Will US Retail see the growth again?

The Retail Index: The S&P Retail Index is a capitalization-weighted index of domestic equities traded on the New York Stock Exchange, American Stock Exchange and NASDAQ. The stocks in the Index are a high-capitalization stocks representing a sector of the S&P 500.

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As can be seen from the chart the index is at record 5 year low (-40%!). The question really is whether the spending will pick up when the economy picks up or are we seeing a change in pattern in the consumer spending. Every retailer with the exception of probably WMT and AMZ are trying to find their groove in this new world. From the data on consumer behavior, it does seem that at least in the short term (3-5 years?) “affluent spending” will trend downwards while “saving” and “conscious spending” will stay. Yup – somebody did hit the reset button 🙂

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Special interest groups and lobbying

Does the formation of special interest groups (SIGs) always bring in overall inefficiencies in the economies they operate? Does having SIGs always imply re-distribution of wealth to the cartels?

Did the car lobby hamper the growth of public transport in the US? Does the farm bill with its tariffs and subsidies impact the US economy and the consumers as a whole?

In today’s world, it does seem so. The latest is of course the story of the financial cartel that took over the power in the last 3 decades or so. Simon Johnson lays it our clearly and succinctly in his article on the Atlantic: http://www.theatlantic.com/doc/200905/imf-advice