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Bloomberg Spews A Bunch Of Disingenuous Crap On Consumer Comfort

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Bloomberg Spews A Bunch Of Disingenuous Crap On Consumer Comfort

 

"Consumer Confidence Rises to 4-Year High" 

blared the Bloomberg headline in a font that really was that big.
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That's just so wrong. So wrong. I mean, should we really be jumping up and down, shouting, "Hip Hip HOORAY! Hip Hip HOORAY!"

Uh... no.

Let's look at the first key point that Bloomberg made.

Household confidence improved last week to a four-year high as more Americans said the economy was improving and decided it was a good time to shop.

The Bloomberg Consumer Comfort Index (COMFCOMF) was minus 36.7 in the period ended March 4, the highest since April 2008, up from minus 38.8 in the prior period. The gauge on the state of the economy reached a one-year high, while the buying-climate measure climbed to a level last exceeded in December 2009.

Just the comparison to April 2008 is telling. Think about it. Where was the economy in April 2008? Only in the early stages of the worst economic depression in the US since 1932, if you want to make stupid year to year comparisons without explanation. This is pure garbage, cheerleading, public relations. It certainly isn't financial journalism, something the Bloomberg is occasionally good at. In this case, though, the Hizzoner the Mayor should be ashamed of himself.

After several more lines of bullish snorting, the writer allows Bloomberg's Joe Brusuelas to make what I think is really the key point in all this. "That said, consumer confidence remains at the low end of the historical range."

It's also true that it's at the high end of the range of the past 4 years  but the issue is whether that's a good or bad thing. The reporter implies that it's a good thing.  Here's the chart that accompanied the article.

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Bloomberg Consumer Comfort Index 1 Year Chart
Bloomberg Consumer Comfort Index 1 Year Chart

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http://www.bloomberg.com/quote/COMFCOMF:IND

But let's have a little perspective, shall we. Bloomberg also has a link to their interactive chart for that indicator that allows a 5 year lookback. I've taken the liberty of drawing in a few straight lines to illustrate the trend using tools available on the website.

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Bloomberg Consumer Comfort Index 5 Year Chart- Click to enlarge

Bloomberg Consumer Comfort Index 5 Year Chart- Click to enlarge

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While the initial implication of the one year chart linked directly in the article was that sentiment had broken out, if you took the extra step to go to the interactive chart and zoom out, the picture became clearer. The index has only rallied to the high end of the trend range. Clearly, if it breaks out next week, that would suggest that the tide had turned. But all we see at this point is that it might, or it could be that this is high tide, and the next move will be back out to sea.

Furthermore, is there a correlation between these short term peaks in the sentiment trend and subsequent market behavior? The answer is, "Not so much."

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Consumer Comfort and Stock Prices Chart - Click to enlarge

Consumer Comfort and Stock Prices Chart - Click to enlarge

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Over the course of this recovery, yes,  the sentiment peaks  have tended to confirm the uptrend. But they also tend to follow the stock market, so they don't tell us anything we don't already know and they tend to mark less than good entry points in the short run.

So why are we even paying attention to this? The answer lies in the big picture, which Bloomberg hides by stopping its history at 5 years. The data goes all the way back to 1986 when ABC News first published the index.

Here's the historical data from the days before Bloomberg bought this index in February 2011.  The red X marks approximately where the index stands now. I think you get the picture.

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Source: http://www.langerresearch.com/uploads/m020611.pdf

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"Consumers" understand better than Bloomberg, better than professional economists and pundits, certainly better than Ben Bernanke who continues to rob the Aunt Millies of the world to pay off the banksters, indeed better than all the soothsayers and gurus of the financial world put together, where things stand. They know the deal.

Yes, a tiny handful of them are experiencing things being a little better. They're the ones that own stocks. But a minus 36.7 reading ain't exactly rolling in clover, especially when the historical average is around -12, and neutral is zero. In fact, from the perspective of "consumers" or perhaps more accurately, "We, the people" this "recovery" is even weaker than the one in 2003-2005, and the second wave of that recovery from 2005-2007. Americans recognize that, notwithstanding the minor trend of  improvement of the past 3 years, we are still in deep, deep trouble. I guess Bloomberg just didn't want to trouble us with the facts. They have terminals to sell, where the market bigwigs have access to the whole story. Screw the rest of us. We're just fodder.

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Fri, 03/09/2012 - 01:26 | 2238477 ClassicalLib17
ClassicalLib17's picture

I am a municipal elected official in Illinois and I sent this message to our police and firemen union leaders today( I am  a private sector union member):

Dear first responders,

This commentary aptly explains why "inflating" our currency is so destructive to the working class and retirees. If you truly are leaders, you will educate yourselves to the facts so you can protect what little will be left for your members when the big one finally comes. Constitutional guarantees will mean doodly squat when the .... hits the fan. The clock is ticking, gentlepeople, and there is no way out of this mess unless we take hold of the situation ourselves as taxpayers(not union members) and demand that our state and federal gov't do what is necessary to bring our fiscal house in order. I'm sure that you have heard the rally cry to tax the rich, well, their riches are based on the same fiat currency that you are holding in your pocket right now. Our economic system is seriously out of balance and everyone is going to pay the piper in the end. Our day of reckoning is on the horizon. Where will the revenue come from when no one can afford to do business in this state anymore? We have lost 850,000 people and 2 congressional seats in the mighty Land of Lincoln so far. Do you see a trend here? What would you attribute the loss in population and business to? Illinois' dire financial problems are now becoming a regular segment on the business news channels now and that can only mean that even the parasites realize there is no more to be had. Our state legislature has played us as suckers for decades and soon it will be to be time to pay the piper. I would like to maintain the status quo as closely as possible, but the city's liabilities have to come into balance with the revenues. If we don't stabilize our finances soon, we may find ourselves in the same position that many other cash-strapped communities are now faced with. That's not an ideal situation for anyone concerned.

http://www.timnerenz.com/2012/02/money-trouble.html 

Thu, 03/08/2012 - 20:39 | 2237934 LouisDega
LouisDega's picture

Im confident. I used Irish spring and had a good bowel movement this morning. Im feeling like a confident man.

