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Huge Miss From Philly Fed: Comes In At 8, Expected 20
Philly Fed drops from 21.4 to 8, worst since August of 2009. Expected at 20.Why is the market down on this? This means that the Fed will soon have its Congress OpCo legalize a) negative interest rates and b) make holding any cash in deposit or money market funds treason.
From the Philadelphia Fed:
Results from the Business Outlook Survey suggest that regional
manufacturing activity continues to expand in June, but at a slower
pace than in May. Surveyed firms reported no expansion of overall
employment and work hours compared with May. Fewer firms also reported
increases in prices of inputs this month. The survey’s broad indicators
of future activity continued to suggest that the region’s manufacturing
executives still expect growth in business over the next six months.
Some Indicators Suggest Slower Growth
The
survey’s broadest measure of manufacturing conditions, the diffusion
index of current activity, decreased notably from a reading of 21.4 in
May to 8.0 in June. The index, which had edged higher for four
consecutive months, fell back to its lowest reading in 10 months (see Chart).
Although still positive and suggesting growth, indexes for new orders
and shipments showed a mixed pattern this month — the new orders index
increased 3 points, while the shipments index decreased 2 points. The
current inventory index increased 13 points and moved back from a
negative reading into positive territory, suggesting an increase in
inventories this month.
Until this month, firms’ responses
had been suggesting that labor market conditions were improving, but
indexes for current employment and work hours were both slightly
negative. For the first time in seven months, more firms reported a
decrease in employment (18 percent) than reported an increase (17
percent). The largest percentage (62 percent), however, reported steady
employment levels. The workweek index also declined into negative
territory, its first negative reading in eight months.
Firms Report Reduced Cost Pressures
Nineteen
percent of firms reported higher input prices this month, down
significantly from 39 percent last month. The prices paid index
decreased 26 points but remains positive, now at 10.0. On balance,
firms reported declines in their own manufactured goods — slightly more
firms reported decreases in their prices (15 percent) than reported
increases (9 percent). The largest percentage, 71 percent, reported no
change in the prices of their manufactured goods. The prices received
index fell 10 points, to -6.5, its lowest reading in nine months.
The
future general activity index remained positive for the 18th
consecutive month and increased slightly from 37.0 in May to 40.2 (see Chart).
The future new orders and shipments indexes remain at high levels,
although they fell 9 points and 6 points, respectively. For the 14th
consecutive month, the percentage of firms expecting employment to
increase over the next six months (33 percent) exceeded the percentage
expecting declines (13 percent). The future employment index, however,
decreased 11 points and is at its lowest reading in four months.
In
special questions this month, firms were asked about the probability
that they would relocate some or all of their operations out of the
tri-state region over the next five years (see Special Questions).
The average probability of relocating was 12 percent, a decline from 20
percent last year. The average probability of relocating all operations
was 4.2 percent, which was little changed from previous surveys. Firms
were also asked to rank the factors that were influencing them to leave
or stay in the region. According to the firms’ responses, the two most
important factors influencing the decision to leave are (1) the cost of
labor and (2) taxes, subsidies, or regulations. The two most important
factors influencing the decision to stay in the region are existing
investment in fixed capital and the availability of skilled workers.
Summary
According
to respondents to the June Business Outlook Survey, regional
manufacturing activity continues to expand. A few indicators, including
employment, suggest a slower pace of growth this month. Firms also
reported a moderation in cost pressures this month, and more firms
reported price reductions than reported increases for their own
manufactured goods. Firms expect continued growth in their
manufacturing business over the next six months, with over half of the
firms expecting growth in activity, new orders, and shipments.
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Market brushed it aside after a quick drop and is now following AAPL higher again.
How's that working out for ya?
SPX @ 1110 now on small waterfall.
I think if Harry Wanker is a day trader he's in trouble.
Sarcasm, guys.
