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Chicago PMI Comes In Uninspired And In Line, Employment Component Causes Market Spike
The positive goal seeking data bias continues: after a horrendous ADP jobs report pushed futures lower earlier, the Employment component, a far less relevant metric in the Chicago PMI released at 9:45 (and 5 minutes earlier if you are a subscriber), the Employment index, came in at 54.2, an improvement of 5 points over the 2010 low of 49.2 in April. And somehow this number is supposed to reverse all the negativity associated with not only the ADP, but the very large likelihood that Goldman may be well on its way to revising its NFP (+150k) expectation lower. Otherwise, the actual overall reading of 59.1 came in right at expectations of 59.0, and marked another yet another monthly decline, from April's 59.7; the Business Barometer index is now at a three month low as can be seen on the chart below. Of 7 components in the index, just employment, as noted, was Higher: everything else was flat or negative, with both the Inventories and the Supplier Deliveries subcomponents plunging, by 9.9 and 4.4, respectively. Inventories is now at the lowest reading since February 2009. Restocking is now over - no more GDP gains will be seen courtesy of this economic gimmick.
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Uninspired, bitchez
yes, you are.
Let's all move to Chicago and make widgets!
Or guns - going to be a big market for guns now that the ban on handgun ownership has been ruled unconstitutional. Congratualtions to the good people of Chicago. Go get your Second Ammendment on!
Supreme Court 2nd Amendment Gun Control Ruling. The US Supreme Court reversed a lower court’s ruling that allowed Chicago’s strict handgun ban on Monday, confirming that the Second Amendment’s proclamation of the right to bear arms is a principle that is applicable nationwide.
The court decided 5-4, with Justice Samuel Alito writing that the Second Amendment applies to the states and federal government equally.
The court’s ruling forced a federal appeals court to think again about upholding the 1982 Chicago ordinance ban that barred residents from owning handguns for personal use. Justices Stephen Breyer, Sonia Sotomayor, John Paul Stevens, and Ruth Bader Ginsburg wrote dissents from the decision.
Within his own dissent, Justice Stevens wrote that he was concerned the decision will prevent local and state efforts to decrease gun violence. He also stated that its consequences will be destructive to communities across the nation.
Make things? In Chicago? Ha.
Sorry, we don't swing that way, especially not if we want to be the next Detroit.
There's not much making going on in Chicago these days. The jobs have been taxed and regulated away and the middle class is nonexistent. Chicago's major remaining industries are fake government union jobs, and sitting around waiting for Entitlement checks.
With crime how it is, and the Supreme Court narrowly ruling that the Bill of Rights now applies in Chicago, getting into the FFL business might be nice, but the thug politicians aren't going to let any in the city. Daley's also talking about making more stringent de facto bans than what DC implemented (and is being sued for) after the SC threw out their prior ban.
In 1922, as aggressive inflation took hold (but with hyperinflation still a year away), the unemployment rate in Germany quickly subsided to full-employment levels.
Oops sorry that is from a future playbook. As you were.
Source: http://newsfrom1930.blogspot.com/
June 28, 1931
A brief blather on contemporary matters. One of the things that's been striking me reading the 1931 news recently is the number of municipal bonds that are having some kind of trouble; I summarize most of those items to give a feel for what that kind of crisis looks like day-to-day. While I'm not giving investment advice here and urge everyone to do their own due diligence, it occurs to me that the municipal and state bond markets now just possibly may not be adequately pricing in the risk of trouble down the line, especially since that trouble appears to be looming fairly clearly. The more reassuring commentary on the matter usually points to the very low historical default rates for municipals. It's kind of disturbing, however, to look back on how many of our recent bubbles and financial fiascos cited similar reasoning, i.e. safety based on historical data when much of that data was compiled under different circumstances. Like, for example, how a geographically diversified mortgage security was safe because house prices had never declined across the whole US at once...
Maybe if we hire millions of cherry pickers...it just might work!
Arthur cuts off the Black Knight's left arm.
Arthur: Now stand aside, worthy adversary.
Black Knight: 'Tis but a scratch.
