Tuesday, December 13, 2011

Morning Update/ Market Thread 12/13 - Lies, More Lies, and Still More Lies Edition

Good Morning,

Equity futures are rising bouncing this morning with the dollar flat, bonds lower, oil higher, gold & silver flatware, needed to swallow rising food commodity prices.

Gamblers beware, yesterday the market fell substantially, but so did the VIX.

There have been many large corporations lowering their earning estimates in the past week, this morning it was Best Buy’s turn. Hmmm, how does that square with all the hype over huge (supposedly record setting) gains in “Black Friday” sales, and now the made for T.V. supposed 15% one year gain in online sales to which my bullshit flag is flying at full mast!?

Yep, not so much. Retail Sales for November decelerated from the .5% supposed growth in October to only .2% which is less than half the .5% expected. Just as a reminder, the Retail Sales report is grossly overstated due to measurement in dollars and also due to substitution bias which fails to account for stores that have closed. So, all the hype was just that, a complete snow job on the populace – here’s Econoplicit:
Retail sales in November advanced but not as strongly as expected. However, October and September were revised up and weakness in November was largely in components that had surged earlier. Overall retail sales in November grew 0.2 percent, following a 0.6 percent boost in October (originally up 0.5 percent) and a 1.3 percent spike in September (previously up 1.1 percent). November's number fell short of market expectations for a 0.5 percent increase. Excluding autos, retail sales gained 0.2 percent in November after increasing 0.6 percent in October (unrevised) and increasing 0.6 percent in September (previously up 0.5 percent). Analysts had called for a 0.4 percent improvement. Gasoline sales declined marginally in November. Sales excluding autos and gasoline in November rose 0.2 percent, following a healthy 0.7 percent increase in October. Within the core (excluding autos and gasoline), gains were mixed but mostly positive.

Overall components were largely favorable. Once again, the strongest component was for electronics & appliance stores which jumped 2.1 percent in November, followed by nonstore retailers (up 1.5 percent) and auto dealers (up 0.5 percent). Also seeing gains were furniture & home furnishing, clothing & accessory stores, sporting goods & hobby, and general merchandise.

The largest decline was for miscellaneous store retailers, down 1.2 percent. Modest decreases also were seen in building materials & garden equipment, food & beverage, health & personal care, gasoline stations, and food services & drinking places.

Retail sales on a year-ago basis in November came in at up 6.7 percent, compared to 7.5 percent in October. Excluding motor vehicles, sales were up 6.6 percent on a year-on-year basis, compared to 7.5 percent the month before.

The headline numbers for November retail sales were disappointing but upward revisions are partially offsetting. The trend still appears to be moderately healthy spending gains, taking into account earlier robust gains. However, today's later released Redbook sales suggest a deceleration in sales growth in early December. A caveat as always is that weekly numbers are relatively volatile.

So much for setting records, note how Econoday fails to compare the current number to the revised number like they do when it’s the other way around? If they reported this consistently then the headline would read, “Retail Sales growth only one-third that of October!” But the truth is, as I’ve pointed out repeatedly, these numbers are all, well let’s just say that my bologna has a first name…

If you really want to see your true Retail Sales growth and true all-time records, here it is right here:


Gee, measure retail sales in dollars, how’s that .2% increase in “sales” looking now? Can you say exponential math?

Yep, getting close to a record all right:

M2 Velocity:

Bucking the trend of large corporate misses, the NFIB Small Business Optimism Index actually did rise 1.8 points in November, up to 92.0 which is still well below their base 100 index number. Here’s Econohope followed by the entire NFIB report which is a always a pretty good read and indeed they are more optimistic sounding… (just as the rug gets pulled?)
Pessimism is easing significantly in the small business sector based on the November sentiment report from the National Federation of Independent Business whose index is up 1.8 points to 92.0. Five of 10 components rose while three held unchanged with gains led by a big jump in the key component of future sales. Employment plans also rose sharply while economic expectations improved sharply. Though the direction is positive, overall readings still remain weak and well below those prior to 2008.
NFIB Small Business Index Dec 2011

Also from the B.S. department, the National Association of Realtors is admitting that they, too, have been grossly overestimating sales:
Home sales even worse than we thought

After its numbers were challenged, the National Association of Realtors took another look at the data and has decided to lower its numbers for home sales from 2007 to 2010.

Last year saw the fewest number of homes sold in 13 years. Now we find the number is even smaller than the 4.91 million sales we thought occurred.

The National Association of Realtors, which for decades has published statistics on sales of existing homes, says that its data were wrong and that fewer homes were sold from 2007 to 2010 than it had reported.

New numbers will be issued Dec. 21, The Associated Press reported.

Questions about the numbers were first raised earlier this year by CoreLogic, a real-estate analysis firm, which said the NAR's home-sales numbers could be as much as 20% too high.

While the NAR said 4.91 million existing homes were sold in 2010, CoreLogic said its analysis showed that only 3.3 million homes were sold.

The NAR responded by saying it would take another look at the data. In recent months, the group consulted with CoreLogic, as well as the Federal Reserve, the Department of Housing and Urban Development, the Mortgage Bankers Association, the National Association of Home Builders, Fannie Mae and Freddie Mac, The AP reported.

The NAR concluded that its numbers were too high and that some sales had been counted twice.

OOPS! Reported home sales 20% too high? …Just a mistake, no nefarious action there, no. No self-interest driven deception foisted upon the masses that a commoner might commonly refer to as FRAUD?

“No,” says President Obama, “technically” they can’t be prosecuted because they didn’t break the law. Really? Guess he’s never heard that fraud is completely illegal.

In case you didn't see it yesterday in the comments, here is someone who is running for President who promises to actually do something about the fraud:

I, Nathan Martin, no longer consent to the lies.