This page has been archived and commenting is disabled.
Chicago PMI Plummets From 67.6 To 56.6, Biggest Monthly Drop Since Lehman Bankruptcy
The May Chicago PMI is out and contrary to the herd of clueless Wall Street idiots, better known in polite circles as economists, it came at 56.6 on expectations of 62.0, a collapse drop from the 67.6 before. This is the worst monthly drop since the economy imploded back in October 2008, and the second largest two month drop since 1980! A quick look at the New Orders index indicates it was the lowest since September 2009. But the good news: the economy is still in expansion... for about 1 more month. The release says it all: "NEW ORDERS and PRODUCTION posted their largest declines in several years...but remained positive" and "INVENTORIES accelerated buildup" - thank god for artificial economic expansion. And from the respondents: "Fuel cost are going to have a major impact on business activity in a negative way that will slow recovery to a crawl." Uh, what recovery? Just you wait until QE3 is announced in 3 months. And elsewhere, the May consumer confidence completed the trifecta of bad news, coming at 60.8 on expectations of 65.4, and down from 66.6.
And the two month change:
And from Reuters, a comparison of PMI and GDP:
The survey respondents confirm everything we have been saying since the Japanese earthquake struck in March, and really since December 2010, when we had the nerve to mock Goldman's December 1 call for an economic resurgence.
1 ?Incoming orders have definitely slowed down, but we needed that. We do continue with a high level of quote activity.
2. ?Prices continue to increase eating into margins which will inevitably impact the long term organic growth outlook for the US. Oil markets continue to rise, primarily on speculation, which could have short-term impacts on economic and job recovery. Increases on food costs could foster continued economic and political instability in third world countries. Strengthening of foreign currencies against the dollar are cause for concerns relative to continued inflationary pressures.
3. ?High oil prices are driving up pricing on plastics, and most chemical items. High commodity prices such as corn (>7% increase in April) continue to escalate industrial ethanol pricing. High Fuel prices are also driving up costs. At some point demand will drop because there will be less in the spending pool for consumers, which will cause business to decline. Weakness of the dollar vs foreign currency is also causing issues with increased costs for imported goods. Rough times ahead if oil & commodities do not ease up.
4. ?Aluminum pricing, like other commodities I suspect, has really eaten into our margin. Mills and Fabricators alike are increasing their cost, besides the actual commodity. Paper Roll and Film suppliers are adding a temporary surcharge to their goods to cover costs they are incurring. Seems to be getting popular among the bigger players.
5. ?Our prices are up (asphalt/oil), and the weather is hurting the construction industry right now.
6. ?Fuel cost are going to have a major impact on business activity in a negative way that will slow recovery to a crawl.
7. ?Commodity prices need a break. Hopefully the new planting season has good weather and produces good harvest yields.
8. ?Business keeps increasing but pricing pressures continue to rise as well. Often we see no valid reason for some of the increases other than trying to improve margins.
9. ?Inventory increase to cover any fall out from Japan crisis. Commodities are still pushing up our cost.
10. ?Slowdown from Japan automakers.
11. ?Finally seeing a slow down in the request for price increases.
12. ?Local economic environment beginning to show signs of gaining steam BUT financial quality of certain borrowers remains poor.
»
- 10612 reads
- Printer-friendly version
- Send to friend
- advertisements -
I love how economists can miss these numbers over and over and over and no one seems to care. Who's worse, economists or ratings agencies? Oh wait, they are both on the same payroll. Got it.
Out of 55 estimates on bloomberg, no one got it right, and only 2 people underestimated the number. Weirdly, one of them was LaVorgna from DB.
No one said propaganda is necessarily correct.
The Ministry of Disinformation in this country is working overtime. I believe nothing, only that I'm paying more for essentials, working harder, and have less disposable income at the end of the month.
I'm just revelling in the ferver of a fine economic recovery...
Mr. Market's response ?
DJIA +71
Nazz +16
S&P +7
"What, me worry ?"
http://images3.wikia.nocookie.net/__cb20090330192128/uncyclopedia/images...
and over and over and over and over and over . . . etc., etc., etc,. . . . .
You figure if anyone else messed up their job this much theyd be fired.
Oh well, market don't care, just keeps rallying, cant let a sour economy run a happy day over Greeks getting more bailout money.
Bizarro world indeed.
Im a paramedic and if I was this wrong people would die..and I probably make a quarter of what these douche bags do....go figure.
Well, there's your problem: A dead body is an objective fact.
But who's to say that an economist is wrong generally about "the economy" "improving" or "bottoming".
If you changed careers and instead advised people on how to "live better", they would find it substantially harder to prove you aren't doing a good job!
Hmmm..Dead bodies means less people looking for jobs..less people defaulting on mortgages and less medicare!! Im not a medic Im a Green shoot gardner!!
but it's my guess that if you were dead you would probably default...
just sayin'...
