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Baffle With BS: After Chicago PMI And Durable Goods Tumble, Manufacturing ISM Soars

Tyler Durden's picture


When in doubt, baffle with bullshit. Just a day after the Chicago PMI posted its biggest collapse in years (not to mention the absolutely horrendous Durable Goods number), leading everyone to believe that the ISM, and Q3 GDP will be absolutely abysmal, here comes the Manufacturing ISM number, printing far above expectations of 49.7, and well above the last print of 49.6, and in fact posting its first increase since May of 2012. This means that the ISM to Chicago PMI gap is now the widest since September 2009. Perhaps the White House's Alan Krueger had run out of explanations for why the economy is collapsing into Q4, and finally made sure going forward all economic data will be better than expected. At least until the election of course. The biggest movers in the September ISM print: New Orders, Prices, and Employment, all of which posted numbers solidly in the 50+ range. Now we look forward to either an epic beat in the Services ISM next, or a complete collapse to continue treating everyone like mushrooms. In other news, construction spending plunged to -0.6% from -0.4%, on expectations of a +0.5% increase. But who cares: today housing is irrelevant as somehow the US manufacturing industry is improving, all other signs to the contrary be damned.

The ISM table:

From the report:

The report was issued today by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "The PMI™ registered 51.5 percent, an increase of 1.9 percentage points from August's reading of 49.6 percent, indicating a return to expansion after contracting for three consecutive months. The New Orders Index registered 52.3 percent, an increase of 5.2 percentage points from August, indicating growth in new orders after three consecutive months of contraction. The Production Index registered 49.5 percent, an increase of 2.3 percentage points and indicating contraction in production for the second time since May 2009. The Employment Index increased by 3.1 percentage points, registering 54.7 percent. The Prices Index increased 4 percentage points from its August reading to 58 percent. Comments from the panel reflect a mix of optimism over new orders beginning to pick up, and continued concern over soft global business conditions and an unsettled political environment."




Of the 18 manufacturing industries, 11 are reporting growth in September in the following order: Textile Mills; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Wood Products; Apparel, Leather & Allied Products; Paper Products; Petroleum & Coal Products; Primary Metals; Fabricated Metal Products; Furniture & Related Products; and Miscellaneous Manufacturing. The six industries reporting contraction in September — listed in order — are: Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Machinery; Chemical Products; and Computer & Electronic Products.

The respondents show some bullishness. Well, 3 of 9 do... Still 33% is better than nothing when you have a reelection campaign on.

  • "Appears that our so-called 'slowdown' was a summer thing. September brings with it increasing requirements and business." (Paper Products)
  • "Business improved through Q3, but is beginning to show signs of slowing down in Q4; this has been a typical trend over the last few years." (Wood Products)
  • "Business has picked up going into the last quarter." (Plastics & Rubber Products)
  • "We are sticking to our manufacturing plan, but have slowed production down considerably. Haven't added any new units to the 2012 plan, and still have no forecast for 2013 released." (Computer & Electronic Products)
  • "Sales have tanked over the last two months, bringing a very concerned and stressed management team. Not very optimistic for the near-term future." (Apparel, Leather & Allied Products)
  • "Uncertainty in the healthcare legislation (reform) continues to be the underlying force keeping our sales revenue below its full potential." (Miscellaneous Manufacturing)
  • "Steel and aluminum prices still dropping, and auto production orders are up." (Transportation Equipment)
  • "Domestic business is up; international is down." (Electrical Equipment, Appliances & Components)
  • "Demand seems to have stabilized from August. New orders are appearing this month without advanced notice from our customers." (Chemical Products)

And so on. Futures, naturally, explode as a wave of short covering washes out all the brand new weak hands.


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Mon, 10/01/2012 - 10:12 | 2844852 aint no fortuna...
aint no fortunate son's picture

so..... NOW we know the REAL reason why the Dow was up 80 pre-market... why its almost like somebody knew in advance what these goal seeked numbers would be

Mon, 10/01/2012 - 10:13 | 2844861 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Executive Order 12631--Working Group on Financial Markets:

Mon, 10/01/2012 - 10:18 | 2844886 LawsofPhysics
LawsofPhysics's picture

The captial and price controls have only just begun.  Bloody sheep.

