Reality .vs. Spin – Confidence And Trade

By Karl Denninger, The Market Ticker

The spinmeisters were out this morning on the trade data:

The gap grew a larger-than-anticipated 18 percent to $36.5 billion, the highest level since January, from a revised $30.8 billion in August, the Commerce Department said today in Washington. Imports surged by the most in 16 years, swamping a gain in exports.

This is being cited as “evidence” that the consumer has turned the corner – that consumption is increasing, and the economy recovering.

“Sometimes what looks bad on the surface is actually quite good and I think that’s the case this time around,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “Exports are growing strongly and imports are turning up because domestic spending has turned the corner.”

Ok, if that’s true, where are the clear and obvious increases in sales tax receipts?

That data is near-real-time, it is not gamed, and it automatically (mostly) excludes food, since food sales are not taxed in most jurisdictions.

It thus correlates very well with discretionary consumer spending on goods – you know, the things that are imported?

Sal Guatieri hasn’t bothered to look at those numbers, because they don’t support his thesis.  Yet sales tax receipts aren’t just “support” for a thesis, they are in fact the final word on it, as they’re not subject to government game-playing or “adjustments.”

Consumer confidence came in at 66 even, much lower than expected.  Big surprise?  How?  Were you freaking blind with the 10.2% unemployment number, and expected that consumers wouldn’t be impacted by that?

Told ‘ya so.

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