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Biggest Philly Fed Miss In 7 Months Ignored As Fed Injects Reserves Via Repo
A month ago we mocked the Philly Fed number which printed at an outlier level of 8.1, slamming expectations of a negative print, and sending algos into overbuydrive. A week ago we were validated when the annual revision brought that number down from 8.1 to 4.6. Today we get confirmation that the December print was a total farce, with a January Philly Fed print which is once again solidly in negative territory, or -5.8, which just happens to be the biggest miss to expectations of 5.6 in seven months. Yet while a month ago the huge beat was a reason for the robots to ramp stocks, today's miss is a reason to... ramp stocks even more. Why? Because moments before the disappointing announcement the Fed decided to inject even more liquidity in addition to the now daily unsterilized POMO, following the resumption of repos, which injected some $210 million in reserves into dealers. This is in addition to the $3 or so billion that today's POMO will add as stock purchasing dry powder for banks.
This is how today's Philly Fed looked: note the collapse in number of employees, which apparently nobody cares about anymore:
From the report:
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from a revised reading of 4.6 in December to -5.8 this month (see Chart).* The demand for manufactured goods showed slight declines this month: The new orders index declined from a revised reading of 4.9 in December to -4.3 in January. The shipments index remained slightly positive but suggests no overall growth — the percentage of firms reporting increased shipments was mostly offset by the percentage reporting decreased shipments (26 percent). The indexes for both delivery times and unfilled orders recorded slightly negative readings this month.
Labor market conditions at reporting firms deteriorated this month. The employment index, at -5.2, fell from -0.2 in December. The percentage of firms reporting decreases in employment (16 percent) exceeded the percentage reporting increases (11 percent). Firms also indicated a decrease in the average workweek compared with last month.
And why was this huge miss completely ignored by algos and bank prop desks? Here's why, courtesy of the first Fed repo operation of 2013:
To summarize: two big misses to unadjusted data massaged by seasonal adjustments, and a major miss to a diffusion index, all ignored and offset by even more Fed liquidity.
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I fought the Fed and the Fed won.
hey folks, it's over as slaught says the Fed won.
now please proceed to the nearest processing center for your monthly psychological evaluation
Strange game.
The only way to win..
payback for a good employment and housing number, equities were beginning to think a recovery was really happening
Well, maybe to the three remaining CNBS viewers. Most everyone else can see the paint still drying on the tape.
Marketwatch has it figured out:
Jan. 17, 2013, 11:22 a.m. EST
Stocks rise as economic view brightens
Housing starts rise more than expected, jobless claims drop sharply
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks advanced on Thursday, with the S&P 500 index extending gains into a third day, as upbeat data on housing and jobs gave Wall Street some respite from other concerns.
http://www.marketwatch.com/story/stocks-gain-as-economic-view-brightens-2013-01-17?link=MW_home_latest_news
wow.. what a total fking farce.. but hey.. at least yellow metal's outperforming!
That's because when the fed fixes things, it only owns one tool to fix things. A printer.
Long PM's, Oil and Food.
- Slaughter
What was the call for the 13th's gap up. 1497 we go short? There was an article last week and I can't find it for the life of me. It's a hedge fund manager that measures the business cycle and his theory is the market shits the bed on the 13th piece of 'good' news. Trying to figure out if this qualifies under his idea...
I thought it was a cycle of 13 solid buy "up" days????
Posted on 1-10:
According to DeMark Trend Exhaustion Sequential™ indicator (based on DeMark's theory as he described it in his book), after the close today, the "official sell" 13 count signal was triggered at ~1470 ES and ~1472 SPX today (contrarily to Bloomberg reporting, blowoff to 1492 is no longer needed to trigger DeMark sell signal).
http://www.zerohedge.com/news/2013-01-10/forget-rotation-2013-great-risk-recoupling-so-far#comment-3142768
Bernanke's legacy will be his (false) narrative on the economic good & sustainability of his "virtuous circle" theory, so the Fed will do everything in its power to postpone the inevitable crash that destroys that theory.
As it is, it's the flow versus stock (as ZH and others have made abundantly clear time and time again) that matters most in the battle to keep equities (and other asset classes) artificially propped, and their ability to maintain sufficient flow to accomplish an ever-lasting erection of risk asset classes is already compromised (not to even mention the entire "diminishing returns" or half-life/duration of action memes).
When the next major crash occurs, and equity investors are forced to face the fact that paper returns on equity investments are fleeting, nebulous, largely uncaptured, here today & gone the next minute/day/month illusions, The Bernank can only hope he has already left his position as Fed head.
The Bernank is hoping for an external reason for the market to crash...war...false flag or whatever. If it doesn't come he is praying the whole thing holds together for one more year until the next guy takes the reigns.
i know i've said this before....but the only "risk" left in equities is "event" risk (and our taxes may have already paid for that protection too)
"The Bernank is hoping for an external reason for the market to crash...war...false flag or whatever."
I honestly can not see how someone in B's position, with his contacts, could not possibly know that the 'External reason(s)' have already been planned and timed... IMHO...
Love to have someone help me read that (hint hint you Fed gurus) - so is this report saying $210 M repoed at .1% interest for a period of 1-day? Whats the big deal if its over 1-day?
Much thanks in advance!
Until the S&P closes above 1560 and stays above that the fed hasn't won a thing.
coming soon to an index near you
Which one? The Dow?....Even I don't think it will fall that far.
touche'.......maybe the RUT 2k
High beta and smaller market cap containing indexes are easier to reflate, so that's why the R2k has been on the most centrally planned glorious tears of all.
Then of course, consider that I'm all conspirac-y, even claiming crazy things such as The Bernank admitted targeting the stock "markets" for fiat carpet bombing on 60 Minutes.
