This page has been archived and commenting is disabled.

Bring Out QE3: Philly Fed Plummets: Prints At 3.9 On Expectations Of 20

Tyler Durden's picture


The Philly Fed, which was expected to rise from the April number of 18.5 to 20, instead collapsed to 3.9! This compares to the March level of over 43. So much for the "Economic Recovery"TM. The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 18.5 in April to 3.9, its lowest reading since last October (see Chart) and the 3rd largest 2 month drop on record. The demand for manufactured goods, as measured by the current new orders index, showed a similar slowing: The index fell 13 points while the shipments index declined 23 points; both remained positive, however, suggesting slight growth last month. For the first time in eight months, firms reported that unfilled orders and delivery times were falling—both indexes were slightly negative this month." And even thought the prices paid dropped from 57.1 to 48.3, this was little solace for survey respondents: "A majority of firms continued to cite input price pressures and a sizable share of firms reported higher prices for their own manufactured goods again this month." Time for Tim Geithner's 2011 NYT OpEd edition, titled appropriately, "Welcome to the Economic Stagflation." And, oh yes, bring on the QE3.

From the report:

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 18.5 in April to 3.9, its lowest reading since last October (see Chart). The demand for manufactured goods, as measured by the current new orders index, showed a similar slowing: The index fell 13 points while the shipments index declined 23 points; both remained positive, however, suggesting slight growth last month. For the first time in eight months, firms reported that unfilled orders and delivery times were falling—both indexes were slightly negative this month.

Firms’ responses continue to indicate overall improvement in the labor market despite weaker activity, orders, and shipments. The current employment index increased nearly 10 points and has now remained positive for eight consecutive months. The percentage of firms reporting an increase in employment (32 percent) is higher than the percentage reporting a decline (10 percent). Only slightly more firms reported a longer workweek (17 percent) than reported a shorter one (13 percent) and the workweek index decreased 14 points.

And some "expert" views on this collapse per Reuters:


"It's pretty ugly. The Philly Fed index was a lot weaker than
expected. New orders, shipments, unfilled orders, inventory, delivery
time, all down quite sharply. Employees were up smartly, which is good,
but the average work week was down. So you still had growth over the
month but that growth has slowed pretty sharply, and that's also been
reflected in the six month outlook.

"We are seeing some of the
knock-on effects of what happened in March and April, which was the
residual affect of the Japan earthquake hitting the production numbers,
the big run-up in energy prices, and you're also seeing a bit of a soft
patch given you're getting a rollover in inventory momentum."

"I'm not overly concerned because I think this gives way in the next
couple of months. You've had a pretty smart drop in energy pieces and
that has a pretty big effect on the Empire and Philly Fed survey given
the mix of chemical industries and things of that nature. Also two
sources of demand that will continue to drive manufacturing are exports
and capital spending, which are looking very strong. I think this is a
soft patch, but no more than that. I fully expect this to move the other


"All the numbers that we just saw were extremely, extremely bad. Any
relief or optimism that investors may have had after the jobless claims
report has now been erased. All of these numbers confirm that the U.S.
recovery is moving at a glacial pace and the Federal Reserve really has
no choice but to take a back seat with monetary policy and wait for the
economy to gain momentum. This also shows that even though the Federal
Reserve is talking about exit strategies, they are not ready to
implement them. The latest reports just confirm that the U.S. economy is
not at the right point for (Ben) Bernanke to follow the footsteps of
(ECB head Jean-Claude) Trichet."


The Philly Fed was a weak report across the board. Unlike the Empire report where they underlying looked pretty good, the underlying of the Philly Fed looked pretty soft.

"The housing data was weaker than expected. The housing market is still really going nowhere.

"The second quarter, especially April and perhaps May as well, is going to be marked by parts shortages from Japan. That hit the industrial production data last week and that was all due to autos. Whether (the Philly Fed weakness) is due to that is unknown. You could see a second quarter that was weaker than we were expecting but at the same time the third quarter, which was supposed to be softer than Q2, may come out firmer as those auto plants get back to full speed."


"It was, I think, in a word, pretty ugly. It wasn't just the headline but it was basically the data beneath the surface. New orders, shipments, they both fell pretty sharply. The lone positive was the employment index but if you're looking at the more forward looking index, new orders, they basically got annihilated.

"We're probably past the peak in regard to manufacturing activity, but we don't think manufacturing activity is stopping. We just think it is slowing a bit.

"This in no way suggests to us that we should expect manufacturing activity will cease to be an engine of growth in the recovery, we just think it's going to be less powerful.

"The regional manufacturing reports are sometimes prone to volatility and you looked at what happened earlier in the week with Empire, Empire wasn't as bad as it first looked. You have to take Philly Fed in the context of what are the other regional indexes telling you."


