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The day after the Thanksgiving holiday in America is called Black Friday, when it is said many retailers begin making a profit for the year, hence being "in the black." The media closely follows the retail sales on Black Friday as one gauge of how the holiday season will unfold. This year sales were up 3% over last year despite the recession.

Or so it has been reported.

We also heard media reports of people being injured and killed in shopper "stampedes" this year. Those are the sorts of anecdotes that stick in your head better than sales statistics.

I mention this because the normally popular store I shopped at this weekend was empty. Sure, it was just one store. Still, that's mighty strange for the biggest shopping period of the year.

My favorite conspiracy theory involves a secret society of powerful people managing the news to create trading opportunities. When things get too peaceful, this group invests heavily in weapons manufacturers and then uses the media to sell a war. When the stock market is in the crapper, the puppet masters buy retail stocks and use the media to paint the holiday season as rosier than it is so they can cash in on the market bump. And so on.

Big money is made when markets fluctuate and when you have better information than other investors. What better way to game the system than to cause the fluctuations yourself?

Now you might argue that such a conspiracy would have to involve so many people that it would be impossible to keep it a secret. I'm not so sure about that. First, you would only need to succeed in manipulating the media 55% of the time, just to pick an example number, and that would be enough to reap huge profits over the long run. And there could still be plenty of dissenting voices and competing points of view, so the manipulation could get lost in the noise.

The key to making the manipulation work is making the manufactured crises more compelling or more "sticky" than the plain vanilla stories that are competing for attention. For example, the story about the shopper stampede only needed to be picked up by one influential news source in order to be copied by all. It could as easily been ignored.

And the stampede story is "sticky" because I will probably remember it for the rest of my life, whereas I won't remember a report of some particular store having lower sales this season. It's the same process used by trial lawyers when they argue their cases in terms of human suffering to have a larger impact on the jury.

It wouldn't require the involvement of many people to control the source of economic statistics. At some point in the process of tabulating the results I assume there is literally one person who sees the total before anyone else. Hypothetically, the "story" of brisk retail sales for Black Friday and shopper stampedes might involve only a few paid conspirators beyond the inner circle of the puppet masters.

I don't actually believe the theory I just described. At least not yet. But if your comments tell me the stores you visited in the past week were empty too, I might revisit that position.

 
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Dec 1, 2008
I'm not a huge shopper but I am college-student-poor and there were things we needed in the house so I was more than willing to stand in long lines to pay less for those things so I hit a few stores at around 10am.

Target - Definitely busy but it pretty much always is. I walked right up the register, no line, to pay (in two different Targets)
Borders - Could not have been more over staffed. The store had probably 3 times more employees than customers and it was actually kind of annoying how many times someone asked if they could help me find something. They had one register open and again, no line.
Bes Buy - Appeared to have every employee working and it wasn't nearly enough. The store was PACKED, every register was open and I was still about the 8th customer in line when I did get in line.
 
 
Dec 1, 2008
Actually, I agree with your theory a little bit. I follow Gizmodo and Engadget too, and both had polls saying that people were much more likely to buy electronics this year than last year. Sure, their polls could be biased because some of the new readers might not have been interested in buying electronics last year, and only started reading as a method of research before buying (like me). But that doesn't mean there are a comparable amount of readers leaving because they're less likely to buy, so it wouldn't be enough to offset the results.

The point is, electronics are much more expensive than many other gifts, and if people are buying more electronics than other things, but fewer items overall, sales could still rise. In my particular situation, I just bought a new Macbook Pro, and my brother bought stock in Apple. Which would fit your theory perfectly... if either one were happening on a larger scale, and we were what you'd call the "elite." But I'm just a cook and he's just a marine.
 
 
Dec 1, 2008
I help manage a restaurant in a food court of a shopping mall and we were definitely busy. We had a slight decrease in revenue for the day compared to last year though, even with increased prices over this time last year. I also went by my local wal-mart on thanksgiving night and there were people scoping out the locations of the items on sale.
 
 
Dec 1, 2008
The conspirators have a name: The National Retail Federation.

If you enjoy information overload, try this link
http://www.ritholtz.com/blog/2008/12/spinning-black-friday-retail-sales/
 
 
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Dec 1, 2008
I wanted to experience the Black Friday madness once. That was more than enough for me. I read a quote once that said, a gift is large even if it is small, if it is thoughtfully given. For this reason, I have decided that I am not giving Christmas gifts anymore. I'm going to donate to a charity in those people's names I would normally be giving gifts. I live in the Western New York area and had to go out for some essentials this past weekend. You'd have no idea the economy was slowing. And, quite frankly, I'm not sure I buy into the whole jobless rate reports either. If people are still deficit spending to this degree, I think we should take another look at debtor's prisons.
 
 
Dec 1, 2008
The one catch in your theory is that it although it may not take many people to make it work, this is true only if no one is working at cross-purposes to you. If one person or group is working to manipulate the market in one direction and another is working to manipulate it in another way they might cancel each other out. Hence, you would need a larger conspiracy on your side than against it to pull off a general manipulation. This doesn't make it impossible, of course, it just adds to the complexity. Then again, there certainly must be times when many people see the same opportunity and end up working to achieve the same goal quite independently of each other.
As far as people manipulating the market, the fact that people often get caught for things like “insider trading” indicates that there are people out there trying to do it all the time. For every one that gets caught doing something illegal, there must be many getting away with it, and many more doing everything that can be done legally. Why not? If there’s money in it, someone will try it.
 
