What a difference a week makes!
Just a week ago, I was apologetic for being so bearish on the markets. People were complaining that the writers at PSW were “too negative” and that we were out of step with the MSM, who saw nothing but “green shoots” under every economic rock. On June 28th, I wrote an article comparing the US consumer to the NY Yankees as a way of explaining how the analysts can be so wrong in their expectations for a recovery. Ipointed out that, although they are the winningest team in baseball history, I can still remember a10-year dry spell from 1965-1975, saying: “Like the US consumer, you come to EXPECT the Yankees to be in contention and you may make your bets that way out of habit, but that storied history of performance is NOT going to stop you from hitting a 10-year losing streak is it?“
Like the Yankees, themedia EXPECTS the US consumer to win. After so many consecutive years of stuffing our faces and shopping until we drop, the global media simply refuses to believe that theUS consumer can do anything more than stumble slightly before getting right back on the horse and refinancing or whatever it takes to get out there and start charging once again. As the US consumer makes up 70% of our economy, it’s no wonder all the sentiment polls think prosperity is just around the corner because everyone believes the US consumer is simply resting. The homebuilders telll us things will rebound, the manufacturers tell us things will rebound and the companies reporting earnings, who are “beating” expectations by only doing 35% worse than last year, are all giving us sunny outlooks as well because the US consumer is coming to save us all.
Isn’t it amazing how, just 7 days later, the media has suddenly gotten on a totally different bandwagon? Just as a crowd turns on a star ballplayer who strikes out in a clutch situation, the MSM has turned sour on the US economy and has changed their outlook on the US consumer from “resilient” to “dead” overnight. While extremism grabs a lot of headlines, sometimes the truth can be found in the very dull places between the labels. I have long pointed out (some may say ranted) that commodity prices were unjustifiably high and were jeopardizing the recovery by pulling money out of the pockets of already-nervous consumers…
