Why is the Consumer so Depressed Still?

The University of Michigan consumer sentiment survey came out with much worse then expected results today. Why in fact is the consumer sentiment down in August from July? And why are consumers have such lower personal expectations while being more bullish on the national economy? My guess is that the media spent most of July and now August obsessing about job losses, foreclosures, and such that its gotten the average consumer downbeat when they should be more positive. The economy clearly isn't peachy so it's not about whether its a great economy, but consumers should be much more bullish then they were in June and even July. Its so much clearer now that the economy has turned the corner and at this point all we lack is a stronger consumer in the US for an all out bullish scenario. About the only reason a double dip recession could happen is if the consumer were to remain hidden. Luckily though, consumer confidence surveys don't always align with spending. Consumers tend to spend what they have regardless of how they feel when answering a survey.

• 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.

Its also possible that the typical consumer surveyed isn't heavily invested or tied to the global economy. Though with a dramatic increase in car production in July its hard to see how everybody could not see improvements around the corner.

This report may make me pause on considering an investment in Liz Claiborne (LIZ), but it doesn't change my mind on global growth stocks like technology and commodities. It does make me wonder if a void is developing in the US. Anybody that just has wealth tied to their house is still hurting while the more wealthy with stock investments and a global perspective is much more bullish. In that scenario the typical LIZ consumer would be stronger sooner then expected.

Cramer had an interesting bit last night on his Mad Money show talking about how negative the media is these days. As he shows, the media is absurdly negative compared to where the economy is in this cycle. Cramer basically sums up our sentiment.