Infant formula rationed in UK

Baby milk rationed in UK over China export fear

Retailers in the UK are rationing sales of powdered baby milk because of a surge in demand in China.

,
BBC 

8 April, 2013

Danone, the manufacturer of Aptamil and Cow and Gate baby milk powder, said most supermarkets were introducing a restriction of two cans per customer.

It said the limit was to prevent some individuals from bulk-buying baby milk for "unofficial exports".

Retailers were also capping sales of Nestle's SMA milk, despite the company saying there were no stock shortages.

Danone said in a statement: "We understand that the increased demand is being fuelled by unofficial exports to China to satisfy the needs of parents who want Western brands for their babies."

Chinese thirst

"We would like to apologise to parents for any inconvenience caused by this limit. We know that most parents only buy one pack at a time, so we hope that the impact of this limit on UK parents will be minimal," it added.

Supermarkets Asda, Sainsbury's, Tesco and Morrisons said they have limited purchases to two units per customer per day of powdered baby milk brands, including Aptamil, Cow and Gate, SMA and HiPP organic milk formula.

Foreign-made baby formula are popular in China, especially since a locally manufactured formula laced with the industrial chemical melamine killed six infants in 2008 and caused another 300,000 to fall ill.

Earlier this year, shops in Australia were forced to restrict sales of infant formula, as Chinese customers and tourists bought them in bulk to send them home or to sell them online.

Authorities in Hong Kong also introduced restrictions in February to prevent shortages, banning travellers from leaving the territory with more than 1.8 kg (4lb) of formula. Last month, 10 people were arrested there for trying to smuggle more than the allowed amount into mainland China.

Danone said it was taking action to respond to the shortfall in the UK, including increasing production of milk, which means extra supplies of all its brands are arriving every week, according to BBC business correspondent Emma Simpson.

Boosting production

Danone is also increasing production and supplies of its brands that are already available in China, in order to meet demand there.

But it added: "If parents are unable to find their baby's usual brand of milk, we recommend they try another local store or revisit the store on another occasion."

Richard Dodd, head of media and campaigns at the British Retail Consortium, said: "A number of retailers are limiting the amount of baby milk that can be bought by any one customer.

"Retailers are taking this precautionary step to ensure stocks continue to be available to everyone wanting baby milk," he added.

However, Nestle insisted there were no shortages of its formula milk available to retailers.

The company said: "We do not have any evidence of bulk purchase of SMA for export, and we are in the process of contacting all our retail customers to confirm this, and to notify them that we do not have - and do not anticipate - any stock issues for powdered infant milks.

We would like to reassure our consumers that we are not seeking to impose any limits on the sale of our formula, and any decision to do so is at the sole discretion of the retailer. Contrary to reports, Nestle UK has never requested that retailers limit the supply of SMA powdered infant milks sold to consumers."

Panic buying in the UK

There is a message here: BE PREPARED!

UK snow: panic buying hits supermarkets as shelves stripped bare

Panic buyers stripped supermarkets shelves bare of essential items after weather warnings predicted a deluge of snow

the Telegraph,

18 January, 2013

Frantic scenes were reported across the West Country, Home Counties and south Wales, in what officials described as worse than peak Christmas shopping periods.

With much of Britain expecting to be brought to a standstill today by a 40–hour snowstorm, shelves were left completely empty and basic items disappeared amid fears families would be left snowed in.

Supermarkets reported a "frenzy" as people stampeded along the aisles, filling their trolleys with bread, milk, vegetables and other essentials, leaving stores "virtually empty".

Massive queues of traffic also built up as shoppers battled for space outside stores as parking spaces became a premium.

At a Tesco branch in Aberdare in South Wales on Thursday, hundreds of shoppers stocked up after the Met Office put out a rare red warning, meaning motorists should only travel if necessary.

Shopper Rhiannon Griffiths, 38, said: "It was a real scrum - people were grabbing loaves and milk and dashing to the tills.

"I managed to get two small loaves and some pitta breads - but that was all that was left."

The bakery at the Tesco store was working around the clock to meet the huge demand for bread.

Another customer Brenda O'Neil, 47, added: "A member of staff said there was more bread in the oven which would be it in 45 minutes.

