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Durable Goods Broadly Miss Expectations, Push 10 Year To 2.44%, Lowest Since January 2009
Capital goods orders widely miss expectation, coming in at +0.3%, on a consensus of +2.8%, with the previous -1.2% drop revised to just -0.1%. Durable goods ex transportation came in at -3.8%, on expectations of 0.5% (previous -0.9% revised to 0.2%). And the kicker - non-defense capital goods ex. aircraft came in at -8.0% M/M versus expectations of 0.4% (with the previous print of 0.2% revised far higher to 3.6%). The 10 Year has hit 2.439% on the news. Goldman is pretty laconic: "This report is weak and much worse than expected." Pretty much game over for the reflation scenario. Check to you Bernanke - the only option left is the nuclear one.
Goldman's summary on the results:
A Slump Outside Aircraft
BOTTOM LINE: This report is weak and much worse than expected. Orders were roughly flat in July, but only because of a large increase in orders for civilian aircraft. Elsewhere, demand for hard goods fell sharply, with capital goods orders erasing most of the prior two months' gains. Upward revisions to data for the prior month take a bit of the sting out of this report, and push our estimate for the Q2 GDP revision to 1.2% from 1.1% previously.
US-MAP
Durable goods orders -12 (4, -3).KEY NUMBERS:
Durable goods orders +0.3% in July (mom, +8.6% yoy) vs. GS +4%, median forecast +3.0%.MAIN POINTS:
1. Orders for durable goods edged up 0.3% in July, but this masked slumps in many sectors as bookings for civilian aircraft rose sharply. We tend to look through the aircraft orders because they are lumpy and because lead times to production are much longer than for most other durable goods. In other types of capital goods, orders fell 8%, wiping out most of the gains of the preceding two months.2. One moderating factor in this report was an upward revision in the data for June, to -0.1% from -1.2%. This included a mark-up of shipments of capital goods, which restores 0.1 point to our estimate for Friday's revision to the second-quarter growth rate. We now expect that figure to be revised to a 1.2% annualized rate of growth, versus 1.1% previously. However, on balance, this report is yet another sign that the US economy is losing momentum as it moves into the second half of 2010.
Some highlights from the release:
Computers and electronic products, down following four consecutive monthly increases, had the largest decrease, $0.5 billion or 0.4 percent to $121.1 billion.
Inventories continue to grow:
Inventories of manufactured durable goods in July, up seven consecutive months, increased $1.8 billion or 0.6 percent to $311.2 billion. This followed a 1.3 percent June increase.
Machinery, up five consecutive months, had the largest increase, $0.9 billion or 1.9 percent to $51.4 billion.
Capital goods:
Nondefense new orders for capital goods in July decreased $1.8 billion or 2.8 percent to $64.1 billion. Shipments increased $0.9 billion or 1.4 percent to $64.7 billion. Unfilled orders decreased $0.6 billion or 0.1 percent to $487.2 billion. Inventories increased $1.0 billion or 0.8 percent to $129.8 billion.
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Time to buy a Rolex Daytona on the cheap?
Shoot, soon you'll actually be able to buy Daytona on the cheap.
Corexit Swamp, Baby!
Hell, soon you'll just be able to jump in a Ferrari Daytona and drive off, if you can find some gas! Mad Max, bitchez
Rolex are easy, not really rare and not good for resale imho unless you want to make pennies per se. Come join the real game and play rare and important Patek Philippe timepieces. Have NEVER lost on a buy/sell deal on a proper vintage collectable Patek.
Added bonus, wear it as you wish and can be easily restored to like new by the factory and virtually no one in the general public really knows what it is. Muggers love Rolex bling yet are generally clueless on Pateks.
Not so for some Rolexes such as the Valjoux and Zenith Daytonas or the classic Milgauss, or any Comex Sub.
Ok, true and agree. Still, i felt he was talking modern production... Your comment is well valid of course. Still, Pateks are a mainstay and collectors are very able to pay accordingly. If i were to ride the subway, which in fact happens when in various cities, a Patek with deployant clasp would be my first choice to avoid improper attention.
Man, you are a Patek snob (mind you, Patek is my no1 favorite brand though). I have got you figured out: Rolex does not make any complicated movements, therefore they are not worthy. Jesus m#t#er #ucking Christ, guys like you cannot admit that for robustness and practicality nothing comes close to a non-chronograph Rolex.
