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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:

Orders:

Shipments:

 


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Wed, 04/24/2013 - 08:48 | Link to Comment Cassandra Syndrome
Cassandra Syndrome's picture

But, but, but

Wed, 04/24/2013 - 08:50 | Link to Comment cdntrader
cdntrader's picture

Kerosene for a new all-time high...

Wed, 04/24/2013 - 08:53 | Link to Comment Acet
Acet's picture

I blame it all on Winter being cold!

(and on water being wet)

Wed, 04/24/2013 - 08:56 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Wonder if fire still burns?

Wed, 04/24/2013 - 08:59 | Link to Comment Dr. Engali
Dr. Engali's picture

No but ice is still cold.

Wed, 04/24/2013 - 09:23 | Link to Comment forwardho
forwardho's picture

Heratic.

Wed, 04/24/2013 - 09:09 | Link to Comment Sudden Debt
Sudden Debt's picture

WHO TOLD YOU THAT ABOUT THE WATER PART???!!!

THAT WAS NEED TO KNOW INSIDE INFO!!

Wed, 04/24/2013 - 09:13 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Blame the gods of the copybook headings.

Wed, 04/24/2013 - 09:19 | Link to Comment max2205
max2205's picture

moar good news

Wed, 04/24/2013 - 08:52 | Link to Comment midtowng
midtowng's picture

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

Wed, 04/24/2013 - 08:56 | Link to Comment yogibear
yogibear's picture

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

Wed, 04/24/2013 - 08:57 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

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

Wed, 04/24/2013 - 09:14 | Link to Comment onewayticket2
onewayticket2's picture

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

Wed, 04/24/2013 - 09:00 | Link to Comment Cassandra Syndrome
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.

http://en.wikipedia.org/wiki/Richard_Cantillon#Monetary_theory

Wed, 04/24/2013 - 09:03 | Link to Comment Winston Churchill
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.

Wed, 04/24/2013 - 11:34 | Link to Comment disabledvet
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.

Wed, 04/24/2013 - 08:59 | Link to Comment Antifederalist
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.....

Wed, 04/24/2013 - 09:54 | Link to Comment gdogus erectus
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!

Wed, 04/24/2013 - 10:16 | Link to Comment disabledvet
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."

Wed, 04/24/2013 - 10:19 | Link to Comment ejmoosa
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......

Wed, 04/24/2013 - 09:16 | Link to Comment Chaffinch
Chaffinch's picture

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

Wed, 04/24/2013 - 09:21 | Link to Comment forwardho
forwardho's picture

No but, but, but, Cass.

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

Wed, 04/24/2013 - 10:15 | Link to Comment Groundhog Day
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

Wed, 04/24/2013 - 10:15 | Link to Comment Groundhog Day
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

Wed, 04/24/2013 - 08:48 | Link to Comment spastic_colon
spastic_colon's picture

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

Wed, 04/24/2013 - 08:50 | Link to Comment Stonedog
Stonedog's picture

So this is bullish, right? [/sarcasm]

Wed, 04/24/2013 - 08:54 | Link to Comment Bearwagon
Bearwagon's picture

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

Wed, 04/24/2013 - 09:21 | Link to Comment Alpo for Granny
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.

Wed, 04/24/2013 - 08:50 | Link to Comment Cognitive Dissonance
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.

Wed, 04/24/2013 - 08:56 | Link to Comment LawsofPhysics
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.

Wed, 04/24/2013 - 08:52 | Link to Comment jubber
jubber's picture

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

Wed, 04/24/2013 - 08:53 | Link to Comment fonzannoon
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?

Wed, 04/24/2013 - 08:55 | Link to Comment 101 years and c...
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.

Wed, 04/24/2013 - 08:56 | Link to Comment Dr. Engali
Dr. Engali's picture

There is  a little boys conference he wants to attend.

Wed, 04/24/2013 - 08:56 | Link to Comment Dr. Engali
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?

Wed, 04/24/2013 - 08:59 | Link to Comment Bearwagon
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 ....

Wed, 04/24/2013 - 09:12 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Temporarily durable goods?

Permanently temporary durable goods?

Wed, 04/24/2013 - 09:16 | Link to Comment scatterbrains
scatterbrains's picture

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

Wed, 04/24/2013 - 08:55 | Link to Comment TumblingDice
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. 

Wed, 04/24/2013 - 10:15 | Link to Comment e-recep
e-recep's picture

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

Wed, 04/24/2013 - 15:40 | Link to Comment TumblingDice
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.

