The collapse in Europe, fears of default, weakening US data, the stock market dive… it all adds up to what Doug Short describes as a “stunning setback” for the University of Michigan Consumer Sentiment survey.
As the chart below shows, the reading has now hit a level not seen since early 2008.
Meanwhile, as we noted, there’s a pretty big gap growing between the sentiment (surveys, markets, etc.) and the data which just hasn’t collapsed by that much. Ominously this will need to be resolved one way or another.