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April Vehicle Assembly Rate Collapses, May Industrial Production Estimates To Be Cut

Tyler Durden's picture


As if today's disappointing announcement of slowing Industrial Production was not enough for all those still hoping for a hockeystick to the economy, we now get an update from Stone McCarthy which looks at the latest Wards Automotive data and sees what apparently nobody has factored into their models yet. In a nutshell, the annualized April motor vehicle assembly plunged at a 12% rate from 8.923 million in March to just 7.847, the lowest reading in all of 2011. From SMRA: "In the past, such a sizable drop in the assembly rate has usually translated into a sharp decline in motor vehicle output. We project motor vehicle output to decline by 9% in April, which would be entirely consistent with the drop-off in the assembly rate." The immediate impact: the drop in the industrial production already seen, but the bulk of it due to delayed aftereffects will likely impact the May number, as the follow through from the Japanese supply chain halt starts ringing a loud alarm bell across Wall Street. Of course, this is another thing that all those calling for a 4% H2 GDP could have absolutely not foreseen (and in fact it was originally supposed to be positive for the economy, eh Deutsche Bank?). Expect to see drastic downward cuts to May Industrial Production and next, to Q2 GDP.

And for those curious, here is Goldman's inability to spin today's Industrial Production in a favorable way.

Industrial production flat in April (mom) vs. GS +0.5%, median forecast +0.4%.


1. US industrial production stalled in April, due to a sharp decline motor vehicles and parts production (down 8.9%). This decline appears to be the effect of supply-chain disruptions resulting from the natural disasters in Japan. Overall manufacturing output declined by 0.4%, while output of manufactured products excluding motor vehicles and parts rose by 0.2% Together with downward revisions to previous months, these figures imply that the annualized three-month growth rate of manufacturing output excluding vehicles slowed from 8.4% in January to just 1.8% in April.

2. Mining and utilities output both increased (by 1.7% and 0.8%, respectively). The capacity utilization rate fell to 76.9% in April from 77.4% in March.



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Tue, 05/17/2011 - 13:51 | 1283692 Ray1968
Ray1968's picture

Could $5/gal gasoline have anything to do with this?

Obama energy policies are killing the industry he tried to save (with our tax dollars)

Tue, 05/17/2011 - 13:51 | 1283699 Sophist Economicus
Sophist Economicus's picture

No!    It rained in April

Tue, 05/17/2011 - 14:15 | 1283819 jus_lite_reading
jus_lite_reading's picture

Industrial Production was down due to unusual amounts of pollen. People sneezed and stayed home.

Tue, 05/17/2011 - 14:37 | 1283979 zaknick
zaknick's picture

Mad Max Beyond AmeriKKKa here you go!!

Fascist Implosion, bitches!

Amerika: the KKK/bankster empire ends in tears!

Tue, 05/17/2011 - 16:34 | 1284533 smlbizman
smlbizman's picture

bullshit i is is selling like a billion cars a week.....look it up....i just cant find the title info or registration info at my local dmv....

Tue, 05/17/2011 - 14:17 | 1283831 andybev01
andybev01's picture

Yes but the sun also shone; double whammy!

Tue, 05/17/2011 - 14:17 | 1283833 Slash
Slash's picture

whatever happened to Hugh Hendry or whatever? wasn't he doing something with Japanese steel producer CDS's or something? did he get killed or make a killing?

Tue, 05/17/2011 - 14:24 | 1283873 spartan117
spartan117's picture

He was short Japan.


Must have made a killing.

Tue, 05/17/2011 - 14:32 | 1283916 aerojet
aerojet's picture

Tsunami, Bitchez!

Tue, 05/17/2011 - 15:14 | 1284174 Clorox Cowboy
Clorox Cowboy's picture

Were there 4 Tuesdays or 5 in April?  Trust me that will make all the's the newest thing in seasonal adjustment circles.

Tue, 05/17/2011 - 13:52 | 1283702 francis_sawyer
francis_sawyer's picture

They don't build 'em like they used to...

Tue, 05/17/2011 - 14:21 | 1283874 Arthur Two Shed...
Arthur Two Sheds Jackson's picture

Once I built a mono-rail?

Tue, 05/17/2011 - 23:50 | 1285980 jeff montanye
jeff montanye's picture

and made it run, made it race against time?

Tue, 05/17/2011 - 13:55 | 1283710 disabledvet
disabledvet's picture

"and our re-election campaign slogan is now officially underway"--(clapping, camera flash bulbs popping, magical line sheet wisked off white board) "yes i give you...i give you...A PICKUP TRUCK IN EVERY DRIVEWAY!  Questions please, questions.  Yes, not all at once, not all at once. You there, you there!  What say you?  Why not a "chicken in every pot" you ask?  Well, well....

