Ugly Chicago PMI Best Captured By Respondent: "The Economy Really Seems To Be Hanging On A Thread"

Tyler Durden's picture

Just like yesterday's atrocious second Q3 GDP revision needed at least 1 minutes of work (so about 60 seconds more than most algos are willing to put into it) before the true gist of the economic data ugliness could be truly captured, so the true story in today's Chicago PMI - usually a critical advance indicator to the Manufacturing ISM (except lately of course: under central planning any historical correlations make no sense) - only appeared into view following a more than cursory glance.

Sure enough, while the headline number printed above 50 for the first time since August, 50.4 to be specific, missing expectations of a 50.5 increase, yet up from 49.9, the bulk of this was driven by the most illogical driver: i.e. Prices Paid, which directly correlates with collapsing profit margins, printing at a 16 month high - inverse deflation is everywhere these days it seems, while the all critical New Orders plunging to the lowest since June 2009 or 45.3 from 50.6, and finally inventories declining from 49.6 to 47.1: which makes sense after as disclosed yesterday it was inventory accumulation in Q3 that accounted for 36% of US economic "growth." What good news there was was in Production, Backlogs and Employment: the same Employment we have been told to ignore in all other data series due to the impact of Sandy.

But perhaps the best summary of the economy are the following bolded statements from the Chicago PMI respondents:

  • The economy really seems to be hanging on a thread. I do not think that upward price movements can be sustained at a time when real growth is questionable.
  • Business sales been slowing throughout the year, and continue to slow, but now at an increasing rate, becoming very alarming.
  • We are officially swamped and doing everything we can to get our machines out this year....some will bleed into 2013, but we will make up a large portion of our yearly revenue in Q4.
  • The fiscal cliff looms over us as our biggest customers are defense contractors. Can't see how increasing taxes on job creators will solve this problem, only growth will.
  • Hospital inpatient census rates are reducing - cost reduction initiatives are manadatory.
  • Several large orders continue to 'pend' but several smaller orders have kept our backlog up. Next year still looks very promising.

Finally those who enjoy predicting overall economic strength based on the New Orders less Inventories indicator, we have some bad news:


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Cognitive Dissonance's picture

"The Economy Really Seems To Be Hanging On A Thread"

A spider web of corruption, decits, lies and private/public denial.

<Precisely because of this maybe our future holds a crumble rather than a collapse.>

Stoploss's picture

"Several large orders continue to 'pend' but several smaller orders have kept our backlog up. Next year still looks very promising."


Who is responsible for this liar?

Looney's picture

The Fiscal Cliff circus is just a distraction, a masterfully crafted Goebbels-like propaganda, so when the Poop hits the Propeller both sides can blame each other. If Romney were elected, we would've seen exactly the same show.

The STRING the whole thing is hanging on is rotten and can't hold this shit any longer. Even if they, by mistake, suddenly "solve" the Cliff, they would need to make-up something else very quickly, so they can blame the collapse on it.


SeanJKerrigan's picture

Interesting theory.  I do think that most of DC is still delusional and doesn't understand the possibility of collapse. At the same time however, there are some higher thinking oligarchs who are looking ahead.

I'm not sure however that blaming each other is the best solution from a tactical point of view. The whole point of the two party system is to divert public anger back into the system and to prevent "solutions" outside of their control from being presented.

Splitting the population's anger between Ds and Rs might serve the individual politicians in the short term, but it forces people to begin to embrace more extreme solutions and this could destabilize the power structure as it exists. (Read this analysis on Nazi Germany to see what I mean.)

As of this time, they are pretty confident in their level of control however, so what you say is possible.

I am more equal than others's picture

Cut the thread already and lets get it on.

MiltonFriedmansNightmare's picture

Remember, the C in CPMR stands for Chicago.

Jim in MN's picture

Goldman called, they want their thread back.  With interest.

vast-dom's picture

and the dow is............up a tick in green! 



Pool Shark's picture



"The Economy Really Seems To Be Hanging On [government borrowing]."

There, fixed that for you.

mrktwtch2's picture

someday the truth will matter..but not

EscapeKey's picture

Dow up 25 pts.

The fact that it hangs on to a thread is bullish!'s picture

Who can make such a strong thread????

the not so mighty maximiza's picture

Time to bring this fucker down.

buzzsaw99's picture

job creators, that's a laugher! in china maybe, here nothing but layoffs and executive bonuses. they should be executed for treason.

chet's picture

I do love it when people in the government contracting biz talk like they're John Galt.  No more taxation!  But grow the defense budget!

