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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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Tue, 09/25/2012 - 10:13 | 2827687 mckee
mckee's picture

iConfidence

Tue, 09/25/2012 - 10:17 | 2827704 GetZeeGold
GetZeeGold's picture

 

 

Looking Good Billy Ray!

http://www.youtube.com/watch?v=XtKydtoLucc

 

Tue, 09/25/2012 - 10:31 | 2827756 mckee
mckee's picture

Feeling good Louis!

Tue, 09/25/2012 - 10:33 | 2827765 GetZeeGold
GetZeeGold's picture

 

 

Lobster......or cracked crab?

 

Tue, 09/25/2012 - 10:43 | 2827790 I am more equal...
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. 

Tue, 09/25/2012 - 10:33 | 2827766 saturn
saturn's picture

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

Tue, 09/25/2012 - 11:12 | 2827938 Son of Loki
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."

Tue, 09/25/2012 - 10:35 | 2827774 Watauga
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.

 

Tue, 09/25/2012 - 10:46 | 2827800 edifice
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?

Tue, 09/25/2012 - 10:49 | 2827814 Bangin7GramRocks
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!

Tue, 09/25/2012 - 11:00 | 2827880 edifice
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.

Tue, 09/25/2012 - 11:23 | 2827990 pazmaker
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

Tue, 09/25/2012 - 11:35 | 2828053 edifice
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.

Tue, 09/25/2012 - 11:42 | 2828083 mayhem_korner
mayhem_korner's picture

 

 

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

Tue, 09/25/2012 - 13:52 | 2828677 mckee
mckee's picture

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

Tue, 09/25/2012 - 14:11 | 2828746 tonyw
tonyw's picture

I prfer the power of AND  acquire more AND require less

Tue, 09/25/2012 - 13:55 | 2828680 LMAOLORI
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

 

 

 

Tue, 09/25/2012 - 14:37 | 2828730 Watauga
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.

Tue, 09/25/2012 - 15:04 | 2828993 mrdenis
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 ! 

Tue, 09/25/2012 - 14:12 | 2828748 Watauga
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.

Tue, 09/25/2012 - 11:15 | 2827958 Son of Loki
Son of Loki's picture

Watauga,

 

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

 

 

Tue, 09/25/2012 - 14:09 | 2828735 Watauga
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.

Tue, 09/25/2012 - 11:40 | 2828072 mayhem_korner
mayhem_korner's picture

 

 

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

Tue, 09/25/2012 - 10:57 | 2827864 FL_Conservative
FL_Conservative's picture

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

Tue, 09/25/2012 - 11:09 | 2827925 Cash2Riches
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/

Tue, 09/25/2012 - 15:43 | 2829213 vulcanraven
vulcanraven's picture

iSpend

Tue, 09/25/2012 - 10:14 | 2827688 Punct
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.

Tue, 09/25/2012 - 10:18 | 2827708 Abraxas
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.

Tue, 09/25/2012 - 10:33 | 2827767 Dr. Richard Head
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. 

Tue, 09/25/2012 - 10:14 | 2827690 mrktwtch2
mrktwtch2's picture

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

Tue, 09/25/2012 - 10:15 | 2827694 fonzannoon
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!

Tue, 09/25/2012 - 10:16 | 2827698 Abraxas
Abraxas's picture

Towards the two-class system:

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

Tue, 09/25/2012 - 10:18 | 2827709 LoneStarHog
LoneStarHog's picture

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

Tue, 09/25/2012 - 10:51 | 2827821 Go Tribe
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.

Tue, 09/25/2012 - 10:18 | 2827711 ItsDanger
ItsDanger's picture

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

Tue, 09/25/2012 - 10:25 | 2827736 pods
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

Tue, 09/25/2012 - 10:31 | 2827753 DavidJ
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.

Tue, 09/25/2012 - 10:24 | 2827715 Mercury
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...

Tue, 09/25/2012 - 10:24 | 2827728 Randall Cabot
Randall Cabot's picture

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

Tue, 09/25/2012 - 10:51 | 2827820 pods
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

Tue, 09/25/2012 - 10:58 | 2827868 RSBriggs
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)....