Looking at prices paid, is that inflation I see?
No
"Move along now, this is not the inflation you're looking for."
Followed by...
"Off to the reeducation camp for you!"
Well, at least that's what my implant tells me. YMMV
Philly Fed and Bloomberg Consumer consider fall despite good report on jobless claims. This crazy, lazy economy!!!
http://confoundedinterest.wordpress.com/2013/01/17/2013-housing-recovery...
OK so the FED 'won'....so now what?
I fucking hope Bernanke has a head on collision with a fucking freshly loaded fucking septic truck and his fucking mouth is open when it happens.
Fuck you Federal Reserve and fuck you primary dealer ass sucks.
Hey, Philly Fed brings a stinking diaper to our big recovery party this morning. Some nerve.
PM's going balistic on this.
If all you have is a hammer, everything looks like a nail.
expectations...
http://cdn.motinetwork.net/demotivationalposters.net/image/demotivational-poster/1011/expectations-demotivational-poster-1289070057.jpg
edit:
10 minutes of fun:
http://www.google.be/search?hl=nl&safe=off&q=demotivational+expectations&bav=on.2,or.r_gc.r_pw.r_qf.&bvm=bv.41018144,d.d2k&biw=1617&bih=792&wrapid=tlif135843604629210&um=1&ie=UTF-8&tbm=isch&source=og&sa=N&tab=wi&ei=1Rb4UL3INciYhQfatYBY
S D
I LOVE those motivational posters!
I Like "General Activity Indexes"!! :D
Bernanke loves his short squeezes. Especially around weekly option expiration.
The POMO beatings injections will continue until morale the stock market improves.
And it never will because retail will never again touch this mess with a dime.
Horse shit!
$210 million can ramp the SP 4 points? Wow.
No, but 3 billion at 10x leverage can.
200x leverage in gold and silver. Too bad it will take 7 years for the Fed to return 300 tons of AU...
It takes a lot of fillings to make 300 tons.
Well first they have to pay Methman $5 per ounce to dig silver out of the ground, then there is the exchange ratio of gold and silver...................
That takes a long time!
pods
GOLD IS BACK UP!!
I want gold DOWN - so i can buy more.
It will go up - WAY UP - in due course.
ROOTING FOR $150 OIL. MORE TAXES, GOV CUTS, LOWER WAGES TOO! WHOO HOO!
Sure worked like a MthrFckr on the shiny. barbaric relics.
what can go wrong? /sarc
And the equity bubble is heating up...
I just checked in with my financial advisor Joe Weisenthal. He says the markets are up.
Bullish!
For fuck's sake BTFD.
What DIP?
Kilwin's toasted coconut. MMmmmm
BTSRI
Slight Ramping Incline
I have said it a dozen times. You come here for the truth. You do not have to act on it, you do not even have to agree with it, but it is the TRUTH.
Thank you Zero Hedge.
It's all Leprechauns & Unicorns. ( I need 5k skittles for your deposit)
Don't forget that the NY fed has been negative for many months now, as well. Hello, FED, this is reality calling.
Fuck the fed
how may more negative A/D days, with positive closes can they muster? post op-ex should be very interesting going into the debt ceiiling etc. time to motivate the politicians again!
10 day a/d's and longer positive--no breadth divergences-new highs in averages confirmed-stay long, get longer
Burnanke has said he will CTRL+P until the 'job creators' start creating jobs. It's going to take 6 - 12 months before most figure this out.
just keep your stops tight,and don't chase the trade. when key support gets broken reverse, and sell the new range. the shit is going to hit the fan. risk is wandering around like a chicken with it's head chopped off.
The Banks Themselves Have
Not Trusted The Liquidity Trap.
And Now With THIS Lately
Taken Together, That Implies
Reluctance To Go Long On
Debt Assets COMBINED With
Rising Money Supply
ZH: I don't know yet if the above
will retain links or if they'll open in
new windows by this (which I'd like
them to do for your advantage. I'll
try adapting.)
READER:
In Case These Links Aren't Yet Available:
The Banks Themselves
http://www.bloomberg.com/news/2012-07-09/dealers-decline-bernanke-twist-bids.html
Have
Not Trusted The Liquidity Trap.
And Now With THIS Lately
http://stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-140628/
Taken Together, That Implies
Reluctance To Go Long On
Debt Assets COMBINED With
Rising Money Supply
In the 30's rich lenders ran out of creditworthy
non-rich people but lent anyway.
Bernanke figured out how to keep the
wealth concentrating going while simultaneously
perserving the opportunity to invest in the
concomitant adversity.
how are these crooks not be charged? this is criminal what is happening.
there is no way the market should be green today, let alone up 70 plus pts based on the horrible philly fed data.
its like they r running this market up so high, so even when a correction happens, rather than happening from the 1390 or below level on the s&p, it will happen from the 1500 level and same thing with the dow, bernanke and his criminals will push the dow way above 14000 so when the correction hits, rather than coming from the 12000 leve, it will be less painful from 14000 and above.
We've proven one can print money on trees . . . but is there a free lunch?
Rejoice! Who needs an economy? We have PRINTED prosperity now!
Thanks to Bubbles Bernanke, we can become a planet of couch potatoes, waiting for our entitlement checks to come, while we all watch football. But then, that would require someone to work to play the game and produce it. Oh well, we'll just "wealth effect" our way to eternal bliss and prosperity!
I've heard about people in history who were drawn and quartered for what Bubbles Bernanke is doing now. Now, we celebrate monetary devaluation! What a twisted world!
Dear Sheep, Please do not be alarmed. Spring time is nearing, and that will be good for all. You will be relieved of your Winter wool in our spring-forward sheep-shearing. And do not be afraid of our lonesome shepherds either.
Go back to your grazing on Our green pastures.