I heard a guy on the radio like this.  He and his wife were longtime armed forces employees, recieved their training and education and so on from the military.  Now they're both in the DC area selling their expertise back to Uncle Sam as contractors, making well over $250k (he says).  But the guy is talking like he's some sort of master capitalist complaining about taxation.  You mean taxation to pay for the government which has supported every aspect of your professional life and now pays your fabulous "private sector" salary?  I just can't take those types seriously.

Dr. Engali's picture

They better hurry up with that war.... reality might start to set in with the sheeple that we are fucked.

Bay of Pigs's picture

Which war? I've lost count...'s picture

My TV is really about to crap out...should I buy a new one now or wait till January?  Oh what did you say?  This isn't Clark Howard's site...shit balls

Monedas's picture

My last CRT TV has been making crackling sounds when I turn it on for a couple of months .... then poof it went dead .... is that the picture tube, a gum wrapper fuse or the power supply .... or just break it open and sell the copper coil around the CRT electron gun ?

blunderdog's picture

Just make it's plugged in and start poking a screwdriver around through the air-holes in the back.  That'll often fix that sort of thing.

Jim in MN's picture

When it comes to electronics, free is a good value.  Whatever you can get for free or next to nothing should be better than good enough.

CH1's picture

Whatever you can get for free or next to nothing should be better than good enough.

Funny how often that's true these days.

squib's picture

I know we are only '4 years in'...but I'm getting economy/financials/BS fatigue.


I still love unicorns though.

nantucket's picture

oh yo yo yo....oh oh oh....ooooh oooh ooooh ya ya ya ya yaaaaah

HyperLazy's picture

Quik - some one roll out a central banker or a politician to fluff the markets...

pebblewriter's picture

The thread is tied to a stick that's propping up a box of whoop-ass. 

An analog that predicted 1421 in April, 1288 in June, and 1472 in Sept is signalling 1290 in January.

Tsar Pointless's picture

That analog and I must be siblings, 'cause that's where I see the S&P within the next month.

pebblewriter's picture

Damn.  I shoulda called you instead of doing all that charting!  Here's hoping we're both right.

Monedas's picture

Did you hear about the currency trader who was crucified on a cross of yen ?  

MilleniumJane's picture

Yes, yes....bow to the masters or all hope is lost!</sarc>

"The fiscal cliff looms over us as our biggest customers are defense contractors. Can't see how increasing taxes on job creators will solve this problem, only growth will."


bullmkt's picture

Bullish.Sorry,Tyler.You must wait for another "bearish" data to be short on and get stopped out (again,and again).

Up,up,up.Yesss.Blame it on algos this time.

Boilermaker's picture

The market is going to TANK!!!

Wait...update...shit it's up again.  That's odd.  I thought they would give up today.

mdtrader's picture

When they finally do a deal on the fiscal cliff then it will tank. At that point the market will realise that higher taxes and spending curbs are not bullish for stocks. Oh and because the shorts will no longer be worried about some dumb politician giving the algos the horn, which then smash the Dow 200 points higher in minutes.

Boilermaker's picture

I wrote that one down!

Thanks.  I'm gonna be RICH!!!

mdtrader's picture

Lol. I wouldn't bet on it. Everybody loses on the markets now apart from the machines! Those things hoover up people's cash faster than an online casino.

CH1's picture

The market is going to...

Once again, THERE IS NO MARKET. All is manipulation, all is theater. In the audience sit all the 401K sheep.

Use your fiat to buy real, unregistered, valuable things.

Madcow's picture

Can't Geithner just call up Zuckerburg and figure out how to issue "Sudden Stop Prevention" bonds by monetizing social commerce in the clouds - ?? 

Quinvarius's picture

And what perked this up from the last bottom?  And what is about to happen again?

caimen garou's picture

the dawn of the planet of the apes, we have nothing but button pushing monkeys telling us that everything is great while slinging shit at the american people! problem is that not only are they shitting on thier nose, the sheep are leaving their mouth open.  

mayhem_korner's picture



The economy is hanging on a noose. 

Monedas's picture

This whole inverse pyramid of lies, that is our economy, can be traced back to the mother of all lies .... "I did not have SEX with THAT woman !"

SmoothCoolSmoke's picture

Wrong.  Our economic condition goes back to the real mother of all lies:  "Sadam Hussien has WMDs"

caimen garou's picture

wrong, you have to go back a little more than that to a big nose fellow and a tape player.

roadhazard's picture

Wrong again, it was, "I am not a crook" ~ Nixxon

dwdollar's picture

The real Santa Claus could come down and cancel Christmas and it still wouldn't fucking matter. The markets would rally hard that day and everyday until the middle of Jan. It's just that time of year when the dumbest of the dumb money is the biggest player.