The new 2010 Subbie with ceramic bezel? It makes me puke. Why would Rolex copy Chanel? The real Rolex brand ended in 2009 when the last of the old style Sea-Dwellers left the retailers.
I will stick with my IWCs. Rolex are bourgeois......lol.
Gold up $8.40 -- that's my durable goods.
This has seemed apropos for a while now:
Revise bitchez!
Spin, bitchez!!
From Yahoo:
"Durable Goods Orders Rise by 0.03%"
No mention of the big miss.
http://finance.yahoo.com/news/Durable-goods-orders-rise-03-apf-1931753116.html?x=0&sec=topStories&pos=1&asset=&ccode=
Yahoo never calls me the "big miss".
"Check to you Bernanke - the only option left is the nuclear one."
Aieee! How'd he get the launchcodes?!!!1!
Oh so consumers are not on their 4th and 5th Vizios?
Banks not letting 'em get another... But still the PPT seems to think Visa is a buy... Bastard won't fall...
That is one of my Puts currently giving me heartburn. I still have faith it will fall, and even further than I thought.
IMO that's part of the genius of the Hindenburg omen indicator - counting new highs as well as new lows. I'm not aware of any data on what happens to stocks in those 2 categories when the collapse does come, but the obvious guess would be the outperformers fall harder.
Good luck.
Look at Netflix.That stock will eventually go to zero. They are only a middleman an the moment Apple decides they want those streaming rental profits they will have. They have alll the consumer friendly interface devices and the connections to acquire hard to get licensing.
They will go the way of blockbuster
One middleman won't work so another will?
The big number is in capital goods. So much for the "business is retooling and thus the GDP can't shrink" crowd. July is a prime month for capital expenditures and if those orders are down, then Q3/Q4 are going to Monica.
Nice one. Took me a second.
They're going to get cigars stuffed in their cooters?
i went into best buy a couple weeks ago to help buy my parents a t.v. there was no one in the store, just a giant wall of flat screen tvs more then a hundred feet long and no customers at all. it was the middle of the day, on a weekend.
I see that here in the UK as well - a prosperous part of the UK, in fact.
Comet, PC World, you name it - Saturday, 2pm, usually the busiest part of the week, and it's half empty.
The scariest part of this is when you try to warn your friends about the upcoming scenario, they refuse to listen. Most people don't want the news, they only want to be told "it will be ok".
well they must know its not so ok, because they aren't going out and buying new flat screen tvs.
People here in London are living day to day.
I know smart, aware young people who dont watch the news any more, read papers or relevant blogs. No more bad news please. In the meantime, no big purchases, even huge discounts in summer sales. House sale volumes are essentially zero - only death and divorce cause property to come to market.
However people still believe things will improve in time - maybe because the alternative is so bad.They have no evidence for this, its just hope. When I tell them I trade for a living, they still ask - hey, what should I buy? They get confused when I say 'puts'...
Its the calm before the storm, I fear, when their hope is dashed.
Brilliant comment and insight. Try explaining why it is possible to 'buy' and 'sell', and still make money.
barking, the reason why average Joe is not buying has nothing to do with the fact that things are not OK. It is the fact they have no money.
If we needed it, we'd already have it. Those that run the stores know that as well.
Check out empty golf courses on beautifully weathered Saturday afternoons.
Concur. Over the last year to 18 months, I have had ZERO problems walking on local golf courses here in So Cal and have had few 5.5+ hour rounds.
During the bubble years, if I was lucky enough to walk on, it was a guaranteed 6 hour round at some places.
Hell, I played a local muni here in 3.5 hours a few weeks ago.
Reetoolin, I'll give ya retoolin come here ya knucklehead!
Looking at discount sites like slickdeals.net, there used to be a wide variety of deals to be had. Over the past few months, the vast majority of bargains have all been electronics-related.
I'd wondered why; now, I know.
Jinx! We posted at the same time. Christmas season is going to be an electronics consumer's dream, if there are any electronics consumers left.
Still no baby? I have the towels ready....push, PUSH!
Ah, our first Zerohedge birthing. Makes me proud.
I'm still stuck on her name though...
LOL! I still have about two weeks to go officially; I'm just hoping she finishes up a little early. It's August and hot.
We decided on Jane, btw.