Harry,
I'm very interested in learning more about your change in attitude regarding the market. As you may know, I often write about the psychology of the markets and the people. I would be interested in interviewing you with regard to an article series I'm thinking about. I promise you I have no intention of bashing you and to prove it I will give you final approval or rejection of any parts that include you.
But clearly there is much more going on here, both with you and the market in general, than meets the eye and I would love to know more about you, your background and your thinking. You would stay anonymous of course and like I said, you have final approval over any sections that include you. What say you?
It would be via e-mail. If you say yes, I will give you my e-mail address and you can make (or not make) first contact.
No problem. Gladly speak with you.
Great.
Please make contact. I will respond to confirm and then I will come up with some questions and we shall see where we go from there. Thanks.
ZHcognitivedissonance at gmail dot com
Honestly looking forward to this. I feel like I have a lot of history with HW since I remember someone with that handle posting over at ritholtz.com in 2008/9.
I am looking forward to this as well. But as I promised, this won't be a Harry hit piece nor a Harry pandering piece and my main focus is market psychology, not Harry. But it will be fascinating. Harry just responded so now I need to reflect and come up with some questions.
I know I will learn from this discourse. I always learn when I walk in someone else's shoes.
Could someone help out a newbie?
Any insightregarding Sarcasm would be helpful.
Thx-c2084
There is a history here on ZH with Harry. At one point Harry was extremely optimistic and has since moderated his optimistic views with what some might say is a more sane and realistic point of view.
So Harry has been on both sides of the fence. I suspect some people weren't sure which side of the fence Harry was on when he commented above about the market.
I am glad to see that you have reached out to one of the members who have apparently been designated free-fire targets on this site.
I have been reading and occasionally speaking out here for about 6 months. In general I appreciate the prevailing pessimism and grim humor, as my own view is that we are approaching a singularity in the history of human civilization where hubris is potentiated by unrestrained power over our physical and economic environments. However I am often repelled by the appearance of a lynch mob mentality that directs contempt and outright hatred toward anyone who doesn't appear to support the majority negative consensus. Members like Harry and Leo often receive multiple vitriolic replies that don't even relate to what they have just said. In fact they are sometimes attacked in absentia for supposed transgressions of thought without having even made a comment.
I don't know if or where this fits into your psychological observations, but I try to encourage civilized discourse whereever I find it.
"Members like Harry and Leo often receive multiple vitriolic replies that don't even relate to what they have just said. In fact they are sometimes attacked in absentia for supposed transgressions of thought without having even made a comment."
I'm hoping I can present a fair view of Harry and others as a sort of mirror in front of the general ZH audience in the hope that we are willing to see our own narrow mindedness a bit better.
I figure since I wasn't lynched by calling my audience people who are in an Insane Asylum, I can continue to insult my readers in the hope that I learn something along the way. If others learn as well, that's the cherry on top. Actually I think people are willing to learn about the ugly side as long as our faces aren't rubbed in it.
Watch out for the worm...
+21
Harry, the correlation between aapl and slw is amazing, check it. Also, the cult known as apple is in a bauble. Bet on it.
Initial jobless claims surging to 472,000 and the Philly Fed Index at 8 is definitely a huge buy indicator. Isn't that right, Jerry Boyer?
</Larry Krudlow>
As per what the Labor Dept. spokesman said, it was probably that low because of the Federal holiday. (major sarcasm off)
I really miss the good 'ole days when "snow" was the go-to excuse.
Too bad all the sellers already sold.
ES wants to go to 1150 real bad, just consider this madness a selling opportunity.
Only 20% of market volume is real.
I think thats why the markets aren't tanking. All the bears are waiting for 1150. That would be the right shoulder of the head and shoulder. Neck line of 1040. It breaks that, SPX 860.
I don't like calling patterns when you've only set up one shoulder and half a head.
Left shoulder is the Jan. high, head is the April high and now we're about to form the right shoulder:
http://s873.photobucket.com/albums/ab298/johnlaw1/?action=view¤t=s...
