"Worst Since Lehman" - The State Of The US Consumer In One Dismal Chart

Tyler Durden's picture

U.S. companies (other than Amazon) that depend on consumers' discretionary income are at their weakest 'since Lehman'.

As Bloomberg notes, for Doug Ramsey, chief investment officer at Leuthold Group LLC, this makes them cheap enough to be a “contrarian pick." He cited a ratio between two versions of the S&P 500 Consumer Discretionary Index: one that weighs Amazon and every other stock equally, and the other that accounts for market value and gives about 10 times more weight to the online retailer. As the chary below shows, the ratio fell to the lowest level of U.S. stocks’ eight-year bull market on May 31, and closed near that level Wednesday.

What is also worth noting is the 'break' happened when The Fed stopped QE3...


So what has been driving Amazon higher? Simple - same as what has been driving FANG stocks...

Central Bank balance sheets rule the world... until they don't.

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Polemos's picture

Debt is negative potential energy.

A world without debt is a world whose potential energy is zero.

When the potential energy is zero, the actual energy is zero too:

"And where did the energy come from to create this matter? The answer is that it was borrowed from the gravitational energy of the universe. The universe has an enormous debt of negative gravitational energy, which exactly balances the positive energy of the matter."
--Hawking, Stephen W. Black Holes and Baby Universes and Other Essays. Bantam Books, 1993, p. 97

So, those who hate debt hate life itself.

Everything is as it should be. Praise the bankers--because of them you are alive.

Croesus's picture

Just proves that any idea can be twisted to suit a particular agenda.

Around here, it still seems like people "shop til they drop"; stores are busy...

Wulfkind's picture

Yessssss !!!!

The return of "SINCE LEHMAN !!!!

Croesus's picture

Petition to appoint a special prosecutor to investigate Seth Rich murder: @ 55k/100k sig's needed:


Please copy/repost elsewhere!

froze25's picture

Done, sharing now. Thanks for the heads up. 

HillaryOdor's picture

It is not true that total energy is zero if potential energy is zero because there are other types of energy such as kinetic.  Also Stephen Hawking is not someone I personally would take seriously.   

But the analogy is not worthless.  Negative potential wells (large debt) cause particles to fall into bound states where they get trapped (lose their freedom).  Once your total energy (wealth) is large enough to escape the well (of debt) you are free again.

open calender's picture

you can add an extra 1200/USD a week to your account working at home for 3 hours a day... go here to this site... http://bit.ly/2jdTzrM

yogibear's picture

But millennials are still willing to pay $1,000 for an iPhone.

silverer's picture

All the iPhone needs now are larger serial numbers printed on the outside and a way to shackle it to your ankle. There. You've arrived.

Captain Chlamydia's picture

I'm soooo übergeil when I read . ...since Lehman....spanking the monkey now 

Mr 9x19's picture

no offence but, based on your nickname, not that much.

gregga777's picture

Yeah, right.  The Big Bang Theory can't account for 96% of the mass/energy in the Universe.  So, the Cosmologists or whatever people like Hawking call themselves dreamed up dark matter/dark energy. To somehow account for the missing 96% they dreamed up dark matter that can't be detected.  F***ing Magic!  They dreamed up dark energy that can't be detected.  More FM!  It's Magic!  It must be there but we just can't see any of it or detect any of it with any known type of device or instrument.  It's all FM!


In the meantime, they completely discount any role for electricity in the Universe.  Despite the fact that the most abundant material in the Universe is plasma.  Plasma is electrically charged.  But, the Cosmologists say that it can't do anything.  Until, NASA experiments show that plasma does lots of things in our Solar System.  

The late astonomer Halton Arp showed more than 40 years ago that quasars, supposedly the most distant objects in the Universe with the highest redshifts, are actually nearby objects ejected from galaxies with active galactic nuclei.  Using a variety of telescopes he showed that they were VISIBLY connected by plumes or jets of material to nearby galaxies roughly on a line perpendicular to the galaxies rotational axis.  In other words, they were ejected alternately above and below the center of the galaxy out of the center of the galaxy.  Their redshifts were a function of the parent galaxy's redshift and their apparent distance from the AGN.  The closer they were the greater their redshift was versus the parent galaxy.  The farther from the parent galaxy the more the redshift approached that of the parent galaxy.  

The probabilities of accidental alignments are on the order of 1 in a million or greater.  Halton Arp's work has been suppressed by the Cosmological community.  He had to go to Germany to even get permission to use telescopes and satellite observatory facilities.  

I suppose people like Steven Hawking never actually bother looking through visible light telescopes or examining what x-ray observatories, radio telescopes and other devices actually SEE in the Universe.  