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 05/19/2011 - 10:23 | 1291261 Racer
Racer's picture

And don't forget to BTFD on this horrendous news

Thu, 05/19/2011 - 10:27 | 1291303 Fish Gone Bad
Fish Gone Bad's picture

Bad news followed by bad news, followed by bad news.  Eventually the carpet is going to yanked out from under this market.

Thu, 05/19/2011 - 10:32 | 1291316 Harlequin001
Harlequin001's picture

Sounds Bullish...

Thu, 05/19/2011 - 10:40 | 1291378 wang
wang's picture

It is Bullish - Pandit just scored a $42m pay package

Thu, 05/19/2011 - 11:00 | 1291468 smlbizman
smlbizman's picture

no housing, no jobs and no is bullish because it can't get any worse...wait this just in.... 

Thu, 05/19/2011 - 12:29 | 1291946 Overflow-admin
Overflow-admin's picture

But the HFT can't read the news...

Thu, 05/19/2011 - 10:45 | 1291398 oklaboy
oklaboy's picture

knockin on ma door, good lovin gone bad.....

Thu, 05/19/2011 - 10:24 | 1291263 the not so migh...
the not so mighty maximiza's picture

Summer of recovery reporting for duty

Thu, 05/19/2011 - 10:31 | 1291310 DogSlime
DogSlime's picture

Was their prediction based on an assumption that QE3 would have been announced and cemented by now?


Thu, 05/19/2011 - 10:21 | 1291265 Temporalist
Temporalist's picture

Don't forget the housing sales drop of .08%.

Larry Yun still thinks it's a recovery.

""The recovery is very sluggish," said the group's senior economist, Lawrence Yun"

"Sales slipped 0.8 percent month over month to an annual rate of 5.05 million units from a downwardly revised 5.09 million in March, said the National Association of Realtors."

Thu, 05/19/2011 - 10:26 | 1291272 Caviar Emptor
Caviar Emptor's picture

Stimulate me!

Trickle me down!

Thu, 05/19/2011 - 12:16 | 1291876 ThreeTrees
ThreeTrees's picture

Bahaha +1

Thu, 05/19/2011 - 10:23 | 1291277 Hard1
Hard1's picture

See Phyllys - Bitchez!!!

Thu, 05/19/2011 - 10:27 | 1291286 Herne the Hunter
Herne the Hunter's picture

Oh well. Who needs manufacturing when you have services...

Thu, 05/19/2011 - 10:31 | 1291309 Aductor
Aductor's picture

I will link myself into the Matrix and enjoy the ignorance. After all, a 980 P/E-Pisani stock is quite attractive.

Thu, 05/19/2011 - 10:30 | 1291328 Harlequin001
Harlequin001's picture

yep, thought I might sell some of my gold and buy some of that...


Thu, 05/19/2011 - 10:25 | 1291287 Vagabond
Vagabond's picture

apmex 2011 eagles: 111584

Thu, 05/19/2011 - 10:30 | 1291327 postban
postban's picture


Thu, 05/19/2011 - 11:19 | 1291539 Temporalist
Temporalist's picture

Only 905 tubes available of 2011.

Thu, 05/19/2011 - 10:25 | 1291288 oogs66
oogs66's picture

but LNKD is doing so well, so everything must be good.  please focus only on the good bits of data, ignore all bad data, ignore the games we are playing to avert breaching the debt ceiling and just assume governments will bail everyone out

Thu, 05/19/2011 - 10:28 | 1291292 DOT
DOT's picture

Bake in that QE boys.

No number this time please, maybe call it "QE Gold" !



Thu, 05/19/2011 - 10:26 | 1291297 Temporalist
Temporalist's picture

Michael McKee, Bloomberg's economist, said the Philly number was because of Japan.  I guess people prefer excuses over facts; economist is just another way to say apologist.

Thu, 05/19/2011 - 10:36 | 1291356 SheepDog-One
SheepDog-One's picture

But Japan was deemed 'GOOD NEWS" by all eCONomists.

Thu, 05/19/2011 - 18:55 | 1293742 StychoKiller
StychoKiller's picture

Economists == Fortune Tellers (and not very good ones at that!)

Thu, 05/19/2011 - 10:27 | 1291300 Caviar Emptor
Caviar Emptor's picture

The demand for mindless occupations is booming! 

Long mindlessness

Thu, 05/19/2011 - 10:31 | 1291307 Harlequin001
Harlequin001's picture


Thu, 05/19/2011 - 10:30 | 1291308 anti Oligarchy
anti Oligarchy's picture

Should be interesting to see if the market rallies or not on this.

