Wall St woes felt at "world's largest" flea market

CANTON, Texas (Reuters) - Danny Cavazos says he knew the U.S. economy was going south long before anyone started talking about a $700 billion Wall Street bailout.

"It hit Main Street first before it hit Wall Street," he said as he sat on one of the chairs made from the horns and tanned hides of Texas cattle that he sells at a gigantic monthly flea market in the small town of Canton, 50 miles east of Dallas.

"I've seen a 50 percent drop in business since March. It's a lot. People are not traveling as much to places like this because of the high gasoline prices."

The U.S. House of Representatives was set on Friday to debate the controversial financial industry rescue bill that it rejected on Monday but which the Senate has since passed with the addition of tax cuts and expanded federal insurance for bank deposits.

For Cavazos and hundreds of other vendors at the self-styled "world's largest flea market," the pain has already set in, leaving many in a bind.

Cavazos, 57, says his options are limited.

He says his customers would like him to get a facility so he could accept credit cards "because cash is tight."

But he knows the current crisis has been brought on in large part because of unsustainable debt levels in both the housing and the broader consumer markets, so even moving from his "cash only" policy may prove fruitless.

"If credit is not available it will hurt my business even more. It will be a depression, not a recession," Cavazos said.

His views were echoed by many of the vendors selling their wares on a warm Texas autumn day at this market, which resembles a massive garage sale with everything from toys and guns to furniture and just plain junk on display.

Americans have an enduring love affair with such markets but they are slumping as much as those devoted to stocks.

Cash may be king for most of the hawkers but the credit crunch is still biting. Several interviewed by Reuters said business has never been so bad.

"This is the worst it's ever been," said Sallie Scanland, a South Carolina native who has been coming to Canton for 30 years and who sells signs near the entrance to the market grounds.

Bubba Bennett, a heavyset seller of tanned cow hides, said he reckoned it is the worst he has seen in 38 years in the trade.

Strategies to cope with the downturn seemed limited. Some of the vendors like Ed McCraw, 63, of Lubbock in north-western Texas said he also has a roofing business to supplement his income from selling military gear like camouflage jackets.

He said his sales were way down even though it was the start of hunting season in these parts.

Others said they may have to scale back or find another way to eke out a living.

"We are at the bottom of the bowl. We are a dying crowd," said "Buffalo" Bob Koch, a 66-year-old hippie selling jewelry

on tables set up outside of his old van.

"I haven't made over $1,000 at this market in over a year," he said with a shrug.

(Editing by John O'Callaghan)