FEB 28, 2018
Proverbs, 16:18: Pride goeth before destruction, and an haughty spirit before a fall.
Consumer Confidence just hit an 18-year high. The last time it was this high? Just before the dotcom collapse and the Nasdaq falling more than 75%.
It is difficult to blame delusional consumers for their delusional confidence. The Fed has been rigging the game for so long now that it is difficult to remember a time when risk assets were allowed to fall without the Fed Plunge Protection Team interfering in the free market and rushing in to buy stocks, the last time fake demand and printing press money weren’t propping up the whole charade in absence of true organic growth.
The chart below is another attempt to evaluate the historical context for this index as a coincident indicator of the economy. Toward this end, we have highlighted recessions and included GDP. The regression through the index data shows the long-term trend and highlights the extreme volatility of this indicator.
Never has there been a bubble market this manipulated this brazenly for this long, and the inevitable recession to follow is going to be a monster.