"A lot of people were waiting - there was a big queue. I bet the supermarkets love a snow forecast, they make a fortune."

Other shops in the South Wales valleys said there had been a sudden rush on bread, milk and other essentials.

Helen Rogers wrote on Twitter: "At a Lidl's in Monmouth was manic, [with the] car park overflowing. Bonkers as it was before the red snow warning."

At a Tesco superstore in Newbury, Berkshire, workers described the scenes as chaotic.

"It's gone absolutely crazy - it's almost a sort of mass hysteria," one worker, who declined to be named, said.

"People are rushing in and blindly grabbing what they can see, frightened there will be nothing left.

"The shelves are emptying as fast as we can fill them - they're after bread, milk, diary produce, fruit, vegetables and lots of people seem to be stocking up the tinned stuff like soup."

She added: "It's snowing outside and the car park is jam packed with hardly any spaces left, there are so many people flooding in here. I'd say tonight we are even busier than we were just before Christmas and that was bad enough.

"One woman told me that all the TV forecasters and newspapers are predicting the country will be under a foot of snow and all the roads will be blocked by tomorrow.

"She said she decided to rush in and do a massive shop because all her friends were doing it, and if she put it off, there would be nothing left and she wouldn't be able to get here anyway through all the snow."

Shoppers in Chippenham, Wiltshire, also reported "panic buying" at a local Sainsburys, which they said became "virtually empty" with similar scenes in Tetbury, Glos.

Forecasters have warned of major travel disruption, threats to power supplies and fears for the elderly as they predicted falls of up to 12in in some areas today and tomorrow.

Higher ground will see the worst, especially in Wales and the west of England, but up to 4in will fall in other areas. Winds up to 25mph will also cause drifting, forecasters said.

A red weather warning has been issued in South Wales, where up to 12in of snow and 30mph winds are forecast.

Thousands of people were advised not to leave their homes, with the dangers so severe that even the fit and healthy are at risk.

The collapse of Europe

By The Numbers: 20 Facts About The Collapse Of Europe That Everyone Should Know

Michael Snyder

Economic Collapse Blog,

8 January, 2013

The economic implosion of Europe is accelerating.  Even while the mainstream media continues to proclaim that the financial crisis in Europe has been "averted", the economic statistics that are coming out of Europe just continue to get worse.  Manufacturing activity in Europe has been contracting month after month, the unemployment rate in the eurozone has hit yet another brand new record high, and the official unemployment rates in both Greece and Spain are now much higher than the peak unemployment rate in the United States during the Great Depression of the 1930s.  The economic situation in Europe is far worse than it was a year ago, and it is going to continue to get worse as austerity continues to take a huge toll on the economies of the eurozone.  It would be hard to understate how bad things have gotten - particularly in southern Europe.  The truth is that most of southern Europe is experiencing a full-blown economic depression right now.  Sadly, most Americans are paying very little attention to what is going on across the Atlantic.  But they should be watching, because this is what happens when nations accumulate too much debt.  The United States has the biggest debt burden of all, and eventually what is happening over in Spain, France, Italy, Portugal and Greece is going to happen over here as well.

The following are 20 facts about the collapse of Europe that everyone should know...

#1 10 Months: Manufacturing activity in both France and Germany has contracted for 10 months in a row.

#2 11.8 Percent: The unemployment rate in the eurozone has now risen to 11.8 percent - a brand new all-time high.

#3 17 Months: In November, Italy experienced the sharpest decline in retail sales that it had experienced in 17 months.

#4 20 Months: Manufacturing activity in Spain has contracted for 20 months in a row.

#5 20 Percent: It is estimated that bad loans now make up approximately 20 percent of all domestic loans in the Greek banking system at this point.

#6 22 Percent: A whopping 22 percent of the entire population of Ireland lives in jobless households.

#7 26 Percent: The unemployment rate in Greece is now 26 percent.  A year ago it was only 18.9 percent.

#8 26.6 Percent: The unemployment rate in Spain has risen to an astounding 26.6 percent.

#9 27.0 Percent: The unemployment rate for workers under the age of 25 in Cyprus.  Back in 2008, this number was well below 10 percent.

#10 28 Percent: Sales of French-made vehicles in November were down 28 percent compared to a year earlier.

