Consumer Confidence Soars As Richest And Poorest Feel Better; Middle Class Worse Off

Tyler Durden's picture

The NY Fed is not the only place where Hopium grows anew. Moments ago the conference board reported its September confidence print, which soared by nearly 10 points to 70.3, from 60.6 in August, and expectations of a 63.1 print: this was the highest print since February when hopes that the European LTRO may work (it didn't), and the largest beat in seven months. Ironically, the February beat was driven by 6 month forward hope as well, hope which have been dashed by today's current conditions number as the spread between hope and reality once again collapses. Naturally, the driver for today's miraculous pre-election beat: 6 month outlook soared from 71.1 to 83.7. In other words, if the present did not quite work out as had been hoped, one can just defer hope one more time - surely this time the future will certainly be different. Finally, and as was to be expected, the "confidence" when broken down by income buckets: those with $50k and more in income feel better, those with $35k and less in income feel better. Who is worse off? Why the middle class of course, or those with incomes between $35-$50k.

 

This is what class warfare looks like. There has never been a better time to be poor.

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GetZeeGold's picture

 

 

Lobster......or cracked crab?

 

I am more equal than others's picture

The top tier - 'let them eat cake'

The bottom tier - 'thanks, sucka!'

The middle tier - is in a threesome - one side says suck it and the other is putting it to the kidneys. 

saturn's picture

Bernank owns all assets. Bernank owns you too. All hail the mighty Bernank!

Son of Loki's picture

"Bath Salts sales up by 10 points also as richest and poorest loaded up on confidence-laced BS (that's Bath Salts, laced w/ the real BS) this last month."

Watauga's picture

The Middle Class, or Working Class, ranges from about $80K at the low end to about $300K at the high end.  It is within that range that one gets few, if any, government (e.g., taxpayer funded) benefits, but still has less money than is necessary to gain any sort of meaningful wealth.

A family of 4, with income of $200K, and two college aged children, and a standard mortgage (assume an average between NYC and Smalltown, USA, of a mortgage of about $3K per month, including taxes and insurance, which is a basic 2000 square foot, four bedroom home on less than 1/4 acre in a suburb or small town 15-60 minutes from work).  Off the top of the $200K, govt in various forms and ways, takes at least $50K (Federal income, Social Security, Medicare, State, Local, gasoline, excise, personal property, sales. . .).  Since Social Security will never pay back anything paid in, another $30K goes straight into retirement funds for both income earners.  Already, the $200K is $120K.  Pay the mortgage and some upkeep/maintenance costs of about $40K.  Down to $80K.  Pay for college (at $200K you get $0 help from anyone), in-State tuition, at $25K per child, so down to $30K.  Now, pay for insurance of various kinds, from medical to life to car--say, about $18K.  Down to $12K.  This is what you have to pay for food, gas, clothing, and other essentials.  Forget about entertainment or travel or fun. 

Some will whine about taking retirement up front, but without it, you will have nothing in 15-20 years when you retire.  Some will whine that Timmy and Suzy can pay their own college way, or that they don't need college, or that they can go to community college for two years then transfer.  Okay, I will grant you that, but here we are looking at an average sort of scenario, and $25K for college, in-State, has become standard. 

This is working, middle class--$200K.  Go up to $250K, and you are not much better off, because chances are you are taking a job in an urban area with higher housing costs and higher cost of living.   Some will argue that $80K is not the low end of middle class, but it is at that point that you start to lose govt benefits for college tuition, so that is where I am marking it for my family of four.  If you have two kids in college and make less than $80K, you should be getting help for college.  Above $80K, and the help starts to diminish as income goes up.

 

edifice's picture

The Middle Class, or Working Class, ranges from about $80K at the low end to about $300K.

$80k at the low end!? Jesus, man, what part of the country do you live in? San Francisco?

Bangin7GramRocks's picture

I agree that his numbers are high, but where in this country can a family not be poor making less than 50k. I struggle on 150k. Goddamn deflation has really hit the middle class huh!

edifice's picture

Ah, I see. He was referring to family household income, not individual income. In that case, I agree... $80k would be the low end. And I agree with you, about not being able to support a family on $50k; it would be exceedingly difficult.

pazmaker's picture

I guess I'm poor and didn't know it!!!