Tue, 05/17/2011 - 13:59 | 1283742 francis_sawyer
francis_sawyer's picture

"A PICKUP TRUCK IN EVERY DRIVEWAY!  Questions please, questions.  Yes, not all at once, not all at once. You there, you there!  What say you?  Why not a "chicken in every pot" you ask?"


These days, it's more like...

"DRIVE-A-WAY & PICK-UP your chicken basket from Popeyes"...



Tue, 05/17/2011 - 14:08 | 1283794 disabledvet
disabledvet's picture

"we can do that too! gas cards and Popeyes.  next question please.  you in front--what say you?"

Tue, 05/17/2011 - 14:19 | 1283844 francis_sawyer
Tue, 05/17/2011 - 14:47 | 1284028 candyman
candyman's picture





Tue, 05/17/2011 - 13:56 | 1283715 mayhem_korner
mayhem_korner's picture

They don't need to build any more cars anyway - they're stacked 4 high at the dealer lots.  It's worse than the shadow inventory of RE.

Tue, 05/17/2011 - 14:04 | 1283760 Rainman
Rainman's picture

....and the price on used cheaper cars is taking off. Used car dealers can't get cheapies at the auction because dealer's aren't getting trade-ins and cash for clunks took a lot of good merchandise off the road for destruction. Po folk get the camshaft again !!

Tue, 05/17/2011 - 14:13 | 1283822 TheTmfreak
TheTmfreak's picture

Not to mention as regulations increase car costs continue upwards. Some aren't "safe enough" so they can't be imported. Like that indian car that was like 2k new.

Tue, 05/17/2011 - 14:22 | 1283863 NotApplicable
NotApplicable's picture

Not to mention that lots of cheap used cars were shipped overseas back when everyone was getting 5-6 yrs dealer financing @ 0% with an employee discount to boot. Never mind how many years forward that pulled demand.

At least the parking lot in the otherwise empty bowling alley (next to the brand new Nissan dealership) stays full now.

Heck of a job, Bernanke!

Tue, 05/17/2011 - 13:59 | 1283724 jkruffin
jkruffin's picture

It is plainly obvious how to kill this ponzi scheme once and for all. 

Short the SPY to hell, and Short the hell out of the EUR/USD and Benny's ponzi is over and collapsed.

Tue, 05/17/2011 - 14:03 | 1283751 francis_sawyer
francis_sawyer's picture

"It is plainly obvious how to kill this ponzi scheme once and for all..."


Buy PHYSICAL everything, with FRN's...

Tue, 05/17/2011 - 14:04 | 1283755 jkruffin
jkruffin's picture

Yes, I should mentioned that you buy PHYSICAL with the fiat profits from the shorting

Tue, 05/17/2011 - 14:23 | 1283885 francis_sawyer
francis_sawyer's picture

That's "the Morgue's" strategy with silver...

Granny's tea set is halfway out of the cupboard already...

Tue, 05/17/2011 - 14:00 | 1283730 LawsofPhysics
LawsofPhysics's picture

This is all about the collapse of Japan's economic engine, period.  GM would keep stuffing the pipeline if they had the parts.  Who needs customers in a ponzinomic system such as ours?

Tue, 05/17/2011 - 13:59 | 1283733 cougar_w
cougar_w's picture

Even though I understand the origin of the term, we have to stop calling these "black swans". They are too big and lethal to be swans anymore.

I vote for "black pteranodons"

Tue, 05/17/2011 - 14:06 | 1283782 mynhair
mynhair's picture

Black monkeydons as found in Wizard of Oz.

Tue, 05/17/2011 - 14:07 | 1283791 cougar_w
cougar_w's picture

Yes that works too. As an added bonus they fly out your butt.

Tue, 05/17/2011 - 14:00 | 1283750 RobotTrader
RobotTrader's picture

They are celebrating this news by:

- Bidding up WFC by 3% (the "Fix Is In" on the banks, as of today)

- Jamming COF, AXP, DFS up to new 3-year highs.

- Pushing "Grandma" utility stocks up to new highs for the move (thanks for ZIRP)

Tue, 05/17/2011 - 14:03 | 1283766 Tyler Durden
Tyler Durden's picture

As we said yesterday, we believe Utility stocks will subsantially outperform from here on out as part of the great QE unwind compression trade.

