Barrons.com: No War, Economy Expanding
Long time readers know I am a fan of Barron's, and frequently reference the usually fine Econoday updates of daily economic data. But the NYT's Floyd Norris points to what can only be described as the single most absurd commentary on Sentiment data you will likely read in your lifetime.
"Consumer confidence is unusually low, at its fifth all time worse reading in 40 years of Conference Board data. The Conference Board's consumer confidence index literally plunged in June, down nearly 8 points to 50.4. The expectations component is at a record low of 41.0, down more than 7 points, with the present situation at 64.5, down nearly 10 points for its worst reading since the early part of the ongoing expansion in 2003. But there is an expansion still underway and this is not a time of war, which makes the results difficult to figure."
Normally at this point in our conversation, I would be railing about whether the economy is expanding, given the negative readings in jobs creation, manufacturing, income, and consumption, and how understated inflation makes GDP look better than it is regardless.
But considering that this is not a time of war, I must have another explanation. It seems I have fallen thru a tear in the fabric of spacetime into an alternate universe. Back in my universe, where the US is likely in a recession, there is also two wars going on, one in Afghanistan and one in Iraq.
This tear in the fabric of spacetime does explain some of the more absurd commentary we have heard over the past few years: That the credit crisis is contained, or the economy was doing well, that real estate has bottomed, etc. We are simultaneous inhabiting two separate universes, one where everything is going swimmingly -- and this one.
The disagreements about the state of the economy, the housing debacle, and the credit crisis seem to come about when someone from THAT universe -- the one where the economy is expanding and there is no war -- accidentally falls into OUR universe -- but keeps discussing their universe.
Other than that, I can find no other explanation for the Barron's Econoday commentary. Can you?
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We'll have more on Sentiment data later today . . .
NOTE: This data is not the same commentary found in Barron's the weekly financial magazine, but rather, is via Econoday, which feeds some data and commentary to Barron's. Its not the sort of thing you can blame Rupert Murdoch for . . .
UPDATE: June 26, 2008 10:32pm
CORRECTION/CLARIFICATION: The original reference to war excluded the word "beginning" preceding the phrase. Corrected text below. Our deepest apologies to those we may have inadvertently offended.
Consumer confidence is unusually low, at its fifth all time worse reading in 40 years of Conference Board data. The Conference Board's consumer confidence index literally plunged in June, down nearly 8 points to 50.4. The expectations component is at a record low of 41.0, down more than 7 points, with the present situation at 64.5, down nearly 10 points from its worst reading since the early part of the ongoing expansion in 2003. The results are difficult to figure. The expansion is still underway and we're not at the beginning of a war such as 2003 or 1990 when the last such lows occured.
http://premium.econoday.com/reports/US/EN/New_York/consumer_confidence/year/2008/yearly/06/index.html
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Previously:
Are We Too Gloomy?
http://bigpicture.typepad.com/comments/2008/06/are-we-too-gloo.html
Sources:
War? Recession? Not Here
Floyd Norris
June 25, 2008, 3:41 pm
http://norris.blogs.nytimes.com/2008/06/25/war-recession-not-here/
Consumer Confidence 10:00 ET
Barron's Econoday, June 25, 2008
http://premium.econoday.com/reports/US/EN/New_York/consumer_confidence/year/2008/yearly/06/index.html
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Thursday, June 26, 2008 | 07:14 AM | Permalink
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Comments
Tell that to all the guys at Walter Reed.
Posted by: Chad @ Sentient Money | Jun 26, 2008 7:38:05 AM
While the alternate universe theory is attractive, I find that it is more likely that cognitive dissonance overload is more likely.
It's what happens when people spend so much time positing theories that are diametrically opposed to the facts at hand that they create a virtual alternate universe.
Every day we see examples of this syndrome.
We've had many sophisticated financial folks who continue to maintain that we can borrow our way out of a debt problem. Last week it was politicians who were convinced that drilling our way out of an energy problem was as easy as eating your way out of an obesity problem.
