This page has been archived and commenting is disabled.
ECRI Leading Indicator Plunges Deeper Into Double Dip Territory As Stocks Turn Green
The ECRI Leading Indicator has just moved
further into certain recession territory, hitting -10.7 for the most
recent week (the previous revised number is -10.5). The market goes
green on the news, as the Liberty 33 traders have done their job for the day and are off to the Hamptons. And what is so odd about the market reaction one may ask - bad news are as always priced in,
as the apocalypse is nothing that a little money printing can't fix,
while minimal upside surprises (soon to be revised far lower) are
sufficient to move the market higher by over 100 points intraday.
Hopefully the HFT operators unionize and go on strike soon in demanding
greater pay, and get the Greek trucker treatment as a result, because
this market is not even a joke anymore.
»
- 16785 reads
- Printer-friendly version
- Send to friend
- advertisements -
Time will tell.
Wow. How insightful.
duh......reality is a lagging indicator.
@lizzy36
Succinct and trenchant analysis.
At the Fed the our Motto is;
Friends don't let friends loose money.
Short ECRI, long S&P, trade of the year
Man, today really takes the cake. I'm actually a bit scared that they are so desperate that they (obviously) have no choice but to ramrod equities higher...
Why do I get the feeling something god-fucking-awful is about to happen...
This is really really really beyond-the-pale now...
Boilermaker what sticks in my mind is Zbig at the CFR meeting a couple months ago saying its all imploding for the elite unless there are massive 'terror attacks' to get the insolent non-consumin sheeple back in line...now I dont think that would even help them at this point but clearly theyre desperate.
Reposted from another thread -
I typically stay quiet on days like this because I am very interested in how the ZH crew interprets the data - and I have nothing of substance to add.
However, I can tell you that a portion of our money is managed by a HF that is widely respected and has been very adept at maneuvering through bull, and especially bear markets.
Their quarterly conference call was very bearish and mirrored much of what ZH sources are saying. From a macro perspective especially. Basically, this last call confirmed much of what I have been reading here lately.
EDIT: A little more perspective (not my words/paraphrasing) - "The ramp may very well continue, but things will most likely not end well." So it's a patience game. But I guess that's easy to say when you are up a multiple of 18 over the last 11 years. Unfortunately, I have not been with them that long.
Rally Monkey #fail
http://www.youtube.com/watch?v=bga4vLTOJ4U
Lowest grade porn stars are ramping today.
Slamming the cash on the counter, "I'm out !".
LOL
http://www.youtube.com/watch?v=CXNXlEERkXc @ minute 1.15
I do like a good bounce ;)
I love the Ukraine!
I must know who this girl is and where this photo came from!
Watching the Ukrainian mail order bride put her clothes back on is FAR more entertaining and worthwhile than watching this snakepit of the Great Fallen US stawk markets! The Golden Goose is dead people, retail investor is long gone, all confidence destroyed. So while assclowns like Leo talk about the next big boom economic upswing, I put my prayers into his total demise one morning very soon!
dayum, you can get one of those in the mail? maybe the UPS man would actually get the package all the way to my front door if I ordered one, no, two of those.
ummm, milkshake for lunch.
Gaps always get filled...
Hmmm perhaps, and pumps always get dumped.
Yes, Once again the market is green and once again we get to see just how useful Photoshop is at making pretty charts. Is there any way to animate these charts so I can enhance my buzz?
Scroll up for a buzz.
"We are in a compressive deflationary contraction, a.k.a. the long emergency. This is not a cyclical recession. It's the end of one thing and the beginning of another thing, another phase of history in which people will have to learn to live differently or perish."
-James Howard Kunstler from: "What is It?"
http://www.kunstler.com/blog/2010/07/what-is-it.html
They are just offloading their long positions. They need CNBS to do the dirty job of sucking in the retail players to buy.
Give Bernanke extra sexy-time with rubber fist!
Numbers all lovingly calculated using the new economics type math that one must have a PHD to comprehend. For example; old syle- phi r squared equals the area of a circle. New style- pie are not squared, pie are rounded, cake are squared equals all is well and under control.
