Tragic Trifecta: Initial Claims Soar, Housing Starts Plunge, CPI Below Expectations

Tyler Durden's picture


We didn't really need a confirmation that the economy was deteriorating and completely disconnected from the "market", but we got it nonetheless. First, Initial Claims coming at 360K, on expectations of 330K, the worst print and worst miss in six weeks, confirming that weekly data is largely noise and that there is no sustainable downward trend. The May 11 weekly print adjusted and unadjusted were 360K and 318K respectively, virtually unchanged from a year ago at 373K and 325K, showing that in one year there has been essentially no progress, and that weekly initial claims of 350K is the new normal. Of course, the last week's print was also revised higher from 323K to 328K, while initial claims also missed expectations of a round 3MM print, instead printing at 3009K.

The second negative economic number came from Housing Starts, which plummeted from a downward revised 1021K to just 853K, well below expectations of 970K, the biggest miss since January 2007 and validating the data we have shown previously in the collapse of lumber prices. So much for the "that" recovery too. The silver lining - the "no capital requiring" housing permits which rose from 890K to 1017K, which as all hedge funds know, is the easiest way to game interest in the system.

Finally, confirming that the Fed's transmission channels are completely broken, and yet paradoxically giving Bernanke even more green light to continue building up future inflation and more QE, was CPI data, which declined from -0.2% to -0.4% in April, the worst MoM drop since December 2008 despite the monetary pumpathon from the Fed and BoJ. This is the second monthly miss in a row (and fifth of the last six). The YoY figures also misses +1.7% relative to a 1.8% expectation (ex Food and Energy) - also the lowest print since June 2011, although not very unexpected in light of the previously reported weak PPI data.. Much of the driver for this drop MoM and YoY are from a 4.3% drop in Energy prices MoM. That said, CPI would have been +0.1% if it was not for gasoline. Of course the bad is good mantra is in full swing as lower inflationary prints are providing ammunition for doves to push for more QE to defend their inflation goal. We wonder just how quickly oil prices will snap back once chatter of a taper is dismissed.


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Thu, 05/16/2013 - 08:46 | 3568403 buzzsaw99
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Thu, 05/16/2013 - 08:51 | 3568423 GetZeeGold
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This must be like living in paradise.


Oh crap.....we just lost Chris Matthews.

Thu, 05/16/2013 - 08:52 | 3568430 Temporalist
Temporalist's picture

I just got a tingly feeling...all over...oooooo...ooooooo...

Thu, 05/16/2013 - 08:53 | 3568442 sodbuster
sodbuster's picture

I get that when I see pics of Kate Upton.

Thu, 05/16/2013 - 08:55 | 3568453 Headbanger
Headbanger's picture

I get that when I find some ammo to buy!

Thu, 05/16/2013 - 09:11 | 3568517 WayBehind
WayBehind's picture

Soaring unemployment? Must be some kind of mistake. Just ask those clowns at CNBC.

Thu, 05/16/2013 - 09:36 | 3568629 King_of_simpletons
King_of_simpletons's picture

Bullish News ! Could not get any better.

" Economy is in early stages of recovery "

Thu, 05/16/2013 - 09:49 | 3568691 Sudden Debt
Sudden Debt's picture

Eversince I woke up, I was in the early stages of going to bed.

Thu, 05/16/2013 - 16:02 | 3570569 Dead Canary
Dead Canary's picture

When I was born, I was in the early stages of dying.

Thu, 05/16/2013 - 09:09 | 3568512 aint no fortuna...
aint no fortunate son's picture

should be good for another 100 point up day!

Thu, 05/16/2013 - 09:23 | 3568566 yogibear
yogibear's picture

At least a 100 points.

Thu, 05/16/2013 - 11:07 | 3569128 JimBowie1958
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DOW 16000!

This is fucking hilarious

Thu, 05/16/2013 - 10:21 | 3568672 Sudden Debt
Sudden Debt's picture



"all because of more ripples in the ocean than last month..."

"because outher space got bigger...."

"because every person on earth aged on average 1 month since last month"



Thu, 05/16/2013 - 08:54 | 3568447 insanelysane
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Maybe the BLS will start coming clean after the IRS fiasco.

Thu, 05/16/2013 - 09:01 | 3568473 Pool Shark
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Well, don't bother asking the Justice Department; Eric Holder "Just Doesn't Know:"


Thu, 05/16/2013 - 08:57 | 3568462 Clint Liquor
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This 'Recovery' is like going into a Intensive Care Unit and seeing a patient completely hooked up to life support (the FED) and having someone say they are recovering nicely.

Thu, 05/16/2013 - 09:10 | 3568516 LawsofPhysics
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In other words, this "data" means absolutely nothing as that 85 billion per month will simply become 120 billion per month, then 300 billion etc. etc. etc.  "Winning" -  End the motherfucking Fed already.

Thu, 05/16/2013 - 09:42 | 3568662 eclectic syncretist
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If the economy keeps tanking the Fed will have to print even more and then the equity markets will skyrocket like there's no tomorrow.  It all makes perfect sense, in a George Castanza Bizarro World, that is.