The worst thing about cognitive dissonance overload is that eventually the victims' heads explode from the intracranial pressure, and it's awfully messy. Don't stand very close to any mainstream political pundit, Fox news personality, or a representative from a realtors group.
Posted by: Someone of no consequence | Jun 26, 2008 7:48:51 AM
The elites in this country do live in another universe, It's called denial.
Oh, and don’t forget there are ladies at Walter Reed also.
Posted by: Formerly known as... | Jun 26, 2008 7:53:25 AM
I'm not quite such a fan of Barrons as you BR. They've long been fully paid up members of the Rose Tinted club like their stablemates over at the ed page and to some extent the reporting pages of the WSJ. To be honest I only read it intermittently but the "tone" is basically always the same so I assume this reflects their editorial stance.
Posted by: John | Jun 26, 2008 8:24:42 AM
Obviously you haven't been keeping up w/ modern physics. According to some variants string theory, there may be several trillion simultaneous universes (but, can or should the word "universe" ever be used in it's plural form?) and we just happen to be in one of them. Sort of gives you an idea of why a lot of physicists prefer finance to theoretical physics. Well, that and the money.
Now get in your worm-hole and you can travel to one of the other universes if you dare.
I prefer the universe of Rock Candy Mountain, where work is a four letter word, and the rivers flow with whiskey.
But seriously, the economy has not yet collapsed, and neither of the two wars are existentially threatening. I see the sentiment numbers as evidence of the innate fear of gravity. Once at the top, which really the US, more or less still is, and has been for a while, all roads lead down. I think people are beginning to come around to the notion that things are not apt to get any better for awhile, (or, at least not until our new Messiah Obama is crowned)and in the meantime, they might just get a good bit worse.
Posted by: Donkei | Jun 26, 2008 8:37:15 AM
Lower the price of oil ... Save The World. It's just that simple. Everything else is old news, which is not to say it doesn't have an effect. Nobody really cares that much about financials except those who are unlucky enough to own some at this time and those who want a bottom so they can satisfy some avarice.
Most people believe the price of oil is fake. By inference, the system is crooked and investing in it is not safe. You not only have economic risk, you now have the risk of being ripped off by someone sending out another memo in an attempt to bird dog another price jump. All problems will begin to unwind and correct properly when Congress fixes the oil mess, hopefully in July.
It is astounding how many analyst types and pundits ignore oil when 'noticing' there are problems in the financial world. It's still housing, financials, rating agencies, write offs and the like. Yes, those are important, but they are yesterday's news and only affect a segment of the economy.
Rather than note oil is sapping disposable income, pin head pundits remember the recent past use of the home as an ATM and forget that not everyone is as clumsy with their personal finances as those who are so much fun to write about. Rather than apply a little common sense to oil prices and the rapid price run up and the lack of shortages of anything made from oil, pin head pundits speak the catechism of the ostrich, and talk stupid.
Rather than examine the complex way derivatives can be used to invest in oil, most stump brained thinkers only think of vanilla shorts and longs in commodity futures and ignore exotic methods. Plus, greed speaks ... "It couldn't be MY investments causing this mess!"
Incidentally, I up a little from my return back into the markets a couple of days ago. It could disappear in a day, but I'm happy. I went nowhere close to oil or anything related to natural resources. I'm going to buy them on the dip, or possibly crash, in August. I'm expecting everything else to look like Goldilocks on meth and crack combined later this summer.
Posted by: cinefoz | Jun 26, 2008 8:38:15 AM
Did Kudlow help write that article??????
Posted by: gunthestops | Jun 26, 2008 8:38:55 AM
I love Alan. Santoli is a thoughtful guy but I knew Jack Kennedy and he's no Jack Kennedy.
The comment about elites is right on. The reality is the minions are in a fight for their life. Those writing for Barron's live in an alternative universe. That is reinforced by the circles they report about.
Before we start a new cycle, NYC will become an epicenter of the real estate crisis and Wall Street with see layoffs in size and scope larger than at any time in our lives. THEN we shall see Barron's reporting that the world is coming to an end.
That's when I will be buying.
