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Spinning The Consumer Confidence Number
Earlier we thought we were joking when we noted that in America the only digestable news is good news (or at least, that is what it becomes after a few quick spin cycles.) To our surprise it took about 10 minutes to confirm that the joke was really fact. Remember that horrendous consumer confidence number from about an hour ago? The same one that all those who prevsiouly praised, and said the confidence board could do no wrong, is now being derided as completely irrelevant, manipulated, etc, and, if you reallllly think about it, it is just a big, flashing green light to buy, buy, buy. Indeed - here is Collins Stewart to provide the requisite spin. As for the reality, the one that ABC Consumer Comfort has been demonstrating for months now, the truth is that both UMich and Confidence Board are now merely 3rd if not 4th derivatives of the machine controlled, micro-volume equity market. If the market has a down day, consumer confidence goes down, and vice versa. We wonder just how indicative of the broader "consumer" confidence are the daily gyrations in the SPY bid and offer, and how anyone, aside from various ETF desks and a few Atari 2600 consoles, has any reason to be confident based on what is happening in the market intraday.
As you all know, we are very constructive about the equity market. Today, the Conference Board released their gauge of Consumer Confidence, which came in below expectations (Exhibit 1) and has led to a quick drop in the equity market. A few thoughts:
- That reading has no correlation to the equity market or economy other than at extremes as a contrary signal. As you can see it recently hit a HISTORIC extreme. Even the moderate recessions saw this economic measure headfake after the initial recovery. This environment should be no different.
- Despite the weaker reading it is still trending higher off the recent historic low.
- We should thank the market gods for the weaker reading because it will give the Fed an excuse to do what they already said they would – keep rates abnormally low for an extended period, thus keeping the Yield Curve historically steep.
- We would use any weakness caused by this econ release to increase exposure to the equity market with a particular focus in the Info Tech, Health Care, Financial, and to a bit lesser degree Consumer Discretionary and Energy sectors.
Rinse the idiots, Spin, Repeat.
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Negative numbers are good and positive numbers are good thats the moral of the story. I'm getting dizzy.
Moin from Germany,
time to repost this clip from the Collins Steward US Equity Strategist...... This might explain the desperate spin attempt.....
Be Very Afraid Of Tony Dwyer......http://immobilienblasen.blogspot.com/2010/02/be-very-afraid-of-tony-dwyer.html
I see reports of German business confidence declining but FT reported an increase in the IFO index. Explain if you can?
Moin,
here is the link/graph
http://www.cesifo-group.de/portal/page/portal/ifoHome/a-winfo/d1index/10indexgsk
The index will very soon roll over.....
At least our exporters will get a little relief from the fast falling €....
But this won´t prevent the coming slump
I swear I've read a positive spin about business confidence yesterday. Might have been on welt.de (Springer Presse). Trying to find it now. I was surprised reading it and thought to myself, this was very different from several opinions I previously heard.
What a piece of shit. These bastards should be accountable for spouting this crap on national TV.
t will give the Fed an excuse to do what they already said they would – keep rates abnormally low for an extended period.....
Um, the Fed not only does not need an excuse to keep rates low, but they have kept rates low since greenspan days and bernanke is likely to keep ZIRP in effect to the end days of civilization.
and we add to that, Mr Greenspan was quoted this morning (sic) "the economic rebound has only been in the stock market benefitting the rich."
amazing how many of us begin to find honesty and truth as we grow older......
On a LOL scale of 10, a +10!
Now I understand why all those seniors are so fucking grumpy. Evidently it is just the "American Way" and it seniors do not naturally turn grumpy at a specific age.
They simply lose their tolerance for BS.
I doubt he said that.
http://news.yahoo.com/s/nm/20100223/bs_nm/us_usa_greenspan_1
The only thing I can come up with is that Greenspan is terminally ill and now he is trying to get into Heaven?
The market is controlled by Cray XT computers.
Let's replace this computers by some ZX spectrum.
You can't hit me with bad news, I have the CNBS pep squad.
"Reality is whatever we define it to be" -- every nut job from Bush to Kim Jong-il.
I've said it before and I'll say it again. The leaders and shakers and opinion makers lie in order to give us permission to believe the lie. For those who want to believe that all is well, they need positive feedback, in the same way a 4 year old needs positive feedback from Daddy that there are no monsters under the bed or in the closet.
If you want a no spin zone read www.dailyjobcuts.com and you see the death of America. Its very depressing.
Depressing indeed. They might as well advertise xyz ways to kill yourself.
Qui bono? Who benefits from compiling the bad news and creating opinion?
