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Richmond Fed Collapse: Atlantic Region Manufacturing Enters Contraction As Raw Material Prices Increase At Highest Rate Since Index Inception
The latest and last regional index confirms that the economy is now not only slowing its rate of expansion, but is in fact contracting. The narrative is plain ugly: "The index of overall activity was pushed into negative territory by weak readings for shipments and new orders, while employment growth held steady. Other indicators suggested additional softness. District contacts reported that capacity utilization turned negative and backlogs fell further, while delivery times grew more slowly. In addition, manufacturers reported an uptick in finished goods inventory growth." But not all is bad: for example those predicting inflation are once again proven correct: "Distrcit manufacturers reported that raw material prices increased at an average annual rate of 6.12 percent in May - the highest reading since the inception of our surve in December 1993 - compared to April's reading of 4.81 percent." Fear not: it is "transitory." And 82% of experts say no QE3 is coming so....
More from the report:
In May, the seasonally adjusted composite index of manufacturing activity—our broadest measure of manufacturing—fell sixteen points to -6 from April’s reading of 10. Among the index’s components, shipments decreased nineteen points to -13, new orders dropped twenty-five points to finish at -15, while the jobs index held steady at 14.
Other indicators were mostly weak. The index for capacity utilization moved down fourteen points to -12, and the backlog of orders index lost eighteen points to -19. The delivery times index declined thirteen points to end at 5, while our gauges for inventories were mixed in May. The finished goods inventory index edged up two points in May to end at 12, while the raw materials inventories index eased two points to 16.
And the latest spin from the apologists: since America doesn't really manufacture anything, who cares about manufacturing surveys. You can't make this up.
The two charts that matter:
Elsewhere, America sold 32,000 new homes in April, at a median and average sales prices of $217,900 and $268,900 respectively. On a NSA basis this is about 5.5 months of supply. For the first time in 2011, over 1000 houses priced more than $750,000 were sold in the month.
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Nasdaq not looking strong
http://deadcatbouncing.blogspot.com/
Steve Wynn said it a while back
http://www.youtube.com/watch?v=fWacc6L9NoU
manufacture is for bitchez! its all about, printing, services and Banking!
QE to the X degree bitchez!
The printed money heroin is killing the addict
bernanke's reign of terror over the world is transitory.
No big deal. It can be fixed in 15 minutes by our Chairman.
" Fear not: it is "transitory."
So is a heart attack!!
Look Greece CDS¡¡¡¡¡¡¡¡¡¡¡¡¡lol
Did Greece default or something? Not seeing any news...
Haircuts gonna hurt market
Who cares? Consumption is 70% of our economy anyway. Markets seem to like this news. That's all that matters. Higher stock values will boost confidence, spurring more spending and thus more hiring to meet all the pent up demand. That will in turn lead to higher corporate profits, and higher still stock prices, which will make consumers confident that the recovery is gaining traction. They will boost spending even more, raising demand and also generating more tax revenues to offset our budget shortfall. The government can then spend freely to upgrade our crumbling infrastructure, creating more jobs in the process.
Did I hit all the talking points? I think I got most of the big ones...
A+ You can apply for that shill position now. lol
omitted "...are necessary to retain top talent".
If Ben Bubbles & Bananas Bernankincide did own a car, it would most assuredly be a Fiat.
Bloody hell.
Sales and traffic down sharply while gas is $4/gallon. And that is even being mitigated somewhat by the Social Security tax cut.
Transitory: "trA:nsIt@ri" something that you don't want but is real and bad that you wish would go away. Commonly applied to Herpes and Inflation.
I just love the humor of Zero Hedge.
Also can someone clear this up for me? Serious question.
Every time the dollar falls vs the Euro, stocks go up because they are priced in cheaper dollars. So why isn't there a corresponding fall in European stocks, since they have more expensive Euros? This strikes me as very odd. Seems like all the big players simply have long dollar/short SPY and short dollar/long SPY trades on, nothing else matters.
Be careful doing that or you'll go cross-eyed.
yeah, seems insane....us stocks go up when dollar is down, but euro stocks go up becasue us stocks went up....
Seemingly odd-er, although not so much as of late, is when the metals "decide" to move with the dollar, and not against it.
I enjoy days when metal thinks for itself.
Persistent High unemployment? Higher input costs? Fed mandate of inflation control and unemployment targeting both going to hell in a hand basket?
Yeah Ben, this QE thing is really saving the economy alright.... (rolls eye)
Not persistent....
transitory.
Of course QE2 working. Think how much worse things would be without it. Like banksters forgoing their bonuses - and morning non-dairy soy milk lattes. Can't have that, can we?
