March Durable Goods Implode, Plunge -5.7%; CapEx Recovery Put On Indefinite Hiatus

Tyler Durden's picture

So much for the great American CapEx recovery. Moments ago the Census department released the March Durable Goods report, thanks to which one can lay to rest any hope of a recovery in the US economy, with the headline number printing an absolutely abysmal -5.7%, an epic swing from the +5.7% (revised lower of course to 4.3%) in February, and confirming the recovery is dead and buried. This was the biggest miss in headline data and the biggest drop since August, and the second worst since January 2009.

Although we are confident the propaganda spin is just waiting to be unleashed: after all it is possible that March weather was both too hot and too cold, thereby making the number completely irrelevant - after all it is always the inclement weather's fault when the economy does not act as predicted by some economist's DSGE model of reality and stuff.

This headline number was obviously a huge miss to expectations of -3%, with the misses spreading to all sub headline categories too: Durables ex-transportation was down -1.4%, on expectations of a 0.5% rise, (previous revised from -0.5% to -1.7%). And so much for CapEx with Cap Goods nondefense ex aircraft up just 0.2% (0.3% exp) with the previous revised from -2.7% to -4.8%, while the nondefense orders shipped ex air missed expectations of a 0.8% rise, printing at 0.3%, and the February data revised from 1.9% to 1.2%. In brief, horrifying economic data however one looks at it, and proof that the great CapEx recovery never existed to begin with. So much for 3% Q1 GDP, which is about to be revised by everyone lower across the board.

Finally, if this economic collapse validation doesn't send the S&P limit up, nothing will.

The only two charts needed to show what is really going on in terms of capex and generally spending on core capex:



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cdntrader's picture

Kerosene for a new all-time high...

Acet's picture

I blame it all on Winter being cold!

(and on water being wet)

GetZeeGold's picture



Wonder if fire still burns?

Sudden Debt's picture



GetZeeGold's picture



Blame the gods of the copybook headings.

midtowng's picture

I'm honestly curious how long the stock market can go the opposite direction of the real economy.

yogibear's picture

Indefinitely . Held up by Bubble Bernanke and the Fed's QE money.

GetZeeGold's picture



If we lose a couple printers things could get a little dicey.

onewayticket2's picture

does anyone keep an "implod-o meter"?  something like DEFCON, but with a 100 or 1000 point scale?

Cassandra Syndrome's picture

4 Forces drive prices. Demand for the concerning entity, supply of the concerning entity, demand for money and the supply of money. The spigot taps of QE flow into the financial markets. The UK Sunday Times top 1,000 Rich List soared 23% in value for 2012, all thanks to the increase in equities and very little to do with traditional capitalism with the supply of goods and services we want or need. It's the classic Cantillon Effect, and when all this pent up supply of liquidity hits mainstreet, inflation will let rip.

Winston Churchill's picture

Six months seems to be average from 40 years of watching 'market' behavior.

the market is a contrarian indicator and the players there are usually tht last

to grasp reality.This summer will be rough if they stick to their normal form.

disabledvet's picture

"if you put a big dishof food in front of a dog he will salivate." that plate is an unlimited amount of liquidity before Wall Street and Washington. "since the dollar is rallying on the news" you tell me where the speed bump is goin to come from.

Antifederalist's picture

Free money. No alternatives. (Except Au and Ag which MSM say are scary)

Stock market is a HUGE short.

This too will end badly.

Doom on you Bernank, And Krugman . You will regret this.....

gdogus erectus's picture

Until the last bear capitulates and puts his money in. Seriously, it's a mind game. It can go up as long as they want. Printing up a hundred billion per month doesn't even cause that much inflation since it creates no velocity.

Now, get some velocity going with someone (a sovereign) disorderly selling stocks or treasuries in a panic and then we'll finally see some excitement. And that's going to happen. But none of us will make money on that crash. With paper anyway.

