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What's Wrong With This Picture?
September retail sales were a modest miss: that much was made clear earlier. However, what the market may have missed is that this "miss" was on the back of Department of Commerce's favorite fudge factor: seasonal adjustments. The 0.1% "decline" in retail sales was for the seasonally adjusted numbers of $426.3 billion in August and $425.9 billion in September. So what happens when one strips away the Arima-X-12 a la carte adjustment which is always and everywhere in the eye of the beholder? Well, this:
As the chart above shows, the unadjusted retail sales number difference from August to September was a whopping $40 billion, or a 9% drop in one month, which in turn meant the headline retail sales number contained in it had an "adjustment factor" of $39.6 billion. This was the biggest NSA September retail sales drop on record, even worse than the prior worst such monthly drop posted in 2007 when the Second Great Depression was about to begin.
So one wonders: just what is the basis for the adjusters to apply the biggest ever seasonal add back to the raw number ever?
Either way, whatever it is, the algos are obviously infatuated with the record NSA September sales drop which is the reason for the fresh all time S&P high - if anything, record unadjusted retail sales drops is just what the Fed ordered to keep the taper forever on the backburner.
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There's that term "NSA" again. Man, they're everywhere. They probably have the Arima-X-12 code too so are in posession of all the historical BS spin in the reporting. Given where all these datapoints are heading, little wonder Washington is getting increasingly paranoid over public reaction... I don't like where this is heading. Saw a movie about it, ending wasn't pretty.
Wait! You mean our righteous overlords (ever may they be obeyed!) LIED to us?
No.. can't be! This is God Bless America. The magic Constitution makes everything work out!
/s
and then there is the labor day factor combined with back to school and generally nice weather in the parts of the country that were not stormy
Seasonally adjusted should not be reported as the headline number. It should be a footnote to the real data.
Hedonic adjustment to the truth. Because sometimes the truth isn't truthful.
THE TRUTH!
YOU CAN'T HANDLE THE TRUTH!
(POTUS to the people)
I saw that movie too. The trick is when the Zombie horde comes after you, try to flee to the sporting goods store at the mall and block the doors.
Keep pumping Benniebux to the Wall Street slime! Who cares about the people. Close the FED!!!!
It is amazing that financial analysts now routinely state with a straight face that good numbers are bullish because it means that QE caused a recovery, and bad numbers are bullish because it means more QE, and the public by and large has no problem with that.
I would bet you that by and large the great American public has no idea what QE is/means and could not care less if someone explained it them.
I have my own ideas...good numbers are bullshit and bad numbers are bullshit. They just make it all up...and we keep...BAA...falling for it....BAA.
Another day in the life of the mindless species known as the North American Sheeple.
Life in the Empire of Lies. We're just tilting at windmills, boys and girls. This will go on and on and on.....
This will go on and on and on.....
It will, so long as everyone obeys the thieves and liars.
Yellen and her 12 stooges will just print more money. More and more QE to transfer more wealth.
No debt ceiling currently, means much higher debt levels going forward.
The trajectory of the US is clear. The story continues until there is a currency crisis.
Red... Blue...
...
I KNOW!!
RGB!!
RED BLUE GREEN!!!
THERE'S NOG GREEN IN THE CHART!! WHAT DID I WIN??!
I just love it when with the 'stroke of a magic wand' badass news becomes goodass news.
I guess I'm confused why they bother put a happy spin on it at all. 9% drop or 9% gain. Does it really matter? As long as QE is guaranteed it doesn't seem to have any point. This is like reporting to a hard core drug addict his needles are sterile. Makes no difference to him. All he cares about is the high.
Miffed;-)
Please, there is no "market" for true price discovery. To the moon!
The good news; We will all be trillionaires!
The bad news; We will all be trillionaires!
LMAO!! So true.
XMAS SEASON will be horrendous ,
Look the divergence between DJTransports and Financials...A W E S O M E
Tonight on Nightline: former chief Kessler rides Ted Nugent reverse cowgirl as former officer Pike watches with the Koch brothers.
Although perversions such as you describe are depressingly common at this point; nevertheless, they still seem to be more common among Democrats than Republicans, and certainly more so among 'progressives' than conservatives. Thus, I find it kind of odd that you would chose the particular individuals whom you did in order to illustrate whatever point it was that you were trying to make.
I hope you get paid for the drivel you spew, the alternative is...well...just stupid.
the algos just need an excuse to ramp shit up. reality is irrelevant.
thats why stocks are ramping today. they saw that massive number and were able to realize ben will have to mention MOAR tomorrow which should get spx to 1900 by halloween.
exactly. all news is bullish.
seasonal adjsutments over the course of the year add up to 0.. let's not cherry pick next time when SA number looks weak and NSA looks strong..
Uh....show us how that has worked over the past years. Where have they been subtracting rather than adding? Which months? I want names and numbers!!!
Okay, well how about we look at NSA only. (apples to apples)
Which is the biggest negative on that chart?
pods
What does this article mean? Do I have to give my underwear back that I bought in September?
Over.
The slow grind down continues. If you think this year's numbers are bad, wait till next year when a good portion of the working serfs have $3k less in disposable income (ACA).
This is not going to end well. I can see it everywhere I go right now. People are still trying to go about the "consumerism" that used to give them that dopamine rush. But now they cannot get enough to really release that flood. They still go about doing the same thing, but buying less, and looking broken. And this is in an area that is doing quite well.
This is going to be one long, hard ass winter.
pods
Normally my company gets an order in July around $1 million for November delivery from each of our top three accounts. The holiday product. That number has held steady for the last five years.
