US Consumers At Crossroads As Spread Between Visions Of Present And Future At Record Divergence
Yesterday's most recent data from the Conference Board's Confidence Index recapitulates very well the Economic Inquisition purgatory that living in America has become: pain and suffering now, coupled with the promise of salvation and financial bliss at some point in the future. Of course, on a long enough timeline we are all dead, so it is only fitting that the administration, whose slogan had something to do with tangible change, is gradually encroaching on the Catholic Church's turf in an all out war for the souls of America's taxpayers as tangible becomes increasingly ephemeral and, well, intangible (save for unemployment and the wads of electronic cash deposited in Goldman Sachs' employees bank accounts - both of those are all too real). While the CBCC number came in at about the expected reading of 52.9 (from 50.6 in November), all of the "improvement" in confidence came from rosy future expectations, which rose to a two year high of 75.6 (from 70.3 previously). As for the present: current conditions plunged to another record low of 18.8. Never before has the differential between present pain and future hope been so wide.
The impact of this divergence politically is all too obvious. The voting population, which has been extremely patient, and keeps hoping that the future will finally bring something better and in line with oh so many promises, may very soon change their mood and realize that the present is here to stay, regardless of what the Fed manipulated capital markets demonstrate. When that happens watch for some interesting election fireworks on this side of the Potomac river.
Reading between the lines of the CBCC indicates that Obama and CNBC's grand plan to get consumers to spend, spend, spend again has fizzled. Autobuying intentions dropped to 3.8 from 4.5 in November, the lowest read in over a year, when the SAAR was 10.5 million. The double dip in the auto sales will soon be upon us. Furthermore, buying intentions of major household appliances held at a weak 23.7: Cash for Bidets can't come fast enough. Most troubling, however, homebuying intentions have plunged to a near-thirty year low: at 1.9, the percentage of Americans planning on buying a house is the lowest since 1982.
And just in case you thought that shellshocked US citizens will look to get the hell out of Dodge, at least temporarily, to take advantage of that strong, strong dollar and travel abroad, think again. The percentage of Americans planning a vacation in the next six months fell to 35.7, the lowest since April. The David Rosenberg-penned "frugal consumer" is here to stay, which can only mean that both the Fed and the US Government will become buyers of first, last and everything inbetween resort, as the traditional component of US GDP (sorry David Bianco, you are unabashedly wrong in your "consumer is irrelevant" propaganda). Maybe it is time to dust off all those Russian Politics 101 manuals, in our search of how to defeat Soviet Style Communist fiscal and monetary policy, which have so thoroughly penetrated the United States of America itself.