 
Dec 1, 2008
I avoid black friday shopping like the plague, I will say I was in both Wal Mart and Target over the weekend and both were less then normal volume of people despite the large sales going on. Target had several idle registers and bored looking employees.

I did hear the local cosco's were packed on Friday so look for cases of paper towels under the tree this year.

I am curious whether that 3% represents net or gross.

GH in NY

 
 
Dec 1, 2008
I was at Sears over the weekend, and I noticed that there were a lot of people there, and many of them were actually shopping and buying. While my wife was browsing, I decided to shop through clothes for our kids, and I was able to find hoodies for $4.99 and jeans for $9.99, plus another 20% off everything. She was a little upset that I was able to buy complete outfits for our kids for less than what she wanted to spend on 1 top for her. The moral is, it looks like retailers are slashing prices now rather than wait until after Christmas. I guess this way they can tell if they are going to be able to make it to Christmas.
 
 
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Dec 1, 2008
You wouldn't need to manipulate the media 55% of the time. You've just got to be really good at picking your spots and cashing in. If you were making millions of dollars each time you manipulated the market, doing it more than once or twice a year is just showing off.
 
 
Dec 1, 2008
First off, all the stores I visited were packed. My family and friends reported the same, so at least around Pittsburgh there was a lot of shopping done.

Secondly, there is a reason why sales could be up still, despite the economic crisis that is not massive conspiracy. Speaking to a lot of higher ups in the retail business, they expected a large Black Friday but expect sales to curb dramatically until the last week or so. The prevailing theory was that people would be spending only a little less than usual, but they would be focusing their money on Black Friday and the week before Christmas. So spending could very well be up for now, only to dip for the next three weeks or so.
 
 
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Dec 1, 2008

Aaaaaah, that explains...

This morning I was a bit suprised to find in Lithuanian main internet news portal, under section 'Crimes', usually dedicated to local *events*, a message about US winter sales: two guys shot each other over a toy, one sales person in NY stomped to death by a massive crowd of shoppers and a pregnant iwoman injured.

Sticky stories.
 
 
Dec 1, 2008
Hi, Scott. I didn't visit any stores at all, except my local liquor store (run out of booze? unthinkable!), precisely because I am tempermentally unwilling to face the mob mentality. And for the guy who offered as an excuse the fact that he had been standing in line for 17 hours, I can only say, along with you, "And then he voted!" Cheers! fpainestam
 
 
Dec 1, 2008
I visited a Circuit City in Santa Barbara that was far from packed. However, the store has always done poorly and is going out of business, so I'm willing to say that the store was packed by their standards.

Maybe the increased sales numbers reflect more people doing Black Friday shopping online.
 
 
Dec 1, 2008
Scott, I am not crazy enough to go stand in line overnight to take my chances at one of the 10 item X's per store that might be a good deal. I certainly don't want one of the ridiculously underpowered computers being sold as "Deals". However, my wife went to Office Depot - got in line before they opened, then spent an HOUR AND A HALF waiting in the checkout line. The line did the mamba down the aisles all the way to the back of the store and after 40 minutes an employee with a shopping cart full of soda went along passing out sodas to the people.

Similarly, there were enough takers for some of the cheap computers that my wife saw someone sell one of the "certificates" that allowed you to purchase one sold for $50. (You had to be in line overnight to get a certificate).

My daughter got text messages from a friend who was standing outside of Wal-Mart - in line - from 8:00 PM until the morning when they opened at 5:00 AM.

My wife also went to Best Buy before 5:00, but left when she saw the line was over 200 people already. That was when she saw the computer certificate thing "scalped".

OK, so maybe my wife and daughter are part of this cartel that controls the media and makes all the money. But if so, why don't they share some with me? Greedy bastards! Or, could it be that the cartel that does this buses people in from other locations that make the news in just certain towns? That's probably cheaper than having really good deals on Black Friday. All you need is to have say 200 cities - and maybe just 10 stores in each - full of people and having things like scalping certificates, trampled people, etc. to make the news sound like it happened everywhere. I hope they don't pick my town again next year...
 
 
Dec 1, 2008
There are two factors here. First, to not believe that the media/government/retailers/whatever are not trying to "mislead" you would make you extremely naive. This is marketing in and of itself. "People are buying things! Feel free to come out and spend your money!"

The other issue is what they're buying and where. In my neighborhood, the Wal Mart was packed, and people were buying crap. The cheap 4$ blenders, etc. The Circuit City, I was in line 10 minutes before opening and, had I been there for one, still could have picked up one of the nice, very expensive, HDTV TVs that were listed as "Doorbusters".

Bottom line is the economy still sucks, people are scared, everyone's doing everything they can think of to "fix" it (via injection of cash or convincing you that everything's going to be OK), and we'll see what the results are when it's finished.
 
 
 
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