I think the market is realizing that the FED is in a tight corner - more QE is more pain at the pump.  No QE is a market getting hammered.


if you want a conspiracy take on it, then go with adding QE and forgetting about the pain at the pump.  What is the political risk?  Sure, lots of Americans are going to suffer, but who will they vote for?  Funny how Republicans are playing along and not putting any effort into 2012.  Obama will have a free ride despite the suffering. 


They all win again.

Thu, 05/19/2011 - 10:36 | 1291343 FreeNewEnergy
FreeNewEnergy's picture

Obama may run unopposed since the Republicans are all bailing out, though maybe Newt can finally win when they "fix" the results from the non-traceable, easily-hacked touch-screens.

Flip the vote! After all, it really doesn't matter who is president since the world is run by Lords Blankenstein and Dimon Jamie.

Thu, 05/19/2011 - 10:48 | 1291416 Bay of Pigs
Bay of Pigs's picture

Yes, it looks like a Mitt Romney/insert the stooge (Palin, Huckabee) ticket that has no chance to dethrone our foreign born King.

Of course, I'm not betting we even have an election in Nov 2012.

Thu, 05/19/2011 - 10:59 | 1291462 jowenchrist
jowenchrist's picture

We need a black scapegoat - he fits the bill -

Thu, 05/19/2011 - 11:09 | 1291491 reload
reload's picture

Perhaps the Republicans have realised that winning in 2012 would be a poison challace.

Thu, 05/19/2011 - 10:28 | 1291311 stormsailor
stormsailor's picture

yeah, qe3 is a no brainer.  and when the japanese print up a godzilla amount of yen. dollar goes up and we devalue again to raise equities.  euro problems, same.  this could go on for decades.

Thu, 05/19/2011 - 10:34 | 1291351 SheepDog-One
SheepDog-One's picture

Or, only a few more hours.

Thu, 05/19/2011 - 11:25 | 1291571 ElvisDog
ElvisDog's picture

For it to go on for decades, QE would have to maintain its effectiveness at least on some marginal level. I don't think nature really works that way (and I'm calling economics part of nature). Imbalances don't go on forever. The natural state of things is to reach an equilibrium state. I suspect long before we get to "decades" there will be a QE that will have no positive effect whatsoever, and then we'll get a QE that has a negative effect. That is when things will unravel and the world economy will return to a new equilibrium.

Thu, 05/19/2011 - 11:46 | 1291679 Bleeping Fed
Bleeping Fed's picture

You're talking like QE had a positive effect in the first place...

Thu, 05/19/2011 - 12:46 | 1292019 ElvisDog
ElvisDog's picture

I didn't say "positive", I said "effective". I think QE1, QE-lite, and QE-2 have been effective in keeping the ponzi going over the past two years.

Thu, 05/19/2011 - 10:31 | 1291312 FreeNewEnergy
FreeNewEnergy's picture

Market took a little downward pressure on this, despite the LinkedIn IPO. Should last about 10 minutes before the options expiration pump resumes.

This is all very bullish. Timmah told me so.

Thu, 05/19/2011 - 10:29 | 1291314 Bay of Pigs
Bay of Pigs's picture

I'm sure this was all due to bad weather.

Thu, 05/19/2011 - 10:32 | 1291318 cdude
cdude's picture

This is huge! This is monumental! Already playing out in the markets. Caused the S&P to go negative for a whooping 10 minutes. 

Thu, 05/19/2011 - 10:36 | 1291344 Harlequin001
Harlequin001's picture

Nah, that was just a flash crash...

Thu, 05/19/2011 - 11:32 | 1291605 ElvisDog
ElvisDog's picture

But if you look at a 3-month chart of SPY, the S&P 500 has basically gone nowhere over the past 3 months. It would appear that the current level of QE and POMO has lost its market-levitating powers.

Thu, 05/19/2011 - 10:34 | 1291332 lieutenantjohnchard
lieutenantjohnchard's picture

guess it's time for zh's resident genius' to post something along the lines that although the philly fed index is plummeting t-shirt sales are booming.

Thu, 05/19/2011 - 10:32 | 1291333 ABCStore
ABCStore's picture

Sick and tired of the word "unexpectedly" in the news.


Thu, 05/19/2011 - 10:35 | 1291336 deflator
deflator's picture

There is no place left to turn for real economic growth. We have reached "capacity for growth" in real terms. The only thing we can chase debt with is new debt. The obvious solution from a top down economic model is top down debt distribution. Of course it does nothing for bottom up deflation but exacerbate it with top down inflation.

Thu, 05/19/2011 - 10:32 | 1291337 John Law Lives
John Law Lives's picture

Data re. Existing Home Sales, Philly Fed and Leading Indicators was all much worse than expected.  Expected reaction from this FUBAR market:

Stocks should surge on hopes for QE3...