#11 36 Percent: Today, the poverty rate in Greece is 36 percent.  Back in 2009 it was only about 20 percent.

#12 37.1 Percent: The unemployment rate for workers under the age of 25 in Italy - a brand new all-time high.

#13 44 Percent: An astounding 44 percent of the entire population of Bulgaria is facing "severe material deprivation".

#14 56.5 Percent: The unemployment rate for workers under the age of 25 in Spain - a brand new all-time high.

#15 57.6 Percent: The unemployment rate for workers under the age of 25 in Greece - a brand new all-time high.

#16 60 Percent: Citigroup is projecting that there is a 60 percent probability that Greece will leave the eurozone within the next 12 to 18 months.

#17 70 Percent: It has been reported that some homes in Spain are being sold at a 70% discount from where they were at during the peak of the housing bubble back in 2006.  At this point there are approximately 2 million unsold homes in Spain.

#18 200 Percent: The debt to GDP ratio in Greece is rapidly approaching 200 percent.

#19 1997: According to the Committee of French Automobile Producers, 2012 was the worst year for the French automobile industry since 1997.

#20 2 Million: Back in 2005, the French auto industry produced about 3.5 million vehicles.  In 2012, that number dropped to about 2 million vehicles.

One thing that these shocking numbers cannot convey is the tremendous amount of pain that many average Europeans are living through on a daily basis at this point.  To get a peek into what life is like in Greece these days, check out this short excerpt from a recent Bloomberg article...

Anastasia Karagaitanaki, 57, is a former model and cafe owner in Thessaloniki, Greece. After losing her business to the financial crisis, she now sleeps on a daybed next to the refrigerator in her mother’s kitchen and depends on charity for food and insulin for her diabetes.

“I feel like my life has slipped through my hands,” said Karagaitanaki, whose brother also shares the one-bedroom apartment. “I feel like I’m dead.”

For thousands of Greeks like Karagaitanaki, the fabric of middle-class life is unraveling. Teachers, salaries slashed by a third, are stealing electricity. Families in once-stable neighborhoods are afraid to leave their homes because of rising street crime.

All over Europe, people that have lost all hope are actually setting themselves on fire in a desperate attempt to draw attention.  Millions of formerly middle class Europeans have lost everything and are becoming increasingly desperate.  Suicide and crime are skyrocketing all over southern Europe and massive street riots are erupting on a regular basis.

Unfortunately, this is just the beginning.  Things are going to get even worse for Europe.


Meanwhile, those of us living in the United States smugly look down our noses at Europe because we are still living in a false bubble of debt-fueled prosperity.


But eventually we will feel the sting of austerity as well.  The recent fiscal cliff deal was an indication of that.  Taxes are going up and government spending is at least going to slow down.  It won't be too long before the effects of that are felt in the economy.


And of course the reality of the situation is that the U.S. economy really did not perform very well at all during 2012 when you take a look at the numbers.  The cold, hard truth is that the U.S. economy has been declining for a very long time, and there are a whole bunch of reasons to expect that our decline will accelerate even further in 2013.


So if you are an American, don't laugh at what is happening over in Europe at the moment.  We are headed down the exact same path that they have gone, and we are going to experience the same kind of suffering that they are going through right now.


Use these last few "bubble months" to prepare for what is ahead.  At some point this "hope bubble" will disappear and then the time for preparation will be over.

Economic decline in Britain

London Austerity And The End Of Capitalism

In London prominent computer shops are closing down on what have been some of the busiest streets, The public are asked why they think this is

Britain

Empty Shops Rate Sets 'Alarm Bells Ringing'

The British Retail Consortium says there are a record number of empty shops on the High Street - and the outlook is set to worsen.

Sky News,

19 November, 2012

One in 10 shops in UK high streets and shopping centres were empty in October - the worst figure since the British Retail Consortium's nationwide survey began in July 2011.

As retailers continue to battle against stagnating sales and rising costs, the new figures showed last month's town centre vacancy rate at 11.3%.

A fifth of store units are currently empty in Northern Ireland, while the rate for Wales is 15.1% and for the North & Yorkshire region the rate is 14.6%. Greater London had 7.6% of its units lying empty.

BRC director general Stephen Robertson said the latest figures would set "alarm bells ringing" and the financial challenges for both customers and retailers were far from over.

