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The Disconnect Remains; Contracting PMIs Imply Dramatic Q4 Losses For Global Stocks

Tyler Durden's picture




 

Economic Surprise Indices have begun to drift back lower in recent days after a short-lived scurry into positive territory  as anticipation of Fed/ECB action supported equity valuations over the last few months in the face of deteriorating earnings. Critically though, as Deutsche's Jim Reid notes, headline PMIs (and the ISM) are still well behind levels that are consistent with current equity markets as the disconnect between rich equity prices and poor fundamentals remains very wide. Back around May/June they were broadly in line and since then liquidity has propelled markets but with the data at similar levels, and clearly the hope is that the current fundamental weakness corrects into year-end but at current levels the S&P faces a 9% correction, Europe 22%, and China 25% - hope is indeed a powerful thing.

 

 

Source: Deutsche Bank

 

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Tue, 10/02/2012 - 09:55 | 2848134 CPL
CPL's picture

God damn the markets need an enema.

Tue, 10/02/2012 - 09:56 | 2848139 GetZeeGold
GetZeeGold's picture

 

 

Just buy equities......Ben Shalom is backing them with his full faith and credit.

 

Tue, 10/02/2012 - 09:57 | 2848143 FL_Conservative
FL_Conservative's picture

Cue the Bernanke/Charlie Evans duet in 3....2.....

Tue, 10/02/2012 - 10:30 | 2848257 LiesAreTheOnlyTruth
LiesAreTheOnlyTruth's picture

Wasn't the Joker standing on Wall Street in the movie Batman when he cried, "This town NEEEEDS an ENEMA!" ??

Tue, 10/02/2012 - 11:48 | 2848507 vast-dom
vast-dom's picture

SP at 9% correction is all you infer from the data? Reality has long been done away with. Yet I maintain my positions.

Tue, 10/02/2012 - 09:55 | 2848136 ekm
ekm's picture

Reposting:

 

This is a Pyramid Scheme at a point that the collapse is beyond the point of return,the current buying is simply FORCED BUYING due to the lack of NEWCOMERS (or suckers).

 

The current buying is simply a HOPE that the suckers will arrive, but they won't. The suckers are either retired and need money for medical care or living in the basements of the retired ones.

 

It's over, it definitely over. QEn was the panic move.

 

Pyramid Schemes always collapse in few days or weeks, they never, ever, ever wind down orderly.

Examples:

http://www.ft.com/intl/cms/s/0/0c6e25e4-e553-11e1-b758-00144feab49a.html#axzz288nMA6Cj

http://www.macrobusiness.com.au/2012/09/gunns-and-the-elites/

http://en.wikipedia.org/wiki/Pyramid_scheme

http://www.time.com/time/specials/packages/article/0,28804,2104982_2104983_2104998,00.html

http://en.wikipedia.org/wiki/MMM_(Ponzi_scheme_company)

Tue, 10/02/2012 - 09:57 | 2848141 Shizzmoney
Shizzmoney's picture

But wait, I thought the economy improved when neo-liberal and neo-conservative economists just keep telling us over and over that some numbers that they pulled says we aren't in a recession?

Oh wait, it's all bullshit, I forgot.

 

Tue, 10/02/2012 - 09:58 | 2848150 Jason T
Jason T's picture

Does (flash) imply Flash Crash?

Tue, 10/02/2012 - 09:59 | 2848152 MrBoompi
MrBoompi's picture

When Deutsche Bank (or Goldman, etc) tell the public to expect a 9% correction, that's the signal to buy, isn't it?

 

 

Tue, 10/02/2012 - 10:01 | 2848156 Dr. Engali
Dr. Engali's picture

It will be interesting to see if Ben props this thing up until the just after the election. There will be a lot of shocked people if he ever lets this pig find it's fair value.

Tue, 10/02/2012 - 10:05 | 2848166 Abraxas
Abraxas's picture

IMHO Ben does not concern himself with the outcome of the election. The difference between the two candidates (and parties) is non-existent and they can't touch him anyways. The boy is very well protected.

Tue, 10/02/2012 - 10:09 | 2848180 RiverRoad
RiverRoad's picture

Makes ya wonder if the Fed put ol' Romney up to running just to lock-in their Obama winner.

Tue, 10/02/2012 - 10:02 | 2848161 Jlmadyson
Jlmadyson's picture

What it tells us much like 08 is we ain't seen nothing yet.

Tue, 10/02/2012 - 10:05 | 2848169 RiverRoad
RiverRoad's picture

Apparently the Fed is hell-bent on giving us a perpetual bull market; things certainly are different this time.

Tue, 10/02/2012 - 10:08 | 2848176 mayhem
mayhem's picture

why arent these showing up on FINVIZ this morning? Seems unusual. Maybe this is a sign? Trying to keep the news all positive lol

Tue, 10/02/2012 - 10:12 | 2848187 HD
HD's picture

Just 9%?

 

 

Tue, 10/02/2012 - 10:14 | 2848197 Sudden Debt
Sudden Debt's picture

but if we would print more money and give it to the banks....

just a idea... thinking out loud and all...

 

Tue, 10/02/2012 - 10:15 | 2848202 francis_sawyer
francis_sawyer's picture

Cue the RaRRy...

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