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Hatzius On Philly Fed: "Disappointing...Factory Sector Growh May Have Cooled A Bit In Early Q2"; Downgrade Next?

Tyler Durden's picture




 

Whereas in restructurings one has fulcrum securities (just ask an equity committee, and valuation fight counsel what that is), in lemmingoloy one has fulcrum Wall Street economists. As always, the only one that matters in this regard is Jan Hatzius, whose every word is assayed with a fine toothed comb by the Wall Street econoshortbus: all it takes is for Hatzius to issue some unkind words about a GDP component and the downgrade avalanche begins. Which is why reading his comments following less than flattering data is always very informative (after all it was Goldman with their disastrous in retrospect call in December to upgrade the economy that forced everyone, except us, to have an overebulient outlook for Q1 GDP, subsequently friendo'ed). Below is his take on the Philly Fed which according to us is the first salvo that will confirm Q2 GDP is about to be whacked, leading to a full year GDP reduction, and setting the stage for QE3, as we have been claiming since January.

The key section:

1. The Philadelphia Fed index fell to 18.5 in April from 43.4 in March, a much larger decline than anticipated. However, the level of the index remains consistent with steady expansion, and is inline with readings in the November to January period. Nevertheless, the news is disappointing, and suggests that factory sector growth may have cooled a bit in early Q2. As discussed in yesterday's US Daily [TD: posted here], supply chain disruptions resulting from the natural disasters in Japan may affect manufacturing output in Q2, but we have no specific information that this was at work in today's report.

Oh but you will soon enough Jan. And how is your December "American golden age" call going to look then when your well built house of cards topples into the sea of another $1 trillion in mandated liquidity?

The balance of the note:

2. The sub-indexes of the Philly Fed report generally mirrored the headline: most of the major indexes declined, but remain at reasonably good levels. New orders fell to 18.8 from 40.3, shipments to 29.1 from 34.9, and employment to 12.3 from 18.2. The index of unfilled orders remained very high (though it also declined a small amount), and the index for supplier delivery times rose - perhaps consistent with supply chain problems.

3. The FHFA house price index - a measure of prices for homes with agency-conforming mortgages - fell by 1.6% mom, a much larger decline than anticipated and the second largest in the series' history. The decline in this price index is particularly worrying because, due to its composition, it should be less affected by distressed sales. The fact that it is also declining very sharply implies that the prices on homes with higher-quality borrowers are also slipping.

4. The index of leading economic indicators rose by 0.4% mom in March, a little more than expected, and the previous month was revised up. Gains came from the average workweek, supplier delivery times, building permits and the slope of the yield curve.

 

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Thu, 04/21/2011 - 11:07 | 1192372 redpill
redpill's picture

Disappointing, like when Uhhbama misses a putt on the 14th.

Thu, 04/21/2011 - 11:15 | 1192416 hugovanderbubble
hugovanderbubble's picture

Please talk about the European Sovereign debt haircuts (schemes)- Forgiven debt plans

Greece (60-70%)

Ireland (50-60%)

Portugal (40-50%)

Spain (20-40%)

Thu, 04/21/2011 - 11:20 | 1192426 Harlequin001
Harlequin001's picture

it's just a flesh wound...

Thu, 04/21/2011 - 11:22 | 1192443 eatthebanksters
eatthebanksters's picture

but I'm not dead yet!

Sat, 04/23/2011 - 07:02 | 1192500 Harlequin001
Harlequin001's picture

I know a joke about that...

'and it was at this time in the darkest days of Christianity that when nailed to the cross and raised up for all to gaze upon his tortured and twisted body he looked down wearily at his 12 apostles and said softly with his last dying breath, 'Judas, Judas, don't touch my fuckin' Easter eggs you bastard, I'll be back for them again on Monday'...

Howzat...

Thu, 04/21/2011 - 11:16 | 1192418 TruthInSunshine
TruthInSunshine's picture
04-21 11:06: IEA chief economist says would be 'happy' to hear oil producing countries say current prices too high, damaging economy

 

Or Bernanke could quit printing ass reams full of money - but why note blame the $38 to $112 climb in oil in 19 months on anyone BUT Bernanke?

Thu, 04/21/2011 - 11:27 | 1192466 Johnny Lawrence
Johnny Lawrence's picture

Exactly.  Oil prices have been going up since August because of Bernanke.  It's not a recent phenomenon.

 

Mon, 04/25/2011 - 20:22 | 1206021 tomster0126
tomster0126's picture

Exactly, oil price goes up, dollar value goes down, b/c Bernanke's going mad at the printers scrambling to get more fiat in the hands of our consumers.  what a joke...

