Forget Green Shoots: These Are the Brown Shoots Turning Black

I never believed in green shoots - they were always brown at best - and now they are turning black and will stay black through 2010. As I write this Larry Kudlow is screaming, telling viewers and suckers to essentially ignore very disappointing retail sales data and invest based on consumer confidence. Well, pal, consumer confidence is still negative - just not as negative as it was - we all know that - but it is headed south again. C'mon, Zucker, do you really want ratings that badly? Remember what you want badly, you get badly.

Where was I? Oh, black shoots. My newsletter, ChangeWave Shorts, is published by Investor Place Media and we have an in house brand - ChangeWave - and in house survey group that has been doing sentiment surveys on everything from consumer purchases to oil exploration budgets for eight years plus. And they survey the same people, enabling them to create and use great baseline data. And they are never wrong - truly - my interpretation of their results may be wrong, but the data is always spot on and typically weeks if not months ahead of other data gatherers.

The last consumer survey, finished up earlier this week, tells us the slight uptick in some categories of consumer spending and the rebound in confidence was a head fake. My interpretation - brown shoots turning black. Simply put, consumers continue to spend less and plan to spend less heading into the rest of the summer.

Let me quote the report:

The mixed picture we reported back in June has worsened in ChangeWave's July consumer spending survey. And for the first time in four months we're seeing an actual pullback in the 90-day spending outlook going forward. The ChangeWave survey of 2,681 U.S. consumers, completed July 6th, has also picked up a significant worsening in consumer sentiment and expectations. Spending on travel/vacation, durable goods for the home, and consumer electronics all edged downward in the current survey, even as automobile and restaurant spending stayed flat.

After three consecutive months of improvements, our July survey has registered a setback in U.S. consumer spending. Better than two-in-five U.S. respondents (45%) now say they'll spend less over the next 90 days - 2-pts worse than the previous survey in June. Only 22% now say they'll spend more - 3-pts worse than previously. The spending outlook is down across all income categories, with lower income households (under $50,000 per year) particularly hard hit.

The travel/vacation category was the biggest loser - only 26% of respondents are spending more and 35% less on these products and services - a six point shift, more versus less, in the past month.

I got these results on Tuesday and look what we saw Friday morning - very weak retail sales data from everyone from Macy's (M) to Costco (COST) - data Kudlow continues to scream at me to ignore. I guess the desire for celebrity and rankings is stronger than his ability to do third grade math. And that math says the consumer is dead and getting deader. At a macro level, let me summarize what you hopefully already know.

Housing: Dead and believe it or not, getting deader. Forget historical norms - the 2.6 million peak was fueled by funky mortgages and investors, perhaps 60% or more of demand - and 500,000 starts is still too many with 11 months inventory and more than two million foreclosures on the horizon. Maybe more. Home prices will not stabilize, nationally, until 2012 at the earliest - when foreclosures peak - and consumer confidence cannot seriously until that happens.

Consumer Spending: Dead, deader, dying again - besides the loss of wealth - housing and stock market crashes - take away more than $4 trillion in credit and more to come. No wealth, no cash due to falling incomes and unemployment, no credit - ain't no meaningful consumer spending rebound for as far as the eye can see. Don't believe me? I vacation midway between Myrtle Beach and Wilmington every year for a generation and take, excuse me, took the kids for a movie, an ice cream and some shopping at a large enclosed mall - several department stores, food court, the works - in North Myrtle Beach. Wanna buy that mall? It is empty and on the market for $3.3 million - not $33 million, $3.3 million.

Banks: On the mend in the headlines, the big ones - Citi (C), Wells (WFC), BOA (BAC) - broke and getting broker as delinquencies and defaults climb faster than anticipated - well ahead of reserves - and toxic assets sit there like a vacant lot in New Jersey. Citi keeps comparing its performance and capital to its $2 trillion dollar balance sheet - what about the $1.2 trillion in off balance sheet assets (last November's count) that are off balance sheet for a reason? Wells says it is fine, yet it has almost $350 billion in commercial real estate loans not to mention more than $90 billion in option ARMS on its balance sheet. And BOA still has Ken Lewis, a blind, deaf and dumb board, and unknown liabilities from its purchase of Merrill. For purposes of full disclosures, most of my assets are at Citigroup and I bank at BOA.

Credit Markets: What credit markets? They do not exist for all but a couple of investment banks and AAA rated companies. Otherwise, it is all government backed borrowing. Trillions backed by Uncle Sam - and a few billion in private transactions.

I know you know all this - but I put it together with new consumer spending data to prove a point - optimistic anchors and pundits can talk up the market or the economy and Congress can re-write laws but no one can change the laws of math. And those laws tell me, and should tell you, consumers are right to pull back and they will do so throughout 2010.

So what to do now? The crazy value investors are looking at hotels - hotels! I just stayed at a great Hilton (HLT) in New York for less than half what I paid 20 years ago. Look at shorting hotels - Starwood (HOT) looks ripe to see continuing problems in bookings and revenue - and maybe the booking sites like Expedia (EXPE) - they are going to take another hit this quarter and be in the doldrums for at least another 4-6 quarters.

Comments

[Fighting Yoda:]

Green turned brown turned black - dead, deader, deadest- good analogies.

Well lot more bad news to come, well on the way to new lows in a couple of months.

