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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Webster Groves who wrote (78661)	5/3/2008 9:44:21 AM
From: SouthFloridaGuy	Respond to of 116555

Whatever.

To: Webster Groves who wrote (78661)	5/3/2008 5:49:11 PM
From: mishedlo	Respond to of 116555

I agree and have written about it. The effect will be spread out over 3 quarters, some of it has already been spent and stores lowering prices may negate so much of it that it actually backfires totally. globaleconomicanalysis.blogspot.com Addendum Aaron Krowne at the Bank Implode-O-Meter just pinged me with ... Extending your point that retailers are lowering prices to attract "stimulus check spending" it's important to remember that price drops don't just reduce the $6-12 billion additional likely to be spent each quarter, they reduce total sales and hence consumer spending because all prices are affected. For example a 1% drop in prices, all other things equal, would cause sales to plummet by about $25B for each quarter. That is more than enough to wipe out even generous estimates of the quarterly impact of the stimulus. -Aaron