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Historic Collapse In Philly Fed Which Prints At -7.7 On Expectations Of 7.0, Weakest Since July Of 2009, Biggest 3 Month Drop Ever
As we predicted following yesterday's disastrous New York Fed, we get the second confirmation that the economy is now contracting, courtesy of the Philly Fed, which just printed at negative 7.7 on expectations of 7.0%. This is the lowest number since July of 2009, and is the biggest three month collapse in the history of the series, plunging from 43.4 in March to -7.7 in June, or an over 50 point drop in three months. As expected, the Fed is telegraphing that the economy is collapsing and that stocks needs to plunge another 20% before Operation Twist (QE3) is given a green light. And make no mistake: the downside 3 month momentum in the series at -51.10 is the worst ever: all those buying stocks in advance of more easing are completely forgetting that they will take major losses before the market is low enough to allow actual easing to proceed.
From the report:
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 3.9 in May to ?7.7, its first negative reading since last September (see Chart). The demand for manufactured goods, as measured by the current new orders index, showed a similar decline: The index fell 13 points and recorded its first negative reading since last October. The current shipments index fell just 3 points but remained slightly positive. Firms reported declines in inventories and unfilled orders, and shorter delivery times.
Firms’ responses suggested little overall improvement in the labor market this month. The current employment index remained positive for the ninth consecutive month, but only 14 percent of the firms reported an increase in employment, while 10 percent reported a decline. Only slightly more firms reported a longer workweek (14 percent) than reported a shorter one (12 percent) and the workweek index was down only slightly from May.
There is good news: margins may finally improve:
Indexes for prices paid and prices received declined from May and continue a trend of moderating price pressures in recent months. The prices paid index declined sharply, by 22 points this month. Still, 37 percent of the firms reported higher prices for inputs this month, and 10 percent reported a decline. On balance, firms reported a slight rise in prices for manufactured goods: 17 percent reported higher prices for their own goods this month; 12 percent reported price reductions. The prices received index decreased 12 points, its second consecutive monthly decline.
Alas, the Hope is now extinguished:
The future general activity index decreased 14 points this month and has now dropped 61 points over the last three months (see Chart). The indexes for future new orders and shipments also declined, decreasing 9 and 14 points, respectively. The index for future employment fell 17 points and has declined 32 points in the last two months. Still, slightly more firms expect to increase employment over the next six months (21 percent) than expect to decrease employment (16 percent).
And visually:
Next Zero Hedge prediction about to come true: Goldman will cut its H2 GDP forecast to sub 2% momentarily.
h/t Sean Corrigan
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Is this not the easiest fade of all time? Start shorting and don't stop until you're in the green. EA$Y
Nah, surely it has been priced in! Mr. Market doesn't lie . . .
next up.....gold revaluation
Negative official job prints by Q3 and negative GDP by Q4, bitchez.
Hello, double dip.
Oh, and ZH, let me play devil's advocate regarding this statement of yours:
Isn't that the 'easy' and 'expected' event? 1) There will be more monetary QEeesing, and 2) It will produce similarly stimulative and supportive consequences for equity, commodity and bond markets.
I beg to differ on either or both accounts, but maybe the absolute mass trampling the high plains in swarming herds is on the right side of that future mega trade...
maybe they just got the captcha question wrong....those negative numbers can fuck you up.....eh?
Markets love it.
...DB, not so quickly.
Bears got trampled to death.
DOW down around -1,000 in weeks, and 'bears got trampled'?
Hmmm, if it's down minus 1000, doesn't that mean it's actually UP 1000? Gol'durn negative Captchas!
He's hanging upside down while typing. Also, he's colorblind.
We did? I've added to my short positions on this "rally" as it'll be faded by the end of the day most likely. Once POMO money fades off market will tank.
Please consult your doctor if the market Viagra lasts less than 4 hours.
