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What's Wrong With Consumer Confidence?

thetechnicaltake's picture


This is
an interesting video taken from CNBC's "Squawk On The Street" and
seen earlier in the week here on ZeroHedge.

The show's host, Mark Haines, is
incredulous that Tuesday's consumer confidence number came in lower than
expected. Haines mutters: "What the heck is that all about?" As
Haines goes onto explain, housing is higher in most major markets and corporate
profits are better. The only thing missing was the next statement out of his
mouth, and I will fill in the blanks: "What
do people want?"

It just goes to show how divorced Wall Street is from Main Street.


The show's talking heads or those people in the boxes suggest that
the real angst Americans have is rising gas prices at the pump, increasing
health care costs, and an uncertain labor market. This is all true, but I don't
think that it is the real source of America's angst.




The real
source of America's
angst is a sense that
something is terribly wrong
. What that something is isn't tangible -like
higher gas prices - but it is palpable. Maybe it is the lack of leadership in Washington or the
inability of that leadership to do anything but put our problems off for
another day.


There is no
collective purpose to the actions coming out of Washington. There has been no sacrifice for
the greater good. Bailouts and government programs, like "cash for
clunkers", have perpetuated the same old thing. The bailouts have favored
the connected or those who where irresponsible in the first place. Is this the
American way?


This is not the change that Americans wanted. They voted for
it, but this is not the change that Americans wanted.


So what kind
of change did Americans want?


For this we
need to go back to September, 2001 and the War on Terror. With the attack on America,
President Bush was handed a golden opportunity to galvanize Americans towards
the purpose of sacrificing for the greater good, but instead all he asked of
his fellow countrymen was to go to the malls and continue shopping. The soldier
in combat made the sacrifice, but this is what they do.  Their sacrifice
was unconditional, and this was understood and accepted by all. But where was
the sacrifice asked of the ordinary American here at home? At the very least,
shouldn't we have been asked to cut back on our consumption of large cars and
oil to decrease our reliance on those very same foreigners who were at war with
I am sure my fellow citizens would have been willing to act for the greater
good, but they were never asked. This was President Bush's biggest failing.


Now we come to
President Obama. His crisis isn't the War on Terror, but a generational
economic crisis. President Obama did come to the electorate and say "we
need to change the way we do business" referring to the grid lock and
bipartisanship in Washington.
 I think the President was sincere. From an idealogical perspective,
Republicans and Democrats need to work together to solve the problems this country


But for
President Obama it isn't so much what he has done (i.e., wasted a lot of money)
but what he has failed to do (i.e, galvanize the country for the greater good)
that is so discouraging.  Even if the other guy (Senator McCain) was
elected, he probably would have done the same thing - thrown good money after
bad - as this was what was being recommended by the economic of this country.
 Oh, these were the same economic leaders who missed the crisis in the
first place. 


But like his
predecessor, President Obama is missing what kind of change Americans really
want and why there continues to be so much dissatisfaction. Americans are
willing and ready to make that sacrifice to improve their nation and the future
of this nation for their children - provided that burden is shared by all. The
only problem is that no one has asked them to make that sacrifice, and the
window of opportunity for the Obama administration to come to the American
people to make such a sacrifice has closed or is closing quickly.


As measures to
resuscitate the economy begin to peter out, the fragile underpinnings of the
economy will begin to be exposed yet once again. The likelihood of throwing
more money after the problem - in front of a mid term election - is becoming increasingly
diminished. With no real economic catalyst to sustainable growth and with very
little fixed after this crisis, one really needs to ask what does the Obama
economic team do next?


One thing is
for sure: the time to ask the American people to make a sacrifice passed long
ago when the President first took office. This was the one option that has been
squandered, and this is why Americans remain so dissatisfied.



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Fri, 10/30/2009 - 19:38 | Link to Comment Anonymous
Fri, 10/30/2009 - 22:00 | Link to Comment Marge N Call
Marge N Call's picture

You're right by golly. Look, I see a rainbow out my window. And here comes a black girl and a white girl holding hands and singing "we are the world". Wow, and darn it, it look like world peace WILL come true after all.

Here comes my unicorn to take me to my job as the training dummy at the Miss Universe blowjob training camp. Awesome.



Fri, 10/30/2009 - 18:56 | Link to Comment TomJoad
TomJoad's picture

I'm very confident. Confident that we're screwed.


Jump! You Fuckers!