Ruh roh reorge.
Margins squeezed like a marshmallow into a piggy bank, and production coming down off its methadonic-QE high.
GS should be calling for the Dow 15K any minute now...
All those compressed margins waiting to flow through as 'forbidden' price hikes. Will they come through as dribbles and drabbles or will they act like a laser where one forbidden state change induces a whole cascade. We may see a large spike in consumer prices soon as everyone passes through their costs at once.
You should see a massive wave of price increases in food over the next 30 days. Start watching for BOGO deals at a new higher price, then when the bogo ends the price will not drop.
That is currently the prefered method of hicking prices 5-10%. This goes for fresh beef, pork, chicken, veggies, milk, dry goods, canned goods, etc. It is pretty much across the board.
Richmond Top is a countercyclical signal of sell the f...g top
On the way up all we heard was about the positive change in the second derivative. Now that we are getting negative change in the first derivative, we are hearing bull shit spin, like who cares about manufacturing anyway.
Oddly O'Bama has said the renaissance of America, is dependent on manufacturing and doubling exports in 5 years (3 yrs left). The corollary of that is killing the USD. What happens if the increase in manufacturing/exports fails to materialize to levels sufficient to underpin the "renaissance" and the only thing America is left with is a dollar that has lost 50% of its purchasing power in 10 years?
That scenario is coming in 5 years, not 10.
I will give it about 2 or 3
Nope. weeks, possibly a couple of months.
Printing money has never worked in the history of the world. No different this time.
Is this game like "The Price is Right" where you have to be closest without going over? I'm claiming 18 months.
I went ahead and junked myself on this one. You people obviously know something that I am not privy to.
Good luck!
That scenario is already here. It's just hidden under a media blast of insane making proportions. The programming is constant for good reason. Too much slack and someone might wake up.
ORI
http://aadivaahan.wordpress.com/2011/05/24/ultrasound-to-the-mis-fit-in-us-all/
We have the mother of all yard sales.
"On the way up all we heard was about the positive change in the second derivative. Now that we are getting negative change in the first derivative, we are hearing bull shit spin, like who cares about manufacturing anyway."
Who cares about public education either? Zero taxes == maximum liberty!
well, for me that is.
I love the US strong dollar policy. ;)
http://research.stlouisfed.org/fred2/series/DTWEXM?cid=105
Very Strong!
Transitory...bitchez...!!!
Higher costs
Less exports
Less jobs
Less recovery
More recession
Transi....
Oh, s**t! Forget it.
Hey so for the past 2 months I have had a bid in for a short sale property list price 82k, my offer 75k. 2 months later, bank gives a counter offer. 87k.
Yes, that's right their counter took 2 months and was above the approved short sale list price.
There's a prime example of why this mess is taking forever to clear.
Mark to fantasy is a fun game with all kinds of new rules and rulers.
Correct. I hear lots of stories about banks jerking around the foreclosure sales. It's not about fixing the problem whether foreclosure backlog or manufacturing it's about making the numbers look nice. Your house is probably on some bank's asset sheet at twice the price you bid and they take a big paper hit by selling it to you. It would have been nice if they let you know that ahead of time before you wasted two months.
Well, the house was supposedly already approved for short sale at 82,000... Mostly they're wasting agents time. I'm not going to bother chasing. But hearing things like there are only around 30,000 listed homes (in the area), etc... makes me laugh.
Two can play that game, LOWER your offer to $69K(FRN)
We are going into a Depression, folks.
Ben's 3 year experiment is about to blow up in everyone's face.
TOTAL and ABSOLUTE failure.
America is in trouble!
Not to burst your bubble baby but America has been in a depression since 2001.
http://dshort.com/articles/2011/mega-bear-2000.html
Pick one
a) Ben was correct. Saved us from another Great Depression (Deflationary Collapse) therefore re-writing the laws of Macro Economics
b) His money printing was a complete failure (as is always the case throughout history) and we are about to pay dearly for it.
Let's fight it out before we junk away
the bernanke and his predecessor the illustrious Lord Vader/Greenspan are the penultimate cosmetic surgeons. Through their policies they have given the illusion of youth and vibrancy to a gnarled old wreck. They have applied the monetary equivalent of live botox bacteria to hide the massive wrinkles of a dying economy, but in their haste to cement the illusion, they have merely accelerated the death.
It is this strange twilight world between regimes that instills a sense of confusion and in some despair. The old rules don't work or only work for certain classes of society. The new rules have yet to be discovered and land mines lurk behind placid illusions waiting to destroy us economically.
