Over the short to intermediate term the consumer confidence indexes (c0n cons) are dog chasing tail indicators, essentially following the Dow. The long term trend of those indicators is another story however. They reveal the secular trend of the mood of the American people. That trend is still down. And there’s an important message in that.
All of the con con reporting services are now proprietary, so you have to know where to look to get the data in one place in a format that extends back over the long haul. The better known and most widely followed of the con con surveys are those produced by the Conference Board and by Reuters with the University of Michigan. Both get big media headlines when released each month, but the releases only show a tiny snippet of the story, focusing on meaningless, noisy short term squiggles when the real narrative is in the long term picture. No one in the Establishment media propaganda machine ever analyzes or even bothers to report that.
For example, Bloomberg has another con con index which it bought from Disney’s ABC News back in 2011, but they only publicly report the data for past few years. I have seen charts of this data going back to the 80s published several years ago, but Bloomberg does not make the current long term charts public. I assume you can look at them if you have a Bloomberg terminal. Gallup also has a con con index, but it only goes back to 2008.
All of these indicators look similar over the long haul. Briefing.com has charts of the Conference Board and Reuters-University of Michigan consumer sentiment indexes going back to the late 1990s, showing both the component present conditions and expectations indexes, as well as the composite indexes. While these two most widely reported surveys sometimes vary from one another in the short run, their long term trends are similar, showing lower highs and lower lows since 1999. The charts of the Con. Board’s Con Con Index are the most interesting.
The interesting part is that long term declines in the expectations component have correctly negatively diverged from the present conditions index, which in the short to intermediate term periods of a year or less follows stock prices. Apparently, unlike Establishment spokesmen and economists, the public gets it. The public has correctly foreseen in the past that while things might be trending up in the short run, they were going to get worse. The economists, with their garbage in/garbage out econometric models don’t know and don’t care. Their sponsors and employers pay them to spew the company line, whatever that may be, and that’s what they do.
The trend of consumer expectations from 2004-2006 clearly disproves the Establishment company line that “no one foresaw the crisis.” We hear that self serving nonsense spewed all the time by top dog crony capitalists like Robert Rubin, their central banker and government henchmen Geithner and Bernanke and their sycophants, and mainstream economist mouthpieces for the Establishment mob. But the truth is that increasing numbers of ordinary people (aka “consumers”) obviously recognized that something was wrong for several years leading up to the 2007-08 housing bubble crash and financial crisis.
We know that not just from this chart, but from the conversations that took place back then on message boards that I have published since 2001, which are preserved for posterity. And we weren’t the only ones. These discussions took place on message boards all over the web. Countless numbers of ordinary people and even a handful of well known independent and honest economists (there are a few), saw what was coming. The only ones who didn’t see it were those Establishment insiders whose power and fortunes depended on not seeing, or lying about it if they did. They continue to lie today to cover up the fact that they were lying then.
Which brings us to another fallacy, the idea that insiders somehow know more than the rest of us. They don’t, but they do control the levers of money and power on Wall Street and in Washington. They make that work in their own favor until their hubris, greed, lust for power, and moral turpitude lead them to make to yet another of their massively destructive blunders. That then forces the rest of us, who are not at fault, to pay the price of their sociopathic behavior.
The forces that will lead to the negative consequences of their behavior are once again building. The negative divergence in consumer sentiment expectations that has developed since 2011 suggests that regardless of how loudly and how often the Establishment proclaims the fallacy that Bernanke and the Obama Administration made the world “safe for capitalism” again, things still are not going well beyond Wall Street and the Washington Beltway. The public is not buying the Establishment propaganda, any more than it did in the last two cycles. We, the people, or we “consumers” as the social manipulators like to call us, are wise to their lies. We know that something evil this way comes. However, the divergences between the social mood and the manipulated markets tend to have a very long lead time. If the past is prologue, we’re still a year or more away from the next collapse.
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