Surge In Consumer Confidence To 2008 Levels Sends 10 Year Yield To 2013 Highs

Tyler Durden's picture




 

The Conference Board's measure of just how awesome everyone feels just hit its highest level since February 2008 driven by an impressive surge in 'Expectations'. This should surprise nobody: as we previewed earlier today, "just to make sure that the market closes well green today, the only actual "data" will be yet another reading of consumer "confidence" this time from the Conference Board. Expect this to surge on news that it is Tuesday and stocks have nowhere to go but up, which in turn will send stocks, where else but, up." In short: reflexivity in all its glory. And to think it was just 10 days ago that the market reacted in absolutely the same way to a UMichigan confidence print that beat expectations by the most ever and to the highest since 2007. Perhaps if the US had one consumer confidence metric for every day of the week, all days would be like Tuesdays.

The last two months has seen 'hope' rise by its fastest rate in 18 months as this 'survey' of sentiment (as opposed to hard economic data) joins the UMich survey at pre-crisis levels of happiness. Of course one can cherry-pick the exuberant and dysphoric but we thought it interesting that the plans to buy a home, a car, or a TV within the next six months fell.

 

The reaction, equity prices and Treasury bond yields spike with the latter breaking 2013 highs to 13 months highs.

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Tue, 05/28/2013 - 10:15 | 3603406 mattdubz86
mattdubz86's picture

where is the USMACRO bloomberg ticker to show all these data points raising that line to catch up to S+P?

Tue, 05/28/2013 - 10:16 | 3603408 Debtonation
Debtonation's picture

Confident about what?

Tue, 05/28/2013 - 10:21 | 3603428 DavidC
DavidC's picture

Debtonation,
Likewise. What am I missing here?

DavidC

Tue, 05/28/2013 - 10:51 | 3603539 markettime
markettime's picture

Whats the magic number? 2.5% and we see the 10 year get sucked out the door? QE 150 BIL per month baby! I wonder if Mars is accepting application for citizenship. 

Tue, 05/28/2013 - 11:03 | 3603576 fonzannoon
fonzannoon's picture

Lower. 2.3%ish

 

Tue, 05/28/2013 - 10:22 | 3603438 jbvtme
jbvtme's picture

about the price of dogs and ponies

Tue, 05/28/2013 - 10:24 | 3603446 PiltdownMan
PiltdownMan's picture

Confident about Beranke and The Fed's witches coven printing oodles more money and keeping interest rates at dangerously low levels.

Look at chart of Case Shiller house prices and consumer confidence. Oy vey!

http://confoundedinterest.wordpress.com/2013/05/28/double-double-toil-and-trouble-case-shiller-hpi-rises-10-9-yoy-lps-hpi-rises-7-6-bubble/

Tue, 05/28/2013 - 10:16 | 3603409 fonzannoon
fonzannoon's picture

The ten year fucking treasury is still 2.08%. I would give my neighbors left nut to have one JGB selloff type day and send the 10yr to 3%.

Tue, 05/28/2013 - 10:18 | 3603417 LawsofPhysics
LawsofPhysics's picture

Exactly, how much more will it cost the taxpayer to fund all those liabilities now?  "Winning"  I remain long guillotines, black markets and sharecropping.

Tue, 05/28/2013 - 10:26 | 3603451 EscapeKey
EscapeKey's picture

Won't happen. If anything anywhere close were to materialize;

a) the bond market would shut down

b) the PPT/PDs would immediately hit every order to sell, once the market would re-open

c) the Federal Reserve would announce "new and extraordinary measures" to "calm the markets" (aka increase the pace of bond purchases)

d) Lots of Federal Reserve papers would emerge telling us that since these purchases are "temporary", the bond purchases are in fact not inflationary.

Tue, 05/28/2013 - 10:33 | 3603478 fonzannoon
fonzannoon's picture

It may not happen, but they will have to smack down equities to avoid it. They are walking that tightrope right now. If this market euphoria keeps up rates will continue to climb. They have had it both ways, but they are going to have to make a choice.

