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Chart Of The Day: Continued Collapse In Capital Goods New Orders Confirms US Is In Recession

Tyler Durden's picture




 

While the just released Durable Goods orders report for October came in modestly better than expected (which many thought would be a decline due to Hurricane Sandy), the primary driver of this continues to be record durable good inventory accumulation. Excluding the noise, and focusing only on real, non-noisy economic strength metrics such as New Capital Goods Orders (technically defined as the year over year change in Non-Defense Capital Goods Excluding Aircraft), a very different and far uglier picture emerges. In fact, the October Y/Y Plunge of -8.1% in this major indicator was the biggest drop since 2009.

Curious where this collapse in New Orders is in the context of prior recessions? Here it is (shaded areas indicate NBER-defined recessions). We have never had such a steep drop in Cap Goods in the past 30 years without a concurrent recession.

To summarize: according to one of the least susceptible to manipulation indicators of US economic strength and growth, the US economy is now in a recession.

Source: St. Louis Fed

 

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Tue, 11/27/2012 - 10:13 | 3014025 LawsofPhysics
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It is a depression, and we never left it.  SNAP, there goes the "invisible" soup line.  Stupid fucking sheep.

Tue, 11/27/2012 - 10:14 | 3014032 GetZeeGold
GetZeeGold's picture

 

 

One green chute left....grab it fast.

Tue, 11/27/2012 - 10:31 | 3014080 camaro68ss
camaro68ss's picture

Hurry bernake, we need more printed capital goods....

your our only hope

Tue, 11/27/2012 - 11:43 | 3014208 Dr. Richard Head
Dr. Richard Head's picture

Notice what happens that when welfare for warfare is taken out - no growth.  Funny.

Tue, 11/27/2012 - 12:03 | 3014329 Dalago
Dalago's picture

This wouldn't have been so extreme if only the people enstalled an Austrian based economy: http://mises.org/daily/6280/Learn-the-Austrian-Take-on-the-Great-Depress...

Tue, 11/27/2012 - 12:10 | 3014351 Hugh_Jorgan
Hugh_Jorgan's picture

It's crazy to watch former enemy states and banana republics using the supply-side economic model and having huge successes even as America abandons it in favor of the centrally planned European model that is on fire and in the process of collapse. We deserve what we get.

Tue, 11/27/2012 - 12:57 | 3014483 NidStyles
NidStyles's picture

Austrian School is not supply-side. Look I know you traders and investors have enough to worry about before you begin to understand Economics, but please. Milton Friedman is a Keynesian, as is MMT and Supply-Side. Austrian School is nothing like any of those.

Tue, 11/27/2012 - 13:21 | 3014545 OutLookingIn
OutLookingIn's picture

Agreed.

Ongoing Depression.

Within depressions you have some false recovery periods, but that does not alter the fact that they are taking place within the ongoing depressionary period.

History will look back on this as the 'Greater Depression II'  

Tue, 11/27/2012 - 14:25 | 3014750 economics9698
economics9698's picture

We went into depression, the government did the Freidman thing, pumped a lot of money, it acted like heroin numbing the pain.

See M-2 velocity graph.

http://research.stlouisfed.org/fred2/series/M2V?cid=32242

The problem, as any Austrian (not to be confused with supply sider) is that resources are misallocated when credit is cheap.  S&L, Nasdaq, housing, and now government will be collapsing.

The solution is bankruptcy and lowering the cost of government, federal, state, and local, to no more than 25% of GDP. 

This means a end to the welfare state, bloated military, and a collapse that will last, if we are lucky, 6 to 18 months.

That’s the good part.

The bad part is the authorities can drag this out for decades, throw in some war, kill millions of goyims, and then pretend nothing happened while they live like kings all over the world.

 

Tue, 11/27/2012 - 14:41 | 3014817 Orly
Orly's picture

Grammar cop says:

If I am not mistaken, "goyim" is already plural, sort of like deer and deer.

:/

But you're absolutely right.  If we took our medicine now, the duration of pain would be much less.  Maybe 24 months or a little longer.  Six months is a bit of a stretch, I think.

The worst thing that we could do now is become Japan, which we are doing at a substantially accelerated rate.

Tue, 11/27/2012 - 14:51 | 3014855 economics9698
economics9698's picture

I never took Yiddish, my bad.

Tue, 11/27/2012 - 16:51 | 3015252 Orly
Orly's picture

Okay, so you know I had to look it up...

Actually, my bad.  "Goy" means a nation, like the nation of Israel but it is not Yiddish.  It is Hebrew.

The term "goyim" is plural and means, basically, everybody else.

_________

But none of that changes the fact that we need to have these banksters take their medicine, take their losses and sell their property for pennies on the dollar so that we can get on with our lives sooner rather than later.

Tue, 11/27/2012 - 14:24 | 3014751 Cortez
Cortez's picture

Or the 'Great Supression' since Gov't is acting like Depression doesn't exist in modern life and Recessions are just a little bug bite.  100 freakin' news channels and none are Real.

Tue, 11/27/2012 - 17:18 | 3015225 Dr. Acula
Dr. Acula's picture

>Milton Friedman is a Keynesian, as is MMT and Supply-Side.

What are these forms of "economics" exactly? Do they use the scientific method (e.g. falsifying theories through experiments)? Or are they supported by any kind of epistemology, as the Austrian School is?

They seem like bullshit to me. These guys are like the global warmists: they call themselves scientists, make predictions without ever checking them, and make baseless pronouncements. (Actually the IPCC presents "scenarios", not even predictions.)

These guys are not scientists and they are not even respectable forecasters.  They are mere con artists and tinkerers.

 

Tue, 11/27/2012 - 15:42 | 3015049 NotApplicable
NotApplicable's picture

Hope in one hand, shit in the other...

Tue, 11/27/2012 - 10:15 | 3014034 ejmoosa
ejmoosa's picture

The four year, multi trillion dollar dead cat bounce.