It serves a purpose no doubt.
Propaganda is powerful and it goes both ways.
The government lies and manipulates but the opposing forces do just the same.
Beware!
'Oh, to live on Sugar Mountain
With the barkers and the colored balloons,
Though you're thinking that
you're leaving there too soon'
-Neil Young
'Fractional-reserve banking systems are historically prone to runs and deflationary contraction. Paper-money systems are inherently prone to inflation. Our modern financiers have devised a paper-money-cum-fractional-reserve-banking-system(with yet another credit structure, also highly leveraged, lurking in the shadows) that is prone to inflation and deflation at one and the same time. The greatest generation? In devising infernal financial machines, we're the one.'
-James Grant
The King Report
Monday February 22, 2010
Issue 3701
A month ago, we noted that the BLS had increased the waiting of ‘owners’ equivalent rent’ in the CPI because home prices were declining. If anything, the weighting should decline because housing is consuming less of a person’s income (18.8% per Visual Economics). In 1975, the housing debt-to-income ratio was 23.21 percent. In 1980, the housing debt-to-income ratio was 39.26 percent. In 1985, the housing debt-to-income ratio was 32.59 percent. In 1990, the housing debt-to-income ratio was 26.17 percent. In 1995, the housing debt-to-income ratio was 22.69 percent. In 2000, the housing debt-to-income ratio was 23.43 percent. In 2005, the housing debt-to-income ratio was 26.83 percent. In 2009, the housing debt-to-income ratio was 18.84 percent.
On Friday, the usual suspects heralded the great CPI and the negative Core CPI. Headlines proclaimed that Core CPI was negative for the first time since 1982. This is a totally invalid, if not ignorant, statement because CPI methodology has been altered something like 10 times since 1982.
And if one actually believes the Core CPI is a valid metric, the return of deflation, after the trillions of dollars in stimulus, credit creation, nationalization, etc. should scare the CNBC out of you.
(Roger that.-AM)
But we digress. Once again the CPI methodology has been changed. In fact, there are two changes to the January CPI. The BLS has changed its seasonal adjustments and the BLS has increased the weighting again of OER by including secondary home ownership in the metric.
For the vast majority of Americans, there is no cash benefit for falling housing prices in the CPI. The BLS has increased the weighting of housing, probably because housing prices are in retreat. Your home price can fall while you pay more for the necessities of life and the Ministry of Truth will tell you that prices are going down even though your checkbook says the opposite. And Street Shills will yell ‘hallelujah’ and implore the Fed to pump more credit.
But wait, there’s more chicanery. Second home ownership is listed as ‘unsampled’. If we understand the English language correctly, this means the BLS does not sample to procure the particular data. Logic dictates that if one does not sample, then they are manufacturing the data by guessing.
(Guessing is such an innocuous term for widespread manipulation.-AM)
How else did the BLS craft a benign CPI when PPI jumped 1.4% in January? Somehow the BLS got electricity prices falling 1.1% despite record snow storms and severely cold weather. All other energy prices soared. The BLS has the price of electricity and natural gas (energy services) declining 4.7% NSA over the past 12 months.
We have maintained for years that CPI is constructed to NOT show inflation because: 1) It is used for COLAs, 2) It fosters the overstating of GDP, and 3) Provides cover for the Fed to paper over declining US living standards. CPI minus PPI shows PPI is at its largest gap (1.20) to CPI since 1980.
(See graph above from Thoughtofferings.com, link is to the right. -AM)
And there are other changes to CPI. Medical care commodities, because they are inflating, will also have ‘unsampled’ factors in their compilations.
The BLS has healthcare costs up only 3.4% for 2009. This is a way to keep inflationary expectations well anchored. More proof of CPI fraud and the scheme to understate inflation is the weighting of ‘medical care’ in CPI. Healthcare spending is estimated to be 17.6% of GDP in 2009 per the Kaiser Family Foundation. So what weighting does the Ministry of Truth assign to ‘medical care’ in CPI? 6.513% BLS will say its estimate is out-of-pocket expense. But someone, the government or business, pays the balance. And those costs are based on to someone.
AM Here: As posted on this blog on November 25, 2008 -' Remember the movie, 'It's a mad,mad,mad, mad, mad world'? At the end of the movie that generation's inglorious bastards were all gripping a fire ladder as the motor blew up and the ladder lurched viciously throwing them 'akimbo'. The vicious movements from left (inflation) to right (deflation) best mirror our market action.We are at the cusp of being at the most volatile period (per volatility indexes) ever. As in ever since we've had a stock market. This volatility is mostly driven by shifting perceptions of inflation and deflation. The compression of time frames within which this inflation/deflation switch gets flipped on and off can only result in one name for our current economic malaise : Indeflation.'
