This page has been archived and commenting is disabled.

Dallas Fed Big Miss, Prints at 11.5 On Expectations Of 18.4, Survey Respondent: "All Of Our Raw Material Costs Are At Record Highs"

Tyler Durden's picture


The Dallas Fed diffusion index is out, coming at a disappointing 11.5 on expectations of 18.4, with the market completely ignoring it. After all good diffusion index data is to be bought even if it confirms surging inflation, and bad diffusion index data is to be avoided. And while the component data is pretty bad (projected wages and benefits 6 months ahead plunge by 12 points as do Capital Expenditures, as firms refuse to spend any more organic cash on growth, offset by expectations of lower input costs, which remains TBD), the true nuts and bolts of the index can be gleaned from the respondent surve, presented below, although the most relevant one is here: "Prices are high,
which makes for lower volume. The supply of cattle is limited. The cost
of grain for livestock is unusually high because of high corn prices,
partly attributable  to ethanol subsidies.
All of our raw material costs are at record highs. The cost of diesel also hurts us. A weak dollar is not good for us."
No surprise there.

Comments from Survey Respondents
These comments were selected from respondents' completed surveys and have been edited for publication.

Plastics and Rubber Products Manufacturing
We've seen a drop
off of new orders and particularly repeat orders, perhaps related to
the expiration of stimulus funds in the general economy.

Nonmetallic Mineral Product Manufacturing
Two factors have
resulted in an increase in demand: consolidation of a sister location
into our location and the closure of the sister location, and exit from
the industry by a competitor in Florida. These factors have
significantly improved order flow through our location. We have also
seen a minor increase in order flow from existing customers, indicating
the beginning of a recovery in the housing sector. Commodity-based raw
material prices have begun to increase, partially due to higher energy
prices and a weak U.S. currency. As a result, we will seek a small
price increase for our products within the next two months. The impact
of the recent situation in Japan on the world economy has yet to be
determined, so we remain cautiously optimistic at this time.

Fabricated Metal Product Manufacturing
A large new project with a local maker of high-end furniture may double our volume of shipments.

Our oil field service,
coal mining and minerals mining customers continue to accelerate their
demand. Other markets remain soft. We are adding to our labor resources.
The only area of difficulty we have is hiring and retaining qualified

Machinery Manufacturing
We continue to see
a slow improvement in demand in our markets, but our industrial
customers remain very cautious and cost-conscientious. My impression of
the general economy is less optimistic than a month ago. Costs that
matter to consumers, like food and fuel, are going up very
significantly. The uncertainties in the Middle East and Japan are
affecting everyone's confidence.

Chemical Manufacturing
We are seeing a small slowdown in new orders thus far this month, but we expect it to pick back up to February-type numbers.

Demand seems to be
gaining traction slowly, but we are concerned about the effect of
higher oil prices, particularly on consumer demand.

Furniture and Related Product Manufacturing
The outlook seems
to be on the edge again, and we are very unclear as to the direction.
The last three weeks, which are normally dramatically upward, are two
weeks up and one week down. How much world events are playing on this is
unknown, but gas prices are dampening business. All of our dealers are
certain on that one point.

Computer and Electronic Product Manufacturing
Commercial aircraft business is anticipated to increase. Military and defense business is fairly flat.

About 10 percent of our
revenue is sourced from manufacturing sites in Japan that have been
affected by the recent earthquake. About 60 percent of our products are
sourced from other facilities, and it is possible to move all
production to other sites over time. Due to our manufacturing
processes, most of our WIP (work in process) to meet the current
quarter demand is in final stages in other parts of the world. Hence,
supply impact will be greatest in second quarter 2011. Near-term, about
10 percent of our revenue ships into Japan, and customer sites vary
from being fully back on line to not knowing when production would
resume. The impact on demand is not known at this point.

Food Manufacturing
Prices are high,
which makes for lower volume. The supply of cattle is limited. The cost
of grain for livestock is unusually high because of high corn prices,
partly attributable to ethanol subsidies.

All of our raw material costs are at record highs. The cost of diesel also hurts us. A weak dollar is not good for us.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 03/28/2011 - 10:41 | 1108533 Cognitive Dissonance
Cognitive Dissonance's picture

Ho Hum. Market still climbing. QE 3.0 being priced in.

Mon, 03/28/2011 - 10:45 | 1108542 lizzy36
lizzy36's picture

Alas there will be NO QE3 this year. Looking forward to when it is priced out.


Mon, 03/28/2011 - 10:52 | 1108550 Harlequin001
Harlequin001's picture

No surprises there then... bullish...

'The cost of grain for livestock is unusually high because of high corn prices, partly attributable to ethanol subsidies.'

Nothing to do with more new money chasing corn then...


QE3 is a certainty, it's just a matter of how many and how much.

