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Despite Plunge In New Orders, Employees, Wages, And Workweek, Richmond Fed Beats Expectations
Just because you have to laugh (rightfully so since it seems everyone is so 'confident'), we thought a quick look under the covers of the Richmond Fed 'beat' was worthwhile. The index 'rose' from -6 to -2 (still negative), beating expectations of -4, seemingly driven by a 'surge' in Shipments (from -9 to +8). The Richmond Fed accounts for around 9.1% of the nation's GDP so it is intriguing that (drum roll please)... New order volume plunged to its lowest since January; the number of Employees swung to a negative, also its lowest since January; the average workweek cratered to -6 (its lowest since August 2012); and Wages dropped near its lowest level in a year. But apart from all that... of course, it's 'expectations' that are keeping the dream alive (despite a fading belief in higher wages). So hard data about the current situation is still collapsing but 'hope' brings us off the ledge?
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the writing I read on the wall says deflation and recessionary trend intact .. employment is going down.
"Why do we have these hunger games each year? why not just take 24 kids from all the districts and kill them... because HOPE is a GREATER motivator then FEAR" Or something to that tune
The Hunger Games
Bullshit, no currency or society has ever collapsed because of "deflation".
That's not what he is saying... There are very strong deflationary forces all over over the globe, but central banks fight this with determination. However, the money they print (so far) does not end up in the real economy (wages mostly), only in asset prices => deflation in the real economy, inflation in asset prices. So you are both right, but your comment doesnt make sense...
My business has real inputs and requires a lot of energy. Tell me, what's the price, in fiat, for energy, specifically diesel, over the last 5, 10, 15 years? Make sense now?
Who gets paid in energy/diesel? Nobody. Prices of energy/diesel go up, (real) wages decrease... Clear?
Riiiiggggghhhhhtttt. No one needs to heat/cool their home, drive their car, turn on lights, or eat. Major fail there loser. If you produce a real product you have real inputs. Pushing paper creates nothing of real value. Your eCONomy isn't doing well if all you create are financial products of mass destruction. PLease, wake the fuck up.
You cant read... Jesus christ, being AND stupid AND arrogant at the same time, very bad combination...
OF COURSE ENERGY PRICES GO UP!!!! (and therefore prices of real inputs, but thats not the point)
Im saying: WAGES DONT INCREASE, EVEN DECREASE IN REAL TERMS. That means => the average joe has less money to spent => DEFLATION.
Central banks try to counter that by printing shit loads of money, but they can not "force" a company to increase salaries, the rather buy back stocks, or give bonuses to the managers/directors. So asset prices (and yes, energy prices) go up while wages dont increase. As long as wages dont start to pick up, there wont be "normal" inflation. Therefore, all broad measures of inflation are low and about to cross the zero-bound in a lot of countries.
"OF COURSE ENERGY PRICES GO UP!!!! (and therefore prices of real inputs, but thats not the point)"
--
But it is the point asshat. because producers will stop producing. Tell me dipshit, what's "price" of something you need to survive, but that isn't available? I hope those managers/directors taste good.
Try calculating inflation using the pre 1980 formula and get back to us...
This time it is very different as the west goes Soviet Style (circa the Soviet Union in the late 80's)...
I love your contradictions, you admit energy prices will/are going up, but so long as wages don't, we don't have inflation. Tell that to the sap who drives an hour each way you fucking turd. That inflation is very real to them, and there are many. Another princeton eCONomics grad...
You're talking about demand pull inflation... that's not what we have... the economics books don't like to talk about what we have... cost push inflation. Totally different ballgame.
PS, there is only one relevant measure for inflation.
PS, there is only one relevant measure for inflation. Agree, increase of the money supply. Sharply up until 2007, since then first a bit down, now increasing (more slowly).
Yes, this is cost push inflation, and this is highly deflationary for asset prices if wages dont increase. If someone has a salary of 100, pays 30 on food/energy, 50 on housing, 10 on "fun", he/she has 10 left to or save or invest or whatever. If food/energy prices go up (so that the person has to spend 50 on that), but wages dont, he/she needs to cut back spending om something else. This creates a HUGE deflationary force, and downwards pressure on asset prices (I dont know if you read the pieces of the Chilean guy who posted here often, Lima or something who explains that very clearly). This is what (central) banks hate, so they print money. For now, the printed money ends up in asset prices (and in commodity prices via people who bet on inflation/devaluation of the USD) so the prices of those things go up. This can not go on forever, sooner or later 1) wages will start to pick up => probably huge inflation and borrowing costs spinning out of control or 2) asset (and commodity) prices collapse to a level that is in line with fundamentals. Im not sure what it will be.
