Economic Confidence: Down Among Consumers, Up Among Businesses

This post combines the latest results of the Rueters/University of Michigan Survey of Consumers, the Conference Board’s Index of CEO Confidence and the State Street Global Markets Index of Investor Confidence indicators.

These three indicators should disclose a clear picture of the overall sense of confidence (or lack thereof) on the part of consumers, businesses and investors as the current recessionary period develops.

Today’s early release of the Reuters/University of Michigan Survey of Consumers for November showed a decline in consumer sentiment with a reading of 66, a increase of 19.35% above the level seen in November 2008.

The Index of Consumer Expectations (an important component of the Conference Board’s Index of Leading Economic Indicators) declined to 63.7 resting 18.18% above the result seen in November 2008.

As for the current circumstances, the Current Economic Conditions Index decreased to 69.6, or 21.04% above the result seen in November 2008. (Click charts to enlarge)

The latest quarterly results (Q3 2009) of The Conference Board’s CEO Confidence Index climbed to a value of 63 indicating that CEOs are more optimistic about their future prospects.

The October release of the State Street Global Markets Index of Investor Confidence indicated that confidence for North American institutional investors declined 12.8% since September, while European confidence declined 9.3% and Asian investor confidence increased 2.4% all resulting in a decrease of 10.0% to the aggregate Global Investor Confidence Index which now rests a whopping 32.03% above the result seen last year.

The chart below (click for larger version) shows the Global Investor Confidence aggregate index.

Comments

[User 353732]

1.Very large companies with an important and growing presence in the Global South are confident for sound reasons. Declining revenues and earnings capacity in the US and EU will be more than offset by growth elsewhere in the next few years. Companies in the hydrocarbon energy supply , food, life sciences, nuclear technology, bandwidth and transportation industries have compelling reasons for confidence as these will do well in the expanding markets of the Global South.

2. Big business executives who are entwined with the Big Govt, Big Money, Big Media Troika also has reason to be confident as they monetize their social and political connectivity with the reigning Troika. They certainly can look forward to rich and richer compensation and privileges even as they fire hundreds of thousands of middle class professionals and arbitrage the free, unlimited credit that WashDC provides with global investment returns.

3. Small and new businesses and many mid sized businesses , starved of credit and choked by increasing taxes, regulations and mandates have no reason to be confident. They are fearful and discouraged.
Ordinary Middle class households seeing shrinking after tax discretionary income, hostile job markets, declining credit access, downward mobility amongst friends, family and neighbors and fearful of the Troika's deliberate and malevolent class warfare have no reason to be confident.

There is thus a trifurcation: the globally integrated who can ,in time, escape the US Regime;
the politically and socially connected who abet the US Regime and profit from its favors;

and the increasingly disenfranchised small and new business owners, mid sized business executives and ordinary Middle class working families.

2009 Nov 13 02:30 PM

[Graham and Dodd Investor]

This just shows the extent that "producer sovereignty" has prevailed in this country.

Normally, the "heartbeat" of a business waxes and wanes with that of its consumers. The fact that business does not feel this way right now is highly unusual. It is a signal that businesses feel that they can continue to find ways to "extract money from" (read: rip off) customers, no matter how poor they are.

2009 Nov 13 07:33 PM