Tue, 05/17/2011 - 14:09 | 1283779 Muir
Muir's picture

and spot on

That and your analysis of the FEDs put selling on Tres were the best Financial analysis anywhere this year.


Tue, 05/17/2011 - 14:13 | 1283823 LawsofPhysics
LawsofPhysics's picture

Yep, people still need water and power.  Well some do.  Folks in my neck of the woods are pretty "self reliant".  How long before that phrase gets wiped from existence by TPTB?

Tyler, where can I find more info on utility stocks the represent mostly communities in non-broke states?

Tue, 05/17/2011 - 15:28 | 1284228 Spalding_Smailes
Spalding_Smailes's picture

QE unwind ??? Who would have thunk it ..... Lol .... Not the bears or the doomers' I guess ....



The amount of freight carried by the for-hire transportation industry increased 1.9 percent in March from February to reach the highest level since July 2008, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics’ Freight Transportation Services Index released Wednesday, May 11. The March increase followed a decline in February.

BTS, a part of the Research and Innovative Technology Administration, reported that shipments measured by the Freight TSI rose 15.1 percent over the last 23 months, starting in May 2009, after declining 15.7 percent in the previous 16 months beginning in January 2008. Freight shipments have increased in 17 of the last 23 months. Freight shipments in March (108.6 on the index) rose 15.1 percent from the recent low in April 2009 (94.3) when freight shipments were at their lowest level since July 1997.

Freight shipments reached a 33-month high in March despite a slight slowdown in the rate of growth in the beginning of 2011 compared to the end of 2010. For the first three months of 2011, freight shipments measured by the index were up 1.3 percent following a 2.1 percent increase during the final three months of 2010. The first quarter of 2011 saw the seventh consecutive quarterly increase since the second quarter of 2009.




Tue, 05/17/2011 - 16:15 | 1284451 SoCalBusted
SoCalBusted's picture

Yes indeed, DUK is doing well for me and I got lucky with ICO

Tue, 05/17/2011 - 14:05 | 1283770 francis_sawyer
francis_sawyer's picture


Why don't you do something useful by crunching those observations into a thesis or prediction and telling us why it's relevant...

I can go to FINVIZ.COM to see what's green, or just listen to Bob PISS ON ME


Tue, 05/17/2011 - 14:11 | 1283814 disabledvet
disabledvet's picture

"yes, yes.  i am peering into my creestal skull--i mean BALL, crystal BALL--and i'm seeing something here--yeessss, 'cloudy with a chance of rain.'  Yep, it's official.  50/50 chance of pretty much everything."

Tue, 05/17/2011 - 14:30 | 1283897 francis_sawyer
francis_sawyer's picture


In the 'Rocky' Mountains... CLOUDY

In the 'Cloudy' Mountains... ROCKY


Tue, 05/17/2011 - 14:02 | 1283761 mynhair
mynhair's picture

This must be bullish for stocks:  all those resources able to be used...err..elsewhere?

Tue, 05/17/2011 - 14:05 | 1283762 augie
Tue, 05/17/2011 - 14:05 | 1283763 kito
kito's picture

whats the big news here? every automaker already warned of limited production. its NOT due to anticipated lack of demand, as in 2008, so what is the point of this article?

Tue, 05/17/2011 - 14:03 | 1283772 Tyler Durden
Tyler Durden's picture

The point is to demonstrate the endless divergence between reality and (future) perceptions. What was consensus for April IP, where did it come? What is consensus for May IP, and where will that come. Also, one may be surprised that IP does impact GDP, and thus fiscal, monetary and other general bailout policy.

Does that answer your question?

Tue, 05/17/2011 - 14:11 | 1283801 Muir
Muir's picture

or if he needs weighty, cumbersome explanations of the wide spread phenomena that are "predictions" refer him to Talib 

Tue, 05/17/2011 - 14:23 | 1283869 Caviar Emptor
Caviar Emptor's picture

Could it be....that they were...lying?

Tue, 05/17/2011 - 14:37 | 1283950 Muir
Muir's picture


Tue, 05/17/2011 - 14:19 | 1283843 LawsofPhysics
LawsofPhysics's picture

Yep, in general most things "paper" starting to detach from anything real.  Successful investing is not a race to the bottom and I appreciate ZH's help.

Tue, 05/17/2011 - 15:38 | 1284285 kito
kito's picture

thanks for the response. although i think most would agree that any effect on gdp due to supply issues actually is (for lack of a better phrase) a transitory issue.

Tue, 05/17/2011 - 16:02 | 1284409 d00daa
d00daa's picture

Please explain this robust consumer "demand" for new vehicles, that doesn't include dealer channel-stuffing.