Tue, 11/27/2012 - 10:30 | 3014076 Cognitive Dissonance
Cognitive Dissonance's picture

Time to get really serious and release the dogs of QE.

<Will $10 Trillion be enough or should we do $20T?>

Tue, 11/27/2012 - 11:09 | 3014215 Dr. Richard Head
Dr. Richard Head's picture

I was having a Twitter discussion with Michael Gayed,CFA and I believe he agrees with your sarcasm.  He thinks "QE3 at $40 billion a month is nothing and that Apple's correction along was $100 biillion market cap loss in one stock.  Bonds that keep getting bids have nothing to do with yield moves."  I sure love those paper-bugs.  They have a wonderful fantasy land.

Tue, 11/27/2012 - 12:03 | 3014334 ZippyBananaPants
ZippyBananaPants's picture

Michael Gayed (MarketWatch?) is an asshole, any of the idiotic articles he writes for MW is crap, he makes up some stupid headline to get readers of the article and then when you read it, nothing but crap.  I have already commented to him after one of the articles, so this should not be news to him. 

Tue, 11/27/2012 - 10:56 | 3014175 JPM Hater001
JPM Hater001's picture

Yeah but if your going to throw just one more party this was one hell of a ride.

Ah Gatsby.

Tue, 11/27/2012 - 12:20 | 3014394 csmith
csmith's picture

24 days till Dec. 21st...Congress says F the cliff, we're going over, and the Mayans party like it's 2011...should be a fun day!

Tue, 11/27/2012 - 12:54 | 3014477 jeff montanye
jeff montanye's picture

is that george wilson creeping around the cabana bar?  serious menace but no dennis.

Tue, 11/27/2012 - 11:09 | 3014213 ArkansasAngie
ArkansasAngie's picture

But ... but ... it's all been done in the name of the greater good.

A better outcome would be had by simply letting moral hazard remove the status quo parasites. 

As it is ... death by a thousand cuts is going to hurt for a long time. 

Tue, 11/27/2012 - 12:11 | 3014362 Hugh_Jorgan
Hugh_Jorgan's picture

No matter how much hot air you put under the dead cat it is still... well, dead!

Tue, 11/27/2012 - 14:10 | 3014696 ejmoosa
ejmoosa's picture

It will want to bloat a bit before it's last burst....

Tue, 11/27/2012 - 15:22 | 3014988 e-recep
e-recep's picture

my question is : does the dead cat ever bounce twice?

Tue, 11/27/2012 - 18:43 | 3015660 imbrbing
imbrbing's picture

If you throw it down hard enough

Tue, 11/27/2012 - 10:29 | 3014069 Eireann go Brach
Eireann go Brach's picture

Depression my ass, in your eyes it probably is because you do not have a job or have a shitty job! Go check out the fucking malls, the sheep are spending all their money like drunken sailors!

Tue, 11/27/2012 - 10:32 | 3014085 LawsofPhysics
LawsofPhysics's picture

Riiiiiiiggggghhht.  I hope those SNAP cards keep working then.

Tue, 11/27/2012 - 10:34 | 3014093 Cognitive Dissonance
Cognitive Dissonance's picture

Mrs. Cog and I live on the outskirts of the DC area (the belly of the beast) and there seems to be no depression around here..........yet.

<Lots of brand new Mercedes, Lexus and Caddies on the road. Amazing what you can buy on a federal government/contractor salary.> 

Tue, 11/27/2012 - 10:36 | 3014105 Dr. Engali
Dr. Engali's picture

Their time is coming.

Tue, 11/27/2012 - 11:11 | 3014217 ArkansasAngie
ArkansasAngie's picture

My fingers' are crossed.

I'm not holding my breath however.

Tue, 11/27/2012 - 11:12 | 3014224 Dr. Richard Head
Dr. Richard Head's picture

I live in a eastern county of Cleveland and homes are being built, commercial buildings are going up and expanding.  M&A taking place at a fast pace.  The only thing I can tie that to is the fact that our Congressman, who abrubtly retired from our district AFTER the primaries, was a good little neo-con and was able to get plenty of loot for being a good boy.

Tue, 11/27/2012 - 11:26 | 3014252 adr
adr's picture

Like Eaton's new headquarters and the new hotels around it? Lots of new condos and hospital buildings. I like Developers Diversified's giant megaquarters that looks like nobody is ever there. Remember the Ahuja medical center was the first new hospital in Cuyahoga county, if you don't count the expansion of the Cleveland Clinic and University Hospital along with every hospital recieving $200 million upgrades over the last decade. Of course that area has one of the largest concentrations of Jews in the world.

Or you could be talking about Lake County where billions are being spent to support the illegal hispanic population that has turned the elementary school into a spanish only district. There are more section 8 welfare palaces going up outside Cleveland than almost anywhere else in the country. Development after development of what would be $200k townhomes in any white suburb.

Cleveland can show you everyting going on in the country and the economy. Doctors and lawyers getting rich, the poor getting record handouts, middle class whites losing everything trying to figure out how they wil feed their kids.

Tue, 11/27/2012 - 11:29 | 3014263 Dr. Richard Head
Dr. Richard Head's picture

Bingo on the Lake County.  HUGE hispanic population do keep the trailor parks running for sure, as well as growing section 8 in the heart of Painesville, OH.  Not enough porperty taxes to pay for those socialism prisons, I mean schools.  EVERY school running out of funds.  I think LaTourette's quick retirement was a prelude of the rats leaving the sinking ship.  So be it.

Tue, 11/27/2012 - 15:46 | 3015065 NotApplicable
NotApplicable's picture

Thing is, there'll never be a shortage of rats.

Tue, 11/27/2012 - 14:16 | 3014721 Cortez
Cortez's picture

Ahhh!  The Cleveland Clinic.  They pride themselves on "World Class Healthcare."  Too bad they aren't required to have full disclosure.  It should read "World Class Healthcare Billing."