Big brands including JJB Sports, Clinton Cards, Blacks Leisure, Game and Peacocks have either disappeared or scaled back their presence in town centres after going into administration.

And the collapse of electricals chain Comet this month will be another blow.
Mr Robertson renewed his call for Chancellor George Osborne to freeze business rates, which are set to increase by 2.6% in April.

He said: "Many retailers are battling stagnating sales and rising costs, and next year's threatened business rates increase can only make matters worse.

"If the Government wants to breathe life back into our town centres and ensure the retail industry can play its full role in job creation, it needs to freeze rates in 2013."

In response, a Department for Communities and Local Government spokesman said: "Empty shops are a wasted economic opportunity that spoil the town centre. That is why we are proposing to scrap the damaging red tape that is keeping so many shops boarded up, allowing young entrepreneurs to open pop-up shops and turn the high streets into an exciting start-up launch pad.

"The best thing Government can do to help businesses is to provide them with a stable economic environment, which is why we want to protect local firms from soaring tax bills. We've postponed the revaluation, which will stop soaring tax bills for 800,000 firms, and given businesses the option of spreading this year's increases out over three years.

"Councils also have the power to grant discretionary discounts, and we've temporarily doubled small business rate relief, meaning approximately a third of a million businesses - including many small shops - are currently paying no rates at all."

The sinking French economy

Worse Than The Infamous Lehman September: France’s Private Sector Gets Kicked Off A Cliff

Wolf Richter.

Testosterone Pit,

27 September, 2012

This should have been an exciting moment: the Paris auto show, “Mondial de l’Automobil,” this weekend with over 100 new models from around the world, from econo-boxes with rounded corners to exotic prototypes that will never see production. Chicks next to some of them. Nausea-inducing colors, downsized motors. Something for everyone. But it had been preceded by two days of supplier events loaded with the dire verbiage of an industry on a death march. Particularly in France, whose private sector is veering into economic fiasco. And on Monday, it became official.

A barometer of the real economy in France, new car sales as measured by registrations, crashed in September—down 18.3% from September last year, and accelerating (year-to-date, sales were down “only” 13.9%). It was the worst September in years, worse even than the infamous Lehman September of 2008. And 2012 is shaping up to be the worst year since long before the financial crisis.

Of the French brands, market leader PSA Peugeot Citroen saw sales drop “only” 5%, helped by the introduction of its new sub-compact Peugeot 208. But year to date, sales were down 18.4%. Renault got killed. A stunning 33.4% plunge for the month and 19.8% YTD.

An equal-opportunity fiasco. Even the heroes from across the Rhine got their clocks cleaned in France. Volkswagen (VW, Audi, SEAT, Skoda) fell 17.4%. BMW and Mercedes where hit as well. GM (Opel, Chevrolet) tumbled 20.8%, Ford 31.5%. And Fiat, well, it might as well hang up its hat: down 38.4%!

In an ominous sign for the private sector and its investment climate, light utility vehicles (less than 5 tons) dropped 12.5% for the month, and “industrial vehicles” (over 5 tons) 20.1%.

“It’s unclear if automakers can survive without government help,” lamented VW CFO Hans Dieter Pötsch. But government help may be hard to come by. Steeped in the debt crisis, governments are struggling to reduce their deficits, or at least keep them from ballooning. Cash-for-clunkers programs, which burned through many billions of taxpayers euros after the financial crisis, or outright subsidies, will be a tough sell when pensions, salaries, and social services are on the chopping block.

French President François Hollande could only waffle about supporting the “competitiveness” of the French auto sector. Alas, on the production side, the sickness goes back years. In 2005, PSA and Renault together assembled 3.2 million vehicles in France; last year, it was less than 2 million, and this year will be even worse.

And then the second shoe dropped. France’s Manufacturing Purchasing Managers’ Index (PMI) dove to 42.7 in September, the lowest reading since April 2009, during the depth of the financial crisis. Only Greece, which lost a fifth of its economy over the last five years, was lower, but barely so. Even Spain outperformed France. Export sales skidded, but the worst was in the domestic market. New orders were particularly hard hit, a harbinger for pain to come. Lacking new orders, manufactures ate up their backlog at the fastest rate since March 2009—when the economy appeared to have seized.

