Darden Says 'We're Screwed'

Posted 2012-12-04 10:14
by Karl Denninger
in Consumer

(Reuters) - Darden Restaurants Inc (DRI.N) warned on Tuesday that earnings for the latest quarter would miss expectations after unsuccessful promotions led to a decline in sales at its Olive Garden, Red Lobster and LongHorn Steakhouse chains.

Promotions my ass.

The simple reality is that the devaluation of purchasing power is biting the consumer and the more QE The Fed does to cover deficit spending, and thus the more deficit spending The Government does, the worse this problem is going to get.

You can cover it up for a while with more borrowing, such as in Student Loans. But eventually that "goosing" of the economy runs out, as acceptance of credit tops, and when that happens the trend re-asserts itself and the driver of it, which is the government's deficit spending, comes back to the fore.

Bubble TV is trying to play this off as "fiscal cliff" concerns. Nonsense.

The trend was evident more than six months ago in the macro-level data and I've been talking about it since. There is no evading the impact of what the government has done with its handmaiden The Fed.

Remember that we were told that "Christmas would be strong" and other similar lines of crap. Well, if sales are going to be strong, why the profit warnings?

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