What's Wrong With This Chart?

Tyler Durden's picture

One (and by one, we mean the incumbent presidential candidate) can only hope that consumer comfort tracked by Bloomberg is not a leading market indicator... Of course, with Wall Street now solidly on the side of Mitt Romney, and well aware it needs to crash the S&P ahead of November if Romney is to have a running chance, this may well be the case.

 

Bloomberg Consumer Comfort Index vs S&P 500...

 

Chart: Bloomberg

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holdbuysell's picture

Hey, the green line and red line are no longer tracking together... /sarc

LongSoupLine's picture

yep, it means algos don't need comfort nor confidence

Dr. Richard Head's picture

"Correlations between markets and consumer sentiment are hereby null and void" - Ben Bernanke

Hippocratic Oaf's picture

It'll correct itself, but only AFTER the election.

Doesn't matter who wins, but nothing will happen before that. 

After that..............hide yo kids

AldousHuxley's picture

market priced in FED's stimulus.

consumers not pricinging in...also consumption gets eaten away via inflation while market reflects inflation.

 

no wage increase for last 3 years means 3 *4% = 12% wage CUT

 

http://static4.businessinsider.com/image/4e9a0fb86bb3f7754b000000/income...

 

infact last 15 years has been terrible for workers.

SWRichmond's picture

Hey, dummies!  The green line is supposed to drag the red line along with it!  Be comfortable, dammit!  Don't you know what "wealth effect" means?

bdc63's picture

CLEARLY what the 'consumer comfort' number needs is a BLS birth/death adjustment ....

Hype Alert's picture

Bush did it.

 

No wait, the TOTUS said you didn't build that on your own, the government helped.  I think I'll give the government full credit for this one.

vast-dom's picture

"crash" is SP 1000 > Romney > QE4 > SP 1250 > QE5 > ... > SP 780

falak pema's picture

you don't live in the same land as Joe W :

US Economy Relative Strength - Business Insider 

Three Reasons The US Economy Is Doing Better Than Everywhere Else In The World - Business Insider

You don't drink the Kool Aid this guy drinks ! Lol!

You're more on this tack, as published by the all accomodating BI who panders to all tastes :

The End Of US Economic Growth - Business Insider

Well, well, the Usa the envy of the world and at the end of its thether...something tells me the world of BI is very round! 

STP's picture

Great article by the "Business Insider"!  Not many articles wrap up all of the problems associated with the lack of growth.  A good example is demographics.

RationalPrepper's picture

Vast-dom,

 

Please include dates on QE4, SP1250, QE5, and SP780 so I can trade accordingly,

Thanks - RP

 

HaroldWang's picture

Yep. Been following this data point for weeks yet never, ever a mention of it anywhere except here and Bloomberg, of course.

Spider's picture

Wrong - people arent buying bonds anymore so nowhere for the money to go except stocks and bullion.

fonzannoon's picture

thats a real interesting observation spider. worth watching.

Spider's picture

Whats interesting is if the Fed does NOT do QE then who is left to buy US bonds?  Bond prices rise and existing bondholders get slammed, which is good for stocks and commodities because all that bond money has to go somewhere.

If the Fed does QE then we know what happens to stocks and commodities...

Look at the US 10-yr today, down only 1.3% while the German 10 yr is down 6% even with stocks dropping.  Could people start abandoning US bonds BEFORE the Euro crisis is resolved, which is AGAINST popular opinion? (i.e. US Dollar gets stronger b/c Euro-crisis hasnt been resolved).  Not sure but if you want to be a contrarian thats where you'd be..

fonzannoon's picture

THe playbook says crash Europe, therefore Europe buys US treasuries, China gets scared again and starts buying because it still has not figured out what to do. I also think every 401k ends up in a bond fund next leg down. Why try for 8% in the S&P as long as you can get 5% in your bond fund every year?

Alea Iactaest's picture

Spider and Fonz - Nice lovefest you two have going on, same person? No time for me to refute point by point but your analysis is terrible and needs to be challenged. I am simply posting this for anyone thinking the above analysis holds water. Later.

vast-dom's picture

china buys PM's and dumps US paper since their exports are going down the drain anyhow.

Spider's picture

Nah Fonz and I arent the same person ... not sure what i'd gain by creating profiles simply to respond affirmatively to my posts since I really could care less if people agree or not.  I'd rather hear why they disagree

So Alea, i'd love to hear who's going to be buying those Fed bonds without QE?