QE2 bitches!
I must admit that Tyler is biased to the down side reporting angle. When Baltic Dry stopped dropping - no mention, etc. However, why are you all surprised to see that the PPT still have the market under control? Follow the money.
I have to agree with you on that, Commander. I love reading this site but sometimes it seems a bit sensational - reporting "imminent wars" and "imminent volcano eruptions", etc.
Most of the time, it's chock full of great info that is difficult to track down elsewhere but the bias does hurt its credibility a bit. I felt the same with the BDI, once it started rising, not a mention here. When it falls, it's somehow "enormous news".
Although the BDI index is a measure of economic activity, it may be a false positive due to seasonal variations. The BDI was going up in May but SPX kept going down. One cannot cherry pick. It is pretty obvious that things are bad when the Fed is talking about QE2. A better indicator to where we are headed would be corporate bond yields and the 5 and 10 year treasury bonds. It is obvious that the only thing keeping us up at these levels are deficit spending. Take that away and it will crater....the scary thing is that the govt cannot keep at it for much longer they have already shot their wads with QE1.0 and TARP. If QE2 comes along watch people flee the USD. Once that occurs it is checkmate.
Concur
As ZH observed yesterday, it's the rate of change in the equities that's speeding up. The daily average is hanging around, but the candles are getting bigger. Uncertainty certainly abounds.
But as Mole on evilspeculator.com always cautions us, this market is about throwing people off the rollercoaster, not getting you to your planned destination in an orderly fashion.
as mentioned yesterday the new meme will be that big multinational usa business is being geared toward 150 million chinese developing middle class (and the increasing uber rich) rather than the ever shrinking 40 million usa middle class.
you might begin to see the numbers reflect only growth with respect to china and asia trade. in other words, tptb (the top 10%) will throw the usa middle class under the bus as hopeless.
i see a future (we might already be there) where the beltway and east coast (so called) elite simply divorce themselves from the rest of the country, and the inconvenient numbers.
You mean the Chinese middle class that is about to lose all of its accumulated capital when those 2nd and 3rd apartments they bought (which sit empty) lose half their value?
i didn't say i agreed with the elite posturing. i simply proposed what i thought the meme might be. also, you forgot to remind me about the empty chinese cities, the real estate overbuild, the pollution, the low wages, the commie statistical lies etc etc ....come on man. if you want to disagree do it right.
but that meme is really tiresome :
FYI
Total consumer spending of chinese middle class = $1.5 trillion
Total consumer spending of American and European middle class = $15 trillion
Okay?
you're no more tired of the china meme than i am of the bs perpetrated on the average person in the usa by the beltway, east coast and ruling class. at this point if you can't see that the ruling class in the usa doesn't give a hoot about flyover country then you never will. if you believe that all is well in the usa then i tip my hat to ya. far be it for me to attempt to convince a true believer that the usa is still on the rise.
I don't believe for a second that "all is well in the USA".
But the meme that the big corporations are going to continue making their profits easily by replacing the American or European middle class consumer with the Chinese one is just nonsensical when you look at the numbers I quoted above.
i never said "replace." my view, hunch, prognostication, what have you is that the multinationals will shift their primary focus to the area of growth which is china and asia. the usa is in a down cycle that may last another 10 to 15 years or longer if the current leadership continues to make bad decisions. even the fed acknowledged that. you might have read it on these pages even. people in this country are trading down. see k and cl statements this week. but if you're bullish call your clients and load them up on usa equities, siv's and cmo's. use me as a contrarian indicator.
CVX Q2 income triples, stock down. meanwhile the insolvent banks soar!
What number do you believe? The PMI was actually pretty good. How is that reconciled with ECRI? And, no, it's not "fake" numbers or juicing, etc. There's definitely a lot of mixed signals with some pretty strong earnings to throw in as well.
Maybe they are correct in saying the ECRI doesn't really matter unless other indicators like PMI or ISM follow suit. And so far, they're not.
