Macy’s meltdown was sobering – but explainable given the shift to online, as it literally eliminates middlemen, and presses the ability to maintain margins for a lot of businesses, even if they match prices with low overhead virtual stores.

I do believe however, that the strong Dollar has more of an impact on all these known ‘brick & mortar’ versus online battles, than is recognized. In New York a lot of pricey retail depends on international buyers; not merely Russians (they are a fleeting customer given the collapsed Ruble; but particular Canadians; a staple of New York retail that’s often ignored; and whose ‘Loony’ is below par to the US Dollar now; inhibiting their buying power on this side of the border, as are policies really irritating our largest trading partner).

Elsewhere the Brits are pretty steady; because the Pound has not plunged like the Euro (I’ve argued for a couple years that Britain is brilliant by ‘not’ adopting the Euro, even though they’re in the EU. Czech Republic similarly stuck with a wisely devalued Kronen. In Florida retail and entertainment venues (not just of course hotels, but theme parks and more) are extremely dependent on Latin American customers. They too are more strapped with spending ability in the currency wars still leaving Americans on-top of foreign spending prospects. 

(Perhaps the irony about ‘imports’ shrinking from South America has this tidbit today, which says something about the criminal class that remains in power in Caracas: U.S. agents arrested two relatives of Venezuelan President Nicolás Maduro on charges they conspired to transport 800 kilograms of cocaine to the U.S. The arrests, per the WSJ, come amid U.S. accusations that the top echelon of the government in Caracas is involved in the narcotics trade.)

The consumer shopping extravaganzas are being trumpeted in China, while a prospective further devaluation is ignored amid seasonal marketing nonsense in a way. What they will do (if it occurs and that’s why Shanghai rallied in hope it occurs) is similar to what happens if Draghi’s thumbs his nose at responsible monetary policy, and goes ahead with more QE from Europe’s ECB.

Markets overseas would bounce and then be sold-into; while the US Dollar of course would resume strengthening (after the expected consolidation going on just now) and US stocks would be pressured further, given harsher competitive conditions for our exports, especially where comparable products are available from local producers or manufacturers in Asia or Europe. Here in Florida, only the British seem to have favorable buying power; which is also why the UK for now is among the least travel-cost attractive destination for Americans, while of course Europe is a basic bargain given the Euro near 1.07 as our forecast multiyear overall decline from 1.40 continues; and frankly it’s not over yet.