DeadFred's picture

People who are scared silly when the stuff starts getting thrown off the blades of the fan will buy the bonds is my guess. The Fed may or may not be able to help this ailing economy but they can certainly roil up enough fear to get the bonds sold. You'll know its here when El Erian and the other gloom and doomers get lots of MSM face time. They may be a bit delayed this time because they only appear toward the end of the dump and this one has just been birthed. Dropping from the strong resistance in the S&Ps mid 1400's would have been more impressive but we may have to settle for the double top scenario. Who knows, maybe they have one more mini-ramp left in them and we'll get our wishes.

poor fella's picture

How many times can that occur though? Another balloon that needs to be constantly inflated (unless the govt actually tackled the budget), which they are too polarized and happy NOT to do (since priority number 1 = deadlock). They'll scare up enough bond buyers a few times, but gradually that money is moved and dead.. Inflated equity markets are the same - when the markets start falling (especially on low volume) and perceived value of the superstars is finally deflated, equity and assets will be vaporized and the Fed pumping was all for nought. These money flows are not producing wealth, just another chance to churn and fee, on the way down. There is absolutely NO WAY to reinflate the financial system from the top - it destroys 90% of the base the top is built upon. Nobody wants handouts or will accept socialism forever, contrary to popular belief, because people LIKE to work - The debt/consumer/service system is locking up, which is why the landing will not be easy.

This is 'The Forest' I perceive through the trees. It's possible our representatives can get their shit together, even if ONLY to save their own necks, but I'm not counting on it.

Panafrican Funktron Robot's picture

"i'd love to hear who's going to be buying those Fed bonds without QE?"

I completely agree with what is implied here, ie., the bond market is way, way the fuck overpriced in the absence of serious Fed intervention, but the thing is, the Fed has been intervening all along here, and I doubt they would discontinue this practice anytime soon.  Keep in mind, they don't actually have to announce shit in order for said shit to happen.  

"all that bond money has to go somewhere."

If bonds do go to shit, it's not a given that it's going to go into stocks/commodities.  While I personally invest heavily in real currency (gold), I don't necessarily anticipate a stampeding herd, and with retail more or less perma-out of the stock market, I see people just sitting in cash to be perfectly honest.

fonzannoon's picture

alea thanks for your insight. i will really take it to heart. 

DeadFred's picture

TLT has regained 38% of its month long drop in the last couple days, after making a double bottom. Who knows if it hits the insane highs again but those of us in the housing market have our fingers crossed.

LMAOLORI's picture

 

 

fonzannoon

Look who wants to put your 401K into a privately run system 

 

snip

Two weeks ago, Sen. Tom Harkin (D., Iowa) proposed revamping the U.S. retirement system by replacing the 401(k) with a privately run retirement plan that would provide lifetime income benefits, similar to a pension.

Now, a new report from Fidelity Investments paints an optimistic picture of the 401(k)’s impact. On Aug. 2, Fidelity released an analysis of the 11.9 million 401(k) accounts it administers. Since 2009, the company says, the average employee contribution in the second quarter rose by $150, to $1,660. Employers, for their part, contributed an average of $950 in the second quarter, up $90 since 2009.

“Rising contribution levels from both employees and employers show a strong commitment that both have to workplace savings plans,” James McDonald, president of Workplace Investing for Fidelity, said in a prepared statement.

fonzannoon's picture

that mechanism already exists in the form of a variable annuity. i am surprised zh does not post more about them. maybe alea can shed some light...oh wait he has nothing intelligent to add

Chuck Walla's picture

Two weeks ago, Sen. Tom Harkin (D., Iowa) proposed revamping the U.S. retirement system by replacing the 401(k) with a privately run retirement plan that would provide lifetime income benefits, similar to a pension.

Komrade Harkin is a fellow Communist by any other name. He is also a 1st class imbecile and possibly senile. That said, stealing, appropriating  401K money is his ultimate wet dream. Then he can really help pay off all the friends, pals and cronies of the elite. He is a petty thief of the lowest brand.

 

FORWARD SOVIET!

Arnold's picture

The reason for this seeming increase is that traditional pension funds are poorly funded. New hires(less than 5 years) are generally required by contract to paticipate in the 401k system and old hires for the most part do not think they will receive a full pension that they were promised.....Also as a savings plan, you can generally borrow against it.... The Fidelity 401k plans that I have contributed to charge high fees, making it very difficult to have positive returns.... And the period to become vested is very long,3-4 years. If you are not vested, you loose the company match at separation.