Mon, 03/28/2011 - 11:19 | 1108703 Popo
Popo's picture

The Fed consistently demonstrates their bizarre inability to perceive causality.

It's kind of like the old fable about the man who attempts to train his horse to live without eating any food.  The training progresses extremely well day after day, week after week...   Weeks later the man claims "You know it would have worked, but I had some bad luck and my horse died".

...And quantitative easing would have worked too... if it wasn't for that dang coincidence of spiraling commodity prices.





Mon, 03/28/2011 - 11:22 | 1108732 Harlequin001
Harlequin001's picture

Absolutely old stick...

Mon, 03/28/2011 - 12:59 | 1109191 Chuck Walla
Chuck Walla's picture

Its not that the Fed cannot perceive causality, but that it is very inconvenient to be faced with one's failure. Especially when the mandate comes from the bankers and not the people truly impacted by the policy failures.  In other words, tough titty said the kitty when the cow ran dry.

Mon, 03/28/2011 - 13:13 | 1109252 blindfaith
blindfaith's picture

It is not that this falls on deaf ears, but on egotists and narcissistic men who will not be convinced that they caused their child to shoot helpless classmates.  Same thing, only when catastrophic events take place, will their folly be perceived but not admitted to by them, and we can hear them sing in unison..."I had bad judgement, if I'd only known or been told". 

 Off the hook by the ever forgiving American people with memories two seconds long and far to busy with app's.

I don't understand why this should be any surprise to anyone who has been awake behind the big desk for the last 90 days.

Mon, 03/28/2011 - 10:48 | 1108551 FOC 1183
FOC 1183's picture

that is certainly the current trend in FedSpeak.  But...will the process of pricing it out be the excuse for bringing it back?

Mon, 03/28/2011 - 10:48 | 1108552 Id fight Gandhi
Id fight Gandhi's picture

I agree no QE 3

How? Why? Everything is so fucking great and running tip top. World is burning and everyone buys Netflix and priceline.

Mon, 03/28/2011 - 11:04 | 1108614 alien-IQ
alien-IQ's picture

because they want things to be even bettererer

Mon, 03/28/2011 - 13:16 | 1109267 blindfaith
blindfaith's picture

tanks, I nedded sumthin ta luagh at snice I saw my blii for coper go sky highh.

Mon, 03/28/2011 - 11:46 | 1108855 DarkMath
DarkMath's picture

Sorry Lizzy,

You're wrong. There will either be an explicit QE3 or the fed will just end QE2 without shrinking its balance sheet. In the latter case that is equivalent to QE2 in perpetuity because the Fed's balance sheet is now so large just re-investing the maturing bonds they bought is equivalent to QE2.

In other words the Fed's balance sheet is so big unless it shrinks there will be QE to infinity. QE3 would be an INCREASE in the Fed's balance sheet beyond the obscene level it is now.

See this article from Jim Rickards:!.html



Mon, 03/28/2011 - 12:33 | 1109059 chairsatan
chairsatan's picture

I don't think this is accurate - without an explicit new QE program, the Fed only has its conventional OMO tools.  Their normal OMO auctions are for t-bills, not long bonds and certainly not toxic waste.  So as the long bonds and toxic waste matures, they can't roll it over using conventional tools, and without another QE they will hit the zero bound on short term rates while rates on the long bond and mortgages go vertical.  I think.

Mon, 03/28/2011 - 13:06 | 1109224 DarkMath
DarkMath's picture

"they can't roll it over using conventional tools"

Do you have a link confirming that?

Mon, 03/28/2011 - 13:22 | 1109298 blindfaith
blindfaith's picture

It is all guess work, because WE have NO idea what they are doing until after they did it.

  Look at the 120 billion "in other Assets" ....WHAT??? How did THAT happen while I was at lunch, that is what I would like to know.  120 billion is the combined GDP of 80% of the nations of the world...and it is a casual foot note on their balance sheets? 

Mon, 03/28/2011 - 10:48 | 1108557 alien-IQ
alien-IQ's picture

looks like QE XXX is priced in. I'm looking forward to that asteroid hitting the earth rally...Homebuilders and REIT's are gonna rock.

Mon, 03/28/2011 - 11:02 | 1108598 TeamAmerica
TeamAmerica's picture

Big dittos on the asteroid strike.   We deserve a good one. :-)

Mon, 03/28/2011 - 11:02 | 1108606 Rogerwilco
Rogerwilco's picture

After being dead wrong for years, I'm finally seeing the light. Empty strip malls are a sign of growth and opportunity in CRE because they're proof positive that the developers are smart enough to screw the banks. Similarly, higher wholesale prices and stagnant wages show that employers have workers under their thumbs, so who needs to worry about margins? If the whiners need a break from the mandatory 75 hours a week, Uncle Sam has a 99 week paid vacation plan waiting for them. It's all good, ZIRP, S&P 2K, and 10% unemployment can coexist in the land of the free.

