Global Economic 'Mojo' Still Lacking

Tyler Durden's picture

As of Q3 2011, the citizens of less than 20% of the countries involved in Nielsen's Global Consumer Confidence, Concerns, and Spending Intentions Survey were on average confident in their future economic confidence. Not surprisingly, Nic Colas of ConvergEx points out, six were in Asia, the least confident were in Eastern and Peripheral European nations, and furthermore overall global consumer confidence remains 9.3% below 2H 2006 (and 6.4% below Q4 2010) readings as the global economy still has a long way to get its 'mojo' back. Colas points to the fact that 'confidence is an essential lubricant of any capitalist-based system' and one of the key challenges that worst hit Europe (and other regions and nations) face is capital markets that are assessing the long shadow of the Financial Crisis of 2007-2008 and the ongoing European sovereign debt crisis impact on the world's Consumer Confidence.


Nic Colas, ConvergEx Group: Confidence Games around the World


Today we review the Nielsen Global Consumer Confidence, Concerns and Spending Intentions Survey with an eye to comparing the most recent readings of country-specific and regional sentiment to the 2010 data as well as that prior to the financial crisis.  While the Street doesn’t often focus on this particular dataset, its combination of breadth (50+ countries) and depth (+28,000 online consumers) makes it uniquely useful in gauging global levels of consumer confidence.  The upshot is that as of Q3 2011, only 11 of the 56 countries surveyed had citizens that were, on average, confident in their future economic prospects.  Not surprisingly, six were in Asia.  Versus both pre-crisis levels and those of 2010, the most recent measured levels of confidence during Q3 2011 were 9.3% below 2H 2006 readings and 6.4% those of Q4 2010.  In short, most of the global economy still has a long way to go in getting its “Mojo” back.


For such a seemingly simple crime, the ‘Confidence Game’ is a relatively modern invention.  And no surprise to the denizens of the Big Apple, it was invented (or at least made famous) right here in New York City.  On July 8th, 1849 the New York Herald ran an item in its crime section noting the arrest of one William Thompson.  His scam was breathtakingly simple:

  • Dress like a wealthy man of leisure
  • Walk up to another man of leisure in the street
  • Strike up a conversation that gives the impression that the two of you are acquainted
  • Ask for the gentleman's watch in the following way: "Have you confidence in me to trust me with your watch until tomorrow?"
  • Take the watch and walk away, laughing as if the whole thing is little joke between two friends, never to be seen again

The only problem Mr. Thompson encountered was when he relied too much on the city’s large population to prevent his marks from ever spotting him a second time.  Sure enough, someone who had given him a watch valued at $2,800 in today’s money (think of a nice used Rolex) pointed him out on the streets to police and he was arrested after a brawl with the arresting officer.  One of his former cellmates from Sing Sing identified him at the stationhouse.  The case made the front page during the subsequent trial, since the accused could rightly say that he had been given the watches willingly rather than by force.  How could it be theft?


There is a great quote from David Mamet’s movie House of Games, spoken by a veteran con man, which neatly summarizes why such scams work: “It’s called a confidence game.  Why? Because you give me your confidence? No.  Because I give you mine.”  If you’ve ever been the target of a scam, you know this is true.  The first “tell” of someone running a game on you is that they appear TOO familiar, TOO friendly.  They are trying to make you feel like they have total trust in you.


But in this little seed of a criminal idea is a greater and more important truth: confidence is something that is shared by two or more people.  It can grow or shrink, quickly or slowly, and has its roots in the social wiring most human beings share.  And from an economic standpoint, confidence is an essential lubricant of any capitalist based system.  You need confidence in the legal system, the market’s ability to set prices fairly, and in your fellow citizen to hold up their end of a bargain, just to name a few structural necessities.  And you need confidence that the underlying economy is sound, that you will continue to have a job, that interest rates will remain stable, that inflation is under control, and so forth, before you will spend freely.