Im not saying we ARE experiencing deflation, im saying there are huge deflationary forces that are being papered over by the central banks, all in all inflation is low (although some things go sharply up in price, some sharply down). You (law of physics) can again comment in a rude and ignorant way on this post, but maybe you can rather tell why: Copper (and other metals) have topped out, break-evens are crushing down and all over the world inflation rates are dropping.
I guarantee you that if the FED is serious about slowing QE, it will be scenario 2 (this is what happened in Japan every time they cut back QE/mon policy, i.e. deflation in asset prices.. => Dow Jones 4000, 10y US at 0,50%, oil at $35, etc.
" oil at $35, etc." - Not going to happen. The energy and resources it takes to recover the oil is increasing much faster than the energy value of the oil you recover. There are 7+ billion people all competing for a better standard of living, and oil is a vital part of that. So there is plenty of fucking demand for oil. The only way oil ever goes back to $35 would be to bring that demand back under a billion or so. It that simple, are you going to seriously try and tell us that there is no demand for a higher standard of living, or that there are not 7+ billion people (and growing) or that oil is easy to extract or all oil is the same. Go back to princeton fool and get an engineering degree, then go talk to the people who actually work in this field, my brother has been an engineer here for 20+ years. Think those natural gas (fracked) wells return big or have a decent lifespan? think again.
Can you also post something without swearing? Or that's just your "style" (i.e. you like to seen as a dumb frustrated fuckhead). If people keep being raped by the central bank policies without wage increases, this lower oil demand might actually become true.
Im done talking to you, was fun.
Troll. There are real experts and hard limits. Demand for the most fungible energy (and commoditiy chemical) source will not wain so long as there are 7+ billion people (and growing) seeking a better standard of living. Have yet to see any eCONomist present a factual argument otherwise. Your own contradictions give you away. The world has seen a superpower default before and erase massive debt (Soviet Union, gone, dissolved, no one to collect debt from), the default of the U.S. will be no different.
Pretty much... but humanity has met carrying capacity before (albeit in smaller societies and scales)... I think it's presumptuous to think that 7+ billion folks will be running around when our gentleman's agreement about the economy (currency) continues to unravel. While there have been plenty of superpowers crash, there have also been plenty of wars and other purges. We can agree though that so long as this many folks are running around, all demanding increasing standards of living, then basic resources (oil) won't be getting any easier to obtain or cheaper anytime soon (ever). Further, america's control over the world economy is not likely to continue given the rest of the world contains rational actors who don't particularly care for the inflation tax, among other things.
I think there's a fundamental disconnect in the way that you're using the terminology... The money supply has nothing to do with the underlying economy... it can only goose it a bit (and that's debatable). What you're calling deflationary forces are simply the dwindling of the real economy. I'll posit that this is independent of increases or decreases in the money supply. The money supply is simply how we all agree to interact with the real economy... not vice versa. In short, control of the money supply solely controls perception of the economy... hence the attack on all fronts to manage perception (else the printing would fail much sooner).
In your scenario, the money supply cannot decrease from J6P spending less... the mechanisms that would otherwise "destroy" money have been placed on hold.
In a centrally planned economy, given the mechanisms to create increases in wages are safeguarded and sealed, the risk is always to the decrease in demand -> decrease in commodity prices side (your second scenario). It's the pressure relief valve for the entire planning process... oil gets too expensive -> back off -> oil gets cheaper -> game on. Ben always chooses the devil he knows. At some point, however, there will be such a fundamental disconnect between the currency and the real economy that faith in the currency will be lost and the centrally planned mechanisms will fail. In other words, it works until it doesn't... They'll overshoot on the dose one day and we'll OD...
PS, I think the person you're referring to is gonzalo lira http://en.wikipedia.org/wiki/Gonzalo_Lira
True, i was a bit hasty. The money supply and the real economy are independent, agree. But one thing is sure, if a lot of money is printed and somehow put outside the balance sheet of the central bank (and as you said, the "money destroying mechanisms" are put on hold + the number of things to spend money on is stable), then prices will go up on average, i.e. inflation. The opposite is also true, when the shadow banking structures collapsed, money was destroyed at a rapid pace (several trillions USD), at that time we experienced deflation very clearly, J6P had less money to spend (on average) and all prices (except bonds) went down. This proces was stopped by central bank intervention. Since 2007 the money "destroyed" roughly equals the money printed, so overall, prices have been only increasing very slowly over this period. I put the example of spending 100 on purpose, to show that some prices (food/energy/stocks) went up, others (housing, "fun") went down. "My" deflationary forces come from the simple fact that the cash flows needed to justify current assets (=other ppl liabilities) prices will just not be there (so, not enough productivity/growth). A logical consequence would be a lowering of those asset prices (i.e. deflation in asset prices = default in liabilities), but since this is not "allowed" we dont see it. Im just not sure whether the collapse has only been postponed or that it will be avoided.