And Russell 2000 jumps instantly from red to +0,7%. Welcome to the centrally commanded "markets". Sackman is working overtime today... What a joke, lol
Yar...what the hell was that! I saw the RUT before I looked at the report...assumed the report must be at least consensus. Fell like an anvil through consensus....must mean it can only go up from here.
I think all the Algo's just reset to buy mode.
Maybe they are incapable of understanding a negative number.
if abs(philly_fed) > 5.0:
buy()
No. They pump today so tomorrow's dump won't look as bad.
they break that 1268 level, it won't look so bad. This buying is precipitous.
Probably all it is, pump a bit today for Fridays big dump.
$DJI jumped 65 on this news.
Appparently the Fall of Greece has been baked in...
Pump a rally to Sell the rally? Who knows.
Robo knows, ask him.
Then do the opposite.
I see the DOW up 40. By noon -200 again like yesterday? Well who cares really, the markets are a meaningless joke now.
I've wanted to say this for a month now but it will not reach the previous high as it hasn't done for the last 6 weeks. It is sliding and looking like it is about to fall off the edge. Of course, I've put this in writing so it'll magically bounce to the clouds.
QE3, here I come.
There will be no QE, but I'd certainly welcome the huge jump in gold if they did. The party is over, everyone needs to stop gazing over at the keg, its empty bitchez, go home.
No QE yet... everything will tank including the shiny, so get ready to back up the truck for a nice big haul of in your hand metals....
Don't you mean hand in your metals...
hmm this happened during QE, so much for a weaker dollar and QE driving to full employment....dear FED dont start printing bad numbers until QE2 is over.
BTFD. EOM.
I love this play. Levitate on low volume and then cash out heavy as it falls. No wonder those guys never loose.
Tyler, could you add links under "zerohedge reads" for TFmetalsreport.com and Martin Armstrong's site? The info they post, in my opinion and hopefully others, has been invaluable.
+ $1530
Also add
fofoa.blogspot.com too
Jekyll & Hyde Market: We love high prices....no wait we hate high prices...no we really meant we love high prices...scratch that...we hate high prices again?
June 22, if the bernanke doesnt throw the market a bone, this shitshow is really going to hit the fan.
Bend over market, Bernank's bone is headed your way.
Bullish-t
TD: Biggest drop since July '07 or July '09? Headline says '09, but article says '07. Thanks!
Thank you, Tyler. It is good to have ONE news source that doesn't have a creation units machine in the closet, attached to its economic lying machine, grossly spitting out utterly useless and unproductive assets while throwing a blanket over and beating the crap out of TRUTH.
And next up...pink slips in the wildly unproductive [in fact destructive] financial services industry.
+1
OT: Tyler, the bottom of P has fallen out, now below IPO price.
Still haven't touched the 200-day EMA on SPY yet.
Close, but no cigar.
http://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=0&mn=9&dy=0&id=p80857655623
And gold shows its the ultimate in strength.
CNBS was hilarious today. They spoke about how much stocks could go up if the Philly Fed beat. No concept that it could be worse. Mind you stocks seem to like the bad data.
Liesman tried to point out that prices declined so that was good as no inflation - hmmm, he has been saying that inflation isn't a problem anyways.
Then finally, they pointed out that this doesn't preclude other data from coming in better than expected - ugh.
Only in the fantasy world that CNBC anchors live in could they believe production is rising.
Wait a just a minute. I thought, per the BlowHorn, we were rallying on less than abysmal housing data?
I'm confused. Oh well, on with the "shooting of generals" as GROSS misallocation momentum stocks are experiencing trouble maintaining ballast. Thank you Cramer, for blowing such dumbass market bubbles.
Oh well, onward and upward with absurdly irrelevant financial news coverage of things like the CA pot grower catalyst for fertilizer stocks, P, and shoppers going wild for things they cannot eat.
100 P/E momo stocks are taking on water? Thats just terrible....and we were promised THIS time it really would be different!
