Let's start with the confidence numbers:

The Conference Board Consumer Confidence Index ®, which had retreated in July, rebounded in August. The Index now stands at 54.1 (1985=100), up from 47.4 in July. The Present Situation Index increased slightly to 24.9 from 23.3 last month. The Expectations Index improved to 73.5 from 63.4 in July.

Nice spike.  But let's look inside the numbers:

The proportion of consumers expecting an increase in their incomes increased slightly to 10.6 percent from 10.1 percent.

That's the key "inside number" in the index; with only 10% of consumers expecting an increase in their personal income, and a tiny change internally, expecting major shifts in consumer spending behavior (necessary in order for the economy to rebound) is fanciful.

The Richmond manufacturing index was expected to rise to 16 from 14, but didn't - it instead came in flat.  The Philly Fed index, of note, did rise dramatically (reported a few days ago) but one must wonder what people are smoking over there, given the Philly CITY budget problems and their lack of a prospect for fixing them.  Richmond tends to be a decent index against national activity, and it remains in the dirt.

I remain convinced at this juncture that unless something major changes in actual employment and personal income over the next three months that retail will be absolute disaster come this holiday season, and that will put the spike in the heart of those claiming "green shoots", along with the collapse in both autos and home sales given the expiration of both "Cash for Clunkers" and the $8,000 home-buyer credit.

Both have pulled forward demand and attempted to continue the Ponzi debt-accumulation bubble of claimed "economic gains."  Neither of these programs, however, has or will produce durable changes in economic activity.

As I have pointed out repeatedly history on this point is clear: You can pull forward demand with such programs, but you cannot create true economic progress.  The "Drive America" 2001 0% financing bubble urged by the Bush Administration arguably caused the failure of both Chrysler and GM by pulling forward demand and conning both firms into producing cars at a twenty million unit annual run-rate.  This in turn created a need to allow 100%, 120%, even 150% "rollover" financing which took the place of 0% interest once that expired, which created monstrous embedded and inevitable losses for these firms when the consumer hit the wall on ability to pay.

If we had learned ANYTHING from the 2001-2006 debt bubble it should have been that such "programs" make the inevitable collapse WORSE. 

But we learned nothing - absolutely nothing - from the mess, and indeed are instead trying to once again replicate the stupidity of 2001-2003!

It won't and can't work folks.

Fasten your seatbelts: The road ahead has a NASTY dip just around the corner and while there are 60 of you on this bus there is only one door, five parachutes, and the Goldman Sachs guys up front near that door are not wearing knapsacks.