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Guest Post: Consumers Are Confident Of Recession
Submitted by Tony Pallotta of MacroStory.com
Consumers Are Confident Of Recession
And that my friends is the nail in the economic "recovery." August consumer sentiment was just reported at 54.9 from 63.7 in July. This is the lowest level since May 1980. The chart below shows the correlation with sentiment and the consumer component of GDP which is about 70% of the economy and why I say the "recovery" is over.
In Q2 the consumer component of GDP was 0.07% from 1.46% in Q1. Based on historical correlations and today's sentiment data the Q3 consumer component will contract much further in the (2%) range. This will bleed into the fixed investment and inventory components of GDP causing further contraction.
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I say that comparing "confidence" now with 1980 is apples & oranges.
How many "consumers" were taking anti-depressants in 1980?
I wasn't then....I am now.
Comparing apples to oranges is easy. I generally eat apples when given a choice.
I'm not taking them. Just wallowing in my depression and in the depression.
Part of the healing process. And when you are good and ready, snap out of it and re-engage with life. The world needs more people to do that, the times require it.
How is it that the democrats get away with saying that a balanced approach is raising taxes and raising spending by nearly 10 trillion over the next 10 years?
As an American I would draw the centrist line at a spending freeze and no tax increase. I would say leaning to the right would be cutting spending (not reducing from the baseline but actually spending less next year than we did this year) and lowering taxes. I would say that leaning to the left would be raising taxes and increasing spending.
What Barrack Obama calls for as a balanced approach is actually a leftist dream outcome. The republican alternative is a leftist dream light. The mainstream republicans are either too dumb to see this or they are actually in on the scam to increase the size of government while pretending to be fiscally conservative. In today's enviroment I tend to believe the latter.
Xanax economic model.
Didn't have to. You could smoke on planes and at work. Remember kids, smoking is bad. Now take this pill.
Had not yet discovered the 420 in 1980. Now.......
Consumer Confidence the lowest since Jimmy Carter's last summer in the White House. Well done.
The Isley Brothers. Billboard R&B Singles Chart, #1...May, 1980. Prime groove...
http://youtu.be/fj8wufqK59Y
Does drinking count?
How many times must I explain this to you.
1) It is transitory.
2) Conensus was too high.
3) The time period chosen was unfavorable.
Seasonally adjusted, consumer confidence was 99.6. At least.
Excellent list. Let me add a few more:
1) Besides earthquakes the Astroid ELEnin also pulled consumer confidence in an unnatural way.
2) Tea Partiers flooded the survey.
3) The college kids were far smarter in 1980...the data is bad.
4) The sun was in the poll-takers' eyes!
+QE3
So whats the market doing now then, last designed hurrah pump before the HUGE Jackson Hole dump within a few hours/days?
looks to me like it's trying to establish a holding pattern until JH, that is unless something in Europe implodes.
Indeed SD1, next week is the one it seems. Perhaps a massive break in the eastern markets on Monday morning open, followed by a slew of announcements, measures, interventions, circuit-breakers..... till the US opens that is.
Then, we'll see something incredible. As I'd pointed out before, strong rhymes with August 15th 1971 (also a Monday to boot). And Gold, no good feelings about Gold going into next week.
Moonday morning, it's going to be something.
ORI
http://aadivaahan.wordpress.com/2011/08/04/many-drafts/
Yea....just incredible to see how totaly controlled and manipulated it all really is. Bankrupt Europe, bankrupt USAA+, but all is well for today while we figure out how to do it all again another day. How about a meteor the size of a school bus slams directly into Manhattan? Sure would cure a lot instantly.
come on guys and girls this news is bullish!
Dealer Broadcast
12 Aug 2011 at 14:49:28 (GMT) Futures Margin Update: With effect on 17 August 2011 @ 2:00PM CET the initial and maintenance margin for D.J. EURO STOXX Bank Index Future(FESB) will increase by 7%, ECX CER Future(CER) by 5%, D.J. EURO STOXX 50 Index Future(FESX) by 18% and SPI 200 Index Future(AP) by 17% and D.J. EURO STOXX Insurance Index Future(FESI) by 2%.
more bullish news
Dealer Broadcast 12 Aug 2011 at 15:15:32 (GMT) Important news 1/2: Following recent market events, the European Securities and Markets Authority (ESMA) have requested a suspension on short-selling on equities in the financial sector from August 12th 2011 for 15 days, covering credit institutions and insurance companies. So far Italy, Spain, Belgium and France have decided to enforce the ban. Sure as hell will I short Reggies French banks next week.
