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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


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Thu, 10/04/2012 - 10:13 | Link to Comment swissaustrian
swissaustrian's picture

Falling off a cliff "better than expected" - wait for the hard landing, we're still flying and haven't touched the ground yet.

Thu, 10/04/2012 - 10:14 | Link to Comment mayhem_korner
mayhem_korner's picture



I think that's called "Wile E. Coyote syndrome."

Thu, 10/04/2012 - 10:31 | Link to Comment BandGap
BandGap's picture

It's like falling off a 100' cliff versus a 1000' cliff. You're dead regardless, it's all about the mess that has to be cleaned up.

Thu, 10/04/2012 - 11:44 | Link to Comment Alea Iactaest
Alea Iactaest's picture

But with a 1000' foot cliff you have those couple of extra seconds... Kick the can?

Thu, 10/04/2012 - 10:16 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Silly Tyler.

This is just the New (World Order) normal.

Thu, 10/04/2012 - 10:13 | Link to Comment mayhem_korner
mayhem_korner's picture



When you have a cold, the thought of not having the flu "comforts" you.  When you have the flu, the thought of being alive "comforts" you.  The theory of relativity takes on a psychological persona (that plus skewed gov't data)...

Thu, 10/04/2012 - 10:18 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

With everything hanging on the CONfidence game it stands to reason that CONfidence would eventually go bi-polar.

<Could someone please tell me how I'm supposed to feel because I've got no clue.>

Thu, 10/04/2012 - 10:13 | Link to Comment Blasé Faire
Blasé Faire's picture

As a consumer, I am confident that this could get ugly.

Thu, 10/04/2012 - 10:15 | Link to Comment GeezerGeek
GeezerGeek's picture

Consumers will be more comfortable staying at home and playing video games than if they had jobs and had to commute to work every day.

Thu, 10/04/2012 - 10:17 | Link to Comment LongSoupLine
LongSoupLine's picture

"Consumer Confidence" is one of the largest grossly manipulated propaganda tools of the regime.  It's not an index, it's an "inspirational poster" fabricated as such.

Thu, 10/04/2012 - 10:21 | Link to Comment mayhem_korner
mayhem_korner's picture



Kinda like the Pepsi Challenge, eh?

Thu, 10/04/2012 - 10:19 | Link to Comment Shizzmoney
Shizzmoney's picture

This just in: the majority of upper middle class-to-uber rich people......are kind of aloof.  Not dumb: they wouldn't be rich if they were morons (although some are recipients of the lucky sperm club).  But these people get their information from MSM, will keep telling them everything is going to be OK (the same syndrome that the poor and minorities get from Democrats like Clinton: "The jobs are coming!"). 

There's a reason we invite these folks to the poker tables.

Thu, 10/04/2012 - 10:21 | Link to Comment GolfHatesMe
GolfHatesMe's picture

Hey Bernanke, Comfort This

Thu, 10/04/2012 - 10:23 | Link to Comment DeadFred
DeadFred's picture

What I see when I look at the chart is so much noise as to make the data practically worthless. Might as well read tea leaves as to poll consumers on their level of confidence in the economy. The charts show that consumers got bummed out in 2008-9 and not much has changed since then.

Thu, 10/04/2012 - 10:43 | Link to Comment Apply Force
Apply Force's picture

While there is noise I do think the trend is your friend.  I know that the few dollars I have are better spent than saved - the opportunity cost of holding the digital and/or green tickets is too high, and so my "consumer confidence" is equally high.  80% spent on needs/future needs, 10% or so toward wealth preservation, the remainder in green tickets.

Thu, 10/04/2012 - 10:26 | Link to Comment AynRandFan
AynRandFan's picture

5.2% fall in factory orders

MW spin:  BTE!

CNBC spin: "a less rapid loss of momentum in manufacturing activity."

The news is so heavily filtered by our Progressive media, it's a wonder we know anything.

Thu, 10/04/2012 - 10:29 | Link to Comment GolfHatesMe
GolfHatesMe's picture

Yes, we are prepared to Un-Bold the Parentheses

Thu, 10/04/2012 - 10:29 | Link to Comment mayhem_korner
mayhem_korner's picture



Pundits will be salivting over equities' "gains" today...all the while ignoring the 3%+ goose to today's retail gasoline futures.  And so everyone is poorer at the close.

Thu, 10/04/2012 - 10:33 | Link to Comment DavidC
DavidC's picture

CRApple flying and the Euro hitting 1.30, what's to worry about?


Thu, 10/04/2012 - 10:37 | Link to Comment edifice
edifice's picture

Yes, but what's the Southern Comfort index looking like? My guess is, parabolic uptrend.

Thu, 10/04/2012 - 10:42 | Link to Comment miker
miker's picture

Many of these indexes are manipulated.  Period.  The people over them have been convinced that it is their patriotic duty so as to help the public keep the faith.  Some will not play ball.  For example Rober Shiller is still very skeptical about the housing recover, even though it's obvious that the propaganda machine has been turned on for just the opposite.  Some won't compromise their ethics.  They don't go out and pronounce doom and gloom (except guys like Faber, etc.) but they won't be polyanna either. 

Anyway, I'm convinced alot of these stats are manipulated at the request of Geithner, etc. to the degree that the people doing it are comfortable.  Obviously the government can't MAKE them manipulate, but they can offer incentives.  Manipulation can be perfectly legal as many of these indexes have all sorts of variables/assumptions that can be tweeked.

Thu, 10/04/2012 - 10:51 | Link to Comment ziggy59
ziggy59's picture

Cure for consumer bipolar dx?

iBuy therefore iAm

Thu, 10/04/2012 - 11:05 | Link to Comment Squid Vicious
Squid Vicious's picture

bloomberg = pravda in the 80's

Thu, 10/04/2012 - 11:47 | Link to Comment Alea Iactaest
Alea Iactaest's picture

Not sure BBG would be my first (or only) choice, but OK.

Thu, 10/04/2012 - 11:31 | Link to Comment Tombstone
Tombstone's picture

I am in complete de-consuming mode in proportion to Benny's pumping mode.

Thu, 10/04/2012 - 11:53 | Link to Comment q99x2
q99x2's picture

Consumers are always confident enough to buy something. Although there are only two left in the US.

Thu, 10/04/2012 - 13:49 | Link to Comment Grand Supercycle
Grand Supercycle's picture


Stocks are being dragged up by yet more USD selling.

Price action today looks like the previously mentioned SPX Election Rally, but without the pullback I wanted beforehand.

Therefore the postponed correction when it happens, will be WORSE.

Thu, 10/04/2012 - 13:59 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Do not confuse consumer confidence with consumer spending. The relationship works in the leveraging up cycle, but not in deleveraging. In deleveraging consumer confidence is I have a job, I have a meager salary increase, my mortgage payment is strangling me less and I can repay a bit more of my mortgage and credit card debts.


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