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The Grinch Will Not Steal Christmas


so the consumer is tapped out, huh?


"I take Him shopping with me. I say, 'OK, Jesus, help me find a bargain!'"
-- Tammy Faye Bakker

Tammy Faye Bakker's quote reminds me of something I've heard my wife say, that "Whoever said money can't buy happiness doesn't know where to shop!" And 'tis the season indeed for consumers to start making their holiday lists and checking them twice.

All I have to say is thank God for Wal-Mart (WMT). If it weren't for Wal-Mart, then I guess all those who write for the "Chicken Little Real Estate Times" would be out of work!

I can't believe anyone buys into the stuff that has run over and over and over again in financial media. I did a Google search for "housing meltdown" and the world's most popular search engine came up with some 678,000 results in 0.22 seconds. The phrase "mortgage meltdown" yielded another 330,000 sites.

Here is the CliffsNotes version of all those stories: Put a fork in 'em, the consumer is dead.

One story quotes the Consumer Federation of America and how it says there's more than $130 billion in mortgages that will reset this year. Another will use the sky-is-falling catalyst of the consumer using his or her home like an ATM. The common theme was that spending was about to disappear faster than the New York Yankees from the playoffs.

If you believed the headlines, you'd assume the fat lady was backstage, warming up.

But maybe, just maybe, all those consumers who were being cited in those articles represented a minority rather than a majority of consumers. That might explain why there are lines at every restaurant, or at the malls.

Just maybe, do you think that not every consumer runs up $20,000 on their credit cards and only makes the minimum payment? And maybe, as I've been saying for months, the Grinch will not steal Christmas.

Finally, perhaps the fact that gasoline has fallen nearly $1 per gallon in the past three months means consumer sentiment is on the upswing.

When you follow the markets and the pundits like I do, the number of those I call exceptional is rather slim. However, one person that I can't help but listen to and respect is Laszlo Birinyi Jr., founder and president of Birinyi Associates. Mr. Birinyi's work showed that, since the beginning of September, consumer-discretionary stocks have been the best performers among the S&P 500's 10 industry groups.

Again, sounds like the poor old consumer has thrown in the towel, doesn't it? Of course it doesn't sound like the consumer is dead, because he, she, we aren't dead -- we're alive and spending! And as I said weeks ago, the added cha-ching in our pockets each time we gas up will continue to keep us spending right up to and through the holidays.

Retail sales excluding service stations rose 0.6% last month. That was nearly three times better than the advance in August, according to the Commerce Department. And in case you hadn't noticed, Wal-Mart has been surging to a new 52-week high and I'll bet you can't tell me the last time that happened when consumers were tapped out. If you can't quite remember the date, I'll give you a clue -- IT'S NEVER HAPPENED!

You wouldn't see the world's largest retailer hitting on all cylinders if consumers were no longer capable of spending. And as Wal-Mart frequently does, yet rarely gets credit for, it's doing its best to keep the consumer happy by cutting prices, and I'm not just talking about a test market for generic drug sales.

Last week Wal-Mart cut prices on more than 100 toys and games, declaring an early start to this year's price wars on toys. The company said this was just the first in a series of moves this season that will cut prices across the store on more than 10,000 items, from toys to electronics to jewelry.

So next time some headline shouts how the consumer is done, finished, kaput -- just ask yourself who is pushing those dollars and that plastic through the registers. The answer is you and me, and from where I sit, we're also circling the parking lot looking for a place to park.

And to that, I'd say the folks writing those doom-and-gloom stories about consumers should go out and talk to one, because we're not that hard to come by.
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