Mon, 03/28/2011 - 11:31 | 1108783 MachoMan
MachoMan's picture

All that vacant CRE property might as well be dumped on the RRE shadow inventory list...  because the services and retailers that filled those spaces, or at least a significant portion of those spaces, are gone forever.  The only possible use will be either governmental buildings or conversion to residential living...

Mon, 03/28/2011 - 13:28 | 1109322 blindfaith
blindfaith's picture

Actually we will need the space so we can store all those " we will create jobs" promisses from that last election.

Or has everyone gotten side-tracked and forgotten?

Mon, 03/28/2011 - 11:11 | 1108663 SheepDog-One
SheepDog-One's picture

'Market still climbing'? I dont really get the attitude sweeping across america today, 'nothing we can do, may as well bend over some more' climbing is DOW up 20 points? I think americans like getting fucked in the ass daily.

Mon, 03/28/2011 - 11:28 | 1108762 Cognitive Dissonance
Cognitive Dissonance's picture

Misery loves company.

Mon, 03/28/2011 - 10:44 | 1108545 SparkyvonBellagio
SparkyvonBellagio's picture

TIPs are still paying about 3-4% ? LOL

Mon, 03/28/2011 - 10:56 | 1108575 DeadFred
DeadFred's picture

Of course they are.  Haven't you heard inflation is very low, but at least deflation ins't so much a threat now.  TIPS always seemed like a bad investment to me, you have to rely on the governments inflation stats to get paid.

Mon, 03/28/2011 - 10:46 | 1108549 Dr. Sum Ting Wong
Dr. Sum Ting Wong's picture

QE forever!

Mon, 03/28/2011 - 10:47 | 1108556 Boilermaker
Boilermaker's picture


I can see Benny racing toward the 'wall of worry' with a pole vault stick and a bag of $7B in POMO.

They'll just jack it even harder.

Mon, 03/28/2011 - 10:55 | 1108559 Spalding_Smailes
Spalding_Smailes's picture

The drum beat of no QE 3 gets louder ...... BOOM - boom - boom - BOOM - boom - boom 


The market has 8 quarters of earnings getting better every time for 95% of the businesses .... Apple, Starbux, IBM, CAT, Exxon, McD's, Macy's, LuLu, AT&T, Ford,Google, 3M, Deere, Loews, PG&G, Pepsi, Amgen ect .......

Things getting better will crush QE3 expectations and carry stocks moving forward and the dollar, upp, up and away ....

Mon, 03/28/2011 - 11:01 | 1108590 Shameful
Shameful's picture

Here is a question, why not just go into commodities?  Since you expect a massive manufacturing and economic boom to happen won't that put pressure on commodities?  I have to assume in the midst of a US industrial/economic boom people would drive more and use more copper.  If your wrong and it's just fraud and money printing that will also reflect well in commodities.

Mon, 03/28/2011 - 11:18 | 1108671 Spalding_Smailes
Spalding_Smailes's picture

Commodities have run up because of QE2 and China's building boom, after thats over they will get hit. This will help businesses moving forward, because quoting - bidding for work is so tight the pass along is not taking place my best friend owns one of the biggest manufacturing plants in the midwest ..... He's loaded with work and the quotes are flooding in, but margins are still tight ..... He just had someone in from Germany who will be building machines for Alcoa in the USA, they want this manufactured in the US, shipping cost from Europe would kill them ....


After the middle east quiets down, QE is over, oil will get crushed and everyone will be happy ....

Mon, 03/28/2011 - 11:12 | 1108674 SheepDog-One
SheepDog-One's picture

Well certainly people will be using more lead and copper soon.

Mon, 03/28/2011 - 11:21 | 1108736 Johnny Lawrence
Johnny Lawrence's picture

Wow, think stocks will continue "moving forward" if there is no QE3?  I agree with you that commodities will get hit if there is no QE3, but thinking equities will continue their rise is mentally retarded.

Mon, 03/28/2011 - 10:49 | 1108560 equity_momo
equity_momo's picture

Climbing a wall of worry? This market is climbing the Mount Everest of BS.

Mon, 03/28/2011 - 11:54 | 1108889 Boilermaker
Boilermaker's picture

No kidding, but the cliche' is just so motivating.

Mon, 03/28/2011 - 10:51 | 1108564 somethingelse
somethingelse's picture

unrelated but interesting:

Goldman Sachs tells employees in Tokyo they can not leave: if they do they lose their job:


Mon, 03/28/2011 - 10:56 | 1108577 alien-IQ
alien-IQ's picture

hopefully they are also mandated to take lots of baths, drink lots of tap water and eat the local sushi.

