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Dallas Fed Implodes: Biggest Drop And Miss On Record Send Market To Intraday Highs
If this doesn't send the S&P to new all time highs nothing will. Moments ago the Dallas Fed reported its April General Business Activity report and in short it was the biggest miss to expectations on record, plummeting from 7.4 to -15.6, on expectations of a 5.0 print and the lowest since July 2012. It was also the biggest one month drop on record. Since all of this will be attributed to balmy spring weather in New Zealand, extra rainfall in the Russian Steppes, the US sequester, evil European fauxterity, Cyprus deposit confiscation, and of course, Bush, there is no point in commenting on this disaster at all. And why comment: judging by the market's response which is now at the day's highs, it is not as if anyone even pretends any data matters. The only hope now for those expecting a 20,000 on the DJIA is that the ISM due out soon, will print at 0 and everything will be permanently fixed. In other news the daily prayer to praise St. Bernanke begins at 11 am when POMO ends. Please orient yourself to face the Marriner Eccles building when bowing down.
Biggest miss on record:
The breakdown of the components:
From the report:
Texas factory activity was flat in April, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell from 9.9 to -0.5. The near-zero reading indicates output was little changed from March levels.
Ebbing growth in manufacturing activity was reflected in other survey measures as well. The capacity utilization index came in at 2.7, down from 5.5, and the shipments index fell to zero after rising to 10.6 in March. The new orders index fell nearly 14 points to -4.9, posting its first negative reading this year.
Perceptions of broader business conditions worsened in April. The general business activity index plummeted from 7.4 to -15.6, reaching its lowest level since July 2012. The company outlook index turned negative as well, declining from 9.6 to -2.2. Labor market indicators remained mixed. The employment index has been in positive territory so far in 2013 and moved up to 6.3 in April. Twenty percent of firms reported hiring new workers compared with 14 percent reporting layoffs. The hours worked index pushed further negative, from -2.4 to -6.5.
Price pressures abated in April. The raw materials price index dropped from 19.1 to 2.5, posting its lowest reading since last July. The finished goods price index dipped to -3 after posting positive readings throughout the first quarter. The wages and benefits index edged down from 18.5 to 17.7, although the great majority of manufacturers continued to note no change in compensation costs. Looking ahead, 34 percent of respondents anticipate further increases in raw materials prices over the next six months, while 21 percent expect higher finished goods prices.
Expectations regarding future business conditions fell markedly in April. The index of future general business activity fell 22 points to -6.7, its first negative reading in five months. The index of future company outlook also plunged, dropping from 21.6 to 6. Indexes for future manufacturing activity fell slightly this month.
The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. Data were collected April 16–24, and 94 Texas manufacturers responded to the survey. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month.
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and just think....the Dallas Fed Survey has been consistently stonger than the other regional manufacturing surveys.
Its leading, as usual.
Bubble Bernanke and the Fed unlimted bubble commitee is determented to make a market bubble equal to the dot com.
Companies should just dilute their stocks by offering more and have Bubble Bernanke and the Fed buy everything.
Since Bubble Bernanke and the fed buys everything, sell it to them!!!!
Banks cook your books, send all you money converted and bankrupt. Let Bernanke and the Fed with the FDIC pickup all the losses.
Momma told me not to short
Momma told me not to short
She said:
"That ain't the way to have fun, son ... that ain't the way to have fun."
The Messiah and the Bearded Clam have a few doctored numbers they can refer to, to demonstrate their success:
BLS unemployment; and
The Russell 2000.
The S&P will be levitated.
Still waiting for ES 1600. Come to daddy.
I missed my wife the other day. But I can say something the Fed can't.
"At least my aim is getting better".
Anyone else here find the 'O' to be a bit of a let down?
I mean look at the daft looking cunt, he is all skin and fucking bone, he looks like a good meal would kill him, and the way he talks? You fucking kidding me? He sounds like a third rate B movie actor who has forgotten his lines.
Talk about sinking low folks, he is on par with the fucking imbeciles who run this show here. Is this really the best we can do as nation states? Are these fucking clowns the very best we have? Well if they are folks, we are trully fucked, cos' I wouldnt trust the 'O' to watch my telly never mind run a fucking country.