100% Ponzi FUBAR


Thu, 05/19/2011 - 10:36 | 1291339 A_MacLaren
A_MacLaren's picture

Back when Pittsburgh was a ragin' steel town, I can see why the PhillyFed was relevant.

Not being from that part of the country, but assuming there are still headquarters and something of economic importance to the report, can someone help me out to understand the modern relevance?

Thu, 05/19/2011 - 10:57 | 1291456 Temporalist
Temporalist's picture

Cream cheese?

Thu, 05/19/2011 - 11:33 | 1291621 A_MacLaren
A_MacLaren's picture

I was thinking steak sandwiches, but I'll accept cream cheese.

Thu, 05/19/2011 - 10:33 | 1291341 oogs66
oogs66's picture

Greece 10 year bonds traded at 16% today, another record.  EU bailout, QE3, even more Japanese future growth, what's not to like about the market?

Thu, 05/19/2011 - 10:36 | 1291346 SheepDog-One
SheepDog-One's picture

Uh oh! While 'all is well, couldnt be better', the FED monster demands more feeding! Shovel in FRN's fast as you can now boyz!

Thu, 05/19/2011 - 10:44 | 1291347 Jovil
Jovil's picture

The reports mentions that unfilled orders and delivery times were falling. I believe this is the Japan problem with the supply chain disruption. Many manufatured goods globally depend on parts from Japan and not just Japanese automobiles. June and July quarterly earnings reports for the first time will show a full quarter after the disaster in Japan. The following quarter will be even worse. This will have a great impact on the stock markets and this will be the catalist the Bernanke is looking to implement QE3 which will drop the DOW over 1,000 points.

Visit my web site at

Thu, 05/19/2011 - 10:37 | 1291348 zaknick
zaknick's picture

The dreams of KKK empire turn to ashes in your mouth.

"In the age of lies, even the clumsiest frankness is preferable to the best-orchestrated ruse." - Albert Camus

Thu, 05/19/2011 - 10:55 | 1291434 topcallingtroll
topcallingtroll's picture

A real KKK empire wouldnt have let you come over, much less give you a forum.

Thu, 05/19/2011 - 22:01 | 1294249 Bringin It
Bringin It's picture

The forum allows a conrtolled release of pressure.  It's not practical yet to shut it down.

Thu, 05/19/2011 - 10:38 | 1291353 RobotTrader
RobotTrader's picture

Seems like the Dow should be trading at 9,000 on all this horrific economic news.

But it is still over 12,500.

And as usual, the XRT and IYR haven't budged and are still pinned at 3-year highs.

Wonder how high the market will go when things actually start improving?


Thu, 05/19/2011 - 10:41 | 1291362 Harlequin001
Harlequin001's picture

they won't...

but as if by magic, the numbers will still get better...

Thu, 05/19/2011 - 10:44 | 1291384 stormsailor
stormsailor's picture

yeah,  /es up over 10 yesterday on nothing. can you imagine if we were to have some real, verifiable good news in the headlines.  probably a 1000 points on the dow in one day.


it seems no matter how much absolute bs and manure and bad numbers and fraud etc.etc. is thrown at this market, it keeps going up like a zombie from hell.

Thu, 05/19/2011 - 10:48 | 1291400 John Law Lives
John Law Lives's picture

Seems like ZH would have give its loyal followers an ingore button by now so we could make you disappear.

But ZH won't do it.

And as usual, you are here stirring the pot.

Wonder what will convince ZH to drop you from the payroll?


Thu, 05/19/2011 - 10:55 | 1291444 topcallingtroll
topcallingtroll's picture

I am rather glad a diversity of opinion is tolerated. The chorus starts sounding the same after a while.

Thu, 05/19/2011 - 11:02 | 1291463 John Law Lives
John Law Lives's picture

Do you consider the mindless posting of stock charts by Robotomy to be an "opinion" of some value here?  People can get stock charts from Yahoo! Finance.

Thu, 05/19/2011 - 11:09 | 1291493 stormsailor
stormsailor's picture

i read all the economic data here, as well as elsewhere.  but every day i see the roads packed with people, the malls are full, you can't even get reservations on the sc coast for vacation and the whole world just seems to keep humpity humping along.


i've become so frustrated over the past 2 years i'm nearly manic.


up the republic.

Thu, 05/19/2011 - 11:16 | 1291522 baby_BLYTHE
baby_BLYTHE's picture


I am betting on another major 'panic' probably via a monetary accident before the elections.

The stage will be set, the face of the impending crisis, for Ron Paul to beat Obama in a landslide in 2012.

