The Polar Vortex Is Back... In The Middle Of July

While every single economist and "straight to CNBC" pundit was quick to blast the atrocious economic performance in Q1 as solely due to the "harsh weather", what has emerged in various retail earnings reports so far in Q2 is that, drumroll, they lied. In fact, as one after another "stunned" retailer admits, the depressed spending observed during Q1 continued, if not deteriorated even further, in the second quarter. Which means only one thing, the same thing we said back in January: as a result of Obamacare, the declining credit impulse resulting from the Fed's tapering, and a ongoing contraction in global trade as the world slides back into recession, the US economy is on the verge of stalling and may well enter into a tailspin if one or more exogenous events take place in a centrally-planned world that is priced to perfection.

To be sure, one of the potential scapegoats we highlighted previously was the replacement of the polar vortex with what we dubbed the "solar vortex", ala El Nino, which as we further reported, has already been blamed in advance by the Bank of Japan for a spending collapse set to take place in the second half of 2014, the year when the Japanese economy now almost certainly re-enters recession.

More