Thursday, May 12, 2011

Retail and Food Services Sales - Lowest since July 2010

How robust is the recovery?

St. Louis Fed - Retail and Food Sales

Remember that back then, in July 2910, some were talking about a Double-Dip (Hi!) that was saved, IMHO, by:
a- The extension of the emergency and extended jobless benefits
b- Berna-man's speech hinting about QE2
c- Then it's confirmation
d- Then its start
e- Then by the fiscal stimulus package that was passed at the end of 2010 (payroll tax benefits, depreciation package for investment/capex)

a) Will last till the end of 2011, right?
b) Gone
c) Gone
d) It ends in 6 weeks
e) -- Payroll Tax Benefit: consumed by the increase in gasoline prices
----- Depreciation thingie: not sure. Need to learn more about it, but I'd say if the outlook doesn't improve too much people won't invest because of uncertainty even though it becomes 'cheaper'.

*Disclaimer: charts and data are presented as I receive/see them. Sources are usually not checked for validation and my own calculations are of 'back of the envelope'-type. I am aware that some math that I do myself might be wrong and/or misleading to some extent. In financial markets the rate of change of economic data is often more important than the actual level and the perception of 'what is priced in' is more important than 'what is actually going to happen'. This is actually the way people pick entry and exit points. So... yes, sometimes you might say 'This guy is an idiot, this is way wrong!' with a high conviction, being right. Not to worry. Markets are made of expectations and the clash of conviction between its participants. Portfolio managers know that being an idiot is sometimes profitable and being smart is often a bad choice. It is all reality, sometimes good, sometimes bad. By the way: corrections to my analysis and intelligent debate is welcome. theintriguedtrader AT gmail do com

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