And another thing Barry, buy a fucking suit that fits your feminine frame you stupid cunt, you look lost in that one son, and it doesnt match your eyes.
If the bath house rumours are true, a strapless dress might work better for Obozo.
Thanks winston,
That of which has been seen, cannot be unseen. I will never look at the weak willed fucker the same after that pearl of wisdom mate.
Makes my skin crawl.......
George Carlin (RIP) is right there with ya...(as am I):
http://www.youtube.com/watch?v=xIraCchPDhk
According to Morgan Stanley:
http://fs1.hidemyass.com/download/YYNB3/s46g57028081978abtre3h2ou0
Why Did the Fed Choose a 6.5% Threshold?
We found intriguing the suggestion by Chairman Bernanke that the Fed could – should the current thresholds not be sufficient – “lower even further” the threshold for the unemployment rate. The Chairman alluded to this ability after making reference to the Fed’s success at managing the market’s interest rate expectations. He suggested that the current threshold at 6.5% remained sufficient to “approximate what’s called the Optimal Control path of interest rates, that it seems to give a path of unemployment and inflation that’s about as good as we can get with the monetary policy tools that we have.”
How can we show that the 6.5% threshold was sufficient in December? Exhibit 1 shows the Optimal Control path for the funds rate that minimizes the deviations of inflation from 2% and the deviations of the unemployment rate from 6% – last updated in November 2002. The exhibit also shows the unemployment rate progression under that path. An important assumption in the Optimal Control analysis is that the public fully anticipates that the FOMC will follow this optimal plan. For the path of rates to be effective, the market must believe the Fed will follow the plan. The more transparent the Fed is regarding its intentions, the more likely it becomes that the Optimal Control path for the funds rate will achieve its goals.
Understanding why the Fed set the initial unemployment threshold at 6.5% will help you understand why they may change it in the future. Exhibit 1 shows that the unemployment rate will cross 6.5% around November 2015 given the Optimal Control path of rates. Under the framework, the first 25bp rate hike will occur in September 2016, or nine to ten months after the unemployment rate reaches 6.5%.
If the Fed had chosen 7.0% instead of 6.5% for the threshold, the unemployment rate would cross in March 2015. With a 7.0% threshold, the Fed would have a difficult time explaining why the Optimal Control liftoff was projected to take so long (almost 1 ½ years) after having seen substantial improvement in the labor market (assuming that reaching the threshold proxies for “substantial” improvement). In addition, the market may not have believed that either (1) a 7.0% unemployment rate would constitute “substantial improvement”, or (2) the Fed would be able to keep rates on hold for that long after the unemployment rate reached 7.0%.
If the Fed had chosen 6.0% – a more understandable threshold, given the SEP’s longer run central tendency range for the unemployment rate between 5.2~6.0% – the unemployment rate would reach the threshold in September 2016. In this case, with the Optimal Control funds rate projected to lift off in the same month, the market may have interpreted the “threshold” as a “trigger”. Given the Optimal Control analysis – which Chairman Bernanke and Vice Chair Yellen seem to favor – we can see why they chose 6.5% for the threshold in December 2012: they had to make sure the “buffer” between crossing the unemployment threshold and the start of rate hikes was neither too long, nor too short.
Interest rate will not go up for the foreseeable future. Unless you really believe the U.S. will be allowed to hard default.
when does the public wake?
1 WTF cares?
2 what the fvk good will it do?
3 People like root canals better than congress now so I suppose that is being awake. Honestly. the polls show WE HATE these fvkers but yet do nothing about it except accept our slavery''
Bubble Bernanke and the Fed unlimted bubble commitee is determented to make a market bubble equal to the dot com.
Companies should just dilute their stocks by offering more and have Bubble Bernanke and the Fed buy everything.
Since Bubble Bernanke and the fed buys everything, sell it to them!!!!
Banks cook your books, send all you money converted and bankrupt. Let Bernanke and the Fed with the FDIC pickup all the losses.
But the Fort Worth FED was +9.3 to 24.7...wasn't it?
Mr. Bernanke has done a great job munging market data by conjuring the illusion that debt is cheap. The reaction of the equity markets is to be expected given that hyperbolic discounting of future economic activity, with the Fed's 'help,' has been a successful strategy thus far. How far the Fed can keep dodging the "there ain't no such thing as a free lunch" law remains to be seen.