Mon, 03/28/2011 - 13:35 | 1109351 blindfaith
blindfaith's picture

Welcome to are really funny...and WE need it.  Seriously!!! You have a great sense of bad someone from Goldman didn't appreciate it.

Mon, 03/28/2011 - 10:59 | 1108585 SilverRhino
SilverRhino's picture

Notice the people giving the orders are NOT staying and living in Tokyo.  Fucking hypocrites.  

Mon, 03/28/2011 - 14:25 | 1109592 andybev01
andybev01's picture

' Some employees praised the level of information about radiation levels and safety the firm has communicated to them.'



Mon, 03/28/2011 - 10:51 | 1108566 RobotTrader
RobotTrader's picture





No impact whatsoever.  They can raise prices and the consumer will gladly pay.

Once the U.S. Consumers engage in a spending orgy, and start eat out at restaurants, they cannot be stopped.

After getting dragged through the mud in 2008 and 2009, they are tired of gloom and doom and they are ready to start living it up and spending wildly.

Mon, 03/28/2011 - 10:56 | 1108581 Spalding_Smailes
Spalding_Smailes's picture

All the clowns that think we are in a depression .....

Look around, stores packed even with gas at $3.80, when QE 2 is over oil will get monkey hammered and people will be giddy this summer swiping those cards spending junkies need a fix ....

Mon, 03/28/2011 - 11:04 | 1108623 Cleverbot
Cleverbot's picture

No I have no idea what that is but go on and explain it to me.

Mon, 03/28/2011 - 11:06 | 1108629 TeamAmerica
TeamAmerica's picture

Missing the connection between QE2 and the price of oil.    Ending QE2 increases oil

Mon, 03/28/2011 - 11:06 | 1108630 LawsofPhysics
LawsofPhysics's picture

"when QE 2 is over" ---  Bahahahahahahahah hahahahahaha Bahahahahahaha.  QE will never end, stealth QE will take it from here.  Very funny indeed.  Even the Fed, will no longer fight the Fed.  Bahahahahahahaha.  Thanks for the laugh this morning.

Mon, 03/28/2011 - 11:21 | 1108722 lieutenantjohnchard
lieutenantjohnchard's picture

hey i like that! even the fed won't fight the fed. trademark it, my man.

Mon, 03/28/2011 - 11:21 | 1108728 Spalding_Smailes
Spalding_Smailes's picture

Now its stealth QE ? So gold should not drop .....

Why is it only at 1,417 with all the new black swans that have flown into town and the dollar fall, its done nothing since Oct 20th, ..... ? But, but, everyone must know QE can't stop as you say, but it's not being priced in, why ?


You should do stand up at the funny farm ..... A modern day Richard Pryor routine .... 

Mon, 03/28/2011 - 11:45 | 1108839 LawsofPhysics
LawsofPhysics's picture

Gold will drop, some, only to correct relative to silver.  The innovators are indeed getting back in the game, but the up front costs for doing business remains high.  Margin compression big time.  Spinning paper on Wall Street does not create real value, period.

Mon, 03/28/2011 - 11:24 | 1108749 Harlequin001
Harlequin001's picture

Hey Spalding, don't walk into the light...

Mon, 03/28/2011 - 12:57 | 1109156 tmosley
tmosley's picture

Looks like you've got almost enough rope.  

How is the government going to continue operating with no more QE?  The Fed is buying 70% of treasury issuance.  Japan is down and out.  Where is the money going to come from?  The sky?

Mon, 03/28/2011 - 15:37 | 1109838 Rogerwilco
Rogerwilco's picture

All the clowns that think we are in a depression

Nope, no depression here...


The states conspired to make tax collections look worse than they really are.

Mon, 03/28/2011 - 11:06 | 1108635 topcallingtroll
topcallingtroll's picture

Yeah...I got burned out on doom and gloom too. Life is short. Spend your money and live it up. You only live once. Now back to my wife and our girlfriend. Do I have a cool wife or what!

Mon, 03/28/2011 - 11:11 | 1108661 overmedicatedun...
overmedicatedundersexed's picture

top how much air pressure in that blow up doll you call a girl friend?? lol

Mon, 03/28/2011 - 11:41 | 1108832 MachoMan
MachoMan's picture

she's pretty awesome until she figures out that she can fuck the girlfriend without you, talk all day about girl shit, have someone that really "understands" her emotions, AND get you to sponsor their lesbo love fest via divorce.  You'll come home one day and the only thing left will be a dildo suctioned to the floor where they fucked one last time before cleaning you out (and in their post dildo sex bliss forgot to take the dildo).

Mon, 03/28/2011 - 11:11 | 1108641 Boston
Boston's picture

Not necessarily.