@Harry
Even a corpse will twitch when injected with enough epinephrin. The GDP internals show who's administering the "medicine".
I was going to do the opposite of what I thought would happen, but I forgot which way wus up, so i've inadvertedly made a 30/70 hedge.. the question is.. do I keep going into the weekend.. can you imagine if chatting up women were done with rolls of a dice?
While in greece land the greece truckers are still striking....the IMF/EU plan to privatise their jobs will not go withouth any struggle.....
I'm guessing the Greek Govt. will use the Army to drive trucks and break the strike -- result: More bloodshed!
They are doing this to prop up the GBP at all costs. TBTB have been rotating through weaknesses in currencies to keep afloat the most fragile currency in the world.
When the GBP tops in this cycle against the USD at the 1.66 level, expect everything to take off against the Japanese Yen. It is their turn. Expect a years-long ramp in X/JPY pairs.
According to the charts, this event should take place about the 20th of August, 2010. Get ready.
:D
Orly, you have actually made some good calls over the months...
Why, thank you for noticing.
:D
I am in the same boat as everyone else here, though. One never knows, even in the vast and "unmanipulable" 4X market, what is the genuine appetite for risk. We are at the mercy and whim of those who have an agenda other than free markets.
I am still utterly convinced that the reasons for all this commotion is to prop up an insolvent UK through the use of some sort of currency roundtable, where all the majors get in line to take a whipping in lieu of the Pound Sterling. Awful nice of those chaps, eh? I have no proof, just circumstantial evidence; an inkling of a suspicion.
However, the chances of this ending well for Great Britain in the current paradigm are Slim to None and Slim just got on his horse and left town. The world is a-fitt'na change in a hurry.
Currently, we are in a massive bottoming/topping process for many major currencies, not the least of which is the Japanese Yen and the Swiss Franc. Soon, even an untrained monkey will be able to trade 4X, simply by pushing the button that says "buy." Get ready for it.
Thanks again for the kind words.
:D
I second that. I often read your take on the currencies.
Thanks to you, too, Rick.
The best play right now in 4X is the rolling over of the Ozzie Dollar against the greenback. The restocking process has just about run its course, so expect the commodity currencies like AUDUSD to get hammered, especially if the equity markets are allowed some semblance of a correction.
I don't think the equity markets have very much upside left, though it appears that this rally is fighting death more fiercely than a more normal market generally would. I just get the feeling that there is some panic going on in the backrooms in the Halls of Power that we peons are not privy to. The AUDUSD has risen a lot on the back of increased risk appetite as reflected in the equity markets.
In sum, the move in the AUDUSD is rapidly running out of steam as risk chokes over its own feet. (Witness the HFT miniflashcrashes that are coming as the fumes in the tank aren't enough to drive the ship any longer...) Of course, anything could happen but the downside potential (sell short...) is much greater than the upside (get long...) in the AUDUSD. My own insane target: 0.7350, a mere 1700-pip move from here.
:D
Folks, with the St. Louis Fed comments about QE, resuming to buy MBS and the "autorefi" option on the table it wouldn't be prudent to attempt a short entry here.
That came out of nowhere and if they can pull it off, it's QE without calling it such. It probably won't even need Congress approval.
I haven't digested all the details yet on this option but me thinks, this should have been done in the first place when the whole industry was nearly taken over by the government. Why haven't they done this? We're talking much less than the banks received in bailouts, TARP and other free cash from the taxpayer.
It's communism. Calling it anything else is bullshit. Don't like the sound of it but why have the citizens compete for the lowest product of the money sharks when government either owns the money sharks or gives them money for free. Plain and simple.
Communism? LOL
What is Lecter, a vampire or something?
Agent Starling- 'Theres no name for what he is'.
Theres no name for what this is, never been seen before.
Charley, the GSEs are government entities.
The loans are backed by government guarantees.
The government is involved, not only on the fringes.
Government giving loans to the people to buy houses.
That is communism.
Now, the lawyer in me would argue that government has to give the SAME LOW RATE to every citizens or it's discrimination.
