Washington and Wall Street are just robbing Peter to pay Paul – front-loading sales to paint a false picture of economic health.

The grand “carnivale” continues unabated.

I suppose it begins with Sukhot, really, the biblical “Feast of Ingathering.” Then there is that celebration of grain libations, Oktoberfest, and the great candy shakedown, Halloween.

Now we’ve made it through one of the really big stations of this half-ecumenical, half-epicurean tour: Thanksgiving. All we have left to do is survive Chanukah, Christmas and New Year’s.

I suppose the original idea was that the best way to preserve recently harvested food was to eat it all, and then live off “the fat of the land” through winter’s dark days.

Fortunately, late winter starvation is pretty much off the table these days. We can now purchase tender steaks and fresh oranges and grapes in the very dead of winter, courtesy of Texas, California, Florida and occasionally, Chile.

Unfortunately, we must now find other ways to deal with said “fat.” My preference is for long walks about the property at dawn. It gives me a chance to think in relative peace and quiet. (My wife thinks I am mad, and prefers afternoon sessions of Tai Chi in the warmth and comfort of our family room.)

In the End, These Are the Stories That Matter Most

One of the more enjoyable aspects of this time of year is, of course, the opportunity to catch up with family. As I mentioned in a recent Taipan Daily, "Washington Just Can't Connect The Dots", our segregation into nuclear units deprives us of the many parallel narratives offered by our extended families. Come the close of each year, we do our best to fill this void with travel and long letters relating all that has happened over the past months.

Yes, yes, I know: Sometimes, cramming oneself elbow to elbow around a mid-sized American dining room table can be a tad trying. You probably don’t want to hear about your spouse’s great uncle’s bout with kidney stones (again!) while you’re still working on a plateful of turkey and giblet gravy… Or your cousin’s run-in with an HR clerk who wouldn’t accept his time in online poker parlors as “an education in psychology and statistics...” Or how your brother’s very attractive and oh-so-PC second wife has stocked the house with recycled toilet paper…

But it pays to be as tolerant as one can manage, because these narratives can offer subtle clues to what is going on in the real world, as compared to the fantasy world of Washington and Wall Street. (See? You just knew I’d go there eventually!)

Critical Clues From Around the Table

My colleagues and I have repeatedly demonstrated this dichotomy between the real and paper economies with charts and tables. But I saw those same cold facts in miniature at my parents’ Thanksgiving dining room table.

We read in the news that spending was up last month. October supposedly saw incomes rise some 0.2%, making for the second rising month in a row. And indeed, we hear from our sister-in-law that both she (a substitute teacher) and her husband (a carpenter) received more work hours last month. Neither made any overtime pay or such. But at least she qualifies for state health insurance.

And I don’t rightly know if this is good or bad, but I have read that consumers spent about 0.7% more this October than last. I suppose this means that Retail is finally picking itself up off the floor. Unfortunately, it also means that our family savings are falling behind by about 0.5%, a fact confirmed by my parents, who – despite concerns about their falling “fixed” incomes – mentioned that they would indeed be shopping for all the grandkids on Black Friday.

The Split Between Sane and Sales

There’s your dichotomy in a nutshell. In a recent poll, consumers stated that they were quite concerned about the state of things in general. Those who weren’t unemployed or underemployed were worried that, even if they didn’t lose their jobs, they might yet find themselves supporting (or perhaps even housing) parents, kids or siblings.

Many said that they might still shop a bit this year, but not with any real enthusiasm. Mostly, they planned on foregoing frivolities like those hundred-dollar electronic hamsters, and focus instead on necessities like sweaters, gloves and warm socks.

Thus we read that this year’s Black Friday sales were indeed up some 0.5% year over year. But we also read many retailers have put sundries such as bread, milk, and the aforementioned dreaded recycled toilet paper on sale, alongside toys and electronics, so as to front-load their overall numbers.

In point of fact, just about all of the recent rise in GDP has been front-loaded in the same fashion. Just as Main Street retailers have discounted paper towels so as to entice folks to buy next January’s wipes in November, Washington has borrowed against future tax revenues so as to entice folks to buy cars and houses a year or three before they could afford the same. In the end, neither effort generates genuinely unique sales. They just borrow from Peter to pay Paul.

My Wife’s Turkey Soup Is Killing Santa

My wife chose not to join the Black Friday throng at the stores this year. It’s not like the checks wouldn’t clear. Between my own investing and my fees for writing these missives to you fine folks, I’ve certainly done well.

She says it just feels wrong. “Just because we did all right is no reason to go off on some sort of spending spree. First off, it flies in the face of common sense. And it teaches the kids the entirely wrong idea about how people ought to act in a time of crisis.”

She has suggested that perhaps we ought to make things for each other this season. This is all well and good for her to say: She has been knitting all year in preparation. But there is no arguing with her about it, at least for the moment. She is busy in the kitchen now turning the turkey carcass into a vat of delicious smelling homemade soup.

Hmmm, maybe she has a point. Still, I’ll probably sneak out and pick up a few store-bought items, just to be sure. After all, these kids are gonna choose a home for me someday.

Other Related Topics: Adam Lass , Economic Recovery , Retail Industry , Retail Sales , WaveStrength Options Weekly

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