Philly Fed Jumps By Ridiculous Amount, Even As Margin Collapse Accelerates

Tyler Durden's picture

Following one of the biggest drops ever in the Empire Manufacturing Index a few days ago, it is only completely logical that the Philly Fed would follow through with one of the biggest jumps in history. The Philly Fed prints at 22.5 versus expectations of 5, and a previous read of 1. GM, which was about to take out all the bids at 34.60 pre-news, the US Treasury, GETCO, and nervous flippers, all thank the Philly Fed. Then again, a look behind the headlines indicates that the scariest trend: that of margin collapse, is in full force, as the prices paid-received margin is over 40. From the release: "Price increases for inputs remain relatively widespread this month. Thirty eight percent of the firms reported higher prices for inputs this month. The prices paid index, which had increased in the previous month, increased 3 points. On balance, firms continued to report declines in prices for their own manufactured goods: Slightly more firms reported decreases in prices (16 percent) than reported increases (14 percent). The prices received index remained negative for the sixth consecutive month, although it increased 7 points this month."

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TradingJoe's picture

Too funny that they don't even bother what lying will do to this "index" and the aftermath of it! Becomes perfectly clear why all of us who can afford it should move the hell some place else!

unwashedmass's picture


amazing that this is happening, what with Harrisburg now on a respirator. how far is harrisberg from philly? maybe the people of harrisburg could drive over and bask in the sunny warmth of philly?

Calvin Jones and the 13th Apostle's picture

Harrisburg is a two hour drive on I-76(most of which is also the PA Turnpike) from Philly.

Id fight Gandhi's picture

Exact opposite of new yorks. Good timing too, gm might drop!

Harrisburg is so close to bankruptcy.

SMG's picture

You know, I am just not going to look at the news for a month and let my inverse positions sit.  I just can't see how this is going to continue with global delveraging and stagnant global wages.

RobotTrader's picture

The only thing that matters is how the market reacts to the news.

And today, the market loves it.

unwashedmass's picture

do the markets love it, or do the governments' and Wall Street's computers love it?

as far as i know, the mutual funds are still seeing outflows....none of this is convincing the unwashedmasses to walk in and take all the crap off wall street's hands.......

won't get fooled again!

Vampyroteuthis infernalis's picture

Wall Street's computers and hedge funds ARE the market. Who are we kidding? Don't diss on the Robo if he is right about the rigged game.

tmosley's picture

Markets are no longer relevant, Robo.

If you keep thinking that the little numbers flashing on your screen mean anything, you're going to be in for a big surprise when the capital runs out completely.  You might be up 500% on your Amazon shares, but your whole portfolio won't buy you a ham sandwich.

spongeBOB's picture

EUR/USD dumped but ES spiked up. Any Arb disconnect here?

Orly's picture

Exactly.  Both the yen and Euro are tanking.

Man, nothing makes any sense any more!



Bartanist's picture

I suppose it could be a market. The supermarket dictates prices not based on supply and demand.

It is of course not a free market based on supply and demand. There is always someone in the middle controlling and dictating price.... for "liquidity's sake" ROFLMAO.

Traianus Augustus's picture

Wow look at that...the data really is improving!!!  Now if it was only based in reality, instead of the same old bullshit!!!

Rainman's picture

And in other news, Sears appliance sales in toilet.

spongeBOB's picture

sears had a TV ad here in Chicago for 3-door SS fridge for $699.

risk-reward's picture

Today would make a good "reversal day"

mule65's picture

Crickets around here.  Bears destroyed again.

tmosley's picture

What are you talking about?

The real bears know you can't short these markets.  They all have gold and silver.  They are doing just fine today, than you very much.

unwashedmass's picture


well said. sittin on my gold and silver and extremely happy camper here. particularly fond of the actual bullion i hold looking at all this crap going on....sheer insanity.

RockyRacoon's picture

If you depend on government largess for your "market" gains then you are no better than those on the dole doing the same thing.  Looking to Uncle Sam for your sustenance is no different from folks on food stamps.

shushup's picture

Wait till we find out it's a typo and the real number is 2.5 not 22.5

Traianus Augustus's picture

or the first 2 was supposed to be a "-"

EscapeKey's picture

With the revisions going on these days, I find it much more likely it will be revised to 225.


Cognitive Dissonance's picture

One must simply applaud the wildly successful manipulation of the markets in order to debut the GM IPO. The Philly Fed will be revised when it no longer matters. All that mattered today was the spectacular GM IPO payday being disbursed as I type.


Withdrawn Sanction's picture

Too right.  My bet is for an oddly misplaced decimal point.  The mea culpa will be something like,  "Oh right, it should have been one place to the left.  Ooops, sorry."