12 Aug 2011 at 15:16:29 (GMT) Important news 2/2: With immediate effect, it will not be possible to open new short CFD positions in affected companies during this period. Note: existing short CFD positions will be permitted and do not need to be closed. Please refer to your trading conditions in the account menu.
Greece CFDs: Also the Greek securities regulators Hellenic Capital Markets Commission have banned short-selling on the Athens exchange for a period of two months with immediate effect. Clients will not be able to short Greek CFDs until this ban has been lifted. Note: existing short CFD positions will be permitted and do not need to be closed.
Why not include the entire world? Or lets ban all leveraged instruments
I was wondering if zero hedge stand by their '$2000 quote for gold in less than a month - with near 100% certainity'?
think you lot are top notch,
thanks
Um, well Zerohedge didnt make that statement, that was a statement from someone else that was posted here.
And that article did not say 'Gold to $2,000 within 1 month', it said some options trades suggest someone believe gold would be that high next year.
I was a tyler
http://www.zerohedge.com/news/cme-hikes-gold-margins-22-which-gold-ignor...
You sound like an astute investor who may be in a bit of a hurry.
Zerohedge doesn't make this kind of predictions, it's often just play on the words.
By the way, if you buy gold to make money, you shouldn't, because you don't understand this product. It's a tool to preserve capital, not to increase it. You will have a bigger purchasing power in wage-dependent products and services, because most people will have become poorer, but it will stay exactly the same (which is already fine) in incompressible things like apples and bread.
And that's why all the people who comment or rejoice on gold reaching "new highs" are incredibly stupid. Gold does not make new highs. Paper money makes new lows.
Against gold, but also against wheat or oil. Strangely, I have seen many people talk about a "gold bubble" on forums (even generalist ones), but very few (if any) talk about a CHF bubble or a corn bubble.
The sheeple has always the same memes, suggested by the medias...
Yes, but, but - how about if you park your hard earned money in gold, plant potatoes and store rice in buckets? Then when deflation hits levered assets such as real estate, you roll your gold over to hard assets at reduced prices? This will feel like you made an investment rather than just preserved capital. At this point it becomes semantics.
Like I said. You become richer relatively (i.e. because the other people become poorer), not absolutely. So you'll be able to purchase far more wage-dependent assets (land, boats, stocks, etc.) but the same number of incompressible assets (i.e. electricity, gasoline, apples, pears, things made by robots, very low margin products, etc).
You don't "make money", beause in my (very strict and schumpeterian conception of the thing) it would mean being able to buy more incompressible assets also. For example, at the beginning of the month, you have $10 and can buy 10 apples. At the end of the month, you earn your pay of $200 and can buy 210 apples. You have made money. You have more units of currency in your pocket.
When you put your capital in gold, it's in order to keep the same number of units of currency, not to increase it.
If you keep your 2011 $210 and decide not to buy apples with it, but rather gold, you'll still have $210 in your pocket (of 2011 value) when you sell it in 2013.
Which is already incredible: in a negative growth world, the challenge is to preserve your K and not lose it like the rest of the people.
To "make money", you need to take further steps, and, indeed, buy wage-dependent assets when there is "blood in the streets". But it takes intelligence and guts (you need to buy when everything around you screams apocalypse), and only a few of the current gold bugs will be able to become millionnaires (in today's dollars) through gold.
So wait... I get what you're saying, but (speaking apples here) I'm thinking since Jan 2004 (random date , $400) apples haven't increased in price by OVER 4x. I could be wrong, but thinking not... What about banans? over 4x? So instead of $.69/lb now, they were $.16/lb? Does this mean gold is overpriced? I own both g and s btw...
That's because gold has already priced the coming inflation, in anticipation. It's up to you to see if the potential inflation will be higher than what has already been priced in.
"When you put your capital in gold, it's in order to keep the same number of units of currency, not to increase it."
I think there is an error in your reasoning. The idea is that gold is money (ignore what Benoccio claims - he is lying to keep the ponzi going), i.e a store of value, which the USSA dollar is not; it has decreased in purchasing power. So, you do not in fact have the same number of units of currency at exchange (in the future), but you have increased the number of units.
For example, say in 2010 you have $1 and buy gold with it. In 2010-2011, the dollar has lost 15% of it's value. In 2011, you exchange your gold for USSA dollars and get 1.18 back. It is important to note that we are talking about money and not goods.
Now look at purchasing power. Let's say that an apple costs $1 in 2010. In 2011, that apple costs $1.18. If you held cash, you cannot afford an apple - you're 18 cents shy. However, if you held gold, you can purchase an apple by exchanging gold for ben/clown bux; thus the presevation of capital. So, when you put your capital in gold, you preserve the PURCHASING POWER of your capital and not to keep the same number of units of currency.
