"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

The September retail sales numbers released this morning tells the tale of the the story we have been reporting for quite some time. The Commerce Department reported that retail sales dropped 1.5% percent last month, less than the 2.1% economists had expected. while overall retail sales rose 0.5%, auto fell 10.4%.

A 0.5% rise in overall retail sales is actually a poor number when you take into account that the fall is one of the biggest retail periods for bank to school shoppers. Along these lines, insiders at many retail chains have been unloading their company stock.

J. Crew Group, Inc. (JCG)
Polo Ralph Lauren Corp. (RL)
Gap Inc. (GPS)

The good news seems to be in the financials as y/o/y earnings comparisons are easy to beat. In addition, the financials are enjoying a period of borrowing money at near zero, and lending that money out at 5-6% for real estate, and 20% for credit cards. Naturally, the earnings numbers are going to soar!

When a bank can make 500% to 2000% on lending money, is there any surprise that JPMorgan posted earnings of 82 cents for the quarter versus 9 cents a year ago?

The real issue going forward is the employment picture. People are desperate for jobs. As a small example, 10,000 people in the Louisville, KY applied for a job with General Electric that had 90 positions available. All for the whopping salary of $27000/ year with benefits.

As a side-note, General Electric employees in France get benefits that GE employees don't get in the United States. Why?

Corporations ship millions of U.S. jobs overseas, and then expect the U.S. consumer to pony up and buy things on credit. This is why so many consumers are hamstrung by debt, and can't afford to buy major items like cars and homes. The damage has been done, and the repair process will take years. Keep in mind, the millions of people who have filed for bankruptcy since 2005 will not have their credit repaired for 7 years. This pushes hopes for another potentially growing economy out to beyond 2012-2016.

Intel's numbers this morning was another interesting piece of information. The company ramped up production to put new products on the shelf for a new generation of computers. Heavy discounts helped back to school shoppers scoop up computer bargains, but once again Intel achieved its latest results by "keeping a lid on spending and making better utilization of its manufacturing facilities as demand improved."

In other-words, COST-CUTS.

For now, sit back, take profits, and enjoy the ride.