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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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Thu, 05/19/2011 - 10:45 | 1291386 wang
wang's picture

Bloomberg's Michael McKee just did blame it  on Japan

Thu, 05/19/2011 - 10:50 | 1291413 Clueless Economist
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!

Thu, 05/19/2011 - 10:57 | 1291441 cowdiddly
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. 

Thu, 05/19/2011 - 11:11 | 1291515 curbyourrisk
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.

Thu, 05/19/2011 - 11:21 | 1291564 Note to self
Note to self's picture

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

Thu, 05/19/2011 - 11:25 | 1291570 oh_bama
oh_bama's picture

What are you talking about? What problems?



Thu, 05/19/2011 - 10:45 | 1291399 Cocomaan
Cocomaan's picture

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

Thu, 05/19/2011 - 10:47 | 1291411 john39
john39's picture

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

Thu, 05/19/2011 - 10:55 | 1291433 Temporalist
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.


Thu, 05/19/2011 - 10:58 | 1291457 WineSorbet
WineSorbet's picture

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

Thu, 05/19/2011 - 11:15 | 1291520 curbyourrisk
curbyourrisk's picture

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

Thu, 05/19/2011 - 12:44 | 1292009 Dental Floss Tycoon
Dental Floss Tycoon's picture

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

Thu, 05/19/2011 - 10:47 | 1291410 buzzsaw99
buzzsaw99's picture

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

Thu, 05/19/2011 - 10:49 | 1291418 john39
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.

Thu, 05/19/2011 - 11:03 | 1291469 vocational tainee
vocational tainee's picture

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

Thu, 05/19/2011 - 10:51 | 1291425 Jack Burton
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.

Thu, 05/19/2011 - 10:54 | 1291427 A Man without Q...
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.

Thu, 05/19/2011 - 10:54 | 1291428 monopoly
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.

Thu, 05/19/2011 - 10:52 | 1291429 RobotTrader
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.

Thu, 05/19/2011 - 10:55 | 1291446 writingsonthewall
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...?

Thu, 05/19/2011 - 10:56 | 1291449 buzzsaw99
buzzsaw99's picture

momotrader u never disappoint.

Thu, 05/19/2011 - 11:00 | 1291451 Robslob
Robslob's picture is it you never follow up on any of your 1 day wonders / TZOO?

You are truly a tranny.

Thu, 05/19/2011 - 11:48 | 1291698 SheepDog-One
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.

Thu, 05/19/2011 - 11:35 | 1291630 ZakuKommander
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.

Thu, 05/19/2011 - 11:44 | 1291687 SheepDog-One
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.

Thu, 05/19/2011 - 11:49 | 1291723 SheepDog-One
SheepDog-One's picture

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

Thu, 05/19/2011 - 10:51 | 1291431 doomandbloom
doomandbloom's picture


Thu, 05/19/2011 - 10:54 | 1291439 writingsonthewall
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?

Thu, 05/19/2011 - 11:22 | 1291558 Temporalist
Temporalist's picture

Yea, nuclear fallout.

Thu, 05/19/2011 - 10:54 | 1291440 GOSPLAN HERO
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

Thu, 05/19/2011 - 10:55 | 1291447 RobotTrader
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.

Thu, 05/19/2011 - 11:03 | 1291470 Robslob
Robslob's picture


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

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

Thu, 05/19/2011 - 11:10 | 1291512 lieutenantjohnchard
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.

Thu, 05/19/2011 - 11:06 | 1291480 vocational tainee
vocational tainee's picture

Meet you in six month..

Thu, 05/19/2011 - 11:10 | 1291501 lieutenantjohnchard
lieutenantjohnchard's picture

robottrader. when you need yesterday's news.

Thu, 05/19/2011 - 11:18 | 1291551 Urban Roman
Urban Roman's picture

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

When will that be, RT?

Thu, 05/19/2011 - 11:49 | 1291708 SheepDog-One
SheepDog-One's picture

OMG DOW down 10 points CRASH CRASH CRASH!!

Thu, 05/19/2011 - 10:57 | 1291454 Matxeu
Matxeu's picture

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

Thu, 05/19/2011 - 11:02 | 1291460 Robslob
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...

Thu, 05/19/2011 - 10:59 | 1291461 Fish Gone Bad
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. 

Thu, 05/19/2011 - 11:09 | 1291494 Tyler Durden
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?

Thu, 05/19/2011 - 11:49 | 1291717 ZakuKommander
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.