Jane ... very nice! You gotta like a name because, well, you are going to be saying it a great deal for the rest of your life!
How about her middle name though -- perhaps we can squeek a suggestion in there?
Jane Marla ?
Sounds ok to me! Hahahaha....
@-Michelle-
I didn't know you were expecting. Always love your posts and love "Jane." Will be praying for you and the baby....
Thank you!
We demand video with 24 hours.
The name can wait until your rustle the little darling down to your local town hall to have her cute butt stamped as wage slave. You do this by registering the birth like you register the model and serial numbers of the TV you just bought with the manufacture. Only in this case the state's children are being registered with the state, thus begins their life long servitude.
But other than that Michelle, we're all "pulling" for you. :>)
With each child we've had, I've dreaded the trip to the office of Vital Statistics more and more. I suppose it shouldn't matter, considering my husband is military. They already know everything there is to know about us. There's just something about having to walk in to that room and fill out the paperwork...
I've found the average man doesn't give this process a second thought. It's just what you do. But woman seem to be more aware. Or should I say polarized.
Sorry for the sterotyping but from what I've seen, read and actually hear when I ask people these questions (people think I'm strange, I wonder why?) woman either see this process as a way of making sure their children are safely within the bosom of the state or they intuitively understand that by doing so, they are tying a bind they (or their children later) might not be able to unwind.
Well, you are strange CD. Of course so is just about eveyone who reads and writes this blog.
Mephisto was spot on with the observation, "However people still believe things will improve in time - maybe because the alternative is so bad.They have no evidence for this, its just hope. When I tell them I trade for a living, they still ask - hey, what should I buy? They get confused when I say 'puts'..."
Brilliant, if you ask me.
I like Jane too. Very nice name.
I am seeing heavy pricing pressure in consumer electronics. Laptops, netbooks, LCD HDTV's. I'm not pulling the trigger, though. These prices will drop further. I'm thinking the Dell Mini line will see prices from $99 to $150 later this Fall or for a Christmas promotional. You could have already picked up a Mini 10 for $195 last week. It's deflation. And yes, I know food is still too high, but we can thank the FRB for that. They have only been successful at reflating the basic goods prices, but it won't last forever.
My parents cabin was broken into last weekend. They took some tools, but left the TV, the DVD player, good quality bookshelf stereo and the computer.
Buy a TV? Shit people won't even steal them anymore. Kind of ironic that we have reached a point where tools are more valuable to a thief than electronics.
If it's a lcd tv they are incapable of living longer than 3 years unless you never turn them on so what's the point.
DONT WORRY! New 3D TV's are hittin the shelves and surely everyones lining up for this 'nevermind no food, must-buy' event with shiny new credit cards Im sure! Retardnation ON!
You can really tell they panicked there. Usually, there's just enough delay between introducing new technologies to allow the aspirationals to hit each product. Plasma to LCD, then the new HD sets and so forth. They practically just came out with the LED TVs and the new internet TVs and now they're already pushing out 3D.
@-Michelle-
Brilliant observation. The pace of innovation is only reinforcing the consumer's deflationary instinct. Why buy something today when you could have something better and a relatively cheaper price tomorrow? Not saying 3D is better than LED (who wants to ear the glasses?), but you get the idea.
And just to emphasize that point, Toshiba announced a new glasses-free TV:
http://www.breitbart.com/article.php?id=CNG.a4beb92cb77f8784d5ff41116c57...
3d tv messes with your left brain right brain connection. So my guess is they can tweak the signals or bury signals like subliminal messages in it much easier. Because like you can put half the signal on one half of the carrier and half on the other so analyzing the carrier will be more difficult.
It's just too suspcious. 3d is like a fucking monster child that society just won't adopt but the won't stop pushing it.
1952
http://assets.nydailynews.com/img/2009/03/29/amd_3d_movie.jpg
Bought a 3D converter for my old cr TV.....now all I see is Debt, Deflation and Depression..;>)
+3D
Take the 30% out of auto and light truck manufacturing for fleet/government sales and that number is pretty anemic. I guess the government "willing" business to invest is not going to work either so they'll just have to take over everything so they can run it better and stop these bad reports from coming out.
Could be worse. The number could have been 0.29% instead.
Time to rally 10%
DOW 10,000 hats OFF!
get to gold and silver quick.
Quick is right. Silver's jumping.