Thu, 05/16/2013 - 09:53 | 3568722 mayhem_korner
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My two cents...would replace "if" with "as". 

Thu, 05/16/2013 - 09:23 | 3568570 TrumpXVI
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Or watching a Frankenstein movie.

"It's ALIVE!"

Thu, 05/16/2013 - 09:27 | 3568590 NoDebt
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He's worse than dead, Jim.  His brain is gone!

Thu, 05/16/2013 - 09:02 | 3568480 W T F II
W T F II's picture

"Collaborators" and "Apologists" always run eventually. I guess Matthew's over/under on direct-implication felonious scandals ending right insdie the Oval Office is 3 1/2...Afterall, there IS a limit to tolerance.

Thu, 05/16/2013 - 09:17 | 3568551 azzhatter
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Obama must not have let Matthews blow him last night. Sounds like a spurned cum guzzler

Thu, 05/16/2013 - 09:18 | 3568554 azzhatter
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The useful idiots in the press starting to realize they ain't in the club?

Thu, 05/16/2013 - 09:24 | 3568576 yogibear
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Useful tools. Otherwise Eric the Placeholder sends his Just-Us goons over to rough them up.

Thu, 05/16/2013 - 10:14 | 3568841 PiltdownMan
PiltdownMan's picture

Someone has to watch Chris Matthews which I have given up doing.

Lower starts, lower "inflation," higher initial jobless claims. Here comes da Fed? Again??

Thu, 05/16/2013 - 08:51 | 3568426 Pool Shark
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Biggest month-over-month drop in CPI since January 2009:

Thu, 05/16/2013 - 08:55 | 3568455 buzzsaw99
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You can tell from the price action of TIP that a bunch of money knew that two weeks ago.

Thu, 05/16/2013 - 09:13 | 3568534 scatterbrains
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yes and lumber and gold and silver etc.  but notice how with the news now out of the way gold is holding firm and being re-accumulated.

Thu, 05/16/2013 - 09:23 | 3568569 Burt Gummer
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It was because of the insert excuse here.

Thu, 05/16/2013 - 09:24 | 3568573 gatorengineer
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more stimulus needed, no sign of inflation, load the paper..........

Thu, 05/16/2013 - 09:53 | 3568719 Jdog
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yeah, with all these negative news, the Dow should pop another 2000 points! keep in coming! Ben will be printing $200 billion a month by Christmas!


Thu, 05/16/2013 - 08:49 | 3568404 Headbanger
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The horror...

Commencing final implosion countdown...  10, 9, 8...

Thu, 05/16/2013 - 08:54 | 3568441 I Am Not a Copp...
I Am Not a Copper Top's picture

Nope - market will yawn, that is until Europe Close, then to the moon!  Fuck You Holder!

Thu, 05/16/2013 - 08:58 | 3568467 kridkrid
kridkrid's picture - One of the best scenes in the movie... didn't make it into the original, but added in Redux.

Thu, 05/16/2013 - 08:46 | 3568406 Sach Mahoney
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This is all very bullish.  Well done.  Crank up the printing press Ben.  

Thu, 05/16/2013 - 09:05 | 3568494 Doomer
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Yep.  The taper is now off the table (although it was ever really on the table).  Rally On!

Thu, 05/16/2013 - 09:27 | 3568587 BurningFuld
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Everyone please look at what happened to the stock market in Wiemar Germany when they turned on the printing press. Stocks just "may" protect you from the coming Currency Apocalypse.

Thu, 05/16/2013 - 11:10 | 3569139 optimator
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And be sure to look at what happened to the gold Mark!

Thu, 05/16/2013 - 08:48 | 3568409 Edward Fiatski
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There goes the angle that housing will get the economy out of the where it currently is.

Thu, 05/16/2013 - 08:57 | 3568461 insanelysane
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It is just too sunny and warm to build houses.

Thu, 05/16/2013 - 09:16 | 3568547 akarc
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Yepper, who could have predicted glaciers in Florida

Thu, 05/16/2013 - 08:48 | 3568410 cutefarts
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Thu, 05/16/2013 - 09:09 | 3568513 Mr. Magoo
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Yup, gold and silver down again, time to BTFD

Thu, 05/16/2013 - 09:17 | 3568549 CrashisOptimistic
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The clear evidence of relentless deflation/eroding GDP growth is not good for gold.

Thu, 05/16/2013 - 08:48 | 3568411 Temporalist
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But my rations of chocolate went up right?

Thu, 05/16/2013 - 08:50 | 3568422 buzzsaw99
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Yes, because after torture you must really love big brother.

Thu, 05/16/2013 - 08:54 | 3568449 Temporalist
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It is quite clear that the Doomers at ZH are unappreciative of the great beneficence that is The Amazing Bernank.

Thu, 05/16/2013 - 08:58 | 3568465 insanelysane
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Some people just don't appreciate having sunshine blown up their arse every day.

Thu, 05/16/2013 - 09:09 | 3568511 Doomer
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And understand that there is no such thing as a free lunch.

Of course, the banksters aren't afraid to steal our lunch money, so they do get their lunch for free.

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