Consumer Confidence

And Richmond Fed beats too, coming at +5, on expectations of 1... QE2 not looking so hot all of a sudden.

Hopium consumption continues: expectations surge as current conditions plunge. One year inflation expectations surge from 2.2% to 2.6%. If only any fundamentals mattered any more.

Confused yet: a few days ago the Conference Board came out with a confidence number which was a massive miss, and which drove market higher on expectations of QE2. Today, to prove that nothing coming out of the government is even remotely credible anymore, the UMichigan Confidence index came at 68.2, beating expectations of 67.0, and compared to a previous read of 66.6. Once again, our condolences to all those who trade the candles in this joke passing for a market.

And risk off. 7 out of 8 Richmond Fed indicators declined, with just Vendor Lead-Time remaining flat at 0. Number of Employees plunged from 12 to -3. And w/r/t the now almost certainly sub 50 print, Shipments, Volume and Backlog all plunged by 10 or more points. In a word, total diffusion index massacre. As for consumer confidence: somehow the record September surge in stocks did nothing to make people forget juw how broken the US economy is, and that they do not enjoy being lied to about recessions being over. The Conference Board printed at 48.5, compared to 53.2 revised in July, on expectations of 52.4.

Some funny quotes in the latest weekly ABC Consumer Comfort Index poll, which incidentally dropped from -43 to -46, just inches away from the 2010 lows, but more importantly, just inches away from the lows seen throughout the entire depression, as consumer sentiment has gone nowhere fast in the past two years: "Recession Ends, Nobody Notices." Indeed, as the chart below shows, ABC's weekly poll of about 1,000 random people shows nothing at all good for the economy, which, oh yes, is now out of the recession, but not the depression. And for technicians out there, the reading of 46 dropped just below the 52 week average of -45.98. Joking aside, the report found that: "This week 89 percent of Americans rate the economy
negatively, 75 percent say it’s a bad time to spend money and 55 percent
rate their own finances negatively." Surely these are the Green shoots that forced Larry Summers to realize that destroying the Harvard endowment is a far less dangerous job than continuing to bring ruin and pestilence to all of America.

It may not have the pull of those two "other" consumer confidence polls (which always magically seem to beat expectations just when the market is about to roll over), but for sheer depth of polling, the Gallup look at consumer confidence arguably presents a far more detailed and accurate picture than either the Conference Board or the UMichigan index. And today Gallup is out with a report titled: "U.S. Economic Confidence More Negative Than a Year Ago - More Americans rate the economy as "poor" and say it is "getting worse" -  of course, as this report is based on truthiness and not on birth-rate adjustments, the only places you may read about it are a variety of fringe blogs. Amusingly, even Gallup acknowledges that the primary driver of consumer confidence (which itself ends up driving stocks), is stocks themselves (they don't call it the dog wagging indicator for nothing) are the computerized and generally arbitrary moves in the stock market: "Despite the recent upturn in the nation's equity markets, Gallup's
Economic Confidence Index, at -34 during the week ending Sept. 12,
confirms a downward trend in consumer confidence that started in
mid-August." We don't expect this level of honesty and objectivity to be repeated in either of the soon to be released other "confidence" indicators, which is sad, because if consumers and investors realized that we have now gotten past the point where the natural ponzi drive of the market works (i.e., confidence correlates with the S&P, people may have been able to save a lot of money which they will otherwise lose in the S&P). But that does not fit with the Fed's agenda, so don't hold your breath on the truth finally coming out on this.

nsumer confidence comes in at 53.5 in August versus 51.0 in July: somehow the fact that the economy officially double dipped in the month was lost on the 6 or 7 top CEO respondents in the Conference Board rolodex. Just one word can explain this one: Lol. At least the idiots at the CoCo retardo institute made their tail wags dog shell game seem just a little credible by declining the read on the job plentiful from 4.3 to 3.8, and there was even a decline in the jobs hard to get category from 45.8 to 45.7... but somehow confidence was higher. Enjoy your bizarro day trading.

Expectations at 62.3 vs consensus of 61.3 (previous 60.6), and Conditions at 76.5 vs 76 (previous 75.5). And with this latest self fulfilling prophecy report out of the propaganda bureau, expect stocks to promptly go green as the ugly GDP number is all but forgotten. This report brings today's official economic release docket to a close. The upcoming ECRI Leading Indicator report (10:30 Eastern) will also come in higher than -10 and with that we will close solidly green as the administration high fives itself over yet another horrible economic print cover up.