Ah well, on to the next FED bubble blowing exercise.
Weird how this morning my cars veered itself into a mall, and parked me right in front of $9 burrito Chipotle store. Is it the new GPS chips taking over consumers cars?
Chipotle burritos are the new filet mignon.
P looks terminal
If the stock market collapses again, won't people start to see that it is simply a money laundering business for elites?
What people? The 401K Bathrobe Brigades? It will soon be too late for them anyway. No retirement at The Villages for them.
But but I wanted to drive my golf cart to the mega Walmart super duper center and be able to hangout.
been long SH since Japan Tsunami.. in the green nicely now.
Am also long AOB.. chinese small cap unjustly got hammered IMO.
"Bad news" is "good news" until the regulators back off the TBTF vampire squid team...QE III, IV, V, VI is going to be "the trade" going into 2H.
Gold stocks are a screaming buy once Paulson pikes out half his GLD against feared redemptions...
Funny part is there will be no more QE's, at least not in the form the crack junkies in the markets expect anyway. Maybe a bit of bond buying, but no more free sacks of crack rocks for 200 P/E stocks to binge on.
Stealth QE's coming to your nation soon...
Come on everybody clap your hands
Now you're looking good
I'm gonna sing my song and you won't take long
We gotta do the twist and it goes like this
Come on let's twist again like we did last summer
Yea, let's twist again like we did last year
Do you remember when things were really hummin'
Yea, let's twist again, twistin' time is here
Yeah round 'n around 'n up 'n down we go again
Oh baby make me know you love me so then
Come on let's twist again like we did last summer
Yea, let's twist again, twistin' time is here
Come on let's twist again like we did last summer
Yea, let's twist again like we did last year
Do you remember when things were really hummin'
Yea, let's twist again, twistin' time is here
Yeah round 'n around 'n up 'n down we go again
Oh baby make me know you love me so then
Come on let's twist again like we did last summer
Yea, let's twist again, twistin' time is here
Junked for Chubby Checker?
Okay, how 'bout this?
http://www.youtube.com/watch?v=h6TIEkB4_F8
Well good morning my Biflationist friends. Note the huge disparity between prices and prices received. Again. And the huge drop in employment. They're all interconnected in our grand, biflationsitic economy!
Pointing out such fundamentally incoherent things will get you branded a terrorist in Amerika.
Tread carefully.
Depending on your ability to influence others and inform them of reality and facts, you may need to be 'Re-Educated' at the nearest Green Shoot Re-Orientation Facility.
+1 George Orwell FTW
I can see the error of my ways! Thanks for re-indoctrinating me so efficiently. I am voluntarily re-writing my history and becoming a counselor at summer youth camp for utopian leaders of the future.
Please make sure to order your Counselor Kit, including course materials 'Bannerism & Sloganeering As New Truth' and 'Cult of Personality & Its Central Role In Utopia' as soon as you are able - they are back ordered.
thanks again for coming through with the clutch advice! This is sure to be the summer of The Great Leap Forward. We will have an annual celebration with our Great Leaders at the parade ground in front of the national nuclear power plant where we will all be joyfully employed
I've been saying the problem with the 'hyperinflation' theory is no one can pay for hyperinflation, or even a bit more regular inflation.
Dog I think you've uncovered one of the fundamental principles at work in biflation: the quicksand under the consumer makes it difficult to reach for the aspirational moon
More earnings,maybe?
"...The prices paid index declined sharply, by 22 points this month..."
Both P and LNKD headed down. Maybe, hopefully, the bloom is off the rose...
Market lemmings still pushing each other into the water this morning. Lot of fins circling around out there.
Sounds Bullish for the US Markets.
You forgot it's, Green Shoots on a Turd Re-Orientation Facility.