Jul 11 02:56 AM

[Davewmart:]

And that is if things go well! :-)
A systemic shock from any number of sources and the roof could cave in.
Default in sovereign debt setting off a chain reaction, China ceasing to stockpile commodities leading to another nosedive, markets taking serious fright at the financing needs of Britain or where ever, you name it.
Likeliest in my view is that the markets which have been fiddled, sorry, supported, since March suddenly wake up and realise that they are on stupid multiples of likely earnings and take the next leg down, that impacts unemployment, and hence spending, house prices and commercial real estate.
The banks are then exposed as living in la-la land, with the monies poured in by Governments in an effort to support unrealistic valuations shown to be wasted.
Governments then have a choice between attempting more support, and destroying their credit ratings, or finally letting the banks go bust.
Happy days!
Just think, instead of buying your kids an ice-cream , for the same price you will be able to buy the mall!
They'd be well advised to take the ice-cream.

Jul 11 03:25 AM

[TheFounder:]

Shulmas writes a clever article.

After 4 months of pumping, finaly, some common sense and a sense of reality is coming back to the markets.

Jul 11 04:53 AM

[tobi:]

Bank earnings will rock because through the last crisis they are now officially allowed to lie. The facts don't move markets, it's what people think of them, that's why it ironically cheers higher oil on one day and falls because of it on the next. Secondly there have been some improvements made in most sectors and indicators. Don't let the fact that you missed the last rally and perfect entry point guide your wishful thinking, just trade whatever the market brings because it's not the time for investing unless you have a 5-10 year horizon.

Jul 11 08:37 AM

[dcb:]

Barak, the smoke and mirrors president, was taken to task for pointing out economic realities by the media and wall street, and for making us unhappy. With a bit of pressure he changed his tune, like he always does, and "green shoots". Well after a certain amount of time you can only talk about things getting better when they aren't, and you can only coddle wall street without doing anything for the economy before the public starts to realize.

Now they have wasted trillions bailing out banks that should not have, and we are talking about a second stimulus and that things aren't getting better. When you do not address the cause of the problem, things don't get better, and they end up costing more in the long run. Now we are faced with a worse fiscal situation and have wasted trillions.

Jul 11 09:14 AM

[dcb:]

This is what heppens when special interests (wall street 0 cntrol our government. resources get misspent, and we do not have a lot to waste anymore!!!


On Jul 11 09:14 AM dcb wrote:

> Barak, the smoke and mirrors president, was taken to task for pointing
> out economic realities by the media and wall street, and for making
> us unhappy. With a bit of pressure he changed his tune, like he always
> does, and "green shoots". Well after a certain amount of time you
> can only talk about things getting better when they aren't, and you
> can only coddle wall street without doing anything for the economy
> before the public starts to realize.
>
> Now they have wasted trillions bailing out banks that should not
> have, and we are talking about a second stimulus and that things
> aren't getting better. When you do not address the cause of the problem,
> things don't get better, and they end up costing more in the long
> run. Now we are faced with a worse fiscal situation and have wasted
> trillions.

Jul 11 09:15 AM

[User 353732:]

Three things are become sadly evident in July:
1. Consumer and business debt defaults will be high to very high in Q3( perhaps higher than in Q2)
2. Several large firms(financial, retailing and industrial), are likely to fail in Q3
3. State and muni finances will deteriorate even more
A reasonable inference is that :
1. Another 1 to 1.5 million net jobs will be lost while after tax wages and income will compress for tens of millions more who are still employed
2. Consumers will reduce discredtionary and deferrable spending yet further: those who can( ie the top 15% of income earners) will continue to hoard cash and pay down debt
3. The economy will shrink yet again, substantially, in Q3
4. The frequency and brazeness of lies from the Govt, Wall St and MSM and assault on the middle class will continue to increase

Jul 11 09:18 AM

[Dave Dorgan:]

You have provided quality statistics, and you have displayed a practice which Peter Lynch was also very fond of i.e. the use of personal anecdotal evidence. The results of some basic People Watching 101 can be very insightful.

Jul 11 09:35 AM

[I need more...:]

Instead of shorting hotels, what about a vehicle like SRS? I ws just traveling on business, and shocked at the amount of commercial real estate with for lease signs, restaurnats closed, etc.

Jul 11 09:58 AM

[the.bighouse:]

Mr. Shulman you said about your firm's statistics " And they survey the same people, enabling them to create and use great baseline data. And they are never wrong - truly -" But perhaps Mr. Dorgan is closer to correct by saying "Maybe you have provided quality statistics, and you have displayed a practice which Peter Lynch was also very fond of i.e. the use of personal anecdotal evidence" Mr Shulman...Remember economics and their statistics are STILL not a pure science or pure mathematics and can be wrong or skewed or anecdotal. Even in your firms survey.
Im not saying you are wrong but dont be too glued to the numbers cause you'll never see the true Green Shoot or Mustard Seed when it comes. You have to be statistically flexible while you watch the numbers so that you are not at the airport when the ship gets in!?!
AND...please cut Mr. Kudlow a break! I am a moderate politically and dont always agree with his political/economic view. However, I do enjoy Mr. Kudlow's enthusiasm for his trade as well as his quests who I think give a balanced economic viewpoint. I really think you mix Mr. Kudlow's enthusiasm with what you call "screaming". Also I think you are a bit presumptuous by saying his viewers are suckers. (This is your quote " Larry Kudlow is screaming, telling viewers and suckers to essentially ignore very disappointing retail sales data and invest based on consumer confidence.") Finally, I think in your screaming enthusiasm you owe Mr. Kudlow or at least his viewers an apology.

Jul 11 10:11 AM

[Bernard Thomas:]

Kudlow is a patriot. Kudlow is a capitalist. Kudlow is a cheerleader. Larry will use enthusiams to encourage people back into the market to create a selfulfilling prophecy. Fundamentals do not matter. It is all about enthusiasm. Perception is reality with Larry.

