Initial Claims Plunge: QE4EVA Ending Sooner Than Expected?

Tyler Durden's picture


The economic data dump trifecta has been released, with updates on claims, retail sales and PPI. The end result was a nearly even beat/miss split.

  • Initial Claims dropped 29K from the upward revised 372K, down to 343K, beating the consensus of 369K. Needless to say, this comes at a bad time for the market when in the aftermath of yesterday's Bernanke conference, this better than expected number brings us one day closer to the end of QE4EVA. Unclear how much of this is merely the overshoot to the seasonal adjustments resulting from the fudging that happened during Sandy. Remember: all claim numbers are still largely distorted due to the impact of the Hurricane, which means that yes, the surge is indeed, Sandy's fault.
    • Of note in the claims number was the surprising surge in those claiming Emergency Unemployment Comp, which jumped by a whopping 186K, and the stunning jump in State employees claiming benefits, which jumped by a ridiculous 480K! All Sandy's fault too?
  • Retail Sales were a miss at the headline level, printing at +0.3%, and missing expectations of +0.5%. This was driven once again by a 1.4% rise in auto dealers (one assumes this excludes channel stuffing). The number was modestly better at the internal level with the Retail Sales less autos printing as expected 0.0%, and unchanged from last month. Finally, ex-autos and gas, sales rose 0.7%, beating expectations of 0.4%, driven entirely by a 3.0% surge in sales at non-store retailers in the aftermath of Hurricane Sandy.
  • Finally, Producer Prices in November dropped 0.8%, below expectations of a -0.5% decline, driven by a slide in food and gas prices. Ex-food and gas, PPI rose 0.1%, just as expected.  November PPI ex-food and energy rose 2.2%, also in line with expectations.

In short: data which on the surface may indicate the Fed's easing is ending far sooner than even we expected yesterday.

Initial Claims...


Emergency Unemployment Claims jumped the most since July 2010...


Advance retail Sales...

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Thu, 12/13/2012 - 09:49 | 3058906 mckee
mckee's picture

Now that high unemployment is justification for QEn+1 (and the election is over) I expected 800k initial claims.

….. now what?

Thu, 12/13/2012 - 10:00 | 3058948 stocktivity
stocktivity's picture

The fed will just revise it's 6 1/2% target down to 5 1/2%....not to worry....the printing presses won't cool off for years to come. Until then....It's all Bullshit!

Thu, 12/13/2012 - 10:17 | 3059018 smlbizman
smlbizman's picture

wrong stock...they will go the other way...onward and upward....just when you thought you knew the answers, they change the questions

Thu, 12/13/2012 - 10:03 | 3058956 semperfi
semperfi's picture

you mean they'll start telling the truth - ha! - they don't know how

Thu, 12/13/2012 - 10:07 | 3058969 SheepDog-One
SheepDog-One's picture

Right...wasn't every big brain economist saying just yesterday that what Bernank really needs is higher unemployment? This 6.5% was just a Bernank headfake.

Thu, 12/13/2012 - 10:16 | 3059017 Atlasshruggedme
Atlasshruggedme's picture

I thought that QE4VR was suppose to push the market higher? 

Thu, 12/13/2012 - 10:25 | 3059045 GeezerGeek
GeezerGeek's picture

This data set clearly shows that Obama's policies are finally beginning to get some traction. The Republicans must therefore accede to his demands for exorbitant tax increases (on the rich, only, of course). If they do not give in the unemployment problem will worsen and it will be the fault of the Republicans. At least that's what the numbers will say, no matter how much manipulation is needed.

Thu, 12/13/2012 - 09:50 | 3058911 Who is John Galt
Who is John Galt's picture


Thu, 12/13/2012 - 09:51 | 3058913 in-Credible Banker
in-Credible Banker's picture

But - but - but....


Who will buy the $100 billion per month in new Treasury circa 1% coupon?


Bueller, bueller???


Thu, 12/13/2012 - 09:56 | 3058931 CPL
CPL's picture

Same people buying it before and still being unable to buy it all when it's offered.


How sad is that?  

The theives have FULL control of the inputs and outputs of the economic Tbill selling machine, yet still they can't even raise enough of their own interest and capital in managing their own scam.