Wed, 04/24/2013 - 08:55 | Link to Comment firstdivision
Wed, 04/24/2013 - 08:57 | Link to Comment Gutenberg
Gutenberg's picture

Forward!

Wed, 04/24/2013 - 08:57 | Link to Comment Navymugsy
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.

 

  /sarc

Wed, 04/24/2013 - 09:03 | Link to Comment The Second Rule
The Second Rule's picture

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

Wed, 04/24/2013 - 08:59 | Link to Comment Yen Cross
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.

Wed, 04/24/2013 - 08:59 | Link to Comment MiltonFriedmans...
MiltonFriedmansNightmare's picture

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

Wed, 04/24/2013 - 09:16 | Link to Comment Yen Cross
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.

Wed, 04/24/2013 - 08:59 | Link to Comment yogibear
yogibear's picture

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

Wed, 04/24/2013 - 08:58 | Link to Comment Jason T
Jason T's picture

hunker down bitchez

Wed, 04/24/2013 - 08:58 | Link to Comment tarsubil
tarsubil's picture

I once went on this big roller coaster that had this huge plunge to start. You spent what seemed minutes clicking up this huge first hill. Then over the hump we go. Everyone put their hands up and scream. Enjoy the ride.

Wed, 04/24/2013 - 09:00 | Link to Comment billwilson
billwilson's picture

Can we start a new comparison model. Let's compare initial reads to initial reads - screw the revisions (which are alwasy in the direction that makes the initial to revised number look better than it should.) If there are systemic issues in the initial numbers then the corect comparison is initial to initial.

So today we should have had the intial compared to the intial for Feb (not the revised down revised number). Therefore the drop would have been even bigger.

 

Wed, 04/24/2013 - 09:03 | Link to Comment Kina
Kina's picture

This is going to mean ...more stimulous...more printing....aka Japan hyper print...you know it will work.

 

 

Wed, 04/24/2013 - 09:06 | Link to Comment kw2012
kw2012's picture

Yes because the solution to too much spending is more spending.

Wed, 04/24/2013 - 09:06 | Link to Comment kw2012
kw2012's picture

Thank God the Fed is pumping 85 Billion a month in to the stock market.... errr I mean banks. Otherwise Suzie six pack might have a hissy fit about how poorly her "investments" are doing.

Wed, 04/24/2013 - 09:05 | Link to Comment dcohen
dcohen's picture

Bernanke, do your thing.

Wed, 04/24/2013 - 09:05 | Link to Comment rsnoble
rsnoble's picture

I'm gona make my own digital zeros today.  In fact I have thousands of them floating around in cyberspace it's a great sense of security. LOL.

Wed, 04/24/2013 - 09:07 | Link to Comment Kina
Kina's picture

Don't worry another 2000 points on the Dow will create a recovery.

Wed, 04/24/2013 - 09:09 | Link to Comment Yen Cross
Yen Cross's picture

     Turned on CNBS to catch the news release and that ' Human PEZ dispenser' Cramer was yapping. I don't miss watching that crapola station one single bit!

Wed, 04/24/2013 - 09:09 | Link to Comment Smuckers
Smuckers's picture

No more farts coming from the corpse....recovery over.

 

Wed, 04/24/2013 - 09:10 | Link to Comment monopoly
monopoly's picture

The 64,000 dollar question is....When does it start to make a difference to the markets? 

Wed, 04/24/2013 - 09:19 | Link to Comment yogibear
yogibear's picture

Not a bit anymore. The bots are not interested.

The bots have plenty of Bernanke and the Fed's QE money.

The bots get a little hyper when they read the white house was bombed and react, although slightly.

 

Wed, 04/24/2013 - 09:25 | Link to Comment WTF_247
WTF_247's picture

$2 dollar answer is - it wont.

Funds are all in algo land.  Ben gives them money to drive the market.  Big funds are the only ones that can actually back the market off when they sell.  If they view the world as riskless then they will not.  Most backoffs in the market are driven by selling futures and buying VIX, not selling stocks.  Until this does not protect them the scam will continue.

This is also why most selling only lasts a few hours.  Stocks are only following the index through arb, not through actual selling by funds.  Once risk is back on they unwind the ES hedge and the markets rocket higher.

Wed, 04/24/2013 - 09:10 | Link to Comment The Second Rule
The Second Rule's picture

It all has to end sometime....

Stellar Desideration: http://www.youtube.com/watch?v=z6cD2COkpdU

Wed, 04/24/2013 - 09:13 | Link to Comment MFLTucson
MFLTucson's picture

What did you people expect when you elected Barack Obama? 

Wed, 04/24/2013 - 09:23 | Link to Comment tarsubil
tarsubil's picture

If only we had elected the other sock puppet! I told you guys but noooOOOOoooo.