Major plunge in Consumer Confidence, which came at 50.4, below expectations of 51.0, and down almost 10% from an upward revised prior 54.3 reading, previously seen at 52.9: yes lower, but this BS revision was enough to make the jump in new home sales appear amazing post revision. Let's see if a real plunge in consumer confidence is enough to take the market lower by 100 DJIA points. Something tells us the gaps on revised data are only to the upside.

The Conference Board is on fire today. First it killed the Shanghai after revising its China propaganda massively as reported previously, and now it indicates it surely has no credibility whatsoever, after its June Consumer Confidence number came out at 52.9, compared to 62.5 expectations, and a 62.7 previous (revised down from 63.3). And in keeping with recent tradition, we won't be surprised if this number is also massively revised down subsequently. CNBC warns to take consumer confidence numbers, when declining, with a grain of salt, and to gobble them up when rising, wholeheartedly.

The only thing worse than the oil flowing out of the GoM gusher, is the BS now openly flowing out of the government propaganda machine, which has jumped the shark beyond all semblance of credibility. How consumer confidence in May was the highest in over two years, at 76, higher than April's already ludicrous 73.6, and highest since January 2008, is not even worthy of commentary. It must have been the flash crash, the BP oilspill catastrophe, the market's 10% drop and Europe's bankruptcy that really pushed consumer confidence to that near record level... Just who do these people call to "gauge" confidence anyway: just Barack Obama, the president, the POTUS, and the Teleprompter in Chief (not necessarily in that order)? We must have missed when the Chinese ministry of propaganda, data fudging and bullshit, LBOed the US government's data dissemination bureaus (no doubt with Goldman Sachs pocketing a cool billion in advisory fees, and even throwing in a free second lien on Mykonos in the process), but with this most recent release we have no doubt it happened.

The propaganda machine's favorite subversive mechanism to instill confidence in the prevalent population, is by nudging none other than the Confidence Index itself. And indeed, over the past few months, the Conference Board and UMichigan indices have been on a straight upward slope. What better way to get Joe and Jane Sixpack out to the mall to spend, than to give them the impression that all their neighbors are out, doing just that (and buying 5 iPads in the process). Don't forget the US economy is based on reckless spending and credit, and the Sixpacks love that, especially if they don't have to pay their mortgage ever again (as Obama told them to do). Yet the Consumer Index is nothing but just another massive scam. To wit: observe the ABC Consumer Comfort index, a representation of consumer "confidence" which according to many is much more detailed, due to its larger sampling size, and more up to date, due to its weekly updates, yet one which, refusing to drink the Kool Aid has never once been mentioned on the biggest propaganda channel of all, CNBC. Yesterday, the latest ABC numbers came out, and they were a stunner: at -49, the index is barely a few points away from all time record lows, and well into deep recession territory. In fact, the only confidence consumers can have, is that there is absolutely nothing predictive about the CONsumer indices out there: the spread between the ABC and the administration darling's Conference Board just hit a record high, as see on the chart below. In fact, it has gotten so difficult to sway popular opinions with these simplistic methods of subliminal control, that even Goldman Sachs is concerned about the utility of such indices going forward. Goldman's Jan Hatzius, in discussing Consumer Confidence, notes: "Since the monthly spending figures are noisy estimates of the true underlying trend, it does make sense to put some weight on confidence alongside actual spending when trying to gauge the outlook for consumption. This still points to a U-shaped rather than V-shaped recovery in spending." If after reading this, you still think that consumer indices are indicative of anything at all you probably were one of those who did buy 5 iPads over the past month.

The Case Shiller housing report, the Conference Board's Consumer Confidence Index, and the FDIC Q4 bank report came out Tuesday with mostly negative results. Things like the biggest loan contraction since 1942 ought to grab your attention. These are significant numbers.

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 ishappening in the market intraday.

Looks like the ABC Consumer Comfort Index was right all long

US CONF BD: PRESENT SITUATION INDEX LOWEST SINCE FEB'83US
US CONF BD: JOBS, EARNINGS CONCERNS LIKELY TO CURB SPENDING
CONF BRD:PLENTIFUL LESS HARD-TO-GET -44.1% FEB V JAN -42.1%
US CONF BOARD: JOBS HARD-TO-GET 47.7% IN FEB VS JAN 46.5%
US CONF BOARD: JOBS PLENTIFUL 3.6% IN FEB VS JAN 4.4%
US CONF BOARD: CONS EXPECTATIONS INDX 63.8 IN FEB V JAN 77.3
US CONF BOARD: PRESENT SITUATION INDX 19.4 IN FEB V JAN 25.2
US CONF BOARD: JAN INDEX REVISED UP 0.6 (ORIGINALLY 55.9)