Thu, 05/19/2011 - 11:20 | 1291542 John Law Lives
John Law Lives's picture

Ron Paul will never be nominated by the GOP.  He is too good for them.

Obama vs. Romney in 2012

Thu, 05/19/2011 - 11:21 | 1291565 John Law Lives
John Law Lives's picture

<<<   the whole world just seems to keep humpity humping along.  >>>

Much of the world is racking up debt at an alarming pace.  If deficits really don't matter, then who cares.  Unfortunately, deficits matter, and the Ferryman demands his due when the ride is over.

Thu, 05/19/2011 - 11:57 | 1291754 Cardinal Fang
Cardinal Fang's picture

ever notice the similarity between the words 'deficit' and 'defecate'?

Thu, 05/19/2011 - 12:10 | 1291839 John Law Lives
John Law Lives's picture

They look similar.  They both stink.

Thu, 05/19/2011 - 11:36 | 1291634 ElvisDog
ElvisDog's picture

The key to what you are seeing, stormsailor, is the Federal government's ability to fund a $1.6T deficit. If that went away, the roads, malls, SC coast, and so on would look a lot different. As long as we can run deficits at 12% of GDP, the status quo will hold. No one really knows how long that will be.

Thu, 05/19/2011 - 11:04 | 1291484 lieutenantjohnchard
lieutenantjohnchard's picture

robottrader. when you can't find a parrot.

Thu, 05/19/2011 - 10:36 | 1291357 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

But why would QE3 fix this!!??

Thu, 05/19/2011 - 11:22 | 1291573 John Law Lives
John Law Lives's picture

QE is for the TBTF banks.  It is not for Joe Sixpack.  Never was.

Thu, 05/19/2011 - 10:37 | 1291366 buzzsaw99
buzzsaw99's picture

stimulate me bitchez!

Thu, 05/19/2011 - 10:38 | 1291368 Quintus
Quintus's picture

Two biggest misses in the data issued this week:

Empire State Survey 11 vs Exp 20

Philly Fed Survey 3.9 vs Exp 23

Both figures produced by the Fed directly.  I wonder if there could be any reason why the Fed is now pumping out data that points to significant economic weakness dead ahead?  Maybe they have a plan to 'Fix' this weakness when it arrives?

Thu, 05/19/2011 - 10:56 | 1291435 Urban Redneck
Urban Redneck's picture

Only after the 536 beg for it- (536.5 if you include the Senator from MBNA) 

Thu, 05/19/2011 - 10:40 | 1291369 GeneMarchbanks
GeneMarchbanks's picture


Thu, 05/19/2011 - 10:41 | 1291370 Re-Discovery
Re-Discovery's picture

Expectation of of further Currency Devaluation . . . eh hem . . excuse me, Quantitatve Easing  HAS to be in the equity markets now. Othewise, S&P 1000.

The only question now is how is the FED going to buy Treasuries or get them bought.  Re-investing gets 30% of the job done, or thereabouts.  There are also REPO strategies they can use. Maybe some assets sales and re-invest in treasuries.  I still think at least a QE-lite is necessary (short term.)

The only problem is, and I do think it matters, I don't see an opportunity for the Chairman to announce a different strategy between now and June 30.  And "Yes", bureaucrats DO care about these things.


Thu, 05/19/2011 - 10:39 | 1291371 monopoly
monopoly's picture

And for the first 10 minutes on NBC today show all they talk about is Arnold and his child, who gives a shit, while the Middle East burns, the Mississippi crests hurting thousands of people, and inflation rages along with food stamps. Back to music on the set.

Thank goodness Pandit of C is getting millions for running an insolvent company.

Thu, 05/19/2011 - 10:41 | 1291380 suldog
Thu, 05/19/2011 - 11:17 | 1291526 baby_BLYTHE
Thu, 05/19/2011 - 10:44 | 1291382 Fantasy Planet
Fantasy Planet's picture

Ben's been wearing baggier suits lately but his QE3 baby bump will be impossible to hide much longer.   

Thu, 05/19/2011 - 10:44 | 1291395 Gene Parmesan
Gene Parmesan's picture

Well played, sir!

Thu, 05/19/2011 - 11:57 | 1291767 Cardinal Fang
Cardinal Fang's picture


Thu, 05/19/2011 - 12:53 | 1292079 Zedge Hero
Zedge Hero's picture

It's to hide the bullet proof material under his suit.  Paranoid? Nah practical.  But don't worry it's transistory.

Thu, 05/19/2011 - 10:46 | 1291388 Problem Is
Problem Is's picture

"These steps... will grow the economy and add to the more than one million private sector jobs created last year."


"The stock market has come roaring back. Corporate profits are up. The economy is growing again."


