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Tuesday, February 12, 2013

Well, This Is Just Depressing

NFIB.  I refuse to pretend this isn't happening, but it's the type of thing that does not sit well:
We're still at -30 for six-month business outlook. How is that even possible? With construction up, this thing should be in the 20s at the worst. During the entire 2008-2009 recession cycle, the number never got down into the 30s. 

There has been a notable degeneration in actual sales over the last year, so I can't even blame this on mood:
 We had climbed out to the positives finally last year, and then we keeled back over. But earnings and sales are very weak, so it seems like it isn't mood, but reality. 

Inventory outlook isn't good either.Updated to add:


So where were all those rail containers going then?

It may be as simple as the timing of the Chinese factors. China had special tax measures which may have speeded up intermodal shipments, and the later NY holiday could have had an influence.

Construction really is up.

MV building may be slowing.
What ever the bad news is or where you find it, it is good for the U.S. stock market.

The market has broken above the last line of resistance before S&P 1576.

Unless it is a fake out.
85 billion a month has to go somewhere! Stocks, commodities. There is quite a large bubble developing in low quality debt, as well as an increase in buy-ins for commercial properties that have been hanging on the market.

Gas and stocks and junk debt will go up, until....

They either quit or karrumph.

Fortunately we do not have the built up disfunctionalities that existed in 2008. Still, it is not a great outlook.

The 30 this month for six month outlook in NFIB is, I think, the fourth worst reading ever on this survey. Since it follows two 35s, one can no longer dismiss it.
Joseph, the idea that the stock market is predictive of economic performance is basically BS. That may well be true during an even money time, but when you have the helicopters deployed, it's definitely not.

I mean, anyone looking at stock prices in December 2007 would not have said that a recession was underway, would they? And if the wealth effect is so powerful, how did the 1929 and 2008 even happen?

It's amazing the nonsense that people will believe. If rising asset prices actually did control, how would any bubble ever end? Money is a proxy and enabler of trade, and when asset prices go high enough to constrain trade, inevitably the jig is up.
I interpret -35, -35, -30 as small busines thinking after the election, "BOHICA, the regulation tsunami is coming!"

I think with a different election result those numbers would have tracked change in sales.

These business people are also the main folk actually punished by the income tax rate increases ... the folk who have already made their money and have it in tax-exempt investments, not so much.
We're still at -30 for six-month business outlook. How is that even possible?

It's just the sort of thing we'd expect to see in an economic recovery in its "first inning".

Too much sarcasm? I always have to ask. Seems excessive again.

December 28, 2012
James Paulsen: 2013 Investment Outlook

With 6.9 percent deficit to GDP stimulus, almost 8 percent M2 money supply growth, a continuation of an unprecedented size and growth in the Federal Reserve’s balance sheet, a zero short-term interest rate, a record low mortgage yield, and similar policies evident about the globe, from an economic policy standpoint, the recovery seemingly has not even made it out of the first inning yet.
Here's some lighter reading for you, MOM. It's an article on Wired.com about searching for consciousness in patients that are in a vegetative state: link
Speaking of small business pessimism, our local Vietnamese noodle shop closed up. It was a Mom & Pop (and toddlers and friends) place that had been there for years. They closed about a week ago (10 Feb) with a "Thanks for your business" type sign out front. They were definitely too young to retire and no sign that they moved to a new place. The restaraunt right next to them also closed. I'm in a "hot" area economically speaking and we're still losing businesses.
Walmart spilling some truthiness!
The two percent FICA hike comes right out of money
velocity and Main Street. If that doesn't show the need
for major tax code changes, I don't know what does.
No wonder Walmart had a bad February .

Walmart's already stated that a huge hunk of their biz comes immediately after welfare checks are issued. No surprise that the FICA bump would come right out of their hide.
Yeah, I noticed the Walmart leak. Walmart stopped releasing monthly results a while ago, so this was an unplanned, unscheduled truthiness.

Also, tax refunds will be delayed this year due to the IRS having to prepare the forms after the beginning of the year, so that's going to hurt.

Gas prices aren't helping either.

It's kind of a triple whammy.
D - I'm sorry to hear that, but it does seem like small businesses are closing. It's more disturbing when it is younger people.

We better hope that a lot of middle-aged individuals are out there scrabbling, because I was just reading Rockefeller, and that didn't look good either.

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