Lack of work pushed the PMI employment component down for the seventh month in a row. Already, with unemployment at 10.6%, youth unemployment at 25.2%, and rising, and more than 3 million people out of work for the first time since 1999, heat is building up in the system.

Lay-offs, albeit difficult to undertake in France, have been making headlines. Trophy companies are involved, PSA and Air France-KLM Group, for example. Hollande himself stepped in to prevent them, or at least to delay them. Today’s headline hog is ArcelorMittal, largest steelmaker in the world. It will, despite government machinations, permanently shut down two idled furnaces. Furious workers instantly occupied the plant. At least they didn’t take management hostage, not yet.... [Taking Bosses Hostage, a Negotiating Tactic in France].

The largest companies get most of the attention. But the confidence barometer of small and medium-sized businesses—the ones that are supposed to create most of the jobs—crashed in September to 84, the lowest level ever in the series, which started in 1992. It was at 129 in April. That’s what falling off an economic cliff looks like.

The private sector in France is only 44% of the economy, and shrinking. 56% is public spending, to remain level in the 2013 budget. So a measure of stability. But to reign in its deficit, the government is trying to impose a slew of tax increases on the private sector and households—how exactly that might perk up the private sector remains a mystery. Fasten your seatbelts.

In Greece, whose PMI was even worse than France’s, GDP, bad as it is, no longer does justice to reality. Take new vehicle registrations: they plunged 46.7% from prior year and 80% from 2008. People have stopped buying new cars. And not just cars! Read.... Greece, Tell Brussels “To Take A Hike” And Let The Troika Bail Out The ECB Instead.

And here is Switzerland-based George Dorgan wading into a nasty fight between the Swiss National Bank and Standard and Poor’s. Read.... Is Standard And Poor’s A Rating Agency Or A Rumor Agency?

China

The Coming Collapse Of Consumption In China

Gordon Chang

Forbes,

1 October 2012

On Friday, Nike shares declined 1.1%, largely on China concerns. The world’s largest sporting goods company reported that Chinese orders were down 6% when analysts had expected them to rise 1.2%.

The only real surprise is that almost no one saw this coming. Rahul Sharma, founder of Neev Capital, maintains investors overreacted to Nike’s China problems, saying they should have been paying attention. It’s no secret Nike has been carrying excess inventory in China, and this had led to discounting that in turn hurt sales of new products.

Company after company is reporting softening Chinese consumer demand. Most notably, Burberry’s Chief Financial Officer Stacey Cartwright blamed China as her company released discouraging guidance earlier this month. Its stock dived 21%, the worst one-day loss since the retailer went public in 2002.

Investors still believe consumption will carry the Chinese economy past its current difficulties. And on the surface, China’s shoppers appear resilient. The National Bureau of Statistics reported that retail sales increased 13.2% in August year-on-year. Moreover, the People’s Bank of China is apparently expecting a stellar National Day. Days ago, the central bank completed the biggest weekly net injection of cash in China’s history—365 billion yuan—to meet expected demand during the week-long holiday.

Yet even official statistics are starting to reveal the slowdown in consumption. For one thing, the current retail-sales figures represent a deterioration from the second half of last year, when growth ranged from a low of 17.0% in August to a high of 18.1% in December. Moreover, current growth rates are also below those in the beginning of this year: the aggregated January-February period clocked in at a still-healthy 14.7%, and March posted a 15.2% gain.

The downward trend in the figures becomes even more worrying when you strip out of them inflation and exclude government procurement and store inventory, which are inexplicably included. The growth of “retail sales” in China, at least as we think of the term, is probably in the low single digits at the moment.

Problems in the retail sector are highlighted in the most recent China Beige Book, which is based on a survey conducted by New York-based CBB International from August 9 to September 3. It both confirms a slowing of Q3 retail growth and shows retailers less optimistic than they were three months earlier. That’s because the closely watched survey, modeled on the one by the U.S. Federal Reserve, reveals a decrease in the number of companies hiring and an increase in those cutting staff. The number of businesses cutting wages more than doubled from the previous survey, and there has been an increase in store inventories.