"The steps we’ve taken over the last two years may have broken the back of this recession…”

Obama Bin Lyin'
Jan. 26, 2011, State of the Union

Thu, 05/19/2011 - 10:43 | 1291392 Hannibal
Hannibal's picture

Social Constructs and Symbolism

Most people seem to forget that there is an important difference between
the abstract world of our symbols and the real world that supplies our
food, water, fuel, etc; that's why people are willingly going along with
projects that threaten their ability to support themselves from the land
that surrounds them, whether it's more deepwater drilling that kills
marine life or hydraulic fracturing poisoning the aquifer or simply the
enforced dependence of almost everybody on a food supply that comes from a
long way off and is heavily dependent on petroleum every step of its way
into our mouths. As long as what we're doing seems to make sense in this
world of our symbols--or as long as everyone else trusts that the much
smaller group of people who currently benefit from it have their interests
at heart--we ignore what's under our noses, go to our jobs (if we have
them), exchange the symbols we are rewarded with for a whole slew of other
symbols (salary dollars for interest payments), and then for the
necessities of life if there's anything left over.

World-class philosopher John Searle lets the cat out of the bag about how
it all works in his recent book Making the Social World, explaining how
corporations come into being through a series of symbolic actions: an
attorney writes certain symbols on pieces of paper, brings the papers
before a judge, and the judge makes a declaration, bringing the
corporation into "existence" by fiat--but it's actually all just "words,
words, words," so nothing is really created in any physical sense. So why
are corporations thought of as powerful "things" that can interfere with
our lives in so many ways? Searle explains this (p. 107), under the
heading "How Do We Get Away With It?":

"The short answer to the question is that we get away with it to the
extent that we can get other people to accept it."

An important reason why people accept such symbolic entities being created
in this way, of course, is that the whole process is backed by the force
of an enormous network of institutions, economic, legal, police, and
military. But these institutions themselves are also patterns of human
organization ultimately dependent upon people's acceptance of symbols, and
Searle goes on to ask why people accept these large-scale institutional
structures. A very general answer to this question is that we believe our
institutions work for our benefit, and many of them do, much of the time,
or so we used to think. But, Searle points out, there are all sorts of
institutions that people continue to cooperate in maintaining that do not
work in their own interest at all, institutions that structure our human
activities in ways that are most unjust, in fact, so he has to repeat the
question, and finally answers it this way:

"In accepting the institutional facts, people do not typically understand
what is going on. They do not think of private property, and the
institutions for allocating private property, or human rights, or
governments as human creations. They tend to think of them as part of the
natural order of things, to be taken for granted in the same way they take
for granted the weather of the force of gravity."

Well, of course--how many people do you know who have ever thought deeply
about how the symbols that figure so prominently in our lives these
days--like the mathematical calculation of compound interest, a purely
symbolic operation that creates absolutely nothing real--and the
institutions that support them came into being in the first place?

The important conclusion, which Searle does not go on to draw but that we
can draw here, is that when enough of us start to realize that the present
institutional structures are ultimately a matter of symbols held together
by people's continuing acceptance of them, we can start to think
consciously about how the patterns that these symbols force our activities
into might be changed to make them more just, in everybody's interest,
and, if we're lucky, maybe even sustainable with our own local soil,
water, and energy.

Thu, 05/19/2011 - 12:22 | 1291890 Cardinal Fang
Cardinal Fang's picture

Since you saw fit to waste my time by posting this, I will reciprocate. I guess what you and Searle are really saying is "this is the shit that happens when we trust our existence to a bunch of shithead academics and philosophers".

You see? As far as explaining the nature of human social constructs and symbolism, after quite a bit of study on the matter at hand, I can tell you that God has a sense of humor and, for that reason, the answer is lost on the witless who are always concocting complicated reasoning schemata.

Thu, 05/19/2011 - 10:44 | 1291396 Dr. Engali
Dr. Engali's picture

More of our freedoms stolen while we slept.

Thu, 05/19/2011 - 11:11 | 1291517 Alex Kintner
Alex Kintner's picture

Ha ha. So now if the cops hear noise in your home, they can assume you are scurrying to hide/destroy evidence, and can break the door down with no warrant. Un-freakin-believable.

Why don't they stop chipping away at it and just shred the entire Constitution in one feld shwoosh.

Thu, 05/19/2011 - 10:46 | 1291405 overmedicatedun...
overmedicatedundersexed's picture

get ready for gov to start tellings us how to survive on cat food and road kill - caviar is fish eggs who would eat that stuff and meat why meat is killing lovable god's creatures ..keeping warm in the winter and air conditioned in the summer is killing the planet suffering under global is the american public who are the root of all that is wrong and it's about time they paid in spades..(hmm poor word choice, so sorry obumaists)

Thu, 05/19/2011 - 10:52 | 1291420 writingsonthewall
writingsonthewall's picture

Is that really 3.9 from 20 expected? - this isn't a missing decimal point is it?