TYLER--could you re-do the graph you posted last week with the ISM showing the doble dip, and add today's information?
Would be interested to see.
Thanks
cin
Nov 2009 was last time we printed below 56 on this.
LOL
Oh shit.
We are in a world of trouble and pain now.
Time to jump out the window.
Franken, it just makes me laugh people think that a bit more money printing sleight of hand can carry us forward glitch free another 16 months to some mythical 'election' goal? Total nonsense to me, like saying if only another gallon of fuel is added to the 747 tank we can glide from San Fran to India.
well, if you are a joo the Hanukkah oil lasted for 7 nights when it was only suppose to last for one. Christians and muslims have their own stories inspiring hope when all looks grim. People have been believing lies for thousands of years, thats not a slight towards god, thats a full-wind-up backhand to religion.
Economics has become a religion. Its no longer accountable to fact or reality. It's just what allows people to have enough piece of mind/purpose to punch a clock and remain comfortably subservient so as to avoid the terror inspiring concept that we are all intrinsically good and not what our culture tells us we are.
BTFD
Sheep:
Have you heard of the new P2P digital money called Bitcoins ?
The money is "calculated" with a distributed algorithm on private computers in a decentralized "crowd computing" fashion, with the more participating computers, the more secure and acceptable the money becomes.
Every contributor of CPU clocks / instructions to calculate so-called "blocks" which make up the newly created Bitcoins is rewarded with previously generated Bitcoins.
Every Bitcoin is an encrypted and digitally signed piece of data bytes that store its history
, date of creation, number and ID of network computers it was previously stored on and so on.
No central authority, no bank, no fees involved.
The only way to stop it is to switch off the Internet.
Bitcoins works in a way like Napster or EDonkey and was invented in 2009 by the Japanese hacker Nakamoto.
This is like our money in our digital bank accounts except there's probably more honor among hackers than their is in central bankers.
Except when the most industrious hackers are actually de facto government workers...
Collapse confirmation has to be highly bullish, or something. Think I'll polish my silver and gold today.
Wow, biggest money printing bonanza in a generation and the SPY is less than 1% from 3-yr. highs and many gold stocks are red today. And to boot the 5-yr. yield is still under 1.75% as many investors still fear a new recession and could care less about stocks.
Any investor with 2 brain cells to rub together is bailing from this trainwreck. Better bail now, at any moment bids will not be hit soon as the 401K Bathrobe Brigades get nervous and place their large sell orders. The trick is to smell the smoke and get out before youre engulfed in flames.
This is smelling like a massive retail setup more and more. It is really odd to watch yields fall and stocks go up.
Why don't you change your name to Idiot Consensus?
Robo...I highly recommend you go read FOFOA...it might help you understand.
+ $1530
FOFOA!
Send me a gmail R and I will direct you to my blog, I write about gold, TEOTWAWKI and "The Tinfoil Brigade". Other topics too. Great fun.
I am yearning for Goldmans take on this..... spin this muthafuckers
And gold within 2% of its alltime high
Nominal highs. Still have a long way to go to get back to 2000.
+/- 40% inflation since 2000.
Watch where you aim that thing!!!
I only aim at the bullshit, so you are pretty safe.
BUT...BUT...BUT...GREECE DAMIT..Greece is what we are celebrating....come one..we need one happy day for Greece....
Osama Obama is sweating the 2012 election.
16 months....like gliding a 747 on a gallon of gas halfway around the world. Cant be done.
Have you looked at the field of challengers? Obama walks right back into office as if there's nothing wrong.
They're setting Huntsman up for a 2012 win.
Why setup Huntsman when Obama has provided an excellent ROI? Obama is a lock in 2012.
Just look at that Roach Motel [SPY]. Wholesale liquidation of positions...MASSIVE...and yet the instrument barely moves. If ever there was proof that the market is broken, the Roach Motel is the tell.
In the meantime, superdee duper bullish criminal syndicate Wall Street algorithmic bulls have been selling into the fabricated up open. Six second long equity hold period complete.
Confidence inspiring! Thanks again, Ben.
that confirms it: Rally is on. (with news like this...how could it not be?)
Once upon a time, this sort of news mattered to investors, now it is only machines that can't read, it doesn't
Huge breakaway gap in FXI after Shanghai has been sold down hard the last two weeks is a big heads up for the bears.
Traders are now becoming even more emboldened to start buying each and every dip from here on out.
Momo, you are still the perfect fade. No comment on the 'huge upcoming economic expansion'? LOL
ITG, you might like my blog. Send me a gmail if interested, I write about gold, FOFOA, TEOTWAWKI and the Tinfoil Hat Brigade!
Yet another indicator that US data no longer matters--only Europe and China.
Still strong bids in TLT today after the flurry of horrid economic news. Interest rates keep getting driven lower and lower providing even more cheap fuel for the stock speculators who can now buy anything and everything with super low margin rates.