Posted by: bdg123 | Jun 26, 2008 8:42:25 AM
cinefoz<---you still around buddy--I thought they would have kicked you out of your trailer by now--how the heck do you get internet service living in a cardboard box under a bridge----you are one crafty dude!!!!
Posted by: gunthestops | Jun 26, 2008 8:49:08 AM
It's very sad what Murdoch has done to all the Dow Jones properties, including Barron's. Barron's has been very far behind the curve during this entire bear market. I recall a Mike Santoli column this past December claiming that "things aren't all that bad." Three months later Bear Sterns got vaporized.
I gotta think what Barron's has been spewing for the past nine months leaves two possibilities: either the journalists working there have been lobotomized, or -- more likely -- Murdoch has sent down a directive for all the publications to maintain a bullish tone regardless of what the facts say.
Clearly Murdoch is no journalist. However, he is a tremendous businessman. Whether his strategy to take the Dow Jones properties down market to provide financial information to the masses will actually work remains to be seen.
For me, the take away lesson is that now nothing in Dow Jones publications can really be trusted... which is sad because the WSJ was probably the greatest newspaper in the country before Murdoch ruined it.
Remember that Murdoch was behind the Iraq war based on oil prices.
"The greatest thing to come out of this for the world economy, if you could put it that way, would be $20 a barrel for oil. That's bigger than any tax cut in the any country."
http://www.guardian.co.uk/media/2003/feb/11/iraqandthemedia.news
great call Rupert.....
Posted by: insaneclownposse | Jun 26, 2008 8:52:51 AM
Barry,
Maybe the war Barrons was referring to is the one between Israel and Iran which -- as far as I can tell -- hasn't started yet. I have heard that if/when it does, it could have an even larger effect on the world's markets.
Posted by: Michel Caldwell | Jun 26, 2008 8:52:56 AM
Yes, I have an alternate explanation for all this: President Adolf Blair and his propaganda plants embedded in the not-so-well disguised "free press" are having a "Mission Accomplished" acid flashback out of respect for the passing of George Carlin.
Posted by: Risk Averse Alert | Jun 26, 2008 8:55:43 AM
cinefoz----you are one crafty dude!!!!
Posted by: gunthestops | Jun 26, 2008 8:49:08 AM
reply: Damn right. I'm also good looking, muscular, popular, well liked by all, and just about perfect in every way. My only flaw is that I continue to underestimate my perfection. Thanks for noticing.
Posted by: cinefoz | Jun 26, 2008 8:55:55 AM
Yes, I have an alternate explanation for all this: President Adolf Blair and his propaganda plants embedded in the not-so-well disguised "free press" are having a "Mission Accomplished" acid flashback out of respect for the passing of George Carlin.
Posted by: Risk Averse Alert | Jun 26, 2008 8:59:39 AM
This is but an example of increasingly common quantum leakage from what scientists call "Murdoch World," a pyramid-shaped planet (all power and truth flow from the top) in the same neighborhood as Bizarro World. In this planet's non-wars, the 20% of the non-troops which suffer brain injury begin to discover logic and threaten historical instability.
Posted by: cavjam | Jun 26, 2008 9:00:46 AM
Well...it's really very simple...As Ron Suskind in a NYT article some months ago wrote when interviewing an administration spokesman...and I am parphrasing....You guys live in reality. we create our own reality.....Simply don't admit what is happening and it isn't..........
Posted by: grumpyoldvet | Jun 26, 2008 9:06:09 AM
Yes BR I can explain the absurd comments... the Republicans/Conservatives along with the Wall St. criminals all enjoy lying.... if a person tells a lie enough then the lie becomes TRUTH to him.. a la Hitler. Now I am not equating these people with Hitler..but the same principle is correct. Bush thinks he is the Christ sent savior of America and must bomb Iran to save it along with the rest of the Middle Eat.... similarly, Ahmadinajad thinks he is the savior of Islam and must destroy the Great Satan...
Let's face it, almost everyone in our society is either in denial or blatantly lying.... Maybe Art Bell should Really President, he is the Savior sent by the Aliens..
