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Huge Miss In Dallas Fed Causes Stocks To Surge, As Texas Manufacturers, In Their Misery, Are Drunk On Hopium
The Dallas Fed Manufacturing Index came at -17.7, on expectations of -6.0 and compared to -13.5 previously. Needless to say this is a whopping miss. It was almost worse than the worst estimate in the series of economist predictions which came at -21. And of course, with the only thing left for decimated Texas-region manufacturers being hope, the General Business Activity six month ahead reading surged from -4.3 to 5.2. So what happens? Stocks completely ignore the actual data, which now virtually guarantees that a sub 50 ISM is coming any minute. But why should anyone care - after all only Brian Sack, the 18 PDs, and a few vacuum tubes are trading. So let em rip. Then again, no POMO today, so this could be the first Monday that the Fed is unable to close the DJIA green.
From the Dallas Fed, which somehow just barely mentions how much uglier the economy is becoming all the way in the third paragraph:
Texas factory activity rose slightly in
September, according to business executives responding to the Texas
Manufacturing Outlook Survey. The production
index, a key measure of state manufacturing conditions, edged back
into positive territory following a reading near zero in August.
Other factory activity indicators also improved in September. The new orders and shipments indexes remained negative for the fourth month in a row but moved up from their August levels. The growth rate of orders index jumped from –13 to zero, suggesting the pace of incoming orders may be stabilizing. Meanwhile, the September capacity utilization
index climbed back into positive territory, with the share of
manufacturers reporting an increase rising from 22 to 28 percent.
Measures of general business conditions continued to worsen. The general business activity index pushed further negative this month, falling to –18. The company outlook
index dipped back into negative territory, with 25 percent of firms
reporting a worsened outlook, the highest share in more than a year.
Labor market indicators improved slightly in September. The employment
index turned positive, up from a negative reading in August. Nineteen
percent of respondents said they hired additional employees, while 17
percent noted layoffs. Hours worked were largely unchanged, while wages and benefits rose modestly.
Prices firmed this month. After doubling in August, the raw materials price index remained at 24 in September, with 31 percent of manufacturers reporting higher input prices. Finished goods prices
stabilized, ending a three-month streak of declines. The future
indexes for both raw materials prices and finished goods prices were
positive and posted large increases over last month.
The six-month outlook improved in September.
Most future indexes of manufacturing conditions rose this month after
falling in August. The future indexes for production and new orders jumped up; nearly half of manufacturers expect increases in these indicators in coming months. The future general business activity index advanced from –4 to 5, and the future company outlook index rose as well, with 80 percent of firms anticipating flat or improved activity six months from now.
The Dallas Fed conducts the Texas Manufacturing
Outlook Survey monthly to obtain a timely assessment of the state’s
factory activity. Data were collected September 14–22, and 100 Texas
manufacturers responded to the survey. Firms are asked whether output,
employment, orders, prices and other indicators increased, decreased or
remained unchanged over the previous month.
Survey responses are used to calculate an index
for each indicator. Each index is calculated by subtracting the
percentage of respondents reporting a decrease from the percentage
reporting an increase. When the share of firms reporting an increase
exceeds the share of firms reporting a decrease, the index will be
greater than zero, suggesting the indicator has increased over the
prior month. If the share of firms reporting a decrease exceeds the
share reporting an increase, the index will be below zero, suggesting
the indicator has decreased over the prior month. An index will be zero
when the number of firms reporting an increase is equal to the number
of firms reporting a decrease.
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Yeah! Blame it on JR!
He Tyler! Look at this stock: http://www.google.com/finance?q=NASDAQ:OPEN
If you ever wanted to short something, THIS IS IT! :)
Open Table...
P/E excluding extraordinary items (TTM) 176.4x P/E Normalized (MRFY) 299.8x P/Sales (TTM) 19.3x P/Tangible book (MRQ) 18.3x P/Cash Flow (TTM) 103.7xIs the tech bubble back?
Rather than make a free cell phone call for a rez, you pay mobile net and make tangled, hands busting online rez while driving.
Good call SD. On the other hand, Prepaid Legal will sell you a lawyer's phone number for $25.00 a month As Homer Simpson loves to say, how can I lose?
True that but I thought this was a good short at $40 but would have gotten creamed had I done it....stay alert
this part isn't bad:
Mfg. Production Index 4.0 vs. previous -0.1. New Orders -3.0 vs. previous -9.3. Shipments -1.0 vs. previous -3.4.
So is it an improvement if new orders move from -9 to -3, or is that just getting worse at a slower rate?
I'm not an expert in the Fed indexes, but my line of thinking is:
1. month zero, index new orders level at 100 (to measure increase, decrease, no change);
2. month 1, index drops 9 points, new index level 91.
3. month 2, index drops 3 points, new index level 88.27 ((91*(1-.03)).
So, a decline by 3 in month two isn't an "improvement".
Of course, the trouble with these indexes is that one business could be up 10% and another down 1%, and their responses would offset (one increase and one decline). Just my thoughts, could be totally off...
Can't wait to see the main ISM this week...I think it's going to miss...
Where can i get a hit of that Hopium ?
Completely farcical. Now they don't even just ignore leading indicators (unless, they're good of course) - they ignore actual data.
Actual data hasn't been used in 50 years. But you are right, even the fake data is openly ignored now.
Headline of Yahoo! Finance:
Without any major economic reports to dictate trading, stocks took a pause from their big September rally on Monday.
Riiiight.
Sausagemaker
my message to the Fed. Far be it for me to turn down a fools money. Yes, The economy is bad, But the economy has nothing to do with the Stock market. This is the " New economy". In the end, Were all fucked. Indulge in the Loaves and fishes while you can, Then take tour profit and buy Gold.