 

I make less then $60k a year but more then $50k, we have 4 kids at home and wife doesn't work...  No food stamps no givernment aid and we don't qualify for earned income credit at the end of the year.

We don't struggle but we don't buy all the extras   only outstanding debt is a small mortgage though

edifice's picture

Kudos, man! I suppose it all depends on location. Here in the Denver area, $50k is sufficient for a single person with no mortgage or other debt to get by on.

mayhem_korner's picture

 

 

It's not the $50K...it's the no debt that makes it work.

mckee's picture

There are two paths brother, acquire more or require less.

tonyw's picture

I prfer the power of AND  acquire more AND require less

LMAOLORI's picture

 

 

Good to know paz that you take responsibility and live within your means I salute you. I think taxes other then for basic government are theft but if more people were like you America would be a better place. Your situation used to be the norm now people like you are the exception. The middle class are truly the one's being screwed in America today. The ultra rich like warren buffet use lot's of loophole's and even corporation's like GE use loopholes end up paying no taxes, the poor are takers who when they do pay taxes are refunded via the EITC. This is a bit dated but it shows the burden.

 

Middle Class--Not the Rich or the Poor--Pay Majority of Federal Taxes, Says CBO Data

snip

Middle-class Americans--not the rich or the poor--pay the majority of annual tax revenues taken in by the federal government, according to data released in a new Congressional Budget Office study. Households earning less than $34,300 per year, meanwhile, actually pay a negative average federal income tax rate.
 
Middle-class households that earned between $34,300 and  $141,900 paid 50.5 percent of all federal tax revenues in 2007 (the most recent year analyzed), according to the CBO study released Thursday, and households that earned between $34,300 and $352,900 paid 66.7 percent of all federal taxes.
 
Households in the top 1 percent for annual income (those earning more than $352,900) paid a healthy 28.1 percent of all federal taxes, but households in the lower income brackets paid relatively little. Those earning less than $34,300 paid only 5.2 percent of all federal taxes, and those earning less than $20,500 carried almost none of the federal tax burden (just 0.8 percent of the total) in 2007.

 

GE Filed 57,000-Page Tax Return, Paid No Taxes on $14 Billion in Profits

http://www.weeklystandard.com/blogs/ge-filed-57000-page-tax-return-paid-no-taxes-14-billion-profits_609137.html

 

 

 

Watauga's picture

$60K with 4 kids in the home?  You likely pay $0 federal income taxes and minimal, if any, state income taxes.  Your kids will go to college for free, or close to it (most prestigious schools, from Ivies to Northwestern to Stanford to the top tier public universities like UNC, UVA, UofM, Cal, UCLA will meet 100% of "demonstrated need," which, in your case, is total).

So, assume you have two of your four kids in college at any given time.  And assume one is at a $50K per year private college and one is at a $25K per year state university.  Instead of $60K, you are actually getting $60K + $75K (assuming 100% of "demonstrated need" is met), so you are now at $135K.  Assume, too, that you still pay no federal income tax--this is the equivalent of getting an additional $15K-$20K, since it is money you spend but never have to pay as tax. 

You are doing quite well under this scenario.

mrdenis's picture

I live in New Jersey ,after taxes (which combined we have one of the highest thefts) insurance,toll roads ,fees ,service charges......250K with 2 kids is just about making it .....throw in a few Bruce concerts and it might bust the budget ! 

Watauga's picture

I live in an expensive urban area, but the analysis is based on a sense of what the average is in the nation, which is why I use the NYC/Smalltown, USA terminology.

Son of Loki's picture

Watauga,

 

That still leaves you with enough money for a additional iPhone, right?

 

 

Watauga's picture

Interestingly, I use, sparingly, and without access to any data, including photos, a 7 year old LG flip phone. 

I could not afford an Iphone at half their price.

mayhem_korner's picture

 

 

Watauga...your post is evidence that those practiced in the art of hyperbole do not make anywhere near $200K.

FL_Conservative's picture

Why not?  I mean, everything's fixed, right?  It's just a beautiful day in the fucking neighborhood.

Cash2Riches's picture

The Rich are getting Richer, The poor are getting more foodstamps and the middle class is getting screwed.