Here is some reality. Mortgage delinquencies and defaults continue to rise as even responsible people are finding difficult to make mortgage payments while unemployed. Let's not even discuss credit card and car payments. The extent of the econimc recovert will be determined by productivity. We are not going to lever ourselves out of this one.

Jul 11 11:15 AM

[jarco:]

Interesting take. I'll let the Kudlow responses speak for themselves. He prompts a quick channel change in my pad.

Jul 11 11:31 AM

[thedevlucas:]

"HLT" I cannot get a qoute under that symbol. In 2007 Hilton was bought by Blackstone Group LP. I agree that shorting hotel stocks sounds fine but I question the advice from Shulman when he lists Hilton Hotels under the stock symbol HLT!!!

Jul 11 11:36 AM

[thedevlucas:]

"HLT" I cannot get a quote under HLT. On your recent stay for half what it used to cost you at a Hilton Hotel the Hotel chain was bought in 2007 by Blackstone Group LP "BX" nyse. I could find no other info on ownership of Hilton Hotels. Shulman confirms my suspicions that a lot of these people don't research what they write.

Jul 11 11:44 AM

[Swashbuckler:]

I accidentally caught the last few minutes of a Kudlow radio interview about a week ago. At first I thought it was some sort of prank. It took me awhile to realize that he actually believed what he was saying. The extent of the delusion was frightening. What was more scary to me was to know that some people actually believed his hallucinations. I mean, talk about turning day into night, black into white. You could go to probably any psych ward in the country and get better investment advice.

Jul 11 11:59 AM

[Sailorman:]

Bush/Cheney were not smoke and no mirrors while they caused the mess!


On Jul 11 09:14 AM dcb wrote:

> Barak, the smoke and mirrors president, was taken to task for pointing
> out economic realities by the media and wall street, and for making
> us unhappy. With a bit of pressure he changed his tune, like he always
> does, and "green shoots". Well after a certain amount of time you
> can only talk about things getting better when they aren't, and you
> can only coddle wall street without doing anything for the economy
> before the public starts to realize.
>
> Now they have wasted trillions bailing out banks that should not
> have, and we are talking about a second stimulus and that things
> aren't getting better. When you do not address the cause of the problem,
> things don't get better, and they end up costing more in the long
> run. Now we are faced with a worse fiscal situation and have wasted
> trillions.

Jul 11 01:07 PM

[Trend Surfer:]

Consumers have been the primary drivers of growth for the last 2 decades. (in hindsight, it seems that our country's piggy bank has been our homes and not real income growth. I mean, after both husband and wife has already been working, where else is money going to come from to fund those expensive trips to mexico and alaska) With such a decline in actual sentiment, is there an actual corresponding decline in spending? If so, when will it flow through to Wall Street earnings releases?

I agree with the article. The big mall (bellis fair) we frequented for the last decade and a half near our place is now bankrupt. But it just seems that there's such a disconnect between Wall Street results and main street despair.

An article at CBSmarketwatch's site mentioned that there are some fund managers looking to invest should there be a disconnect between sentiment and results. This disconnect almost seems unbelievable unless there are something else at play here.

I'm a technician and trader. I find these types of disconnects to be the primary reason why I don't trust fundamentals and those that spins the story from it. I mean, look at Alcoa's earnings. I thought the significant aspect of the release is the indications of economic growth. If so, then the focus is on their top line results, not their bottom line net profits.

I've got signals to short after the close of this week. The signals supports an intermediate term downtrend. As far as how far down it will go, time will tell.

Jul 11 01:10 PM

[Boxed Merlot:]

...I think you are a bit presumptuous by saying his viewers are suckers. (This is your quote " Larry Kudlow is screaming, telling viewers AND suckers to essentially ignore very disappointing retail sales data and invest based on consumer confidence.") ...
The presumption may be on your part as the "and" conjunction between "viewers" / "suckers" may refer to the same group, it still makes a possibility for another. I view occasionally and quite honestly thought I was watching an episode of "The Pitchman" the first time I saw it. All he needs is black Just For Men died facial hair and he could promote some real valuable products.


On Jul 11 10:11 AM the.bighouse wrote:

> AND...please cut Mr. Kudlow a break! I am a moderate politically
> and dont always agree with his political/economic view. However,
> I do enjoy Mr. Kudlow's enthusiasm for his trade as well as his quests
> who I think give a balanced economic viewpoint. I really think you
> mix Mr. Kudlow's enthusiasm with what you call "screaming". Also
> I think you are a bit presumptuous by saying his viewers are suckers.
> (This is your quote " Larry Kudlow is screaming, telling viewers
> and suckers to essentially ignore very disappointing retail sales
> data and invest based on consumer confidence.") Finally, I think
> in your screaming enthusiasm you owe Mr. Kudlow or at least his viewers
> an apology.

Jul 11 01:11 PM

[smerritt:]

Larry Boone, from Barclay’s Capital stated, ‘reassuring news’ is an effective antidote for social unrest. As an example, completely absent of economic evidence, the treasury recently reported that ‘green shoots’ of economic activity were beginning to sprout, but could not cite any specific examples that were independent of companies merely spending the stimulus or TARP (or TRAP) money they had received. A few reputable media outlets (there are only a few left) have begun to notice the reports for what they represent. The Financial Times, stated in April, “Talking-up recovery prospects can make sense, economists believe. Expectations of better times ahead, if enough people believe in them, can become self-fulfilling.” Now even the weakest economist should clearly recognize this thinking as “Voodoo Economics”. And if the market relies on nothing but confidence (without actual economic data or progress), then it is a confidence game and the ring leader is a ‘con man’. Green Shoots are a scam and it is very doubtful that this president is remotely interested in fixing the economy until his marxist social agenda is forced through. Caveat Emptor.