Mon, 10/01/2012 - 10:38 | 2844969 JPM Hater001
JPM Hater001's picture

Yes, that pesky part about Prices jumping 4.  Oh and its increasing faster.

Mon, 10/01/2012 - 10:46 | 2845004 LawsofPhysics
LawsofPhysics's picture

Yes, available energy is what it is.  Mankind trying to "beat" nature and the laws of physics - FAIL.

What is the energy input compared with the energy gained (through profit by sale or direct use of excess)?  The difference is being made up with printed fiat, no suprise all commodites will go much higher, well so long the as the government and central banks keep trying to "fix" things.

Man no smarter than yeast when trying to comprehend exponential equations.

Hedge accordingly.

Mon, 10/01/2012 - 11:14 | 2845115 ekm
ekm's picture


Mon, 10/01/2012 - 10:19 | 2844894 LetThemEatRand
LetThemEatRand's picture

And for those who are still stuck in the red team/blue team debate and who either love or despise Reagan because he was supposedly a small government free market conservative, think about who signed that particular executive order which is just about as anti-free market and pure pro-oligarch as one can imagine.

Mon, 10/01/2012 - 10:24 | 2844920 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I agree with your first statement Rand but to be fair the guy that signed that order mumbled his speaches and drooled during his dinners and had his handlers like Don Regan tell him what to do.

"Speed it up." - Don Regan, into the mic, while POTUS Reagan was speaking

^^ Youtube that if you have never seen it.

Mon, 10/01/2012 - 10:37 | 2844966 aint no fortuna...
aint no fortunate son's picture

when Regan came to D.C. Wall Street came to D.C., deficit spending exploded and securitization was born

Mon, 10/01/2012 - 10:44 | 2844991 disabledvet
disabledvet's picture

The irony of course is that Wall Street was destroyed by securitization. Amazingly this country was running budget surpluses at the time! Now there are only deficits, only war...and "you gotta pay for that Wall Street."

Mon, 10/01/2012 - 10:57 | 2845059 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yes, because WS didn't have Woodrow Wilson's ear.


Mon, 10/01/2012 - 10:26 | 2844929 adr
adr's picture

Amazing what happens after you get shot by a NWO operative in order to put your puppetmaster in charge.

Reagan was allowed to do a lot of good things, as long as he played ball and passed what they needed passed.

After Reagan the NWO made sure Americans would never have a free thinking presidential candidate in the running again.

Mon, 10/01/2012 - 10:56 | 2845049 DeadFred
DeadFred's picture

There does seem to be a distinct difference in words and especially actions pre vs post Hinckley. I still wonder why they let their Kenyan guy bad mouth them as much as he does, absolutely no actions but the words are disrespectful. That's why I'm betting that their Mormon guy gets his chance now despite all current indications that O gets a second term. Think of it from basic human motivations, if you have all the material wealth you could possibly use what are you after? Power and respect. Romney can't win with the S&P at healthy levels. We have two, maybe three weeks max to see if my theory is bogus or not.

Mon, 10/01/2012 - 11:14 | 2845118 Spastica Rex
Spastica Rex's picture

Petrol prices.

Mon, 10/01/2012 - 10:31 | 2844932 economics9698
economics9698's picture

Reagan was very close to Obama with his economic policies.  His record in California was remarkably similar to his presidency, taxes, regulation, speak bull shit, taxes, regulations. 

People forget this was the asshole that had a chance to reform social security and instead passes a tax hike on the middle class and poor while cutting the top rate from 70% to 28%.


Mon, 10/01/2012 - 10:26 | 2844928 LMAOLORI
Mon, 10/01/2012 - 11:16 | 2845125 ekm
ekm's picture


I had never read that before. Thx a lot.

It's so blunt.

