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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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


mayhem_korner's picture



The Philly Bernank-Steak

Ham & Bernank

Bernank Doodles

Bernank Whiz

Bernank-Heads (Packer fans)

...and my favorite, Grilled Bernank

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.

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.

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.

Things that go bump's picture

Mayhem was quite possible with iron age weapons.

edifice's picture

Exactly. Get ready for the New Dark Ages.

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.

e-recep's picture

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

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!  

Alpacanio's picture

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

EuroInhabitant's picture

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

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.

Jason T's picture

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

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!

Dr. Engali's picture

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

JPM Hater001's picture

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

LongSoupLine's picture

Charts?  Algos don't need no stinking charts!

wandstrasse's picture

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

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?

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 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 know...cuz the Fed will be buying it.

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.

new game's picture

good point - where the fuck is my free money!


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...



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.

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.

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.

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.

SheepDog-One's picture

Double triple SECRET QE coming next!!

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?

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.

semperfi's picture

more infinite QE - quick !

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?

Quintus's picture

More like Redbull Felix Baumgartner.

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.

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.

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. 

SheepDog-One's picture

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

kridkrid's picture

And then look the fuck out....

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.

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.

Jlmadyson's picture

Chart says it all.

Let The Wurlitzer Play's picture

Were does that second chart coincide with QEoo?

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.