Consumer Confidence Lowest In 16 Years

Financial Times:

US consumer confidence dropped to a 16-year low this month, a level that has historically signalled recession.

The Reuters/University of Michigan index of consumer sentiment fell 11 per cent for early February to 69.6, compared with the previous month - the lowest level since February 1992. "Past declines of this magnitude have always been associated with subsequent recessions," said Richard Curtin, the director of the survey.

Read the whole story: Financial Times

Comments

[VivaZapata]

Lowest? someone still has ANY confidence left?

[loki]

Hold the phone, wasnt it just a couple weeks back we were being told that things were not bad and retailers were doing great?? That was just a couple weeks after we were told Xmas retail sales were in the toilet.
I sure wish they would make up their minds.

[themodernleader]

Bonddad and Olephart: I just read on Bloomberg that the Japaness steel makers have agreed to a 65% rise in the price of steel beginning in April of this year. This is devastating for the American consumer. We will no longer afford things made of steel and other metals.
We are losing control of our own house.

[olephart]

With oil prices and gasoline going through the roof, we could be self sufficient in steel as SUVs and pick Ups are converted into plug in hybrids. The ratio would be about four to one giving us a 25 year supply.

[olephart]

Posted reply to a Bonddad Article last month:

"Consumer prices rose by 4.1%" (official release)

"If year-over-year inflation hits 7-8% then stagflation talk is warranted, but not until then." (Bonddad quote)

Everyone knows that 4.1% number is as useful as a Kudlow tax cut. I submit that 7-8% is closer to reality and we are already experiencing Stagflation. Indeed, the bottom 65% of the workforce has been suffering from Stagflation for about three years. Also, I would bet that those in the 65% to 95% bracket pulled the most out of their houses and/or their houses showed the greatest appreciations over the last five years. Now with falling home prices, this group will get to experience (in a much more comfortable environment) what the bottom has been living through. No, they won't have to buy more Hamburger Helper but they may not purchase that new car or may take a beating on that second house. Those declining equity values along with declining home values are going to start showing up in retail spending especially at all those semi upscale shops where the well to do (now less well to do) have been shopping. Watch the employment numbers in retail. Watch the small business bankruptcies. Watch the economic stimulus package yield a speed bump in the road to disaster.

posted 01/18/2008 at 19:22:39


Just released:

January import prices rise 13.7% year over year.

http://www.bls.gov/news.release/ximpim.nr0.htm

also:

Retail Sales Show Inflation, Not Growth

http://bigpicture.typepad.com/comments/2008/02/retail-sales-sh.html


It's getting closer.

[themodernleader]

When the factories are shutting down; when the decent jobs leave and don't return; when the factories shut down and are dismantled for scrap; when the big banks created by Reagan to compete in the world go bankrupt and are bought up by Arabs; when the construction stops as abandoned houses are stripped of their metal and other valuables; when the Wall Street speculators and swindlers demand that their Federal Reserve servants funnel the American-printing press paper to and through them; when the Administration tells us time and again that the economy is fundamentally sound: Americans know this Country is in trouble--big time.

[LammertMacroeconomics]

13 March 2008 - The Next Predicted Low by the Macroeconomic Saturation Model

Asset valuations are a money phenomenon. This money can be either real, derived, or, in a speculative manner, borrowed. The latter two categories shared the commonality that the terms of repayment must be executed against ongoing and future (sustained) earnings or against ongoing and (sustained) future wages of the consumer masses. At generational saturation areas collective consumer wages are constrained by oversaturation of ownership, oversupply, and overvaluation of these assets with decreasing requirements for demand related ongoing production. Nonessential service related jobs including debt creation services disappear. The job contracting macroeconomic system cannot support ongoing asset related debt servicing, insurances, and taxes. The current generational macroeconomic saturation area is unique in that the world has never experienced the amount of derived or borrowed money created by the practices of the related financial service sectors. That owed money is now disappearing exponentially through default. From a day before the Wilshire's predicted high on 11 October, a first decay fractal of 31 days (8/17/8 days) is discerned. The second fractal is currently on day 59 of an expected 2x or 62 day lower high growth period, followed by a 15 day non linear drop in likely a 3/7/7 day fractal decay sequence. New municipal and state debt and old municipal and state debt the latter which is retired by issuance of new debt may be the epiphenomenon qualitative canary in the coal mine relating to the amount of real money available. As the prospects of future default on these issuance's becomes a possibility, will all of the Wilshire's down going trend lines be breached as the imbalance between the money needed for reissuance of old debt and the creation of new debt - and real money available becomes evident?

[VivaZapata]

The big boys have accomplished their mission, via inflation they are weakening the working man's purchasing power. Since most of them cashed out and bought gold, they have set themselves up nicely to scoff up stuff when everything is down. This will backfire on them though as the pensioners will be eating cat food and the workers will be cooking lima bean soup: business will stagflate.

[realitytrumpsbull]

I think they should shut the stock market down for a month, and publicly ass-paddle anyone shown by documented, triple-verified proof to be up to any kind of shady business, and do it right on the front steps on live TV, then give the perps a video copy to keep and treasure for all time...day-trader scarlet letter, there.

[mmckinl]

"Meanwhile, import prices for food, energy and other commodities rose 13.7 per cent in January, compared with a year earlier, the biggest increase since records began in 1982." Isn't this reason enough to lose confidence.

Throw on top of that, declining home prices, increasing health care premiums and deductibles, declining real wages and pensions, and the increasing costs of all education, K-college, including books, fees, tuition and room and board.

Now include the cost of losing two wars that we were lied into.

This country is broke and broken.

[bmermaid]

Try 26 years. It hasn't been this bad since the inflation of the 1980s.
I remember how it used to be circa 1980, when every time I went to the grocery store, everything cost more. I hate for my kids to go through it, because it's hard when you're starting out.

[joebaggadonuts]

No, I think the consumer confidence of 92 is about right. That's when we had the slogan "It's the economy stupid" in the presidential race. http://en.wikipedia.org/wiki/United_States_presidential_election,_1992

Like all things economic, the market had already reached bottom, THEN.

Now, we are still on the way there, so the consumers are beginning to notice. It feels to me like it's going to get a lot worse before it gets better. The early 80's may be a good comparative date, I remember things going up fast. I just don't think anything in living human memory is like what is going on now. And for some reason, I don't think it's quite like the late 20's either.

[abbiehoffmansghost]

How could it get any lower? This article

CounterPunch Diary
The Terrorists Still at Ground Zero, 7 World Trade Center, Lower Manhattan By ALEXANDER COCKBURN here
http://www.counterpunch.org/ will give you some insight into how terrorism is the reason for the dangerous economy. It's not what you think but is patently obvious.

[mrcontinental]

That's totally disgusting. No mention of the almost one trillion defense budget as a problem.

Canada here I come I suppose.

[mmckinl]

Canada will be hit hard as well ... Any country that is integrated into the US financial system, as Canada is, will get hurt.

Try Singapore, I hear Jim Rodgers is there!