The question is indeed how long the central planners will be able to play the game "rightly". Im not sure that the central planners will be allowed to go on/stay in power long enough to OD. It is very interesting to see how this turns out in Japan. If they fuck up (and they are about to do that, the trade balance is completely destroyed since they need to import energy with a strongly devalued yen + the gov deficit/debt are out of control), there will be a lot of pressure on central banks to do less and lot of criticism on central planning in general. The system is cracking in Europe, Hollande, Barosso etc. are scared to death that the ruling elites will be outvoted in some election. Could be in the North or in the South.
Gonzalo lira is the guy indeed. In Chile, the central planners fucked up, i think/hope (maybe naively) that they are stopped before things get out of control that badly.
At the end of the day, Japan is going to fall prey to not being a reserve currency... simply put, the rules are different for us. Obviously, the dollar is subject to the same worldly constraints as all other currencies, but there's definitely a pecking order. I fancy the dollar as an aging prize fighter in a division of mediocre competition... at some point, it will get too old to compete, but it can still hold its own with the lot of them... the up and coming stars have no intention of testing the old man and, instead, opt to dance with other competition until the dollar retires or is retired. In short, I'm not sure I would put too much faith in Japan as being a perfect blueprint, although it is definitely being studied and can provide some insight into our future.
Also, the relationship between increases in the money supply and inflation is not perfectly direct. This is why you can have huge contractions in shadow liabilities, but yet much smaller money printing operations cause inflationary prowess. In other words, all conjured money is not created equal and some money has a much higher impact than others. The runup in shadow liabilities didn't cause all assets to runup in a perfectly correlated and direct fashion, equal to the amount of the liabilities. Only a portion ever spills over into something capable of multiplying... on the way down (contraction) prices likewise do not decrease in a perfectly direct manner. At the end of the day, the real economy dictates the impact of money mingling.
I think the other aspect is that people overlook the real design of the economy... it's as much political as it is about math. If it really is a money grab as many people proclaim, then why would there ever be a mark to market imposed? Prison sentences? Withdrawal of public support? Clawback of bonuses? What are the mechanisms to change the present trajectory? Does it just continue to become more and more a command economy until the entire lot of production is dictated? My guess is that it ends from supply chain disruption/producers sitting on their hands and not from any conscious decision to stop printing, but I'm just a mere mortal.
There two types of price deflation: one, the good one, where prices go down because of increased productivity. The other, the bad, is caused by the bust (less production) of the artificial boom caused by the the "created" (created via fraud debt creation) fiat "money."
The first is the one the banksters rob and the second is the one they dred because it crushes them and therefore the record "printing."
Side note: As indicated above, price inflation is the SECOND effect of fiat-money creation, the first is to steal any and all productivity gains from an economy.
http://armstrongeconomics.com/2013/05/25/gold-the-real-conspiracy/
Then the economy won't collapse. You seem to be treating economic collapse as if it is a given.
Central banks are responding to immense deflationary pressures by printing money. They hope to counter the economy's deflationary pressure by creating artificial inflationary pressure. You seem to be betting the banks will win. I'm not so sure the real economy won't win.
None of that "free money" is making it into the real economy. You seem to think it is, major fail. The capital mis-allocation and mal-investment continues. bad-behavior continues to be rewarded, not punished (which is what a real market is for, that and price discovery, please take your mickey-mouse eCONomic theory and shove it up your ass)... Long black markets, guillotines and sharecropping...
I never said the money was making it into the real economy. if it isn't it supports the idea that this will end with massive deflation rather than inflation. You seem to have faith that TPTB actually know how to make the economy do what they want. I don't,
You fail to acknowledge that the currency is in the hands of man... not math (real economy). At the end of the day, man has a mutually assured destruction button... at the present, we're sitting on the glass, getting bored, and we're about to start hitting the glass with a sledgehammer, carnival pissing contest style. The real economy can die, but how we interact with it is largely of our own choosing.
PS, the banks are an illusion... they're just the first line of defense for real people... the same people that ensure they win from either scenario... which is not to say they don't have a preference, but I digress.
