The stock market looked like hell yesterday, considering the announcement that retail sales for November were up 1.2% -- double the 'estimate' of alleged economists. Another statistic out yesterday: Producer prices for finished goods jumped 3.2% -- well above the 1.7% estimated by, probably, the same bozos who grossly underestimated retail sales. (Where on earth do these guys get their numbers?) Not that either statistic can be trusted. Retail results supposedly were up across the board, not counting autos, but someone in the chat room said he'd read that 55.4% of the increase in revenues was attributable to higher gasoline prices. Did he perhaps confuse the two reports? [Note: We have since determined that, in fact, he did not. For a statistical explanation of this astounding footnote, one that you will not likely find in the Wall Street Journal, check out the Intraday Notes section of Friday's newsletter.] Regardless, it seems difficult to believe that retail spending could be holding up so well in the face of a deepening real estate bust and incipient recession. We had hoped for a plausible explanation from Merrill Lynch's chief North American economist, David Rosenberg, who has already declared a recession, but his latest report merely cast skepticism on the sales figures. He says he'll wait to see what December brings before he attempts to parse the meaning of November's ostensibly upbeat numbers. Concerning the leap in producer prices, it was interpreted just as we might have expected by the resident genius at Deloitte, chief economist Carl Steidtmann, who had this to say: "What the market is beginning to realize is that there's a much more severe inflation problem that is going to make it more difficult for the Fed to cut interest rates." Here the U.S. sits, inches from the maw of the deepest deflationary
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