Retail Sales Rebound and Other News

Retail sales perked up and rose 2.7% from the previous month as folks rushed out to take advantage of the cash for clunkers program. I guess that's what happens when you hand out checks for $4,500. Consumers will spend it. It's the American way. Subtracting out the effects of the clunkers program and gas, other sales rose a less impressive 0.6%. Still, better higher than lower. However, July retail sales were revised lower to a decline of 0.2% from 0.1% and total sales for June through August 2009 were still down 7.6% from the same period a year ago. So while sales appear to have hit bottom, we're operating at low levels. Calculated Risk has good graphs which you can see here. It will be interesting to see what happens after the clunkers program expires. The really good news is that if retail sales fall off a cliff again, we can always give everyone a check for $4,500 to buy a new refrigerator, or washer/dryer, or, well, just fill in the blank and write your congressman.

In a remarkably sane move, a federal judge threw out the SEC's $33 million proposed settlement with Bank of America over its disclosure (or lack thereof) of bonuses paid to Merrill Lynch. US District Judge Jed Rakoff pointed out that the SEC fine levied on B of A "does not comport with the most elementary notions of justice and morality" because the company's shareholders - the victims of the alleged misconduct - are the same people being asked to pay the fine. Well, that and taxpayers, who also happen to fund the SEC's payroll, which made the whole settlement even more preposterous. Judge Rakoff has set a court date of February 1st so we all get to hear the juicy details of how the SEC conducts its investigations. It's nice to know that somebody is taking a stand against all of the recent government kowtowing to Wall Street. I happen to think that the $3.6 billion in bonuses paid to Merrill Lynch employees after the firm lost $20 some odd billion dollars and required an additional $20 billion from the government to close the merger with Bank of America is one of the the most egregious and distasteful actions I have ever seen a Wall Street firm take. And I don't think a silly $33 million fine even begins to cover it. I'd really like to know how the move was ever justified and who was involved in making those decisions. Nothing better than a trial to get everything out into the open.

In yet another remarkably sane move, Wells Fargo fired the employee who was throwing parties at a beachfront Malibu pad that had been seized from Madoff investors. Apparently, Wells Fargo frowns on that sort of behavior. It's too bad she didn't work for Merrill Lynch, because she probably would've gotten a promotion and another bonus. At any rate, no more wild and crazy parties, which is a major bummer because I was hoping to get an invite to the next one.