Jeepers - that's a rather large change in business expectations - have they been spooked by something?


Maybe they're just jealous of the 'King Midas' that is the LinkedIn IPO. I mean ordinary businesses must be shitting themselves if they are unable to make gigantic profits from thin air!

Thu, 05/19/2011 - 10:51 | 1291430 Papaneuf
Papaneuf's picture

Who cares?

Vote on CNN now:

Should McDonald's retire the Ronald McDonald character?



Thu, 05/19/2011 - 11:00 | 1291452 GOSPLAN HERO
GOSPLAN HERO's picture
"All money is a matter of belief."  -- Adam Smith
Thu, 05/19/2011 - 11:00 | 1291467 lilmac929
lilmac929's picture

"Economic Recovery"TM


I love this site!

Thu, 05/19/2011 - 11:05 | 1291476 Jovil
Jovil's picture

The puppet masters are pulling the strings and there is nothing we can do about it. Other countries don't take the crap we are.

Thu, 05/19/2011 - 11:06 | 1291481 somethingelse
somethingelse's picture

Tyler,  who hold the TM for "Economic Recovery"?   The FED or the Treasury or jointly held or other?

Thu, 05/19/2011 - 11:09 | 1291492 gaoptimize
gaoptimize's picture

Markets oblivious to this portent, no response at all.  I was discussing women being more vulnerable to "normalcy bias" with my wife (the goddess in my avatar photo) last night.  She agreed and said that she did not see the economy affecting her standard of living as much as (the cost of) our preparations, and said she was entitled to her more optimistic view of the economy and it's future prospects.  I asked her what she thought of the new housing starts data...she was oblivious to both the data and even the concept until I explained it to her.  I explained the number of single family homes in America, the population increase, the implied replacement rate if new starts were to stay at this level, the effects on construction employment and appliances/furniture and like durable goods demand and implications for our property value.  I then asked her if she thinks she has the information necessary to have an informed opinion of the state of the economy and it's future prospects.  No answer, just the pained look on her face of an optimist suffering from an information attack on her normalcy bias...but not moved to action.  Pretty much how the markets are reacting to this data.

Thu, 05/19/2011 - 11:32 | 1291616 chubbar
chubbar's picture

So, how'd that couch work out for ya?

Thu, 05/19/2011 - 12:05 | 1291800 Jason_1sandal
Jason_1sandal's picture

Ditto, at least mine likes the idea of growing our own food and buying silver, otherwise it's "everything will be peachy" as soon as "they" fix it....

Thu, 05/19/2011 - 13:00 | 1292135 RockyRacoon
RockyRacoon's picture

Mine has acquiesced to the knowledge that I'm "on top of this thing" so I do all the handling of extra money.  She concentrates on her job and brings in the excess for conversion to preservatives (things that will tide us over the depression hump/slump).  That's about the best I could ask for because a little knowledge is dangerous in the wrong hands.

Thu, 05/19/2011 - 11:13 | 1291497 alfred b.
alfred b.'s picture


    Why...#**@&?#..... I'm sure that these numbers are all "transitory"....but in the meantime I may need to move in with the Obamas; anyone know their address??



Thu, 05/19/2011 - 11:20 | 1291549 Alex Kintner
Alex Kintner's picture

Obama's are renting a white house with an iron picket fence from Goldman Sacks. I'm afraid it's a gated community. But if you're a lobbyist, I'm sure they will accomodate you.

Thu, 05/19/2011 - 12:38 | 1291998 alfred b.
alfred b.'s picture


  Thanks Alex, I know what u mean; but if I were a lobbyist I would'nt need a place to live....lollll



Thu, 05/19/2011 - 12:43 | 1292001 alfred b.
alfred b.'s picture




Thu, 05/19/2011 - 11:13 | 1291504 Alex Kintner
Alex Kintner's picture


Thu, 05/19/2011 - 11:13 | 1291525 Broomer
Broomer's picture

Road to recovery is the road to nowhere.

Thu, 05/19/2011 - 11:22 | 1291559 overmedicatedun...
overmedicatedundersexed's picture

if an economy falls in the forest and no one sees or hears it does it make any noise?

Thu, 05/19/2011 - 11:33 | 1291608 haskelslocal
haskelslocal's picture

Doesn't the chart demonstrate that in both recessions, this index went UP? Seems to be either a flawed index or it's flattening out like it should.