AND they have their own printing press.

Thu, 12/13/2012 - 09:56 | 3058933 Quintus
Quintus's picture

Precisely - and that is why QE will not end.  If the conditions outlined by Bernanke for ending QE look like being met (Unlikely given the extent to which they are fudged) he will simply change them.

Unless and until another buyer (or buyers) is seen standing ready to throw $100bn at the Treasury every month, year in and year out, without asking for yields any higher than they currently are, QE must continue.



Thu, 12/13/2012 - 10:05 | 3058962 SheepDog-One
SheepDog-One's picture

Or, maybe there's another plan entirely and all this is just letting them march in place until it happens. 

Thu, 12/13/2012 - 10:46 | 3059147 CPL
CPL's picture

Yup...march in place until you need the lemmings to march off a cliff together.


Thu, 12/13/2012 - 10:03 | 3058955 plaspotje
plaspotje's picture

bennie boy want north korea to buy ,,but they refuse to be part of the game

Thu, 12/13/2012 - 09:55 | 3058922 firstdivision
firstdivision's picture

November PPI ex-food and energy rose 2.2

Ummm...didn't Ben have this data point before his speech yesterday? 


FYI: BDIY is down another 8% today.



Thu, 12/13/2012 - 09:54 | 3058927 lordbyroniv
lordbyroniv's picture

There are no jobs.  How are you people making a living?

I dont think the younger generation is going to take kindly to reality when they get there.




Thu, 12/13/2012 - 10:01 | 3058950 forwardho
forwardho's picture

Yes lord, it does have a way of creeping up and biting one square in the ass.

Thu, 12/13/2012 - 10:21 | 3058998 foodstampbarry
foodstampbarry's picture

They don't give a shit. 'The One' is in the oval office that's all that matters. Keep the freebies rollin bitchez!

Thu, 12/13/2012 - 09:56 | 3058932 fonzannoon
fonzannoon's picture

For whatever it is worth Liesman absolutely called Santelli out this am and skewered him. I hope Tyler puts it up. Santelli was whining about debts and deficits and Liesman asked him why the traders he represents are still buying treasuries instead of dumping them. Basically he said "you talk a lot of shit but look at your actions". Santelli's response? Traders want to make money. Which is fine. But stop whining then.

Then it got better. Santelli, knowing he was trapped, grabbed a trader and asked the trader why he was buying treasuries and not selling and the trader responded "who would buy?". Now that was a great response. Basically the trader admitted there would be no one on the other side of the trade. That sounds kind of scary. Liesman pressed him further and the trader scurried away. The point is these guys sounded like people adding to their Madoff accounts even as they were screaming about a Ponzi. Santelli came off completely two faced and Liesman slapped him around like a toy. That was refreshing.

Thu, 12/13/2012 - 10:00 | 3058947 Tsar Pointless
Tsar Pointless's picture

Santelli is two-faced.

That's why he came off as being so.

Thu, 12/13/2012 - 10:04 | 3058959 fonzannoon
fonzannoon's picture

People are going to junk my comment because I was giving Liesman credit. They will miss the point. The point is, just like the politicians. Look at what people do, not what they say. That trader gave the truthful answer. There is no one to sell to. That is why they have to buy until infinity. The second someone hits sell it's all over. But that guy knew he just got in over his head. All three of them did. I am sure they are in a conference room right now asking each other wtf just happened out there.

Thu, 12/13/2012 - 10:53 | 3059180 francis_sawyer
francis_sawyer's picture

I doubt you were getting junked because of a supportive Liesman comment... More Like ~ ANY comment you make which acknowledges him in any way (relevant or irrelevant) is inviting a JUNK...


& since I broke my own rule by this comment, I'll dutifully JUNK myself...

Thu, 12/13/2012 - 10:06 | 3058965 buzzsaw99
buzzsaw99's picture

rick works for the maggots same as all the other cnbc whores

Thu, 12/13/2012 - 10:09 | 3058976 fonzannoon
fonzannoon's picture

I love the junks. freakin cavemen. Wake up. When you are watching kabuki theatre EVERYONE is an actor.