One of the key difficulties capital markets face at the moment is the challenge of assessing the long shadow of the Financial Crisis of 2007-2008 and the ongoing European sovereign debt crisis on the world’s Consumer Confidence.  While many countries have local surveys of their populations, no two measurements are done exactly the same.  This makes it hard to compare results around the world and over time.  We recently came across the Nielsen Global Online Consumer Confidence, Concerns and Spending Intentions survey, which is a large scale (+28,000 people) multinational (+50 countries) and at least a few years span of time (2005 to the present).  While it is likely that short-ish continuity that keeps this dataset from wider use on Wall Street, it is long enough to encompass the period before and after the Financial Crisis.

We’ve included several tables from the Nielsen data, and here are our key takeaways:

As of the most recent readings in Q3 2011, the world is not a very confident place.  A score of 100 is the watershed between confident and dour consumers.  Only 11 of 56 countries manage to break above this line – Brazil, China, Hong Kong (measured separately), Indonesia, Malaysia, Philippines, Thailand, India, Saudi Arabia, U.A.E, and Norway.  The clear trends are that Asian countries and exporters of raw materials rule the global confidence roost at the moment.


The world’s least confident consumers reside in Hungary (last score 37), Portugal (40) Croatia (49) and Romania (also 49).  Greece had a score of 51 in Q3 2011, and Italy came in at 52.


In terms of comparisons to how confident the various countries’ consumer felt before the Financial Crisis, back in 2H 2006, very few countries have been able to bounce back completely.  On average, the world’s major developed and developing economies poll at 9.3% lower confidence than pre-crisis levels.  The ones that have been able to set a new and meaningful fast lap for consumer confidence: Austria, Egypt, Saudi Arabia, Turkey, Philippines, Taiwan, and Thailand.


By region, Europe has actually been much harder hit in terms of consumer confidence from the peak than any other area of the world.  Across both eastern and western Europe, confidence is 23-24% lower than 2H 2006, versus an 11% decline in the Americas and 8% reduction in Asia.  The U.S. is 28% lower, to be sure, but other parts of the region are only down 14% (Canada) to 21% (Mexico).  Brazil, as mentioned earlier, is actually up 18% since 2006.


Over the last year (meaning later 2011 versus 2010), western Europe is a clear laggard as well.  Italian consumer confidence took an unsurprising hit last year, down 27%, with almost all other countries in the region down double-digit percentage terms as well.  The big winners were in the Middle East (Egypt and Saudi Arabia), rather than Asia.  The notable exception here was China/Hong Kong at +4/5%.


There’s very much a “Half empty/half full” debate when it comes to any kind of consumer confidence measurement as a Buy/Sell signal, of course.  In general, it pays to buy risk assets when things look dreadful and sell them when skies clear.  But the current picture of global consumer confidence from the Nielsen survey looks very much like one of those sketches of an iceberg in a children’s textbook.  A lot of the mass is below the surface, with only a tiny bit poking up out of the water.  It pays to consider the possibility that global consumer confidence has gone through a semi-permanent shift to something below the waterline, invisible to producers of goods and markets alike.  If true, this would mean that consumers will only slowly begin to reappear, essentially as the iceberg melts.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
DrunkenPleb's picture

Anyone else caught wind of this yet? New reserve currency... bitchez.

DavidPierre's picture

Jim Sinclair’s Commentary

It started very subtle, but now it is becoming visible. That is good for gold, and eventually not good for the dollar.

In 2012 actions will be taken. They may not be solutions, but there will be consequences.

2012’s true range in gold will be $1700 to $2100.

India to pay gold instead of dollars for Iranian oil. Oil and gold markets stunned
DEBKAfile Exclusive Report January 23, 2012, 5:57 PM (GMT+02:00)

India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, debkafile’s intelligence and Iranian sources report exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran’s total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.

Element's picture

And check this; Pakistan's major religious groups, retired Military and politicians have got together in a mass protest to issue a direct warning to the Pakistani Govt against re-opening logistics routes for NATO into Afghanistan, plus they are demanding NATO logistics flight over Pakistan also be discontinued, to force the US and NATO into negociations

... er ... that would be negociations to hammer out an agreement for the rapid withdrawal of NATO:

Dr. Engali's picture

The empire's influence is crumbling.

roadhazard's picture

Sounds good to me. Get the fuck out of Afghanistan.

Silver Bug's picture

You would think everything is rosy if you watch main stream media! Real people know we are in a depression.