The indeflation special is still a top seller at the Red Pill Diner. This struggle 'tween virtue and vice is writ large as the debate between deflationistas and debasionistas. Ones' lens depends on what one means by ones' ends. The deflationistias mean that deflation is the midwife of hyperinflation. The debasionistas mean that America's resilient wealth exporting machine will import higher asset values. The former pines for reason before farce, the latter embraces the tragedy.
Never have so many been so confident of so little (flat at best) done with so much (trillions of meatballs.)
The Unbearable Brightness of Doing Nothing is your humble blogger's call.
AM Rule #6,'The cold hard fact of our age is that the bankrupt ideology of the rich that had greatly succeeded in drafting the inner monologue of regular folks so that they would vote against their self-interests is colliding head-on with a Mr. Market that is a bit pissed off that we've inflated it out of the business cycle for the last quarter century', or the 'What just Happened Crisis', has given us Rule #7, 'Failure to liquidate the insolvent banksters has led to the liquidation of a large part of the productive economy. A taxpayer financed bailout of rich folks' bad speculative bets has resulted in zombie banks and zombie customers... a fiscal tide that lifts no boats', 'The I Can't Believe it's not Capitalism' plan.
We're kicking the 'creative destruction' can down the road trying to avoid the Deadhead Economy on the other side of Sugar Mountain. We are fighting a war with the future using the armaments of the past.
This guy is a baffoon!! Anybody and I mean anybody that listens to to this BS deserves to lose all their money.
Consumer confidence is down? why? what about the green chutes? These types of reports are given so that volitilty goes up a little...like when one PANS FOR GOLD....you tip one side higher, then the other side, then the other side, then the other.....this is their synchronicity.
You mean as in PARAchutes issued to those jumping out of the plane?
;)
It doesn't matter what they say. The game is over. The consumer is actually leading the professional. It is really quite amazing to watch as it unfolds but it makes perfect sense since the professional raped the consumer and used it to pay himself a bonus. What the professional hasn't figured out that the consumer already knows is that there won't be another rape. There's nothing left to take.
One more thought. Pull up a 20 year monthly chart on the SPX and identify how long it took to put in the 2000 top, the 2003 bottom, the 2007 top, the 2009 bottom and the one we are in the midst of now. Pull back a little from the five minute chart and the picture becomes very, very clear. Nothing changes under the sun. Nothing, zip, zilch, nada.
Michael Strauss, chief economist at Commonfund, believes several factors were likely behind the weak consumer confidence figure, namely that the survey was conducted amid sovereign debt issues unfolding in Europe, a retracement in the equity market and unusually bad weather in places not accustomed to getting hit by severe weather.
"The market was grappling with three factors that aren't normal economic factors," Strauss said, adding, "The oddity of this number being so weak on the labor side is that we don't see it showing up in other statistics. Normally, when you get big moves in consumer confidence that are meaningful, then you see it show up in other data. My feeling is that you'll see this number reverse in subsequent months."
The dismal consumer picture comes as Washington has been increasingly focused on improving the labor market to assist economic recovery
Isn't that the entire market? These guys sound like a bunch of amateurs.
If we end down 1% or so on the day, that makes for a great buying opportunity? We've been rising for two straight weeks, basically. Maybe a 1-week dip is in the cards?
You know the market is in a manic phase when "Buy the dips!" means rush right in 30 minutes after the start of a decline from a multi-week high.
"You know the market is in a manic phase when "Buy the dips!" means rush right in 30 minutes after the start of a decline from a multi-week high."
Please don't say that. Leo said it was OK to buy the dips. My FSLR "buy", from a few weeks ago, is really hurting me now, so I'm just praying he's right.
FSLR was my first 25-bagger.
Cheer up, your money is always good with me.
You bought Leo's FSLR? Shame on you sir. Please refer to Cognative Dissonances comment 241664 above:
"I've said it before and I'll say it again. The leaders and shakers and opinion makers lie in order to give us permission to believe the lie. For those who want to believe that all is well, they need positive feedback, in the same way a 4 year old needs positive feedback from Daddy that there are no monsters under the bed or in the closet."
Speaking of a consumer confidence game, while Paulson et al. are stealing the gold off the Capitol dome, Tracy Residents Now Have to Pay for 911 Calls | 13CW31
Tracy, California, February 18, 2010 -- Tracy residents will now have to pay every time they call 9-1-1 for a medical emergency.
