I thought it of interest to see what surveys of forecasters indicate about two questions being asked: Is a dollar collapse imminent -- Martin Wolf is skeptical, while others [0] are convinced the end is nigh -- and is a double dip recession likely? I take a look at the messages conveyed by FX4casts.com and the WSJ October survey of forecasters.

The Dollar

First, let's take a look at what a survey of approximately 50 banks and financial firms indicates, for the value of the dollar (Fed broad index) and the euro/dollar exchange rate.

Figure 1: Log dollar index (broad) (blue), mean forecast (red squares), high and low forecasts (95% bounds) (teal +). Forecast dates typically pertain to 4th Thursday in each month. NBER defined recessions shaded gray, assumes last recession ends 09Q2. Source: Federal Reserve via St. Louis Fed FRED II, FX4casts.com, NBER, ...

What group can claim credit for being the driving force behind the world’s largest economy? Hint: You are probably a member of this group.

The answer is U.S. consumers, whose spending is responsible for more than 70% of U.S. gross domestic product (GDP). As we’ve seen in recent years, when consumer conditions are bad, the effects can be widespread. If consumer spending falters, it affects business income and tax revenues. If revenues fall far enough, the effects can include increased unemployment, which in turn exaggerates the problem because the unemployed have reduced incomes and tend to make fewer purchases.

Economists, traders, investors, and policymakers all take great interest in the financial health of consumers and what they may do next. Here are some popular indicators of consumer behavior.

The Monthly Retail Trade Survey is conducted by the U.S. Census Bureau, which mails questionnaires to about 12,500 businesses. The Census Bureau uses the data

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The longer the rally persists, the more dangerous it becomes.

The S&P 500 is up almost 60% since March. The Dow just had its best quarter since ’98.

Yesterday, the Dow slipped 29 points. Is the rally finally rolling over? Or is this a genuine bull market, just taking a pause?

If it is a real bull market it’s a funny-looking bull – one that is missing parts!

For example, corporate earnings are missing. P/E ratios are rising far above the corporate earnings that support them. This puts the market 35% overvalued on a cyclically-adjusted P/E basis, says Smithers & Co.

And if you look at it in terms of its “q” ratio – a comparison of capitalisation and replacement costs – the S&P is even more overvalued. As for emerging markets, “they’re off the charts,” says the Financial Times.

Another missing part is the consumer. This from David Rosenberg:

“ Consumer confidence not only

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A bias to buy dollars remains…Looks like coordinated jawboning…Fujii now talks about intervening! Gold remains below $1,000…And Now… Today’s Pfennig!

Good day… And a Terrific Tuesday to you! Well… Stop the presses… You know the presses that are talking about the countries that are on the docket to begin a rate hike cycle, because… Russia has thrown a cat among the pigeons this morning with a rate CUT… Let me tell you why this is a big deal…

Well, when everyone is thinking that the G0-GO countries of Norway, Australia, and Brazil will probably begin their rate hike cycles this year, and other won’t be far behind… While the U.S. drags its feet and wallows in the zero rate mud… The thinking was that the rate differentials to the dollar would begin to widen, causing even more pain for the dollar. And, the reason these countries were able to raise rates

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With two sets of U.S. weekly oil statistics due out Tuesday and Wednesday expected to confirm fears of high inventories due to low demand, the price of oil dipped to the bottom of its 12-week range. A Reuter’s poll showing a 500,000 barrel inventory increase in the week to September 25 compounded middle distillate forecasts showing a 1.1 million barrel rise.

CEO of Saudi Aramco, Saudi Arabia’s state-run oil company, Khalid Al-Falih indicated Monday that demand from emerging markets and an uptick in China would not offset the loss in demand for oil for some time. Al-Falih also suggested that global consumption would not flag irrevocably and that higher oil prices were needed to fund concurrent development projects.

With the FTSEurofirst 300 broadly falling, U.S. and Brent crude futures were below $65 and $64 respectively by midmorning, Sept. 29. A rebound to $66.59 and $65.71 respectively followed at noon, due

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Debunking The Paradox of Thrift: Why Consumer Spending Won’t Save Our Economy

by Mark Skousen, Contributing Editor

“America’s saving rate has leaped ahead – and it’s sending America to the poorhouse.” – David Fessler

An Investment U column attacking the virtue of thrift – surely not?

Yet there it was – an article from David Fessler on September 12, entitled, “The Paradox of Thrift: How a Better Savings Rate is Fueling the Recession.”

David Fessler is a friend and smart investment analyst, so I was surprised that he fell for one of the biggest myths in economics today – the so-called “paradox of thrift” that Keynesian economists spout all the time.

Here’s the problem with the theory, plus a few stocks that are front-and-center of the opposite argument…

The Keynesian Way

Let’s start with the facts, as David correctly noted. During the

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In August, the Conference Board’s Index of Leading Economic Indicators (LEI) rose 0.6%, following gains of 0.9% in July and 0.8% in June. This was slightly below the 0.7% consensus expectation, but on the other hand, the July number was revised up from 0.6%, so the gain was coming off a higher base. Five of the ten indicators were up on the month, three were down and two were unchanged. This marks the fifth month in a row that the index has been up since it bottomed out in March. Prior to that, it had fallen for 20 straight months -- one of the longest negative strings on record. The five components that were up, in order of their impact on the index, were: the vendor performance index, which rose to 57.1 from 52.0; the spread on 10-year Treasuries versus Fed Funds, which rose to 3.43% from ...

Last week we received positive readings for some key economic indicators. But I still see plenty to worry about.

Source: FRED

On Tuesday the Census Bureau announced that U.S. retail and food services sales in August were 2.7% higher than in July on a seasonally adjusted basis. True, 2/3 of the additional $9 billion in spending was attributed to motor vehicles and parts, and September car sales could be much worse than August. Another 1/6 of the new spending came from gasoline stations, and the higher average gasoline prices in August are hardly cause for celebration. But even excluding autos and gasoline, core retail sales were up 0.6% in August. Here's the summary from Stephen Stanley of RBS:

after a string of contractions, these data suggest that consumer demand is, at a minimum, stabilizing. Core retail sales may even

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For Immediate Release

Chicago, IL – August 27, 2009 – Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week’s analysis include Aeropostale (ARO), Ross Stores (ROSS), Dollar Tree, Inc. (DLTR), Dick's Sporting Goods (DKS) and Kohl's (KSS).

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This week: Some Retailers Seeing Sales Growth

Second-quarter profits for the retailers have been coming in better than expected, mirroring a trend I've seen with other industries. Nearly 75% of the retailers have topped expectations.*

Though the numbers are better than forecast, they need to be taken in context with the economic backdrop. Most retailers failed to achieve growth, either in terms of same-store sales or profits. The third-quarter could remain challenging, given the consumer confidence numbers. The Conference Board's index of consumer confidence stands at just 54.1. Though

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So what has stocks soaring now, during this great deleveraging — this credit crunch — this historic pullback in household balance sheets?

Consumer confidence, of course.

We recently vowed to stop calling our national brethren “consumers” in favor of less degrading words — like Americans, citizens or just plain-old people. Thus, we report the Conference Board printed a surprisingly optimistic gauge of American consumption attitudes (doesn’t that sound better?) yesterday. After two months of decline, the index kicked back up to 54.1, just shy of a 2009 high.

Coupled with the latest printing of the home price index, that was enough to keep this mega-bounce alive and kicking. The news shot the S&P 500 to a 1% gain within moments of yesterday’s opening bell, which eventually faded into a 0.25% advance. The index is up almost 4% in the last five trading days. The Dow hasn’t fallen for six days in a row.

We

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