There is no competition for government service or we would call it corruption.
Walkure- it wont happen because it doesnt enrich the world elite. Give 'insta-lowered' rates? Just a brainfart from the Philly FED guy, nothing more. WHATEVER you see them do will only benefit the FED, it will IN NO WAY benefit the 'consumer'.
The idea of the MS Slam Dunk for autorefi was pretty much killed yesterday.
http://www.calculatedriskblog.com/2010/07/slam-dunk-stimulus-ms-missing-...
You know why it's not going to happen?
Because the banks would get the shaft in this proposal.
Of course they're not letting it happen.
American capitalism doesn't benefit the American people.
The banks profit while the citizens fight for survival and have to pretend they like the banks or they won't get their loans.
Fuck the banks. They don't have the authority to give loans or determine who gets which loan at what rate.
C'mon nice horsies, look at all this beautiful, cool water -- drink, you sods, drink!
@walkure
Auto-refi might be sweet for politics, but it wouldn't help the economy all that much. The proles used to nab $400B a year from the housing ATM, so the $40B to $70B estimated benefit from auto-refi is small potatoes.
The bank gets money for free.
The citizens pay a surcharge for the banks to loan out the money.
The citizens bought the banks effectively with taxpayer funded bailouts.
The banks have "established" a system as to how grade the citizen's worthiness for a loan and THIS IS THE BEST PART!! .. the banks have created a system to determine which person gets to have the loan at which rate!!! How cute.
I say fuck this shit.
Government is involved. That's communism.
Now, be logical and give all citizens the same low rate for their shitty fucking housing loans and be done with it.
Put the bankers out on the streets. Nobody needs them anymore. Money is from the government for the people, no middle men required. Yes a few bureaucrats that can get paid min. wage like all the other slaves.
Why are we even discussing this?
Do not believe any talk from the FED until you see it. The whole charade stays afloat because of the uncertainty involved with future FED actions. When everyone jumps on the deflation train and thinks the FED is pushing rope, they have to use everything in the arsenal to keep it together for as long as possible (hopefully long enough for people to forget/put their pitch forks away). It's just noise. Once the soon to be beaten path becomes obvious, the whole thing unravels....
When Ben mentions the possibility of more printing, it's total bullshit at this juncture. Simply put, without additional monies authorized from congress, the FED is at the end of its rope. The only thing it has left to move the markets is talk. Well, talk is cheap and I know better. They're bluffing. This can continue on its own inertia for a while... and many factors are at play, but without more monies, play time is over.
In order to continue financing our deficit, they need to create a flight to safety... this has many faces, but all to the same end. The days of the FED simply outright buying all treasuries are coming to an end, all things equal.
It isn't communism... it doesn't have a name... we just know it isn't the capitalism in our textbooks (which may or may not mean it is actually capitalism at work). In all likelihood, put a face with a name is simply describing a temporary period on a timeline... as we'll morph into something else soon enough... and probably back again before you know it.
Remember, the banks are not going to get repaid with monopoly money. That's what they pay you and other creditors with... they want real property, commodities, and blood.
Sysiphus pushed up his rock, only to see it roll back down the hill, this time he's gonna be too slow to get out of the way!
Stop whining ... this will be the Mother Of All Crashes ... grown men will be seen openly weeping for the comfort of their mother's arms ...
Yep then their mothers head explodes like a melon courtesy of DHS/U.N. Insurgent Sweep Group minigun mounted Escalades....troubling times comin indeed!
GS employees will be jumping off the top of 85 Broad ...
This generation doesn't have what it takes.
Robot trader: I love your pictures, baby. how about some soft porn video soon or just plain naked women?
You must work for the SEC?
That made me spit coffee out of my mouth. Noice one brutha!
I don't. Is that against the rules?
For all the talk about the double-dip, why is it that the NBER never having called a tough is ignored?
http://www.nber.org/cycles.html
Maybe ECRI is coming to reality because everyone is laughing at them.
They a bunch of corrupt sycophants and complete idiots. They have NO credibility.
