Were January Retail Sales Overstated or Is My Tinfoil Hat on Too Tight?

I flat out do not believe the numbers that the Census Bureau reported for January retail sales. Based on conversations with retailers, the nasty weather crushed sales during January. I will bet dollars to donuts that future updates to retail sales reports will feature significant downward revisions. In particular, I find the reported clothing and clothing accessories sales to be outside the realm of believability.

Am I crazy to think that anecdotal reports from a handful of apparel retailers are more reliable than the U.S. Census bureau? Maybe.  But do your own due diligence. Go into any apparel retailer, other than the limited segment that sells cold weather gear, and ask them how their January results compared to previous year. It is highly likely that you will hear the January sales were off by a huge percentage. Thus, I declare that the claim that retail sales in general and clothing sales specifically were up in January to be highly suspect.

According to the Census Bureau, the "advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $427.8 billion, a decrease of 0.4 percent (±0.5%)* from the previous month, but 2.6 percent (±0.9%) above January 2013".  The report also indicated that sales of clothing and clothing accessories increased to $20,985 million dollars from $20,742 in 2013.

Check out this article on US Retailers' January 2014 Sales Roundup. There is a huge difference between same store sales and net sales. While the primary reason for the discrepancy between net sales and comparable store sales is due to January 2014 being treated by many retailers as a 4 week month and January 2013 sales being a 5 week month, the net sales number certainly appear abysmal. Given the timing differences and the impact of store openings and closings, net sales in most cases would not be as reliable an indicator as same store comparable sales. However, given the 20% (1 week reduction) shorter period measured, the number of retailers that reported declines of greater than 20% in net sales seems somewhat suspicious.

It will soon become apparent whether my tin foil hat is on too tightly. February retail sales are due to be reported on March 13, 2014 at 8:30 am. I will be highly surprised if this report does not include a downward revision to the January advance report.

Weather Weirdness and Arctic Sea Ice

There has already been lots of weather weirdness in 2014. The unanswerable question about all the weather weirdness: A) is it nothing more than weather being unpredictable, or B) is climate change exacerbating the weird weather leading to extreme cold in Atlanta, extreme heat in Australia, and unseasonably mild weather in Sochi.

One theory that seems like a plausible explanation for the cold weather experienced in the U.S. east of the Rockies is that Arctic warming has reduced the differential between the cold winds emanating from the Arctic and the warm winds from the tropics. The theory is that the diminishing differential is leading to a slower and wavier jet stream that is dipping south and also allowing the polar vortex to escape the Arctic.

Is there some truth to the above theory? Trying to determine the validity of this theory makes it particularly useful to know what happening to the temperature in the Arctic. For those that like websites that track changes, The Arctic Sea Ice News and Analysis website is a terrific resource. They publish a daily report on the extent of Arctic sea ice.

Viewing the two images produced daily by this site seems to provide tremendously contradictory information. The trend line image shows that yesterday seemingly was a momentous day. The 2013-2014 sea ice extent trend line crossed the 2011-2012 trend line for the first time this winter. This year's trend line for Arctic sea ice also seems to be poised to drop below the 2 standard deviation channel for the first time this winter. The reduced level of Arctic sea ice would seemingly be strong evidence that climate change is having a big and measurable impact.

However, in looking at the map of Arctic sea ice, it is does not product a sense of panic about the loss of sea ice. Viewing the map, the areas that have lost sea ice seem rather unsubstantial.

My guess is that the weather weirdness and the Arctic sea ice level both serve as a litmus test for ones views on climate change. For those that believe climate change is occurring to due to greenhouse gas emissions, both are confirming data points. For global warming skeptics, the weird weather and current Arctic sea ice levels prove absolutely nothing.

Visit the Arctic Sea Ice News website for larger version of these images

Related Post

Below Average Extent For February Arctic Sea Ice A Mixed Signal For Global Warming Alarmists and Deniers

4 Must Read Climate Change Articles From The Past Week

Comments this week from Prince Charles and John Stossel were at opposite ends of the climate change spectrum. While Prince Charles described climate change deniers as "headless chickens", John Stossel pointed out that there is not much the U.S. can do to impact climate change as long as China and India continue to pump massive amounts of CO2 into the atmosphere, so why not just "chill out".
Climate change deniers are 'headless chickens' says Prince Charles
Let's chill out about global warming - Fox News
The drought in the southwest of the U.S. is a slowly developing castastrophe in the making. I for one certainly would not be making any long term investments in Las Vegas, given the water woes that city may face in the near future. And agriculture in Southern California may be in huge trouble as water throughout the semi arid southwest become a scarcer and more expensive resource.