Fri, 10/30/2009 - 18:55 | Link to Comment Anonymous
Fri, 10/30/2009 - 18:47 | Link to Comment Anonymous
Fri, 10/30/2009 - 18:26 | Link to Comment Brett in Manhattan
Brett in Manhattan's picture

Debt + Fear of Job Loss = Lack of Confidence

Fri, 10/30/2009 - 17:28 | Link to Comment George Washington
George Washington's picture
The Economy Will Not Recover Until Trust is Restored

Americans no longer trust their politicians, the justice system, their ability to obtain liberty, or the media. Americans know that the boys launched the war in Iraq (which will end up costing $3-5 trillion dollars) based upon justifications which turned out to be untrue. Many Americans have read that the government imported communist Soviet Union torture techniques and then said "we don't torture". Many Americans also know that the government spied on American citizen (even before 9/11 ... confirmed here and here) while saying "we don't spy", and that the government apparently planned both the Afghanistan war (see this and this) and the Iraq war before 9/11.


Fri, 10/30/2009 - 21:43 | Link to Comment Anonymous
Fri, 10/30/2009 - 16:55 | Link to Comment Anonymous
Fri, 10/30/2009 - 17:50 | Link to Comment Miyagi_san
Miyagi_san's picture

Michigan sentiment plus Accorn = CNBS

Fri, 10/30/2009 - 15:47 | Link to Comment Anonymous
Fri, 10/30/2009 - 17:46 | Link to Comment Miyagi_san
Miyagi_san's picture

GW ...word...

Fri, 10/30/2009 - 15:45 | Link to Comment Anonymous
Fri, 10/30/2009 - 15:10 | Link to Comment ft65
ft65's picture

I'm not surprised confidence is down. How can any average Joe be anything other than distraught. No savings, and a job that looks ever more shaky. I haven't felt confident about the future from a year before this mess started unravelling. There is no bright future.  

Fri, 10/30/2009 - 15:09 | Link to Comment Anonymous
Fri, 10/30/2009 - 14:51 | Link to Comment Anonymous
Fri, 10/30/2009 - 14:45 | Link to Comment Anonymous
Fri, 10/30/2009 - 14:44 | Link to Comment mannfm11
mannfm11's picture

There has been a deflation in order since 1990.  We almost didn't get out of the early 1990's recession, then we had a huge bubble in stocks burst in 2000, which has created an environment of over investment in a broad series of areas.  Had the US tightened in 2001, the depression very well could have started then.  Unfortunately, the bust didn't happen in 1998 when the LTCM mess hit.  The bubble would have been somewhat smaller and we could have managed with the political scene.  The whole euphoria that was in order at the end of the 1990's was a mandatory situation to attempt to maintain.  An administration could not come in and have the economy go flat on them.  At least the bubble created a perception that Congress had solved the budget problem, which was really nothing but the same forces that placed California in its now unsolvable budget situation, a bubble in captal gains and stock option income compensation tax receipts.  The same disaster faces Obama today, as he has the impossible task of rectifying the poor timing of his entrance.  Clinton and Bush II had some advantage in the fact home equity and lower mortgage payments allowed for free income bumps for consumers and provided a pool of money to circulate through the economy, thereby creating the bubble we now have that is deflating.  The consumer no longer has a low interest rate credit card or a method of transferring balances with no payments for a year, nor does he have the free relief of a lower interest rate and home equity to extract and go shopping.  Most suddenly realize that the shortcut to retirement all the experts told them was present was nothing but a delusion.  Those that hold onto this delusion are about to see it wiped out with this next stock market bust that isn't going to come back to these levels for 20 years or longer on a price adjusted basis. 

Fri, 10/30/2009 - 14:34 | Link to Comment Anonymous
Fri, 10/30/2009 - 14:30 | Link to Comment bugs_
bugs_'s picture

Jobs Haynes.  Jobs for the man of the family.  A

future for his children.  Mom is having a hard

time with her single income now.

Fri, 10/30/2009 - 14:27 | Link to Comment walküre
walküre's picture

Nuke Iran.

Consumer confidence up 200%.

So, there ya go.

Fri, 10/30/2009 - 14:23 | Link to Comment Anonymous
Fri, 10/30/2009 - 14:08 | Link to Comment Anonymous
Fri, 10/30/2009 - 15:48 | Link to Comment Anonymous
Fri, 10/30/2009 - 21:53 | Link to Comment Marge N Call
Marge N Call's picture

Hell yeah.

Exceus me, I have to do some blow off of a hooker's ass...(not my line of course).

