Consumers Just Didn’t Get The Memo – Everything Is Beautiful

Posted by: Howard Silverblatt on February 27, 2010

February was a sweetheart of a month, with love for all (it’s all in the definition), and not just on the 14th. The FDIC loved another 500 banks, raising its list of ‘challenged’ institutions to 702 from the 252 that were the center of their admiration at year-end 2008. Google decided to engage China in talks, as one part of Congress accelerated their love for Toyota, while another part of Congress yielded their approval for Ben with hopes of him not yielding some back. The quick Volker rule seemed to be more of a dating process, sometimes called discovery, other times called politics. Wall Street quantified that its love for bonuses had derived a 17% growth rate (not sure if there is a default swap on it – they never tell you to after the event), as both buybacks (at least for authorizations – the proof however is in the trade) and dividends (best month in 2 years – and that’s cash in your hand) come back into fashion. The Democrats and Republicans tenderly played with Health Care, in a picture (or photo) perfect setting, as investors fell in love with the dollar (actually they just liked the Euro a lot less), new home builders decided they loved their homes too much to sell them, translating into an 11.2% sales decline in January, as existing home owners also stayed put, as represented by a 7.2% decline in existing home sales. GDP was set 5.9% for Q4, but warnings emerged that 2010 may not be as good (everything is relative, and as stated in the definition). Canada started off depressed by its lack of metal, but cheered up as its ladies hockey team took gold (with the ladies starting the party on the ice); Canadian investors however were much more happy, as Canada performed the best of all global equity markets in February, permitting those people to party even more. The only one left on the side line appeared to be the consumer, whom with no one to turn to, were down right depressed over their insecure, paranoid, emotionally inspired belief that higher prices, higher taxes, and fewer jobs were ahead of them (where do they get that from? didn’t they get the memo?). That, even though it now appears that many of them may be classified as rich. These malcontents sent the Consumer Confidence Index down to 46 from an already discouraging 56.5; someone needs to lobby them a pick-me-up e-card, or at least something more than a token stimulus package. March madness is coming (Syracuse will beat Villanova, but in the end ‘you’re not in Kansas anymore’; if the President speaks basketball, you need to speak basketball), but in Washington, March madness will be called reconciliation, which should insure late-night TV employment.

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Reader Comments

Strategery

February 27, 2010 04:56 PM

LOL. Thanks for telling it like it is. To paraphrase Wanda Sykes, those athletes who won gold metals will be taking them to those "cash for gold" places because of the economy...

John Sweden

February 28, 2010 12:08 AM

OH... we got the memo... just not the money.

Snoz

March 1, 2010 07:18 AM

With so much love in the air, no wonder love-struck Americans are non-stop kissing their politicians, Bernanke, Geithner, and their superior portfolio. From the perspective of the average middle-class American, the romance has just started even though the courtship of three yesteryears were quite insensitive and hurtful. Fortunately, to show his courtship has honorable intentions, the token gifts, eternal affection, and whispers of sweet-nothings from dear old schmoozer Uncle Sam will continue despite rumors that he has several high-maintenence mistress residing on Wall St. While his seductive mistress of Wall St feasts on caviar and faux gras, but for love, his loyal true-love would not have subsisted on potato and chuck roast.

Jackie

March 1, 2010 02:18 PM

I am still waiting for my bailout money ... if I am blue, it is because I am still holding my breath ... can't ... wait ... much ... longer ...

Jeff

March 1, 2010 10:48 PM

Our jobs are tentative, wages are flat or lower, 17% real unemployment, our home values are down and can't be sold at any price, our politicians patronize us and then sell out to the lobbyists and special interests, our 401K's are better but still down 20-30% from 2007, our free capitalistic economy is a joke where big business gambles with our money an then gets more when they screw up, yada, yada, yada. Which memo were you referring to? The one about re-allocating more wealth to 1% of the population.

marc

March 2, 2010 02:44 PM

A professor of mine in college gave me the phrase "decision paralysis" for times such as these. The news, even intra-day, is more confusing than I ever remember it being. As bad as things are, any decision that I might make might make things worse right?- so nothing gets decided. How sad.

Ken

March 9, 2010 12:16 PM

Oh yes everything is coming up roses!No jobs,higher costs and unemployment benefits ending soon! No investments left to worry about though so I can watch from the sidelines as Wall Street constructs the next bubble.

Bart Bertholic

March 14, 2010 02:51 PM

Precious metal prices are on the rise and if the prognosticators are right, then inflation will kick in and gold will be more valuable than it is today as a hedge against the ravages of inflation and rise much further. It will pay well for the wise investor to pay heed to this trend and have gold & silver in your portfolio / possession for the future.

Bart Bertholic

March 16, 2010 11:03 AM

I'm a believer that a crisis is coming and that one of the best, if not the best, places to have safe assets is in silver & gold -- the next best place should be fixed or equity indexed annuities that guarantee your principal against loss.

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Businessweek’s Emily Thornton, Amy Feldman, Ben Levisohn, and Ben Steverman focus on matters great and small for investors, from the views of a hot fund manager to an explanation of the latest products devised by Wall Street’s rocket scientists. Exploring trends in any area, from bonds and stocks to closed-end funds and futures, always with an eye towards giving investors a better understanding of the sometimes confusing and often chaotic world of finance. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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