And if the right shoulder is formed so much lower than the left, it's a REALLY bearish signal. I guess that means Timmay and Benwah will have to set the knobs on the algo machines to 11, (nod to This is Spinal Tap).
K, got it now. Was looking at a way short time frame at a baby one setting up there.
Nobody expects the philly fed!
Bring out ... the comfy chair.
(oh no, not the comfy chair)
Beware the comfy chair.
Update: guess you beat me to it, sumo. And now for something completely different...
BB says: "Mom, with this finger, I touch this key, creating $10^24 instantly and dooming the Earth to become a 'flaming marshmallow.'
Oh sorry Barney Frank is the 'flaming marshmallow.'
+ !!!
Good laugh on that one
when the markets are controlled by criminal commissars, nothing f***ing matters
Excuse me....the REAL NEWS of the day is the rumor that AAPL is doing a 4-1 stock split causing AAPL to hit a lifetime high.
Thanks Lizzy. That makes total sense.
Sadly
Oh they want to have a penny stock after the crash to make it more boiler roomy.
so what if the stock market is 50% overvalued?
so what if bond yields are 50% what they should be?
watchya gonna do aboudit?
---- Team Geithner spokesperson, Dr. Evil
So that is Philly, Dallas, KC all showing massive slow downs...
with hal backing off, close to 100% correlation, eurusd temporarily diverging, 200dma head fake
what's next ?! initiate crash 2.0
Check out the way Bloomberg treats this news. I don't get how a 0.4 reading on US Leading indicators outweighs tanking employment and output... but then, that's just me talkin
•Philadelphia Fed Factory Index Slumps to 8 Following May's 21.4 Reading
US Leading Indicators Climb in Sign Recovery to Extend Into Second Half
Agree.
And they all miss how the largest positive contribution to the leading indicators is the yield curve slope. Which IMO is utterly irrelevant without a functioning credit transmission mechanism to business.
This from the bloomberg market data / economic calendar page:
Hey Roubini, you were saying???
Then again, that should say: Yo Roubini..
Oooo...green shoot!
On a side note. What crack pipe do banks think we are willing to smoke if they intend on ending free checking?
1)Why should we suffer because they can no longer rely on the billions in stolen overdraft fee charges?
2) How dare they believe they can accept 0% rates and charge for checking.
3) This is unsustainable because everyone will switch to the first bank that keeps free checking. Personally I must have signed up about 20 people this year with TD bank because they reimburse all my ATM fees and are an incredible bank regarding customer service.
4) Apparently having billions in customer deposits to gamble in the markets is not enough for them that they now need checking fees.
Apparently that is why the banks have some false strength. Regardless I reiterate what I have believed since last fall that losing overdraft fees is going to place serious pressure on their capital requirements since they are losing that monstrous income source. So now we have banks that can no longer make money in any regard aside from the stock market and short squeezes and here we are a year later about to flush directly into the depression and the market is barely over 10,000 and rates have been 0% for an eternity and they still have the SPE's off balance sheet assets that they have to raise capital for by Jan 1 2011 from FASB 166/167. We also have FASB considering a return to market to market.
So banks are not making money from lending. They are still not taking losses, they are losing overdraft fees, there are witnessing new souring loans, unemployment checks are drying up, new claims are increasing, credit is destroyed for consumers and all those supposed profits during the bubble were proven to nothing more than manufactured temporary earnings that resulted from 0% rates, speculation and loose lending that can never occur again. So all those earnings ended up being taxpayer debt do who in their right mind thinks the big banks can return to normalized earnings when the majority of those earnings were false and reliant upon mark to market markups on the way up.
These guys are out of control
Here's throwing a little Chinese hot mustard on a razor cut - my bank charges $4.40 if there is an error in arithmetic at time of deposit - even when the error is their fault. Of course, I don't pay it, as they would prefer, at this point in the relationship that I not yell "fuck off" whilst other depositers wait their turn.