JD
Posted by: John_Doe | Jun 26, 2008 9:07:46 AM
Isn't this paper now a part of the organization owned by the same Rupert Murcoch who said the Iraq invasion would result in $20/bbl oil?
Posted by: Bob A | Jun 26, 2008 9:12:52 AM
Below are excerpts lifted from a Time Magazine article that came out this morning. Boy, this ought to cheer you up!
----
"...The announcement came after North Korea handed over a long-awaited accounting of its nuclear work to Chinese officials on Thursday, fulfilling a key step in the denuclearization process. Bush said the move was "a step closer in the right direction" although he made clear the United States remains suspicious about the communist regime in Pyongyang.
"The United States has no illusions about the regime," Bush said in a statement that he read to reporters in the Rose Garden.
Specifically, Bush said the U.S. would erase trade sanctions under the Trading With the Enemy Act, and notify Congress that, in 45 days, it intends to take North Korea off the State Department list of nations that sponsor terrorism.
North Korea's declaration falls short of what the administration once sought, and the White House already has come under criticism from some conservatives. Bush said there was still a long way to go.
Bush said the U.S. message to North Korea was, "We will trust you only to the extent you fulfill your promises. I'm pleased with the progress. I'm under no illusions. This is the first step. This isn't the end of the process. It is the beginning of the process."
"If North Korea continues to make the right choices it can repair its relationship with the international community ... If North Korea makes the wrong choices, the United States and its partners in the Six-Party Talks will act accordingly."
While welcoming North Korea's declaration, Bush repeatedly said it was just a first step...."
----
One thing is for sure...that report will not be worth the paper it is written on. This is just one more reason why we should be so happy with the current state of affairs.
Sometimes reality is a bitch!! As stated by others above, you can either deal with it or ignore it.
I think our family jewels are clearly exposed on this one. It's hard to straddle the two camps on this issue; but Bush has had no luck on this issue either. I kind of feel sorry for Bush. Everything he has touched has turned to @#it. Much of this has been brought on by the current Administration; but not all of it.
Source: Time Magazine
Title: Bush Will Lift N Korea Sanctions http://www.time.com/time/politics/article/0,8599,1818078,00.html?xid=feed-rss-netzero
Posted by: BG | Jun 26, 2008 9:14:36 AM
we've become a nation of cognitive dissonance, wikiality and truthiness.
If the market sees a waterfall decline this summer like summer 01, blame above.
Posted by: maybe panzner's on to something | Jun 26, 2008 9:16:26 AM
I just read a WSJ story about oil prices. It appears that everyone who USES oil products claim the problem is being caused by investment banks and exotic investments. The people who sell the exotic investments blame everyone else. By inference, the Mafia doesn't commit crimes, it just works in the system. Anyone who complains about Mafia antics is just expressing sour grapes.
So, the people closest to the problem all point fingers at the same place. Either they're too dumb to know their business, or they want Congress to stop the thieves. The thieves, of course, blame the victims.
Posted by: cinefoz | Jun 26, 2008 9:16:34 AM
Uh, anyone notice that Europe is tanking?
Posted by: MarkM | Jun 26, 2008 9:18:02 AM
>>>"All problems will begin to unwind and correct properly when Congress fixes the oil mess, hopefully in July."
XAXAXA Do they ever fixed anything?
Posted by: sergtat | Jun 26, 2008 9:19:02 AM
Is Mr Abelson not writing for Barrons?
I remember many months ago his editorial posted on BP and himself digressing on the dim prospect of profits within the SP universe. Assuming that there is only truth in sciences the theory of black holes driving to different universes may have been applied today.
Posted by: Philippe | Jun 26, 2008 9:19:11 AM
That Barron's parrots the standard administration line -- "the U.S. economy is fundamentally sound" -- is unsurprising. After all, that's their job as stenographers.
But it's the folks who actually SUBSCRIBE to read this bilge that worry me. Why would you spend your hard-earned money on a diet of toxic lies? Just nibble on some rat poison or something.
Posted by: Jim Haygood | Jun 26, 2008 9:28:30 AM