As for the Hispanic effect on the area, I know long-time dry wallers that have exited the business because they use to get 25 per foot to hang new construction ten years ago.  Today the going rate is 13 per foot by hispanic labor. 

Tue, 11/27/2012 - 10:58 | 3014181 JPM Hater001
JPM Hater001's picture

I predicted long ago the original states will ceed back their property from DC.  There is no majic document that says DC remains after the invasion.

Tue, 11/27/2012 - 13:10 | 3014516 aztec two step
aztec two step's picture

seed or cede.....but not ceed

Tue, 11/27/2012 - 11:01 | 3014193 Its_the_economy...
Its_the_economy_stupid's picture

Wash dc is a BOOM TOWN! The skyuline is nothing but cranes putting up skyscrapers. DC is awash in CASH!

Tue, 11/27/2012 - 11:09 | 3014212 Cognitive Dissonance
Cognitive Dissonance's picture

Fairfax county is booming as well. The government teats are plentiful and producing nicely.

<Can you grow a few more please?>

Gvt teat

Tue, 11/27/2012 - 10:52 | 3014158 kridkrid
kridkrid's picture

They aren't spending their money any more than my children spend their money as I dole out tokens at chucky cheese. It's the same game on a much larger scale.

Tue, 11/27/2012 - 11:02 | 3014192 Cognitive Dissonance
Cognitive Dissonance's picture

That's Chuck E Cheese to you buster. :)

My children are of the age now where I send them tokens/checks to stay away.

Tue, 11/27/2012 - 11:21 | 3014240 Dr. Richard Head
Dr. Richard Head's picture

Mmmmmm.....the smell of pizza, piss, and sweaty socks.  All that, and a herd of sea-cow mothers surrounding their little turds.  I love that place.

Tue, 11/27/2012 - 11:28 | 3014257 edifice
edifice's picture

Thar she blows!!

Tue, 11/27/2012 - 11:30 | 3014266 adr
adr's picture

And it takes 500 tokens you paid $20 for to buy a $.25 pencil topper.

Kind of like how much the Fed has to print to gain .25% in GDP.

Wow, maybe Bernanke is actually Chuck E Cheese!!! God it would explain everything.

Tue, 11/27/2012 - 11:39 | 3014287 Cognitive Dissonance
Cognitive Dissonance's picture

"Wow, maybe Bernanke is actually Chuck E Cheese!!! God it would explain everything."

Too freaking funny. Paging WilliamBanzai7. Please report to your Photoshop app immediately.

Tue, 11/27/2012 - 12:27 | 3014413 csmith
csmith's picture

Only on ZH do you find this hilarious shit!!!

Tue, 11/27/2012 - 11:54 | 3014312 kridkrid
kridkrid's picture

That's why I said, " same game on a larger scale". It really is the same game. Money is printed for the kids. The kids run around feeling very "invested" in their activity. They get rewarded with trinkets built in China. The house always makes money. mercantilism.

Tue, 11/27/2012 - 13:42 | 3014627 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

That’s awesome kridkrid, Mr. Bernanke = Mr. Cheese

I remember reading about a kid getting bit by a snake that crawled into one of those ball pits,

Correlates to WS lobbyists crawling in the DC “ball pit”

we always called it the “Eballa-pit” a virtual hot zone

cheers.

Tue, 11/27/2012 - 14:48 | 3014841 mayhem_korner
mayhem_korner's picture

 

 

The Philly Bernank-Steak

Ham & Bernank

Bernank Doodles

Bernank Whiz

Bernank-Heads (Packer fans)

...and my favorite, Grilled Bernank

Tue, 11/27/2012 - 12:17 | 3014378 quasimodo
quasimodo's picture

The place actually makes me close to physically ill whilst letting the kiddies play games that every other rugrat with a snotty nose has just played. The pizza would make any good mafia member proud though.

I make them wash thier hands after playing every game, it's such a fucking germhole. At least the prizes are a real bargain for what you spend.

Tue, 11/27/2012 - 10:58 | 3014172 dwdollar
dwdollar's picture

I agree. This isn't a depression. It's a collapse. During a depression, people save and plan on or hope for better days sometime down the road. During a collapse, people are either clueless or so apathetic they don't care about the future. That's why you see people behaving like animals for cheap shit that won't last a year. They're only desire is to enjoy what's left before the end. It's a Roman-style collapse.

Tue, 11/27/2012 - 11:00 | 3014190 JPM Hater001
JPM Hater001's picture

Bravo DW.  That is the defining difference here.  Recessions occur and consumption drops so prices drop.  Only this time the recession has occured, consumption was up 13% on Black Friday, and inflation is about 6%.

 

Romans got off easy if you ask me.  No one had guns then.

Tue, 11/27/2012 - 13:26 | 3014567 Things that go bump
Things that go bump's picture

Mayhem was quite possible with iron age weapons.

Tue, 11/27/2012 - 15:49 | 3015076 NotApplicable
NotApplicable's picture

Certainly a lot more personal!

Tue, 11/27/2012 - 11:06 | 3014205 Dr. Engali
Dr. Engali's picture

+1 Spot on.

Tue, 11/27/2012 - 11:27 | 3014253 edifice
edifice's picture

Exactly. Get ready for the New Dark Ages.

Tue, 11/27/2012 - 12:33 | 3014432 lakecity55
lakecity55's picture

+1 on collapse. Other than those of us who have been long time coin collectors, how many ZH brothers/sisters have begun stocking PMs?

I mean, anyone should have some PM, but ZHers began stockpiling a ways back. 

We have also had a lot of bad luck, as there have been too many PMs lost to boating accidents, or tailgates left down on the pickup. I predict even more accidental sinkings and such.

Tue, 11/27/2012 - 15:30 | 3015019 e-recep
e-recep's picture

where to stockpile them? you know not everyone has a garden or yard.

Tue, 11/27/2012 - 13:28 | 3014580 OutLookingIn
OutLookingIn's picture

Head in Sand.

Or is that head up your arse?

Ask yourself where all that consumer money is coming from?

