Tuesday, February 28, 2012
Every month the Consumer Confidence Board trumpets its findings and if its positive, it gives the rats and roaches on Wall St motivation to invest more and lying, disingenuous politicians the 'ammunition' to continually declare we're in recovery instead of Admit we're in year 5 of a depression.
Today, the Board proudly stated that US consumer confidence went up to 70.8 compared with 61.5 in January, noting in its official release that, "Consumers are considerably less pessimistic about current business and labor market conditions than they were in January. And, despite further increases in gas prices, they are more optimistic about the short-term outlook for the economy, job prospects, and their financial situation"
Let's put aside the fact that consumer confidence in April 2007, when the economic downturn first began was 106.3, Do you know how the Board comes up with its findings?
The Board takes surveys via telephone to ask people who don't seem to mind being disturbed during the dinner hour, their views of the economy. And do you know how many people they poll to get an accurate barometer of the mood of 310 million people?
And though their monthly findings are released at the end of each month, do you know when the cut off date is to compile their survey, released today the 28th?
So let's break down where the economy really is:
* New orders for durable goods fell in January 2012 by 4%-- the largest drop in Three years. Durables are usually a key indicator of how happy people are to spend big bucks on things (cars, homes, jewelry...) They are a True reflection of consumer confidence.. or lack of it.
* Case-Schiller index shows for eight consecutive months, house prices are Dropping, even with interest rates exceptionally low to entice people to get into 30years of debt, um.. I mean a mortgage.
When 49 attorneys generals got together recently to settle with banks on robo-signings and other unscrupulous practices (which banks always do), beyond the financial settlement which most of it being paid by Freddie & Fannie Mae (the taxpayers), it meant hundreds of thousands of homes in limbo could now be free to put up for sale on the market. And basic economics teaches you, the greater the supply, the less the demand and the less the buyer has to pay to acquire.
Ergo, home prices are going to keep dropping as sellers compete with banks trying to liquidate their newly foreclosed properties... Guess who can afford to go lower?
* People are using the credit cards again and its not to buy luxuries. From the New York Post:
"More American households are falling back into the debt hole — this time without the safety net of home values to help bail them out. Last year, total US consumer debt reached the highest point in a decade, according to a credit-card industry observer... In December, the total consumer debt, which is the combination of non-revolving and revolving debt, rose by some 9.3 percent to $2.498 trillion, according to the latest Federal Reserve Board numbers."
Nice to see One US newspaper openly acknowledge the economy is weak and unemployment is high.
And speaking of debt, do you know what the total US consumer debt is?
~ $2.48 trillion, the highest total in a decade.
And the total for US student loan debt?
~ Close to $1 trillion.
And how much has the government spent since 2008 to prop up banks, financials and buoy the stock market artificially?
~ $7 trillion.. enough to pay off the Entirety of US consumer and student loan debt, with $3.5 Trillion left over...
As an aside: Why parents are still pushing their kids to go to college today, we'll Never understand. Don't you people understand it is the one debt that can not be erased in a bankruptcy?! Unless you die or permanently disabled, it stays with you Forever! A young person becomes a debt slave at 18years old-- how cruel a punishment is that to push on your son or daughter, just so they become Another doctor, lawyer or Wall St rat.
And this notion of job creation-- where is it coming from?
It was announced last week, the Postal Service plans on cutting 35,000 jobs. Newly bankrupt American Airlines plans to lay off 2100 workers. IBM will be laying off 1000 workers. Then there's people working in government jobs on state and local level.. teachers, police, firefighters.. all laid off due to budget cuts... Where do these people find work-- McDonald's?
So honestly.. Why the Fuck would anyone feel More optimistic today than last month? Why would anyone truly believe things are getting better for the nation? Because the Dow is hovering at 13,000?? Because corporate profits have never been greater than since this depression began??
Our only reasonable guess why consumer confidence went up in February is that the Board was fortunate enough to poll 5,000 utter imbeciles who are too tired, busy and/or lazy to care about life outside of themselves.
Posted by Susquehanna at Tuesday, February 28, 2012