Consumer Confidence Revisited

If there is one single thing that is exactly the same over industries, professions and endeavors of all sorts…it is confidence. Often irrational, exuberant and all encompassing confidence can make or break any situations. You could be working on a billion dollar deal or a toy puzzle with your nephew, confidence will have as much to do with your success as any given skill set. This is why I consider easily dismissed bits of data such as consumer confidence to be very important.

Though people really are sheep, the shepherd is a bum without them. This rather simplified example is something that Wall Street seemingly still hasn’t learned and refuses to. Yesterday, I made the analogy of going to the well once too often…I often fear the industry has been making that mistake over the past decade, slowly approaching a point of no return with its most important customer… the American public.

The Conference Board’s confidence index dropped to 60.8 from a revised 66 reading in April, figures from the New York- based private research group showed today. Home prices decreased 5.1 percent in the first quarter from the same time in 2010, according to data from S&P/Case-Shiller. A separate report today showed manufacturing cooled.

Consumer finances have been squeezed by rising costs of food and fuel and erosion in home equity, causing spending to slow.

With more foreclosures on the way and the inability of most individuals to get in on the recent Sugar Rush Bull Market, the small investor becomes further alienated from the Wall Street money circle of inbreeding and cash shuffling transference. This brings an added level of disdain for those of us living the six and seven figure ivory tower lifestyle and the further retrenching of wallet openings, luxury expenditures and a multitude of other activities which you could say lead to the trickle up economics The Street depends on.

Similarly as with the unending mortgage crisis, I am not trying to preach or beat you guys in the head with the same thing over and over. It is valuable, however, to understand the long range costs of the Wall Street bailouts and how they affect the economy at large. There is indeed a correlation between hard work, intelligence and a career in investment banking, sales & trading, etc…there is also, however, a great, big fluffy pillow protecting those of us participating in these industries from the harshness of reality.

The consumer confidence numbers reflect the reality of how most Americans live, it is foolish to think that the Gilded Age can continue forever. Legislative and systemic changes are and have been coming. It is a great time for many of you guys to consider alternative means of continuing your careers in the service of not just your wallets but your communities. It may seem odd to read this from me, but we live and we learn. As much as I rant about commies and socialists it is plain stupid to ignore certain collectivist aspects of society. What those aspects are…you are all smart enough to figure out for yourself.