Thanks in advance.

Tue, 05/17/2011 - 14:07 | 1283792 francis_sawyer
francis_sawyer's picture

As for me, I'm still waiting for the automakers to do like a JOSEPH A BANK, or Men's Wearhouse deal...

"Buy one truck, and get the second truck, absolutely FREE"


Tue, 05/17/2011 - 14:06 | 1283780 digalert
digalert's picture

Wouldn't have to do with overstuffed dealerships, would it?

Tue, 05/17/2011 - 14:09 | 1283781 apberusdisvet
apberusdisvet's picture

Will all Japanese products now glow in the dark?


Getcha red hot geiger counters now.  Hmmm I wonder when US citizens are going to be arrested after bringing geiger counters into grocery stores and causing panic when the readings go off the charts?  Will a TSA thug be in every supermarket?

Tue, 05/17/2011 - 14:12 | 1283818 mayhem_korner
mayhem_korner's picture

Getcha red hot geiger counters now.


Tue, 05/17/2011 - 14:06 | 1283784 Global Hunter
Global Hunter's picture

If everything across the board starts contracting anywhere near 9 or 12% what will the hit be to the government in terms of tax revenues?  

Tue, 05/17/2011 - 14:14 | 1283809 francis_sawyer
francis_sawyer's picture

we don't need no stinkin revenues... Our overlords have a confetti making machine...

Tue, 05/17/2011 - 14:11 | 1283799 Franken_Stein
Franken_Stein's picture


David Rockefeller and the Council on Foreign Relations want to have you all microchipped by the year 2017.


So they can track your every move and store all your money on it and also delete it, if they want to.

So you are all being assigned an ID number, like cattle, or the Jews in Auschwitz !


What, you don't believe it ?

Well watch this Interview with Aaron Russo:


This chip is supposed to be implanted into your body.

They want THE MATRIX to become reality.


When will you American clowns finally wake up and DO SOMETHING AGAINST

the megalomaniac genocidal psychopaths who control your puppet politicians ?!





Tue, 05/17/2011 - 14:18 | 1283852 LawsofPhysics
LawsofPhysics's picture

Yep, how long before the second amendment disappears?  By then it will be too late.

Tue, 05/17/2011 - 14:22 | 1283862 cossack55
cossack55's picture

Uh duh!!. We (4%) know that. I for one am no longer willing to take it in the neck for the sheeple. I am out. They had plenty of chances and warnings. Screw em.

Tue, 05/17/2011 - 14:35 | 1283939 augie
augie's picture

you will want them on our side when the time comes comrade

Tue, 05/17/2011 - 14:27 | 1283895 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Very true, except for one part.  Our government is not "American".


Tuco Benedicto Pacifico Juan Maria Ramirez

Tue, 05/17/2011 - 14:09 | 1283802 topcallingtroll
topcallingtroll's picture

The auto industry will eventually go the way of textiles and steel.

Ford is likely to survive.
GM may survive in the USA in a stripped down version after its next bankruptcy.

There was a third I forgot its name. Doesnt matter because even if it is still alive it will be dead in a few more years

Tue, 05/17/2011 - 14:12 | 1283821 francis_sawyer
francis_sawyer's picture

"There was a third I forgot its name"



FIAT! (ror)

Tue, 05/17/2011 - 14:16 | 1283830 mayhem_korner
mayhem_korner's picture

There was a third I forgot its name. Doesnt matter because even if it is still alive it will be dead in a few more years

Do you mean Diamler-Chrysler, or were you referring to one of your offspring?

Tue, 05/17/2011 - 14:20 | 1283847 disabledvet
disabledvet's picture

they should have kept Megan Fox for the Transformer 3 flick.  now she's doing a movie with Mickey Rourke and we all know what that means. Still I see sales of Camero's already going through the roof in the run-up to the blockbuster--and beyond.  "You can have any color scheme you want.  And we mean ANY color scheme."

Tue, 05/17/2011 - 14:17 | 1283836 Muir
Muir's picture

Continuing with my main point, ordinarily I would say this headline is deflationary:

"April Vehicle Assembly Rate Collapses, May Industrial Production Estimates To Be Cut."

However, I've since learned that ALL NEWS is inflationary.

Inflationary news ----> harbinger of Inflation.

Deflationary news----> justification for QE(n +1) Thus: Inflation.

Ergo all news, of whatever sort, in any time period, is Inflationary.