Don't they just deduct it from the amount of the deposit credit that night?
I would either:
1. Find a new bank
2. Go collect some dog feces and take them down to the bank and hurl them at the highest ranking person there that day (usually found in the big corner office in the back with one piece of paper on his desk watching internet porn)
The chart, Derivatives Notionals, Commerical Banks, referenced by Ilan Moscovitz from the Office of the Comptroller of Currency as of Dec. 31, 2009 shows that “the problem (of risk) is getting worse.” It shows that the notional amounts of derivatives concentrated in five federally insured TBTFs-- JPMorgan, Bank of America, Goldman Sachs, Citigroup and Wells Fargo— have risen to $206 Trillion. Everyone else, $7 Trillion.
“No matter how you measure it,” says Moscovitz, “this is a ton of risk, and it's concentrated in five hands…
“There are at least three problems with this picture,” says Moscovitz in The Coming Financial Meltdown :
http://www.fool.com/investing/general/2010/06/15/the-coming-financial-meltdown.aspx
Time to move more FRNs into the Bank of Sealy and Bank of Maytag....
now, that's funny.
it's official hal _IS_ backing off
I'm waiting for the afternoon ramp. The Quad Witch ain't dead yet.
Denninger noticed that someone traded this news 15 minutes in front of its publishing.
Again.
http://market-ticker.org/archives/2417-OBVIOUS-Insider-Trading-Again.html
Guess they didn't see this coming?
They should consult The Psychic Friends Network next time.
Yes, Philly Fed was lower but look at this gorgeous spin on Leading Indicators at CNBC.com:
Leading Economic Index Soars in May
Separately, the Conference Board, an industry research group, said on Thursday its gauge of leading indicators rose to a new peak, suggesting the U.S. economic recovery will continue.
The Psychic Friends Network actually went bankrupt (couldn't they have seen that coming??)
CNBC is the "New Psychic Friends Network" The results will be the same.
Looks like we have a divergence of views. The Philly Fed survey is anecdotal and thus a bit fuzzy, and the rest of these are no different. I'll go with Tyler's theory that the market is all about the EURJPY trade.
Since there is a banking rant here, I wonder what would happen if there was a non-for-profit bank instituted. Free checking and savings (the savings would actually yield interest), the banks holds 100% for reserves in UST or some other "safe" instrument to cover their costs. No loans provided, just a basic checking/debt holding company, great customer service, and completely safe. Heck, they could have financial planners on staff, or some form of automated planning services to help people control their cash flow and debt.
I wonder what all of you think about this idea?
Isn't that called a Credit Union?
Just need to add HFT services for the "little people"
I honestly don't know.
They are called "small folk", not "little people". How non-british of you.
Herbert Hoover ... I mean , Obama , should be feeling swell about this
Those EURUSD bullish warnings have strengthened further today.
Vice versa for the USD index of course.
It seems the current EURUSD downleg has ended.
http://stockmarket618.wordpress.com
I actually don't mind being "Little" "Small" or whatever.
Just a few days ago I spoke with a Branch manager about moving a small amount of money related to our little two bit, good for nothing over in debt life and when it was resolved... she made a comment...
I am glad you are having us move the money instead of the "Other" bank (FDIC) that could do the job much faster for cost. The Problem was the Manager says it will take a few days before all is settled between her bank and the target bank. Instead of paying someone a fee to make it happen in a few hours. *Shrugs... we live pretty slow here in the south.
Things are slow living in the south, HFT means nothing to me. If you buy something you held it until you die. Then maybe a flea shop will sell it to someone else who will know what to do with it.
Not fantasy trading that goes "Poof" if you blinked at the wrong time. That is not banking and that is not how you want to move money.
If somehow the USA Dollar went Poof along with everything else, that is ok too. We have some crops to trade for needful things you all may not need anymore in wall street LOL, just be sure to be able to eat.