US Consumers Hit Peak Schizophrenia - A Chart

Tyler Durden's picture

An hour after getting a whopper in the retail sales number, which handily beat all expectations, we get "confirmation" that consumers are not only more optimistic, with overall Michigan confidence sliding from 59.4 to 57.5, on expectations of 60.2, but that they have less to look forward to than ever in the past 31 years, with the consumer expectations number dropping from 49.4 to 47.0, the lowest since May 1980. Yet expectations for a Dow 36,000 are easily the highest since October 2007. Although the chart that will blow everyone's mind is this comparison of the YoY change in retail sales and consumer sentiment. Two words: Peak Schizophrenia.

h/t John Lohman

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TooBearish's picture

Its inflation - RS nominally reported DOOD!

Corn1945's picture

Yeah, I don't believe retail sales are adjusted for inflation. So you can't just look at the headline number.

Comay Mierda's picture

real CPI running hot at 11.4%

tekhneek's picture

Easy now fuzzy little man peach.

You're not accounting for expansion and contraction in efficiency! If steak's expensive, people will buy ground beef instead thus maintaining their standard of living!

Everyone knows this. Go back to sleep. Nothing to see here.

No but seriously... inflation really is at 11.4% and real unemployment's hanging out around 24%. Good times. What was the great depression? 34% unemployment? 10% off...

Quinvarius's picture

Yeah.  And it is nothing that a 11% pay cut can't reverse, or an 11% drop in employment.  Everyone knows the key to printing money, giving it to your buddies, and having it maintain some value, is perma-recession.

idea_hamster's picture

Isn't this just what loss of confidence in a currency (i.e., pre-hyperinflation) looks like?

In 2008, people thought 'things are going to get worse, so I better stock up on what will help -- cash.'

Now, people think 'things are going to get worse, so I better buy [whatever] now -- I don't think I'll be able to afford it later.'

mayhem_korner's picture



You're right, but we aren't there yet.  The tipping point is when the masses realize that the almighty fiat is losing value and they begin in earnest to convert it to just about anything else.  Money velocity is THE KEY indicator of confidence loss and the accelerant to hyper-inflation (if it goes that way).

Pinto Currency's picture


Now wait for the markets to pile into general equities.  That will be the next sign that our currencies are failing.


P&G will sell soap in whatever currency - and make a profit.


There's been a pop in consumer discretionary purchases (usually leading indicator of consumers going on a buying binge) :  (see second graph).


But also a mother of a pop in M1 money supply which is very inflationary :


The Fed is hell bent on getting Obama re-elected.

Smiddywesson's picture

Weimar Republic:  Oct 1922 to Oct 1923, the markets rose 28x.  Generally, people flee to another currency when their own fails, but this was outlawed so people had nowhere to run but to stocks.  The same holds true today.  Interest rates are 0% and all other currencies are also being debased.  Hence, nowhere to run but real things.

darkhorse007's picture

Don't worry... the inverted yield curve will fix everything. 

pettolicious's picture

Let them eat ground beef and donuts??  

Newsboy's picture


What a twisted reference.

Won_Over's picture

Maybe it is inflation, maybe it's not.... I think it's bigger than that.... it's the depression that has hit mainstream that in order to feel good and not kill yourself the last thing to do is hit the mall and spend that last dollar of your last credit card that still has available credit. After that they will jump off the closest bridge wearing their new Armani clothes and coach bags.

Someone look at the pharma sales, specifically the division of anti-depressants.



Smiddywesson's picture

A friend works for a major distiller.  He told me the same.  People might not buy a new car during a recession, but they will buy luxuries like expensive booze because it makes them feel better.  His company is making massive profits from their most expensive lines.

That's why Hollywood made all those sappy synchronized swimming movies during the Depression, it make people forget for a while.

Janice's picture

Or...people are stocking up on expensive booze to be used as barter should it become necessary....liquor, the real poor man's gold.

JPM Hater001's picture

Someone look at lipstick sales.  They are the #1 indicator of "depression treat".

toady's picture


I wonder how lipstick would be used in a barter situation...

SemperFord's picture

A friend works for a large cable installer and not only are they getting overtime as more Americans sit on their fat ass, they are hiring! So bullish for anything the sheep dumb themselves with until umemployment benefits stop rolling in.

Jay Gould Esq.'s picture

Must be that Herm Cain rise in the polls which has everyone juiced.

Sudden Debt's picture

Good point, i'd like to see the inflation adjusted and gold comparison chart next to it and it will look like a cliff!

Divided States of America's picture

Its not the Americans buying, its all the Chinese coming over here to buy up all brand name high end stuff with their wads of cash....while we buy up their plastic useless junk in droves at Walmart. Thats a fair trade

GeneMarchbanks's picture

Good point. Make sure to call your Congressman in support of the China currency bill, it'll support job growth.

Divided States of America's picture

Had to buy a scarf for my gf at a LVMH store, which costs me and arm and a leg (1k) and when I went into the store, it was a like a chinkfest over there and these effers bought up the whole store like it was on sale. Guess the weak USD is indeed doing wonders for everyone else except the 99% of the US citizens. Those effers took all the stock in the scarf that I wanted to get so now I am on a waiting list for the next shipment. I hope it comes in soon because I have 2 weeks before her bday arrives. If it dont come in, I may have to go to Old Navy and pick one of those Made in China ones. Hope she dont mind.

unky's picture

For 1k i would consider change your gf. You can find many cheaper ones

earnulf's picture

Reality Check!    If you pay 1K for a scarf, you probably paid at least 975 too much.