Arthur: A scratch? Your arm's off!
Black Knight: No, it isn't.
Arthur: Well, what's that then?
Black Knight: I've had worse.
Arthur: You liar!
Black Knight: Come on you pansy!
Arthur cuts off the Black Knight's right arm.
Arthur: Victory is mine! We thank thee Lord, that in thy mercy...
Black Knight: Come on then.
Arthur: What?
Black Knight: Have at you!
Arthur: You are indeed brave, Sir Knight, but the fight is mine.
Black Knight: Oh, had enough, eh?
Arthur: Look, you stupid bastard, you've got no arms left.
Black Knight: Yes I have.
Arthur: Look!
Black Knight: Just a flesh wound.
Arthur: Look, stop that.
Black Knight: Chicken! Chicken!
Arthur: Look, I'll have your leg. Right!
Arthur cuts off the Black Knight's leg.
Black Knight: Right, I'll do you for that!
Arthur: You'll what?
Black Knight: Come 'ere!
Arthur: What are you going to do, bleed on me?
Black Knight: I'm invincible!
Arthur: You're a loony.
Black Knight: The Black Knight always triumphs! Have at you! Come on then.
Arthur cuts off the Black Knight's other leg.
Black Knight: All right; we'll call it a draw.
Arthur = Bear
Black Night = Bull
Would you like me to draw you a picture?
Unfortunately for the ADD among us who think 10 words is 9 too many (and who probably junked your prior post illustrating the hopelessly in denial) you might need to draw a picture. Lot's of pictures in fact.
Please make it a moving picture with graphics and music and keep it under 15 seconds.
<sarcasm>
If I had the ability to create brilliant 15 second clips with graphics and music the way Terry Gilliam did for the Monty Python films I assure you that I would oblige!
Ive heard every line repeated in that movie ad nasuem for decades and have virtually memorized the script.
Stil makes me laugh every time. My favorite scene was the knight sheepishly apoligizing after storming the castle and inadvertenly killing the weddidng guests.
If it weren't for the Monty Python crew, I would have a much harder time dealing with the absurdity that is life... and Douglas Adams has been a great help too! Part of the collective insanity is that people in high places just takes themselves way too seriously...They are paranoid and delusional..which filters down to up and comers who learn the ropes to take over. And it doesn't matter if you stock shelves at the supermarket or do analysis at the IMF..there is a serious, serious lack of humour in organizations of all stripes.
Ok, so let me get this straight.
Yesterday all markets around the globe tanked pretty much around the 3% mark.
Today we're supposed to believe that the buyers have returned.
Go ahead assholes. Melt up this market again. Give me a better position for the ensuing crash in 3rd and 4th quarters.
Haha. What a world.
nah..there's always econo-vie-agra when needed in
bizarro world..
And yet the lipstick is continually applied to the Pig
should we see it for what it is. What's it going to take
to get these values down to where they belong ? Rhetorical
SP range 1040-1043 this morning, what a FN prop job.
This Pig has been slathered in lipstick, caked in makeup, given a votox treatment by the fed, and dressed in a sexy bikini by CNBC, but investors are growing wary of the oinks and the big squeal yesterday.
As soon as this pig decides to frolic around in the shit and mud, even the algos will give up and fat finger the whole charade.
When a Junkie is desperate for a fix, any hint that one might be coming signals the brain to release powerful Endorphins into the blood stream, creating euphoria and killing some of the pain, thus reinforcing the idea that seeking the next fix is the correct course of action to take.
There are no Endorphins released when thinking about going straight, of facing the terrible pain of withdrawal. An addict is fighting the addiction and it's often a losing battle.
The same applies to those who are desperate to find good data to confirm their desire to believe that all is well and economic recovery is just around the corner. The market caught a momentary high from numbers that were no better than in line.
But even the rumor of a friend that knows a friend that has a cousin that works for a guy who might have a connection to buy some smack is all it takes to keep the false hope flowing faster than BP's disaster well.
delete
delete
+1!
+2!
