This Won't End Well; Never Has

The worst trade deficit in five years is the latest example of 'hard' data disappointment and decline - something that is dramatically different from the massive spike in 'soft' survey data that we have been exposing for months. The reality-gap between the two - call it 'animal spirits' - has never been bigger... and that gap has never been filled by real activity's rise to hope.

Real economic activity has tumbled back to its weakest level since the election as surveys' hope soars near record highs.


Breaking down the data further shows that in fact the household has suffered the most even as surveys have soared on hope.


And for those that "believe" that the real economy will catch up to the "pretend" economy soon. Think again...


It never has - and stocks tend to follow the 'hope' lower.