Leading Scientists Explain How Climate Change Is Worsening California’s Epic Drought

Finally, I find the lack of concern of many bright individuals, including John Stossel, regarding the potential sensitivity of the environment to future greenhouse gas emissions to be challenging to comprehend. One of the reasons for the low level of concern is 
The communication of uncertainty is hindering climate change action - The Guardian

Twitter Vs. Facebook - A Tale of Two IPO's

As someone that actually buys advertising from social media sites, the pricing of the Twitter IPO seems outright stupid. Let's compare the Facebook IPO to the Twitter IPO. Just prior to their IPO, Facebook had literally coined a way to print money. On the other hand, the impact of Twitter tweets is fading into little more than white noise.

Immediately prior to the Facebook IPO, we were re-allocating media spending out of print and into Facebook. The capability Facebook had created that both allowed and forced commercial enterprises to buy promoted posts, was a money printing machine. Facebook's promoted posts were the most cost efficient media buy I could find. And our firm was one of millions that increased their spending on Facebook due to the launch of promoted posts and better mobile advertising opportunities.

So how about Twitter. Frankly, at this point, I consider Twitter basically to be a time suck. Given that we have an active social media program, I have to monitor it, and occasionally post (in part, just to keep up with the competition). Twitter does not offer any compelling advertising opportunities yet. The ad positions available will either fall into the category of suffering from "banner blindness" or be rather ineffectual, as it's challenging to come up with a compelling ad given Twitter's character limits.

While my opinion is based on the results being achieved solely by our firm, given that our target audience is 18-49 year old females. this audience is a pretty good one for getting a handle on social media trends. Given that my most recent Twitter posts have had little more impact than if I had just gone outside and shouted into the wind, this seems like a pretty good indication that Tweets are declining in value. Since our fashion site has  over 3,600 Twitter followers, is it sort of shocking how few clicks my tweets yield. When reviewing web analytics, traffic from Twitter is basically inconsequential.

Want to do your own due diligence? Visit any commercial firm's Twitter posts. Check and see how few retweets they are getting. Then check out the Instagram site of a fashion firm or any company that has great proprietary photography and notice how many "likes" they are getting. Instagram is where the action is these days.

The Information on this blog is provided for education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. YOU SHOULD NOT MAKE ANY DECISION, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED ON THIS BLOG WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A PROFESSIONAL BROKER OR COMPETENT FINANCIAL ADVISOR. 

Dang, An Existing PAC Has Already Grabbed the name Throw The Bums Out

I thought I had an inspired idea the other day. It seemed to me that a "Throw The Bums Out" political action committee was a great idea. Given the anger much of United States shares with me in regard to our current Congress, it seemed like this would be an ideal vehicle for a fund raising effort.

The idea behind the PAC would be to fund the campaigns of challengers that were close in the polls and appeared to have a legitimate chance to defeat an incumbent.

I have been beaten to the punch, and not just be a few days, but by years. Although their site does not seem to be active http://www.generalecommerce.com/bumsout.org/ has a copyright date of 2006.

It is a shame that few Congressman will suffer any sort of threat to their re-election bids despite fomenting the stalemate on raising the debt limit and the harm they are doing to the U.S. economy. Election districts have been so gerrymandered that few seats are in competitive districts. Thus, despite the complete breakdown of competent action on the part of Congress, the U.S. electorate is likely to get basically the same Congress even after the 2014 election.  Sadly, the anger felt toward Congress in general is unlikely to be translated into votes against individual incumbents

Oh well, back to the drawing board.

Stifle the U.S. Economy to Set A Good Example on Greenhouse Gas Emissions?

One of the assumptions that guides the posts in this blog is that mankind's pumping of billions of metric tons of greenhouse gases into the atmosphere is likely to result in an environmental calamity. Mankind is conducting an incredibly risky science experiment regarding the sensitivity of the atmosphere to increasing levels of CO2.  Yet, does it make sense for the U.S. to unilaterally hamstring our economy in order to set a "good example".

