> Enrique Diaz-Alvarez wrote:
>
> >April retail sales plunge unexpectedly. -0.2% vs. expectations of +0.5%.
> >Apparently, the (partial) bursting of the bubble did what 5 interest
> >rates hikes and the certainty of more to come wouldn't. So far, my view
> >that the US economy is completely dependent on the stock bubble is born
> >out.
>
> I'd be careful about declaring the bubble burst on the basis of one
> month's retail sales figs.
Yes, yes, I qualified that with a "partial". Don't want to give Jordan any buy signals. If the nasdaq comes back (i.e., if US households dig even deeper into home equity lines and credit cards) retail sales will follow, I think.
>
>
> But if you're right, why do you conclude that 5 interest rate hikes
> had nothing to do with the decline in retail sales?
>
Because sales, consumer borrowing, inflows into stock funds, all continued to skyrocket on the face of the interest rates increases. The first signs of a slowdown didn't come until after the market unpleasantness. Of course, post hoc not necessarily ergo propter hoc and all that, but the evidence is pretty compelling.
-- Enrique Diaz-Alvarez Office # (607) 255 5034 Electrical Engineering Home # (607) 272 4808 112 Phillips Hall Fax # (607) 255 4565 Cornell University mailto:enrique at ee.cornell.edu Ithaca, NY 14853 http://peta.ee.cornell.edu/~enrique