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Goldman Pulls A CNBC, Portrays Highly Disappointing Durable Goods Data As "Broadly Positive"
Up until now, Goldman may have been guilty of various forms of market "intermediation" but if it was one thing, it was at least convincing in the argumentation by its various analysts who are paid to promote the opposite side of Goldman on any one trade. However, today's report by Andrew Tilton on Durable Goods was a massive disappointment. It was written with the sophomoric style, ebullient flourish, statistic skewage and groundless goal-seeking abanadon of a first year script writer for CNBC. If this is the best "conviction" job Goldman can do, then the end may certainly be nigh for the once high and mighty.
In essence Goldman uses every trick in CNBC's book to make a -2.5% read seem like the greatest thing since Flash frontrunning, er... trading.
The report is captured from Scribd below, with the most hyperbolic sections highlighted in red.
For your evening amusement.
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They take it down already?
They should just label everything with...."In defense of our market manipulation" here are the reasons why we continue to squeeze everyone .....
I hope most people do not trust or believe anything these people put out....
If they put it in a LEGAL DOCUMENT that they will frontrun you then WHAT THE FUCK makes ANYONE BELIEVE their "FREE" opinon?
Not so long ago some guy from Goldman Sachs predicted S&P500 would go to 1060 this year. And not surprisingly now another guy from Goldman Sachs is trying to talk the market into going that way.
Somebody has to keep paying those huge bonuses to Goldman Sachs employees. Goldman Sachs probably loaded up on SPY shares and now it needs to unload these shares to naive investors at a nice profit for Goldman Sachs.
Check out how painfully wrong Goldman's Abby Joseph Cohen S&P call was for 2008 and you'll realize there's plenty of (esp recent) historical precedent for it...
AJC: 2008 S&P500 close prediction: 1675
Actual 2007 S&P500 close: 903
AJC was only off by what, 85% on the high side?
Seems to me that they could, in theory, run the S&P up past cloud nine (say, 100,000), but the more pressing question is how long will the public buy the scam that the market is the appropriate measure of our economic health and prospects.
They also predicted $200 oil. Of course, while being long oil. Nothing to see here, move along.
lol.
no wonder GS is now recommending sell treasuries
I'm sorry, but you can't make a silk purse out of a sows ear....
A touch of desperation at the sales desk? This smacks of trying to offload untold stinky piles of SPY to any sucker that comes along.
Everyone has come to the conclusion that GS is the new god. Everyone forgets that they were DEAD last November, just like the entire financial system. Considering that they are afraid to report their VaR (not that it wouldn't be a complete lie if they did), they're still on the ropes.
With little variation on these "pearls of wisdom", you could make the case that things were going to hell tomorrow just as easily.
I wouldn't say Goldman is on the ropes. They are one of the only firms that will be backed in whole by the tax payer.
They win, they win. They lose, they win.
Anybody else out there who has no personal grudge against GS (I've never enjoyed the presence of even one of them) who just wants to bring them down to a world where if they lose, they lose?
Just seems fair to me.
Did someone say the recession is over ?
http://www.businessinsider.com/mohamed-el-erian-july-rally-was-a-sugar-h...
Northern Trust agrees: Durable Goods Orders – Decline in Airline and Defense Masks Improvement
http://www-ac.northerntrust.com/content//media/attachment/data/econ_rese...
What improvement are they seeing in the data point accompanying charts 1 and 2? I see one data point out of eight that shows any change for the better.
Don't see any signs of life. What am I missing there?
Bloomber pulled a very similar "Green Shoots, Bitches!" stunt with the DG numbers:
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http://www.bloomberg.com/apps/news?pid=20601068&sid=arIOipxoB_N8
"U.S. Durable Goods Orders, Excluding Cars and Planes, Unexpectedly Advance
Orders for U.S. durable goods, excluding automobiles and aircraft, unexpectedly rose in June, signaling manufacturing may expand in the second half of the year.
Excluding transportation equipment, demand for goods meant to last several years climbed 1.1 percent, the most in four months, the Commerce Department said today in Washington.
Total orders fell 2.5 percent, the first decrease in three months.
The durable-goods figures used to calculate economic growth indicate companies plan to boost investment in coming months, adding to evidence the worst recession in five decades is starting to ease. Caterpillar Inc. is among companies seeing steadier demand as government stimulus plans here and abroad start to kick in, signaling an economic recovery is in sight.
