Matt Yglesias

34 Responses to “Deflationary Expectations”

1. Jack Says:
   December 2nd, 2008 at 10:17 am

   Even if you rely on next day shipping (and you shouldn’t), the hard deadline is December 23.

2. stefan Says:
   December 2nd, 2008 at 10:17 am

   Christians shop after Christmas as well…at least the ones I know. Any expensive stuff on my list — all camera equipment — isn’t going to get purchased until after Christmas. For now it is books and maybe a guinea pig. I don’t expect book and guinea pig deflation or even pricing seasonality quite yet.

   The Fed should be explicit about a rising price level target under which it will not raise interest rates.

3. James Gary Says:
   December 2nd, 2008 at 10:34 am

   For now it is books and maybe a guinea pig.

   Guinea pig? Wow. Me, I’m hoping to stretch out the leftover Thanksgiving turkey until the next stimulus check comes in.

4. J Says:
   December 2nd, 2008 at 10:38 am

   I don’t expect book and guinea pig deflation

   Please don’t try to either inflate or deflate your guinea pig!

5. stefan Says:
   December 2nd, 2008 at 10:39 am

   The Fed should be explicit about a rising price level target under which it will not raise interest rates.

   Just to elaborate on why this rising price level targeting policy works even if for the moment it looks like we may be stuck with declining prices and good reason to hold on to cash even at zero interest rate: it promises a period in the future with substantial sustained inflation and low interest rates, when it would be best to spend money on goods and assets before they become more expensive. And the people who move early get rewarded. This is much more effective than cutting fed feds from 1% to 0.5% now. Expectations about future policy matter much more than current policy. And the Fed is fully credible if it promises some sustained inflation in the future, with a reward for the people who believe this promise now.

6. mort Says:
   December 2nd, 2008 at 10:42 am

   We’re told that anyone who voted for Obama isn’t christian, so at least we can wait with Matt for the post-xmas sales.
   Can’t shop now without a bridge loan anyway.

7. Jack Says:
   December 2nd, 2008 at 10:42 am

   I actually had Thanksgiving on Saturday due to friends traveling and we saved a hell of a lot of money. Turkey was .99 a pound instead of $1.79!

8. Nicholas Beaudrot Says:
   December 2nd, 2008 at 10:44 am

   Actually, not everything drops further in price after Xmas. Certain goods actually go up in price … in particular I’ve noticed that DVDs of TV shows that have a fairly loyal fan base (e.g. Buffy, X-Files) go back up so they can make more money off the fan base.

   In general media products are often sold at low margins or even a loss just to get people in the door; when there’s less of a chance of people coming through the door, the push the margins back up.

9. steve duncan Says:
   December 2nd, 2008 at 11:01 am

   I have my eye on an LCD television (upgrade from an old yet dependable analog) and I’m convinced a far better deal will be out there AFTER Dec 25th. I know of many others with similar plans. More than a few retailers are going to be unhappy with their holiday sales and scrambling for end of year revenue even if it’s break even on the merchandise generating it. That and inevitably many models of various items will have unexpectedly underperformed despite the fact they’re competently made and work just as well as the competition’s. Those will be especially targeted for clearance sales. HAPPY SHOPPING!!

10. kenny Says:
    December 2nd, 2008 at 11:11 am

    I made the mistake last year to wait until after Christmas and the discounts were not as great.

11. CJ_n_PA Says:
    December 2nd, 2008 at 11:42 am

    From my perspective it appears that the after Christmas prices have become less discounted because of gift cards. The retailers don’t want a $100 gift card to be used on $130 worth merchandise after the holiday.

12. steve duncan Says:
    December 2nd, 2008 at 11:42 am

    kenny Says:
    December 2nd, 2008 at 11:11 am
    I made the mistake last year to wait until after Christmas and the discounts were not as great.
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    Yeah, Budweiser has a pricing policy that keeps discounts to a minimum.

    Hey, I thought they killed you?

13. big bad wolf Says:
    December 2nd, 2008 at 11:50 am

    come on, matt, buy something. you’re a single guy with a decent income. don’t i remember reading here that people who can afford it should buy things? i can and i am trying to do my little stimulus. maybe you—the ninth most powerful person in america—should buy not wait for bargains that may mean more layoffs

14. Don Williams Says:
    December 2nd, 2008 at 3:13 pm

    Poor Sara. Matthew sounds like the kind of guy who breaks up with his girlfriend in early December in order to save on the cost of a Christmas present. What’s the equivalent Jewish deadline?

15. kishnevi Says:
    December 2nd, 2008 at 10:46 pm

    I work in the trenches so to speak, for a large department store.
    1) The price you see this week is the price you’ll see all the way through 12/24; brick and mortar stores will offer coupons and extra discounts to draw in more of the weekend crowd on weekends; the downside to that of course is that you’ll have to deal with more shoppers than on days when the extra deals are not on offer. Online retailers will offer similar deals, especially if they’re the cyberpresence of a brick and mortar store. But don’t expect the hydrogenerated latte-wafflemaker to be sold for a lower price on 12/23 than it’s being sold for today.
    2) Stuff that the retailer is clearancing because it’s discontinued will be sold for less starting on 12/26, because that’s the stuff that he needs to get rid of. But if it’s not being discontinued, it won’t be sold for a lower price on 12/26 compared to 12/23, and the post Christmas discount may actually be less, depending on the vendor’s plans for that item. So if you are buying a hydrogenerated latte-wafflemaker for yourself, the crucial bit of knowledge you need is whether this model is being replaced by an updated, allegedly superior (and definitely higher priced) model. If it is, then wait for Boxing Day; if it isn’t, buy it now.
    3) Also remember that whatever the item is, much of the stock will be sold off prior to 12/24, so that the longer you wait the greater likelihood that the vendor will be out of stock on the item. So the question you must ask yourself is, Do I wait on the hopes of a lower price later and risk not getting the item at all?

16. rejewvenator Says:
    December 4th, 2008 at 8:47 am

    Haha Matt, but there are a few other religions represented here in the US, and while not all of them may have the same objection to paying retail prices, I’ve always thought that buying on sale was part of the American dream.

    In any case, I’ve gone with a hedging strategy. I purchased a TV when it hit my price point just before Black Friday and am now enjoying the rewards of football in HD. But I am deferring other purchases until after Christmas. A note of caution though – with discounts on many items, especially clothing, deeper at the outset than in years past, there may not be much more room to cut prices. I’m personally looking forward to the store-closings and bankruptcy sales that are bound to hit in February.

17. Wes Says:
    December 5th, 2008 at 12:15 am

    Unless the gift can be had from an airport gift-shop, the hard deadline is the 24th as most stores will be closed on the 25th.

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