Tue, 05/28/2013 - 10:35 | 3603483 gjp
gjp's picture

Why can't they just buy both markets and keep them rising forever?  Who's to say they aren't doing that already?  Japan is.

Tue, 05/28/2013 - 10:37 | 3603491 fonzannoon
fonzannoon's picture

They can do that. That is the plan. It is why the currency will die first.

Tue, 05/28/2013 - 10:41 | 3603511 gjp
gjp's picture

I agree, so no paper market 'has to' crash in nominal terms.

And it's all currencies (not one currency crashing versus another), which is why the gold fight is where all the real action is in the global monetary war.  So far TPTB appear to be winning with paper gold shenanigans, but something's got to break soon.

Tue, 05/28/2013 - 10:43 | 3603518 LawsofPhysics
LawsofPhysics's picture

They already are, unfortunately exponential equations are a bitch and the underlying usury (and underlying energy demand/cost to deliver) is what is driving this as the debt-servicing is increasing exponentially.  Boom motherfuckers...

http://www.marketwatch.com/investing/bond/10_year

 

Tue, 05/28/2013 - 10:55 | 3603555 tarsubil
tarsubil's picture

Once all the non-club member shorts are gone, the shears will come out. Win-win (for the 0.1%).

Tue, 05/28/2013 - 10:26 | 3603455 gjp
gjp's picture

Surging yields send the financials spiking.  I guess it makes sense because they can charge that much more on the zero-percent money the still get from the Fed and have in excess reserves.  Quoted yields are only for the taxpayer and the plebes ....

Tue, 05/28/2013 - 10:57 | 3603563 Its Only Rock N Roll
Its Only Rock N Roll's picture

"We never saw it coming!"...said ever market "expert" on T.V.

hint: it's coming 

Tue, 05/28/2013 - 10:16 | 3603410 Shizzmoney
Shizzmoney's picture

I just cease to understand it......people's paystubs are LESS that last year.  How in the world can anyone have confidence in that?

Tue, 05/28/2013 - 10:20 | 3603427 Winston Churchill
Winston Churchill's picture

It is beyond all understanding unless everyone is  now a manic depressive.

Self delusion is now fact.Sure to end well.

Tue, 05/28/2013 - 10:24 | 3603445 Jumbotron
Jumbotron's picture

George Carlin had the answer long ago....

"American Bullshit"

http://www.youtube.com/watch?v=WbzwDFvc-Xc

http://www.youtube.com/watch?v=bu3hy4OMX38


 

 

Tue, 05/28/2013 - 10:28 | 3603459 EscapeKey
EscapeKey's picture

Very easy. Just adjust who you sample.

Instead of sampling people in towns like Detroit, St Louis and Cleveland, just claim the people in these have moved to New York, San Francisco and Phoenix and sample those.

Tue, 05/28/2013 - 10:29 | 3603461 ebworthen
ebworthen's picture

They see the DOW headline numbers and cheer yet have no idea it is their children's future being mortgaged.

Watching the nightly network news with their favorite anchor and lots of happy pill/happy bank/happy people commercials helps too.

Tue, 05/28/2013 - 11:12 | 3603601 Winston Smith 2009
Winston Smith 2009's picture

"They see the DOW headline numbers and cheer"

Thus, the "wealth effect" that The Bernank wants, but far more accurately called "irrational exuberance" by Greenspan. 

I look forward with great anticipation for the next crash which will make 2008 look like nothing and allow those with cash a short window of massive deflation to buy land and real estate for a pittance before inflation takes over.

Tue, 05/28/2013 - 10:41 | 3603510 Kaiser Sousa
Kaiser Sousa's picture

"How in the world can anyone have confidence in that?"

they dont...its all bullshit...

next time you pull up to a freeway entrance or exit ramp ask the mother fucker standing there with a cardboard sign beggin for food or money "do you feel CONfident....." i doubt it

Tue, 05/28/2013 - 11:15 | 3603612 ejmoosa
ejmoosa's picture

Because they wrongly believe that things could not get any worse.

Tue, 05/28/2013 - 10:17 | 3603413 Agent P
Agent P's picture

Do they count if they're CONFIDENT they won't be buying a house, car or TV? 