But there are a couple of options. Residents can pay a $48 voluntary fee for the year which allows them to call 9-1-1 as many times as necessary.
Or, there's the option of not signing up for the annual fee. Instead, they will be charged $300 if they make a call for help.
"A $300 fee and you don't even want to be thinking about that when somebody is in need of assistance," said Tracy resident Greg Bidlack.
Residents will soon receive the form in the mail where they'll be able to make their selection. No date has been set for when the charges will go into effect.
http://cbs13.com/local/tracy.911.calls.2.1502690.html
http://www.youtube.com/watch?v=odw_a1ZPS8Y
while Paulson et al. are stealing the gold off the Capitol dome....you know that cubism came out of two places at once? well, i was just writing about Sir Hank and his gold fetish.
Looks like we’re tracking on the same yellow brick trail. It will be interesting, what you've discovered on Sir Hank and his fetish...
Never call for help. The first thing government does is capture and control the helpful.
Does anybody expect a car salesman to say"our cars are realy very bad. Don't buy them. Buy yourself a motorcycle instead"?. So do we expect somebody whose livlihood (and high flying one I might add) to say"oh,and by the way,the market is way too overvalued.Buy silver or gold instead".What will those analysts and "gurus" do for a living,if say the NySE decided to close its doors?.
And the band kept playing even as the ship sank further and further into the ice cold water....
Are you referring to CNBC?
These numbers lend credence that the "inventory restock lead recovery" is nonsense.
Folks are not buying & have no plan to buy. Whatever levels inventories are being restocked to will not result in new jobs anytime soon.
An economist cites bad weather as a reason behind the weak consumer confidence number... ROTFLMAO!
Consumer confidence craters = No Recovery
No recovery = great news rates stay low for an infinite period of time.
Consumer Confidence Jumps = Great news. Recovery on track
Recovery on track = Do not want to rock the boat so rates stay low to "Foster" growth.
Heads they win..Tails we lose. This is proof if you wish for something hard enough it to can become true in your own mind. So now if anyone was questioning just how far they will take this charade understand something they will proceed with this charade up until the very night that IT ALL ENDS of not their own accord. Whatever the catalyst is Lehman and AIG will pale in comparison since there are so many Financial Fat Man & Little Boys floating around. People talking about this being the "Greatest Bull Market in History" frightens the pants off of me.
My level of confidence that the boning will continue ad infinitum, is at an all time high.
Where Melissa Lee got her gig:
http://datacore.sciflicks.com/the_fifth_element/sounds/the_fifth_element...
I have absolutely no faith in anything the government has to say. Why should I? Inflation under control? Yeah, my house is worth less than it was 2-3 years ago, ergo - deflation. Then: income growth less than CPI (yeah, that's probably my fault), and just about anything I pay for (insurance, taxes, food, liquor, energy, clothes) goes up relentlessly (hell, the snack machine prices just went up 25-50% last week for christ's sake). The economy is all smoke and mirrors and the American public will vote and act according to the pain in their wallets.
Scott grannis from calafia beach pundit told me that the numbers are bullish.
"Consumers", i.e. Joe Sixpack, the public, get it. The US is in a long term secular economic decline, with two possible outcomes from here?another dead cat economic bounce, or outright collapse. The stock market rally of the last 11 months is the bogus result of the Fed shoveling money into the trading accounts of the Primary Dealers. There's no substance to it, just the delusions of a few economist madmen.
http://wallstreetexa?miner.com/2010/02/23/con? -con-surprise-no-surpris?e/
"Consumers", i.e. Joe Sixpack, the public, get it. The US is in a long term secular economic decline, with two possible outcomes from here?another dead cat economic bounce, or outright collapse. The stock market rally of the last 11 months is the bogus result of the Fed shoveling money into the trading accounts of the Primary Dealers. There's no substance to it, just the delusions of a few economist madmen.
http://wallstreetexa?miner.com/2010/02/23/con? -con-surprise-no-surpris?e/
"Consumers", i.e. Joe Sixpack, the public, get it. The US is in a long term secular economic decline, with two possible outcomes from here?another dead cat economic bounce, or outright collapse. The stock market rally of the last 11 months is the bogus result of the Fed shoveling money into the trading accounts of the Primary Dealers. There's no substance to it, just the delusions of a few economist madmen.
http://wallstreetexa?miner.com/2010/02/23/con? -con-surprise-no-surpris?e/
nothing but more (worthless)hot air from windbags who like to hear themselves talk...and probably spend a lot of time admiring themselves in the mirror.
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