Ignore 10 year yields and all this apparent deflationary news,  just BTFDs


Tue, 05/17/2011 - 14:31 | 1283927 sdmjake
sdmjake's picture

"In a social democracy with a fiat currency, all roads lead to inflation" - Bill Fleckenstein

Tue, 05/17/2011 - 14:18 | 1283838 Seasmoke
Seasmoke's picture

i remember reading when they bailed out GM that they needed to be at 10 million per year ......they are in BIG trouble

Tue, 05/17/2011 - 14:28 | 1283903 LawsofPhysics
LawsofPhysics's picture

Citi Bank has been bailed out at least 12 times since 1980.  Why can't the same shit happen with GM?  Won't the new world order want to have at least some perceived competition or will all the competition simply be in the black markets?

Tue, 05/17/2011 - 14:22 | 1283861 Hacksaw
Hacksaw's picture

Bids must be getting thin, I just got this message from TOS.


Tue, 05/17/2011 - 14:30 | 1283920 LawsofPhysics
LawsofPhysics's picture

fucking awesome.  True "price discovery" around the corner?  One can hope.

Tue, 05/17/2011 - 14:23 | 1283867 Problem Is
Problem Is's picture

"this is another thing that all those calling for a 4% H2 GDP could have absolutely not foreseen..."

Wait... I Could For See It
Sometimes those of us on the back of the bus feel the downward trajectory earlier and more pronounced than the moron ruling-financial-political class up front driving...

Tue, 05/17/2011 - 14:33 | 1283923 francis_sawyer
francis_sawyer's picture

Otherwise known as the RINSE part of the 'Rinse-Repeat' cycle...

Tue, 05/17/2011 - 14:34 | 1283951 Byronio
Byronio's picture

Japanese supply chain halt

Chile and Africa, that I just happened to read about, who knows how many other reports, had cars come from Korea and they were COVERED in Cesium. The very IDEA that US automakers will use parts from Japan in building "American" cars is frightening.

But it is all about their god the $ the official god of the USA.

This government and its complicit media are CRIMINALS.


Dead fish and sharks are already arriving along the California coast. Although the cause is supposedly unknown, it is doubtful if we will ever be told that any dead sea life washing ashore is most likely radioactive. See:


The EPA has refused to test the Gulf of Alaska for radioactivity. In their latest negligence, EPA posted on May 3, their refusal to monitor daily radiation from Fukushima, “due to the consistent decrease in radiation levels related to the Japanese nuclear incident.”

Tue, 05/17/2011 - 18:29 | 1284993 sabra1
sabra1's picture

can't wait until oBLAHma and the bernank and timmy wash ashore!

Tue, 05/17/2011 - 15:10 | 1284163 Deepskyy
Deepskyy's picture

Have no fear ZHers...

The Goldman Sachs has spoken...

The next recession in the U.S. "is years away," the chief U.S. economist of the financial giant Goldman Sachs said Tuesday.

"There's still a long way to go. The unemployment rate is still 9 percent, we're nowhere close to a really tight labor market that usually predicates a recession, so I think we're still be in a recovery for a few years," Jan Hatzius told CNBC Tuesday...


In a way he is correct however.  Kinda can't go into another recession until we get out of the depression we are in currently.


Tue, 05/17/2011 - 16:00 | 1284390 Chuck Walla
Chuck Walla's picture

My sphincter just tightened. Don't know if its cause I see the end is near or because I know where Goldman intends to stick it....

Tue, 05/17/2011 - 15:31 | 1284256 patb
patb's picture

This is a bullish signal

Tue, 05/17/2011 - 15:56 | 1284388 d00daa
d00daa's picture

Jesus, you're worse than Leo.  Elaborate or GTFO.

Tue, 05/17/2011 - 15:58 | 1284382 Chuck Walla
Chuck Walla's picture

Fortunately, they are a wholly owed subsidiary of the US Taxpayer. So, Dear Comrades, you can continue to pretend to work while we actually do pay you and your Union Masters so they can funnel it back to the "right" campaigns.

Tue, 05/17/2011 - 16:54 | 1284656 plata pura
plata pura's picture

Being a full blown socialist liberal and a card carrying Republican; my interpretation of a union be democracy in the work force coupled with the firm belief that corporation do's not have inalienable rights given forth by Providence, exclusively to a natural person.  

Tue, 05/17/2011 - 16:48 | 1284618 plata pura
plata pura's picture

Remember the quatrain "when elenin passes; growth and prosperity will be divorc'd by the mistress energy" Donald Baldwin circa 1959 in the year of grace. The slack jawed gawker interpretation be; a nation can no longer have both growth and prosperity together because peak energy be on the backside. Teach thy posterity proper husbandry and they will prosper.

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