Now, lemme get this straight. If I buy a ton of apples NOW, cook them and preserve them using canning methods, they will be worth more a few years down the road? [end stupid comment tag]
Spot on
Although acting as a store of value is one of the large benefits of owning gold, you'd be mistaken if you think that makes up 100% of the current price. It's also a fear trade instrument that is negatively correlated with the stock market. When things go badly people flee stocks and even bonds to gold and treasuries.
What DR is referring to is found in the trend and not in the volitility (square root of the 2nd centered moment - the standard deviation) which you speak of. The trend is the loss of purchasing power of the USSA dollar which is shown in the increase in the price of gold. You're right if you look at the variation around the trend.
@ DR
Excellent observation!
Well I have found that taking the advice of random people on the internet is a great way to make money. I would go all in if I hadn't already spent my money on Lulu, Netflix, Amazon, and LinkedIn like that RoboTrader guy suggested. I just gotta stay long and strong till 8/26 then all of you will be drooling on my Porsche.
There is No! Recession!
BTFD's! Look at BAC! LOOK! AT!! IT!!!
Party on Wayne!
Party on Garth!
People are losing money! by not accepting the new normal training! see the Market go lower! BUY!!
and when the training of the sheep / retail is complete! the FED will NOT! have to add liqudity! the Idiot, Sheepish, Consumers will do it for the FED!
JW there never was any actual recession, all created chaos by world banksters to soon bring everything back up under their total control with 1 world currency. This is all simply a farce.
I am trying to encourage the blind from participating in the BTFD program!
But yes One World sounds Great too!
where can I sign up??
http://www.youtube.com/watch?v=gTB-LDWoETA
never mind the wigger already signed U.S. ALL up!
But? isnt him being there against the Constitution?
Fuck Me!
Where do you buy your coffee?
NAH, I'm trying to encourage them to participate MORE in the FED's 'BTFD program'!
i think we all just want austerity so that the burning starts sonner than later..
better to get this shit over with.
dragging it out is boring!
Hmm.. reminds me of a conversation I just had with a friend. I told him trouble on the horizon. He said; "but everywhere I go people are busy". I said; "yeah, they were busy in 08' before the credit crisis too, right?"
Even though we do have fundamental problems, the triger is completely controlled..
i was only funnin! my bad fellow brothers in arms! my bad! i will tone down my crazy fishing posts some. lol
The "recession" (hate that modern term) itself is not a big event.
The big event, which would have lasting -- and in fact irremediable -- consequences on the world economy and Zeitgeist is when this recession will, finally, trigger defaults of >medium importance, defaults which would have already happened in 2008 without the tens of trillions USD of government guarantees.
That's when some real action will start, before that, it's background noise.
+1 When governments finally run out of taxpayers money and give up keeping this whole thing afloat.....the real fun begins. Could be a ways off yet...or not.
This calls for a Barama/CONgress vacation...
Oh, they're on vacation. Never mind.
Did you read the article saying AIPAC funds all these politicians vacations?
Well, there is always a vacation from their vacation. Don't laugh. I've seen the idea openly discussed.
It should be more widely discussed that 81 traitors (I mean Congress clowns) are vacationing in Israel paid for by AIPAC
http://www.youtube.com/watch?v=gGhpQi2JVRE
but of course, all you see on the news is how bad Israel is.. Right?.. Give me a break,, Sorry to use your comment CD to get this point in open..
I read another forum where just mentioning that got some people labeled as anti-semitic. The next day, they were complainging about Ron Paul and calling him anti-semitic too. To think, we're supposed to be electing an American president to solve America's problems and some idiots are going to make that decision based on how much the candidate cares or doesn't care about Israel?
Always remember, the anti-Semitic term is used to defend what cannot be defended with logic or reason.
Many of the Christians (not most) are far too eager to hate/destroy Muslims. The Jews know this, and use this. Also, they (the Jews) know how the West is on a guilt trip from the crimes of WWII.. Well.. this is quite the combination. All of this along with a strong presence in controlling public opinion through media and entertainment, well, you have the perfect storm. And you have people being elected based on their allegiance to Israel.
I should note that the word Zoinist may be a better choice to describe these people. But, in the end, I will be called a racist either way.
fwiw, O stopped by NYC’s lower west side yesterday evening (I guess before heading to MV) for a $40,000/plate fundraising dinner, or so I heard from two of the many, many of NYC’s finest on duty by the barricades. We shared a laugh (easier I think for them) on who was picking up the policing tab for this working vacation visit.
