consumer spending – The Frustrated CFO

Yesterday was the deadline for reporting first quarter fiscal results: I filed financial statements and supplements with lenders and such; various US government agencies released their data to the public. Everyone was on time. The difference is that I take my job seriously and can substantiate every single digit I report, while the national economists have nothing better to do than look at the numbers in front of them in total bewilderment and spit out funny bullshit.

The Wall Street Journal's online edition titled its summary of quarterly results U.S. Economy Starts Year With a Whimper - a great title for a parody sketch, but no, it's a "serious" article with a grave first sentence:

"U.S. growth nearly stalled in the first three months of the year, fresh evidence that the economic expansion that began almost five years ago remains the weakest in modern history."

I don't read WSJ anymore but the article was forwarded to me, and it makes me wonder whether the person who sent it did so specifically to elicit my indignant bitterness! Well, she failed: I cannot get angry about this fucking shit anymore. I react with questions: What growth?! What expansion?!! Started when?!!!

I've said it before and I will probably need to say it many times again: THERE IS NO RECOVERY!!! This weak whatever we are witnessing is THE NEW REALITY!!! How I wish for these people to wake up and throw their outdated economic concepts, models, and notions out of their high-floor windows! And, to tell you the truth, I don't really trust the numbers anymore either. My naked eye tells me they are falsified: They say GDP (I CANNOT BELIEVE THEY ARE STILL USING THAT METRIC!) grew 0.1% in the first quarter? I say it probably contracted by 5% or more.

But that's not the funniest part. According to economists quoted in the article, "harsh weather likely slowed first-quarter business investment." Really? Not the lack of the world-wide market demand for US products, but the weather? Let me tell you, the coldest city in the world is Yakutsk, Russia. Only Antarctica registers colder temperatures. You know what it's famous for? Diamond mining – it's responsible for 1/5 of the world's production, freezing weather or not.

Furthermore, cold weather "could have even blocked exports—which notched their sharpest decline since the recovery began—from reaching ports." Hmm, let me see. First-hand info: My import/export client had 62 shipments coming to and going from US ports (Bayonne, Savannah, Houston) in the first quarter. None (!) of them experienced any delays.

And are you confused? By definition, exports leave our cold American ports, not reach them. Obviously these business commentators don't know (who hired them?) that boats with exports go the other way – to foreign lands. FYI, according to Global Analysis of National Climatic Data Center, the combined average temperature over global land and ocean surfaces in January was the WARMEST since 2007 and February tied with 2001 for the 21st highest record ever. So, nothing could've blocked our export shipments from reaching their overseas destinations.

But, of course, the thing that stupefies these people the most is the consumer spending. Bitches cannot force themselves to believe that people have no money to buy shit. So, they again blame the weather for the smallest gain in consumer spending on goods since 2011. Yet, the poor frozen bastards had no choice but to spend more on services, including energy to heat homes and health care. Aha, the moment of truth:

"If not for the increased spending on health care and utilities, the economy would have contracted in the first quarter."

Dudes! Make up your melons! Was the "frigid weather" bad or good for your numbers? Or did it actually have very little impact on our new-world economy?

For a really long time now, I've been explaining (and so have other realists) that the overpricing of pretty pieces of paper (aka stocks, bonds, treasury bills, etc.) caused by the gambling games of cocaine-fueled, high-strung nitwits in high-rise brokerage offices and delusional day-traders glued to their hand-held devices has nothing to do with real production values, revenue growth, profit generation, and economy improvements.

It's shocking to me that people seriously accept the stock market "rally" of the past few months as a sign of tangible fiscal gains. The same goes for the rise in housing prices resulted from the unprecedentedly low mortgage rates artificially kept down by the US Treasury.

Don't you people understand that, just like with a terminal patient, this is a temporary remission before the downfall? You cannot take a candy wrapper that worth 1 cent and say that its price is $430 just because there is a schmuck who is willing to shell out that kind of money for it and hope that there is another idiot out there who will pay $450. Any, more or less logical, person should understand that the real value behind the candy wrapper is still 1 cent, regardless of how much money you pay for it. But apparently the general public is severely lacking common sense and logical aptitude.

You know what else they are lacking? The disposal income – the money to spend, the moolah to throw around, the dollars to buy the products of the very companies, whose stocks comprise these people's pension and college funds. If the consumer market contracts, how can companies generate revenues? How can a nation experience a recovery, when 99.9% of it is getting poorer and poorer by the minute?

This issue of the constant reduction of consumer spending is at the core of the economic disasters ahead of us. And apparently the public-stock billionaires, whose wealth is so easily added up and compiled into lists in the Forbes's offices, have already caught up with the reality - they are in high-gear disposal mode.

Please-please read this MONEYNEWS' article about Billionaires Dumping Stocks. In addition to listing the relevant verifiable facts, it also refers readers to the voice of reason – an economist with an impeccable prediction record who foresees a market adjustment as dramatic as 90%!!! And if you want a really full picture read the other articles linked below as well.