 

www.forecastfortomorrow.com

Thu, 04/21/2011 - 11:32 | 1192483 CrashisOptimistic
CrashisOptimistic's picture

Why blame it on anything but geology?

Thu, 04/21/2011 - 11:47 | 1192560 Cdad
Cdad's picture

Exactly, brother Truth.

Thu, 04/21/2011 - 11:07 | 1192379 Sqworl
Sqworl's picture

ya fecking think!!!

Thu, 04/21/2011 - 11:09 | 1192381 NOTW777
NOTW777's picture

43 to 18 - cooled "just a bit"  tiny

Thu, 04/21/2011 - 11:10 | 1192382 RobotTrader
RobotTrader's picture

Not really seeing much reaction in the tape.

XRT is still pinned at 2-year highs, being led by:

COH, TIF, BBBY, WFMI, etc.

Retailers have not had a material sized correction in over 6 months.

By far, it is one of the strongest sectors.  Markets do not top when this group is making new highs and refuses to back off.

Seem like the tape is getting stronger, not weaker.

Thu, 04/21/2011 - 11:13 | 1192400 John Law Lives
John Law Lives's picture

Why does ZH give you posting privileges?

What value do they think you contribute to an otherwise excellent forum?

Thu, 04/21/2011 - 11:19 | 1192422 RobotTrader
RobotTrader's picture

Because I trade stocks for a living and have no choice but to follow the tape in order to avoid losing money.

Since this forum is 98% populated by perma-gloomers and armchair anarchists, my postings provide a little more humor and balance to all the doomer talk around here. 

Besides, the occasional chick photos and poking fun at the bears as driven traffic here to world record highs.

ZH is now one of the top trafficked blogs on Wall St.  Outside of MarketWatch and Yahoo Finance, nobody else really comes close.

Thu, 04/21/2011 - 11:21 | 1192437 Harlequin001
Harlequin001's picture

you are led by the nose and given a living by those on the boards of the investment banks who decide when and if stocks and bonds will fall, and how much money you can make. It is foolish to think you can out trade them or win in this market...

But if you feel better, keep trading...

Thu, 04/21/2011 - 11:22 | 1192441 Robot Traders Mom
Robot Traders Mom's picture

One, you are not adding any humor. Two, quit going to Yahoo Finance and clicking on the day's top performers and saying they are your picks. Three, you don't trade shit for a living.

Who the fuck spends their days trolling? People who have no friends and no life.

Thu, 04/21/2011 - 11:29 | 1192464 LawsofPhysics
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Don't forget government trolls.

Thu, 04/21/2011 - 11:31 | 1192476 aheady
aheady's picture

Daaayum, Momma.

Thu, 04/21/2011 - 11:53 | 1192589 buzzsaw99
buzzsaw99's picture

+1 every word

Thu, 04/21/2011 - 11:40 | 1192530 John Law Lives
John Law Lives's picture

<<<  Because I trade stocks for a living and have no choice but to follow the tape in order to avoid losing money. >>>

You just explained why you are here.  You didn't explain why ZH gives you privileges on this site that many others do not have.

<<<  Besides, the occasional chick photos and poking fun at the bears as driven traffic here to world record highs. >>>

Oh, really?  Does ZH compensate you for driving traffic here?  That might explain your presence.  I have long believed you and HarryWanger were here for that purpose.

I think you and Harry are not real people.  I think you are shills to stir the pot.  You have never said anything of substance that anyone here could not have gotten off Yahoo! Finance.

Spam away...

 

Thu, 04/21/2011 - 11:56 | 1192603 buzzsaw99
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I remember Robo's old blog. It sucked ass. That's why he is here.

Thu, 04/21/2011 - 11:16 | 1192410 baby_BLYTHE
baby_BLYTHE's picture

Robotrader spotted doing the only thing he knows best. (Hint: It's not trading equities)

http://youtu.be/ubpwmCai93g

Thu, 04/21/2011 - 11:16 | 1192394 plocequ1
plocequ1's picture

Who cares? Apple did good. Thats all you need to know. For everything else, Theres God.

Thu, 04/21/2011 - 11:15 | 1192405 RobotTrader
RobotTrader's picture

Just went on Amazon to check out the new iPad2's...

64Gb models with AT&T Wi-Fi are now selling for over $1,000

http://www.amazon.com/s/ref=nb_sb_ss_c_1_6?url=search-alias%3Delectronics&field-keywords=ipad+2&x=0&y=0&sprefix=ipad+2

iPads Bitchez.......