Thu, 05/19/2011 - 11:57 | 1291751 Note to self
Note to self's picture

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

Thu, 05/19/2011 - 11:21 | 1291568 djsmps
djsmps's picture

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

Thu, 05/19/2011 - 11:40 | 1291647 sbenard
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!

Thu, 05/19/2011 - 11:07 | 1291496 I am Jobe
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

Thu, 05/19/2011 - 11:17 | 1291547 FreeNewEnergy
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).

Thu, 05/19/2011 - 11:08 | 1291503 I am Jobe
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.

Thu, 05/19/2011 - 11:12 | 1291506 Tense INDIAN
Tense INDIAN's picture

Nifty Broke Something :::

Thu, 05/19/2011 - 11:17 | 1291528 Josh Randall
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



Thu, 05/19/2011 - 11:21 | 1291567 monopoly
monopoly's picture

Shippers on the way to zero. Hard to believe. Just keep building more ships and they will come. 0

Thu, 05/19/2011 - 11:23 | 1291581 monopoly
monopoly's picture

CMG AMZN PCLN BIDU all higher. What the hell do I know. Not for me.

Thu, 05/19/2011 - 11:26 | 1291589 overmedicatedun...
overmedicatedundersexed's picture

the solution is so simple so it is:

mail each tax paying family a check for $200,000..FRN's from Ben with love.

economy to the moon for 2012..don't cha love it well you know it's the only way to get things going again..

Thu, 05/19/2011 - 11:51 | 1291735 Note to self
Note to self's picture

What would have hyappened if TARP was funneled to the banks by way of mortage early pay-offs for the American public?  $700B worth of homeowner principal paid off in 2008.  Sort of a jubilee.  Banks get theirs (which they were gonna get anyway) but main street also go theirs.  Nobody underwater.  Lots of people flush.  Banks "saved".  What is wrong with this picture?

Thu, 05/19/2011 - 11:39 | 1291617 sbenard
sbenard's picture

So they admit that they have no DATA to back up their claim about Japan, but do it anyway. Hmm!

That TRIfecta has become a FIVE-fecta of bad news:

  1. ECRI manufacturing data predicts a GLOBAL economic slowdown
  2. Housing data disappoints
  3. Philly Fed disappoints
  4. Leading Economic Indicators disappoints
  5. Jobless Claims continue above 400k, moving average continues to rise
Thu, 05/19/2011 - 12:07 | 1291825 vote_libertaria...
vote_libertarian_party's picture

And even number 5 is after millions have used up their allotment.

Thu, 05/19/2011 - 11:54 | 1291733 SheepDog-One
SheepDog-One's picture

Buckle up, people. Robo youve already got your hockey helmet on no doubt, mom doesnt let you go around without it.

Thu, 05/19/2011 - 11:56 | 1291764 Eireann go Brach
Eireann go Brach's picture

Print more Bama Bucks!

Thu, 05/19/2011 - 12:02 | 1291798 PulauHantu29
PulauHantu29's picture

<<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.>>

House prices are down a whole lot more then that when you take out the massive "incentives" from sellers such as a $20k "rebate".....paying for all the clsoing costs.....etc.

Thu, 05/19/2011 - 12:13 | 1291832 Danno Anderson
Danno Anderson's picture

Thu, 05/19/2011 - 12:57 | 1292086 suldog
suldog's picture

Smells like the 'Ring the Bell' day.

Little noon rally to load up the bus, rug-pull imminent.

Heavy May SPX Open Interest at 1325.  See y'all there.

Thu, 05/19/2011 - 13:09 | 1292201 silberblick
silberblick's picture

YouTube's Harisebon7777777 should be commended for his work on measuring the radiation levels in Tokyo. The device he uses costs about $1000, which I am sure he has paid out of his own pocket to provide us with the truth of what is really going on in Japan.

It is eerie to watch his videos. Typically, his hand is shown holding a geiger counter in some public place with people walking all around him as if there was nothing of importance going on; while all along, the geiger counter in his hand reveals what is really happening. Harisebon is documenting the slow irradiation of the Japanese archipelago. A visual unfolding of a tragedy.

While watching these videos. it is hard not to wonder how many of the folks one sees walking down the street will come down with cancer in 10, 20 or 30 years.

Go to Harisebon's YouTube channel and give him a shout-out. He deserves it.

Do NOT follow this link or you will be banned from the site!