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Thursday, September 27, 2007

 

september consumer confidence


the appended table is becoming too unwieldy, so i'm adding the graphs.

monthpresentfuturedifferentialspx
 Sep-07 121.7  85.2  (-36.5)  1528 
 Aug-07 130.1  89.2  (-40.9)  1451 
 Jul-07 138.3  94.4  (-43.9)  1455 
 Jun-07 129.9  88.8  (-41.1)  1503 
 May-07 136.1  90.1  (-46.0)  1530 
 Apr-07 133.5  88.2  (-45.3)  1482 
 Mar-07 138.5  87.9  (-50.6)  1420 
 Feb-07 137.1  93.8  (-43.3)  1407 
 Jan-07 133.9  94.4  (-39.5)  1438 
 Dec-06 130.5  96.3  (-34.2)  1418 
 Nov-06 125.4  91.9  (-33.5)  1400 
 Oct-06 125.1  91.9  (-33.2)  1377 
 Sep-06 128.3  91  (-37.3)  1335 
 Aug-06 123.9  84.4  (-39.5)  1303 
 Jun-06 132.2  87.5  (-44.7)  1277 
 May-06 134.1  85.1  (-49.0)  1270 
 Apr-06 136.2  92.3  (-43.9)  1310 
 Mar-06 133.3  90.3  (-43.0)  1294 
 Feb-06 130.3  84.2  (-46.1)  1280 
 Jan-06 128.8  92.1  (-36.7)  1280 
 Dec-05 120.7  92.6  (-28.1)  1248 
 Nov-05 113.2  88.4  (-24.8)  1249 
 Oct-05 107.8  70.1  (-37.7)  1207 
 Sep-05 110.4  72.3  (-38.1)  1228 
 Aug-05 123.8  93.3  (-30.5)  1220 
 Jul-05 119.3  93.2  (-26.1)  1234 
 Jun-05 120.8  96.4  (-24.4)  1191 
 May-05 117.8  93.4  (-24.4)  1191 
 Apr-05 113.8  86.7  (-27.1)  1157 
 Mar-05 117  93.7  (-23.3)  1180 
 Feb-05 116.8  96.1  (-20.7)  1203 
 Jan-05 112.1  100.4  (-11.7)  1181 
 Dec-04 105.7  100.7  (-5.0)  1211 
 Nov-04 90.2  96.3  6.1  1173 
 Oct-04 92.2  94  1.8  1130 
 Sep-04 97.7  95.3  (-2.4)  1114 
 Aug-04 100.7  97.3  (-3.4)  1104 
 Jul-04 105.3  106.4  1.1  1101 
 Jun-04 100.8  105.9  5.1  1140 
 May-04 90.5  94.8  4.3  1120 
 Apr-04 90.4  94.8  4.4  1107 
 Mar-04 84.4  91.3  6.9  1126 
 Feb-04 83.3  91.9  8.6  1144 
 Jan-04 79.4  107.8  28.4  1131 
 Dec-03 74.3  103.3  29.0  1111 
 Nov-03 81  100.1  19.1  1058 
 Oct-03 67  91.5  24.5  1050 
 Sep-03 59.7  88.5  28.8  995 
 Aug-03 62  94.9  32.9  1008 
 Jul-03 63  86.3  23.3  990 
 Jun-03 64.2  96.4  32.2  974 
 May-03 67.3  94.5  27.2  963 
 Apr-03 75.2  84.8  9.6  916 
 Mar-03 61.4  61.4  0.0  848 
 Feb-03 63.5  65.7  2.2  841 
 Jan-03 75.3  81.1  5.8  855 
 Dec-02 69.6  88.1  18.5  879 
 Nov-02 78.3  89.3  11.0  936 
 Oct-02 77.2  81.1  3.9  885 
 Sep-02 88.5  97.2  8.7  815 
 Aug-02 93.1  95.5  2.4  916 
 Jul-02 99.4  96.1  (-3.3)  911 
 Jun-02 104.9  107.2  2.3  989 
 May-02 111.2  109.7  (-1.5)  1067 
 Apr-02 106.8  109.6  2.8  1076 
 Mar-02 111.5  110.2  (-1.3)  1147 
 Feb-02 96.4  94  (-2.4)  1106 
 Jan-02 98.1  97.6  (-0.5)  1130 
 Dec-01 97.8  92.4  (-5.4)  1148 
 Nov-01 96.2  77.3  (-18.9)  1139 
 Oct-01 107.6  70.8  (-36.8)  1059 
 Sep-01 125.4  78.1  (-47.3)  1040 
 Aug-01 125  79.2  (-45.8)  1133 
 Jul-01 151.3  92.9  (-58.4)  1211 
 Jun-01 156.8  93.5  (-63.3)  1224 
 May-01 159.6  87.1  (-72.5)  1255 
 Apr-01 155.6  78.2  (-77.4)  1249 
 Mar-01 167.5  83.1  (-84.4)  1160 
 Feb-01 170.5  77  (-93.5)  1239 
 Jan-01 176.1  96.9  (-79.2)  1366 
 Dec-00 177  95.8  (-81.2)  1320 
 Nov-00 179.7  101.2  (-78.5)  1314 
 Oct-00 177  107.4  (-69.6)  1429 
 Sep-00 182.5  115.9  (-66.6)  1436 
 Aug-00 183.4  113  (-70.4)  1517 
 Jul-00 186.8  113.7  (-73.1)  1430 
 Jun-00 180.2  111.2  (-69.0)  1454 
 May-00 183.6  118.7  (-64.9)  1420 
 Apr-00 180  108.2  (-71.8)  1452 
 Mar-00 182.5  106.8  (-75.7)  1498 
 Feb-00 181.1  115.5  (-65.6)  1348 
 Jan-00 183.1  119.1  (-64.0)  1394 
 Dec-99 181.5  114.7  (-66.8)  1469 
 Nov-99 176.8  110.4  (-66.4)  1388 
 Oct-99 173.5  101.1  (-72.4)  1362 
 Sep-99 176.3  106.2  (-70.1)  1282 
 Aug-99 176.2  108.9  (-67.3)  1320 
 Jul-99 179.2  107.6  (-71.6)  1328 
 Jun-99 175  114.9  (-60.1)  1372 



So consumer confidence is where it was a year ago. Earnings growth from prior years was not reflected in the market and continues to be great.

This has happened in the face of rising oil prices and the housing problems.

What is the lesson?

 
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not sure, jeff. but i do think there are signs of a problem here. (there usually are! lol)

confidence trends may be changing, and i think the trend is more important than the absolute level. present situation is the lowest reading since december 2005 (post-katrina) after building more or less steadily since mid-2003. present situation tends to lag the market at the bottoms but is closer to coincident at the tops.

the differential (future less present) is also possibly breaking trend -- and down from a point (-50) that often marks euphoria.

given the tightening of credit that we're witnessing in europe and the united states -- and what i would suggest is both slowing earnings growth and earnings growth increasingly concentrating in energy -- as well as employment ratio declines -- and poor market performance of consumer discretionary -- a change in confidence trend could be the harbinger of recession.

granted, historically earnings have to coincidentally collapse to push the market way down. so the lesson for the market remains questionable for now.

but i would suggest that the march of ever-increasing gearing has abruptly halted as banks are being forced to hold bridge loans as well as loans previously slotted for securitization, not to mention bringing a lot of commerical paper structured finance back on balance sheet. all this in the face of all-time-low reserves.

if banks cannot increase lending because of balance sheet issues, credit supply -- and therefore money supply -- contracts regardless of what the fed does with fed funds. that may in fact be some of what we're seeing in deteriorating consumer confidence.

 
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