HELOCS are up at 2009 levels and rising! Houses as ATM's again! Plastic maxed out? No problem, just borrow more, pay off those cards and start again. CHARGE!  

Tue, 11/27/2012 - 11:23 | 3014246 Alpacanio
Alpacanio's picture

It's only invisable because they now give out EBT cards. No soup lines!

Tue, 11/27/2012 - 13:10 | 3014517 EuroInhabitant
EuroInhabitant's picture

US consumer confidence on highest level in 4 years. Housing market up up up. What depression?

Tue, 11/27/2012 - 14:52 | 3014853 mayhem_korner
mayhem_korner's picture

 

 

There is NO DEPRESSION.  And here is why...SSRI prescriptions up 99% over the past 4 years. 

That is all.

Edit: P.S. wait until the collapse creates a shortage of xanax.  Mass psychosis will be most unpleasant.

Tue, 11/27/2012 - 10:13 | 3014026 Jason T
Jason T's picture

but if they fix the fiscal cliff ..whatever the heck that even means.. growth will boom next year they say.

Tue, 11/27/2012 - 10:22 | 3014054 SheepDog-One
SheepDog-One's picture

Just kick the debt to a few more generations down the line, then none of us have a thing to worry about! Partytime!

Tue, 11/27/2012 - 10:32 | 3014088 Dr. Engali
Dr. Engali's picture

We are out of generations to kick the debt to...the upcoming war will see to that.

Tue, 11/27/2012 - 11:02 | 3014194 JPM Hater001
JPM Hater001's picture

I think they have a time machine over at loopers.  See if they can send it to the moon.

Tue, 11/27/2012 - 10:13 | 3014030 LongSoupLine
LongSoupLine's picture

Charts?  Algos don't need no stinking charts!

Tue, 11/27/2012 - 10:39 | 3014112 wandstrasse
wandstrasse's picture

please do not bother the bankers with superfluous issues of the reakl world, thank you.

Tue, 11/27/2012 - 10:31 | 3014036 Dr. Engali
Dr. Engali's picture

 

" Curious where this collapse in New Orders is in the context of prior recession"

 

I'm curious when we left the first recession. Does that mean we've been upgraded from the depression we've been in since 2000?

Tue, 11/27/2012 - 10:17 | 3014038 govttrader
govttrader's picture

And what does the govt do in a recession?  The govt spends money to replace spending lost in the economy.  Oh, you say the govt doesn't have any extra money to spend?  Well, i hear there is a printing press collecting dust somewhere...so lets dust that badboy off...tell the Treasury to sell some more bonds and we'll pick up the slack with QE4.

 

Is there any question that this is what happens next?

I hear QE4 will be positive for the long end in the short term..you know...cuz the Fed will be buying it.

 

http://govttrader.blogspot.com/

Tue, 11/27/2012 - 10:21 | 3014052 LawsofPhysics
LawsofPhysics's picture

If only the tenants of the Corporation of the United States had access to debt-free "money".  Instead they all must pay a private bank to print it for them.  Stupid fucking sheep.

Tue, 11/27/2012 - 10:59 | 3014187 new game
new game's picture

good point - where the fuck is my free money!

not only that!!! IAM SICK AND TIRED OF WORKING FOR A LIVING...

this idea of working is soooo old school. print, and liv the life-here today and fuck tomarrow...

get with it, man, money for nothin chick is free for you with all da free money-vote accordingly til it don't mater...

 

 

Tue, 11/27/2012 - 11:34 | 3014279 adr
adr's picture

uh, the stock market. That is what every equity bull will tell you. The market prints money for all involved. You should have invested $10k in Apple in 2003. You would be a millionaire now.

See free money and you wouldn't have to work.

Tue, 11/27/2012 - 11:02 | 3014195 MachoMan
MachoMan's picture

Unless you're advocating taking away the printing press (sans a few rare occasions, if ever), then all you're advocating is a changing of the person cracking the whip.  It matters not to the backs of the sheep.

Tue, 11/27/2012 - 12:17 | 3014380 LawsofPhysics
LawsofPhysics's picture

The world is always at war, so fucking what?  Did you have a point?  Return to sound money and real consequences for bad behavior or the dark ages, your choice.

Tue, 11/27/2012 - 12:23 | 3014402 MachoMan
MachoMan's picture

It's not necessarily an either or proposition...  we may very well get the dark ages regardless.

The point is that we can return to sound money and real consequences for bad behavior, but it will not fix what ails us.  In short, we've had sound money and real consequences before...  it tends to keep ending the same.  In other words, these things, in and of themselves, are not enough.

Tue, 11/27/2012 - 10:47 | 3014138 SheepDog-One
SheepDog-One's picture

Double triple SECRET QE coming next!!

Tue, 11/27/2012 - 12:11 | 3014360 Orly
Orly's picture

Or how about this for a scenario?

The government wants to get rid of the tax exemption on municipal bonds and in a deal with the Republicans, President Obama axes the tax exemption (after threatening the people with doing the same for mortgage interest, now starring on CNBC...).  Investors jump out of munis so fast, it was as if their hair were on fire.  Then, the Fed comes in or, more likely, uses a proxy to mop up municipal debt.

How do you think?

Tue, 11/27/2012 - 10:20 | 3014039 q99x2
q99x2's picture

Get the warehouses ready. Here comes Holiday Season channel stuffing.

The recession is perfect timing to justify kicking the can over the fiscal cliff. YeeeeHaaaa.

Tue, 11/27/2012 - 10:18 | 3014043 semperfi
semperfi's picture

more infinite QE - quick !

Tue, 11/27/2012 - 10:18 | 3014044 buzzsaw99
buzzsaw99's picture

FRED - BUG LULZ

Tue, 11/27/2012 - 10:20 | 3014048 SheepDog-One
SheepDog-One's picture

Equities near their all time highs remain totaly unfazed. After all, we'll surely sail right over the debt cliff like RedBull Flugtag right?