Mon, 10/01/2012 - 10:42 | 2844982 Meesohaawnee
Meesohaawnee's picture

and then they wonder why nobody wants any part of this joke. us equity markets are the biggest disaster known on earth. the fact they dont hide the fraud is even more appauling.

Mon, 10/01/2012 - 10:13 | 2844854 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

As long as Evans kills your dollar everything will be fiine....

Mon, 10/01/2012 - 10:13 | 2844857 Lohn Jocke
Lohn Jocke's picture

Bad news is good news because it increases the chances for QE.

Mon, 10/01/2012 - 10:15 | 2844868 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Locke, welcome to the 21st century!  Where easy monetary policy is never ending and the currencie flows like shit from a dove!

Mon, 10/01/2012 - 10:17 | 2844877 Quinvarius
Quinvarius's picture

QE is decided based on banking solvency and government spending needs.  If it was based on the economy, they would have stimulated the economy and not government spending or banking balance sheets.

Mon, 10/01/2012 - 10:19 | 2844887 EscapeKey
EscapeKey's picture

It's governmental policy to pick winners and losers.

Those pesky free markets can't do it as efficiently, as a cash-starved political party can.

Mon, 10/01/2012 - 10:15 | 2844871 LongSoupLine
LongSoupLine's picture

Just another day of Bernanke sticking his fat wrench up the anus of the middle class.

May the entire Fed and board get run over by a bus covered in Citi and BoA adds....fuckers!

Mon, 10/01/2012 - 10:15 | 2844872 RSBriggs
RSBriggs's picture


Mon, 10/01/2012 - 10:16 | 2844875 Lost Wages
Lost Wages's picture

Consider me baffled... continually.

Mon, 10/01/2012 - 10:22 | 2844909 Cognitive Dissonance
Cognitive Dissonance's picture

The issue we all struggle with is that we are continuously trying to apply logic and critical thinking where it does not apply. We were conditioned for decades to believe that things worked a certain way. In reality they never did.......but the illusion that they in fact did was much much stronger.

Learning new information is not very difficult. It is removing the old competing indoctrination and bias that is so painful. 


Mon, 10/01/2012 - 10:49 | 2845019 disabledvet
disabledvet's picture

If she's got big tits and a tight ass I'm going for it. That's not revolutionary thinking! It's not a problem of propaganda...but of the WRONG propaganda. The idea that the human race EVER works in an economical fashion is ridiculous.

Mon, 10/01/2012 - 10:55 | 2845041 LawsofPhysics
LawsofPhysics's picture

Correct.  The idea the eCONomics is grounded in reality is beyond stupid.

Mon, 10/01/2012 - 11:18 | 2845126 Spastica Rex
Spastica Rex's picture

"Economics" are a secular stand-in for religion.

edit: one of my favorite books ever

Mon, 10/01/2012 - 11:46 | 2845258 CPL
CPL's picture

Saul is incredibly detailed in his reference material and his reasoning is awesome.  Probably one of the most under-rated authors/philiosphers on the planet.

Tue, 10/02/2012 - 11:46 | 2848501 Lost Wages
Lost Wages's picture

So I should just buy stocks?

Mon, 10/01/2012 - 10:23 | 2844912 Winston Churchill
Winston Churchill's picture

In that case,the plan is working.

I know all these figures are absolute trash.

I have eyes,clients all over the US in diverse businesses.Its crappy everywhere.

Some really strong horseshit we are being fed.

War is now the only option lft for TPTB , after the election gives them some legitamcy.

Mon, 10/01/2012 - 10:19 | 2844879 slaughterer
slaughterer's picture

Bernanke speech at 12:30.  Get your gold orders in quick before it blasts through $1800.  

Mon, 10/01/2012 - 10:21 | 2844902 EscapeKey
EscapeKey's picture

No doubt he'll re-iterate the Fed's strong, Dollar policy.

Mon, 10/01/2012 - 11:49 | 2845268 CPL
CPL's picture

More than likely the same speech we've all heard for four years.  