I bed to differ. I am confident of a long term depression filled with major and minor recessions and recoveries.
Im confident that the world central bankster cabal designed every bit of this and is squeezing us into the final solution- 1 world govt, 1 world currency, under central bankster total control.
Party like it's 1980?
Party like it's 1929.
1860
Party like it's July 1914...
oct 1929
Rally on bitchez! Rallyyy on!!!
WOOT! Wow look at the markets go! And ust think, only a few days ago everyone was convinced there was some dire need for QE! The only debate was how many $trillions it would be to rescue the poor markets and bank stocks higher.
Now, no need at all for QE, WHEE look at em go! Markets FINE, pre-launch checklist A-OK, to the MOON!!!
Monday is Moon Day SD1.
I think everything will run into a giant cheeseball.
At a 100 mph, even water is hard as steel.
ORI
They missed the 2 trillion dollar error.
Lets call this what it really is, a full blown Economic Depression.
The mirrors quit working when the smoke blows away. Welcome the whirlwind.
Sure we're definitely in a depression, but a depression the bankers created.
Government created actually, but the bankers happily leveraged it 9:1 with derivatives.
I feel fairly certain that this downturn will be much more severe than the first. I think most people now have a pretty good idea that the game's up. After the financial crisis in 08, alot of people put their trust in the 'experts' and government leaders and bought into a recovery of sorts. But as more and more people have been laid off and tons of small businesses have folded, most people can't stay in denial much longer.
The only people we know that might still be in denial are secure retirees (government pensions, etc.) that don't have any fingers in the economy except consumption, but any that have grown children are seeing reality through their kids.
Another big difference even over 1980 and certainly the 30's is the internet and availablity of information and analysis that offers much different perspectives and conclusions than the government's story. This is a signficant factor that I believe has gradually eroded the government's story. Probably the main reason why the Treasury extended an olive branch to bloggers last year. They had hoped to build some trust and perhaps influence the tone of the debate. To no avail though.
Overall spending can ratchet down hugely from here. There is still so much "fluff" in our economy. People can learn to cut back on power usage. We hang our clothes out to dry and easily save $25-30/month in gas usage. Vacation cutbacks will happen, school supplies and clothes can be cut even further. People will start making their own lunch, etc. There is a huge consumer spending downturn just waiting to happen when folks realize that frugality can be as interesting and challenging as making and spending money.
Very very well put Miker. Excellent!
ORI
Agreed, Mike.
At street level people are really hunkering down for the long haul. And the ones who appear to be "secure" are really just part of the glass ALWAYS half full crowd. I can't tell you how many of my friends have a shoot the messanger attitude when I point out the way the train is heading over the cliff. Blinders.
Personally I will be doing more hunting and fishing, as well as planning for a garden next year.
Submitted by Tyler Durden on 08/10/2011 20:16 -0400
Just after hitting a new all time high of above $1815 in spot gold, the CME immediately sent out a notice to members advising that gold margins for Tier 1 members were increasing by 22% for both initial and maintenance positions, from $4,500 to $5,500. Unfortunately for the CME, this predetermined move was telegraphed to the market weeks ago, and with rumor 57 out of 22 finally turning out correct, this latest move only managed to push gold down modestly, and at last check was once again trading above $1,800. Just like all central bank interventions, which now have a half life between 1 hour and 4 days max, so this latest exchange attempt to subdue prices will fail spectacularly. Naturally, just like in the case of silver, this will merely embolden the CME to proceed with hike after hike, which in turn will kill speculative elements while merely reinforcing the strong hands. End result: in one month gold will be above $2,000 with almost 100% certainty.
OK still this is an article observing option activity like I said, and today is the 12th! BTW I never listen to ANY 'on this date in the future, the price of something will = this number'...youd have to be crazy.
It seems ongoing wealth destruction has a funny habit of ruining people's mood to spend.
Sincerely, Captain Obvious
please see above sheepdog.
Already blew it out of the water buddy.
Well played, sir.
Markets are pricing in 100% of a mild recession and about 54% for a harsher one - JPM
Really? So there is only about 15% difference in S&P500 between full steam forward and a very gloomy scenario - for a second I feared the impact could have been larger - puh!
Its from their proprietary macro & trends insights, but they seemed a bit more gloomy than normal... was on a global strat call a few hours back and they said while company earnings are indeed high (noone can dispute this, simply a fact) - the fact that most sell side shops had 1500 targets on their SPX eoy is way too optimistic. With $100 earnings for the SPX, that slaps a 15 multiple on it. Clearly not a rational target considering the current situation.