The public never awakens except into blind rage.
That is correct. You're describing animal traits. And you do know what we do to animals, right?
Up is the old Up; Down is the new UP.....We'll all gonna be rich as shit!!!!!!!!!!......
I travel a lot in the western U.S. snd compared to other states, Texas is booming. Basically the entire oil biz is headquarted there. If Texas is showing signs of a slowdown, the rest of us are screwed.
Lower lows and lower highs, trend is down since 2009. Long way to go to -100 though, maybe 30 years.
It’s BULLISH No Matter What…
The price of oil is rising – BULLISH !
More profits for the energy companies, and more investments in “clean energy.”
Most of the new jobs created in March were part-time or temporary – BULLISH !
Since the economy has turned the corner full-time job offers are practically a sure thing.
But didn’t wages go down too? – BULLISH !
Revenues – Costs = Profits!
41 states have revenue shortfalls – BULLISH !
Various states have always complained about shortfalls. It’s another sign that things are getting back to normal.
8 million people are still unemployed – BULLISH !
That’s 8 million spenders, not savers.
Interest rates are rising – BULLISH !
Yet another sign that the economy is getting stronger.
Stocks may be going up but on very low volume – BULLISH !
That means the “dumb money” hasn’t even bought into this rally yet.
People have a lot of concerns and uncertainty about the future – BULLISH !
Not until the “wall of worry” ends will this party be over.
So much new liquidity will cause inflation – BULLISH !
Stocks are one of the best hedges against inflation.
The wars in Iraq and Afghanistan are bankrupting us – BULLISH !
Don’t get made, get even. Debit the Treasury and Credit the defense companies.
Inflation in China is picking up – BULLISH !
That should dampen any bubbles that some people worry about.
Gold is going up in price – BULLISH !
This is a broad-based rally.
Wait, maybe gold is going down – BULLISH !
That means economic fears are dissipating.
Actually the gold price seems to be consolidating and moving sideways – BULLISH !
A sell off or rally would mean things are overheating.
Iran seems determined to develop it’s nuclear program – BULLISH !
More nuclear power plants means less demand on oil which means lower energy costs which means more profits.
Israel may be forced to handle Iran themselves militarily – BULLISH !
That will kick-start the construction industry when we rebuild both sides.
The Health Insurance Reform bill is an abomination – BULLISH !
If insurance premiums rise there will be subsidies; if doctors check out they’ll be replaced with cheap foreign ones; if care is rationed then costs will be controlled and profits ensured.
And now the student loan programs are nationalized – BULLISH !
Good riddance for the banks. Now the government can garnish wages and lower the deficit.
The markets are being purposely manipulated with government money – BULLISH !
What’s not to like? That means the market ain’t going down no matter what.
Big Media is spewing propaganda about the economy – BULLISH !
Perception is reality. People only know what they’re taught. Advertising works.
Greece may default – BULLISH !
Greek bond holders will make up their loses in the stock market.
Japan is a bug in search of a windshield – BULLISH !
Just imagine how much more deficit spending we need to do to beat them.
The Euro is getting weaker – BULLISH !
King dollar is back.
A $400+ trillion financial mine field of derivatives are set to go off – BULLISH !
Let’s start the rumor that if the stock market tanks we’ll all be dead.
----------------------------------
A couple of years old, but still relevant today.
i want to fucking puke.
this why i commented in another article this morning on zerohedge, about how this week is full of key economic data, market movers, etc.
the only thing that matters in this market is bernanke. fundementals mean absolutley nothing.
like today for example, we had as bad of a dallas fed survery number compared to expectations that i can remember,
couple todays report with horrible job report, shit gdp, whatvever we would think matters, and all the market does is either stay flat (minority) or go up to all time highs.
its so fucking absurd, the only way i can smile at all this, is in the end if all these wall st bankers and fed members end up in jail, and all these wall st guys lose their shirts. fuck them all
WHO NEEDS AN ECONOMY? WHO NEEDS JOBS? WHO EVEN NEEDS REALITY? WE HAVE PRINTED PROSPERITY NOW!
This is a good index to follow.
In today's market we need an index of "number of grande bolds sold to people on food stamps" index.
