While it was all good and fine for Howard Penney and I to get excited about this chart bottoming in Q1 (being long the MEGA Squeeze in Consumer Discretionary), everything that matters to our macro model continues to occur on the margin. This morning’s US Consumer Confidence report (see chart) of 46.6 for July was a downtick from last month’s reading of 49.
As importantly, this month’s reading flashes another lower-high on the US Consumer’s appetite to buy into Wall Street/Washington latest line of storytelling. As the story goes, there is no inflation that will be born out of our government Burning The Buck. Bernanke and Geithner can issue limitless levels of credit creation, saving the Debtors obligations and the Bankers bonuses alike, and the US Consumer shall stand in line taking it for the man.
*Editor’s Note: on a 30 year basis, the only chart US macro chart that I can find that looks this bad is that of the US Dollar.
As the Debtors get paid, the Creditors pay the bills. The US Consumer is not stupid.
Keith R. McCullough
Chief Executive Officer