(Banging rock hammer) Liesman bad!!! Santelli good!!!!


Thu, 12/13/2012 - 10:17 | 3059006 gjp
gjp's picture

I love your comments, fonz.  You're right, question everyone and everything.  We are all compromised by the need to live in a dysfunctional system.  Short of dropping out, prepping, going off grid (and most can't do that for any number of reasons), you have to make compromises, and as a result in one way or another not live up to what might be your moral standard.

I would wager most of the commenters here (including me) are not exactly part of the productive class (i.e. not involved in the production of real things, making money from either the financial system or the state).  They see what is wrong but, like Santelli, they are still feeding at the trough to one degree or another.

Thu, 12/13/2012 - 10:52 | 3059166 adr
adr's picture

I am a product designer directly responsible for pumping real products into the economy working for non publicly traded real corporations.

What I have found is that the non productive financial parasites have made it nearly impossible for the productive class to be successful. The publicly traded ponzi apparatus will not allow you to compete unless they believe your company will also go public at some point enabling insiders to profit more off your stock than actually selling your product.

Products that are selling 40% of their inventory are seen as duds, if they are not exchange listed corporations. A public company seling 3% of its inventory is seen as a success, because sales don't matter, only inventory stuffng to make the producer look like they are selling well. If they look like they are selling well, the stock will go up and the directors of the retailer will make a ton of money on the stock they bought through proxies.

The US economy is 100% bullshit and no longer needs a productive class to make people money. The ponzi will come ful circle as there will no longer be any productive citizens left as they all leave for better prospects.

Thu, 12/13/2012 - 10:45 | 3059141 gaoptimize
gaoptimize's picture

There is such a dearth of news and commentary sounding alarm bells that any sounds fine to me, periodically cutting through the momo din.  It is a symptom of a sick market that there hasn't been a sell-off in advance of the fiscal cliff and it's clear indication of our terminal fiscal condition.

Thu, 12/13/2012 - 10:15 | 3059003 SheepDog-One
SheepDog-One's picture

Wait, Santelli grabbed a bond trader and asked him why he's buying and not selling, and he said 'Because no one else wil buy. 'There's no one on the other side of the trade, so I better keep buying'?

Doesn't even begin to make any sense. No one to sell to, so I'll keep buying more myself. I call BS he was just lying.

Thu, 12/13/2012 - 10:20 | 3059033 fonzannoon
fonzannoon's picture

If he was going for a Lie he would have said something like "I think rates can go lower from here and rabble rabble". Nope. What you saw was a rare unscripted moment gone awry. I just happened to be watching it and I felt like Jim Carrey in the Truman show when the camera fell out of the sky and everyone tried to clean it up and make pretend it did not happen.

Thu, 12/13/2012 - 10:43 | 3059129 TheCanadianAustrian
TheCanadianAustrian's picture

I think that MDB has an understudy!

Thu, 12/13/2012 - 09:56 | 3058936 Mad Mohel
Mad Mohel's picture

Slide in food prices? Where? Maybe only at McPuke, everywhere else it is a steady climb. Who makes up this bullshit?

Thu, 12/13/2012 - 09:59 | 3058937 holdbuysell
holdbuysell's picture

End QE4EVA early?
Nah. Bernanke will just make up some other reason for printing to save the banks and to fund runaway government spending.

Thu, 12/13/2012 - 09:59 | 3058940 Iam Yue2
Iam Yue2's picture

"In short: data which on the surface may indicate the Fed's easing is ending far sooner than even we expected yesterday."

If true, and how do you see that impacting thebgold story?

Thu, 12/13/2012 - 09:58 | 3058942 azzhatter
azzhatter's picture

Which food prices dropped? I'm hungry

Thu, 12/13/2012 - 09:58 | 3058943 plaspotje
plaspotje's picture

north korea , i like you ,,  nice job pissing off the little hitler want to be's

Thu, 12/13/2012 - 09:58 | 3058944 Quinvarius
Quinvarius's picture

The economy is not big enough to support bankers and government needs even at 120% employment.  All who doubt QEternity and hyperinflation will be made perfect in the end.

