Tuesday, May 4, 2010

"Kid Dynamite" Has Some Good Observations on Economic Indicators

First, in a post this morning about Molson Coors earnings,

Molson Coors gives us the only economic data point we need to know this morning to evaluate the true state of the economy, emphasis mine:
"Molson Coors says its first-quarter profit climbed 38 percent on a tax-related gain. But consumers bought less of its beer and costs rose, causing adjusted results to miss Wall Street's expectations.

Molson Coors Brewing Co. sold 3.8 percent less beer worldwide. It blamed the decline on high unemployment and a slow recovery in consumer confidence."
Forget all the mumbo jumbo with super extended unemployment benefits, increasing retail sales, government dominated mortgage markets, ISM, PPI, etc etc etc.

You need to know one thing: consumers don't buy "3.8% less beer" if things are getting better.
Second, in a different post, this time about "bacon and breasts,"
"Relative to the second quarter last year, we have heard from many of our customers that there was a slight reduction in a number of screening mammography, and as a result, a reduction in biopsy procedures. We believe this is primarily due to the high levels of unemployment and resetting deductibles and co-pays, leading to the decreased wellness business"
Come on now. If the economy is recovering so rapidly, then why are women cutting essential expenses like breast cancer screening? Also, note, that they are talking about lower levels from what should have been an easy comparison in the 2009 comparable quarter.

Then, just when I thought I had another key data point figured out (bearish!), my wife returned from a trip to downtown Concord where she checked in with a high end candy store in town that specializes in candy apples coated in a variety of fancy products, which sell for about $5 each.  She brought me back a piece of the new product:  chocolate covered BACON - which is selling for $2 a strip.  My wife even got some channel checks from the store owner, asking if people were pretty much buying them as novelties.  The response was that people buy one in the store, and then buy 6 more to take home!  If people spending $2/piece on chocolate covered bacon isn't a bullish indicator, I don't know what is... 
Actually, if people are foregoing essential expenses to buy frivolous novelties, it's even worse than bearish. It shows that Americans are terminally stupid.

As I like to say, "You can't fix stupid!"

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