Fri, 10/30/2009 - 14:08 | Link to Comment Anonymous
Fri, 10/30/2009 - 14:00 | Link to Comment Hammer59
Hammer59's picture

Americans simply have no concept of sacrifice; this is clearly shown by their anemic savings rates of the last two decades, the cars they drive, the way they invest, the food they eat. It was only the severity of the financial crisis prior to the election that even prompted them to embrace change. To expect President Obama to immediately create a reversal of misfortune caused by Bush/Cheney and the GOP only shows how unrealistic and unfocused the population has been, and continues to be. But they are indeed coming around now, and swiftly. It took Bill Clinton a while to get traction (he inherited a shitty economy from Bush Sr), and turned it around. We are bombarded daily by the MSM with everything but the truth--but intution and the internet gives us the notion that yes, something is terribly wrong with our country. The bailouts and stimulus, while incredibly unpopular were a "hail Mary" pass, incredibly desperate---but postponed the Great Depression redux by about a year and a half. In the end, what ruined the Global Economy was overpopulation, worldwide lust of our previous glorious standard of living, and utterly corrupt leadership in Government and Finance. There is a harsh reality ahead of us, which can be a return of the Dark Ages, or a spiritual renaissance---but we cant have both. Human nature is so predictable, so we all know where this is heading if/ when the system fails. Not suprising to see increasing mention of revolution/violence amogst those posting comments. Never corner a frightened man.

Fri, 10/30/2009 - 14:53 | Link to Comment mannfm11
mannfm11's picture

this mess has been brewing for 20 years.  Bush walked in on a bubble that had sprung a leak and Obama walked into one that burst.  Their only plan is to attempt to reflate a debt bubble with global leaks.  Obama will be the most failed administration since Carter.  Dick Cheney is a saint compared to the henchmen Barack has around him.  If he cannot figure that one out, there isn't much hope for him.  Besides, history has shown ethics and politicians from Chicago are not common bedfellows.  Bill Clinton inherited a recovery and a world where someone could drop their mortgage payment by 3% or more simply by going in and refinancing.  Also, the big banks got well in the mid 1990's.  Robert Rubin is as responsible for the Clinton miracle as anyone and more responsible for the bubble than anyone I can find.  Bush II had a much bigger mess coming in than Clinton.  The big problem though has been in Washington DC all the post war years.  Inflate or die has been a situation Bretton Woods put us in over 60 years ago.  Keynes, in defense of his policies said, "In the long run, we are all dead".  We have reached the long run. 

Fri, 10/30/2009 - 19:14 | Link to Comment Stoploss
Stoploss's picture

+10,000!!  By George, i think you have got it!

Your scope is perfect, all that is needed is a little refining. I offer this, IMHO.

In 00 / 01 the dot com bubble burst ( begin bear market ). In response to that, then fed chair Alan " bubbles " Greenspan, initiated the housing bubble as the response to then said recession, of the dot com pop.

That, in and of itself was a FALSE inflation of housing prices, combined with easy credit, ( Your WORD, is all it takes to purchase a million dollar home ), never mind verifing income or any trivials like that. Then bring in subprime. (which is still going on), and here we are.

I believe, since hindsight is always 20/20, in 10 years it will be known as the great depression of the new mellinium, in SLOW MOTION, since we are only almost half way done with this cycle. The more money printed, the slower we go. In the end we will hit bottom. Unfortunately, it doesnt appear to be anytime soon.  enjoy the Slo - Mo decline.

Fri, 10/30/2009 - 14:08 | Link to Comment Anonymous
Fri, 10/30/2009 - 13:59 | Link to Comment HayeksConscience
HayeksConscience's picture

the sooner the system gets reset and we put it back to the way the founders intended - the better. 

No system will work with corruption.   Society cannot function without morals and ethics. You can't post a policeman at every public transaction.

IMHO, What a lot of folks don't realize is the justice system is just as dyfunctional and will need to be reformed as well. 

No doubt most Americans are asleep hoping we muddle through.  But, I still think that when it all comes crashing down there is going to be hell to pay for the government and financial monied interests. 

Fri, 10/30/2009 - 13:31 | Link to Comment Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

As Churchill pretty much said, Americans will do everything but the right thing until the right thing is the only solution left.


)--no cryptic play on words intended.

Fri, 10/30/2009 - 13:25 | Link to Comment time123
time123's picture

What is terribly wrong in America is that decent, well skilled and educated people who want to work and make a living cannot anymore (although they used to), because the well paying jobs are simply not there any more. They all either moved to foreign cheap labor countries, or simply disappeared due to higher efficiencies.

If there is no paycheck to support the family for an increasing number (in the millions) of Americans, where is the confidence going to come from to keep consuming? That is why consumer confidence is falling. It has nothing to do with the cost of gas.



Fri, 10/30/2009 - 13:09 | Link to Comment Noah Vail
Noah Vail's picture

He thinks the Prez was sincere? Really, sincere in selling out to the banksters perhaps, but surely on nothing else.


The people can't put their finger on what's wrong? Horsefeathers, most know but want to pretend that it isn't true.

The American people sacrificed by voting for the free lunch in exchange for giving up real industry and cushy desk jobs that will disappear like water in the desert. And desert is what we as a nation are about to become. Fill up your canteens boyz.

