It’s days like today that will keep the muppets invested as we keep going down. – Jim Quinn of The Burning Platform in reference to Thursday’s stock market moon-shot
Well, I was wrong. I was predicting that the Census Bureau would engineer a miraculously positive retail sales report for December. As it turns out, the CB is admitting to a .1% drop in retail sales for the month. The question begs, then, just how bad were the real numbers? They also are purporting that November retail sales rose .4% instead of the .2% originally reported. Unfortunately for the Government, all of the privately produced retail sales metrics during November showed large declines in retail sales during the month. No, Virginia, the impressive percentage gains in online sales do no offset the decline in brick/mortar sales – online sales activity is about 7% of total retail sales. The Consumer is tapped out which means the U.S. economy is tapped out. But we should blame China, right?
In addition, the NY Fed general business conditions index registered a stunning collapse to -19.5 (vs. -4 expected). This is the lowest reading on this index since the Great Financial
Crisis Collapse in 2008/2009. This graph shows both the Philly Fed and NY Fed economic activity index readings. Does this at all look like the economy that Obama told us the other night is doing fine? (Source: Bloomberg News)
NY Fed President Bill Dudley was out today announcing that negative interest rates would be considered if the economy continues to slide. Negative interest rates are another form of QE. QE is a politically/socially correct term for money printing. “Money printing” is the code for “BAIL OUT THE BANK AGAIN.”
The price of oil is collapsing. I predicted in the fall of 2014 that the price of oil would hit the $20’s. The price of oil is collapsing because collapsing economic activity globally, especially in the United States, is causing a collapse in demand. For get “Dr. Copper.” The real barometer of economic health is oil. Copper is used in a lot of manufacturing applications, but oil/energy is used to mine and refine copper and to manufacture and deliver copper-based products. Oil is the root indicator of economic activity. Oil is the real “Dr. Copper.” Everything else is a derivative of oil. Think about that for a moment…