Tue, 11/27/2012 - 10:29 | 3014074 Quintus
Quintus's picture

More like Redbull Felix Baumgartner.

Tue, 11/27/2012 - 10:38 | 3014108 SheepDog-One
SheepDog-One's picture

Yea.

Wed, 11/28/2012 - 00:26 | 3016498 jerry_theking_lawler
jerry_theking_lawler's picture

Equities High/VIX low.....heard a talking head on CNBS utter the truth the other day....these causes we due to FED action (intervention) in the market.

Tue, 11/27/2012 - 10:21 | 3014051 Quinvarius
Quinvarius's picture

We will stay in a depression as long as the government and the banks keep sucking all the credit and capital out of the system.  This is the same as 1929-1946 depression.

But markets are still going to rise on money supply.

Tue, 11/27/2012 - 10:33 | 3014090 Shizzmoney
Shizzmoney's picture

Exactly, Lak Achuthan notes that before the great depression, we had the "Roaring 20s"....a period when stocks went up, yet the "real" economy didn't expand.

That's what the liberals (and toadie conservatives) don't get when they defend this market.  They think Dow goes up = lifes good!  When it isn't, especially with how incomes have plunged, credit has risen (along with deliquent payments for the last few quarters), and job net creation has barely covered the spread. 

The stock market is NOT the economy......especially in the crony capitalist system we live in today.  As long as they keep that DOW number "up", and gold/silver down...... the people will be complacent. 

Tue, 11/27/2012 - 10:48 | 3014141 SheepDog-One
SheepDog-One's picture

Markets will rise on money supply, until they don't.

Tue, 11/27/2012 - 10:55 | 3014174 kridkrid
kridkrid's picture

And then look the fuck out....

Tue, 11/27/2012 - 11:00 | 3014188 Quinvarius
Quinvarius's picture

The only way it will stop is a complete reform of the banking system and a gold standard.  Until that happens, the bankers will always print themselves more money to avoid liquidating anything.  You cannot short this thing in paper fiat money.

Tue, 11/27/2012 - 11:29 | 3014259 MachoMan
MachoMan's picture

Actually, it will continue so long as humans can delude themselves into believing the myth of the free lunch...  and desire to get today for a promise to pay tomorrow.

Tue, 11/27/2012 - 10:22 | 3014055 Jlmadyson
Jlmadyson's picture

Chart says it all.

Tue, 11/27/2012 - 10:30 | 3014056 Jlmadyson
Jlmadyson's picture

DP

Tue, 11/27/2012 - 10:31 | 3014057 Jlmadyson
Jlmadyson's picture

DP

Tue, 11/27/2012 - 10:24 | 3014061 Let The Wurlitz...
Let The Wurlitzer Play's picture

Were does that second chart coincide with QEoo?

Tue, 11/27/2012 - 10:27 | 3014062 LawsofPhysics
LawsofPhysics's picture

"But markets are still going to rise on money supply."

------------------------------------------------------------------

Correct, and they will continue to do so until either supply lines break, or someone makes the margin call and demands to see or take possession of the underlying assets and collateral.  Then WWIII starts.  Same as it ever was.

Tue, 11/27/2012 - 10:23 | 3014063 forwardho
forwardho's picture

Depression ? The world economy died at end of '08. All these charts show the same thing, the shot of adrenalin into the heart failed to keep the body alive. There are no actions which can be taken to stop the imminent demise. Bright spot is... we know the end of the movie.

Tue, 11/27/2012 - 11:04 | 3014200 Quinvarius
Quinvarius's picture

"Bright spot is... we know the end of the movie."

I know act three involves a lot more adrenaline.  Then maybe we have to shoot this thing in the head to stop it later on.

Tue, 11/27/2012 - 10:25 | 3014065 kito
kito's picture

ive been very down about the u.s. economic situation lately........i went to the shrink.......told him im depressed........he told me i that i wasnt depressed, i was recessed...............

Tue, 11/27/2012 - 10:32 | 3014082 Ljoot
Ljoot's picture

Ba dumm tsssh!

Tue, 11/27/2012 - 10:35 | 3014099 fonzannoon
fonzannoon's picture

Not bad. Someone threw this one up the other day. I laughed my ass off.

"

recently my pet parakeet died. He had been ailing for quite a while. He had Chirpies,it's a canarial desease, it was untweetable."

Tue, 11/27/2012 - 10:39 | 3014109 Dr. Engali
Dr. Engali's picture

 +1 LMAO

Tue, 11/27/2012 - 10:41 | 3014117 kito
kito's picture

nice fonz, thanks for the morning chuckle!!........

Tue, 11/27/2012 - 10:36 | 3014102 pods
pods's picture

I went to the shrink last week and he told me my moral compass was broken.

He said he could fix it with therapy.

I told him no thanks, I will just go to work for Goldman Sachs now.

pods

Tue, 11/27/2012 - 10:59 | 3014185 buzzsaw99
buzzsaw99's picture

Death! by Unga Bunga!

Tue, 11/27/2012 - 11:48 | 3014301 ParkAveFlasher
ParkAveFlasher's picture

Take my gold.  Please.

Tue, 11/27/2012 - 10:28 | 3014068 busted by the b...
busted by the bailout's picture

???  BBG appears to disagree.  I wonder which is right?

Demand for U.S. Capital Goods Climbs in Spending Rebound Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, rose 1.7 percent last month, the most since May, the Commerce Department reported today in Washington. http://www.bloomberg.com/news/2012-11-27/demand-for-u-s-capital-goods-climbs-in-sign-of-spending-rebound.html
Tue, 11/27/2012 - 11:59 | 3014323 BraveSirRobin
BraveSirRobin's picture

This is in contridiction of the report cited above, it seems.

"Bookings for non-defense capital goods excluding aircraft, a proxy for future business investment, rose 1.7 percent last month, the most since May, the Commerce Department reported today in Washington. Orders for all durable goods were little changed, beating the median forecast of economists surveyed by Bloomberg that projected a 0.7 percent drop."