I've noticed the cheerleaders really do not like it when you tell it like it is about this "bull market" economy....
10 things the Bulls Don't Want you to Hear:
1. The Market and the economy are in deep Kim-Chee
Until they accept the reality of the message from the credit markets, the economists who promote "Happy Days are Here again" and other idiocy on Bubblevision, small investors who do not actually do their own homework and read beyond the headlines will get smoked. But since there are fewer of them, nobody will miss them anyways.2. The Economy didn't really recover all that much, we just made it look good on the Tee-Vee
3. Billions are pouring into bonds so you suckers can get stuck with worthless equities
4. Pension funds are insolvent nationwide and YOU'LL be bailing them out
5. Those tents on the side of the road are happy campers on vacation, not the homeless
6. Foreclosures aren't increasing because the banks or states have put moratoriums thanks to all the inventory already backed up into the system; plus there is a tent shortage.
7. The housing data is far worse than the headline numbers (word on the street is that 49% of contracts accepted on new and existing homes; 1/3 of all existing home sales are still distressed sales)
8. HFT hasn't gone away, it's just lurking and waiting to leave the retail trader as the bagholder.
9. Ben Bernanke doesn't have a damned clue.
10. Leverage can be fun but de-leveraging is a bitch and she's in charge now.
The last few mornings I have woken up to the sound of a dirge coming from my radio, which is tuned to an economics program. It's sounding a lot more like the end this week than it has at least in a couple of years. Too be honest, it sounds a lot worse now than it did then because those in power sound ever more clueless. I mean, now they are building half billion dollar schools in bankrupt California, and New York is arguing over whether proposed skyscrapers are ugly without even mentioning the fact that there is a huge overabundance of office space in New York.
I can feel it in the office as well. There are two sides to our research lab. One is controlled by a business, which I work on, and the other is academic. The business side is funded via codevelopment agreements with parties interested in lisencing our technologies, while the academic side is funded by grants. Now, the technology we have developed is truly amazing, and is certainly worthy of being funded by any and all available resources on both sides, but we are suddenly diluged with funds from granting agencies even as our business side starves due to the depression. The requirements for these grants are getting weaker and weaker. It used to be that we would submit 20-30 pages of budgets, proposed work, background information, and other documentation, but we just got funding on a grant that was TWO PAGES LONG, with the entirety of the work to be done proposed in two paragraphs. This is not a change in our writing style, but rather a change that is being crammed down from above at all the granting agencies. Even the NIH has cut total length of any grant application to 10 pages, and they seem to be very lose with funding. I was talking about this with my colleagues on the academic side when it suddenly struck me that this was all money that was stolen either via taxation or debasement. The money we got is probably the best money they ever spent, as we have already done the work, and showed that the drug we developed is able to kill 100% of prostate and prostate cancer epithelial cells, and works after metastasis with no effect on bystander cells (we will use the money to test the drug in mice), but I have seen the vast hoards of federally funded labs that produce NOTHING, and do so at enormous cost (and having had funding stolen by those labs in the past).
The fact that we are now getting fundng for all of these projects initially seemed to be because people were finally "getting it", but now I'm not so sure. How many worthless projects are being fully funded by debased dollars? After my realization, I felt sick, and I still do. *Sigh*
I also see the shorter reports as a way to save money - shorter reports take fewer labor hours and the less paperwork less storage costs too. There are probably fewer people doing the job so they need to cram more crap into less space just to maintain some work flow.
It's all still sickening though.
Yours is an interesting perspective. I'm seeing the opposite of what you describe, however. I design construction plans and write bid documents, and I've seen a flood of "stimulus" money from the federal government to fund these projects at the local government level. The new contract requirements in order to qualify for federal funding are incredible. Literally unbelievable. What used to be a roughly 30 or 35 page contract document has become 70 to 80 pages. There are so many new requirements that they simply cannot be tracked. How many Minority- and Women-owned contractors did you contact in order to put this contract out to bid? What percentage are each of those of the whole? What is the difference off the average for each line item on the bid per each of the above? And the entire bid amount? Make sure to award the bid to one of the above provided the DBE is within X percentage of the average bid total. How many DBE sub-contractors were contacted by the winning contractor to perform work? What percentage is that of the whole? How much money was spent on sub-contactors as a percentage of the whole? What percentage of that percentage was spent on DBE sub-contractors?