Jul 11 01:25 PM

[Paul H. M.:]

Another bitter GOP supporter.

McCain lost (as he should, clearly a mental midget next to Obama).

The facts: Obama raised more money than any candidate, and probably owns more stock that any of us. So to imply that he's a socialist, while he's clearly in the pockets of big business, is just retarded (almost as retarded as G.W. Bush).


On Jul 11 01:25 PM smerritt wrote:

> Larry Boone, from Barclay’s Capital stated, ‘reassuring news’ is
> an effective antidote for social unrest. As an example, completely
> absent of economic evidence, the treasury recently reported that
> ‘green shoots’ of economic activity were beginning to sprout, but
> could not cite any specific examples that were independent of companies
> merely spending the stimulus or TARP (or TRAP) money they had received.
> A few reputable media outlets (there are only a few left) have begun
> to notice the reports for what they represent. The Financial Times,
> stated in April, “Talking-up recovery prospects can make sense, economists
> believe. Expectations of better times ahead, if enough people believe
> in them, can become self-fulfilling.” Now even the weakest economist
> should clearly recognize this thinking as “Voodoo Economics”. And
> if the market relies on nothing but confidence (without actual economic
> data or progress), then it is a confidence game and the ring leader
> is a ‘con man’. Green Shoots are a scam and it is very doubtful that
> this president is remotely interested in fixing the economy until
> his marxist social agenda is forced through. Caveat Emptor.

Jul 11 03:00 PM

[Mad Hedge F...:]

All too true. Every once in a while I stumble across a chart which is so clear, so vivid, so unequivocal in its implications, that it lifts the investment fog. This is that chart. Drawn up by stockchart.com’s Arthur Hill (see www.madhedgefundtrader... ), it shows that we are going to spend the rest of our summer probing for the bottom right hand shoulder in a screamingly obvious “head and shoulders” pattern. It gives a range of possible bottoms from 850 all the way down to 666 by the end of August. The chart fits my own fundamental scenario like a hand in Michael Jackson’s glove (see “The Worm Has Finally Turned” at www.madhedgefundtrader... ). Soaring unemployment, terrible earnings reports, collapsing commodity prices, a catatonic consumer, real estate of every flavor in free fall, and tidal waves of government spending are not what bull markets are made of. Did I mention the weather is terrible? Every feeble, half hearted, low volume rally we saw this week pushed us closer to the edge of the cliff. The charts of every stock and commodity market in the world, rolling over in lockstep like a thirties Busby Berkeley musical, gives you all the smoking gun confirmation you need. Hold on to those shorts as if your life depended on it.

Jul 11 03:01 PM

[jstratt:]

Thank you for many valid points and a good article.

I have been operating on the thesis that we are in a depression that will become evident to all at some point. We have more and longer pain to come than most seem to believe. Ray Dalio's article in Fortune back in early 2009 is worth reading as is anything from Noriel Roubini.

With around 50 Trillion in debt overhanging and much of it created using bad math I see several more waves starting after earnings and again in October.

On the positive side I do think the bottom is around 6000 on the DOW and 600 on S&P. Not so bad if you can remember 14000. If you dont know when to buy wait until it will make you puke blood to buy a stock. That will be the perfect moment.

Jul 11 04:39 PM

[Commercial ...:]

Unprecedented amounts of US Government debt and proposed spending that appears to have no limits are depressing consumers and businesses around the world.

Investor and consumer confidence are very key. Nothing is being done to restore either.

Jul 11 04:51 PM

[User 445590:]

Obama's $700 million election campaign was funded by billionaires, big business & Wall Street as he effectively told everyone that MORE EXCESSIVE BORROWING & LENDING with New TAXATION & REGULATION will solve the very problems they caused.

NO CHECKS and BALANCES on Obama's EXCESSIVE $2 Trillion Failed Bailouts & Stimulus, just calls for more failed borrowing, spending, taxes and regs.

Only Obama and this 60% Dem Senate's $2 trillion DEFICITcould actually make Bush look like a "relative" budget hawk ($350 billion DEFICIT).

GM (Government Motors), Bank TARP Money that Obama won't take back, pending government controls in Healthcare, Energy, Cap & Trade taxes - failed 1930's Marxist Economics by the Master Prophet, Obama with his pork barrel minions spending, regulating and taxing us into oblivion.

November 2010 and 2012 await correcting the bad becoming the absurd.

A 1980 President (post-LBJ/Nixon/Carter) or a 1994 Congressional sweep (post 1993-94 Congressional take-over attempt of Healthcare) await us in the elections ahead. Constititional elections await correcting these absurd policies.

Thanks Obama for the taking the BAD into the ABSURD. What should we have expected from a lifetime community organizer who taugh some law classes and never employed, produced, saved or invested anything. Two books about himself produced his $15 million fortune and provided for hsi soon-to-be discredited Predisency.

OBAMA and CONGRESS are setting the table for a major reversal and return to the values that made us a great nation!

God bless America.

Jul 11 05:14 PM

[LIVE FREE O...:]

Great article that provides us with the facts. The economic situation really is not pretty.

If we turn off the TV (stop listening to the financial cheerleaders), listen to friends and relatives (regarding tight budgets, job losses, credit that has been cut off, foreclosures, etc.). View the number of vacancies in office buildings and stores (here in the Washington DC area), it is obvious the economy is continuing to deteriorate. Even the stores that remain open are having to continually offer "sales" to move inventory (that includes super markets). Although this area is not recession proof, we generally don't get hit as bad as the rest of the country. Not so this time, we are getting clobbered.