As a big WFMI customer, I've noticed a couple of trends lately:

1. WFMI is now conducting weekly price cuts (managers' specials) on a rotating basket of items.  And the cuts are far more drastic than they were 2-5 years ago, when they rarely ran such sales.

2. When I and my friends shop there, we load up on the special stuff (low margin to WFMI) and barely touch the un-discounted items. 

So sales may be up (or holding steady), but I'd be shocked if margins don't get pressured over the next couple of quarters.



Mon, 03/28/2011 - 11:16 | 1108697 lieutenantjohnchard
lieutenantjohnchard's picture

wonder why schultz was lamenting the explosion in health care costs for sbux employees given the fact that the hermit poster known as robottrader from his 600 square feet dungeon apartment overlooking a paved paradise freeway in los angeles says that consumer demand for sbux coffee is inelastic. the catfish mouth rainbowtrouttrader known as robottrader oughta man up and call schultz and advise him to raise sbux coffee prices since the american counsumer is more than willing to pay up for their beloved sbux coffee.

with your world view you make jerome kerviel and nic leeson seem like the world's greatest traders.

Mon, 03/28/2011 - 11:42 | 1108831 Djirk
Djirk's picture

that is why OPEN is such a bargain at these prices /sarcasm

Mon, 03/28/2011 - 10:51 | 1108567 oogs66
oogs66's picture

Data can be at best described as mixed, and that's generous, there have been some key earnings warnings, and stocks still manage to ignore it all! 

Mon, 03/28/2011 - 10:54 | 1108573 alien-IQ
alien-IQ's picture

"A weak dollar is not good for us"

Seriously? Did they JUST NOW figure this out?

another article for my "What The Fuck" file...

Mon, 03/28/2011 - 10:53 | 1108574 dogismyth
dogismyth's picture

I'm long spirulina, yeast, potatoes, spam, pasta, propane and cheap vodka in plastic bottles.  I will be the fattest person in the USA when no one else can afford to eat.

Eat the rich!

Mon, 03/28/2011 - 14:02 | 1109473 blindfaith
blindfaith's picture

corn syrup...don't forget the corn syrup, can be American without lots ugh corn syrup.

Mon, 03/28/2011 - 11:03 | 1108578 Sudden Debt
Sudden Debt's picture

I'm pretty sure there will be a QE3.

1. Nobody is buying treasuries right now and rates would start to spike to fast if they didn't keep pumping money.

2. Second thing is that before we'll see a end on the QE Saga, we need to see hard austerity plans in the US.

And I don't see them.

3. Obama is still in power.

4. Bernanke still lives.

5. None of the bankers are in Jail yet.


We have a system that rewards bad people at the very top as well as a significant percent at the bottom. That lessens incentives for honest work.


QE untill the US backbone is broken. And when that happens, the once responsible will have moved out with their money.


Mon, 03/28/2011 - 11:04 | 1108615 buzzsaw99
buzzsaw99's picture

Price fixing in the bond market is a given. There are no markets anymore, there is only the bernank.

Mon, 03/28/2011 - 11:06 | 1108636 Sudden Debt
Sudden Debt's picture

Price fixing won't happen. Why would you place your money in US bonds where rates are fixed and risk it skyhigh when you can invest

you money in higher yielding bonds like.... Irish... or Portugese... or Japanese.... or Greek... .... ...



Mon, 03/28/2011 - 11:22 | 1108696 buzzsaw99
buzzsaw99's picture

Prices are set by the bernank even as i type this. That you are not a buyer at these levels does not change that fact.

Mon, 03/28/2011 - 11:14 | 1108690 TeamAmerica
TeamAmerica's picture

You blame Obama?   He has actually suggested raising taxes by an amount that would be meaningful to reducing America's deficit.  On the other side, our brave Republican Congress has toyed with meaningless spending cuts, failing to deliver even the meager $100B in immediate cuts they had promised.

Obama, Bush, think it really matters anymore?   The idiocracy is complete, and posing any individual as THE guy to blame just excuses the American people for their own general stupidity.  

Mon, 03/28/2011 - 11:23 | 1108740 Hansel
Hansel's picture

Obama extended Bush's tax cuts.  WTF are you talking about "he has actually suggested..."  Actions speak louder than words.

Mon, 03/28/2011 - 11:32 | 1108780 Mr Anderson
Mr Anderson's picture

"suggested" and "proposed" are two very seperate things.

Mon, 03/28/2011 - 11:52 | 1108884 TeamAmerica
TeamAmerica's picture

Agreed that he failed to raise taxes, but he did utter the words.   Republicans continue to talk about more tax cuts.   I am splitting hairs between dumb and dumber.