Thu, 03/08/2012 - 19:45 | 2237761 sIewie the pi-rat
sIewie the pi-rat's picture

I assure you that Mike has no editorial influence

Thu, 03/08/2012 - 19:46 | 2237766 sIewie the pi-rat
sIewie the pi-rat's picture

I just junked myself

Thu, 03/08/2012 - 19:51 | 2237781 besnook
besnook's picture

tmi

Thu, 03/08/2012 - 19:40 | 2237746 Squid Vicious
Squid Vicious's picture

bollocks! things are so bad here at least 5% are driving around with one headlight, trying to put off that big capital expenditure until...? 

Thu, 03/08/2012 - 19:39 | 2237729 Dermasolarapate...
Dermasolarapaterraphatrima's picture

With a large portion the pop is gettting free stuff with infinite extensions, of course they are happy.

Thu, 03/08/2012 - 19:32 | 2237714 besnook
besnook's picture

you have to understand the new normal. the new normal sucks so the guage shows that it sucks less even though it still really sucks. this is the case where sucking less is better than sucking more from the vantage point of the sucker who won't be spared the task of sucking for a long while.

Thu, 03/08/2012 - 19:13 | 2237636 breakyoself
breakyoself's picture

Get out there and spend sheeple! (GWB voice)

Thu, 03/08/2012 - 19:10 | 2237633 TeresaE
TeresaE's picture

"...Yes, a tiny handful of them are experiencing things being a little better. They're the ones that own stocks...."

Well, those that own stocks.

And union employees in government bailed out industries.  (Though I wouldn't poll GM's salaried/admin workers about this, they just got hit with new pay freezes and had their retirements taken away to pay the line guys.  So much for get a degree to have job security and good pay).

And defense contractors.

And any of the millions and millions of city/state /county/Homeland security /citizen spying/ GE/Banks, etc that are surviving on Benny's prints and Congress' open checkbook.

This ain't going to end well, even if millions think we are getting better.

Sadly, in Argentina, Zimbabwe and Germany, there was always a huge contingency of fools thinking good times are just around the next corner.  Or election.

Fiat on.

Thu, 03/08/2012 - 19:22 | 2237613 Zero Govt
Zero Govt's picture

Bloomberg: trumpet of the establishment,clearing house of garbage (so much for the journalists)

meanwhile they turn the screws on the only remaining media maverik, Rupert Murdoch. News today the UK Regulator is looking into his BSkyB network if Murdoch is "the right person" to run a media empire

Gee i thought it was a free market and that you could build your own business on merit? ..it appears the Govt (Parasite Club) can take you out of your business based on speculative assumptions on your character

surely that's an end to all politicians careers then as they're all a bunch of lying toerags

Thu, 03/08/2012 - 18:59 | 2237601 Agent P
Agent P's picture

It's kind of like how you feel at the 20 second mark vs. the 2 second mark post a swift kick to the nuts.....Better? Yes.....Good? No, not in the least.

Thu, 03/08/2012 - 18:56 | 2237596 VelvetHog
VelvetHog's picture

First of all, there is no "We the People" any longer.  WE DO NOT MATTER any more until we decide we have had enough and do something about it.

Thu, 03/08/2012 - 19:03 | 2237616 Sudden Debt
Sudden Debt's picture

WE = THEM
And you'd better do what WE tell you to do.

Thu, 03/08/2012 - 18:53 | 2237585 apberusdisvet
apberusdisvet's picture

Sorry Bloomberg, CNBC, etc.; the people are waking up.  But of course that's why they need another World War for distraction.

Thu, 03/08/2012 - 18:48 | 2237570 jesus_quintana
jesus_quintana's picture

Fortunately, no one in their right mind gives two fucks about this number. It has zero impact, no matter how hard bberg wishes it did.

Thu, 03/08/2012 - 18:45 | 2237564 John Law Lives
John Law Lives's picture

Meanwhile, Uncle Sam ran the largest monthly deficit EVER in February at $229 billion.

http://www.washingtontimes.com/news/2012/mar/8/govt-sets-record-deficit-...

 

This is so FUBAR!

Thu, 03/08/2012 - 19:01 | 2237610 Sudden Debt
Sudden Debt's picture

Electric cars don't come cheap... But they pay themselves back in 20 years...

To bad the garantie....

Thu, 03/08/2012 - 19:30 | 2237703 Zero Govt
Zero Govt's picture

you were saying EV's pay themselves back in 20 years ...too bad the guarantee runs out in 3 years, the batteries pack up in 7 and soon to be bankrupt taxpayers can no longer subsidise their manufacturers past 2015

much like trains, buses, solar and wind then

Thu, 03/08/2012 - 18:42 | 2237551 JohnnyBriefcase
JohnnyBriefcase's picture

Seems legit.

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