Heck, Wally World has long sleeve shirts with free scarves for less than $10!!

(Wow, 1K could have bought 31 oz of Silver, which would be a lot better birthday present IMO!)

Temporalist's picture

Suckers like you are part of the problem.

spartan117's picture

What's the old saying about a fool and his money...

Divided States of America's picture

I will admit, I am a total idiot for doling out like this but I am sure when it comes to a girl, ppl do stupid things. Hopefully this is a one-off...I have my fingers crossed.

Temporalist's picture

I have an idea since you have two weeks.  Return the scarf, find one for $500.  Send me $100 for saving you $500 and you will have still saved $400.  Or you can send me the whole $500 in savings since I saved you the money after all.

Divided States of America's picture

Fortunately havent bought yet since I am only on a long waiting list so not out of the money just yet on it but will consider. your proposal.

JP McManus's picture

Here's an idea: Why don't you give me half the money your were gonna to [spend], then we'll go out back, I'll kick you in the nuts, and we'll call it a day!

Divided States of America's picture

Heres an idea: Go to the Occupy protest in your city and find a banker/cop/politician to kick in the nuts...will be more productive.

totem's picture

Why do you think it'll be a one-off?  If you give her a $1K scarf, you're setting yourself up for higher expectations.  And then maybe this: "What happened to the expensive gifts? Don't you love me anymore?"

Just be yourself.  If it's money she wants, let her go (she will ultimately leave anyway).  But if it's you she wants, what you get is not really important; so find something nice but not-too-expensive.

(On a slow-market day, ZH can morph into "Dear Abby"!  :-))

Divided States of America's picture

Kinda like what the markets are expecting out of the Europeans and their plan of a plan right now?? Going higher on higher expectations?

Good advice, l am thinking like the Europeans right now...wishful thinking.

The Limerick King's picture




My God, what's a fellow to say???

If you think that is wise

While some poor child dies

You're the essence of moral decay!  


Jay Gould Esq.'s picture

A thousand bucks. Such is love. 

Here's a Louis Vuitton...but, sorry, DS: Even for a thousand, the chick doesn't come with it.

Spastica Rex's picture

Man - that's the business to get into: selling really expensive shit to stupid rich people.

SemperFord's picture

1K for a scarf, you have to pay for her to slip off the panties, how sad. For that cash you can get a couple of girlfriends to do things your current one won't and you don't have to worry about going shopping!

jdelano's picture

My interpretation is that the confidence numbers just show you how doctored the activity numbers are....


go out and talk to your neighbors, the people that own your local bar, restaurant, dry cleaners--they ain't buyin' shit.  Nobody's buying shit except the 1%.  

Ctrl-Alt-Defeat's picture

Done that, you are entirely correct in my experience :(

centerline's picture

Most people I know are still on tight budget and continue to exercise restraint.  I do think some of these statistics are bogus and/or do not express the true nature of what is going on.

Like Mark Twain said "Lies, Damned Lies, and Statistics."

On the flipside, I do think that large segment of the population who is in debt originally went into a deleveraging mode with the S first hit the F.

Now, after taking on the revolving credit issues due to higher rates, many may have stalled due to low rates.  Either they have been lulled to sleep by the low cost to carry debt combined with economic uncertainly (holding cash), and/or they actively expect debt or the banks or both to blow up and don't want to send good money chasing bad money.

Either way, spending might tick up a little as the population becomes numb and/or says "fuck it, we are all screwed, so I might as well have a iPhone."

Just thoughts

Lone Mad Minute Medic's picture

I believe that small uptick in retail sales comes from three paychecks in sept.

alien-IQ's picture

45,000 Verizon workers ended the strike and went back to work. They had to put gas in their cars...hence the uptick.

pauhana's picture

True.  If the cost of everything you buy goes up, retail sales will look up as well but the hit to the pocketbook will affect how you feel about that spending - not so good.

Raynja's picture

Exactly, its not schizophrenia, its stagflation.

AbelCatalyst's picture

Actually, it's screwflation - higher prices, lower salaries... Thanks Ben!!

sabra1's picture

no santa claus for you, forever!!!!

alien-IQ's picture

Tyler, I think you fail to understand that the market is merely celebrating the crushing of all middle class hopes. That was, after all, the goal.

Johnny Lawrence's picture

A few people pointed out that retails sales was all seasonal-adjustment.  Not one category of the report should an actual increase in sales.

I am curious where Tyler got his "everyone expects Dow 36,000" info from.  I love seeing sentiment indicators on Wall Street.

Corn1945's picture

The retail sales numbers just don't jive with the other data out there: stagnant income, no real credit growth, high unemployment, and abysmal confidence readings.

I can only think of three things:

1) The gains are really from inflation because I'm pretty sure the numbers are not adjusted for inflation.

2) The rich command so much purchasing power that they alone drive retail sales.

3) The data is seasonally adjusted to show gains (ie, made up)