Retail is heading even lower as take-home pay and investment income fall. “We should be on the cusp of a jump in industrial unemployment,” states J Capital Research’s Anne Stevenson-Yang in her September 29 e-mail alert from Beijing.

She has to be right. Foreign enterprises are starting to ditch staff. China is the nation hardest hit by the layoffs at the Motorola “mobility” division after its acquisition by Google: 1,400 employees out of 4,000 worldwide. The company let go staff in Shanghai, Nanjing, Hangzhou, Tianjin, and Beijing. Adidas shut its last wholly-owned factory, and Panasonic, Nokia, and Denmark’s Vestas are cutting staff.

Even large state enterprises are throwing in the towel. This month, Baosteel Group, China’s biggest steelmaker, announced the closure of a mill in Shanghai due to falling demand for steel plate. The enterprise was the first to shutter a steel plant. Other operators tolerate low capacity because they receive low-interest loans and subsidies from local governments, but soon they will have to close facilities too.

And as goes steel, so goes China. Other industries—think solar panel makers—are in worse shape and will eventually have to cut operations as well. Already, there are protests as employees demand payment of back wages. The country’s economic slowdown is beginning to affect social stability, and this in turn further undermines the overall economy.

Stevenson-Yang notes that the purchasing managers’ indexes are the best way to forecast the demand for employment. The HSBC new orders sub index has been dropping at a time when companies are gearing up for Christmas. No surprise then that a recent J Capital survey indicates that large manufacturers are getting ready to shed workers.

Don’t expect to see an increase in joblessness in the country’s official figures, however. Beijing’s Ministry of Human Resources and Social Security reported that the urban unemployment rate at end of this year’s second quarter was 4.1%, unchanged from the middle of 2010. In fact, the sensitive jobless rate, which is well below this year’s national target of 4.6%, has barely moved a tenth of a percentage point since 2003.

Nobody believes the accuracy of the unemployment number. The Chinese Academy of Social Sciences released an 8.7% unemployment figure in 2008, but the prestigious institution has been silent since.

Beijing’s jobless statistics do not count migrant workers, who number as many as 250 million. Also left out are women over 45 and men over 50 as they are considered retired, graduates out of school for six months or less, laid-off state workers still receiving payments from their former employers—perhaps 40.5 million in this category—and those not registered for unemployment. Unemployment, in fact, is high, somewhere in the teens. Disposable income is therefore taking a hit. And an apparent fall off in investment income is not encouraging the Chinese to shop either.

Naturally, many analysts see the solution to faltering consumption in a general pickup in the economy. As Zhu Haibin of JPMorgan Chase in Hong Kong says, “if policy efforts can boost corporate sector investment and profitability, consumption may come naturally.”

There’s a measure of truth in Zhu’s comment, of course, but we have to remember that, as central government technocrats implemented their stimulus program beginning in 2008, they unbalanced the economy even further with massive amounts of state investment. Retail spending increased in absolute size in the resulting recovery, but it plummeted as a percentage of gross domestic product. Today, no nation has a more unbalanced economy.

The ultimate answer is to increase the percentage of household consumption from the current 34% or so. As Premier Wen Jiabao in March declared, “Expanding domestic demand, particularly consumer demand, which is essential to ensuring China’s long-term, steady, and robust economic development, is the focus of our economic work this year.”

That task is difficult in the best of circumstances, but it cannot be accomplished in a downturn. And in any event, it takes years for any strategy to succeed. China’s investment-led, export-heavy growth model is, by its nature, anti-consumption.

And Chinese leaders are beginning to understand they cannot change the model. This month, the official Xinhua News Agency issued a story with this headline: “China Plans Slower Growth in Domestic Consumption.” No, Beijing’s leaders are not planning a smaller contribution of consumption to GDP, but, yes, that is what is in fact happening.

Technocrats can see what is about to occur: Chinese consumption is now on the verge of collapsing.

More on Australia

Australia Department Store Sales Slump 10.2 Percent; Retail, Food Store Bankruptcies; Reflections on Housing and Commodities Bust

Mish's Global Economic Analysis,

5 September, 2012

Interest rates cuts that helped boost retail sales in Australia over the past two months have already worn off. Economists expected a further rise in sales this month only to see a seasonally adjusted .8% decline.

