TraderMark

Sherwin Williams: Short Potential

I am very bearish on the consumer still. Increases in wealth via wages were replaced with increases in wealth via asset appreciation in the 00s. Even using govt understated inflation figures, inflation adjusted wages were flat the whole decade. Now balance sheets have been destroyed and even with rates at all time lows, "affordability" at all time highs things like homes are not even selling at year ago levels.

Remember people get their tax refunds this time of year and we've been bonked over the head to believe the stock market is some "oracle" like thing that tells us if the economy is good or bad. And many people are refinancing and getting one last gasp at house ATM. Reality strikes later in the year... this is going to be a new state of normal ...

2houndz it is hard to short anything now as there is always a 'bid' almost every morning in premarket (futures up nearly every day) and each time we look like we are going to break a technical average 'the bid' comes back.


On May 29 08:51 AM The Hammer wrote:

> Your thesis makes alot of sense. The consumer is toast. Wages are
> flat and have been flat to down for several years. Most of the increase
> of the past decade has been to benefits which is included in wages.
> You can't spend benefits.
> Who the heck is going to spend 18k for a hog?
> Many of these stocks have had huge moves off the March 9 lows. To
> much optimism built in to these stock rallies. In addition I think
> this short term consumer confidence boost will be short lived. People
> will realize that our country is not going to rebound fast and that
> the economy must adjust to the new realities. No more free Housing
> ATM to spend and that one must live within ones income. Thus lower
> level of consumption going forward.