Wall St's Mega-Miss

We’ve known from October that employment and spending numbers would far exceed forecasts. Most forecasters were, many still are looking in the wrong direction.

Witness today’s chain store sales result for Nov. Sales at the 30 chains tracked by Retail Metrics exceeded estimates, rising 5.3% compared with a consensus prediction of 3.5%. “Across the board, there was widespread strength,” said Ken Perkins, president of Swampscott, Massachusetts - based Retail Metrics. “The consumer is feeling better about their situation and is more inclined to spend on discretionary purchases.”

Next, the private ADP employment report showed this week that small businesses added the largest amount of workers in three years in November. No wonder the average shopper in the U.S. spent 6.4 percent more over Thanksgiving weekend than last year.

We have been able to anticipate these headlines before they come into print. There will be more. Economists will marvel at job growth, at discretionary spending just ahead.

There are two keys to Wall St’s mega miss: One is the failure to anticipate the results of Nov/2, that cheering of both employer and consumer. The other is lack of respect for the tenacity of a free America, where creativity and resourcefulness still thrive and this despite the occupation of the WH by the Great Leveler.

We wrote in Oct as follows: In the present situation a spark will be provided by the US masses, suddenly aware that they’ve been taken. That spark to be provided through the voting booth. This is not accounted for in forecasting models! Neither is the celerity with which the process will be accomplished, the overturning of BO’s agenda with the health heist first in line. Neither is the thoroughness in the de-lousing of an economy for two years contaminated by statists. All of this provides fire. Most see a rout by the Republicans but few understand the economic traction to come of it.



Robert Craven