Tue, 09/25/2012 - 11:09 | 2827926 pods
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

Tue, 09/25/2012 - 11:23 | 2827983 Son of Loki
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.

 

Tue, 09/25/2012 - 10:25 | 2827735 Shizzmoney
Shizzmoney's picture

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

Consumers are fucking stupid.

But I guess thats the fucking point.

Tue, 09/25/2012 - 10:36 | 2827777 Dr. Richard Head
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. 

Tue, 09/25/2012 - 10:25 | 2827737 disabledvet
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.

Tue, 09/25/2012 - 10:27 | 2827742 lesterbegood
lesterbegood's picture

On the horizon, Hopium bonds?

Tue, 09/25/2012 - 10:27 | 2827744 whotookmyalias
whotookmyalias's picture

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

Tue, 09/25/2012 - 10:53 | 2827828 pods
pods's picture

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

pods

Tue, 09/25/2012 - 10:28 | 2827746 JOYFUL
JOYFUL's picture

poorest feeling better?@?@?!!!

how kreative of the pollsters to know just when in the day to hit up the fella komin outta Jimz Package Liquors wit the bottle wat's gonna get im thru another day of down n out....in a Merika komin to yu real soon!

as Alinsky said....yu gotta know yur base!

 

http://youtu.be/_b2F-XX0Ol0 \Gil Scott Heron -The Bottle

"dollarnine git a bottle o wine, dollarnine gitme a bottle o wine!"

Tue, 09/25/2012 - 10:35 | 2827773 irie1029
irie1029's picture

Speaking of propoganda and msm bullshit just got this correction from CNN  and oh by the way on a diluted dollar.

 

Correction: Home prices rose in July to their 2003 level, but remain lower than the peak in 2006. CNN's previous alert erroneously stated that home prices had risen to the highest level in nine years. 

Tue, 09/25/2012 - 10:39 | 2827783 yogibear
yogibear's picture

If you get,

Section 8 - free rent,

lifeline - free cell phone

snap card, - free food

welfare - free income

work for cash,

Probably feeling better.

Tue, 09/25/2012 - 10:55 | 2827840 optimator
optimator's picture

You forgot disability, free education, free summer school and camps for all the money making kiddos you have,  in Massachusetts a free car if you agree to look for work, and all the free time you want to propagate.

Tue, 09/25/2012 - 11:01 | 2827886 RSBriggs
RSBriggs's picture

And SNAP, and EBT cards, and free cell phones, and disability payments and ...

Tue, 09/25/2012 - 10:44 | 2827793 edifice
edifice's picture

$35k-$50k is a pretty narrow definition of "Middle Class." I believe the spread is more like: $35k-$75k, or so. No one I know who makes an income below $75k feels any better than they did, four years ago.

Tue, 09/25/2012 - 11:06 | 2827907 RSBriggs
RSBriggs's picture

At 86K, paying 38% Federal, State, County income taxes and city sales taxes and have to pay nearly 2k per month rent to live close enough to an urban area to make that kind of wages.  I'm not doing better.  Honestly?  I can't afford to make this much money - It's costing me 88K per year to do it.

Tue, 09/25/2012 - 10:47 | 2827803 caconhma
caconhma's picture

Do we really can trust to any government statistics?

And finally, the patient, the US economy, has a cancer. All these QEs are just pain-managing medications to make the patient feel less pain for now but it is doing nothing to treat and/or cure the disease itself.

Tue, 09/25/2012 - 10:47 | 2827804 mainuh1
mainuh1's picture

EVERYONE is feeling better, except those that pay their fair share of taxes! The end is near!!!

Tue, 09/25/2012 - 10:51 | 2827809 Bicycle Repairman
Bicycle Repairman's picture

It's a good time to be poor, because entitlements are not going anywhere.  The middle class has suspected that they have been chumps for 40 years now.  Guess what?

Ask yourself these questions: 

o  What happens to the USA if the middle class disappears?

o  What will the middle class do to "defend" itself?

The answer is nothing.