This is not a typical recession. It was a long time in the making and who knows when we will recover. But it is abundantly clear that we have yet to hit bottom and that bottom appears to be down the road "big time".

Based on the reality of our economy, I have been going with the trend but making the most money shorting this market (end of last year until March and now reloading again). Wall street did a great job pumping this market back up to 9000 and provided tremendous opportunities to make some money (SRS, TZA, ZSL, FAZ, SDS).

Thank you Michael Shulman.

Disclosure - I have positions in all the above noted ETFs. I also have short positions in homebuilders, retailers & financials.

Jul 11 05:31 PM

[Northstar10000:]

Krud low was bullish at DOW 12000 and rode it all the way down along with half the other clowns on CNBC. He got green shoot fever at about DOW 7500 and wants to take credit. He has conveniently forgot to say anything about his being bullish all the way down and of course will never mention how much his bullish garbage has cost the average Joe/Jane. Remember his greatest story never told line. And of course we have the hope and change pony show In washington to add to the complete stupidity of the average joker voter. Imagine spending a trillion and not one person read the bill. Finally only a complete idiot would be able to make Bush look OK after a mere 6 months in office. Still in Iraq, Still at Gitmo, still bailing out the big boys, still spending trillions we don't have. Political favors for friends, fire auditors when they get close to the truth. Hope and change, more like 'rope a dope vote"

Jul 11 05:34 PM

[willyum:]

Legally...as an attorney...I can see Kudlow sued...for falsely pumping up the economy...using the media.

Jul 11 07:08 PM

[perceptions...:]

After all of the "smoke & mirrors" fades into history, the reality of the new real economy will still be here.

No amount talk or printing of "paper money", will enable this economy to magically recover.

There is no pot of gold, at the end of the Kansas rainbow.

Get real & get on with life!

Jul 11 09:04 PM

[fed_alchemy:]

Why do you bank at C and BAC ? You should go to your local bank and sit down with someone and get better service .In the war between elite banks and "less fortunate", Im going with a community bank that just had their first foreclosure

Jul 11 09:38 PM

[aldous:]

Just a simple analogy as to where the global economy is right now ; 6 months back {and still now} world leaders were calling this the GREATEST financial/credit/bubbl... crisis in 75 years. Is it any surprise that we are still mired in this crisis with a world economy practically dead? I mean really, talk of "green shoots", a "less bad" series of economic data etc--what are we gonna come outa this in 6 months?? Its really a race to see if the Govt and the Fed can hold up the roof long enuff for all their printed money and debt creation to stave off deflation. Guess what ; Deflation will NOT be defeated, the roof WILL cave in, not if but when.

Jul 12 12:41 AM

[BPYHO:]

It's amazing how fast people jump on the negative train. I know our economy has serious problems but earnings will be on the upside this week and you will be costing yourself $$$ if you are shorting (this week). This upcoming crash will be delayed until August b/c this earnings season will surprise!

Jul 12 01:35 AM

[Michael Clark:]

Kudlow. American entertainment has become shock television. It's amazing how many 'personalities' on tv get paid millions to scream at the viewers. I guess that makes tv exciting. Cramer. Kudlow. Hannity. Springer. They are all in the same league. Then the commercials come on: screaming at you to buy, buy, buy. In Kudlow's mind, it is a patriotic duty to buy. It is a patriotic duty to go deeper into debt. It is a patriotic duty for us to go into debt to pay his salary. Enthusiasm is NOT enough. Let the cheerleaders retire to the Hamptons. Let them be replaced by people who can see, think and speak clearly, without shouting, and without being business's head cheerleader. (This means Sarah Palin is out also, except as head cheerleader.)

Jul 12 02:16 AM

[wheelbarrel...:]

LOL wow so if people buy stocks due to Kudlow's "enthusiasm" and get wiped out a second time I guess it's OK because poor Larry is just doing his job.


On Jul 11 10:11 AM the.bighouse wrote:

> Mr. Shulman you said about your firm's statistics " And they survey
> the same people, enabling them to create and use great baseline data.
> And they are never wrong - truly -" But perhaps Mr. Dorgan is closer
> to correct by saying "Maybe you have provided quality statistics,
> and you have displayed a practice which Peter Lynch was also very
> fond of i.e. the use of personal anecdotal evidence" Mr Shulman...Remember
> economics and their statistics are STILL not a pure science or pure
> mathematics and can be wrong or skewed or anecdotal. Even in your
> firms survey.
> Im not saying you are wrong but dont be too glued to the numbers
> cause you'll never see the true Green Shoot or Mustard Seed when
> it comes. You have to be statistically flexible while you watch the
> numbers so that you are not at the airport when the ship gets in!?!
>
> AND...please cut Mr. Kudlow a break! I am a moderate politically
> and dont always agree with his political/economic view. However,
> I do enjoy Mr. Kudlow's enthusiasm for his trade as well as his quests
> who I think give a balanced economic viewpoint. I really think you
> mix Mr. Kudlow's enthusiasm with what you call "screaming". Also
> I think you are a bit presumptuous by saying his viewers are suckers.
> (This is your quote " Larry Kudlow is screaming, telling viewers
> and suckers to essentially ignore very disappointing retail sales
> data and invest based on consumer confidence.") Finally, I think
> in your screaming enthusiasm you owe Mr. Kudlow or at least his viewers
> an apology.

Jul 12 09:50 AM

[wheelbarrel...:]

Negative train? The 30% move we just experienced was called a bear market rally - don't be a victim.