Bias ratios and VMA are very strange in the x3 etf's right now.  It's all very calm which is nearly impossible for an x3 to do.

Mon, 10/01/2012 - 10:22 | 2844908 fonzannoon
fonzannoon's picture

One of my buddies like to trade stocks. I asked him a few years ago why he has never bought gold. He said "why do I need to, gold and stocks both go up. I will just buy stocks. I don't care if the stocks invest in human shit". Granted gold has creamed stocks the last ten years. But the last few years they have been going up in lock step. So people like my friend just buy stocks. Until they really disconnect no one will wake up.

Mon, 10/01/2012 - 11:10 | 2845096 lunaticfringe
lunaticfringe's picture

That philosophy will only work until people realize paper is paper, but gold is wealth. When that disconnect occurs, gold wll go supernova as people sell that paper shit to get something of real value.

Mon, 10/01/2012 - 10:17 | 2844881 EscapeKey
EscapeKey's picture

"Shroedinger's free markets".

Mon, 10/01/2012 - 10:39 | 2844976 JPM Hater001
JPM Hater001's picture

<---The economy in the box is alive

<---The economy in the box is a zombie

Mon, 10/01/2012 - 10:19 | 2844889 Cognitive Dissonance
Cognitive Dissonance's picture

Now there're just making shit up.


<When did they ever not make shit up?>

Mon, 10/01/2012 - 10:20 | 2844898 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Is this a trick question?


Mon, 10/01/2012 - 10:19 | 2844892 fonzannoon
fonzannoon's picture

shorts will be slaughtered until there are none left. How many times can people fall for this shit?

Mon, 10/01/2012 - 10:23 | 2844914 otto skorzeny
otto skorzeny's picture

every 5 year old knows that what goes up NEVER comes down.

Mon, 10/01/2012 - 10:25 | 2844925 Dr. Engali
Dr. Engali's picture

What's a short? Is that like a mythological creature that dwells in caves?

Mon, 10/01/2012 - 10:29 | 2844940 fonzannoon
fonzannoon's picture

the deflationists (if there are any left) must constantly salivate at being able to short from these levels. Only to take a bat to the head. I can't see anyone really putting serious money to work here.

Mon, 10/01/2012 - 10:35 | 2844956 Cursive
Cursive's picture


I don't consider myself an inflationist or a deflationist, but it seems apparent that when this most recent Fed-induced asset bubble pops, we're going to see a lot more deflation.  I know, I know, you can make a great case for bi-flation and I do think food will hold more relative value than homes, cars and fuel.  We have no money velocity and the Fed cannot do anything about that.  Not even NIRP.

Mon, 10/01/2012 - 12:16 | 2845346 fonzannoon
fonzannoon's picture

i tend to agree but when those bubbles pop i don't know if tne dollar gets the benefit of the doubt 

Mon, 10/01/2012 - 10:21 | 2844900 Kaiser Sousa
Kaiser Sousa's picture

"the recession ended in 2009...."

green shoots for all....... 

Mon, 10/01/2012 - 10:21 | 2844901 adr
adr's picture

The channel stuffing continues. We are going to see dealers giving away cars at the end of the model year.

Reality will be covered by the pile of bullshit until Obama is re-elected. Then it will no longer matter and the market will be free to fly to 30k. Of course we will have entered the hyperinflationary stage, but chairman Obama will be there to take over.


Mon, 10/01/2012 - 10:25 | 2844922 EscapeKey
EscapeKey's picture

Who is president matters little, it's who controls the Fed (and no, not Bernanke).

Mon, 10/01/2012 - 10:26 | 2844927 otto skorzeny
otto skorzeny's picture

I drove through the local Dodge/Jeep/Chrysler lot the other day- that place was PACKED w/ new cars- could barely maneuver through it.

Mon, 10/01/2012 - 10:21 | 2844905 bullmkt
bullmkt's picture

Durden : Baffle with BS - my shorts are not working (again).Stopped out of my shorts (again).Meanwhile

market shoots  up .Has been trening up since Durdens began to shor it.LOL.

