Reality Ahead

Let’s keep our eye on the ball. We have predicted more vigor than is expected for 2011 and given the reasons why. We can actually narrow that window to H1.

If we are right, discretionary spending will expand. Those whose income is linked to this sector may at this time purchase a case of medium priced champagne, to be traded for the finer stuff perhaps once odds approach 85%.

Samuelson once said that, “to be published is to be found out,” referring to economists’ terror of what most of us call a track record; you know, a plumber whose joints leak, a physicist who can’t get his measurements straight, a doc who tossed out the wrong organ. Most of us are held accountable. Not economists. We want to separate ourselves from this bunch, which is why we will regularly visit this topic, to see if we are right or wrong in our earlier prediction.

Let’s stay ahead of the crowd if we can; let’s close the pattern earlier than most. If we’re wrong, we’ll find out pretty quick and print the same in caps. For now, we reported that the last payroll report cooperated with our view. And the Inst. For Supply Management Oct reports for manuf and services were above expectations. And vehicle sales have blown through expectations. From Larry Kudlow, “According to Auto Nation CEO Mike Jackson, rising pickup sales show that small businesses and entrepreneurs are going to work.” Thank you very much.

Finally, we noted earlier that company earnings are surprising to the upside.

So we are set pretty well we think. We don’t know exactly what numbers the economy will print, and really don’t care. All we care is that results eclipse expectations, blow through conventional wisdom. This will cheer the consumer. So far so good.

Robert Craven