Sorry, You Can't Blame The Philly Fed's Collapse On Japan; And Goldman's Take Of Today's Trifecta Of Bad News

Tyler Durden's picture

Already some of those who said that the Japanese disaster would lead to a surge in global GDP (since disproven) are trying to validate that 3rd worst 2 months drop in the Philly Fed in history (43.4 in march, 3.9 in May) can be attributed to, you guessed it, Japan. Sorry. You can't. Goldman explains why: "We have no information on how much of the drop in the Philly survey over the past two months could have been related to supply chain issues associated with the Japanese earthquake, but this is not a region with an especially high concentration of vehicle manufacturing." So while other Fed districts that do have a substantial manufacturing exposure will likely collapse even more, but at least have a validation for their drop, the Philly Fed is indicative of nothing more or less than wholesale economic contraction, absent the "one-time" impact from Japan.

Full Goldman note:


1. The Philadelphia Fed's monthly manufacturing survey weakened sharply for the second month in a row. The headline index of "general business activity" fell to 3.9, from 18.5 in April and 43.4 in March. This still suggests factory sector growth, but only barely. Most of the detailed activity indexes also weakened - the new orders index fell to 5.4 from 18.8, the shipments index to 6.5 from 29.1, and the unfilled orders index to -7.8 from 12.9 - with the exception of employment, which rose to 22.1 from 12.3 in April. (We have no information on how much of the drop in the Philly survey over the past two months could have been related to supply chain issues associated with the Japanese earthquake, but this is not a region with an especially high concentration of vehicle manufacturing.) Price pressures eased a little but remain high in historical terms.

2. Existing home sales declined by 0.8% mom in April to an annualized rate of 5.05 million units. Consensus forecasts had expected a moderate increase. Home sales dropped in three of the four Census regions during the month, with the largest declines in the Northeast. The number of homes currently offered for sales was about unchanged after seasonal adjustment, at about 3.7 million units (the months supply of homes increased, but this was likely due to seasonal variation). The median sales price of existing homes increased by about 0.5% mom on a seasonally-adjusted basis-an encouraging turn after several months of weakness. Existing home sales prices are down 5% year-over-year.

3. Rounding out the weaker-than-expected data, the index of leading economic indicators fell by 0.3% mom in April. The consensus had expected a 0.1% increase.

At this point Jan Hatzius forgets to add that he is now long overdue to downgrade both his Q2 and H2 GDP forecast, as we have been predicting since January.

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Clueless Economist's picture

The most obvious solution to our problems is a $10 Trillion stimulus package to create or save 10 million shovel-ready jobs.

I am the great KRUGMAN!

cowdiddly's picture

I agree these piddly little trillion dollar packages are just not cutting it. Lets try 10 trillion you stupid Keynesian pukes. I am fully condfident they will never quit printing this close to an election year. 

curbyourrisk's picture

Just have the FED pay everyone's mortgage and be done with it.  That would do more to recapitalize banks than any QE_ could possible do.

Note to self's picture

AND everyone would have a little pocket change to go out and buy stuff - like food and gas.

oh_bama's picture

What are you talking about? What problems?



Cocomaan's picture

Generally there's no snow in May, so you gotta blame it on something.

john39's picture

blame the truth for getting in the way of a good ponzi. 

Temporalist's picture

It will be rain, or it's too hot, or too humid, or foggy, and of course winter will come again so people will be preparing early for that, and people had other things to do like baseball or vacation or they were at camp.


WineSorbet's picture

In the great words of Milli Vannilli: "Blame it on the rain"

curbyourrisk's picture

The rapture is scheduled for this Saturday.  Guess they can blame that too.

Dental Floss Tycoon's picture

After the rapture the world will be without a moral compass. . . . I wonder if anyone will notice?

buzzsaw99's picture

no matter what happens the squid will make their bonus and keep prattling on uselessly.

john39's picture

when the signal is given to let it collapse, the insiders will short everything.   after the crash, they will suck up anything of value, taking us to the next stage of world fascism.

vocational tainee's picture

And that is only  a couple of month`s ahead..

Jack Burton's picture

 Economic talking heads have proclaimed that Japan will indeed zoom into strong growth later in the year as the funds are made available to rebuild the NE section of Japan. So the big GDP growth story still has legs, at least among some of the usual suspects.

When the ultimate loss in electrical generating power from the nuclear crisis makes itself felt and the large areas of nuclear contamination are admitted, this will kill a lot of the rebuilding boost. Not to mention Japan faces the deficit crisis sooner or later.

A Man without Qualities's picture

Meanwhile over in Euro, CDS spreads are sharply wider as the EU Zone heads try to push the Greece restructuring solution which will leave the ECB insolvent and require capital injection from member states.

monopoly's picture

When will people wake up to what is being stolen from them? How stupid can the country be? It is so obvious to all of us here. Except the few morons that frequent the site.

RobotTrader's picture

I don't know, but when lawnmower companies like Toro run from $20 to $65 and is up another 4% today after that huge run.....