Thu, 04/21/2011 - 11:15 | 1192417 Cdad
Cdad's picture

whose every word is assayed with a fine toothed comb by the Wall Street econoshortbus

LOL!  Tyler, I love you, man.  

$5 trillion in spending...enslaving the next two or three or five generations to the debt established by Ben Bernanke and Congress, and we will now already be contracting.  Great.  Thanks, Jan Hatzius. What a genius.

But who cares?  Just short more dollars and take markets higher on the theory of a depreciating currency.  That'll do it.

1.  Print money   2.  __________   3.  Economy   :)

Good grief [and by that I mean fuck me!]

Thu, 04/21/2011 - 11:27 | 1192459 bingaling
bingaling's picture

I bet the history books write it completely different . It will blame anything but central banking or congress.

Thu, 04/21/2011 - 11:19 | 1192421 FreedomGuy
FreedomGuy's picture

I predict we will see rain next Thursday. Slightly less rain than expected which could be due to smaller clouds. Possible that it could be more rain or no rain. Have an umbrella in any case.

Thu, 04/21/2011 - 11:23 | 1192445 Harlequin001
Harlequin001's picture

either that, or it will go dark...

Thu, 04/21/2011 - 11:19 | 1192430 dcb
dcb's picture

one would think the fed would say well we have been doing all this QE and it hasn't helped housing, it isn't helping manufacturing, that they would say having done it twice we won't do it more. But they will. If it hasn't worked twice, lets try again. it's that the definition of insanity!!!

Will someone please stop these people before it is too late!!!

Thu, 04/21/2011 - 11:25 | 1192454 Harlequin001
Harlequin001's picture

trust me they are saving us from ourselves, managing inflation and keeping prices stable for us.

Obviously it's a big job keeping millions of people busy...

and one day it should work...

Thu, 04/21/2011 - 11:19 | 1192431 AldoHux_IV
AldoHux_IV's picture

The only thing Hatzius and his fellow Goldmanites should worry about is how to protect their virgin asses from the pound-me-in-the-ass prison mates they will soon find as their neighbors-- maybe they'll believe their bullshit and utterly pointless calls-- highly doubt it though.

Thu, 04/21/2011 - 11:20 | 1192432 Racer
Racer's picture

"IEA chief economist says sees 6 month to 1 year lag before current high oil prices start impacting global economy"

 

I presume that 'lag' started last year? I have been impacted by the extremely high oil price for a very long time now

Thu, 04/21/2011 - 11:21 | 1192440 Hedgetard55
Hedgetard55's picture

Robo, try pricing those stocks in silver.

Thu, 04/21/2011 - 11:25 | 1192447 aerial view
aerial view's picture

QE3 or not to QE3. That is the question unless Jan wants to go a few rounds with The Big D (the Deflation monster).

Thu, 04/21/2011 - 11:24 | 1192450 Tracerfan
Tracerfan's picture

Capital flight from the U.S. will increase as people with money realize more and more that the Feds are targeting them for expopriation in ways never imagined heretofore.

Thu, 04/21/2011 - 11:25 | 1192458 Kickaha
Kickaha's picture

The Fed will start pulling excess liquidity out of the system via the closing of the shakiest of the regional and local banks.  Why do you think all of those "stress tests" were performed?  So, give trillions to the large banks.  As necessary, pull that excess liquidity out of the system by shutting down smaller banks.  If necessary, in the end, only 18 banks will be left standing.

I am not worthy to have even lived in the era that has allowed me to be a witness to this astounding plan.

Focusing only on the Fed's power to continue QE and control interest rates might be a mistake.

Thu, 04/21/2011 - 11:27 | 1192468 Harlequin001
Harlequin001's picture

as the saying goes, 'don't fight the ...gold...'

Thu, 04/21/2011 - 11:58 | 1192599 tony bonn
tony bonn's picture

Disappointing...Factory Sector Growh May Have Cooled A Bit In Early Q2"; Downgrade Next?

correction: Disappointing...Factory Sector Growh May Have Cooled A Bit In Early QE2"; Downgrade Next?

Thu, 04/21/2011 - 12:32 | 1192748 slewie the pi-rat
slewie the pi-rat's picture

i can see it now:  The Backlog Economy!  let's get this discounted to infinity @ 0.0% cost of capital, and sell, sell, sell!

this is like Wimpy saying:  "I will gladly repay you today for next Tuesday's hamburger."

Thu, 04/21/2011 - 12:44 | 1192786 slewie the pi-rat
slewie the pi-rat's picture

really!  these backorders can be seen as practically being receivables!  now, let's go!  green shoots need financing!

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