And that's just the section dealing with Disadvantaged Business Enterprises.
At any rate, my two cents. If I don't vent every now and then I'm gonna lose my shit.
I was hoping for 6 more months of prep time, now I think that is optimistic. This news on top of reading Harvey Organ's blog last night. Good night Mr. Havenstein, oops I mean Bernanke.
I'm with you. In January I was hoping for eighteen months. Now I appreciate every week.
On the bright side, after counting up jars in the pantry, and bags in the freezer, this years garden has provided enough to make it to next years. Gonna butcher my pig next week, half a beef being cut and wrapped as we speak and hunting season is so close I can smell it.
Little House on the Prairie Bitchez! Bwa Ha HA hahah!
Oddly, prices for ammunition,PMs, nicely-appointed minuteman silos and freeze-dried food have appeared to hold up well. Very odd....
If you look at ammo prices, my lead is outperforming any of my other metals.
Long JHP has been one of my better trades as well. Dinty Moore beef stew Oct. calls will probably do ok too.
If there is a Hormel after October.
Input costs bitchez!
Hormel gives me mustard gas - not good in the silo!
Gold @ 1242. JPM precious metals division will have a busy day on their hands.
Vitaliy Katsenelson on Japan, the Land of the Rising Debt
Jeremy Siegel is shitting his knickers! Bring on the CRASH of 2010!
Never overestimate the replacement value of equities within a deflationary collapse...
CNBC has to get rid of that annoying British wanker.
From Bloomberg:
Bookings increased 0.3 percent, compared with the 3 percent median estimate of 75 economists surveyed by Bloomberg News, figures from the Commerce Department showed today in Washington. Excluding transportation equipment, demand unexpectedly fell.
Economists’ estimates in the Bloomberg survey ranged from gains of 1.2 percent to 6.8 percent.
Once again, the vaunted economists (75 here) are all way over the top on their estimates. Stock analysts and weathermen have to love these guys -- they make them look good...
Ok, so they prop it up just enough (-4 handles) to "wait" for a surprise new homes number. Come on, what gives? Oh, yes, let's wait for GDP Friday. Then, if that's bad, let's wait for retail sales.......UGRRRRRRRR! Where's the 1050 support geeks?
Ouch. 276k, -12.4% from last month's revised number.
Ooo - that's gonna leave a mark.
PPT givin-er all she's got, though. Billions of FRNs down the black hole.
Oh well, it's only "money".
I'm sure someone will be by soon to tell us how this is further proof that "the stimulus worked" or that "all is going according to plan", etc.
But just look at that nice bounce-back off the opening sell-off. Seems pretty obvious the FedCo anti-Plunge Team has been told to defend 10K DOW and 1050 S&P at literally any cost.
The printers must be getting jammed! It's under both.
Yep, there they go. If memory serves 1028 is the next resistance on the S&P - after that its 880 and (cue dramatic music) 666.
Wheeeeeeeeeeeeeeeeeeeeeee!
I don't trade but I don't think there's any way they hold 10K. This is the crash you've been looking for...
Heh - me neither. I'm just a humble over-educated Engineer. But numbers? Statistics? Trend analysis? Analytics? Yeah, I do know a little about those.
Watching from the stands is about as close to this crazy-town as I ever want to be.
Agreed, absolutely. I have the popcorn handy.
PLS here. Been thinking about going for my PE but I'd definitely have to take some remedial Statics courses. Ugh. On the bright side, at least people like us will be in high demand once the burning and looting slows down some. Someone's gotta help rebuild. Of course, that's assuming we don't wake up on the other side of all this in a crushing, statist tyranny.
I don't trade but I don't think there's any way they hold 10K.
Rofl, hence my lack of trading...
Commence another round of Q3 GDP revisions.
The 'trend is yer friend'....the 30-Year Bond:
http://4.bp.blogspot.com/_Re9-fle5IRM/TGp60s_9yFI/AAAAAAAAGtc/zkmOXhwQNw...
...... i see yer walking that fine line(deflation scare).
Excellent. My purchasing of appliances finally popped the little percentage into positive terriotory.
Now to watch the electric bill dive.
If Energy Star was a stock, I would bought some by now.
Last month's revisions sort of cancel out the bad from this report.
Thanks for such a great post and the review, I am totally impressed! Keep stuff like this coming!...
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