SheepDog-One's picture

'No place for the money to go except stocks and PM's', well smart people dont forget guns and ammo, and some extra clothes and boots and food and stuff cant hurt either...I bet most people on financial sites dont even own 1 pair of decent boots yet try to figure how to buy another share of Apple.

FLUSA.com's picture

And real estate....Im seeing people buy large commercial deals for crazy money.  For example people buying entire unsold condo projects for full retail value on a per unit basis. One would think you get a bulk discount.  Not to mention the insane carry cost these things have too.

SheepDog-One's picture

I'll never buy real estate its the worst investment ever, people are crazy to keep jumping into that fraud. You never end up 'owning' it at all youre just a renter.

Beam Me Up Scotty's picture

Exactly.  They can raise your property taxes up until you can't afford to keep it.  They don't even need eminent domain to run you off your property.

Also, if the SHTF, how are you going to keep squatters out of your lake cabin, or hunting cabin or off other property you might own?  You will be paying for them to own your property.  Good luck defending your properties unless they are all relatively close together.

I am more equal than others's picture

Wrong - people arent buying bonds anymore so nowhere for the money to go except stocks and bullion.

Oh, mon friar, you are wrong.  It can be piled up and burned.  It can be used for toilet paper but isn't absorable at the real stuff.  It can be used for Monopoly money.  It can be used as confetti after the end of the next world war. Oh, it can be used to judge the worth of others. 

11b40's picture

It can simply sit on the sidelines.  After all, we keep hearing about all the trillions sitting on the sidelines just waiting for this development, or that magic catalyst, or sudden clarity as to what the future holds.....which is pure BS. 

Investors are waiting for fundmentals to improve.  Not day traders, algos, momo's, etc.

Businesses are waiting for DEMAND to return before putting capital to work.

All the rest is just noise.  When someone has a real bona fide asnwer as to how to jump start that virtuous cycle once, please let me know. 

Obummer has not been able to do it, as he licked the boots of the leeches who got us here.

Romey won't do it, as he is joined at the hip of that same tribe of leeches who got us here.

All the answers are politically unpopular - or so they think.  The people could probably handle the honesty, but whoever tries to be honest will be curcified by the opposition promising the people they have a "secret plan" to turn unicorn farts into gold if they get elected.

11b40's picture

It can simply sit on the sidelines.  After all, we keep hearing about all the trillions sitting on the sidelines just waiting for this development, or that magic catalyst, or sudden clarity as to what the future holds.....which is pure BS. 

Investors are waiting for fundmentals to improve.  Not day traders, algos, momo's, etc....INVESTORS

Businesses are waiting for DEMAND to return before putting capital to work.

All the rest is just noise.  When someone has a real bona fide asnwer as to how to jump start that virtuous cycle once, please let me know. 

Obummer has not been able to do it, as he licked the boots of the leeches who got us here.

Romey won't do it, as he is joined at the hip of that same tribe of leeches who got us here.

All the answers are politically unpopular - or so they think.  The people could probably handle the honesty, but whoever tries to be honest will be curcified by the opposition promising the people they have a "secret plan" to turn unicorn farts into gold if they get elected.

malikai's picture

I think this chart means peace, prosperity, and unicorns riding unicycles.

Ignatius J Reilly's picture

welp, there was a picture I was trying to post here of a unicornbrowcycle (unicore with a unibrow riding a unicycle).  Just give me the benefit of the doubt that it was funny.

schatzi's picture

Clearly the consumer is misinformed by the likes of Zerohedge. It's all good. Trust me.

GeezerGeek's picture

I'm having some major renovations done to my house in SE Florida. I asked him, moments after reading your comment (yes, I know sarcasm when I see it), how his future business looked. He wasn't optomistic, whereas he was more upbeat several months ago. Anecdotal evidence only.

fonzannoon's picture

what percentage of obummer supporters have a lot of money in the market? if the market crashed obummer would offer that to his base and they would cheer it.

toady's picture

I don't care about obama, but I would cheer a market crash. The sooner the financial crimes against humanity stop the better off we'll be. I mean a real wipe out, no coming back from this kinda deal.

Stop digging the hole!

Spastica Rex's picture

Seems like many major league bankers support Obama, so...

crawl's picture

The algos won't sell.