The following chart represents the all-time record-low household confidence of a European nation (which, in the last month, fell at the second fastest rate in 20 years).
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This nation's equity market is near pre-crisis highs having rallied over 37% in the last 11 months. This nation's bond market risk is near post-crisis lows with its spread having halved in the last year.
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Name that Nation...
The answer, perhaps unsurprisingly, is 'France'.
Simply put, French households have never been more depressed in terms of their economic confidence - in perfect anti-thesis from the euphoria of their capital markets.
Why is this such a problem? Because consumption - that staple of economic growth - is so highly correlated to household confidence, it is likely that this all-time low print signals a third quarter in a row of declining retail sales. Households’ propensity to make important purchases was also at its lowest level since 2008.
This, of course, will come as no surprise to ZH readers as we have explained (most recently here [8] and here [9]) just what the reality is in France and here how vast the yawning divide [10] is in the supposed core of Europe.
Charts: Bloomberg