Consumer Confidence:

"The Conference Board’s confidence index increased to 73.7, the highest since February 2008, from a revised 73.1 reading the prior month, figures from the New York-based private research group showed today. The report showed the share of Americans planning to buy a house rose to a record high, indicating improving property values and a job market recovery are making households more willing to make long-term commitments."

All-in-all, these are favorable reports.

Please explain away, with evidence. Just do not claim the numbers are manipulated or an outright lie.

I am just trying to get folks to think, and not reflex towards bearish bias.

Tue, 11/27/2012 - 12:55 | 3014478 dexter_morgan
dexter_morgan's picture

Kind of tough to do in this era of 'what propaganda can you trust'. Many times, given the contradictory reports, revisions, etc. people begin to rely more on observation and anecdotal evidence, since that which is observed is not likely to have been doctored or spun. All I can say personally is that given the uncertainty of the tax environment, we will not be spending like past years since it is likely we will need to come up with additional monies to meet the additional tax burden, both federally and locally.

 

Anyways, keep asking the question.

Tue, 11/27/2012 - 13:36 | 3014609 Things that go bump
Things that go bump's picture

Tax revolt!

Tue, 11/27/2012 - 10:28 | 3014072 disabledvet
disabledvet's picture

The question isn't whether or not we're in a double dip recession but how massive is it. "Not all recessions are created equal." Some haven't even felt the first one actually. Hmmmm. I wonder why that is? (And no, it's not because they got a bailout...PER SE.)

Tue, 11/27/2012 - 10:32 | 3014084 negative rates
negative rates's picture

I've been to the brooker, i've been the kanobie, i've been to St.

Louis too, i've been all around the country.

Tue, 11/27/2012 - 10:32 | 3014089 gratefultraveller
gratefultraveller's picture

2nd graph: Head and shoulders?

Tue, 11/27/2012 - 12:18 | 3014384 Orly
Orly's picture

No.

Tue, 11/27/2012 - 10:34 | 3014095 Future Jim
Future Jim's picture

Seems like we can't even get above the high at the end of the Clinton era of cheap oil and gridlock. How much of this lameness is caused by expensive oil and misallocation of capital, and how much of the misallocation of capital is caused by zero interest, fractional reserves, QE, and government spending?

Tue, 11/27/2012 - 10:40 | 3014104 Joe Davola
Joe Davola's picture

Time to channel my inner Krugman: 'durable' goods are bad, we need 'less durable' goods so people will need to purchase the replacement sooner.

Tue, 11/27/2012 - 11:01 | 3014189 buzzsaw99
buzzsaw99's picture

damn you davola that is exactly what they are doing

Tue, 11/27/2012 - 11:56 | 3014318 Joe Davola
Joe Davola's picture

As someone pointed yesterday, the difference between defect and feature is all in one's perspective.

Tue, 11/27/2012 - 12:42 | 3014451 Jumbotron
Jumbotron's picture

That's been Microsoft's perspective for 32 years

Tue, 11/27/2012 - 10:42 | 3014124 rsnoble
rsnoble's picture

Yeah but the little blue squiggley line is starting to slightly turn up.  That's probably a turn around point and you should prepare for a massive recovery. Yahooeysplatenews.

Tue, 11/27/2012 - 10:53 | 3014164 azzhatter
azzhatter's picture

No worries mates, Ben the Bernak has a keystroke for that.

Tue, 11/27/2012 - 10:57 | 3014178 4exNinja
4exNinja's picture

Wait...are you telling me fake growth induced by printing money doesn't work??? Who would have thought :D

Glad to see "job creators" eagerly creating jobs...like Adelson who just paid his investors a special dividend. Clearly that'll create tons of jobs.

Tue, 11/27/2012 - 11:03 | 3014198 Sigep0612
Sigep0612's picture

Buffett was on NBC this morning.   Laurer tried to pin him down on the Fiscal Cliff and Buff wouldn't bite saying that he was bullish "Long Term on the USA"     I don't really give a hoot about Buffett but I agree with his timeframe not his outcome. The reason that there are not more alarms sounding right now is because 1) the media tells us (the sheep)everything is going to be alright (my God...Black Friday sales increase buy 14%...so everything must be alright...right?) 2)Washington will do whatever it takes to keep this economy moving ...and I mean whatever   3) The American people are so ho-hum...that they really don't have a clue as to what we are facing. Unlike the passion displayed in the Middle East and in some parts of Europe, where citizens feel strongly regarding an issue or are forced to suffer physical pain...the USA consumer will just keep doing the same old crap in total oblivion.

My point is that while the economic collapse is inevitable it is not imminent.  I think it will take a major outside catastrophic event to catapult the US over the cliff into the ravine.   Invasion or War between two majors, Economic collapse in Europe, change in the electromagnetic fields, or Honey BooBoo going bankrupt.  

Tue, 11/27/2012 - 11:51 | 3014306 adr
adr's picture

There won't be a collapse in the classic sense. The economy will just fade away as middle clas white people go extinct.

Tue, 11/27/2012 - 12:36 | 3014441 dexter_morgan
dexter_morgan's picture

Of course he's bullish, if it gets tough he'll get the gubmit to throw more money his way as they have on several occasions recently. If anyone has no need for concern it would be that guy.

Tue, 11/27/2012 - 11:05 | 3014203 redd_green
redd_green's picture

But, of course, the recession ended at the rightmost edge of the gray area on the Fed's chart:

http://research.stlouisfed.org/fredgraph.png?g=daJ

Now, we're offficially in a recession?  Heh, yeah.

 

 

 

 

 

Tue, 11/27/2012 - 11:12 | 3014226 Joe Davola
Joe Davola's picture

Welcome to the new normal.

Tue, 11/27/2012 - 11:41 | 3014291 Fix It Again Timmy
Fix It Again Timmy's picture

Don't panic sheeple, just sit on your fat asses and do nothing - someone from the government will save you, you have my word on that!

