WALMART CLOSING 269 STORES AND COUNTING

[Underhill]

The real bad indicator of global economic problems is the price of oil. It is now below $30.00 a barrel. This is a indication of the slowdown of the worldwide, including, the US economy.

I don't think so. I think it's a sign of OPEC trying to drive American production out of business.

 

[Penumbra]

Is this the beginning of the global financial collapse? No, seriously. That is the topic I want to debate.

Most of the stores Walmart is closing, are "Walmart Express". Those are their smaller stores in more urban areas.

Walmart competes almost entirely on price, and competing on price is a hard business. They've been able to do it so long by being the biggest retailer, and by having such big stores. They can buy in such large quantities that they can get cheap prices, and they have a dense supply chain.

But once the rural and suburban areas in the US were saturated, they started expanding into cities with smaller stores, and expanding overseas with acquisitions, and they don't have a competitive advantage in either of those markets. At the same time, online retailers like Amazon have been doing way better than physical retailers, both on price and convenience. Amazon is stealing market share from Walmart, Macy's, and other large stores.

So no, Walmart's store closings has little to do with the global state of the economy. In fact, really cheap stores like Walmart and dollar stores tend to do better than other stores during recessions. Wealth concentration has made the middle class smaller, and so high-end and low-end stores have received more customers while middle stores have been in a tough spot.

The real bad indicator of global economic problems is the price of oil. It is now below $30.00 a barrel. This is a indication of the slowdown of the worldwide, including, the US economy.

That's more of an oversupply problem than a demand problem.

China's demand dropped, and the US has had an unusually warm December, but the bigger global issue is supply. Over the last several years, supply kept going up, because OPEC kept producing, and less conventional sources like oil sands and shale oil ramped up, increasing producing from places like the US and Canada. Supply has spiked over the last five years or so. And now, investors are taking into account the likelihood that Iran will be able to start supplying the world with oil again, which is yet another increase in supply.

Usually when supply outpaces demand, OPEC reduces supply to keep prices high. But this time they didn't do it, because they don't want to lose market share to the U.S., and so they've kept production going full steam to try to make the US reduce their production.

 

[Guy Threepwood]

There are problems with politicians as regulators.....
- They don't understand the industries they seek to manage.
- The results they care about are elections, not bad consequences.
- They aren't liable for deleterious consequences.
- They think they know better than markets.

I think that's a pretty good overview, I would maybe rank the liability factor as #1- beyond elections, I think there are some good intentions in politics on all sides, but choices based on good intentions v pragmatism don't always agree, especially when spending other people's money. And beyond real estate- I agree, the same applies, political and practical goals and motives too often oppose each other.

I'm more of a pessimist here.
The same old risk factors are creeping back once again.
I've seen ads for aggressive lending within the last year.
And of course, the subsidies are still there.

[/quote]

That is true, I may just be more of a wishful thinker, it's the industry my livelihood depends on, so I have little choice but to hope for the best.

We do have a prospective leader in the offing with a little real estate background... I'd be interested; do you think he would help the industry?

 

[Revoltingest]

I think that's a pretty good overview, I would maybe rank the liability factor as #1- beyond elections, I think there are some good intentions in politics on all sides, but choices based on good intentions v pragmatism don't always agree, especially when spending other people's money. And beyond real estate- I agree, the same applies, political and practical goals and motives too often oppose each other.

That is true, I may just be more of a wishful thinker, it's the industry my livelihood depends on, so I have little choice but to hope for the best.

We do have a prospective leader in the offing with a little real estate background... I'd be interested; do you think he would help the industry?

A whole lotta agreement here for RF...unusual.
To the last question....
I don't know if he'd help or hurt the industry (relative to the other candidates).
Part of the problem is how we define "help".
I'm in real estate, & I'd bet many would think I'd harm the industry.
It's cuz I'd end the subsidies & intentional inflation (currency devaluation thru monetary policy),
thereby bursting the looming bubble (what they might see as recovery).

 

[Guy Threepwood]

A whole lotta agreement here for RF...unusual.
To the last question....
I don't know if he'd help or hurt the industry (relative to the other candidates).
Part of the problem is how we define "help".
I'm in real estate, & I'd bet many would think I'd harm the industry.
It's cuz I'd end the subsidies & intentional inflation (currency devaluation thru monetary policy),
thereby bursting the looming bubble (what they might see as recovery).

Yes, it complicates the issue when there are short term v long term benefits - and I think left leaning policies often win based on this kind of 'instant gratification'?

raising taxes, subsidizing, borrowing- redistributing wealth, sometimes can and does work well for a little while.. for some folks.., kinda like signing up for as many credit cards as you can get, you can look like you are doing very well short term!

I think we need a little more of that Scottish frugality, independent spirit!

 

[Revoltingest]

Yes, it complicates the issue when there are short term v long term benefits - and I think left leaning policies often win based on this kind of 'instant gratification'?

raising taxes, subsidizing, borrowing- redistributing wealth, sometimes can and does work well for a little while.. for some folks.., kinda like signing up for as many credit cards as you can get, you can look like you are doing very well short term!

I think we need a little more of that Scottish frugality, independent spirit!

Aye, promising to fleece the few for the benefit of the many is a winning political campaign strategy.