I agree that much pain will be the likely outcome, the timing and the location are so vague as to be useless in understanding how to profit or prepare. If the gods are quiet, a decade could pass before the inevitable collapse occurs, but if the gods be as their history has shown them to be, imbued with a sense of merriment and entertainment at the sight of the plight of man, then an earthquake or two, an untimely death, a plague, or any of the other unstoppable forces of nature could predicate a collapse nearly overnight.
How shall we face the new day with such knowledge always at our backs? I tread lightly and cherish each day, and keep an eye out for symptoms of the inevitable. The world ends one day for us all, in the mean time live as humanity always has, with uncertainy around every corner. The last few decades has merely been a false calm, that has proven itself an illusion.
Live in the moment, know this world, it maybe the only one we ever have.
Invest in yourself.
Pick one?
The three choices are, in reality:
a) Bernanklecide kicked the can down the street, and prayed for the best, or
b) Bernanklecide kicked the can down the street, and prayed for the best, or
c) Both a and b above.
I did not junk you, nor will I fall into a dialectic trap of a or b.
Ben is only the current face of what is wrong. This goes back further than Ben. It goes all the way back to the turn of the last century. This course was set long before Ben was even born.
Not that Ben is not an evil bastard. To focus on Ben is to miss the forest for the trees. The printing is just the lipstick on the pig was was gussied up long ago.
Oh, I'm down with that.
Really.
I often say that the Berncankle is merely a bagman for the puppet masters.
double post (glitch in the Matrix, like Deja Vu)
We The Fed to give us about $2 Trillion Boost to the economy to lower the dollar and stimulate exports.
Profits are down? Looks like we need to accellerate our offshoring. Time to stop wasting so much $ on overpriced American labor costs. We can turn this around and be profitable just as soon as we get everybody on unemployment.
It isn't all labor. Regulations are a signifcant part.
When are they outscourcing traders for GS?
Why outsource when you can replace with silicon chips?
So speedy at executing the firms trades, never get tired and no per diem on hookers and blow.
GOOGLE " Great Depression Headlines" and select Joliet Remembers - which is the second choice down. An elementary school child can see from these posted news paper headlines that NO ONE person was able to state the truth about the economic situation of the time. It took at least three years before the smarter and more observant section of the USA population knew that this depression was something quite different, and that regardless of what the LEADERS were saying - things just weren't getting any better. We could now be entering another period just like that.
Certain trendlines in data can show the reality that the economic propaganda machine tries so hard to mask.
Merely extrapolate how many months/years it would take to have full employment at the current hiring/job creation rate. - The answers is years, around 7 years.
Extrapolate how long to exhaust current inventory of unsold homes and shadow inventory of bank owned real estate. Again years, a 2 year supply of homes on the market, and likely another 2 to 3 years of homes in the bank REO pipline. Home sales will trail unemployment, until people have a job and a job history of some decent length (12-24 months) they won't even consider buying a house. So figure this number of 4 years will likley be even longer.
Tally up the number of persons on food stamps, currently 44.2 million people or one in 7 nationwide, soon that number will be 1 in 6, then 1 in 5. Watch this ratio it is like a anenometer telling you the wind speed is increasing and the storm grows closer.
There are certainly other tells, dig a bit look at credit spending, auto sales, personal assets, etc.
The Great Depression lasted over a decade, 2018 is probably the most optimistic date for a real economic change, with 2022 more likely. The only thing that changes this picture is a rapid technological change of some sort that would allow a transformation of our entire world. It might happen, but I've yet to see much to indicate it.
Looks like the PDs are in fund raising mode. 2 year auction may be a dud.
And the latest spin from the apologists: since America doesn't really manufacture anything, who cares about manufacturing surveys. You can't make this up.
We do manufacture something in America-Dollar based debt! If we count printing money and issuing debt our manufacturing base would trump the world's manufacturing base combined! This coupled with other 'Fed' reports will bring QE 3 online Mid-July or August maybe under another name or "Fed program", add in debt ceiling problems (which is just the Congress 'approving' more debt slavery for the people they 'represent'), and boom gas=$7.50 a gallon and PMs really get this party started!
if it weren't for inflation, well, this is even worse than stagnant.
BiChFlation.
You forgot the 't'...
PLEASE CHECK OUT THIS LINK http://www.joliet.lib.il.us/digitization%20projects/The%201930s/Depression.htm
Don't worry.
Ben B52-Bananas-Bubbles Bernankincide said high raw material input prices are and always will be 'transitory.'
Further proof that Shitanke doesn't know what he's doing.