What Upside is there to the present Financial Crisis?
It seems that not one day goes by without news somewhere in the world of finance and all of it appears to be bad (or so it would seem).
However as far as the consumer is concerned is it all bad and could there be in some weird shape or another some potential upside to it all?
Well the reason for this apparently contrarian view point lies in the following logic. When interest rates rise then people and companies start to make cut backs to try and economize. It is a perfectly logical approach and in the right circumstance is certainly to be commended but in some cases the cut backs can actually do more harm than good but by and large that does not concern us for the time being.
In our case I am looking at the potential knock for the consumer in the white goods / consumer durables market. Sure it is a commercial bloodbath out there with prices being slashed and yes, margins being cut to the bone. Where does this leave the consumer that might be in a cash strong position?
Extremely well positioned is the argument here and if you happen to be one of the lucky ones who can lay their hand on some cash then there are some serious bargains to be had out there no doubt about it.
As we have said, retailers are desperately trying to keep the cash moving and their businesses alive and as such in certain cases the silly bargains are starting to emerge.
The retailers have to clear their shelves and get rid of their stock and in some cases that means discounting fairly massively just to free up cash flow and shelf space.
With Flat Screen TV’s and other types of home audio goods then the answer is that they are what is deemed to be luxury goods and therefore the demand for them always drops in these situations but the retailers still, have the stock to clear and move and if you can wait for the opportune moment then “he or she who sits with cash in their hand is at present King or Queen.”
If you are lucky enough to be in the position of caching an electrical retailer when they are desperately trying to free up space for the oncoming Christmas rush then you are indeed in a winning position from the outset.
Don’t part with your cash too quickly as you may well find that the Plasma Television of your dreams is closer than you think.