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Confidence Beats But Remains Adrift Of Equity Bliss

Tyler Durden's picture





 

While it is certain that derivative-hopers and uptick-algo-watchers are relieved to see a better than expected rise in University of Michigan's Confidence index (thanks to a generous rise in current economic expectations - which we suspect is as co-dependent on the miracle of rising stock prices as it is used to reflexively justify higher equity prices). Stocks are bid (briefly) on this but remain, medium-term, notably dislocated from the real state of less-than-exuberance among the people. And in great rhetorical questions, this one remains: are stocks now higher because rising consumer confidence, or is consumer confidence rising because stocks just spiked.

 

 


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Fri, 02/15/2013 - 11:08 | Link to Comment nobusiness
nobusiness's picture

My confidence sucks and I am losing money being short in the stock market.  So I would say it is the rising stock market keeping confidence up.

Fri, 02/15/2013 - 11:28 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Just amend the Federal Reserve Act to let Bernanke directly buy equities & treasuries with freshly printed FRNs. Why make him jump through hoops?

That way, we can all just set our expected course for a real unemployment rate of 25%, 75 million Americans on SNAP/EBT, a real GDP growth rate of -4% annually, an official U.S. national debt of 23 trillion USD (with 2.5 trillion USD deficits), food & energy inflation at an honest 10% per annum, and Dow 20,000, all set against the continuing backdrop of a worsening, spiraling depression, by the time The Bernanke's current term is over in 2014, and it will all be far less newsworthy.

Bernanke can then pass the Fed's balance sheet, sovereign bonds, equities (lots of CRM, LULU, HBLF & PCLN, etc. etc.), real estate from Maiden Lane (including The Red Roof Inn) onto his successor, and say "sayonara, bitchez!"

Fri, 02/15/2013 - 11:13 | Link to Comment Cursive
Cursive's picture

Who the hell are the survey participants?  Reminds me of the Literary Digest poll or the Gallup blunder of the 1948 presidential election.  Not very representative of the population.

Fri, 02/15/2013 - 11:09 | Link to Comment DavidC
DavidC's picture

Well, are the bearish of us on ZH just completely wrong?

I honestly don't know now, we get the GDP figures worse than expected, today's manufacturing output MUCH worse than expected and yet we keep getting to new highs on the basis of 'sentiment' figures (Russell 2000).

DavidC

Fri, 02/15/2013 - 12:25 | Link to Comment busted by the b...
busted by the bailout's picture

We are wrong on the direction of the market, so far, and to a lesser extent, on the economy too, so far.  But the reason why is that we refuse to be duped by the scam of,

1)  Ben giving nearly zero interest rate loans to banks, and pumping out newly printed free money in exchange for Ts,

2)  which keeps Wall Street happy and Congress too as it can continue their gridlock games and can kicking,

3)  Wall Street then buys stocks with part of the flow, creating low risk gains as long as the flow continues,

4)  rising stock prices makes those lucky enough to have 401Ks happy as stocks rise, so they buy more stuff, adding to GDP,

5)  and those who don’t have 401Ks are happy because they see stock prices going up and assume everything is getting better and better all the time!  So they buy more stuff and add to GDP too.

It’s a "virtuous" (but fraudulent) circle that will continue until the economy slips back into “official” recession and corporate earnings begin to fall, or somebody loses faith in Ts or the dollar, or Ben stops printing, imo.

Fri, 02/15/2013 - 11:11 | Link to Comment jcaz
jcaz's picture

Ah yes- the U of M poll, where they call 30 households..... Priceless.....

Fri, 02/15/2013 - 11:11 | Link to Comment Wm the Shrubber
Wm the Shrubber's picture

Does any of it really matter anymore?  The die is cast, and the game makers are fully in control.  Those of us who pine for truth and integrity in markets and price discovery are naive idealists, and this is an expensive position to hold.  I refuse to play the game any longer.  See you on the sidelines.

Fri, 02/15/2013 - 11:13 | Link to Comment Eireann go Brach
Eireann go Brach's picture

Obama called in the number this moring and made sure it was higher! My hope is that this market crashes down under his watch, he deserves to go up in flames for creating an economy that is an illusion based on lies, fudged numbers and Fed funny money! That will be your fucking legacy!

Fri, 02/15/2013 - 11:13 | Link to Comment Everybodys All ...
Everybodys All American's picture

The con continues.

Fri, 02/15/2013 - 11:40 | Link to Comment AlphaHunter001
AlphaHunter001's picture

the con? you mean market sentiment? yes, this intractable part of human nature is a 'con' LOL

 

I guess all marketing firms should close shop because according to you, market sentiment and trends don't really exist or mean anything

 

FYI - generally speaking, market sentiment is a great contrary indicator.

 

You might as well learn something while you're online

Fri, 02/15/2013 - 11:14 | Link to Comment disabledvet
disabledvet's picture

Markets get ahead of themselves...that should be taken as a good thing...for a time. At some point the economy's "refusal" to grow will "take the pound of flesh." what we do know for a fact is that the euro zone is officially deflating...and they are not responding correctly to this fact. The technical term for deflation is that it "comes in waves." in other words like a hurricane "the PM's get slammed"...but that's just the outer bands. "the eye is still a long way off."

Fri, 02/15/2013 - 11:28 | Link to Comment nobusiness
nobusiness's picture

political corruption, meteors exploding in the sky debt beyond belief.  Makes me confident

Fri, 02/15/2013 - 11:43 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Hopium zealots are in a constant euphoric lather because the equity markets are approaching new highs.  As was pointed out last week, when the Dow was last this high in October 2007, the price of gold was around $700.  Here's a deeper-dive tale of the "recovery" tape:

Silver: Oct. 2007=$13, Today=$30

Gold:  Oct 2007=$760, Today=$1,620 (or whatever they hammer it to...)

Reported Unemployment:  Oct 2007=4.7%,  Today=7.9%

Case-Shiller Home Index: Oct 2007=190.9,  Today=144.9

New Home Sales:  2007=774K, 2012=367K

Housing Units Built:  2007=1,500K, 2012=651K

Fed Reserve Balance Sheet: Oct 2007=$873B, Today=$3.11T

Food Stamp Recipients: Dec 2007=28.7M, Today=48.2M

Federal Spending, Annual Rate:  2007=$2.7T, Today=$3.6T

Fed Tax Revenues, Annual:  2007=$2.5T, Today=$2.4T

Retail Gasoline Price:  2007=$2.84/gal, 2012=$3.68/gal

Money Supply:  Oct 2007=$851.6B, Today=$2760.7B

Personal Bankruptcies: 2007=801K (75% up from 2006), 2012=1,245K

Foreclosures: 2007=405k (40% up from 2006), 2012=742K

 

Don't be fooled by the 'recovery' meme, and be cautious about entering the pre-slaughter sheep pen that is the equity markets.

Fri, 02/15/2013 - 11:54 | Link to Comment Bryan
Bryan's picture

"are stocks now higher because rising consumer confidence, or is consumer confidence rising because stocks just spiked."

Both stocks and confidence are proverbially wearing no clothes.  Once one or the other side finally sees that, it will be a fun day of reckoning.

Fri, 02/15/2013 - 11:55 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Unfortunately, it is not going to be a "day" of reckoning...it is going to be more like 10 years.

Fri, 02/15/2013 - 12:23 | Link to Comment busted by the b...
busted by the bailout's picture

 

Fri, 02/15/2013 - 13:25 | Link to Comment dadichris
dadichris's picture

confidence = "con"

Fri, 02/15/2013 - 17:00 | Link to Comment larz
larz's picture

pro is the opposite of con

progress is the opposite of congress

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