You are correct. I do not acknowlefge that the currency is in the hand of the man, I think markets win in the end because the power of every individual and all their creative energies will find ways to undermine anthing the man tries to make them do. Examples of "the mans" inability to control markets abound on Zero Hedge yet people somehow cling to this idea that cetnral banks will be able to control the market in the end.
not true at all, ha why do you think FDR put social security and make work programs in place?
http://americanhistory4travelers.wordpress.com/2011/09/06/the-great-depr...
The energy to implement such programs now is simply not available, try again.
sorry, i may not have been clear, but i responding to your assertion that no country had a revolution under deflation. America was very close to revolution during the depression, FDR headed that off. Yes i agree we do not have the energy to implement those again.
Correct, hence a more soviet-style break-up of the United States. Just like like the Soviets, this is another viable path to eliminate the outstanding debt. Once the soviet union was officially dissolved, there was no way to collect the debt as there was no one to collect it from. It's a possibility most don't consider, but that is clearly viable. Western states are already forming a new banking union, no one talking about it.
This is obviously bullish for stawks.
Clearly this is a momentous hockey stick save.
Oops.......upon closer examination it just resembles a tiny little prick addicted to viagra.
Hope + Opium = Hopium
Carrot on a stick = Happy Mule
happy mule or ignorant ass?
Are you talking about the 1% or the 99%.
both have one and both are doing impressions
Hope floats?
BS sure does... But it also rolls downhill!
Someone trying to light a fuse...
http://www.marketwatch.com/investing/bond/10_year
tick tock motherfuckers,
paging Mr. gross, paging Mr. gross...
2.25 is where the war starts. It's a coming rather quickly.
All I see happening at 2.25% is the banks covering their treasury shorts and going long expecting to ride that wave down to 1.75% again. If rates break north from 2.25% I am shorting real estate.
KD has a take I think that is similar to the one espoused here ... http://market-ticker.org/akcs-www?post=221147
The 10 yr will likely hang at that area for a while until it blows through, but you never know. The thing to bear in mind is we are definitely in a new bubble and it's now just a matter of when it blows and not if.
It's the final bubble. It will force Ben's hand and he will print his ass off.
Yup, see Japan for the model. Only difference is we won't wait 20 years. We'll go full on with the printing press ASAP. A policy only the short bus crowd currently running the Fed could love.
The bond vigilantes are getting ready to take a shot like they did in Japan. I think we are going to see Bernanke challenged at least one time before the QE printer goes off the rails. There is a lot of money that can be made if it's timed correctly and everyone knows the game. Any sense of weakness by Bernanke is going to be exposed shortly.
quite a hard on in the 10yr yield today. One of many in the past month. One day it will just be post-mortem priapism.
Man, that is nasty looking for equities! All of this propaganda today is clearly signaling the Fed will taper sooner than later.
Yeap we have a company announcement next week, from the reaction of the senior managers redundancies are on the table. Here we go again FFS.
An economy built on fraud and lies!
Deflation? Can t include home prices in that one anymore.
When the Fed "beats expectations," it's not what you think, it's more like domestic abuse.
Don't deprive someone of HOPE...it might be ALL they have.
More and more I enjoy watching the FED's efforts to change perception. Maybe I am wrong, and they can really change reality and not only fudge the numbers.
Yeah but I'm long and strong and making money. Why is everyone gnarling and gnashing their teeth? I like rising markets rather than collapsing markets - why does ZH get so outraged???
I can't imagine why...I guess some people get pissed when they're fed a bullshit sandwich and told its steak.....
Maybe because some people still have a degree of moral integrity and can't stand all the lies that saturate this "market"?
@CDNX fan
Because you are part of the problem.... Go away.
Personally, I wasted a lot of time studying about fundamentals and free markets. I figured that knowledge would help me as an investor. Nope. Being delusional is all you need to make money these days. All you need is to welcome the outright manipulation and lies. Pretend that everything is what they claim it to be.... I suppose some ZH readers are pissed because they have ethics and still believe in economics.
Its not that you as an investor need to be delusional, you just need to accept that most of the world is, as they perceive it as their only salvation. We have all been betting that reality would have taken hold by now, but with the delusionalists calling the shots, there's just no telling. I have suffered from this most of my life by assuming that people would act in their own best interest and the recognition that their best interest was with their future further out than the next ten days. I was and am wrong, but will likely die with my own delusion. We see it acted out in everything from consumption to sex. The world is acting as though there is no tomorrow and cannot even conceive of the notion of delayed gratification. If we can't have right now, its not worth having and is irrelevant.