Mon, 03/28/2011 - 10:57 | 1108579 overmedicatedun...
overmedicatedundersexed's picture

trillions of FRN's and all I got was..

unemployment , high cost of living,  the elite bankers rubbing it in with billions in bonus money. a president who takes time off from the back nine to stumble into another war.

no justice no economy.."someone has got to go to jail"(tip of the hat national treasure)


Mon, 03/28/2011 - 11:03 | 1108604 LawsofPhysics
LawsofPhysics's picture

The opportunity to prosecute the fraud (on all levels) has passed (by at least 30 years).  This thing will be played out until the physical laws of supply/demand and market fundamentals come roaring back and starve out the weak (maybe another 30 years?).  Hedge accordingly.

Mon, 03/28/2011 - 10:58 | 1108580 Cdad
Cdad's picture

A rising cost of diesel fuel...that is the only thing you really NEED to it drives the cost of everything.  Pass through just ahead...into a weak and largely unemployed consumer.

Bullish! ...'cause you can always eat diesel fuel...right?

Mon, 03/28/2011 - 11:00 | 1108592 alien-IQ
alien-IQ's picture

you can't really eat diesel as a main's more of a dipping sauce for the i-pad entre...

Mon, 03/28/2011 - 11:06 | 1108625 Spalding_Smailes
Spalding_Smailes's picture

Most of the layoffs over the last 3 years were low wage earners. They did not spend money at Panera Bread, Macy's, Chipotle anyway. 

I heard the same pass through thoughts when China got blasted by inflation 6 months ago, what happened , Ben exported our inflation to all the peg whores ..... 


The USA at 80% is still a powerhouse. Everything takes time but every quarter things are getting better across the board.

Mon, 03/28/2011 - 11:10 | 1108648 topcallingtroll
topcallingtroll's picture

Peg whores. I like that. Those bitches are getting what they deserve.

Mon, 03/28/2011 - 11:10 | 1108649 LawsofPhysics
LawsofPhysics's picture

"Most of the layoffs over the last 3 years were low wage earner"---  Bullshit.  I know three chemical engineers and two research scientists that lost their jobs.  

Mon, 03/28/2011 - 21:26 | 1111102 Iam_Silverman
Iam_Silverman's picture

"I know three chemical engineers and two research scientists that lost their jobs."

Ahh, but the CEO, COO and CFO kept their jobs, and got a nice bonus too, I bet!  See, you just proved his point.

<sarc off/>

Mon, 03/28/2011 - 11:21 | 1108721 TeamAmerica
TeamAmerica's picture

Damn skippy Spalding - screw the filthy proletariat!  We should just build more prisons to house those unemployed scumbags.

But what are we gonna do about all those teachers getting laid off?   Those damn hippies probably did spend money at Panera etc. 

Mon, 03/28/2011 - 11:37 | 1108813 Larry Darrell
Larry Darrell's picture

No need to build more prisons.

The "for profit" prisons all over the country are starving for inmates to house.


Of course, you'll need to arrest more people to fill those empty cells.  And we know that making more arrests will be even easier now that cities and states are laying off police officers. /sarc

Mon, 03/28/2011 - 11:55 | 1108897 TeamAmerica
TeamAmerica's picture

Even better!   Putting the unemployed into the for-profit prisons is good for business!   They can hire the former teachers as guards.

No sympathy for laid-off cops here on ZH.  They are enforcers for TPTB and are to be shunned.  

And yes, /sarc for those who just can't buy a clue...

Mon, 03/28/2011 - 12:58 | 1109187 tmosley
tmosley's picture

We don't need more prisons.  Half the ones in Texas are empty.  Turns out the "private prison" meme was a bubble, and once again, the taxpayers are stuck with it.

Mon, 03/28/2011 - 11:20 | 1108731 homersimpson
homersimpson's picture

Looks like this clown took over HarryWanger's job.. pom poms and all.. If Spalding is a sequel to Harry, it'd be named "Dumber and Dumbest"..

Of course he/Robo/Leo/etc. conveniently forgets the Fed gov't/Fed burned trillions of cash of proppin' up the ponzi.. Better results my ass. It's more like lowering the bar since 2008..

Mon, 03/28/2011 - 11:46 | 1108851 SheepDog-One
SheepDog-One's picture

You now need a power trencher to even find the bar theyre hurdling over and calling 'Olympic athletic performance' daily.

Mon, 03/28/2011 - 11:23 | 1108742 Rogerwilco
Rogerwilco's picture

"The USA at 80% is still a powerhouse."

As in "'Tis but a scratch"? There is a place for optimism, even sunny optimism, but reality does have to enter the fray at some point. Absent ridiculous deficit spending and market manipulations, we're in a global depression.

What does the "powerhouse" look like at 60%?

Mon, 03/28/2011 - 11:32 | 1108790 Harlequin001
Harlequin001's picture

The USA at 80% is still a powerhouse.

Please explain...

