Consumer Confidence Plunges
Feb 23, 2010
Posted by Jody Eisenman | Filed under Uncategorized
In a surprising blow to the apparent economic recovery, the Conference Board announced today that the Consumer Confidence Index fell almost 11 points from 56.5 to 46. This number was expected to be around 55, and it ended three straight up months. Generally, increased consumer confidence indicates economic growth. These numbers are tabulated by polling 5000 households each month as to current business conditions, anticipated business conditions, current and anticipated employment, and total family income. The number is then based as an index, with 100 being “normal” or at equilibrium. This number was arbitrarily set in 1985. The index hit its’ lowest level since last April. The average number has been 95.6 since the tracking began in 1967.
In addition, Sheila Bair announced that thanks to the massive number of bank failures, the FDIC is now over $20 billion in debt. In order to make up the deficit, the FDIC is going to require that member banks pre pay thirteen quarters in advance. After a total of 28 banks failed over the 2007-2008 period, 140 failed last year. Thus far this year, 20 have been shuttered, which is a pace slightly above last year. Not good.
As such, the stock market is giving back ground. As of 3 PM, the DJIA is down about 80 points. I will try to write about the debt situation in our country shortly.