Strong bid in oil. Your bus pass won't be getting any cheaper. You must be puking up blood.
I don't know how many times I have read your posts and junked you but I have to grudging admit quite a few of your calls have been correct.
Yesterday you predicted that Greek issue would somehow be "resolved" before trading opened, and low and behold you were right...
It seems Robo Mom didn't raise such a fool afterall.... I will miss junking your posts, it was such fun......
ISM Chicago: -Employment index: Down -New Orders: Down (big) -Prices paid: slight down
Can you spell recovery?
If you can't, than just remember these two little letters: Q+E
Duplicate
Consumer confidence now tanked too.
A trifecta of bad data for the day.
And the S&P continues to soar.
Go figure.
The US economy is fine
-Hamy Wagner
All we need is $200 a barrel oil to prove it!
Just more reason for QE3...and the beat goes on...BUY THE DIPS!
But I don't want qe3!
Sure it will make the stock market rise and commodity rise, but they won't hire more people, it hasn't helped housing.
Just let th damn free market flush the shit out already.
Ron Paul was making sense this AM and spoke of price control talk in Europe, no chance of reform due to the Ryan gutting after trying anything, complete loss of free market economics and ultimate doom within 2 years although timing doom was difficult.
He also said QE whatever it takes untill we inflate out of FED debt... win or lose/damn the commodities.
Smart money shorting this rally?
http://deadcatbouncing.blogspot.com/
QE3 celebration will last about as long as a crack addicts last hit...then, back to recession / regression.
The pump in futures is now clear...to mask the "real world" data so that after the fall everyone will now have the barometers of "bad data" to point to when stating the obvious...invest at your own risk.
Yes, we've proven now that the economy simply goes straight into contraction mode without stimulus. We must have Fed money to maintain growth.
Wow! It dropped nearly TWICE the consensus. But I suspect it still won't matter. Wall Street is so drunk on bailouts, stimulus, and Fed printed prosperity that news is now irrelevant!
Let's see ISM Chicago? Well, that's just Chicago. Chicago Fed Midwest? Well that's just the middle of the country. Case Schiller and Consumer Confidence? Well...well...guess that affects everyone. Everyone that is, except your friends the banksters
This isn't just bad. It's TERRIBLE!
they couldn't even manipulate the consumer confidence number to a decent level
The XRT is just now wondering why it is up. Again, it takes a massive 540k share dump and just sits there, as if it were wearing a hockey helmet when it took the blow. Traders follow up with a 600k plus bid...and it sits there.
The VIX reverses a 5% loss in 14 minutes. That's....normal.
Ponzi market end of the month mechanics.
TERRIBLE TRIFECTA!
And of course it time to BTFD with the news
What level does S&P have to fall to for Bernanke to institute QE3? 900 or 1000?
QE3 doesn't happen until 2012. Election year. Need full impact for Obama reelection.
It will not matter...today was so baked in....its a live comedy we are living in...bailouts good...lower priced homes good..less jobs good....more foodstamps..good...debt to the moon and beyond..good..I need to drink more..this is just unreal...
There is little economic activity going on because, as you know, the .gov is a major portion of any activity still going at this point, and they are busy spending it all on keeping the stock market and foriegn countries alive.
QE3 will commence in some form and the whores in the media will proclaim no one cound see $6.00 gas and out of this world food prices coming. It's all because of those middle east and europe bastards that we pay this much for everything. If only they could get their shit together.
My biggest fear is...most morons in this country actually believe that.
Cool.....Buy the gap UP!!!
Nothing fixed after all that money thrown at the banksters
"Incoming orders have definitely slowed down, but we needed that. We do continue with a high level of quote activity."
I work in manufacturing--this was business as usual during the worst of 2008 & 09. Our customers had us quoting like mad while orders slowed to a trickle.
Bad news and markets up.
QE3 will sail late summer early fall as the kids head back to school and to get ready for the Holiday happy time.
QE4 will leave the naval yards at Newport News along with a new sub to vie with the Chinese Song, Yuan, and modified Kilo subs just in time for the election a year later.
The next big collapse will come on a big uptick.
Was this the uptick today?
Top in place?
http://deadcatbouncing.blogspot.com/
QE3, i'm lovin it!
just buy the fucking dip! LOL
Who needs PMI? Just give me more Bread and Circus and I'll be happy.
Bullish.
I can't believe I was the first to say that on this thread.
This is bullish for stocks. Remember, Zimbabwe had the best performing stock market in the world for a while.
It's ABC investing now: hold stock certificates, gold, silver, dentrifice... Anything but cash.
Don't abandon the SUV yet, the Motorcity, courtesy of gubermint motors is ramping up hiring and production. The Marketing intellignetsia has figured out it time to take advantage of Japan's slowdown and all those empty lots in cities across America. I wouldn't doubt it if Build America Bonds proceeds are being used to purchase these fine automobiles.