Dr. Engali's picture

The only way to build confidence is to throw the money changers out of the temples. The too big to fail banks have to be broken up, and those that have commited economic tyranny must be held accountable. The system must reset so that capital can flow to productive capacity instead of being directed to support failing entities. The old system of shuffling paper from one service to another only serves to transfer wealth from one individual to another. It doesn't build wealth We have to start thinking locally so that our local communities can thrive. Power must flow upwards , not downwards with federal mandates. Once these things happen then can we will start to gain confidence.

Georgesblog's picture

They should know that they can't get away with painting their Mojo gold and silver. As George Forman used to say, "What the world wants is the real ice cream."

Troy Ounce's picture



Do you know in Holland they have a socialist politician called Emile Roemer who likes to look at things?

lolmao500's picture

They should put more lithium in the water, that'll crank up the confidence level to new highs!

lolmao500's picture

The enterprise is back in the states. It will deploy for the LAST TIME in March... to Iran.

DavidPierre's picture


A History of False Flag Attacks ... special emphasis on USS Liberty.

Element's picture

Adds new meaning to, "effects-based operations".

Element's picture

'Israeli Mossad agents posed as CIA spies to recruit terrorists to fight against Iran'
13th Jan 2012 

Latest update 20:54 13.01.12
Foreign Policy magazine cites CIA memos from 2007-2008 that the Mossad recruited members of Jundallah terror group to fight against Tehran; U.S. was reportedly furious with Israel and moved to limit joint intelligence programs.

By Barak Ravid

Israeli Mossad agents posed as CIA officers in order to recruit members of a Pakistani terror group to carry out assassinations and attacks against the regime in Iran, Foreign Policy revealed on Friday, quoting U.S. intelligence memos.

[i.e. so if or when discovered it will look to both the Iranians and the Pakis, and the rest of the world, that it was a US operation and may draw them into a conflict ... can you say false-flag?]

Foreign Policy's Mark Perry reported that the Mossad operation was carried out in 2007-2008, behind the back of the U.S. government, and infuriated then U.S. President George W. Bush.

Perry quotes a number of American intelligence officials and claims that the Mossad agents used American dollars and U.S. passports to pose as CIA spies to try to recruit members of Jundallah, a Pakistan-based Sunni extremist organization that has carried out a series of attacks in Iran and assassinations of government officials.

According to the report, Israel's recruitment attempts took place mostly in London, right under the nose of U.S. intelligence officials.

"It's amazing that the Israelis thought they could get away with," Foreign Policy quoted an intelligence officer as saying. "Their recruitment activities were nearly in the open. They apparently didn't give a damn what we thought."

According to a currently serving U.S. intelligence officer, Perry reports, when Bush was briefed on the information he "went absolutely ballistic."

"The report sparked White House concerns that Israel's program was putting Americans at risk," the intelligence officer told Perry. "There's no question that the U.S. has cooperated with Israel in intelligence-gathering operations against the Iranians, but this was different. No matter what anyone thinks, we're not in the business of assassinating Iranian officials or killing Iranian civilians."

The intelligence officer said that the Bush administration continued to deal with the affair until the end of his term. He noted that Israel's operation jeopardized the U.S. administration's fragile relationship with Pakistan, which was under immense pressure from Iran to crack down on Jundallah.

According to the intelligence officer, a senior administration official vowed to "take the gloves off" with Israel, but ultimately the U.S. did nothing.

"In the end it was just easier to do nothing than to, you know, rock the boat," the intelligence officer said.

Apparently, the Mossad operation caused a fiery debate among Bush's national security team and it was only resolved when U.S. President Barack Obama drastically scaled back joint U.S.-Israel intelligence programs targeting Iran, Perry quotes several serving and retired officers as saying.

The U.S. State Department has vehemently denied any ties to Jundallah and many U.S. intelligence officials remained angry with Israel over the 2007-2008 operation.

"Israel is supposed to be working with us, not against us," Foreign Policy quoted an intelligence officer as saying. "If they want to shed blood, it would help a lot if it was their blood and not ours. You know, they're supposed to be a strategic asset. Well, guess what? There are a lot of people now, important people, who just don't think that's true."