Tue, 09/25/2012 - 10:50 | 2827818 optimator
optimator's picture

The middle class will be done away with, leaving only the rich and the poor.  Then the 1% will go after the poor.

Tue, 09/25/2012 - 11:04 | 2827905 Bicycle Repairman
Bicycle Repairman's picture

The poor are quite pliable, easy to maintain and make good soldiers.  In short they are good livestock.  The Rich like having their livestock.

Tue, 09/25/2012 - 10:56 | 2827848 boiltherich
boiltherich's picture

Rich and poor feel more confident, middle gets the blues.  Easy to see why, the rich were just handed the keys to the treasury by Ben Bernanke, they don't feel better, they are dancing on clouds.  The poor do feel better because the same gift to the rich promises that they will indeed be able one day to get a job, or at least their kids might, and of course the fact that QE makes things worse not better does not matter, because it means Romney who would put them all into FEMA camps for being ugly and unwashed will not have any chance to be elected. 

The middle though, it is not as if they are down about all this because their financial literacy makes them aware of the long-term ramifications of QE, because of course they have no financial literacy, it is that history has demonstrated to them an iron rule, any time the rich and poor are happy it is they who will pay through the nose.  Maybe not financially literate, but a sort of common wisdom in reality I guess.  And they know they are clinging to the middle class by a thread as it is, they know just enough about economics to know that we have been in a depression for years and nothing anyone has done has made it better, so doing massively more offers no hope either. 

Tue, 09/25/2012 - 11:34 | 2828002 Bicycle Repairman
Bicycle Repairman's picture

Ever notice how the entitlement class lives as well as the working middle class?  Well, they do.  It's hard to face up to it, but if you are working middle class, you've been had.  And it's only going to get worse.

Do not waste your time with the political class.  They are the guys that created the entitlement class.  They don't care about you.  They've got their voters locked up.

I know reading hurts the heads of some Gen X types, so here is a song that explains it all:

http://www.youtube.com/watch?v=Ovu0_VFJsBY

Tue, 09/25/2012 - 11:59 | 2828172 Urban Redneck
Urban Redneck's picture

Just wait til the first paycheck hits after 1/1/13- or for the really slow to catch on- until 4/15/14.

Been a whole lot of ZIRP since Bubba was in the White House, and none of those tax brackets or exemptions are indexed to inflation...

The 20% buggering of the well off won't feel good, but it's compared to the snuff job that is going to be done on the poor- can someone trying to libe now on 25k afford almost 2k taxes (or  $150/month to Uncle Sam) on their existing pay.  Neither food nor gas is anywhere as cheap as it was during the 90's.  And that number doesn't even take into account the expiring SS Trust Fund pillaging that is also set to expire.

The BS class warfare is the same as always, "Tax the Rich, Rape the Poor,"  Trouble is the poor are too dumb, or too gullible, to figure out the score until it's too late

Tue, 09/25/2012 - 12:10 | 2828214 thomasincincy
thomasincincy's picture

10 cent wings in the 90's I think

Tue, 09/25/2012 - 12:30 | 2828297 thomasincincy
thomasincincy's picture

I came to an estimate that between 15-30% of the average persons NET income goes into their car each year and it depends on whether or not they have a car payment and full coverage insurance in this gap of percentage. If you look into the average household income, I think you will see there is no where to go and a single person on 25k is fucked. IMO... Our problem isn't the price of gas, it's auto dependancy. Auto dependency is also a driver behind rising health care costs, insurance etc...etc...

Tue, 09/25/2012 - 16:06 | 2829298 Urban Redneck
Urban Redneck's picture

Subprime auto CDS to support the State's GM boondoggle, and deepening the hole so the debt serfs can't escape...

Tue, 09/25/2012 - 12:33 | 2828312 thomasincincy
thomasincincy's picture

Over 40k people die each year in auto related accidents and not to mention the many hunderds of thousands of injuries in the US alone

Tue, 09/25/2012 - 12:31 | 2828299 foodstampbarry
foodstampbarry's picture

Down here in the ghetto we be drivin with $4000 dollar rims and some pimp-ass base Boomin!

When was the last time you saw a shitty car in the ghetto? Thanks middle class!

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