Guess I need to finish with the obligatory: Silver, bitchez!

disabledvet's picture

Unless and until zero hedge starts including money loaned out "in all matters of speculation" then simply put "your view of what is a capital expenditure" is hopelessly understated. "the fact that equities are continuing to surge" (let alone treasuries) "is proof positive cap ex is excessive."

ejmoosa's picture

When it does correct, it will be like the tide going out in the Bay of Fundy rather than the tide along the gulf coast......

Chaffinch's picture

Never mind these freak statistics - the Choco ration is up again comrades!

forwardho's picture

No but, but, but, Cass.

You KNEW what was coming, you just could'nt see it.

Groundhog Day's picture

The spinmeister's on Bloomberg radio are spinning the information as "not that important, since the numbers you want to focus on are the housing numbers"

They are really struggling to keep spinning the news

Groundhog Day's picture

The spinmeister's on Bloomberg radio are spinning the information as "not that important, since the numbers you want to focus on are the housing numbers"

They are really struggling to keep spinning the news

spastic_colon's picture

Wow just wow, of course Europe can always take their gains today and buy American (indexes).

Stonedog's picture

So this is bullish, right? [/sarcasm]

Bearwagon's picture

Any other proposals? No? So, in that case: Yes, it's bullish.

Alpo for Granny's picture

This is good for about 150 on the Dow today, PM's will sell off, bond yields will plummet, unemployment will drop, housing will report record new starts, and the Fed will order 1.4 billion toner cartridges.

Cognitive Dissonance's picture

I always enjoy the show Boeing puts on with their magical "order" stick saves to the US CapEx numbers. That is why these charts ex aircraft orders and deliveries are so telling.

LawsofPhysics's picture

Indeed.  Boeing planning on making planes for the BRICs now?  I don't think so.  Victims of their own successful "partnerships".  Fucking cronies.

jubber's picture

of course its bullish both Dow and S&P are up

fonzannoon's picture

Has anybody bothered to ask the Bernak what is so important that he can't manage to rechedule so he can attend his famous once a year conference?

101 years and counting's picture

im not kidding when i say for him, the only thing more important would be he expects to be in the grave by then.  we can only hope.

Dr. Engali's picture

There is  a little boys conference he wants to attend.

Dr. Engali's picture

When everything is made in China and designed to throw away, is there really such a thing as durable goods? How about if we call them temporary goods? Or better yet temporary pieces of shit?

Bearwagon's picture

I recently upgraded the design of my monitor to 'very durable' by changing a few capacitors. The rest seems to work fine. So, in some way, there still are such goods, if you are willing to help it ....

Cognitive Dissonance's picture

Temporarily durable goods?

Permanently temporary durable goods?

scatterbrains's picture

for realz nigga I feel ya...  quick someone throw some intangibles up in that piece.. quit playin.

TumblingDice's picture

The only people that believe the economy is recovering are morons. In fact, this may be very difficult to adjust to, but we will never again see the endless summer of the 90's. Everyone expecting the economy to recover just because it has always recovered are all children of summer. Now is the fall and winter is coming. 

e-recep's picture

fall was from 1980 to 2000. we are still in winter now.

TumblingDice's picture

You'll know winter when it gets here. So far, people aren't ready to accept the harsh reality of this social/economic/political decline. When they do, proably because there's no other options left or to put it differently, when the duct tape runs out, then it will be winter.

Navymugsy's picture

March was excessively "Marchy". Everybody knows this and I'm sure the statisticians at Census compensated for this fact so could we please stop ragging on the Gov't?  All in all it's still quite bullish.



The Second Rule's picture

But it wasn't excessively Ides-y, now was it?

Yen Cross's picture

     This market is stuck on 'autopilot'. The only thing bringing it down will be when it runs out of(Fed) fuel.

MiltonFriedmansNightmare's picture

Agreed, YC.....the question is, when, not if, is the kill switch hit?

Yen Cross's picture

     I think the only thing that will stop the Fed. is when the cost of living gets so unbearable that crowds of people are standing with pitch forks on 'Maiden Lane' demanding 'Chair Satans' head.

yogibear's picture

It's where the Fed's QE money goes to hold up the pension funds.