Seems like those stocks should be locked in an absolutely vicious downtrend with all this horrid news.

But they keep going up.

People seem to be buying stocks with the utmost urgency, no matter how bad the news is.

writingsonthewall's picture

"People seem to be buying stocks with the utmost urgency, no matter how bad the news is."

Hey Robot - you found some idiot friends you can hang about with now.

....or are you being suckered...?

buzzsaw99's picture

momotrader u never disappoint.

Robslob's picture is it you never follow up on any of your 1 day wonders / TZOO?

You are truly a tranny.

SheepDog-One's picture

Its the magic of MomoFader, no matter what the day he can find some bullshit stock pop that he can pretend he owns a lot of.

ZakuKommander's picture

This preposterous frenzy is based upon the beliefs that equities constitute the only manipulated market designed not to fail. Someday there will be much weeping and gnashing of teeth.

SheepDog-One's picture

At this point, RainbowTrader should just be ashamed of his shillery and stop posting. If Tyler or someone else pays him to be here they should be real ashamed of themselves. Theres really no call for extra evil in this world today.

SheepDog-One's picture

Lawnmowers now huh... Robo you expanding your lawn mowing service then?

writingsonthewall's picture

Isn't it snowing in Japan?


There's the problem with the Phily Index.

...oh and there's your annex skywalk - a great place for an ambush.

...oh and there's the droids you're looking for - move along, move along.


This is what they did in 1931 - 1940 - lied about everything in the hope it would change something....but it didn't, things didn't get better simply because they hoped it would.


I must say it's been an extraordinary year - have there been this many disasters - or is it that we're just noticing them more because we have no money and are exposed to the slightest ripple in the fabric of the earth?

GOSPLAN HERO's picture

"There is no art which one government sooner learns of another, than that of draining money from the pockets of the people."

-- Adam Smith

RobotTrader's picture

Uh oh....

Silver and gold just crashed.

Yep, if the economy is weakening, they dump gold and silver, buy dollars, and buy consumer and REIT stocks.

Makes no sense, but that is what is happening.

Robslob's picture


.83% down ($8) in gold is a crash...then

OMG the Dow is crashing as it is down 11 points...

lieutenantjohnchard's picture

the child exaggerates to draw attention to himself. that was the purpose of the blow up charts. i'll bet at christmas dinner the adults park him at the children's table so they'll have someone to entertain them while the adults talk in the dining room.

lieutenantjohnchard's picture

robottrader. when you need yesterday's news.

Urban Roman's picture

When gold gets down to $500 again, I'm defintely buying.

When will that be, RT?

SheepDog-One's picture

OMG DOW down 10 points CRASH CRASH CRASH!!

Matxeu's picture

Tyler, your surreal news of the day- CDC warns of 'Zombie-Apocalyse'

Robslob's picture

Let's see where these are at the end of July but that would require you to keep up with all the trash you pitch like you actually know what you are talking about...RoboShill...

Fish Gone Bad's picture

It is scary how the 3 core meltdowns at Fukushima are no longer news worthy.  The problem has not been fixed, and the cores continue to spew radiation.  Then of course there is still the piles of dead gulf sea animals that are no longer news either. 

Tyler Durden's picture

Have you not heard of the Fukushima social network IPO coming to you courtesy of a conflicted underwriting syndicate that needs to keep valuations in the comp universe (in which the syndicate is directly invested) at 1,000+ P/E?

ZakuKommander's picture

I signed up for LinkedIn early on, probably in a vodka induced stupor. I have responded to those requests to be linked with people I know, who are at least somewhat interesting. But for the life of me I cannot comprehend that this network and it's ugly, boring site have any genuine utility for business or entertainment. The IPO frenzy for LI is indeed a sign that we as a species are doomed.

Note to self's picture

Agree.  I guess the value is in selling the data on those that sign up.

djsmps's picture

During his upcoming speech, do you think Obama will mention the ginormous porn stash bin Laden had?

sbenard's picture

He won't mention it until he has personally perused it all. I wonder if they'll release it to the public! Will that be their proof of Bind Laden's "elimination" perhaps? Hmm!

I am Jobe's picture

WTF happened to the Fucking Green Shoots you fucking Ben and Greenspan and Timmy. Time to hang these bastards period. More Hope and Change we can all fucking believe in


40 BIG signs the USA is at the brink of economic collapse

FreeNewEnergy's picture

Green shoots. Why didn't anybody tell me about the free buffet? Any donuts left?

I'll be at Hooter's Wing Eating Festival with the Bernanke live on CNBC. BYOB (Bring your own bib).

I am Jobe's picture

Seaweeds are going to be glowing in the dark. Underworld life will take a new life. Can we get some Bankers to help out by sending them to TEPCO and wave that goodbye flag.

Josh Randall's picture

Let me get this straight:

TEPCO and F.U.-shima are bad for business

Fake birth certifcates are good for stocks

Fake captures and burrials at sea are good for a devalued dollar and bearish for PM's

Bad umemployment numbers are Bullish for TZOO and LinkedIn