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Everything is ratcheting down a notch and the 'premium consumers' are driving all of the economy right now. We don't see contraction in overall spending becaus

Everything is ratcheting down a notch and the 'premium consumers' are driving all of the economy right now. We don't see contraction in overall spending because when someone suddenly is too poor to afford stuff the richer people above them are also getting poorer and changing their spending habits to pick up the slack. Walmart has noticed this and called it out in their earnings reports IIRC--they see richer people are frequenting their stores and spending more money which is making up for the poorer people that can't afford to shop at even Walmart anymore. So you have the incredibly wealthy people that have actually gained massively as they've been able to gamble on the market in the short term--they aren't changing any habits. But the folks just below them who previously might have bought his and her matching Teslas without a second thought are now looking at their slightly diminished wealth and deciding maybe we settle for just one new Chevy Volt for now. They're pulling up the slack for the former Volt buyers who are now looking at their shrinking savings and deciding, no new Volt this year we're going to get a 3 year old used car. You can follow this ratcheting down all the way to the very bottom level where unfortunately the poorest/lowest levels are just being completely written out and dropped from the economy entirely. The big picture looks like nothing is wrong but the composition of who is spending is changing a lot.

the_only_law 3y ago
> Walmart has noticed this and called it out in their earnings reports IIRC Is there a link to this I can read somewhere? I’d be curious to see their analysis.
- qbasic_forever 3y ago
  https://www.businessinsider.com/walmart-retains-wealthy-customers-thanks-to-inflation-low-grocery-prices-2023-5 https://www.businessinsider.com/walmart-retains-wealthy-cust...
  - AYBABTME 3y ago
    How do they know the income of their shoppers? I'm very curious of the technique they use to come to this conclusion. Although I can guess of some methods they might have available.
    - acquacow 3y ago
      If you swipe a card in their store, they know everything about you...
    - klipklop 3y ago
      Likely by purchasing information about credit card users. They likely include income and credit score in that info along with spending habits.
    - qbasic_forever 3y ago
      They have random sampling surveys for their customers that offer gift cards and cash. Every time I check out at brick and mortar stores I'm accosted by the cashier to go online and fill out a survey on the receipt. It's how they also track if cashiers and associates are having good customer interactions.
    - red-iron-pine 3y ago
      Walmart is a big dog in the retail sector and they have a powerful marketing & research apparatus. They're almost certainly paying for credit card, social media, and other data, and are able to correlate it.
coffeeshopgoth 3y ago
Speaking of the rich, I found this video interesting about luxury goods right now. Patrick Boyle has some other good videos on YouTube, as well. https://www.youtube.com/watch?v=wH6pF-gXbuw https://www.youtube.com/watch?v=wH6pF-gXbuw
- adave 3y ago
  [dead]
lotsofpulp 3y ago
>We don't see contraction in overall spending because when someone suddenly is too poor to afford stuff the richer people above them are also getting poorer and changing their spending habits to pick up the slack. How does this make sense? Total spend = poor spend + rich spend. Poor spend decreases. Then rich spend has to increase. If total spend is staying the same, then some group has to be spending more if people at the bottom are dropping out. I think what you might be trying to say is the spend at the very top is increasing, offsetting the decrease in spend for everyone below.
- landoftheice 3y ago
  [dead]
- Izkata 3y ago
  They explain it in the second paragraph with examples. People are shifting which bucket they're in. So the spend in a given bucket mostly isn't changing, it's a different set of people in that bucket. It's what people mean when they refer to the "vanishing middle class".
  - lotsofpulp 3y ago
    In that case, the spend in the top bucket must come down since no one is shifting into that bucket, therefore total spend still has to come down (if the premise was true).
    - Izkata 3y ago
      > > > > So you have the incredibly wealthy people that have actually gained massively as they've been able to gamble on the market in the short term--they aren't changing any habits. Some are going up and some are going down, it's the middle that's vanishing.
    - qbasic_forever 3y ago
      No the very top bucket has not lost any money in the economic downtown, and actually they've gained significant wealth (because they can take aggressive and short risks on falling stock prices). See this: https://www.oxfam.org/en/press-releases/ten-richest-men-double-their-fortunes-pandemic-while-incomes-99-percent-humanity https://www.oxfam.org/en/press-releases/ten-richest-men-doub... The very top (folks like bezos, musk, etc.) never loses and never had to change their habits. If anything their spending has increased as their wealth increased and they made deals on property, toys, art etc. being sold at cheaper prices by less rich people dropping down a class.