Polemos's picture

The idea that all actual energy has been borrowed into existence, at the cost of incurring a debt in the form of negative potential energy, belongs not to Hawking but to Lord Kelvin:

"Thomson had adopted in 1854 the view that 'the potential energy of gravitation may be in reality the ultimate created antecedent of all the motion, heat, and light at present in the universe'. In other words, it was 'the original form of all the energy in the universe'." --Smith, Crosbie; Wise, M. Norton. Energy and Empire: A Biographical Study of Lord Kelvin. CUP, 1989, p. 533

It has nothing to do with dark energy and dark matter.

franzpick's picture

Big bang, dark matter, gravity-only universal attraction, icy comets, non-quantized red shifts, sub-luminal speed limit, lunisolar precession: Everything you know is wrong.  There's plenty of dark matter out there, in the cerebral cortex areas of closed-minded, non-thinking or-thodox astronomers and physicists.

Thanks g777:


BennyBoy's picture


Hawking is an idiot.

directaction's picture

Typical bubble-headed scientist.  I bet he couldn't even change a flat tire. 

Paul Kersey's picture

Here's an interesting quote:

"Trump has no ideology. All he has is a fierce determination to enrich and glorify himself.

However, he is shrewd enough to realize that, by playing to the resentments of people whose material conditions have been stagnant or in decline for nearly half a century, and whom “liberal” Democrats ignore, he could gain the foot soldiers he needs to advance his avaricious and self-aggrandizing objectives."

And nothing makes the parasitic creditors happier than keeping the commoners in a state of ever increasing debt.

new game's picture

debt needs moar debt and all power and wealth emenates from moar debt(ponzi scheme-the fed). the doom and gloom never arrives as they control all mechanisms of this debt. they will do whatever, creatively, to keep this system intact. write offs, lower rates, conversions, you name it. they control laws, courts, enforcement and the taxation to remain in power. they all benifit from this system that ensures there own control and power. and to think they will relinquish this is absurd...

silverer's picture

I don't see the Donald in it for himself. That would be an easy job. You cooperate with the deep state, and just sign everything they put in front of you. You are make rich by caving in and abandoning all your principle of ethics, morality, and character. Just ask the Hill.

Hal n back's picture

I think Trump sees himself as a hero of sorts. He thinks he can fix it all because he thinks he is that good.

I think its as simple as that.


J J Pettigrew's picture


gdpetti's picture

Gravity creates this energy to begin with, Stephen hasn't yet realized this as he's afraid of stepping out of consensus guidelines.... ask him about the infamous Al Gore's Convenient Lies, now there's a debt based lie that is enormous.

CNONC's picture

The great failure of modern economists is to believe that they could study human behavior the way physical scientists study the world.  The inadequacy of that approach should be self evident.  Debt is not energy of any sort, and even if you could construct a logical analogy, that analogy would remain a model of reality, not a true representation of an economic process. 

Don't feed the bears, and don't encourage the "economists" to believe they are scientists.  Either one ends with you being eaten by a lazy son of a bitch.

Mementoil's picture

The problem is not so much with the debt itself, but with what you use it for.
Debt taken in order to purchase plant equipment = increased productivity = ROI higher than interest rate = prosperity.
Debt taken in order to finance consumption = no ROI = misery.
We are lamenting the later, not the former.

venturen's picture

Tell CT and IL all about it...they have lots of debt and future payments.....as spend themselves to oblivion. Debt can be great if you can pay it back and make money off it....if you just create debt to spend...that is DEATH

Tall Tom's picture

And when the Potential Energy is positive then there is a surplus that can be invested into productibity rather than wasting Energy to account for the negative deficit caised by the Cental Banks.


(Of coutse you neglected to consider this state. Why would I expect any different?)


And you suggest that I need to be thankful for the parasites at the Central Banks? The ones who created the Negative?


Thanks. i needed to start my day with a laugh.




And that also earns a rare downie ftom me.

besnook's picture

now that is great sarc.

peterk's picture

Yep.. "until they dont". that moment paradoxically is now.

Theres a  CREDIT CRUNCH going on in  CHINA right now,  yeild curve inversion  in the short end.

This is just a continuation of what happened in japan wih their long end.

That spurred the US  to hike as  EURODOLLAR rates went up, you know the  non-molested US  interest rate indicator.


Understand this,  JAPAN + CHINA are the  worlds  liquidity basket, its where funding comes from  for the  fat assed americans land lazy aussies + europeans to be able to continue their debt binged disposable consumer good lifestyles. Once  RATEs rise in  japan/china, the worlds  carry trades will reverse course cauising a monolithic reversal in asset prices.

As if on cue, here in AUstralia, the  big banks have raised interest rates to  hime loans + investor loans + interest only loans... it hapened today also by 2 banks and 2 months ago.... the banks raise INDEPENDANTLY of the reserve bank of AUSTRALIA.  The banks funding costs  are going up and capital is becoming scarce, eveidence of which is  higher rates in china/japan.

