Sept Sales Surge....Errrr Come again now?

We get the report from the boys down at the Statistics Office saying September retail sales were UP UP UP.

Hooray!!

So I guess I was wrong and the fed really did need to cut rates in order to stimulate the economy. Way to go Bernake!!

Except hold on a second. The fed funds rate was cut on Sept 18th. That means rates on credit cards, loans, etc were cut on the 19th, 20th,21st, around there. You will recall that prior to the 18th the powers that be (Larry Kudlow, Jim Cramer, etc) were saying Armageddon would arrive without a rate cut. So what I am supposed to now believe is that 2/3 of Sept was pure hell, then magically after the rate cut the final 1/3 of the month saw retail sales surge because interest rates on credit cards went from 23% to 22.5%?

Do the so-called-experts in the media really think we are that stupid?

And putting aside all that. The report says sales increased between August and Sept. Well hmm what happens in Sept every year? I dunno, the leaves start changing colors. Baseball pennat races heat up. NFL season starts. What else, what else? Oh year school starts in about 2/3 of the country. You don't think that had anything to do with increased retail sales do you? This is a familiar trick used...compare month to month instead of year to year. It's like saying sales of salt doubled between November and December. Well no shit. Sales double every year between November and December (For those of you reading this in Florida or SoCal, don't worry if you are confused). And every year sales increase between August and Sept. It means nothing. It is like reporting the sun rose in the east today and set in the west last night.

Another idiotic statement from the article and often used by the media to spin economic bad news:

"The government data did show weakness at department stores and specialty clothing shops, where unusually warm weather dampened demand for fall clothing."

Raise your hand if you buy your clothes based on the weather? Hey honey wanna go shopping for clothes? No way. It's 3.8 degrees warmer than average, I'm not going shopping today, I'll wait for the weather to return to it's 30 year mean before stepping foot in a mall. Next month sales of clothes will be down because in October it was too cold or too wet or too dry or the barometric pressure was too high. This trick is also used to explain away housing starts. I know I decide whether to buy a house or rent based on the weather don't you? My rule is if the temp is below 68, I don't buy homes. And if the temp is below 74 I don't buy clothes.

And how about this gem:

"Sales at gasoline stations also rose strongly in September, up 2 percent following a 2.6 percent drop in August. However, this increase primarily reflected the fact that pump prices were rising last month after having declined the previous month."

Really? Oil spiked to $80 due almost exclusively to the dollar's decline and sales at gas stations went up? So how much of the total rise in retail sales can be explained by the increase in gas prices? Of course we never find out

And finally my favorite part:

"In other news, the Labor Department reported that wholesale prices jumped by 1.1 percent in September, pushed higher by gains in food and energy costs. Excluding those volatile categories, wholesale prices were up by a moderate 0.1 percent. The big increase was driven by a 4.1 percent surge in energy prices in September, including an 8.4 percent jump in gasoline costs, the biggest rise for gasoline prices since March. Food costs surged by 1.5 percent."

Same old, same old. Aside from inflation in the price of food, gas and heating oil, everything is A-OK. I know I never eat,drive or heat/cool my home. So excluding those volatile categories, I should be just fine. Food rising at 1.5% a month....think of that for a second. That works out to 29% a year. But no biggie, it's just "other news" as in "In other news tonight, a dog gave birth to 15 puppies and here is Misty Rivers from Channel 7 news on the scene to cover the story". You know, the story on A24 or at 11:27pm.

Carry on everyone, economy is booming, everything is fine. It's Friday, which means payday for many of you. Make sure you are good Americans and go out and spend every last dime of it. Go buy a new car, a new TV, and a new boat. I know your VISA has a little left on it and hey I hear Best Buy is offering $0 down for 6 months. Better buy that new 80" Plasma before your neighbor does. You don't want to be the loser on your block do you?

Not to brag or nuthin....

but I called FXI about as close as I could without having the SEC make a call. An hour after I said short it, it fell 5%. And why did it fall 5% in an hour?

I-N-F-L-A-T-I-O-N Worries. Finally the knobs are starting to clue in that inflation is indeed a concern.

I've only been saying this for oh I dunno, months and years. Nice to know the s0-called-experts have finally clued in.

Hey Ben Bernake are you listening? RAISE INTEREST RATES! Save the dollar while you still can.

I hate Larry Kudlow

This asshole is celebrating the fact that Citigroup's CEO, former Clinton Treasury Secretary ,Robert Rubin, pressured Ben Bernake into lowering rates.

Citi you may recall just announced a 60% drop in revenue for the quarter. Must be nice to just get on the phone and call Bernake, and poof all your worries are gone. Had it not been for the cut, Citi's stock price would have fallen off a cliff.

But that's OK. We have to protect Wall St. at any cost. So what if gas will cost $5 soon enough due to the worthless dollar? I'm more than happy to pay that much. As long as Rubin and the rest of the CEOs get their $200M bonuses this year, I'm more than happy.

How about you?

Buy Banks, Buy Metals

The jobs number came in this morning at 110,000. Not bad I suppose. Not too high not too low but low enough that the Fed can use it as an excuse to raise rates once again and kill the $US a little faster. As I have said before is despicable that Wall St says jump and the fed says how high? Despite what CNBC will tell you price stability is the Fed's #1 concern, not Wall St bonuses.

What really annoys me is the double sided mouth of the CNBC gang. On the one hand they say all is well in the economy. The they say a rate cut is a must? HUH? Either things are OK or they're not. What in the hell do you need a rate cut for if the economy is humming along just well? Mr.Kudlow? Any comment? Bueller? Fry? Simone? Anyone?

Anyway: seeing how Ben Bernake has become the Wall St poodle, we have to assume he will cut again at the next meeting.

And when he cuts you want banking stocks and you want metals. I own Bank of America and I own SLV. Both have been doing very well lately. SLV took a bit of a hit this week, but bounced back. BofA is steadily climbing up. I am buying some more of both. I would still stay away from WaMu and Wachovia though.