Mon, 03/28/2011 - 11:44 | 1108840 Spalding_Smailes
Spalding_Smailes's picture

The GDP output of the USA 80% still dwarfs every other country. People cut back yes, maybe not eating out for every meal, maybe not going out to the movies every week, but the overall economy has been picking up over the last 8 quarters. 

This is not just driven by Pomo and QE, things are getting better ... Check out every fortune 500 company, sales are picking up around the globe and in the USA.

Mon, 03/28/2011 - 12:53 | 1108854 Harlequin001
Harlequin001's picture

Yes, but the debt has increased, which means that it is not sustainable...

GDP includes a PCE component based on debt servicing costs which rises as people become more indebted. As interest rates begin to rise your GDP will increase but that is not a good thing.

Mon, 03/28/2011 - 11:50 | 1108871 LawsofPhysics
LawsofPhysics's picture

"This is not just driven by Pomo and QE"

So END IT.  I know what the books of my business look like Spalding.  The cost of my input materials and energy are not getting cheaper.  Repeat after me, "margin compression", there you go, I knew you could say it.

Mon, 03/28/2011 - 12:04 | 1108927 Spalding_Smailes
Spalding_Smailes's picture

I'm buying diesel at $4.05 getting 10 miles per gallon in my truck but I also sell printing on the side banner, t-shirts, digital printing ect ..... 

I'm helping a friend paint his house for extra cash over the next month, because my hazmat insurance for my truck will go through the roof after I get my cdl authority.

Everyone must set goals and do whatever is needed to meet those goals. Tons of lazy fucking people in the USA, thats great for me, I'll do anything ....

Mon, 03/28/2011 - 13:03 | 1109202 tmosley
tmosley's picture

What the fuck do you need extra cash for, driver?  I thought you were pulling down $1500 a week, plus $500 hotshots on the side?

Surely you weren't lying.

Mon, 03/28/2011 - 13:16 | 1109248 Infinite QE
Infinite QE's picture

Spalding is amateur hour. Selling printed shit to raise cash? LOL! That is the funniest thing I've read yet! Players who are making millions trading needing to be KinkosLite!

Mon, 03/28/2011 - 14:35 | 1109624 andybev01
andybev01's picture

"Hi this is Bob; what's the model of the office printer again."

I knew I recognized Spauldings M.O.

Mon, 03/28/2011 - 11:49 | 1108873 Harlequin001
Harlequin001's picture

Spalding: 'The GDP output of the USA 80% still dwarfs every other country.'

Why is that when the US is a service economy? The dollar is way to strong and I think we all know that, so if it was properly devalued then it would no longer dwarf every other country as it should not.

Mon, 03/28/2011 - 10:58 | 1108584 LawsofPhysics
LawsofPhysics's picture

Bahahahahaha! Damn that finite planet and its finite resources. Yet another opportunity for the innovators who survived the scheduled downturn.

Hedge accordingly.

Mon, 03/28/2011 - 11:03 | 1108612 Sudden Debt
Sudden Debt's picture





Mon, 03/28/2011 - 11:11 | 1108653 plocequ1
plocequ1's picture

Fuck that.. I want a toaster

Mon, 03/28/2011 - 11:01 | 1108602 topcallingtroll
topcallingtroll's picture

No one said this rebalancing would be pain free, but you will have to.admit the pain as indicated by the diffusion index is mild, and most people who want a job have one. The economy is muddling thru. Long live America!

Mon, 03/28/2011 - 11:25 | 1108751 alien-IQ
alien-IQ's picture

"most people who want a job have one"


Mankind has yet to invent an instrument capable of measuring the stupidity of that comment.

Mon, 03/28/2011 - 11:14 | 1108694 russwinter
Mon, 03/28/2011 - 11:46 | 1108861 SheepDog-One
SheepDog-One's picture

The most immediate market dangers is whats coming that no one at all saw coming. It will all plunge on a big uptick.

Mon, 03/28/2011 - 11:16 | 1108698 baby_BLYTHE
baby_BLYTHE's picture

Stock Market is not hearing the news as it continues to scream higher!

So much for that "Worst Recession since the Great Depression".

Not much further to go until the market fully recovery to pre-collapse highs!

When is the collapse cuming?

Mon, 03/28/2011 - 11:21 | 1108733 alien-IQ
alien-IQ's picture

the stock market does not reflect the economic health of the nation but rather the efficiency of the transfer of wealth...and in that regard, it's mission accomplished. As far as the "when is the collapse coming" question...You're looking at it.

Mon, 03/28/2011 - 11:31 | 1108771 baby_BLYTHE
baby_BLYTHE's picture

"Collapse"= Loss of 8 million jobs between 2007- End of 2009.

Mon, 03/28/2011 - 11:27 | 1108758 Quinvarius
Quinvarius's picture

I like how they blame ethanol and ethanol subsidies for high grain prices.  LOL.