Tue, 05/28/2013 - 10:19 | 3603420 Obchelli
Obchelli's picture

What is the 10 Y Bond yield which will trigger crash in a bond market? (regardless fed buying 85 bln per month?)

Tue, 05/28/2013 - 10:20 | 3603423 asteroids
asteroids's picture

Want to bet the number of people on food stamps also goes up... Now thats consumer confidence for you.

Tue, 05/28/2013 - 10:20 | 3603424 FieldingMellish
FieldingMellish's picture

Cut it any way you want, we have been on the wrong side of the trade for a year now. Gold down, USD and ES up. Its been painful.

Tue, 05/28/2013 - 10:25 | 3603450 Agent P
Agent P's picture

$85 billion + $85 billion + $85 billion + $85 billion...

It starts to add up after awhile.  

Tue, 05/28/2013 - 10:41 | 3603514 IMACOINNUT
IMACOINNUT's picture

gold and silver are on sale --- everything else IS bullshit

Tue, 05/28/2013 - 10:52 | 3603542 ParkAveFlasher
ParkAveFlasher's picture

You have "traded" gold for one year.  In that time there has been enormous volatility/opportunity.  What are you complaining about?

Tue, 05/28/2013 - 11:24 | 3603633 Pareto
Pareto's picture

+1 Yup.  Its like everything I have and everything I'm thinking is ALL on the wrong side.  Thats the reaility.  Plain and simple.  Perhaps there is a bubble in ZH, because thats what it is starting to feel like.

Tue, 05/28/2013 - 10:20 | 3603426 madbraz
madbraz's picture

Didn't Bernanke assert in Congress depositions that the purpose of QE was to bring interest rates down?

 

Well, 10 year yields are 50 basis points higher than when QE started, much like in all prior QEs.

 

That this turd is allowed to BS his way through life to benefit banks is just disgusting.

Tue, 05/28/2013 - 10:21 | 3603429 Yen Cross
Yen Cross's picture

    And some people think 'Chair Satan' is going to lower the alcohol content in the punch bowl. roflmao!

Tue, 05/28/2013 - 10:21 | 3603430 ebworthen
ebworthen's picture

It's Mad Hatter Tea Party Tuesday!

Reflated housing and consumer perception bubbles.

For a minute there all that "not since 2007-2008" talk was worrying me.

Took my SOMA and today is a POMO day so all is right with the world and markets now.

Tue, 05/28/2013 - 10:22 | 3603436 lunaticfringe
lunaticfringe's picture

This marks twenty Tuesdays in a row where the DJIA is up. Behold the power of non stop stimulus.

Surge in consumer confidence driving this? Bullshit. 85 billion a month is driving this daisy.

Tue, 05/28/2013 - 10:22 | 3603437 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I don't know about other parts of the US but here I am seeing all sorts of people driving around in BMWs and Lexus' that have no business owning them, probably due to 100 month car loans and general subprime auto lending documented here recently. You know I'd feel awesome too until the credit collectors started calling me nonstop and I have to hide the car to keep it from being repo'd. Once that happens you'll see that consumer confidence level plunge or new lines of subprime loans to keep that wealth effect going so people feel richer. If I was an economist I'd be monitoring things like repo's and credit collectors for the general health of the economy more so than the economic data from the artist formerly known as the BLS who is now the BS. Even if these surveys aren't rigged the central planners are rigging the credit markets in the background to blow economic stimulus bubbles.

 

Tue, 05/28/2013 - 10:25 | 3603449 ebworthen
ebworthen's picture

Lot's of job postings in my town for work at collection agencies; callers & I.T. help - running for over a month now.

That's bullish, right?