Fri, 10/30/2009 - 13:07 | Link to Comment midnitepoet
midnitepoet's picture

As P.T Barnum once said; "You can't underestimate the intelligence of the American public." And I would like to add: "You can't underestimate their interest in what is happening outside their little, individual worlds." Sadly; Americans know more about sports statistics, sitcom plots, reality show situations and Starbux Lattes than they know about forms of government, Wall Street shenanigans, our political corruption, our military ineptness and the reality of how the banking industry stole control of the country from the politicians. Ppppffffftttthhhhhhhhhhhhhhhhh!

Fri, 10/30/2009 - 21:50 | Link to Comment Marge N Call
Marge N Call's picture

Yep. Thanks to our failed public education, failure to support the notion of a nuclear family, and our worship of Hollywood/Madison Ave.

We reap what we have sewn.

Fri, 10/30/2009 - 13:03 | Link to Comment JohnKing
JohnKing's picture

Why ask the citizenry to sacrifice while keeping the political/finance class in champagne and caviar?  Even Obama doesn't have enough panache to pull that off. I don't know how out of touch you are with JSP but based on your writing I assume you are safely ensconced in some ivory tower. I think JSP would tell you he doesn't have much left to sacrifice, even if he felt led to do so.

Fri, 10/30/2009 - 12:58 | Link to Comment Anonymous
Fri, 10/30/2009 - 13:28 | Link to Comment JohnKing
JohnKing's picture

Obama never defined change, he just let the collective imagination run wild and let others project their own hopes onto him. Where did anyone get the idea that Obama was anything but self-serving politician?

Fri, 10/30/2009 - 14:15 | Link to Comment Ben Graham Redux
Ben Graham Redux's picture

+1,000 - yours is the best description of the enigma that is our President that I've ever seen - bravo! 

Fri, 10/30/2009 - 15:44 | Link to Comment JohnKing
JohnKing's picture

Twinkle twinkle litle star, make a wish on the Obama star. He is a fairy tale that people wanted to believe, some still do. The peace candidate brought more war, the transparency candidate shut down information, the list goes on but the deceived are still blinded.

Fri, 10/30/2009 - 13:25 | Link to Comment thetechnicaltake
thetechnicaltake's picture

I never said anything about Obama caring for the people; the end result is that he will be a one term president.  My point is that he has squandered the most effective thing that he could have done - go to the people.  He cannot do that and with the likelihood of no more bailouts, he is stuck.

Fri, 10/30/2009 - 12:51 | Link to Comment RagnarDanneskjold
RagnarDanneskjold's picture

If you're talking about the greater good, you're part of the problem. Everything done in DC for the past year was for the "greater good."

The reason we are in this mess is because of collectivist thinking. Individuals would never have behaved so stupidly, it is literally impossible due to counterbalancing market forces.. It was efforts, over the past 80 years, to act collectively in support of healthcare, education, retirement, housing, etc., that led us to this point. The way out of this is to sacrifice "the greater good" and return to individualism.

Fri, 10/30/2009 - 14:41 | Link to Comment vanderrook
vanderrook's picture

Thank you, Ragnar.


As I was reading the piece, I was formulating the outstanding sentiments that you have already committed. Anytime I read "for the greater good", I am immediately suspicious and on the defensive. The greater good would have been achieved if those chimps on the Hill would just stay out of most things. The original plan was for the Feds to safeguard our persons, property and rights- nothing more. The rest was up to us.


They (we) have blown the shit out of that premise for all time now.

Fri, 10/30/2009 - 13:21 | Link to Comment thetechnicaltake
thetechnicaltake's picture

All individuals must make that sacrifice.  But your point of "greater good" is well taken in the sense that we don't want to make everyone the same.  The only thing that should be the same is some sense of sacrifice and/or working towards a common goal.  

Fri, 10/30/2009 - 13:20 | Link to Comment Anonymous
Fri, 10/30/2009 - 13:02 | Link to Comment Anonymous
Fri, 10/30/2009 - 21:46 | Link to Comment Marge N Call
Marge N Call's picture

And the other path to progress vis-a-vis individual liberty is........

Fri, 10/30/2009 - 16:03 | Link to Comment Anonymous
Fri, 10/30/2009 - 12:54 | Link to Comment Mad Max
Mad Max's picture

Spoken like a true pirate!  RRRRRGH ye mates!

I do agree though.  The markets are so distorted now that we're in Wonderland.  Mish has a good discussion today of the role of the federal loan-subsidizing agencies on housing affordability and college affordability.  (Hint: cheap money repaid later, borrowed by people with limited concepts of borrowing, drives prices up.)

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