On Jul 12 01:35 AM BPYHO wrote:

> It's amazing how fast people jump on the negative train. I know our
> economy has serious problems but earnings will be on the upside this
> week and you will be costing yourself $$$ if you are shorting (this
> week). This upcoming crash will be delayed until August b/c this
> earnings season will surprise!

Jul 12 09:58 AM

[HERO1957:]

Wanna buy that mall? It is empty and on the market for $3.3 million - not $33 million, $3.3 million.

Good Grief

Jul 12 12:09 PM

[Moon Kil Woong:]

CIT is one of the largest of the new batches of mushrooms growing on the rotting economic lawn. I think the old mushrooms have become about the size of trees now. If you climbed up the Fannie Mae and Freddie Mac ones and fell off you'd probably break your head. And on the AIG mushroom there seems to be a giant worm smoking a hallucinagenic pipe. It reminds me of Alice and Wonderland. In this economy we certainly have to run alot to keep in place and we seem to be barely crawling most of the time.

Jul 12 01:08 PM

[ozymandias888:]

We found out in 2000 and 2004 that Democrats are sore losers. Since 2008, we continue to find that they are also sore winners (with a touch of personality cultism).


On Jul 11 03:00 PM Paul H. M. wrote:

> Another bitter GOP supporter.
>
> McCain lost (as he should, clearly a mental midget next to Obama).
>
>
> The facts: Obama raised more money than any candidate, and probably
> owns more stock that any of us. So to imply that he's a socialist,
> while he's clearly in the pockets of big business, is just retarded
> (almost as retarded as G.W. Bush).

Jul 12 01:36 PM

[dcb:]

Yesterday Mr. Obama asked for more time patience from the public from regarding the economy. Personally, I do not believe Mr. Obama's policies deserve more time, they are misguided, driven by special interests, not directed towards the root of the problem , will actually make the economy worse, and rip off taxpayers for wall streets benefit.

He has abandoned the policies he stated he stood for while running for election at every chance when faced with industry pressure. He has allowed wall street to manipulate the markets increasing borrowing costs, driving up the price of oil , delaying recovery.

He has knowingly talked about green shoots when there were none, creating false expectations. If we wanted a president we knew would lie to use we would have kept bush.

He has spent trillions bailing out wall street to keep credit flowing while American's need help to reduce debts.

He has staffed the White house with wall street insiders.

If you believe, like I do, that Mr. Obama needs to change course and has had enough time I urge you to write the white house explaining why he has had enough time, and why he doesn't deserve more. Below is the link:

whitehouse.gov/con.../

Jul 12 01:36 PM

[EX-AD-MAN:]

Wall Street threw the country's financial body over a log and banged away while W ruled the roost, but somehow it's Obama's fault for not fixing things after less than a year in office? That IS priceless.

Jul 12 02:58 PM

[Yohei:]

Obama has had plenty of time to change course. Plenty of time. He has not.

Get rid of Summers and his proteges, the whole Rubin - GS group. Tell Geithner to resign. Put Volker at Treasury. Start rolling back TARP and the whole alphabet soup of similar programs. Do the same with pork. Stop pumping trillions of dollars into Wall Street. Pass a new Glass - Steagall. THAT would be "change we can believe in."

Endless excuses based on "Bush did it" won't cut it anymore. Leadership is in order. Not more of the same old stuff.


On Jul 12 02:58 PM EX-AD-MAN wrote:

> Wall Street threw the country's financial body over a log and banged
> away while W ruled the roost, but somehow it's Obama's fault for
> not fixing things after less than a year in office? That IS priceless.

Jul 12 04:06 PM

[simplesimon:]

This quote from Huffington Post regarding "fomenting" market fears in order to maximize short sale profits:

{In it, the host of Mad Money says he regularly manipulated the market when he ran his hedge fund. He calls it "a fun game, and it's a lucrative game." He suggests all hedge fund managers do the same. "No one else in the world would ever admit that, but I could care. I am not going to say it on TV," he quips in the video.

He also calls Wall Street Journal reporters "bozos" and says behaving illegally is okay because the SEC doesn't understand it anyway.}

Michael Shulman is a specialist in short selling. It is to his advantage to foment negative market sentiment. It is both illegal and immoral. If you take someone who doesn't care if 20 M retired lose their means of survival...you probably find someone who also believes in evolution-that is to say, this 'highly adapted animal' ( in his own view ) sees "The Weak" as" Prey". Moreover, he feels it his Duty to devour them in order to "advance the species"
( himself ).
I consider this contributor to SA a predator= breaking the law. I will now file a formal complaint to the SEC, using his own fear tactics above in the original article. I will also be looking for others on SA who I feel are in collusion to create market fear/panic, in order to maximize their gains from short sales. Soon, all these 'animals' will be in the bread lines with the now unemployed, and despised Hedge Fund managers. Then, of course, I want to have a discussion with them about survival of the fittest.

Jul 12 05:28 PM

[Freedoms Truth:]

"Barak, the smoke and mirrors president, was taken to task for pointing out economic realities by the media and wall street, and for making us unhappy. With a bit of pressure he changed his tune, like he always does, and "green shoots". "

Wrong. What Obama did was say whatever it took to get what he wanted. Thus in January the sky was falling unless we passed the trillion dollar pork barrel spending bill falsely called 'stimulus'. When - surprise, surprise - deficit spending and bailouts of govts programs combined with threats to increase deficits, taxes, regulations and govt control fail to 'stimulate' a brow-beaten private sector, we get nonsense like VP Biden "nobody predicted this" and Obama's arrogant "I wouldnt have done anything differently."

