On US Consumer spending slowing sequentially, Howard Penney has been as right as the rain feels today in New Haven. If some people don’t understand that the Dollar Down doesn’t get everyone paid at this point, some of those people probably wouldn’t know they are getting wet when rained on either.
The better balance of the rally in stocks since the summer’s highs had everything to do with a US Dollar debasement. We called this Burning the Buck. As the Buck Burns, Debtors and Bankers get paid – the Consumers and Creditors pay the bill.
While I have covered our short positions in both US Consumer ETFs in the last 2 days (XLP and XLY), that was simply because they were down. I will re-short them, at a price. This is not a V-shaped or squiggly shaped Cinderella US Economic recovery. It’s the same kind of recovery we have had in 11 out of the last 11 recessions – 1 to 2 quarters in length, then the US Consumer will call it from there. Stay tuned.
For now, Consumer Confidence continues to make a series of lower-highs (see charts below). Americans are not as stupid as Washington thinks they are.
Keith R. McCullough
Chief Executive Officer