Is This Why Consumer Confidence Is "Overbought"?

Tyler Durden's picture

It would appear the US consumer has become entirely bipolar. Bloomberg's US Consumer Comfort index has swung in +/- 3-sigma ranges for much of the last few months as hope turns to despair and once again rises phoenix-like to hope. The last four weeks have seen the biggest rise in 'comfort' in six years - mirroring quite closely the chaos that was occurring in the lead up to the financial crisis. What is a little perplexing - with all this exuberant optimism and confidence, that factory orders just plunged off a cliff - falling the most since Jan 2009 (though slightly better than expected). Or is it so bad that it can only get better as the imploding economy is imploding slightly slower than expected?

 

Bloomberg Consumer Comfort Index surges the most in six years over the past 4 weeks... but things look a little eery... (note the schizophrenic swings in the lower pane)

 

as Factory Orders fall off a cliff...

 

Charts: Bloomberg