Obama has already blown it. His stimulus is already a failure. What's changed in the last 2 weeks is that the 'green shoots' that signal that failure have become obvious - 3 million lost jobs and counting. That's 6 million jobs deficit compared to what Obama promised. What's also changed is that Obama has dug himself a hole by tying himself to his own fraudulent promises with his bogus claim that the stimulus has 'worked as intended'.

3 million unemployed Americans beg to differ.

Jul 12 10:03 PM

[Freedoms Truth:]

"Wall Street threw the country's financial body over a log and banged away while W ruled the roost, but somehow it's Obama's fault for not fixing things after less than a year in office? That IS priceless. "

More jobs have been lost in 6 months under Obama than under Bush during any period of time. Or that matter, this is the worst jobs performance for any first-6-months-of-a-pr... ever.

"
Endless excuses based on "Bush did it" won't cut it anymore. Leadership is in order. Not more of the same old stuff."

BINGO. If I had an employee who whined that his non-performance was due to the last loser I fired, I'd fire him too. So let's get real and not simplistic here: The US market is underperforming China's stock market -why ? Obama's socialist agenda scare the bejeesus out of the business sector. Cap-and-trade and socialized medicine is whats killing the 'green shoots'.

I seem to recall last year a bogus claim by Obama that his inexperienced self was going to be ready on day one. I seem to recall a promise that the bogus 'stimulus' had to be rush-passed to stop the bleeding, and that it would 'save or create 3 million jobs'. I seem to recall that the Obama administration estimate was a max unemployment of 8% if the stimulus passed. We are at 9.5%, and we will not get under 8% for ... years.

If you make big promises, expect to be called on it when you BLOW IT. Obama lied, Jobs died. America is in a hole, and Obama's plan? Dig DEEPER.

Jul 12 10:12 PM

[Freedoms Truth:]

"The facts: Obama raised more money than any candidate, and probably owns more stock that any of us. So to imply that he's a socialist, while he's clearly in the pockets of big business, is just retarded (almost as retarded as G.W. Bush)."

The argument that smoeone cant be a socialist because liberal billionaires supported him is lame. What's retarded is not knowing that there are some very rich people who are very leftist, even communists. George Soros, the billionaire who funded not just Obama but Moveon.org, comes to mind, as does the Lamont family, one family member took on Sen Lieberman in 2006, from the left.

Jul 12 10:20 PM

[ozymandias888:]

The Obama did a mediocre job managing the Annenberg Project - His only executive experience prior to becoming POTUS. The MSM very carefully stepped around this fact during the election. Is it any wonder now that He is in over His head?

Jul 13 01:12 AM

[ozymandias888:]

And as far as the Obama raising tons of money during His campaign - don't forget (as has the MSM) that the Obama refused to divulge information about his campaign contributors. It seems quite likely His election was financed by foreigners, often using prepaid credit cards and other deceptions to hide their identity and frequency of contribution. In effect, we extended the franchise to non-Americans voting for non-American interests. Funny how they all went for the One.

Jul 13 01:19 AM

[Toeser:]

I agree with the writer that much more pain is ahead. But this is one very mixed economy. I sometimes go to restaurants or stores that are full, yet I see some empty. I rent out a house on a Florida island and we are having record rentals this year. Probably 20% of us are in a depression, but a significant number of people are feeling little or no pain. The total economy killer will be when Congress and the Prez rachet up taxes. Then all households and all parts of the economy will tank. Hold on.

Jul 13 08:35 AM

[Bolton Peck:]

I think that, for me personally as well as a small business owner, it would be to my advantage not to be able to lose my house and everything I own if I get sick enough that I can't go out and fix bikes in my home based business.

We are what, the only Westernized country in the world where you can lose your house by getting sick?

I absolutely agree with the above posters that the trillions of dollars in bailout money should not have been spent on the banks. This was largely engineered in the Bush administration, and Obama disappointed me by not giving back the shit sandwich they handed him.

As a small business owning American who can't afford the extra seven hundred dollars a month it would take for health insurance-I'd be OK with paying a hundred bucks a month extra in taxes towards that goal. No one's ever been able to explain how that would hurt me really.

They say 'but oh, in France you have to wait, you'll have no choice!' which to me sounds like they don't think we're smart enough to do it better than France. Are they right?

My business could compete in its hiring practices based on work environment, quality, reputation etc. and not just 'do you have health insurance?'

How many lawsuits from accidents etc. would not happen if people could just go in for checkups and not have to worry about it, versus losing years of their lives paying for being hurt in a wreck? How much SSI money gets paid out for people who got hurt and couldn't go to the hospital, so were permanently damaged instead, now unable to work? Wouldn't insurance companies themselves save a fortune in not having to pay all those medical bills?

Healthcare opponents take the short view. The banks should be allowed to sink or swim with no taxpayer assistance. The car companies have to pay back what they were loaned.

healthcare reform would greatly help the economy of this country by vastly improving the health, sanity and productivity of its workforce.

Jul 13 10:47 PM

[Michael Clark:]

I agree with you about health-care. The business-class has trained Americans to do a knee-jerk jump every time universal health coverage is mentioned. Too bad we are so easy to train.

Health-care premiums are bankrupting American business -- and taking all the purchasing power away from American workers and consumers.

