can the economy not grow? In addition, holiday sales are expected to be at least 5% higher than last year. Internet retail sales over the holidays are expected to be 25% higher. That can't be bad news for the economy except to those wanting to see a black lining on the economic clouds of the future. In addition, tax refunds should be at record levels next year. Then there's the huge rise in consumer confidence that shows better things are ahead.
I guess it is also terrible that Wal-Mart's same store sales rose 6.1%, total sales rose 13.0%, and earnings per share rose from .41 to .46.
Prof Kleiman comments: "Most of the economists (and stock traders) weren't giddy in the first place, and most of the politicians (including political journalists, including bloggers) won't even bother to notice a fact that contradicts their spin." Hogwash. How much are the S&P 500 and NASDAQ up over last year? 20% and 45% increases are pretty "giddy" predictions of where the market thinks the market is heading in my book. One thing about climbing in Prof Klugman's unkept economic bed is that you have to put up with the smell from his half baked economic forecasts and theories. Prof Kleiman doesn't seem to mind the odor.