“The manufacturing recovery is happening now,” said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York, who predicted a gain in orders excluding transportation. Shipments of durable goods “are likely to grow in the third quarter, and that’s an important reason why we expect the overall economy will begin to grow.”
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So let me get this straight: Total DG orders *fell* big-time, but once you subtract the "big negatives", you get a nice positive number? Oh yeah, really objective there ... in effect you are saying "Excluding the plunge in some durable goods, other durable goods orders looked good." As to Barclays chief shill Maki, the fact that he was flat-out wrong in his bullish prediction but is still sticking to his pre-prepared bullish spin tells you pretty much what you need to know: He`s just another guy with something to sell, and will say *anything* to get you to buy it.
To their credit, among the MSFM outlets, CNN/Money at least reported the story more truthfully:
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http://money.cnn.com/2009/07/29/markets/markets_newyork/index.htm
"U.S. durable goods orders plunged 2.5% in June, a far bigger decline than economists were expecting. The drop revived some worries that the economy may not be stabilizing as quickly as investors have been betting."
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yeah; only by producing one car you put more value into economy than by producing 100 000 bags of Cheetos, and by manufacturing one plane you put more value into the economy than by producing 200 000 000 bags of Cheetos ... i come to think that their mathematics does not have the operator of subtraction, but that subtraction is replaced with http://www.zerohedge.com/modules/wysiwyg_spellcheck/tinymce/spellchecker...); background-repeat: repeat-x; background-attachment: initial; -webkit-background-clip: initial; -webkit-background-origin: initial; background-color: initial; cursor: default; background-position: 0% 100%;">gama-sigma ( GS=Goldman Sacks=Green Shoots ) operator whose function is defined by hopium derivative distribution and http://www.zerohedge.com/modules/wysiwyg_spellcheck/tinymce/spellchecker...); background-repeat: repeat-x; background-attachment: initial; -webkit-background-clip: initial; -webkit-background-origin: initial; background-color: initial; cursor: default; background-position: 0% 100%;">kool-aid variables
Lately Bloomberg has been on the slippery slope to CNBCism.
not sure if this was already shared here, but if not, an amusing article about Tenacious G in NY Ragazine:
http://nymag.com/news/business/58094/
special appearance by Lucas von Bulow.
I'm glad GS is making enough money to pay their people to apply lipstick and other cosmetic products to various farm animals.
What they do with them after that, I don't want to know, I don't want the links to the webpages and NO I am not buying the videos.
I covered the CNN Money treatment of the surprise to the upside May durables vs. the surprise June Durables. This stuff would be funny if it was happening someplace else.
http://tinyurl.com/kuc6ju
"However, for all but the most extreme cycles, it takes six months or more to pick up a clear pattern in the data – far too long for investors focused on short-term business cycle fluctuations, or for that matter policymakers attempting to gauge the current state of the economy. "
6 months is far too long for a policymaker to look at economic data even though it takes that long for a pattern to develop?
after 6 months of no go we are supposed to wait fot the Stimulus to work, but we should buy Goldmans stock pupms on a durable good possible uptrend?
Looks like they want to kill some more shorts.
Tyler, while I agree that GS and CNBC are all scum, I don't see the big deal here. DGOs are usually considered excluding defense/transportation because those are in fact volatile components of the indicator and fluctuate based on government orders. Excluding transportation, DGOs actually went up 1.1%. Core capital goods orders were up from May. But most interesting to me, new orders for primary metals were up almost 9%, a portent that industrial output is about to shift into higher gear.
Good point.
I think the transport data shows iron ore transport is up too. That's a reasonable geen shoot.
China is converting their dollars to hard assets.
actually you are only half correct on this one because you don't know the nature of increase in primary metals, it might as well be stockpiling the stuff as a hedge against possible inflation, because no one knows were the lunacy will take us .... also, that was the period when the Chinese were buying everything they could and stockpiling it, so it wouldn't surprise me one bit that the Chinese contributed more than 70% of that increase in primary metals ... also you have to know where did those trucks and trains go with their loading .. if it was towards the major US ports, that mean that the Chinese bought it, and if the majority of the load went to the inner parts of the US that means that the industry will ramp up, which is highly unlikely considering the credit market ..