I expect the same in canada shortly especially.

The FED imo will RAISE rates.. unexpectdly now , people all thinking rate hikes are over.

It has nothing to do with  unemplyment CPI  factory orders etc, the state of the economy is of no concern as whats happening is a CREDIT CRUNCH and  banks are being starved of their  inventory, CAPITAL!

new game's picture

debt is simple:one man owning the labor of another. and governments taxing the people.

for government is gives them power and they create laws to stay in power(and grow).

what is criminal is the creation of this currency. The FED.

usery is the fee skimmed off(banksters) that produces huge amounts of currency to buy the system through payola of politicians-ask killary and almost every deep stater. legal or illegal means matter not at all.  corporations capitalize on the usery by leveraging cheap currency and labor to produce huge profits by scale and ignorance of antitrust laws. there to for gaming the system to their advantage via stockbuybacks, huge salaries, and bonus. officers cash in. they give huge amounts to the payolla sytem of law creation.(facsism).

and without an alternative we are all locked into this system...

simple shit maynard

Ilmarinen's picture

Since Lehman is back, baby!

Horse Pizzle's picture

Don't own the debt because the debt cannot be paid.

katchum's picture

Let's say you have a bad company with heavy losses every year + insolvent. The share price can still go up when central banks keep buying it. But one day their debt will be so high and their assets so low that debt can't be paid off. So they will need to raise money to pay off debt. This is defined as a bailout from the government and is equal to QE. So eventually, if consumer sentiment keeps dropping, everything will get bailed out and the U.S. dollar will go to zero.

Fitch Viscous's picture

It is all dismal and the markets keep rallying. 

yogibear's picture

All that free Federal Reserve money given to the banks to buy stocks.

The idea of the banksters is to keep assets elevated.

TradingTroll's picture

Yes because there are less companies to invest in. The Wiltshire 5000 is down to about 3618 companies. In 1974 when it started it had5000.

Let that sink in. The population of the US has grown but there are less companies. I say regulations and taxes make it too difficult. So the capital goes to the stock market where only the companies with scale survive, and to real estate estate where primary residence sales are tax free.

What's left of the stock market and real estate are clear ponzis.

Last of the Middle Class's picture

I love the QE III ended "here" line! You're not even allowed to be in the same room with the FED books. What in the hell makes you think you can call an end line to QEIII. You think these guys wouldn't lie for all their money and power? History tells us they would lie in a heartbeat and most likely still are. The line could just as easily be where the ACA began to bite and take out all available discretionary spending, which is more likely the truth, meaning this article is a nothing burger. LMFAO!

new game's picture

a nothing burger with horseshit raddish spread...

but ill take an order of thighs :)

Sky flyer's picture

I've really missed the "since Lehman" stories. Glad to see it back.

wholy1's picture

DUH!  Been my mantra since the BEGINNING of the GreatER Depression, BEGINNING 2007-09 because . . . like [most] everything else "IN this world but NOT OF it", it's a P-R-O-C-E-S-S.  Why are soooo many retail venues shuttering?  The so-called "middle class" is being EVISERATED, financially taped-out, thx to multi-nat'l CORP off-shore mfg, [NOT]Federal[NO]Reserve "financial intervention", parasitic gov AGENT spending run-a-muck.  You be "NOTICED":  "get thy from the 'urbs' "!  Get "hunkered-down", "S-I-M-P-L-I-F-I-E-D" on an inland, RURAL, UNaddressed/UNencumbered portion of ARABLE county dirt?  Get GROUPED, GUNNED, GARDENED, PROVISIONED.  You do really want to become a desperate, TRAPPED, "The Road", "citYzen" either the object OR progenitor of heinous acts just to "survive"?  If so, don't "come a knock'n" at OUR digs with "unwelcomed intent" cuz it may very likely be yout last.  This " way-too INTERDEPENDENT social/political/financial 'clusterfuck' " WILL "normalize" in ways most individuals will neither welcome nor be prepared.  E-N-T-R-O-P-Y will NOT be postponed/mitigated for much longer.

IENTJ's picture

"The beatings will continue until the economy improves ..."

OKUSA's picture

Went to a Dick's Sporting goods store the other day. Empty. It's a weekday I said to myself. Went next door to the TJMAXX. Packed. No one is buying from the MSRP stores.

Solio's picture

The former middle class is not consuming; it is just striving to survive!

Russdiamon's picture

Well this certainly isn’t a good look for the market. Actually, this guy has been calling for a drop lately. His track record is great at this, and it sounds like other info is matching up. Though I’m glad I just have his timing to rely on for the market. I definitely recommend checking him out.