Wed, 04/24/2013 - 09:55 | Link to Comment Umh
Umh's picture

Always vote them out of office. It takes a little while for them to rotate players and we get a brief break in the insanity.

Wed, 04/24/2013 - 09:13 | Link to Comment ekm
ekm's picture

Equation:

Low Energy Prices = Recovery

High Energy Prices = Piece of shit

 

Crude oil has been in hyperinflation since 2003 when it jumped from $30 to $120 in 2008 and so far with a small relief in 2009, which ...cause some recovery.

 

As a reminder, scientists have not come up with technology yet to convert QE into Fuel and Energy.

Wed, 04/24/2013 - 09:13 | Link to Comment FreeNewEnergy
FreeNewEnergy's picture

Sale on kitchen appliances (these are durable, we promise) at Sears and JC Penny. Do your part to help support our failing economy. BUY! BUY! BUY! Buy often! Buy things you don't need! Destroy your good stuff so you can BUY MOAR! Sell your gold and silver and buy stocks.

Buy moar, bitchez!

Wed, 04/24/2013 - 09:39 | Link to Comment Manipuflation
Manipuflation's picture

There, I just shoved the refrigerator off the third floor balcony!  Now I need to go buy a new one on credit that I will eventually default on.  That should help for a little while.

Wed, 04/24/2013 - 09:20 | Link to Comment orangegeek
orangegeek's picture

This may not be true.

 

Ben and Barry haven't ordered a revised report yet.

 

Once this report is revised, the recovery/growth economy will be back on!!

 

Isn't lying/deception/fraud a wonderful thing?

Wed, 04/24/2013 - 09:21 | Link to Comment WTF_247
WTF_247's picture

Since we no longer need earnings or anything related such as GDP, orders or actual demand to drive stock prices this should send the SP500 through 1600.  After all, one can look forward a few years and say it will likely be better.  Who cares about now.  Who cares about 6 months or a year.  Look forward 5 or 10 years - its all good.  Do not sell - just buy.

Wed, 04/24/2013 - 09:22 | Link to Comment Jim B
Jim B's picture

Green shoots! 

Wed, 04/24/2013 - 10:10 | Link to Comment Winston Churchill
Winston Churchill's picture

Green sharts.

Fixed it for ya.

Wed, 04/24/2013 - 09:31 | Link to Comment Manipuflation
Manipuflation's picture

Not to worry though because I am sure that we are adequately supporting a sector of the non-durable goods markets...

 

from wikipedia

 

"Examples of nondurable goods include fast moving consumer goods such as cosmetics and cleaning products, food, fuel, beer, cigarettes, medication, office supplies, packaging and containers, paper and paper products, personal products, rubber, plastics, textiles, clothing and footwear."

Wed, 04/24/2013 - 09:32 | Link to Comment ISEEIT
ISEEIT's picture

No worries. This is a good thing you see. After all the sequester imposed upon the American people is clearly to blame. The solution? Why that of course is to return the gavel to Ms. Pelosi so to as insure that the great leap FORWARD can be finalized (so to speak).

2014 here we come!!!

Wed, 04/24/2013 - 09:35 | Link to Comment WTF_247
WTF_247's picture

Off to the races.  ES starts with a 3pt spike straight up out of the gate on this good news.  Should be 1600 by EOW easy.

Wed, 04/24/2013 - 09:37 | Link to Comment orangegeek
orangegeek's picture

Shit news. Shit data.  Shit economy.

 

Companies buying back their shares like mad to hit EPS targets and stuffing distribution channels with product no one wants.

 

Dow Jones opens up 20 - sounds about right.

Wed, 04/24/2013 - 10:02 | Link to Comment thismarketisrigged
thismarketisrigged's picture

and of course the futures went green with this news, and markets are still green/flat.

 

its like no matter how bad the news continues to get, the markets can not go down.

 

even when its not highly green, it just stays flat, it can never tank, unless of course there is a tweet

Wed, 04/24/2013 - 10:03 | Link to Comment 20834A
20834A's picture

OT: pmbull.com is offline?

Wed, 04/24/2013 - 10:44 | Link to Comment venturen
venturen's picture

Haven't looked is the maket up?

Wed, 04/24/2013 - 11:10 | Link to Comment sbenard
sbenard's picture

Who needs an economy? We have PRINTED prosperity now!

Wed, 04/24/2013 - 14:05 | Link to Comment Agent 440
Agent 440's picture

Durable goods is so 19th century. Buy intangibles! Is there an intangibles etf?

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