Update: El-Erian on the imminent market pullback: Market Mover Friday: Consumer Sentiment plunges, CPI flat…

Vodpod videos no longer available.

CNBC: “The stock market has gotten ahead of reality, Pimco’s Mohamed El-Erian told CNBC Friday.

In a continuation of recent comments, El-Erian, co-chief executive officer of the largest bond fund manager in the world, said the US has yet to see a durable and sustainable recovery.

“Stock investors are making overly optimistic assumptions,” El-Erian said. “The key stimulus has already come into the consumer and has helped in the last few months. But for the third and fourth quarters looking ahead, I am not so sure things will be as good.”

Just three weeks ago, El-Erian told CNBC that the stock market spent July on a “sugar high,” rising to levels not justified by an economy that is still limping along….”

And tonight the WH will release their economic projections…

Markets are SHOCKED! SHOCKED I SAY! by the plunge in consumer sentiment. They dont know us very well do they?

DOW down 127 to 9721, S & P down 14 to 998, NAS down 30 to 1979….

CNBC:

The Reuters/University of Michigan Surveys of Consumers said its preliminary reading of the index of confidence for August fell to 63.2 from 66.0 in July. This was below economists’ median expectation of a reading of 68.5, according to a Reuters poll.The index of consumer expectations fell to 62.1 in early August, its lowest reading since March and down from 63.2 in July.

CNBC:

U.S. consumer prices were flat in July versus June, but fell over the past 12 months by the most since 1950, according to government data that suggested benign inflation pressure even amid signs the recession may be winding down. The Labor Department said on Friday its Consumer Price Index was unchanged after rising 0.7 percent in June, in line with market forecasts for a flat reading

Gasoline prices fell 0.8 percent after jumping 17.3 percent the previous month, helping to keep overall prices contained. The food index declined 0.3 percent, the biggest fall since May 2002, after being flat in June, while prices for apparel and new vehicles rose in July.Compared to the same period last year, consumer prices fell 2.1 percent, the largest decline since January 1950, reflecting the huge drop in oil prices since last year’s peak….

I know, I know, where is the inflation. We are still in a deflationary spiral, but the money printing and out of control spending will cause inflation at some point., My concern is if as I suspect, TOTUS, boots Ben to give the FED to Summers (his reward for endorsing him as a ‘moderate’ in our primaries HA!)  then I think we will NOT TIGHTEN rates in time to stop the inflation when it appears, thus it will be vicious, HYPERinflation when it comes….shiver…Carter anyone? sigh.

Simply Red courtesy of GoodTimeMusic