{"id":360,"date":"2010-02-23T12:03:00","date_gmt":"2010-02-23T17:03:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=360"},"modified":"2018-08-21T09:07:10","modified_gmt":"2018-08-21T13:07:10","slug":"consumer-confidence-in-freefall","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/02\/23\/consumer-confidence-in-freefall\/","title":{"rendered":"Consumer confidence in freefall"},"content":{"rendered":"<p><span style=\"font-size: 16px;\">Wow!\u00a0 The Conference Board reported this morning that its calculation of February Consumer Confidence plunged a whopping 10.5 points, down to 46.0.\u00a0 This is the lowest level since April 2009.\u00a0 This mark is dramatically lower\u00a0than the level\u00a0expected by economists of 54.8.<\/span><\/p>\n<p><span style=\"font-size: 16px;\"><strong>Analysis:<\/strong> Well I have been saying it on the blog now for quite awhile and in many postings:<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 16px;\">&#8220;the asymmetry of market rises and falls&#8221; at <a href=\"http:\/\/jasonapollovoss.blogspot.com\/2010\/02\/asymmetry-of-market-rises-and-falls.html\">http:\/\/jasonapollovoss.blogspot.com\/2010\/02\/asymmetry-of-market-rises-and-falls.html<\/a><\/span><\/li>\n<li><span style=\"font-size: 16px;\">&#8220;it&#8217;s the unemployment rate stupid&#8221; at <a href=\"http:\/\/jasonapollovoss.blogspot.com\/2010\/02\/its-unemployment-rate-stupid.html\">http:\/\/jasonapollovoss.blogspot.com\/2010\/02\/its-unemployment-rate-stupid.html<\/a><\/span><\/li>\n<li><span style=\"font-size: 16px;\">&#8220;big financial markets fall&#8221; at \u00a0<a href=\"http:\/\/jasonapollovoss.blogspot.com\/2010\/02\/big-financial-markets-fall.html\">http:\/\/jasonapollovoss.blogspot.com\/2010\/02\/big-financial-markets-fall.html<\/a><\/span><\/li>\n<li><span style=\"font-size: 16px;\">&#8220;employment situation still treading water&#8221; at\u00a0<a href=\"http:\/\/jasonapollovoss.blogspot.com\/2010\/02\/employment-situation-still-treading.html\">http:\/\/jasonapollovoss.blogspot.com\/2010\/02\/employment-situation-still-treading.html<\/a><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 16px;\">Consumer confidence was likely to drop because the unemployment situation has shown no signs of improvement.\u00a0 Now we have statistical verification of what was an intuitive insight on my part.\u00a0 Consumer confidence has fallen 18.6% and the number was worse than economist expectations by 16.1%.\u00a0 Clearly this is a very bad sign for the future of the economy.\u00a0 Consumers make up around 70% of Gross Domestic Product and when they don&#8217;t feel good about their lives they tend to hunker in the bunker.\u00a0 Ergo, they don&#8217;t spend money.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">This is the very catalyst that I described in my posting just one week ago.\u00a0 It will be very interesting to see what happens to the financial markets in response to this news.\u00a0 If there is a large drop, say several hundred points down, I would consider this to be\u00a0a rational response.\u00a0 This\u00a0will be a strong indication that investors remain sober &#8211; a good thing.\u00a0 If there is only a weak decline then I will worry because it will be an indication of irrational exuberance (as Alan Greenspan so famously called it).\u00a0 The problem with irrational exuberance is that eventually a catalyst will cause a massive sell-off.<\/span><\/p>\n<p><span style=\"font-size: 16px;\"><strong>Importance grade:<\/strong> 10; I consider this news to be second only to the actual unemployment rate.\u00a0 The fact is that we sit teetering on the edge between economic recovery and economic disaster, all driven by the mood of your average U.S. citizen.\u00a0 The news today was definitively not good.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">If you followed my advice last week and are in either cash or low-investment quality bonds right now &#8211; it is time to start looking for equity opportunities.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Be careful out there!<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Wow!\u00a0 The Conference Board reported this morning that its calculation of February Consumer Confidence plunged a whopping 10.5 points, down to 46.0.\u00a0 This is the lowest level since April 2009.\u00a0 This mark is dramatically lower\u00a0than the level\u00a0expected by economists of 54.8. Analysis: Well I have been saying it on the blog now for quite awhile [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-360","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/360","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=360"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/360\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=360"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=360"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}