the_only_law 3y ago

> Walmart has noticed this and called it out in their earnings reports IIRC Is there a link to this I can read somewhere? I’d be curious to see their analysis.

qbasic_forever 3y ago
https://www.businessinsider.com/walmart-retains-wealthy-customers-thanks-to-inflation-low-grocery-prices-2023-5 https://www.businessinsider.com/walmart-retains-wealthy-cust...
- AYBABTME 3y ago
  How do they know the income of their shoppers? I'm very curious of the technique they use to come to this conclusion. Although I can guess of some methods they might have available.
  - acquacow 3y ago
    If you swipe a card in their store, they know everything about you...
  - klipklop 3y ago
    Likely by purchasing information about credit card users. They likely include income and credit score in that info along with spending habits.
  - qbasic_forever 3y ago
    They have random sampling surveys for their customers that offer gift cards and cash. Every time I check out at brick and mortar stores I'm accosted by the cashier to go online and fill out a survey on the receipt. It's how they also track if cashiers and associates are having good customer interactions.
  - red-iron-pine 3y ago
    Walmart is a big dog in the retail sector and they have a powerful marketing & research apparatus. They're almost certainly paying for credit card, social media, and other data, and are able to correlate it.

coffeeshopgoth 3y ago

Speaking of the rich, I found this video interesting about luxury goods right now. Patrick Boyle has some other good videos on YouTube, as well. https://www.youtube.com/watch?v=wH6pF-gXbuw https://www.youtube.com/watch?v=wH6pF-gXbuw

adave 3y ago
[dead]

lotsofpulp 3y ago

>We don't see contraction in overall spending because when someone suddenly is too poor to afford stuff the richer people above them are also getting poorer and changing their spending habits to pick up the slack. How does this make sense? Total spend = poor spend + rich spend. Poor spend decreases. Then rich spend has to increase. If total spend is staying the same, then some group has to be spending more if people at the bottom are dropping out. I think what you might be trying to say is the spend at the very top is increasing, offsetting the decrease in spend for everyone below.

landoftheice 3y ago
[dead]
Izkata 3y ago
They explain it in the second paragraph with examples. People are shifting which bucket they're in. So the spend in a given bucket mostly isn't changing, it's a different set of people in that bucket. It's what people mean when they refer to the "vanishing middle class".
- lotsofpulp 3y ago
  In that case, the spend in the top bucket must come down since no one is shifting into that bucket, therefore total spend still has to come down (if the premise was true).
  - Izkata 3y ago
    > > > > So you have the incredibly wealthy people that have actually gained massively as they've been able to gamble on the market in the short term--they aren't changing any habits. Some are going up and some are going down, it's the middle that's vanishing.
  - qbasic_forever 3y ago
    No the very top bucket has not lost any money in the economic downtown, and actually they've gained significant wealth (because they can take aggressive and short risks on falling stock prices). See this: https://www.oxfam.org/en/press-releases/ten-richest-men-double-their-fortunes-pandemic-while-incomes-99-percent-humanity https://www.oxfam.org/en/press-releases/ten-richest-men-doub... The very top (folks like bezos, musk, etc.) never loses and never had to change their habits. If anything their spending has increased as their wealth increased and they made deals on property, toys, art etc. being sold at cheaper prices by less rich people dropping down a class.