How can we determine ANYTHING from this number. It's way too shortand way too volatile for anyoneto give a shit about. Its leading status is statistically valid, but ALWAYS lost in noise.
d00d ... I'm not sure what you re trying to say here .... explain further if you can ...
Good luck trying to get TD to change his view. Lies and fabrication on the increase in ZH
all hail the fail whale!
The propoganda machine rages on. You would have to go back to the days of Hitler to see a propaganda machine like this. When does apathy end? It's totally pathetic.
Man, Tyler, it was weird reading the GS page.
Yes, a bit "sophomoric" perhaps, but I loved the way it broke GS-Think down to its basic components. Sheer elegance. I have never understood GS this well before.
I salute the GS writer. Keep workin' it, man! You have an even brighter future ahead!
This might not be accurate but for durable goods I try to figure out the consumer portion. Let (current total-current trans)+(current total-current def)=X & let (prev total-prev trans)+(prev total-prev def)=Y. (X-Y)/Y= monthly change of the consumer portion of durable goods. Which today has -14.64% change and was 3.56% last month. It might not be correct but it helps me get a better feel of how the consumer is doing.
leave out all negatives problems and you get a positive report... simple
Same with the earnings... beat the bar that is on the ground and you have growth, uh less bad
well that is good because they beat the earnings estimate.
Like I failed my multiple subject exam but if you take out the subjects I failed, I really passed. Hurray!!!!!
The whole idea of using these numbers to make major decisions is dumb. Their status as a leading indicator is statistically valid but pragmatically useless. Durable goodsover the short term is way too noisy to mean anything in the moment. The only thing they are good for is trying to predict market action based on the GDP numbers... which are in and of themselves also useless for real policy-making.
This article is the mostpoorly written piece of crap I've read all day, but its fundamentally the guy's job to try to extract gold (useful analysis) from a turd (useless short term statistics). GS seems less scary and more incompetent as a result of this. If these guys were really world manipulating bad-asses, instead of merely unwitting beneficiaries of our societal shortcomings, you'd think they would hire folks who can write better than my 4th grade daughter. I don't feel very manipulated by this.
Then again- When writing poetry for sheep, aptitude is optional.
WTF mang ! that's what i said, so don't attack me for saying the same same thing you just did .... you should have left a reply to the two morons above my posts who thought this means something, not to me, cause i basically said the same thing as you did, with some real world arguments based on field knowledge ... and yes, Bloomberg article is worth exactly 0 ...
I think anyone who has ever traded or shared an investment story with someone has spoken to the "if it wasn't for my loss in (XYZ stock, buying a $200k house for $750, etc) I'd be up HUGE" guy.
I feel like the spin being put on data from everyone from the FT to Bloomberg to CNBC and so on is just like this and it's kind of embarrassing.
I can't remember any time in the last 20 years or so where there was such desperation to make everyone feel that things are okay.
It's really scary because the more I watch and read the more I think things must really suck around the country.
NO GREEN SHOOTS HERE:
My thesis earlier this week that a massive increase in prime mortgage foreclosures is going to cause a second, more deadly drop in the financial system is starting to grow some muscle:
http://truthingold.blogspot.com/2009/07/foreclosures-hit-record-levels-i...
I stopped reading this article after the sentence quoted below because of the misspelled word. The fact that it was misspelled contradicted the very message trying to be conveyed. Sloppy work.
It was written with the sophomoric style, ebullient flourish, statistic skewage and groundless goal-seeking abanadon of a first year script writer for CNBC.
you're grammer chequer is bigger then mine
have we not realised that GS ( and JP) are making money from the following
1. HFT
2. going against their own research reports ( like above)
3. spreading rumours ( eg CIT )
4. getting information from the Fed, before other participants
5. controlling main stream media nitwits( well with dennis kneale u dont have to control, he does not need a leash anymore, maybe he has met with the dog whisperer)
Maybe shipments to inventory ratio consolidating at current peak is green shoot Goldman sees?
Dow Jones Newswire articles were not much better...for some reason the equite market is propped up at any cost. But this cost may ultimately be bigger than the equity market itself - loss of trust towards the liars.
I don't believe the hype either. I'm expecting the drop and slowly starting to unload my portfolio and temporarily moving to cash.