Now Retailers want RBA action as sales dive

 Retailers hope the biggest monthly drop in consumer spending in nearly two years will trigger alarm bells at the central bank when its board meets to discuss interest rates.

Retail trade fell by a seasonally adjusted 0.8 per cent in July to $21.4 billion, after being bolstered in the previous two months by government handouts and earlier interest rate cuts by the Reserve Bank of Australia (RBA).

Economists had expected an overall spending rise of 0.2 per cent in the data collected by the Australian Bureau of Statistics.

But department stores' sales slumped 10.2 per cent, the largest fall since April 2005

.

Understatement of the Day Award

The understatement of the day award goes to Macquarie Research divisional director Brian Redican who said "The headwinds for growth may be building more rapidly than analysts or policymakers have been expecting."

More Retail, Food Store Bankruptcies

The Age reports Food, fashion jobs in jeopardy as companies collapse 

 In another blow to Australia's already shaky retail sector, women's fashion chain Ojay and a ready-to-eat food manufacturer have reportedly been put into administration, threatening hundreds of jobs nationwide.

Food jobs also in jeopardy

It was reported early this afternoon that Australian Convenience Foods Group, which makes sandwiches for petrol stations and supermarkets, had collapsed.

Deloitte has been appointed managers of the company, with up to 400 jobs at risk. The company's history goes back to the 1970s. A receptionist at ACF’s office confirmed the company had collapsed.

Australian Convenience Foods fell into voluntary administration on August 28 and Deloitte is currently running a sale process to sell the business as a going concern to a new owner. Expressions of interest for buyers close tonight.

Commodities and Housing Bust

In Australia the Unlucky Country Variant Perception states the case for a substantially weaker Australian dollar based on a slowdown in China and a busting of the housing bubble.

That is right in line with the case Michael Pettis has presented in regards to his prediction of a major slowdown in China.

For details please see By 2015 Hard Commodity Prices Will Collapse; Australia's Mining Boom Dies (and the Official Denials Start)

Wrapping up the disaster in Australia, please see Michael Feller's synopsis on Macro Investor Being a Bear is Not "unAustralian". 

 Peruse the Reserve Bank governor’s recent remarks to the senate or listen to the commentariat on talkback radio and it would seem that Australia’s economy has become victim of nothing more than an insidious rogue gloom-and-doomerism that threatens to hurt the nation, or worse.

At its worst, this anti-half-glass-empty rhetoric smacks economic McCarthyism. Shooting the messenger is as old as politics itself, but in what we like to consider an open, pluralistic society, let alone the 21st century, we should demand a higher standard of debate.

Saying that Australia has unusually high house prices, has a banking system vulnerable to external shocks, relies too much on a cyclical and temporary mining boom, or carries far too much household sector debt is not unAustralian, it is patriotic. And calling on policymakers to do something about our vulnerabilities is not negative behaviour, nor does it diminish our otherwise very obvious achievements, it is prudent.

The bears, the doom-mongers, the chip-kickers, the Hanrahans and the whingers aren’t a bunch of lazy bludgers, jeering from the sidelines, they are the people who are cognisant of the very real risks to the Australian economy. Many of them merely believe that while Australia’s economy is great, and its stewardship has been largely competent, even a perfect work of machinery can have its flaws and it would be remiss to ignore these if they can damage the whole.

Although it’s probably too late to implement policies that would have had us squirrel away some of the boom for a rainy day – a boom that Rio Tinto’s CEO now denies ever existed – and although it’s probably too late to diversify our trade balance before China stops building surplus fixed inventory, it’s not too late to reshape our economic conversation before we face the next challenges, opportunities and threats as an economy and as a society.

It's Too Late

The housing bubble cannot be undone, it can only crash. Retailers will continue to go bust because they overpaid on property or leases relative to demand. Excessive mortgages will make debt slaves out of many Australians for life.

The over-investment in base metals based on a silly belief China could grow 10% a year forever has yet to play out (but it will). 

Does anyone understand exponential math? It seems not. Even if peak oil was not an issue, it is virtually impossible for China to maintain the growth rate most analysts expected. 

No one listened to Steve Keen, me, and other bears when there was time to limit the damage. It's far too late now. Time has expired and any efforts to reignite the boom can only make matters worse.