Board-Ansicht
Mix-Ansicht- The Confidence Factor - marsch, 31.12.2001, 13:19
The Confidence Factor
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Dec 31, 2001
<font size=5>The Confidence Factor </font>
Consumers are becoming increasingly confident that business/employment conditions will improve in the future. However, if they don't continue to spend this negates their very beliefs.
Consumer confidence 'rebounded dramatically' in December, and supposedly this bodes well for the economy heading in 2002. The theory goes that"Consumers are once again feeling better and will become the locomotive pulling the economy out of the current recession''.
Sung Won Sohn, chief economist at Wells Fargo & Co.
To begin with, the consumer confidence numbers are by no means the gospel when it comes to predicting the future. After all the expectations index was busting record highs in 2000, and look what happened this past year. With this in mind, there are many reasons to be skeptical of the rise in confidence for the month of December:
1. Consumer confidence questionnaires are mailed to a nationwide representative sample of 5,000 households, of which roughly 3,500 respond. Did any of these people use to work at Oracle? No? How about Deutsche Bank or Cablevision Systems?
2. The index is based on responses to 5 questions:
1.Respondents appraisal of current business conditions.
2.Respondents expectations regarding business conditions six months hence. 3.Respondents appraisal of the current employment conditions.
4.Respondents expectations regarding employment conditions six months hence.
5.Respondents expectations regarding their total family income six months hence.
Lets not give the consumer the benefit of the doubt for questions 2,4, and 5 (expectations index): quite frankly, if someone can hold $8000 in credit card debt (the average) and still be optimistic it is likely this person will always be optimistic unless financial disaster strikes. Rather, the only relevant questions that come close to describing how consumers feel today are numbers 1, and 3 (current situation). To note: the present situation index went up by an astonishing 0.07 in Decembe (96.9 vs. 96.2). The word on the street is that The Christmas spirit was responsible for 0.05 of this.
3. Consumers that have not yet been laid off obviously must feel more confident considering they are not waking up to the sight of burning buildings, reports of more anthrax exposures, and/or another Enron like collapse. Moreover, consumers can buy automobiles with zero percent financing, and they can refinance their homes and put this money down on 'no payments for 12 months' products that have recently, and repeatedly been slashed in price. In this regard, not only has previously horrible news helped the consumer wield a more optimistic outlook of the future, but so too has the improving purchasing environment.
As America no longer battles domestic terrorism on a daily basis the consumer's only immediate fear is that of economic recession. Rest assured, the consumer can handle this recession if prices continue to drop, stock prices continue to rise, and they don't lose their job. However, unless we are in fantasyland one of these three things will most certainly give next year…
Conclusion
Such is the landscape today: lay-off announcements of tens of thousands of people are largely ignored, while an 'expectations' reading of confidence from 3,500 hand selected people must mean things are getting better. Yes, the situation is somewhat absurd...
Happy New Year!
http://www.wallstreetwishlist.com/fallstreet.htm
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Was sagte Malik vor einiger Zeit:
Brisante soziale Lage
Nach meiner Einschätzung gab es noch nie eine so brisante soziale Lage in den USA. Die Ersparnisse von drei Generationen Amerikanern stecken in hochriskanten Papieren. Die meisten haben ihre Aktien oder Investmentfunds im letzten Drittel der Hausse gekauft. Die meisten haben dafür - und für exzessiven Konsum - nicht nur ihre Ersparnisse aufgebraucht, sondern Schulden wie nie zuvor gemacht. Die Altervorsorge ist gefährdet, die Ausbildungsversicherungen sind beliehen, die Häuser sind verschuldet. Daher ist es lächerlich, auf die Consumer Confidence zu schauen. Es geht nicht um"Confidence" sondern um Kaufkraft.
http://www.mom.ch/aktuell/aktuell_261101.shtml
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Ich wĂĽnsche allen einen guten Rutsch und ein frohes Neues!!!!!!!!!!!!!!!
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