This year we received orders for $450k, $375k, and $250k. This was in July, which tells you what big box retail thinks about Holiday 2013. People think product just shows up in stores and orders were placed days before. Holiday 2013 buys started in April and finished in July. If forecasts start turning up in September, there is still time to add to the orders, but it hasn't happened. It is the end of October, so it is too late now.
Retailers are going to try and create scarcity this season, in the hopes people will rush to buy product and pay full price. Inventory levels were low last year, and they still had a ton of excess inventory they has to sell at 50% off after Christmas.
Thanks adr, it is real time info like this that truly matters, soon google will have their own info database to sell instead of the fictitiious government numbers. there is absolutely no reason why we don't have real time econ data, your post here is light years ahead of any statistic in terms of relevance. thanks, but I think no adjustment will help this years numbers...
He raised his hand and the seas were lowered. His disciples push their keys and retail is saved and the algos jump.
The next version is X-13 ARIMA-SEATS
Destruction of 'The Beast' (The corporate machine) begins with but a single step. Buy local in your neighborhood whenever possible. This is one way we can make sure 'The Status Quo has Got To Go'!
Answer: 1) if economy improves -> velocity of money goes up -> hyperinflation and FED must increase rates faster, but the effect will be slow and only take hold after years of high rates and CPI's going up. Only financial refuge, not safe but only one -> Equities -> Equities go up!
2) if economy worsens -> velocity of money stays the same -> no hyperinflation -> FED keeps or increases QE -> more money becomes available for leveraging -> Equities go up!
That is why everything apparently makes equities go up.
What can possibly make equities go down then?
1) Continued recession and worsening economy
2) Changes in FOMC policy
3) Political upheaval in Washington
4) Revolution
5) War
6) Loss of reference currency status (close by)
G7 will support us, since they are in the same boat (France, Germany, Japan, England, US, Canada, China). BRICS + Saudis + Mexico + Venezuela + Argentina, are on another boat, they are providing the resources and selling them for fiat paper. Watch what happens there, and obviously China is the pivotal point here.
If the financial system were to crash down, the G7 would loose ten to the 12th, but the BRICS + Nations would loose only 10. Interesting and food for thought.
Does that mean that I can take my company's horrible real sales and seasonally adjust them to match the reported number and add that money to our bank account?
When the government claims retail sales are flat, but my company sees a 30% drop in YoY sales backed up by unadjusted data, which do I believe?
2013 has seen the largest collapse in real sales across the board that I have ever seen. Orders have been magnitudes lower all year. What is really funny is the collapse in orders started last November when this full retard rally began in the stock market.
Best Buy ordered half of what they ordered in 2012 this year. That is how they increased profit, they didn't buy anything and sold off old inventory. Shown in the fact that profit is up when revenue is down. Inventory levels are scary low at their stores. They have no product. But the tactic worked for Best Buy's stock price, didn't it. Going forward it's going to be hard to make money if you didn't buy anything to sell in the first place.
"Going forward it's going to be hard to make money if you didn't buy anything to sell in the first place."
That's not the plan anymore. Retail knows what is coming... double dip recession. Their strategy is to MINIMIZE LOSING MONEY over the next 6 months until the bottom is realized. Why else have so many companies been hoading cash when we are in a so-called "recovery"? It's 2008 all over again. Just like 1999 all over again. It's all TPTB have left. Pump & Dump... Rinse & Repeat... Fleece the Sheep... Make the Masses Debt Slaves and the Rich the Masters that control all tangible assets.
All that QE does is allow the game to continue because it reduces the buying power of the medium of exchange. In the big picture, given that currency is a debt receipt, I think the collapse will be deflationary because all the inflation has already occurred. The way TPTB have pumped up the economy or postponed the day of reckoning via inflation. The bust has to be deflationary as unpayable debt is recognized as such.
Rates-of-change in money flows (our means-of-payment money times its transactions rate-of-turnover), have now bottomed. I.e., roc's in required reserves (which are based upon transaction type consumer & business balances 30 days prior), have now bottomed. This represents both a seasonal bottom, & a long-term inflection point.
Long-term inflection points are based upon the distributed lag effect in money flows. The lag for inflation represents a 24 month roc, which contrary to Milton Friedman, has been a mathematical constant for the last 100 years.
In other words, both inflation + real-output have bottomed, as predicted in June of 2012:
2013-09 0.075 0.279
2013-10 0.018 0.263 bottom
2013-11 0.025 0.239
2013-12 0.057 0.199
2014-01 0.032 0.198
2014-02 0.008 0.236
2014-03 0.031 0.189
2014-04 0.024 0.183
2014-05 0.007 0.221
It would take a reversal in Vt to offset the upcoming rise in price trends. Vt has risen this year because (1) unlimited FDIC insurance coverage expired in Dec 2012 & (2) because commercial banks have largely satisfied their needs for increased capital cushions (increases in bank capital destroys bank deposits), & (3) $85b/month QE LSAPs.
So other things being equal, expect gasoline prices to shortly follow the trend.
CNBC spin coming soon:
"Now over to Bob Pissonme to update us on the retail sales picture: Hey Steve, big thanks there buddy and as we have been predicting the market is up today as usual. Now looking at the retail sales picture at first seems to showing a downward trend however most investors are interpreting this as pointing to a HUUUUUUUGE pent up consumer demand heading into the holiday season!!! Combining what will probably be record breaking holidays sales with all that corporate cash on the side lines and then we clear the budget/debt debates in February - LOOKOUT BEARS the markets will be unstoppable!!!!!!"
Clearly bullish for MOAR.