One of the reasons salaries in America are stuck is because of the collusion that has driven health-care costs through the roof. Doctors, medical providers, pharmaceutical companies, and insurance companies all have been having the times of their lives in America. Everybody has been getting rich, at the expense of the American worker and at the expense of sick and dying Americans. Businesses that provide workers with health-insurance benefits have watched insurance premiums rise nearly 10% per year for more than a decade. Doctors, hospitals, drug companies raise prices; insurance companies raise premiums. The worker asks his employer for a raise and the employer says I’d love to give you a raise – but I already gave you a 9% raise in your health-care premium. A worker making $35,000 a year in 1998 would receive a comparable salary of $90,314.90 in 2009 if health-care premium increases had been delivered directly to him in the form of salary instead of being directed to the insturance companies directly. The worker is still being paid $30,000 a year in 2009 -- his purchasing power has been stuck, and he has been driven further and further into debt. The insurance companies don’t care if doctors and drug companies raise prices, in fact they want them to raise prices; they just pass the costs on to the worker and the employer.


On Jul 13 10:47 PM Bolton Peck wrote:

> I think that, for me personally as well as a small business owner,
> it would be to my advantage not to be able to lose my house and everything
> I own if I get sick enough that I can't go out and fix bikes in my
> home based business.
>
> We are what, the only Westernized country in the world where you
> can lose your house by getting sick?
>
> I absolutely agree with the above posters that the trillions of dollars
> in bailout money should not have been spent on the banks. This was
> largely engineered in the Bush administration, and Obama disappointed
> me by not giving back the shit sandwich they handed him.
>
> As a small business owning American who can't afford the extra seven
> hundred dollars a month it would take for health insurance-I'd be
> OK with paying a hundred bucks a month extra in taxes towards that
> goal. No one's ever been able to explain how that would hurt me
> really.
>
> They say 'but oh, in France you have to wait, you'll have no choice!'
> which to me sounds like they don't think we're smart enough to do
> it better than France. Are they right?
>
> My business could compete in its hiring practices based on work environment,
> quality, reputation etc. and not just 'do you have health insurance?'
>
>
> How many lawsuits from accidents etc. would not happen if people
> could just go in for checkups and not have to worry about it, versus
> losing years of their lives paying for being hurt in a wreck? How
> much SSI money gets paid out for people who got hurt and couldn't
> go to the hospital, so were permanently damaged instead, now unable
> to work? Wouldn't insurance companies themselves save a fortune
> in not having to pay all those medical bills?
>
> Healthcare opponents take the short view. The banks should be allowed
> to sink or swim with no taxpayer assistance. The car companies have
> to pay back what they were loaned.
>
> healthcare reform would greatly help the economy of this country
> by vastly improving the health, sanity and productivity of its workforce.

Jul 14 08:59 AM

[wheelbarrel...:]

Typical double talk we can learn to love and expect from Obama - the public must have patience for his failed policies but the new policies on his agenda must be acted upon without delay! Nationalized healthcare will become anotehr multi trillion dollar money pit - if you want proof just look at Medicare and the last audit.


On Jul 12 01:36 PM dcb wrote:

> Yesterday Mr. Obama asked for more time patience from the public
> from regarding the economy. Personally, I do not believe Mr. Obama's
> policies deserve more time, they are misguided, driven by special
> interests, not directed towards the root of the problem , will actually
> make the economy worse, and rip off taxpayers for wall streets benefit.
>
>
> He has abandoned the policies he stated he stood for while running
> for election at every chance when faced with industry pressure. He
> has allowed wall street to manipulate the markets increasing borrowing
> costs, driving up the price of oil , delaying recovery.
>
> He has knowingly talked about green shoots when there were none,
> creating false expectations. If we wanted a president we knew would
> lie to use we would have kept bush.
>
> He has spent trillions bailing out wall street to keep credit flowing
> while American's need help to reduce debts.
>
> He has staffed the White house with wall street insiders.
>
> If you believe, like I do, that Mr. Obama needs to change course
> and has had enough time I urge you to write the white house explaining
> why he has had enough time, and why he doesn't deserve more. Below
> is the link:
>
> whitehouse.gov/con.../

Jul 18 09:12 PM

[wheelbarrel...:]

It is a huge mistake to confuse reform with nationalized healthcare


On Jul 13 10:47 PM Bolton Peck wrote:

> I think that, for me personally as well as a small business owner,
> it would be to my advantage not to be able to lose my house and everything
> I own if I get sick enough that I can't go out and fix bikes in my
> home based business.
>
> We are what, the only Westernized country in the world where you
> can lose your house by getting sick?
>
> I absolutely agree with the above posters that the trillions of dollars
> in bailout money should not have been spent on the banks. This was
> largely engineered in the Bush administration, and Obama disappointed
> me by not giving back the shit sandwich they handed him.
>
> As a small business owning American who can't afford the extra seven
> hundred dollars a month it would take for health insurance-I'd be
> OK with paying a hundred bucks a month extra in taxes towards that
> goal. No one's ever been able to explain how that would hurt me really.
>
>
> They say 'but oh, in France you have to wait, you'll have no choice!'
> which to me sounds like they don't think we're smart enough to do
> it better than France. Are they right?
>
> My business could compete in its hiring practices based on work environment,
> quality, reputation etc. and not just 'do you have health insurance?'
>
>
> How many lawsuits from accidents etc. would not happen if people
> could just go in for checkups and not have to worry about it, versus
> losing years of their lives paying for being hurt in a wreck? How
> much SSI money gets paid out for people who got hurt and couldn't
> go to the hospital, so were permanently damaged instead, now unable
> to work? Wouldn't insurance companies themselves save a fortune in
> not having to pay all those medical bills?
>
> Healthcare opponents take the short view. The banks should be allowed
> to sink or swim with no taxpayer assistance. The car companies have
> to pay back what they were loaned.
>
> healthcare reform would greatly help the economy of this country
> by vastly improving the health, sanity and productivity of its workforce.

Jul 18 09:15 PM