Tue, 05/28/2013 - 11:00 | 3603570 ParkAveFlasher
ParkAveFlasher's picture

The car industry has it all figured out.  At one point they calculated that there is no point to selling to would-be owners , that leasing (renting) is the way to go, and they'd rather act as a font of interest payments for the financing banks to slurp at.  There is a captive "market" in the vast majority of Americans who have to make the choice of living "outside the system" or driving a car to work, and vast majority opts for the latter, which is "free choice".  When the lease is up, they've already overpaid, and the cars as manufactured today last a good while with some minor upkeep, refit, refurb, etc.  A nice engine wash and steaming of the undercarriage, good to go for a new lease.  Slap on a new front bumper, hey that's a 2014 model! $$$$$$

Tue, 05/28/2013 - 11:08 | 3603591 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

You don't have to buy or lease a new car., You could buy used or like I am also seeing here more kids who are rejecting debt by driving to their shitty food service jobs on cheap second hand motorcycles you know like you see in third world banana republic shit holes like the Dominican Republic. The insurance is cheaper on them and they cost less in general across the board for gas and maintainence. The nigga rich types will abuse the credit to no end but this segment (granted they are more of a minority right now) of millenials are also out there to.

Tue, 05/28/2013 - 10:38 | 3603493 optimator
optimator's picture

You just don't think the way they do.  Before they tow that Lexus away go to one of those new car lots that's filled to overflowing.  Pick out the wheels you want, use the incentive payment as the down payment and you're good for another year at least.  Saw somebody do that, 6 months after declaring bankruptcy no less.

Tue, 05/28/2013 - 10:24 | 3603442 Dre4dwolf
Dre4dwolf's picture

A rise in expectations?

Expectations can disapoint.

 

Better to set low standards, so when you surpass them you feel good about yourself instead of terrible.

Tue, 05/28/2013 - 10:24 | 3603443 NotAMathWhiz
NotAMathWhiz's picture

Score one for MSM and the numbness of sheeple.  Where is the measure of the drag that $1T in student loans will have on the economy for the next, say, 40 or so years?  The average American is an idiot.

On a related note, a rare, lucid article on MW about the rip-off called the college degree here in the good old US of A.

http://www.marketwatch.com/story/dear-class-of-13-youve-been-scammed-2013-05-17

Tue, 05/28/2013 - 10:26 | 3603453 Kreditanstalt
Kreditanstalt's picture

As long as the debtors can keep their jobs, they're fat and sassy, aren't they?

We need higher unemployment AND price inflation without economic growth...cue 1974!

Tue, 05/28/2013 - 10:26 | 3603454 mayhem_korner
mayhem_korner's picture

 

 

The same folks thought the Philadelphia Eagles were the "Dream Team" going into last year, too.

Tue, 05/28/2013 - 10:30 | 3603466 rsnoble
rsnoble's picture

So I was wrong about rebound friday, turned into rebound tuesday.

Tue, 05/28/2013 - 10:30 | 3603467 Tsar Pointless
Tsar Pointless's picture

Peak idiocy.

I was flipping through the TV channels last week, and I came across a Detroit Red Wings hockey game, in Detroit. The fans were going nuts over something or another that happened on the ice, and there I was, thinking "Hey - isn't Detroit on the verge of running out of cash?".

Also last week, here in Pittsburgh, we had a mayoral primary election, in which the incumbent didn't seek re-election due to a massive scandal that has rocked the entire city, with the chief of police resigning and being charged with crimes. Yet, only 20% or so of the electorate in this dumb town saw fit to vote last Tuesday, and by Wednesday evening, all attention was back on the Pittsburgh Penguins and the hockey team's "quest for the Cup".

Sheeple. That's all these creatures are. Give them bread and circuses, and let everything else be damned.

Tue, 05/28/2013 - 11:52 | 3603710 Mrmojorisin515
Mrmojorisin515's picture

1. Detroit has very wealthy suburbs that don't give a shit about the city.

2. Peduto, Wagner, every person running for office has been in politics their entire life, what would be the difference voting for them or not?  Pittsburgh politics and local reactions from young people remind me of alot of my friends in 2008 when obama ran the first time.  Until this thing goes to shit, you won't get a different MO from politicians, doesn't matter where you live in the country.  Have you ever tried to discuss what we read on this site with a Blue Collar democrat voter in pittsburgh?  That'll answer all your questions, all pre conceptions of RED and BLUE must be destroyed before anything good can come.

 

Also, if you haven't realized that the city is run by UPMC and CMU then i don't even know what to tell you, were you born in this city or one of our recent transplants?

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