With a miss of that magnitude, the Dow should be down triple digits! But no one wants to trade against the Fed's sugar high!
The Fed is the only market participant. When you look at it that way, up is the only direction it can go.
Remember as a kid, when no one else wanted to play with YOU?,and how you felt.
Well, Bernie & Co, have that feeling now.
No wonder equities popped a little higher...horrible economic data means...good times for the...economy...huh???
Oh right, Bizarro World. Bad (and sinking fast ) economy = good for stocks.
This could be a look thru to what the entire country's economy would look like without government stimulus. We folks down here in Texas have not had quite the stimulus spending that say Illinois or Michigan have had, due to being a red state, and because our unemployment has been better, we don't get the extended unemployment benefits of the blues.
Welcome to your future..
I junked you because you are wrong. Red state moochers like TX, AL, AK andthe like receive more federal dollars than they send in. For example, OK receives $1.48 for every dollar it pays in. Us 'Blue staters' subsidize you banjo staters.
I like how you said he was wrong and then provided irrelevant data to back it up, and ended with a nice ad hominem.
Well done!
Federal Tax Revenue and Spending by state:
http://www.taxfoundation.org/research/topic/92.html
You will find that "Producer States" like Texas and Alaska PAY more taxes than they receive, and loser states like NY and MIchigan receive more than they pay in.
This is why the governmental spending should be reigned in, it is unequal and unconstitutional. IT is also at the whim of politicians.
YOU SIR are WRONG ON ALL ACCOUNTS and need to be "junked" yourself.
Did you read those reports?
What do you make of this one?
http://www.taxfoundation.org/files/sr139.pdf
We,Tx, use our constitution and balance our budget. fwiw.
Chicago Fed National Activity Index decreased to -.53 in August from -.11 in July. The three month moving average, CFNAI-MA3, declined to -.42 in August from -.27 in July.
Of course shit-NBC won't mention this nor the seizing of wholesale crest unions. Fuck it, it's merger Monday. Stocks down? Some profit taking.
Dallas fed doesn't matter unless it can be used to prop up the market.
These surveys don't mean much to me anyway. They're given 3 responses, no change, increase, decrease.
Rick Santelli DID mention the $50Billion bailout of wholesale Credit Unions this morning, but of course, everyone ignored his point about it.
Have no fear friends. If we sell off today ( perhaps to add a tinge of realism ) tomorrow is Turn Around Tuesday and another Sack Attack ...
The Fed will continue to pump, until the Bond Market will not fund them any longer. The only question is how long that will take.
Well, this is the scary thing.
For the time being, they've practically been told yields on 10 and 30 year are guaranteed to go down, which means for now it's a good investment. But they essentially only buy because they expect a bigger fool - the Fed - down the line will buy them off of them.
Exactly how isn't this a Ponzi scheme?
Ponzi schemes are illegal. This is all above-board.
Race to the bottom. Everyone knows it's just monetization. And yet our lawmakers are hounding China about a weak currency...........
Since the stock market's desire is to make the most victims, and everyone knows the FED will not stop monetizing the markets, what would you do if the destruction of portfolios was your life's purpose? ;)
The Indexes do not gage any of the ecomonic fundamentals, they are reflecting the "devaluation of the dollar". WHen you look at it from that POV the increase in the indexes makes perfect sense.
The markets are manipulated by the activities of intervention and it is well documented by many worthy news outlets and net information sites. These are the "Presidents Working Group" which is the Plunge Protection Team or PPT, and the POMO which is Permanent Open Markets Operations, both which flood the markets with what they call "liquidity", and that activity causes the markets to rise. Here is the "POMO" link.
http://www.zerohedge.com/article/pomo-an...
But what does that rise mean exactly. ALL of the bears have been pointint to "market fundamentals" and "economic principals" such as UE numbers. ECRI, GDP, debt/revenue levels, inflated P/E ratios ad infinitium. Many of the market cheerleaders are saying the rise indicates a "recovery".
It is not an indicator of recovery the DOW, S&P, NAS all of them are going up against the fundamentals with a known "market intervention" of billions every day and 2 POMO's scheduled for this week.
http://www.newyorkfed.org/markets/tot_op...
http://shankystechblog.blogspot.com/
So what does the market indicate?
It is going up in the direct inverse of the leverage of the value of the dollar devaluation!
Let me say that again, "It is going up in the direct inverse of the leverage of the value of the dollar devaluation."
That should concern you a great deal. The markets are functioning on something, and this is the ONLY thing that it can really indicate, and if there are some smart people out there I think a chart can be made on that correlation.
The Markets are going up because of the debasement of global currency and the reserve currency.
After all the Federal Reserve is in the "Fractional Reserve" policy business.
PPT and POMO can keep adding zeroes to the amount of FRNs, but sooner or later, the World will find NO heavy Equipment, NO commodities, NO anything of value, just the FRNs -- good luck eating them, folks!
Read it and weep
http://krugman.blogs.nytimes.com/2010/09/25/default-is-in-our-stars/
Once the DOW reaches the orbit of Mars, everyone's gonna look around and say: "Okay, that was fun -- what's for lunch?", only to find someone forgot to actually run the Real Economy! Tasty FRN salads for all!
Chart: ES and ZB
Ben prefers Bonds.
http://99ercharts.blogspot.com/2010/09/es-and-zb.html
Between this bad news and the credit unions being insolvent I would expect a triple digit gain today - buy AAPL OPEN and LVS
sarcasm off
Put the usual spin on this news, along with a Pomo pump tomorrow, and we'll have at least a triple gainer before the pool empties out.
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