Thu, 12/13/2012 - 09:59 | 3058945 Tsar Pointless
Tsar Pointless's picture

A lot of things don't add up when it comes to our economic reports, but go to the DOL's website and look at the full release of this week's UC report.

Not a single state is noted as having a decrease in claims week-on-week, yet somehow, even the not-seasonally adjusted number plunged by over 70k.

There is zero point in following any of this stuff.

You may say it is pointless; you won't be the only one.

I am...the Tsar of Pointless. And I know pointlessness when I see it.

Thu, 12/13/2012 - 10:01 | 3058949 MyBrothersKeeper
MyBrothersKeeper's picture

Drops in food cost?  On what planet. Over Thanksgiving I paid $3.60 for a gallon of milk and $3.53 for a gallon of gas.  Heck even Costco jumped their milk price from $1.69 a gallon to $2.80. Meanwhile, while volunteering at a local foodbank for those in need, a relative was asked if they had birthday cakes (no not the mix, the cooked and fully iced version).  I'm not sure if it's more beneficial to be on the dole or in a minimum security prison.......but either seems to be preferable to trying to earn a living or start a business in the private sector.

Thu, 12/13/2012 - 10:09 | 3058977 SheepDog-One
SheepDog-One's picture

LOL no doubt.

Thu, 12/13/2012 - 10:03 | 3058954 SheepDog-One
SheepDog-One's picture

HOORAY!! I mean, BOO! Wait, what?

Thu, 12/13/2012 - 10:07 | 3058968 buzzsaw99
buzzsaw99's picture

Bennie boy would never lie or change the rules. [/sarc.]

Thu, 12/13/2012 - 10:10 | 3058982 SheepDog-One
SheepDog-One's picture

And if he DOES lie and change the rules mid-play, thats good news! VERY good news!


Thu, 12/13/2012 - 10:09 | 3058975 cajtl5
cajtl5's picture

It is way toooooo early to start drinking but I guess you got to start sometime today. 

Thu, 12/13/2012 - 10:10 | 3058980 moron counter
moron counter's picture

0 interest rate scream that we have a disaster. But one thing I dont understand is, if the fed is buying morgages with printed money then why are people paying their morgages with earned money? They can only throw out a very small percentage of people. If he can print money and give it to the banks force him to print it and give it to the people also. And you do that by no one paying houses and credit cards. At worst it will be a forced collapse.  

Thu, 12/13/2012 - 10:31 | 3059072 devo
devo's picture

if the fed is buying morgages with printed money then why are people paying their morgages with earned money?

seriously, I think everyone should get a JPM credit card, run up 15k in PM purchases, and never pay it back.

Thu, 12/13/2012 - 11:01 | 3059209 adr
adr's picture

They can and will throw out people one at a time. That is why people still pay thier mortgages. What we need is for entire communities to have every mortgage holder stop paying at once.

I'm trying to start that movement in my town. The problem is that I live in a conservative middle class white town that believes you should pay back your debts.

Nobody wants to fight evil with evil, even though it is the only way to win. I know a lot of Christians that say to turn the other cheek. That if evil punches you in the face, ignore it and it will go away. I tell them, no evil will laugh in your face and hit you again.

Thu, 12/13/2012 - 10:18 | 3059027 tooriskytoinvest
tooriskytoinvest's picture

How Bad Has The US Economy Gotten? Fed Easing Is ‘Insurance Policy’ Against Market Collapse And The Fed Announced QE3 And QE4 In Less Than THREE Month!!

Thu, 12/13/2012 - 10:20 | 3059029 Shock and Aweful
Shock and Aweful's picture

I think the term "Job" in these survey's may be being used a bit liberally.

How many of these "jobs" are paying a living wage? 

This is ALL going according to plan....Welcome to the pauperization of America. 

Anyone who believes that these "jobs" created today reflect a real-growth in our exonomy or standard of living are fucking delusional!




Thu, 12/13/2012 - 10:20 | 3059030 resurger
resurger's picture

It's funny, everyone know sees that we are going to see a "RECOVERY" in 2013...


Thu, 12/13/2012 - 10:32 | 3059077 devo
devo's picture

And a Sasquatch.

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