Tyler,
Don't get distracted by the bad news. Please provide more trading insight. How do we play this temporary levitation in equities (especially financials) ahead of Jackson Hole? Do you see the opportunity for some puts in financial equities on the current levitation? More please.
One word...REDEMPTIONS!
Oh I'm confident alright.
Democrat CONgress staffers go to Maui on taxpayers dime!!!
http://dailycaller.com/2011/08/12/democratic-hill-staffers-head-to-maui-...
SUCKERS
The american people dont give a shit while they sit under the tyrants now blatantly ass raping them, they couldnt care any less. thats OK they soon will care when theyre in their new home a FEMA forced labor camp, and no IPhone.
If they really knew what the fuck they were doing, they would have headed to Kauai... but, if it's on someone else's dime, Maui would do just fine.
Hopefully every last one of them inhales a "hot" plutonion particle while sipping umbrella drinks.
Tyler, lay Manufacturing ISM over michigan number. You get the same result.
p.s. I think the zero hedge team are outstanding.....just wanted to know their thoughts - they could still be right. I'll be adding to phy gold position soon enough
sheepdog please get facts right or don't bother.
'Facts'? Oh, so the month is officially over, and what....youre crying because gold isnt $2,000 yet as you demand? Whatever.
Investment grade debt and swaps would put the SPX at 700-800 right now - http://macrostory.com/?p=6173
Can you give us a bullet point list of everything, I can't read fast enough.
Awesome job and thank you
Ready except need more whiskey aka. moonshine
Buy lots of Jagermeister, booze always does real well in collapses. I'll keep some dollar bills around in a Ziplock bag for good fire starting material.
Enjoy!
http://www.youtube.com/watch?v=uNW8ZJU8HQA&feature=player_profilepage
If there is a liquidity crisis in Europe which sucks up USD causing a short squeeze in our currency (the least bad option), won't that be very bad for gold?
If the dollar is the least bad option and we face serious issues that require money and a flight to dollars for safety, won't DX go through the roof as gold falls through the floor?
I'm still learning here, guys . . . I own gold and love it, just trying to get a glimpse from different perspectives.
I guess, as long as you look at gold as just another thing to day trade. Theyll print the dollar to oblivion soon and the dollar will be worthless, and also by then gold will likely be illegal for peasants to hold and trade.
Recession, depression, or whatever you want to call it, none of it matters. As someone else posted already, it is all background noise. Until the debt and out of control spending are fixed, things will, without fail, continue to get worse. Prepare for the worst and hope for the best, right?
Yep a dead body bounces a little up and down while washing down the river bottom. All just noise. But Im really wondering what Bernank does now going into 'Jacksons Hole'...certainly he cant have a wildly rallying market to make the case for QE3, that BTW has already been cooked into the markets a few times over at least. What will he do? Seems to me this is likely the last big sucker rally before a big plunge in days or hours from now.
Now is this confidence of a recession within the Greater Depression?
Finally people are getting it!
Oh wait, nevermind.
pods
Either way, buy dollars or buy gold WE ARE in a DEPRESSION. It's all going down. It has been covered up and bloated into government stimulus, bailouts etc....... umm, ultimate kick the can down the road. As gold goes down, I will buy more. Only real currency along with silver.
This is the only fact that matters now:
http://i.telegraph.co.uk/multimedia/archive/01962/gold_1962975b.jpg
Confidence you can believe in.
Consumer sentiment plummeting into the abyss just in time for the holiday season. Wonder what those retailer balance sheets are going to look like Q1 2012? Mass layoffs on the way?
Why are we all referred to as consumers all the time? And who writes this shit? Better more truthful headline: People know the state of things in the USA friggin sucks. Period. And it is more than just the economy.
Double dip?
it is now a sliding depression. MSM is just fooling the crowd.
Consumer CRASHfidence! Sentiment exactly!
You want to know the real problem and where it's going? Imo, it's not about the bankers - it's about the government. The reality is, cuts cannot come because the largest voting block in the U.S. is rapidly becoming reliant on government spending: Government employees + welfare recipients (including SS & Medicare).
More likely there will be more Big Government empowerment by increasing taxation with marginal reductions in Gov't spending. And, either way (Big Cuts in Gov't spending or Big Increases in taxes), there will be increased anger in the U.S. and there will come days like London had the last couple of weeks (though our police will have a bit more firepower and, one can only hope, willpower).
Sorry for the cliche' but, it's a snowball effect.An avalanche of Big Gov't and there really is no stopping it. WFB's "standing athwart history yelling stop" comes to mind. And, of course, there will always be (as there was in the Soviet Union) those who will get around the laws, or manipulate the laws to their advantage (as the evil bankers have done on Wall St.) for short term gains.