Didn't any of you baby girls see Obama on The View? Every little things gonna be all right now!
Obamatron needs to man up and appear on Jerry Springer -- light weight folding chairs for EVERYONE!!
I'm as bearish on the fundementals as anyone....but Leo might be right...only thing that makes sense of this market action (stocks up, bonds yields down, $ weak, gold/silver bouncing) is that near term ecomonic environment is horrible but this will bring inevitible QE2, 3 etc...very tough trade
-Q/E2, 3, 4, etc-...
Never taking into account that it cant go on forever? Or even much longer? Or that a $5 trillion printfest would actually NOT be beneficial to stawkees but actually far more likely to just blow apart the USD into oblivion?
How many TRILLIONS in printed fake currency is way too much, huh? The Great Leo or anyone else have that firm number?
No of course not, its just 'Q/E printing good, buy dips' well until youre suddenly covered in Black Swan shit without warning.
+ zero (hedge)
which is why we call this blog our home...
trying to hedge against this senseless market is not going to happen.
the government had to pay those on their hedges last time
won't happen again.
trades and options and shorts just won't get recognized or paid.
I submit that the US Govt did NOT pay anything, they just doubled their bets on the roulette wheel! Blood will soon be the only currency of choice in demanding payment from TPTB!
Market appears to be Goose, Goose, Duck instead of Duck, Duck, Goose.
Been waiting for commercial real estate to take a tumble but the REIT's seem to keep coming in with respectable numbers compared to expectations. If the commercial real estate segment of the economy is not collapsing (at least on the books of the big REIT's) then it makes the case of the shorts much more difficult.
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=541852&ven=yahoo
http://www.reuters.com/article/idCNN3023511620100730?rpc=44
Here's what's happening in the economy, in a nutshell. Is this bearish or bullish? Who knows . . .
1. The people who ultimately buy stuff are seeing their assets and wages drop...
2. Companies are making more stuff for people to buy . . .
3. Companies are buying more stuff from each other in order to make more stuff for people to buy . . .
4. The buildings that companies use to operate in order to sell people stuff aren't dropping in price, and may even be getting more expensive . . .
5. Oh, and don't forget that companies are cutting labor costs right and left to improve margins, thus increasing the pace of steps 1 through 4 . . .
Some people look at this picture and say that steps 2-5 are going to eventually stop step 1 from happening . . . Are they right? I don't know.
Those are good points - thats what is happening in ... the US.
But remember a lot of the big companies get 50-70% of their revenues from abroad. And there is a lot of demand for all kinds of stuff in other countries. Thats why the US based companies are reporting great earnings,
Look up "miniscribe" on wikipedia.
yay, here comes the inevitable Euro rally
You look at the ecri weekly growth rate of the index, in stead of the index itself. This week the index actually went up for the first time in weeks and the correlation with the index and the stock market is much higher than its growth rate with the market. Furthermore, ecri themselves claim that using 60 years of data actually shows that a reading of -10 does NOT indicate a recession is certain.
Question for Larry Summers, how do we increase growth with no corporate investment?
Also, how do we increase growth with no credit access for small business?
To risky?
Even the small business bill gets derailed through midterm posturing. Interesting.
Political uncertainty.
Perhaps, but the rate of new spending is not slowing down. On track for another ARRA over FY2010 if you include military stimulus.
We slowly pull away the curtain to reveal the real economy, the real consumer, and what we learn is our structural costs are too high.
So we watch for the tipping point. The finite limit on revenue. The last gasp of the middle class.
Mark Beck
Try to understand, none of this is Re 'Al. It is like THE GAME of monopoly, and the banker showed up fresh from xerox.
"I agree with Jack [Welch], we had to keep the game going." -Oliver Sarkozy, of The Carlyle Group, whose other chief benefactors are the Bushes and Bin Ladins, from .
A cozy bunch, this lot.
No Visibility Ahead: Predicting What's Next (Part 1):http://www.youtube.com/watch?v=5reGFd751zY
Updated DOW charts:
http://stockmarket618.wordpress.com