Just get used to it. Zeroheaders would rather go down in a blaze of glorious martyrdom pretending that they are relevant, than make money. They would like to think they stand for something, but actual action is needed for this type of heroism, not just nonstop, multi-year bearish droning about manipulation, Bernanke, and all the other crap that they think they know about. The are sheeple in the truest sense; they have been following the head bear, Durden, over the cliff now for years, calling for crashes while right in front of their blind eyes, intelligent investors have been making money by simply going with the market. ZH's articles are good to read and there are gems of wisdom to be found, but they must be read with an objective eye to be advantageous to the reader. Most ZH'ers simply lack the objectivity to be successful, and would rather be right about a correction than benefit from what a market provides.
josh U are sorta right, some maybe boycotting wall street for other reasons, how about you list what they are to complete your thought..
You better define "money" there Josh before you make such a sweeping theory....
Personally the BTFD, then sell, and purchase assets to preserve wealth has been working great. ZH simply helps to front-run those dips and peaks...
Don't confuse negativity with front-running a lower entry point. Last time I checked, a profit isn't a profit until you actually sell. If you haven't sold, you have not made jack shit.
I would rather go down in a blaze of glory than make money by playing in a rigged game that will ultimately destroy the world as we know it. But you, as a benefit of living in a still somewhat free society can do as you wish and if desparaging those who do not follow your "society killing for profit" activities makes you feel better about it, then you should be grinnng from ear to ear!,
If 'Neg' is the new 'Pos' i'm upbeat!
Translation: The rich will continue to get richer and everybody else...well.......
I took 25% of my Pell Grants and put it in my Scottrade account based on the following CNBC article. I have full faith and confidence in the power of FRAUD expecially when the President and Holder are in a jam. Not to mention, "as Satan himself, Larry Summers, prepares to take over Bernanke's hot seat."
Lion's Share of Stock Gains to Come
We ARE in a bubble. Nothing makes sense anymore.
Here's my favorite economic news...
STRAIGHT from the IRS IR-2013-52 Newswire (I can't post a link because it comes in emails)
2012 "Total Receipts" (i.e. returns filed) 135,473,000
2013 "Total Receipts" 134,349,000
So, even with all the immigrants pouring in, even with all the Phoenix University graduates hitting the job market and even with Obama's "improvement" in "unemployement".....the IRS confirms a .8% net YOY DROP in jobs.
Note: statistics compare 5/11/12 to 5/10/13 (don't assume these statistics haven't been altered to make things look better than reality. IRS head made 113 visits to the White House....ouch)
Q: If you call a tail a leg, how many legs does a dog have?
A: Four, because calling a tail a leg doesn't mean it is one.
can any other person than a JEW be head of the FED? seems we have no one from asia or white races who have the required credentials..Just asking? what criteria do they need to meet?
The FED is their creation and they have no intention of sharing.
These appointees are the product of association. You have to know the right people to be considered. Having an appropriate background might help but primarily its who you know. Its a club and there should be no suprise the the next will be vitually the same as the last. The lifer government employees hold much of the power as we have seen with the IRS, EPA and SEC, and simply require appointed heads that are willing to look the other way while they do what they do. The Jews are the ones running the economy but its pretty irrelevant to me whether the controlling mob is Jewish, Italian or Irish if their ultimate goal is to make me subserviant to them. If the theory of those most qualified would run things, even with an oversized government, we might have a chance, but in a world of social connections, not so much.
They basically own this country...
Federal Reserve Board of Governors 100%
Benjamin S. Bernanke - Jewish
Donald L. Kohn - Jewish
Kevin M. Warsh - Jewish
Randall S. Kroszner - Jewish
Frederic S. Mishkin - Jewish
Federal Reserve District Banks 75%
FRB of Boston: Eric S. Rosengren - Jewish
FRB of New York: Timothy F. Geithner - Jewish
FRB of Philadelphia: Charles I. Plosser - Jewish
FRB of Richmond: Jeffrey M. Lacker - Jewish
FRB of St. Louis: James B. Bullard - Jewish
FRB of Minneapolis: Gary H. Stern - Jewish
FRB of Kansas City: Thomas M. Hoenig - Jewish
FRB of Dallas: Richard W. Fisher - Jewish
FRB of San Francisco: Janet L. Yellen - Jewish
FRB of Cleveland: Sandra Pianalto - gentile
FRB of Atlanta: Dennis P. Lockhart - gentile
FRB of Chicago: Charles L. Evans - gentile
Is it bad for google ranking ?
What happened to affirmative action?
Except Geitner was born Episcopalian, and now attends the United Curch of Christ.
Tim-may!
Banks should buy farmland and oil and introduce food loan products.
Banks should make loans of people's savings at marginal rates and own nothing but the building the work from.