Tue, 11/27/2012 - 11:48 | 3014300 adr
adr's picture

Black Friday numbers did not increase. Holiday sales numbers will not increase. How do I know this? Actual retail reported data and the fact less inventory was bought and put in stores. Can't sell more if you bought less. I got an email from my buyer this morning with the weekend total, his department is down 32% from last year. I guess using Bamajustments that means a 10% YOY increase.

The one thing that did increase is fraud and the manipulation of adjusted datapoints, like comscore, that can show an increase where it doesn't exist.

The Black Friday tool bins were nearly completely full on Sunday at Sears. There were still a dozen of so $10 PJ sets in the girls doorbuster bin. Walmart still had hundreds of $1 DVDs and $3 Blurays. The only things that were gone were the limited supply doorbusters that sold out in the first hour, things with near zero profit. The rest of retail was barely touched.

Everyone I know that works in retail said the weekend was slower than any in recent memory and people were spending a lot less. Confirmed by store sales totals that didn't come close to matching last year, let alone the sale goals.

Tue, 11/27/2012 - 11:53 | 3014311 Joe Davola
Joe Davola's picture

I won't dispute your claims, but have to wonder how much profit is made on the DVD's/Blurays in what used to be known as the cut-out bins.

Tue, 11/27/2012 - 11:56 | 3014317 Chump
Chump's picture

But...but...but...EVERY SINGLE AMERICAN ADULT went shopping on Friday!  Or just visited a shopping website, or news website, or something...

http://www.weeklystandard.com/blogs/cnn-all-adults-america-went-shopping...

 

Tue, 11/27/2012 - 14:28 | 3014764 cbxer55
cbxer55's picture

Speak for yourself. I did not go shopping the entire weekend. And I told my family that I was not buying Christmas presents for anyone, and they should not buy for me. I am buying nothing but food and gasoline, and the least I can get away with. An occasional book for entertainment is the only thing I have bought otherwise in like four months.

Tue, 11/27/2012 - 12:02 | 3014330 BraveSirRobin
BraveSirRobin's picture

Anecdotal observations may not relect a broader reality. Just saying.

Tue, 11/27/2012 - 12:31 | 3014426 dexter_morgan
dexter_morgan's picture

Then again, they just might. Did some 'shopping' over black Friday where I am at, in an slightly upscale Chicago suburb, and no problems getting in and getting blockbuster items..........not like in years past. What I noticed more of was teenage malingerers hanging around the malls, but not buying much of anything besides food.

Maybe everyone is just staying home and buying online, that could also explain it.

Tue, 11/27/2012 - 12:11 | 3014361 swmnguy
swmnguy's picture

My wife and kids went out to the stores on Black Friday here in Minneapolis, around Noon.  (I went to the hardware store to get some sandpaper.)  They said Target looked like a normal weekend day; the carts were all tidy and stacked, merchandise was in stock and not messed up.  Same for the other stores they went to.  Only Best Buy looked like it was busier than usual.  Anecdotally to be sure, everyone I have spoken with here said "Black Friday" looked like a normal Saturday to them wherever they went.

Tue, 11/27/2012 - 14:03 | 3014677 CitizenPete
CitizenPete's picture

Mostly the same in NE Ohio as well.  It was a normal busy, but no throngs of Zombies like the isolated media  spin would have you believe.  I must admit I did get into the buying frenzies myself - ammo was under $200 per 1000 and even with shipping it beat my local shops by $40/1000 -- so I picked up another 5 cases online.  Gotta follow the lead of the Department of Homeland Insecurity ... who just finished and acquisition of 750 million rounds of .45 cal. JHP ...   (What do they know that you don't?) 

I should see a decent return should I decide to part with it boxed in multiples, rather than delivered in singles out the end of a pipe.

Disclaimer I am long Smith&Wesson and Sturm Ruger:

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

SWHC - Smith & Wesson Holding Corporation(NASDAQ)

10.14 +0.28‎ (2.79%‎) 

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

RGR - Sturm, Ruger & Company (NYSE)

56.92 +1.91‎ (3.47%‎) 

Tue, 11/27/2012 - 11:51 | 3014307 BraveSirRobin
BraveSirRobin's picture

So, consumer confidence is surging, which tends to corroborate the increasing employment statistics. How do we explain away this?

Looking for real discussion.

Tue, 11/27/2012 - 12:11 | 3014337 Future Jim
Future Jim's picture

What you are observing is media bias, cronyism, etc. A conspiracy supported and propagated by legions of useful idiots. Employment is NOT increasing. Based on the civilian employment to population ratio, there has been no recovery.

Tue, 11/27/2012 - 12:19 | 3014382 Hugh_Jorgan
Hugh_Jorgan's picture

A couple months worth of "doctored" employment statistics two months before the most critical US Presidential election in a generation? That is your marker for a positive change in employment? Seriously?! You need to do some reading.

As for public sentiment; the masses are asses, the election results should tell you that. Americans are so ignorant of the world around them these days that "public sentiment" is an utterly meaningless statistic, until perhaps we find ourselves living under martial law, and maybe not even then I fear.

 

"The best argument against democracy is a five-minute conversation with the average voter."

~Winston Churchill

Tue, 11/27/2012 - 12:19 | 3014390 lakecity55
lakecity55's picture

Ha. CNN (Pravda) claims, like, 300 million USA sujects went shopping over the weekend, so these stats are obviously meaningless. I mean, who questions Pravda?

Tue, 11/27/2012 - 12:43 | 3014420 swmnguy
swmnguy's picture

Fair question, and I don't know the answer.  I know that corporations are scaling back or cancelling upcoming fancy business meetings in 2013.  I coordinate them for a living; the tech end for the really fancy meetings with staging, lighting, audio, video, live entertainment; that kind of crap that corporations spend millions on and most people don't know about.  I take this as a cyclical thing, not a secular thing, but it shows there's no corporate expectation of a big bull.

