why the consumer index collapsed

[XBoxBoy]

[quote=Rich Toscano]I’m with DWCAP. Consumer confidence tends to just follow whatever the stock market is doing. [/quote]

Do you have any reason to believe that the stock market is a causation of the change in Consumer confidence instead or merely correlated? When I look at that chart I see correlation, but I don’t see the stock market leading consumer confidence, nor the other way around. (Note that in mid to late 2007 the consumer confidence began diving several months BEFORE the stock market peaked. Yet in other spots it appears the stock market turns first.)

If anything I would personally argue that they are correlated, but neither is a causality of the other. More likely the sentiment of both consumers and investors are triggered by other factors.

[blahblahblah]

[quote=Rich Toscano]I’m with DWCAP. Consumer confidence tends to just follow whatever the stock market is doing. Here’s a good illustration: [/quote]

Or could it be that when people have extra money, some buy things and some buy stocks? I think it’s correlation, not causation…

[blahblahblah]

[quote=Rich Toscano]I’m with DWCAP. Consumer confidence tends to just follow whatever the stock market is doing. Here’s a good illustration: [/quote]

Or could it be that when people have extra money, some buy things and some buy stocks? I think it’s correlation, not causation…

[blahblahblah]

[quote=Rich Toscano]I’m with DWCAP. Consumer confidence tends to just follow whatever the stock market is doing. Here’s a good illustration: [/quote]

Or could it be that when people have extra money, some buy things and some buy stocks? I think it’s correlation, not causation…

[blahblahblah]

[quote=Rich Toscano]I’m with DWCAP. Consumer confidence tends to just follow whatever the stock market is doing. Here’s a good illustration: [/quote]

Or could it be that when people have extra money, some buy things and some buy stocks? I think it’s correlation, not causation…

[blahblahblah]

[quote=Rich Toscano]I’m with DWCAP. Consumer confidence tends to just follow whatever the stock market is doing. Here’s a good illustration: [/quote]

Or could it be that when people have extra money, some buy things and some buy stocks? I think it’s correlation, not causation…

[Rich Toscano]

Yes, I do… I think people put entirely too much credence on stock prices as an indicator of economic health. Also since so many people own such investments, they freak out when values drop and vice versa.

So my bet is that consumer confidence is heavily influenced by stock prices, ie that there is a causal relationship. I doubt you would spot the lag on a multi-year chart like that, but I’ll bet that if you could look closely you would indeed see that confidence trails stock prices. Anyone know of a chart that could confirm/deny my suspicion?

[Rich Toscano]

Yes, I do… I think people put entirely too much credence on stock prices as an indicator of economic health. Also since so many people own such investments, they freak out when values drop and vice versa.

So my bet is that consumer confidence is heavily influenced by stock prices, ie that there is a causal relationship. I doubt you would spot the lag on a multi-year chart like that, but I’ll bet that if you could look closely you would indeed see that confidence trails stock prices. Anyone know of a chart that could confirm/deny my suspicion?

[Rich Toscano]

Yes, I do… I think people put entirely too much credence on stock prices as an indicator of economic health. Also since so many people own such investments, they freak out when values drop and vice versa.

So my bet is that consumer confidence is heavily influenced by stock prices, ie that there is a causal relationship. I doubt you would spot the lag on a multi-year chart like that, but I’ll bet that if you could look closely you would indeed see that confidence trails stock prices. Anyone know of a chart that could confirm/deny my suspicion?

[Rich Toscano]

Yes, I do… I think people put entirely too much credence on stock prices as an indicator of economic health. Also since so many people own such investments, they freak out when values drop and vice versa.

So my bet is that consumer confidence is heavily influenced by stock prices, ie that there is a causal relationship. I doubt you would spot the lag on a multi-year chart like that, but I’ll bet that if you could look closely you would indeed see that confidence trails stock prices. Anyone know of a chart that could confirm/deny my suspicion?

[Rich Toscano]

Yes, I do… I think people put entirely too much credence on stock prices as an indicator of economic health. Also since so many people own such investments, they freak out when values drop and vice versa.

So my bet is that consumer confidence is heavily influenced by stock prices, ie that there is a causal relationship. I doubt you would spot the lag on a multi-year chart like that, but I’ll bet that if you could look closely you would indeed see that confidence trails stock prices. Anyone know of a chart that could confirm/deny my suspicion?

[CA renter]

[quote=Rich Toscano]Yes, I do… I think people put entirely too much credence on stock prices as an indicator of economic health. Also since so many people own such investments, they freak out when values drop and vice versa.

So my bet is that consumer confidence is heavily influenced by stock prices, ie that there is a causal relationship. I doubt you would spot the lag on a multi-year chart like that, but I’ll bet that if you could look closely you would indeed see that confidence trails stock prices. Anyone know of a chart that could confirm/deny my suspicion?[/quote]

No chart, but would absolutely agree with you about the stock market leading consumer confidence. I’ve heard it from so many people, I can’t even count. When the housing market started turning down, and some of us were trying to warn them, they would point to the stock market and claim that it was a “leading indicator” so all was well with the world. It was only after the stock market started tanking that people (especially those not paying attention to anything else) started getting scared.

[CA renter]

[quote=Rich Toscano]Yes, I do… I think people put entirely too much credence on stock prices as an indicator of economic health. Also since so many people own such investments, they freak out when values drop and vice versa.

So my bet is that consumer confidence is heavily influenced by stock prices, ie that there is a causal relationship. I doubt you would spot the lag on a multi-year chart like that, but I’ll bet that if you could look closely you would indeed see that confidence trails stock prices. Anyone know of a chart that could confirm/deny my suspicion?[/quote]

No chart, but would absolutely agree with you about the stock market leading consumer confidence. I’ve heard it from so many people, I can’t even count. When the housing market started turning down, and some of us were trying to warn them, they would point to the stock market and claim that it was a “leading indicator” so all was well with the world. It was only after the stock market started tanking that people (especially those not paying attention to anything else) started getting scared.

[CA renter]

[quote=Rich Toscano]Yes, I do… I think people put entirely too much credence on stock prices as an indicator of economic health. Also since so many people own such investments, they freak out when values drop and vice versa.

So my bet is that consumer confidence is heavily influenced by stock prices, ie that there is a causal relationship. I doubt you would spot the lag on a multi-year chart like that, but I’ll bet that if you could look closely you would indeed see that confidence trails stock prices. Anyone know of a chart that could confirm/deny my suspicion?[/quote]

No chart, but would absolutely agree with you about the stock market leading consumer confidence. I’ve heard it from so many people, I can’t even count. When the housing market started turning down, and some of us were trying to warn them, they would point to the stock market and claim that it was a “leading indicator” so all was well with the world. It was only after the stock market started tanking that people (especially those not paying attention to anything else) started getting scared.

[CA renter]

[quote=Rich Toscano]Yes, I do… I think people put entirely too much credence on stock prices as an indicator of economic health. Also since so many people own such investments, they freak out when values drop and vice versa.

So my bet is that consumer confidence is heavily influenced by stock prices, ie that there is a causal relationship. I doubt you would spot the lag on a multi-year chart like that, but I’ll bet that if you could look closely you would indeed see that confidence trails stock prices. Anyone know of a chart that could confirm/deny my suspicion?[/quote]

No chart, but would absolutely agree with you about the stock market leading consumer confidence. I’ve heard it from so many people, I can’t even count. When the housing market started turning down, and some of us were trying to warn them, they would point to the stock market and claim that it was a “leading indicator” so all was well with the world. It was only after the stock market started tanking that people (especially those not paying attention to anything else) started getting scared.

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