An editorial in the New York Times describes the Obama administration proposed federal limits on power plant emissions of carbon dioxide as a "welcome sign".  Yet, how does it make sense to feed the world's growing demand for coal by shipping U.S. mined coal to countries around the world, while restricting the use of coal by power plants in the U.S.  Restricting the U.S. use of cheap coal to generate power will hinder the U.S. economy while barely having any impact of global emissions of greenhouse gases. Try telling coal miners and communities that are dependent on coal mining that their jobs should be killed in order to set a "good example" for the rest of the world. Furthermore, making U.S. energy more expensive serves to unilaterally impose a tax on the U.S. economy while the rest of the world gets a free ride.

Frankly, I am glad that I don't have to make a decision on which way to vote on this proposed legislation. While a worldwide reduction in greenhouse gas emissions is urgently needed, unilateral legislation that hamstrings the U.S. economy is challenging to support. And the New York Times rationale of endorsing the proposed power plant emissions limits in order to set a "good example" is not particularly compelling.  

Climate Change Will Be Unstoppable By The Time Politicians Take Steps to Mitigate

It boggles the mind that climate change skeptics think mankind can continue to emit billions of metric tons of greenhouse gases and toxic chemicals into the atmosphere every year without altering the environment. Given that Los Angeles, Mexico City and Beijing demonstrate how severely pollution can foul the air on a metropolitan basis, is it such a leap to reach a conclusion that the global atmosphere may be sensitive to the massive greenhouse gas emissions produced by gasoline and diesel combustion in cars and trucks, coal fired power plants, and the plenitude of other sources of air pollution?

It seems unlikely that the pause in the rising global surface temperature during the last decade proves that "global warming is a hoax". Further, any claim that the pause in the earth's warming trend has been greater than a decade should immediately activate BS detectors. A claim that global warming stopped in 1998 can only be made by someone that is illiterate regarding statistics. While the trend of  increasing surface temperature of the earth has has taken a pause for the last decade, it is an exaggeration to indicate the pause has been for 15 or 16 years. The starting point of skeptics exaggerating the length of the pause in global warming is typically 1998, a particularly warm year because of a strong El Nino weather pattern. Cherry picking 1998 as a a starting point is either an indication of statistical illiteracy of an overt attempt to obfuscate the results.

The link between green house gas emission and climate change impacts are firm in some cases and circumstantial in others. The impact upon the oceans are almost certainly related to mankind's activity. The west coast fires, the cycle of heat waves, drought and flash floods around much of the world, and the increased destructiveness of storms such as Hurricane Sandy and other examples of weather on steroids all are indicative of a changing climate.

The greenhouse gases and toxic chemicals emitted to date are already having an impact on the world's oceans. Sea level is rising by 1/10th inch per year and the ocean is becoming more acidic. The mercury content in deep water fish is increasing. Fish are migrating away from the tropics.  Arctic sea ice is declining in the area it covers.

The negative impacts of climate change are leading to worrisome outcomes. As examples, 1) the migration of pests, and 2) reductions in the flow of the Colorado River, could have disastrous impacts if these trends pick up speed. Property insurance rates are increasing to unaffordable levels for many living in flood prone areas.

Yet the question becomes - how much loss of life, property destruction, famine, and economic harm must occur before action is taken to mitigate greenhouse gas emissions? Given that any action that would truly be meaningful to mitigate greenhouse gas emissions must be taken jointly by the U.S., China, and the world's other leading economies, it seems unlikely that anything significant will be agreed upon this decade. The Chinese are moving in slow motion in acting to control the life shortening pollution that clouds the country's major cities. It seems unlikely that a significant reduction in greenhouse gas emissions will become a priority in that country. And in the U.S., much of the Republican party continues to spout a "global warming is a hoax" message.

Thus, given the growth  in greenhouse gasses and CO2 in the atmosphere, we may well be on the path to a climate catastrophe. If the predictions of the climate Cassandras turn out to be true, a very challenging environment awaits future generations. And mankind has no better option than to hope that the most pessimistic predictions of climate change are wrong, because the world's politicians are unlikely to take any action to avert climate change until the impact is upon us and unstoppable.