Economy Continues To Fall Apart

investmentresearchdynamics.com / David Kranzler / October 27, 2014

Forget the “seasonally adjusted,” highly massaged data released daily now by regional Fed banks, industry organizations (i.e. industry snake-oil selling entities) and  of course the Government, here’s what the CEO of NCR, the largest point-sales systems to retailers, had to say after the Company’s 3rd quarter earnings were released:

Market conditions within the retail industry worsened in the third quarter, as evidenced by weak same store sales comparisons and financial results. This resulted in our retail customers spending more cautiously than anticipated and further delaying solution rollouts…In addition to our third quarter preliminary results, we now expect our 2014 results to be below our previous guidance.

Quite the different picture of the retail environment than what you hear from Wall Street and the media cheerleaders.  Even with the massaged data, most current economic reports are falling below Wall Street’s forecasts.

The indicators I would point to which reflect the rotting core of economy are the price of oil and the 10yr Treasury yield.   The 10yr yield is falling because it’s the only “safe” place to park cash that offers some yield.  Note how the yield is dropping despite the ending of QE bond buying.   And oil is a function of supply and demand.  The price of oil similarly collapsed in 2008 just ahead of the financial and economic collapse that occurred that year.  A collapse that was diverted by the onset of an eventual $4 trillion in QE stimulus and taxpayer-funded Government spending.

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