Yes, But . . .

It's getting a bit boring to report the same old stuff, but here we go again.

Discover(R) says that Small Business Confidence Continues to Rise in May. Really, it's another case of bad but less bad. So a better headline would be, "Small Business Continues Its Misery". An ugly fact from this survey (conducted by Rasmussen Reports):

35 percent of small businesses surveyed said they believe the economy is getting better, up from 31 percent in April; 51 percent say the economy is getting worse, down a point from the previous month; and 12 percent see the economy as the same, down from 14 percent in April.

The percentage of small business owners rating the current economy as good or excellent was 12 percent in May, compared to 13 percent in April. The April and May ratings on the current state of the economy are the highest since June 2008. Thirty-two percent rate the economy as fair in May, while 56 percent still think it's poor. . .

28 percent of small business owners say economic conditions for their businesses are getting better, down from 30 percent in April; 44 percent said conditions are getting worse in May, down from 48 percent in April; and 24 percent said things are staying the same, up from 19 percent in April.

25 percent of small business owners indicated they were increasing business spending in May, up from 23 percent in April, while 46 percent said they were reducing spending this month, compared with 43 percent in April, and 31 percent said they are spending the same, up from 25 percent in May.

If you have absorbed the above, you would find a different headline than Discover found.

No wonder stocks are going down. Abu Dhabi's problems gave way to the problem's of the larger country north of it (Greece), which are giving way in the headlines to the problems of a much more substantial economy (Spain), and if you think it ends at Spain, you are an optimist. And at home, small business continues to be the canary that eternally "dies" warning of poison gases inside the mine. Just as Greece's problems are not new as of 6 months ago, America's economic non-recovery absent governmental and Fed machinations is not new.

The bear market that accelerated so rapidly to the downside in late August 2008 when Fannie and Freddie went into conservatorship and then imploded with the Lehman/AIG/Sunday evening announcements/etc. is back. That's the meaning of the topping out around the "Lehman gap". The drip-drip downtrend that was happening off the fall 2007 top was hidden by the huge moves down and up.

It's back. Yes, there was a true bull move in a secular bear market; but, till proven otherwise, it was nothing more than that. Small business doesn't lie.

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