It should be further noted that ethanol producers don't get federal subsidies.  The ethanol mixers (oil refiners) get them.

Mon, 03/28/2011 - 11:31 | 1108786 sbenard
sbenard's picture

I have said it before, and I repeat:

News is irrelevant. We have printed prosperity now!

Mon, 03/28/2011 - 11:52 | 1108879 DarkMath
DarkMath's picture

To all those Jack Wagons who don't think there will be a QE3, don't worry there will be.

No matter whether QE3 is announced or not, if the Fed doesn't SHRINK their balance sheet just the money from maturing bonds they bought will be enough (700 billion) to act as a de facto QE to infinity.!.html


Personally I think there will be a QE3 because things are starting to look bad since the Japanese Earthquake. But it doesn't matter. Either way the Fed won't SHRINK its balance sheet and that is enough to pump the stock market through perpetual POMOs and jack up Commodities.

The Fed balance sheet won't SHRINK until the Fed is disbanded due to rampant inflation in about 10 years.


Mon, 03/28/2011 - 12:10 | 1108916 baby_BLYTHE
baby_BLYTHE's picture

Start the printing presses and start handing out the money, seriously.

The corporates and TBTF banks are already flush with cash.

The American middle-class is what is broke, high in debt and jobless.

Let's get the party started! (Granted it would be short lived).

The American people would rather 'take it' straight to the face rather than from the rear from a bagheaded banker and/or politican

Mon, 03/28/2011 - 17:05 | 1110155 LawsofPhysics
LawsofPhysics's picture

What?  No one is going to build on the "take it straight to the face" comment?

Mon, 03/28/2011 - 18:54 | 1110556 baby_BLYTHE
baby_BLYTHE's picture

they enjoy the rape


Mon, 03/28/2011 - 11:51 | 1108886 JLegs
JLegs's picture

I am new to all this and a bit confused. But, does reality matter any more?  Despite poor economic data, a nuclear meltdown and a new war, the S&P keeps climbing and we are barraged with feel-good propaganda.  Can the charade perpetuate - or will an event more powerful than the Chairman force the market to confront reality?

Mon, 03/28/2011 - 21:30 | 1111111 Iam_Silverman
Iam_Silverman's picture

"or will an event more powerful than the Chairman force the market to confront reality?"

Even scarier, what if this is the new reality?

Mon, 03/28/2011 - 12:15 | 1108983 overmedicatedun...
overmedicatedundersexed's picture

The mulatto swan, that may just take us all down..this is getting more press and a guy like Trump has loads to lose pressing this issue.

enjoy the following..minds that are open.

one eyed man in land of the blind.

Mon, 03/28/2011 - 12:45 | 1109117 Dick Darlington
Dick Darlington's picture
03-28 12:35: Barclays lowers Q1 EPS estimate for Morgan Stanley (MS) by USD 0.20 from USD 0.69 03-28 12:34: Barclays lowers Q1 EPS estimate for Goldman Sachs (GS) by USD 0.25 from USD 3.76 And soon it's that time of the quarter again when we all can celebrate "better than expected" results. Every quarter the same trick and the mainstream media goes nuts when they cheer the beats.
Mon, 03/28/2011 - 12:58 | 1109185 Ned Zeppelin
Ned Zeppelin's picture

BTFD until further notice.  All negative news will be ignored.

Mon, 03/28/2011 - 14:24 | 1109572 Carnegie_IB
Carnegie_IB's picture

agreed to BTFD, GS looks like a buying opp. I imagine, even GS will eat their own and short hell out of their own issue to book profitable trading topline sales.

So let's coin. SELL the F#%ing HIGH, [STFH]


Mon, 03/28/2011 - 15:13 | 1109747 DR
DR's picture

The nation's wealthiest 5% of households account for about 37% of consumer spending, according to Moody's Analytics.

Hampton Street got bailed out-Main Street didn't.

Fed sanctioned stock wealth effect can go a long way...

Mon, 03/28/2011 - 21:24 | 1111087 Iam_Silverman
Iam_Silverman's picture

"The supply of cattle is limited. The cost of grain for livestock is unusually high because of high corn prices, partly attributable  to ethanol subsidies. All of our raw material costs are at record highs. The cost of diesel also hurts us."

Wow, I am seeing all of this first hand.  Our feed costs have doubled over the last six months.  We are seeing good prices for cattle at the sale barn.  This drives a spiral dynamic.  Since it costs so much to feed calves, they are all going to the scales now - even the replacement heifers.  In fact, even some of the momma cows may go too.  What does this cause?  A shrinkage in the cow herd of the U.S.  This means that calves will be even more scarce come next spring, and will drive the price up even higher, and some more medium age cows will go (if it still costs as much to feed).  This puts the price of live beef in a feedback loop that is hard to squelch.

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