Obama is finished. A tanking economy along with an out of control debt problem spells the end of his presidency. With what is coming, we should expect a series of "one termers" unless somebody pulls a military take over. Entirely possible when it comes time to strip the pentagon of it's hundreds of billions. Crunch time comes when there is no money to fund the massive military establishment. And they are no longer a people's military like in my day, but are now fully funded professionals who will not like losing their jobs and pensions.
Theyre trying to whistle past the graveyard, but they dont have enough time, the wheels are going to fall off soon.
I believe we have already seen our last real election. Next up....false flag.
If his presidency is anything like the military action in Libya right now, he'll end it whenever he pleases--our constitution be damned!
Unless of course a series of false flags are launched. We saw how the US rallied behind Bush following 2001.
Even if BHO loses, he'll lose to Rick Perry in 2012. Perry is yet another Bilderberg approved candidate, just like BHO, Bush, Clinton, etc.
The elites will continue to dominate our government until they run it into the ground.
Bilderberg-approved? That's Romney. Perry and his secessionist inner circle are reputed to detest both Wall St. and DC. We'll see...Perry vs. Zero in 2012 could be like 1860. I'm hoping....for change...via Civil War.
Zero is not "finished"...there is a reason he's throwing $$$ at the military...and it's not just to fight foreign wars. It's to buy Pentagon loyalty when Civil War II begins.
Wage deflation is a bitch. With food and fuel and taxes and insurance rising, and just plain outrage that your neighbor is on various welfare programs and has a better standard of living than you, and then add summer heat and fear your granny will die if you can't afford air conditioning, and yeah, you are probably not going to be taking out debt to put in a new kitchen.
And shovel ready translated to Union Bailout. All pissed away for nothing more lasting than a welfare check.
I'm going to adopt a 16 yo Ukrainian girl and go on the dole. I'm tired.
My puzzle starting to take shape here. Another piece just fit in.
I hope that's not another wiener joke.
Fiat lost the battle of Greece already, Euro CBs are buying gold again.
They is now belong to us.
"They is now belong to us."
Are he sure it am?
Bernanke must be stroking himself over all this data.
How fucking lucky for him to have the red carpet rolled out for his launch of QE3, fully justified and backed by the depression his institution helped to create.
Bernanke must be stroking himself over all this data.
How fucking lucky for him to have the red carpet rolled out for his launch of QE3, fully justified and backed by the depression his institution helped to create.
43-26, joking and sarcasm aside...me thinks the west can't handle it.
Arch Street and Market will eat their hat sooner or later...don't fret. The End will be a long protracted agony fest. In the meantime, watch Chase & Ruiz make some magic.
Bread and Circus has its place.
Out Here...going to the 1305 Circus.
The End will be a long protracted agony fest.
That's what they're shootin for, and hoping above all. Like a Roman ruin slowly decaying in the wind and sands of time. So they can hold on to their ill-gotten goods while the rest fight over the crumbs off the table
TARP from the get-go in 08 was designed to ease the US into a lower standard of living.
nan pelosi is up 68% yoy..who's her investment advisor ?? I need the same advice hoo boy.
Operation Twist 2 (QE3) will be the contagion effect that will bring the fed/ecb down to it's very insolvent knees and that's when the fun begins to happen-- revolt and lynching for these assholes.
OH goody! We're back to ignoring the bad news so we can have another Pollyanna Party!
Wow! The most I peruse this data, the worse it sounds. But stocks are on a momentum tear today. It appears that "we're all traders, now", because news and data have become irrelevant. Wall Street is so blind to its own hubris that they are blind to their own irrationality.
Welcom to Bizarro World!
Damn. What is the trade here? We all know that the talking heads are going to try and square this circle.
Mommm! There's brown stuff comin' out of the fan!
Per Bloomberg news:
"The S&P 500 briefly erased gains today after a Federal Reserve gauge unexpectedly showed manufacturing in the Philadelphia area shrank, adding to signs of an economic slowdown. The index erased those losses in less than five minutes after the data was released at 10 a.m."
Italics added, as a sign of complete disbelief. Faith in QE3?