9:08 p.m.
If the following article is any indication, global luxury groups are in for a bumpy ride come 2008 / 2009:
At Subprime Event Too Early to Tell Who’ll Survive
“The subprime crisis, which has claimed the jobs of three chief executive officers and prompted more than $45 billion in writedowns at the world’s biggest banks, may end up spilling into 2009 . . . “These events tend to become deeper and play out longer than most people initially expect,” says Michael Mayo, an analyst who covers securities firms at Deutsche Bank AG in New York. “This is one of the slowest-moving train wrecks we’ve seen.”
And then there’s this:
Slowing Economy Proves Fitzgerald Wrong: Rich Aren’t Different
“Affluent consumers, pinched by shrinking stock portfolios, falling property values and smaller bonuses, are behaving like their less-well-off peers: They’re reining in spending . . . That portends a steeper slowdown than originally forecast for the U.S. economy, or even a recession, because the richest fifth of American households accounts for almost 40 percent of consumer spending, the main engine of economic growth.”
Maybe Prada should rethink that IPO idea . . . again.
9:27 p.m.
And this is just another brick in the wall:
“The likely bursting of the Chinese stock market bubble will probably depress consumer confidence and spending as well as business investment. And the fall could be great since Shanghai shares now sell at about 55 times earnings after tripling in price in the last year, compared with 18 times for the S&P 500 . . . And with U.S. consumers likely to end their 25 years of borrowing and spending and mount a saving spree as American housing collapses, exports to the U.S., and hence growth in local spending in Asia, will be severely restricted.”
Fendi just recently held their Spring 2008 fashion show on China’s Great Wall. Do you think that Western luxury groups are arriving at the party just as all the cool kids are getting in their cars to leave?