Mine is a very cyclical and news/PR-sensitive industry, but even in bad times they still have to have face-to-face meetings with the troops.  In October of 2008 I was in Beijing doing a fashion show (?!) and staggered up to my room all jet-lagged out  and saw on CNN International that AIG had taken their12 top insurance salesmen to the St. Regis outside L.A. and spent $25,000 at the spa, and an employee had scanned the invoice and sent it to the New York Times.  I know that's chicken feed at that sort of joint; probably not even a happy ending in the bunch for that kind of money, just ice cream pedicures and a little caviar on the balls is all.  But I could tell that would absolutely kill my business for 2009, and sure enough I lost 75% of my work, y.o.y. 2008 - 2009.  They did still have meetings, but much fewer, and much smaller.  They called them "training sessions," and there were very few lights and no Huey Lewis or Beyonce.  I was able to make all my payments and not spend up the credit cards.  Lots of breakout sessions for me.

Of course, every election cycle the corps use as an excuse to trim back on the upcoming meetings, because they metastasize and take up all the senior exec's time otherwise.  PowerPoint is an extremely effective technique to avoid communication, and added staging, lighting effects, and Huey Lewis and the News add that certain je ne sais quoi to not telling anybody anything they didn't already know.  They will cut back when they see bad times coming, and they'll beef up during good times.  Slowdowns in my business are usually a leading indicator, and boom times for me are usually a trailing indicator and a warning to me to fill up the war chest and make that massive Costco run.

Jan. - May are usually my busiest months.  For 2012 I made 60% of my nut for the year in those months.  For 2013, it looks like I'll be down about 60% compared to 2012.  Enough to live on, but only just, and I won't know about the rest of the year for a few months yet.  My clients all say it's the cyclical pullback so the execs can do something (whatever they do) other than speak at meetings.  But I have to wonder.

To your point (sorry about the long-winded setup): I think consumers overall are feeling better about the future now than they have since October of 2008.  But that's not saying much.  Instead of thinking they're going to freeze to death in a cardboard box under a bridge, they think they may be able to keep living indoors.  That's a generalization.  People who are doing well continue to think they're going to do well.  I'm hooked up with the corporates, though I'm self-employed, so I think I'll have a slow 2013 but by the end of 2013 they'll feel restless, feel like they have to get back out there and whip up the troops, and 2014 will be better for me.  I think most people who go to a job 9-5 and depend on somebody else for their survival are realizing that the world isn't ending, but they're never going to get a meaningful raise, so they need to pull in their horns, pay down their debt, and more or less tread water until death.  That's better than they've felt since October of 2008, though, so Consumer Confidence can be said to be "surging."  I wouldn't want to have to sell $40,000 SUVs for a living, though.

I think the corporates, particularly in retail, foresee a slow 2013.  They'll survive, but they'll have to cut back or maintain status quo.  Nobody is getting a raise, some people will get cut back to part time or let go, Margins will shrink.  Cash will be devoted to stock buy-backs.  PowerPoint shows will continue to feature mountain-climbing metaphors and lots of talk about how we all need to work together and share the pain.

Is that at all useful to you?  Sorry if I wasted your time telling my life's story.

 

Tue, 11/27/2012 - 15:41 | 3015047 swmnguy
swmnguy's picture

...And wouldn't you know, in the 3 hours or so since I posted this, I've gotten 2 calls from corporate clients, each adding a very small, very last-minute event in January.  Not a lot of money to be gained from them, but enough to postpone the time to start worrying by a few months.  Again, not sure what or whether to extrapolate this out to in reference to the overall economy, but my hunch is that corporations are going to "under the radar" mode and spending cautiously.  Given the industries these corporations are in, that tells me they don't share the confidence we're hearing the consumer is so full of.  My experience is that the corporations aren't always right about these things, and periodically they do cut back on meetings and events just for the sake of cutting back, but more often it's a leading indicator of tough times ahead.

Tue, 11/27/2012 - 19:22 | 3015775 Real Estate Geek
Real Estate Geek's picture

Thank you for some valuable insights.

Tue, 11/27/2012 - 13:28 | 3014579 NidStyles
NidStyles's picture

There is no real discussion to be had with you. The very reason why there is none, is because you are starting from a faulty premise that doesn't require actual factual basis to exist, because it's based upon "expert" opinion, and it's deemed accurate and real because of the authority and position behind that presumed "expert" opinion. These statistics you are quoting are mostly stretched beyond any real reasonable definition to pretty up the situation.

How in the hell do you measure Consumer Confidence unbiased or rationally? Explain that first to yourself then think about what it means by looking at what it is that you are actually measuring. Then think about what it is that it isn't measuring.

I wouldn't waste my time arguing with a delusional patient trolling around on anti-psychotics, so why would I waste my time having a discussion with someone that is obvious that he's the non-medicated version of the same? This storyline you are accepting is delusional and made up out of thin air using manufactured definitions of something that is in all reality unmeasurable. The jokes on you.

Tue, 11/27/2012 - 15:49 | 3015078 BraveSirRobin
BraveSirRobin's picture

Such hostility!

"I wouldn't waste my time arguing with a delusional patient trolling around on anti-psychotics, so why would I waste my time having a discussion with someone that is obvious that he's the non-medicated version of the same?"

You dismiss the reports by attacking a messenger? If I have accurately represented the reports, how am I delusional, etc? It seems you simply do not want to confront them in any rational manner. The reports may be wrong and in error, but you have not shed any light on why this might be.

A look at the methodology for measuring consumer confidence may be a good discussion, however, you have simply bypassed this potentially fruitful examination and discussion.

A prior claim by you that "These statistics you are quoting are mostly stretched beyond any real reasonable definition to pretty up the situation" is simply a stated opinion without any substantiation.

You have even assumed, without evidence, that I disagree with you about these reports, which may not be the case.

Very sloppy "arguments," indeed.

 

Tue, 11/27/2012 - 12:15 | 3014371 SilverMoneyBags
SilverMoneyBags's picture

PRINT MORE AIRPLANES!

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