Fix It Again Timmy's picture

Flocks of lip-sticked flying pigs reported in Philly...

cosmictrainwreck's picture

LOL me too - not precisely a double entendre by definition, but a double somethin'........a alluring image, to be sure

Silverhog's picture

Next week is Kathy in reception dept. turn to spin the wheel. 

goldmiddelfinger's picture

Philly- Philadelphia- Isn't that the urban nightmare whose credit ratings were just downgraded by Moody's yesterday?

Popo's picture

Oh please. They'll revise it down next month, but everyone will have forgotten about it by then.

Oops, we accidentally helped the market soar during the GM IPO. What a coincidence...

TideFighter's picture

GM IPO, 22b market cap, trades within 50 cents of its open and high. right. ReVolt. This thing will end up going as far as a Volt at a tracktor pull (except in Kentucky). Same union, self-admitted financial scamming (even on their own disclosures), same shitty product, same result. Philly Fed prints WHAT!!??


the grateful unemployed's picture

Do you suppose it's that hard to buy something you own (see Bernanke, front running Treasury auctions)?? answer no. Can the Fed buy the GM IPO. rhetorical question.

scratch_and_sniff's picture

Well i suppose the old maxim stands true, if you are going to lie then make it a wopper! (Though personaly i tend to beleive it, and just think that you lot are a pack of curmudgeony old bastards, snigger snigger)

aztrader's picture

Another act of desparation.  With the holidays coming fast, they need to build confidence fast.   The past week took a lot of the confidence in the markets away and they are trying to replace it with more bullish economic numbers even though they most likely are phony using different accounting standards or the like............

the grateful unemployed's picture

This is what happened during GD1, the administration used price controls to help farmers, which had the opposite effect. Price controls, or putting a bid under prices, or stoking asset inflation, merely puts the price of final products out of reach of consumers who are in full out deflation. Of course with the Chinese pegging their dollar, we can still buy prison made goods, dumped on the global market by anti-free trade Socialist countries, but eventually the dollar refuses to go down and all hell breaks loose.

HarryWanger's picture

This is the perfect example of the psychology here at ZH. I post frequently that there is a strange phenomenon that occurs on economic news. If it's bad, like the Empire Manufacturing, it's taken as "proof" that the economy is in "dire straits". 

When we see a good or very good number like the Philly Fed, it's obviously a "lie" or a "fraud". Can't have it both ways. Not all bad numbers are gospel and good numbers frauds. 

Orly's picture

Being analytical, one would think that a move from five to twenty-two is a little suspect, Harry.

HarryWanger's picture

And a celebrated drop of 26 isn't suspect??? That's the point. You guys act like the world's ending on a -26 drop on the Empire index but are "suspicious" of a positive 17 point move on the Philly. 

Orly's picture

Please don't, "you guys," me, Mr. Wanger.  Last stock I traded was

erik's picture

There is an 85% correlation between NY and Philly Fed indices. 

The last time we saw this extreme divergence was Sept 2008 when the Philly went from -24.2 to -1.1 and the NY went from -3.15 to -11.54.

What did the Philly print in Oct 2008?  -38.8

Thus, Sept 2008 ramp in Philly was a complete outlier.  One of the two is telling the truth.  We will find out which next month.

HarryWanger's picture

One of the two is telling the truth.  We will find out which next month.

I would say "one of the two is more accurate". But I agree, we'll find out next month which one is more accurate. But of course if it turns out to be the Philly numbers, I can guarantee you'll hear more people here screaming "lie" or "fraud".

erik's picture

And if NY is right, I can guarantee you will be here making excuses for the bull case.  They're called opinions (and yes i know what those are like).  People here generally have strong opinions regarding bailouts, moral hazard, fascism, etc.  I respect them for that.  Some of the headlines are sensationalist, but it really isn't very different from listening to the Ken Fisher and Abby Cohen types on the other side of the spectrum.

Cognitive Dissonance's picture

Some of the headlines are sensationalist, but it really isn't very different from listening to the Ken Fisher and Abby Cohen types on the other side of the spectrum.

And that's the point. The gospel singer's song is always consider gospel.

Outrageous statements spoken in an environment conductive to acceptance of outrageous statements automatically washes the outrageousness out of them, but doesn't really diminish the truth or false nature of the statement. Thus Cohen and friends will always be considered reasonable.

ZH and a few other blogs are contrary to the status quo and thus anything said on these sites will always be branded as outrageous and ridiculous to the powers that control the status quo.

I submit that the followers of the Ponzi powers that be are even more sheep like than the passive population. The only difference between the two sectors is wallet size, arrogance and perceived self importance.