Mon, 10/01/2012 - 10:26 | 2844930 wonderatitall
wonderatitall's picture

the chicago mob is singing the lords praises....print money ...print money....and buy food and energy and sell it to the stupid masses.

who said crime doesnt least in funny obama dollars it does

Mon, 10/01/2012 - 10:30 | 2844941 Cursive
Cursive's picture


Lever up and buy it all.  There's plenty of commercial real estate waiting for you, too.  In fact, buy and hold.  Check back in 2 years.

Mon, 10/01/2012 - 10:47 | 2845009 Chump
Chump's picture

Not a trading site.

Post the trades recommended by any of the Tylers, complete with all relevant dates and times, that have been losers.

EX: Here's a a link <insert link> stating that Tyler Durden recommended shorting <insert ETF> at <insert price> with a stop of <insert price> on <insert date>.  If you had followed this advice you would've lost <insert loss in form of your choice>.

This should be very easy for you.  In the future, most websites have an "about" page, just FYI.

P.S. And dismissing with niceties for a moment, it's snarky dumbasses like you that let me know we're reaching a top.  "ahahaha look at teh marketzzzlolzzz up to the mooooooon!"  I'm not a trader, so my market indicators tend to be unconventional.

Mon, 10/01/2012 - 10:24 | 2844917 Dr. Engali
Dr. Engali's picture

Factories are gearing up for orders as soon as Obama sends out the vote for me thingamajig check.

Mon, 10/01/2012 - 10:24 | 2844921 otto skorzeny
otto skorzeny's picture

To make myself feel better I signed the e-20th Anniversary card to BO and Moochelle as "Jefferson Davis"

Mon, 10/01/2012 - 10:28 | 2844938 FreeMktFisherMN
FreeMktFisherMN's picture

Seriously doesn't ZH have the ability to filter out advertising? I notice BrotherJohnF's SilverforthePeople website can with all the survival prep stuff.


Looks like the defense of $35 is kicking in on Ag.

Mon, 10/01/2012 - 10:31 | 2844946 Dr. Engali
Dr. Engali's picture

Why should they filter it out? Hit the link and make Obummer pay for being displayed.

Mon, 10/01/2012 - 10:33 | 2844952 FreeMktFisherMN
FreeMktFisherMN's picture

That may be true, but then it'll probably end up in some 'popularity' stat or something about which he'll boast, so I still won't click on it. 

Mon, 10/01/2012 - 10:28 | 2844933 Cursive
Cursive's picture

One thing about which there is little argument, "Prices - Increasing - Faster".

Mon, 10/01/2012 - 10:32 | 2844951 insanelysane
insanelysane's picture

I think you are wrong, about there being little argument.  I saw articles over the weekend saying that inflation is in check and will not be a problem in Q4.

Mon, 10/01/2012 - 10:42 | 2844984 Cursive
Cursive's picture


My point was that, altough the data is mixed about economic contraction or expansion, the prices paid segments of every report show that prices are surging.  All recent reports (and the price of oil, gold and silver) support larger jumps in prices.  How much longer can the Fed blow this bubble before it bursts?

Mon, 10/01/2012 - 10:28 | 2844935 slaughterer
slaughterer's picture

Silver $35 is the "Battle of the Bulge" today--like 21 Sept.

Mon, 10/01/2012 - 10:31 | 2844943 insanelysane
insanelysane's picture

The problem with saying things are going fine, when their not, is that when you start asking people to fix things, they look at you and ask why.  see Spain where they alternate between "everything is fine!" and "we need a bailout now!"

Mon, 10/01/2012 - 10:36 | 2844963 TrustWho
TrustWho's picture

The ALGOS were fed and the gods are happy. About as scientific as Mayans' Kings feeding Kukulcan human hearts, blood and heads! 