 

http://davidmorganblog.blogspot.ca/

Punct's picture

Who cares about the middle class? Let's build a country where there are only really rich and really poor people so that the super rich can enslave the super poor easier.

Abraxas's picture

It's easier for rich to use the fear of poverty to control the middle class. Only the middle class became too expensive for the rich.

Dr. Richard Head's picture

I am very well off into the "rich" class and I have enslaved no one, well except for the people that are applying for jobs and have been convicted in the lower tier of the 2-tier justice system.  In any event, I don't feel better or have much hope - aside from my whiskey. 

mrktwtch2's picture

i only make 36k and i dont feel better..guess i need some hopium..lol

fonzannoon's picture

Bernanke can stop the QE before he starts. 2/3 of people asked feel better. Lets stop the QE and start raising rates and get the party started!

Abraxas's picture

Towards the two-class system:

1% of the middle class goes up, 99% goes down.

LoneStarHog's picture

Well...I feel better now knowing that everyone else feels better...I guess feeling positive is catching...\Sarcasm Off

Go Tribe's picture

Yeah, no kidding! Someone show me a chart that maps consumer confidence index as a predictor of GDP growth or S&P500 performance please. Oh...okay, just asking.

ItsDanger's picture

If you're making 40K, you're lower income class.

pods's picture

That was my thought as well.  

If you can qualify for the EITC, you are not middle class.

Just another re-writing of the definition of classes.  In ten years those making $10 per hour will be upper middle income.

Downward spiral here we come.

pods

DavidJ's picture

It depends where.  40K in new york city is lower income for a family of 4.   In rural Kentucky, it is middle class.

Mercury's picture

AKA: the top and the bottom vs. the middle.

Last call people, pick a side...rich or poor.

 But you can't stay here...

Randall Cabot's picture

It should be a terrific Christmas for the economy!!!

pods's picture

Who would have thought that an emotional survery would come out right before retail season kicks off?

Blatant propaganda is all it is.  

Do you feel better?  Good.  Now go back to sleep and by all means, start creating debt!

pods

RSBriggs's picture

Or just before an election?  I'm thinking the polls will show confidence at 110% by November 6th, and Obama up by 20 percentage points (among polled democrats)....

pods's picture

As to the election, they will be happy if you go out and vote.  Whichever evil bastard clown puppet gets in there will be able to say that he has a mandate to fuck each and every warm body in the ass.

It is not so much as who wins, but the number of people who vote which matters.

The biggest job of the government is to convince us why we need them.

pods

Son of Loki's picture

Christmas? Wait until the Internet Sales Tax hits retailers and consumers. 9% for some states.

Additionally, many municipalities are adding local taxes attempting to solve their massive deficits of public pensions, etc.

 

I am already buying everything online for Christmas before: 1) the sales tax hits; and 2) prices go higher.

 

I am not sure how much longer China can subsidize its textile exporters. When that stops, cotton goods (and similar) will skyrocket.

 

Shizzmoney's picture

Those with $35k and less in income feel better.

Consumers are fucking stupid.

But I guess thats the fucking point.

Dr. Richard Head's picture

Well, according to SAT verbal scores, I would assume the lower class thinks better means shitty.  You know, like phat being sweet over fat or something like that. 

disabledvet's picture

The point of having a bullish THESIS is not have you agree or disagree with me. The point is to have an "it" and then force you to agree with THAT. The backdrop to the greatest counter-cyclical fiscal policy in History is Fukushima, the collapse of the EU, Greece, the Arab Revolt, an Islamic Counter-revolution, the disintegration of the Comminist Party in Beijing, and a ramping of the war effort on a monumental scale courtesy of "the Black Bush." interest rates have PLUNGED on this news...it is only a matter of time now before this "thing" starts paying for itself. And right behind that is comming an all out invasion of the Islamic counter-offensive. Time to ruck-up is fassssst approaching.

lesterbegood's picture

On the horizon, Hopium bonds?

whotookmyalias's picture

The markets are up today, it must mean everything will be OK.  I guess I've been worried for nothing.

pods's picture

If we are going to live out a dystopian novel, can I at least get some Soma?

pods