I guess we could have a "number of McDonalds cups of coffee sold to people on food stamps" index.
This might be a more truthful measure of economic growth / expansion.
That drop in new orders is impressive....both the amount and the % of companies reporting it.
Also the drop in prices paid....
Yes, but Italy has a new government.
All is well!
Funny how a month ago after the Italian election, they were telling us how Italy doesn't matter to the markets. Hmmm....
According to Bank of America Merrill Lynch:
http://www.scribd.com/doc/138127514/US-Economic-Weekly-Bank-of-America-Merrill-Lynch
Macro viewpoint
Easy in, easy out
- Review: The choppy slowdown continued into April, with better jobless claims but weak regional manufacturing surveys.
- Preview: The April employment report will be a good test of whether the March weakness was a fluke or a sign of sustained weakness. We look for a sub-consensus 125,000 increase.
- Hot topic: With persistently sub-2% inflation, the case for continued QE is building. When the Fed does finally head for the exit, the key question for investors is the same as it has been in the past: if inflation is low, it will be a soft landing; if inflation is high, buckle your seatbelts.
So. We need more cash... don't we? Nice miss though;)
Did Cocaine Cause the Financial Crisis?
http://www.barchart.com/video/?id=6077
(actually, the guy has a couple of good points. (there's an ad before)
SPs have been harmonized. Greetings from Beijing.
The short term fix actually makes the long term collapse much, much worse. Had the economy (especially the banks) been allowed to correct, then the malinvestment and bad debt would have cleared by now and we would be on a sustainable path of real economic recovery. Instead, the short term political expedience minded powers, supported by various entrenched interests that stood to lose billions, fucked up our whole economy long term just so they wouldn't lose the big bucks they so richly deserved to lose (wall Street) and get thrown out of office (Washington).
Too bad we got the government we deserved when there is a sizable mninority of us, like here on ZH, that were screaming from the rooftops five years ago, and have been proven right, yet will still go down with the ship when the whole thing collapses.
Europe is going from bad to worst... the Dallas Fed has the biggest drop ever... the DOW is up 109 points because of an impending cut in the Euro rate and endless IV bags of qemorphine.
I've often times wondered to my self that those who think in a society collapse are a bit crazy, but when you consider that Europe is in a depression and the US is not going to deal with its problems... I'm starting to think differently about what may be coming down the road in the not so distant future.
For those of us who don't live in large urban centers, who have land and family in small rural towns, there's always that alternative. When things finally melt down, it ain't going to be pretty.
dont forget , i had a headache...oh and bush
How's that Latino invasion working out for ya Texas?
Swimming in doh like CA yet?
How's that Latino invasion working out for ya Texas?
We have had one for years, almost all const workers are now hispanic, and all lawn maintenace companies are getting killed due to the work at 40% of the old prices.
Most folks do not realize this is not, a SW region issue, it's all the way to the canuck border, they are every where.Wisconsin has tons.
Are you talking about H7N9, or immigrants? LOL
If you think it stops at the Canadian boarder, visit Toronto some time. 100,000 "new Canadians" every year... Yup. :D
Texas has more Capitial Appreciation Bond debt than CA
I don't want to spook the markets, but it is fall in New Zealand (though the weather is quite nice today)
When the DOW breaks .... it's gonna look like a Brazilian "Disco Fire" .... you can stay and burn or go into the toilet .... only the early exiters will get out alive ! Remember when that jet over shot the Sao Paolo runway .... and crashed into the gas station ?
Don't buy into the stock market went up for this or that reason unless they are telling you that it went up because the value of the dollar went down.
Take a look at this chart. It was made by Robert Sahr based on the consumer price index and shows the devaluation of the dollar. See it moves from a base line of 5 to about 130.
http://photos.imageevent.com/stokeybob/followthemoney/RobertSahrcurrency...
The next one shows the Dow Jones Industrial average. Notice if you knock two zeros off of the DOW chart the market has moved proportionally in relation to the devaluation of the dollar in the previous chart? See it also moves from a base line of 5 to about 130.
http://photos.imageevent.com/stokeybob/followthemoney/30DJIA.jpg
Don't forget those capital gains taxes on the illusion of a gain.
"We should remember that the most successful stock market in 2007 belonged to Zimbabwe."
or something like that by Ron Paul