Mon, 10/01/2012 - 10:40 | 2844978 rsnoble
rsnoble's picture

I don't understand what's to baffle anyone: the money printer is running full bore and can outbuy bad news.  So therefore trying to figure this out, and make sense of it is a lesson that should've already be learned. It will work unti it doesn't and good look trying to figure that out we've heard 100% certainty guess the entire rally as to when it will fall apart and the only thing certain is 99% of the people missed the whole fucking thing. Which you can't blame them for that either cause like I said everyone knows it's bullshit and no one can say how long it will last.

Fuck it, im going to the lake have a nice day.

Mon, 10/01/2012 - 10:46 | 2845003 Meesohaawnee
Meesohaawnee's picture

dead on. until a natural correction if ever comes im tired of playing this silly game. im not feeding this fuckin bullshit. of course there are layoffs on wall street. I could get a rat to interpret this . i dont need a harvard grad to teach a fraud. Get all the kids out of econ and finance in college. what the fuck would you tell somone studying market fundamentals

Mon, 10/01/2012 - 10:40 | 2844979 tuttisaluti
tuttisaluti's picture

They turn all the lights in the casino on to atract the players.

Mon, 10/01/2012 - 10:45 | 2844996 ebworthen
ebworthen's picture

...and free drinks and NO CLOCKS.

Mon, 10/01/2012 - 10:45 | 2844997 IndicaTive
IndicaTive's picture

..and hide the clocks.

Mon, 10/01/2012 - 10:42 | 2844986 The Fonz...befo...
The Fonz...before shark jump's picture

Meanwhile FedEx warns of headwinds..... I guess all those contracts, purchase orders, letter of credits, contracts, delivery and logisitcs etc etc are being emailed instead of fed ex....

The only business in America right now is monkey business...

Fraud numbers

Mon, 10/01/2012 - 10:42 | 2844989 Atlantis Consigliore
Atlantis Consigliore's picture

Devalue print, devalue, print, lie, devalue print, RUN....LOL

Mon, 10/01/2012 - 10:48 | 2845012 Scalaris
Scalaris's picture

Someone somewhere is still buying shit?

You call it bullshit, I'll call it magic.

Mon, 10/01/2012 - 10:56 | 2845051 Lewshine
Lewshine's picture

...And please don't forget to mention the continuous, same time everyday, complete CRUSHING of the precious metals market...Which happens NO MATTER what stocks do - Which is the bigger part of Ben's intervention program!! Just try to imagine where these assets would be if Ben was not involved in decapitating them on a daily basis. Gold down 14.00 and Silver down .40 (off their daily highs) - While equities remain way up firm and high! Fuck you Ben and your clumsy, tyrannical bullshit.

Mon, 10/01/2012 - 11:08 | 2845093 FreeMktFisherMN
FreeMktFisherMN's picture

Just more confirmation for people just initiating a look at silver that there is something very critical about it. I am relatively new to all this, but since I got into Ag about year and a half ago, I have been following it very closely on daily basis and see how ridiculous some of the movements are-and how they only occur with Ag (and oftentimes Au).

Mon, 10/01/2012 - 11:10 | 2845100 ekm
ekm's picture

There is absolutely no difference between the quality of US data and the quality of China data.

They are all farts.

Mon, 10/01/2012 - 11:47 | 2845262 larz
larz's picture

Yes but this is the home of the free they are commies over there we have a choice between repulicanism and democraticalism you know

Mon, 10/01/2012 - 11:16 | 2845122 MFLTucson
MFLTucson's picture

All part of the great American lie we are watching play out in DC with Barrack (cant tell the truth) at the helm!

Mon, 10/01/2012 - 11:57 | 2845279 larz
larz's picture

......but didnt you see/hear Michelle at the convention??? ...and now we know what to eat AND feed our kids thanks to the gubbermint cant wait to see what Mitt has in store if he wins YAY

Mon, 10/01/2012 - 11:27 | 2845180 cramers_tears
cramers_tears's picture

The Contrarian Indicators are rising...  Jillian Mincer, f/k/a WSJ Lackey and Stephen C (Talk-it-up) Johnson have just penned this beauty for Reuters...  Which was picked up by a bunch of local weekends.

Get your shorts ready... it's gonna be a Hot 4Q.


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