The CIA, the White House, and the Mossad failed to respond to the Foreign Policy report by the time it went to press.




Just more evidence that Israel does not give a flying-fuck about the USA, or what happens to it, it is all about zionism, and fuck everyone else.

Element's picture

ABC Aust - just happened;


Israel airstrikes hit Gaza

By foreign affairs editor Peter Cave

Posted January 24, 2012 19:31:57

Israel has hit Gaza with a series of airstrikes in response to a series of rocket attacks in recent days.

An Israeli military spokesman said the targets were an arms factory in the centre of the Gaza Strip as well as three tunnels used for smuggling contraband from Egypt.

There was no immediate report of injuries.

Since the start of the year at least seven rockets from Gaza have struck Israel causing no injuries or major damage.

In the past month, four Palestinians have died in Gaza as a result of Israeli air and artillery strikes.


Tension is continuing to rise, and will continue to rise, as long as the NATO fleet is eyeballing Iran from the gulf.

It's just a matter of time until Hezbollah starts chiming in.

But there's a major long range Russian naval air defence umbrella immediately north of Lebanon.

What does Israel do, if Hezbollah starts using targeting and recon drones to use in taking precision-guided cruise missile shots at Israeli financial centres or power stations, or early warning radars and comms nodes?

Do they hit back, risking having the Russians fire naval SAMs at their F-15I attack aircraft bombing lebanese targets, and then hitting Israeli aircraft shelters with naval cruise missiles?

This can happen.

Once tensions get this high you call off major exercises as the USA just did, simply to avoid that sort of misunderstanding turning into a real battle.

So everyone will be on highest alert for any signs of an attack emanating from, or occurring in Lebanon or Syria.


EDIT: And even more!

Australia to follow EU ban on Iranian oil

By Europe correspondent Rachel Brown, wires

Posted January 24, 2012 22:25:18



They look terribly happy about it!

HankPaulson's picture

Actually confidence is important to most all human interaction, the financial industry shouldn't flatter itself that it is any different in this respect.

What does set it apart, though, is the relative lack of core activity which might merit confidence.

When I drive over a properly constructed bridge, that bridge will stand up no matter how underconfident I am. By contrast, even in the face of confidence, this financial system is going to collapse.

disabledvet's picture

Absolutely. Forget "false flags"...we have so many false panic attend going on it's amazing people get up and go to work. The Internet has been a boon to those seeking clarity in this totally insane world: it's no wonder Hollywood and Big Media want to a: shut it down but since they can't b: literally kill those who both use it and are connected to those who do (terrorism! Wake up government!) that's why the annihilation of Big Bank...while also a Big Good. Those that have speculated wildly will learn even with interest rate printing "you still must have economy and growth." And of course this cannot be printed. Once interest rates soar THEN the economy will return to health...not when "they are forced lower." That time has been upon for a while now: Iceland, Greece, Hungary. We're just being told by "largesse-istan" that "this will not be so here." and of course this is untrue.

disabledvet's picture

Europe cannot succeed because growth cannot proceed from imposed austerity. Forget "the collapse"...the problem with the EU is that these are targeted attacks on another country. LUNACY! The EU needs to look to ASEAN for its model...not New York and World War II. But of course its too late for all that.

cranky-old-geezer's picture



You need confidence in the legal system, the market’s ability to set prices fairly, and in your fellow citizen to hold up their end of a bargain, just to name a few structural necessities.  And you need confidence that the underlying economy is sound, that you will continue to have a job, that interest rates will remain stable, that inflation is under control, and so forth, before you will spend freely.

Sending freely requires MONEY more than anthing else.

But people have less money to spend since the financial collapse and all the bailouts draining money out of the economy giving it to banks.

On top of that, people's dollars have lost 1/3 of their value since '08 from all the Fed money printing.

This huge collapse of consumer cofidence comes from people figuring out they're being LOOTED by big banks ...with full government cooperation... and there's no indication it's going to stop.

roadhazard's picture

I'm doing all I can to make sure Big Biz in America does not recover from their greed. I drive Way less, stay home all I can and generally do not spend any money except for prepping, electric and phone. The longer you do it the more comfortable you are living small. Living in the woods twenty miles from town helps a bunch.  Screw them all.