Thu, 05/19/2011 - 11:42 | 1291648 tahoebumsmith
tahoebumsmith's picture

Welcome to the hangover...The 15+ TRILLION DOLLAR keg and coke party is coming to an end. The tap is spewing foam yet we still have a few alcoholics drinking up the half empty beers and a handful of jonesing addicts licking any smeared glass and residue they can find throughout the 200 West St. apartment. What we are left with now is maxed out credit cards and skanky hookers trying to find a ride home. The stimulus stimulated, the tarp tarped, and the pomo pumped. Now it's time to clean up the mess and figure out how to payback the debt we racked up to throw a party for a few viagra fueled CRONIES to get wasted and stare at a washed up skank named Starfire.   

Thu, 05/19/2011 - 11:46 | 1291677 GOSPLAN HERO
Thu, 05/19/2011 - 12:08 | 1291831 PulauHantu29
PulauHantu29's picture

With over $6 trillion in under funded pensions.....$113 unfunded federal liabilities.....massive deficit according to Alan Binder....we will need a QE3 in the range of $2-$3 Trillion for the next six months. A little inflation is much better then a deflationary depression.

Any other estimates?

Thu, 05/19/2011 - 12:17 | 1291867 slewie the pi-rat
slewie the pi-rat's picture

japan it is! 

all the pretenders plead nolo contendre.

The lone positive was the employment index but if you're looking at the more forward looking index, new orders, they basically got annihilated.

QEIII?  maybe.  but even the FEDheads may see, with some of the zeroHeads, that more printing, now, will not abate the japanese hat trick of quake, tsunami, and isotopal wasteland. 

there is no quick fix for fuk_u.  the problems are beyond human scale

we can't "fix" them.  it is like the idea of how much design, materials, work, and craftsmanship goes into building a custom home, but it only takes one careless match to burn it all down. 

we've all been playing with matches.  japan really got burned.

so, this is gonna take more time and work than money, right now.  yes, if we get to the wholesale destruction of capital, again, the banksters may need to reflate, somewhat, again.  but right now?  only the retail destruction of capital, so far!  and, we have enuf "money measures" operating in the various sytems to do the necessary financing, over time, for this work of relief, recovery, and adjustment. 

if more is needed, i'll betcha they can print it!  but right now, pre-emptive printing, beyond what has already been done, does not seem indicated to this pi-rat.  if there is any good news in this mess, it might be that batmanke actually said in his press conference that he had been working with japan to try to do what they could, liquidity- & balance-sheet- wise, since 3.11.11. 

the NWO has broken a leg!  stay defensive in the way you "invest" and keep working on how to do more, with less.  if there's not enuf money around, for a little recession, now, no one could blame the banksters! 

i think it is time for fiscal sobriety, clear thinking, and hard work.

in other words, we are freaking doomed!

Thu, 05/19/2011 - 12:27 | 1291929 luk427
luk427's picture

Where do they get these idiots on CNBC. Mcteer says" the fed is not printing money". "If I had any money I would get out of gold and silver and buy the US dollar"." Gold and silver are in a bubble".

Thu, 05/19/2011 - 13:06 | 1292162 RockyRacoon
RockyRacoon's picture

Saw that.   I used to think he was a pretty level-headed guy. 

Operative words being "used to".

Thu, 05/19/2011 - 12:34 | 1291953 ivana
ivana's picture

Jesus... instant reaction = almost died laughing!

The Philly Fed, which was expected to rise from the April number of 18.5 to 20, instead collapsed to 3.9!!!!!!!

Some of these "greatest shits" we should save and keep for our grandchildern to show them how "economy" looked like 20y before

Thu, 05/19/2011 - 13:08 | 1292172 RockyRacoon
RockyRacoon's picture

LinkedIn has offset any potential damage.

Bread and circuses for the Wall Street proletariat.

Thu, 05/19/2011 - 12:47 | 1292023 ivana
ivana's picture


Thu, 05/19/2011 - 12:53 | 1292081 Hephasteus
Hephasteus's picture

More lies. Let's just move that line down to - 60 and tell the truth.

Thu, 05/19/2011 - 13:35 | 1292338 dcb
dcb's picture

works for me, as they always say buy on the bad news, sell on the good. (LOL) the market goes up!!

Thu, 05/19/2011 - 13:43 | 1292372 knowless
knowless's picture

I really like how employment went up and new orders collapsed.. wonder how long those employees will still be so.

Thu, 05/19/2011 - 14:19 | 1292540 dark pools of soros
dark pools of soros's picture

so did the world end 8 months ago, been totally rebuilt, and now we are losing the world again??   not sure about the hyperbole if similar stats are a few seasons past..

Do NOT follow this link or you will be banned from the site!