Great analogy. I know that we just had 5 great months of near record production at our roofing mfg. facility. Our plant manager decided to put on a 4th shift, (3-4-4-3, 12 hour shifts) I tried to convince him that this was just restocking and that real demand is not there, to no avail. We typically carry $2-2.5 mil of finished goods, our warehouse is now bursting at the seams with $4 mil of finished goods. Guess what? Our PM decided to give everyone a long July 4th week off, as long as you have PTO. Hopefully they won't have to lay off too many of the new hires, but I'm not liking the outlook. We used to have 2 week backlogs, now 2 days looks good.
Google articles about the German car manufacturing sector.
You'd think that cars are flying off the shelves faster than hot cakes.
Double shifts, expansion, new hires and on and on.
Must be all those Chinese real estata gazillionaires..
Here's a complementary view in traderspeak.
There's no news or reason to cause the move. Those come after as justifications. Short term traders all sold on the way down yesterday, thats why we close almost at the low. Today lots of them cover, gently, so we wobble upward.
Why do they cover? They expect a rally tomorrow.
1st day of the month (& quarter for some), dumb slow mutual fund money buys. Regular as clockwork. That's what prop traders are waiting for.
The market could get smacked down late Thursday, but that takes some conviction on NFP. On a bad NFP, second day of the month, we could see absolute carnage as prop traders take money off mutual funds who bought early in the month. That's when I expect to break 1040 for good. Lets see.
Don't Believe The Hype
http://www.youtube.com/watch?v=S6BJ3CvPLhs
Boy, the markets are absolutely directionless this morning. Someone or something is working really hard to keep the S&P above 1040. If this is all the market can muster for a dead cat bounce from yesterday - tomorrow will be a disaster.
I'm in the medical plastics space, and our orders are way down...and I mean way down. Customers are not taking new inventory. They appear to be quite content holding on to their cash.
WHAT???
NO MORE BOOB JOBS???
THE WORLD IS FALLING APART!
...seriously.. what sort of "inventory" are we talking here?
Pill bottles.....way down in production. Brokers are not buying from us, because customers are not depleting their inventory.
Good Morning CD,
I was going to respond to your comment, but after reading what I originally wrote, I realized I was just spelling out the obvious. Hence the deletion. Your comment did trigger some thoughts on the subject, though. When I first became addicted to this site, I often worried that I was searching out the "bad" in the market et al and ZH was certainly the drug of choice. I'm not worried about distorted, drug induced highs anymore. I can see the truth, just as plain as day and this feeling is very liberating - albeit a little sad. Posters like you have helped get here - thanks.
ZH dosent have to compromise journalistic principles on the alter of acess. Much of their doom and gloom and less than flattering articles on Goldman Sacs, the ineffective SEC, HFT etc have been borne out by actual events.
OTOH, the Tom Clancey bent of the readership is thouroughly catered to, especially on slow days, and this diminishes the blog, imo, but blogs must get the hits to survive so maybe the occasional www3 powderkeg scenario isnt so bad, however unlikely.
Then theres the end of civilization mongers always dreaming of the day when they finally get to shoot at guys like me who formerly ridiculed them as I try to steal their pork and beans from their underground bunker.
ZH is not a very good short term trading tool, as the very short term alwas belongs to the powerful manipulators of the markets who distort sentiment the best they can.
But for seeing thru those schemes and for trying to ferret out the truth thru all the layers of deceit, ZH is actually a very good blog for seeing the coming macro trends as they are likely to be, not as they are advertised by the media.
No offence to the hardcore posters here, this is just my opinion; Iran might really get bombed for all I know, and eventual economic collaspe is certainly a possible outcome if fundamental changes arent made.
A double dip is all but a certainty,imo, as well.
@fazzie
I'm not sure if your post is at least in part to my post, but as an aside, I chose to validate much of what was being put on this site during those days of "content insecurity". At the end of the day, all resources pointed in the same direction - it's different this time.
Last time Goldman revised their NFP estimate, weren't they still way off and above the actual number??
Certainly a lot of details like that to take into consideration. Thanks windows vps | cheap vps | cheap hosting | forex vps