Another Recessionary Print: Core CapEx Posts First Annual Decline Since 2012

Tyler Durden's picture

Today's durable goods report appears to have been liked by the momentum-igniting algos, because despite the prior month's negative revision (nobody cares about those), the January Seasonally adjusted number posted a modest beat of expectations, with the headline number declining only -1.0% compared to the expected drop of -1.7%. This more than offsets last month's revision from -4.3% to -5.3%, but again all that matters for kneejerk reactions is the current print. We will have more to say about this shortly.

For now the only number that matters is the capital goods orders nondefense aircraft, aka core capex. It is here that while the sequential print was a modest increase of of 1.7%, compared to expectations of a -0.2% decline, it is the annual number that is of interest. We focus on this, because as can be seen on the chart, the annual change just posted its first annual decline in a year: in the past any such decline would mark the start of a recession, except of course for in 2012 when the New Normal central planning, and the trillions in Fed liquidity injections, made the business cycle as we know it meaningless.

So much for that $1+ trillion in QE: it is good to know that it went to stock buybacks and dividends... if not so much to actually investing in future growth.


And some of the other "spotty" charts. First: Core Capex Shipments:

Then Durable Goods:

And Durable Goods ex transports.

We can only conclude that it has been snowing for a long time.

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Dollar Bill Hiccup's picture

STFU. Who needs capex?

Take on debt, buy back equity.

CEOs paid on price of stock, not reality.

Whatever reality is.

Smegley Wanxalot's picture

I remember the record snowfall in May of 09 very well.

skwid vacuous's picture

i'm gonna have to lean towards....bullish!!! Get to work Mr. Yellen

Seasmoke's picture

Another Depressionary. 


There fixed title for you....

fonzannoon's picture

My Dad always tells me I should have been a cop, or a weatherman. Boy was he right.

L_Conquistador's picture

Bill Ayres's dad told him the same thing.  Now he's a big shot in Chicago. 

game theory's picture

We have the same problem with police pay where I live too. I thought the recession/depression would bring some normalization to bloated pensions and pay packages...but it seems like it has gotten much much worse. 

RSloane's picture

Bloated pay packages and pensions worked so well for Detroit its only fitting that other cities do the same to spread the wealth around.

nakki's picture

On that page you can link to Suffolks and Nassau county community colleges and see what people make. Who needs to be a cop when you can make as much being a professor or a maintenance worker at a COMMUNITY college.

Spungo's picture

This is the healthy pullback we've been waiting for. Great time to buy the dips.

overmedicatedundersexed's picture

just wait for that giga factory, we need a giga of giga factories ...lets hire solyndra's management they know how to get it done....

pods's picture

Now is the best time to buy a (house, fakebook stock, new SUV paid off in 96 months)

To borrow a line from Spongebob:
This is the best depression ever!


LawsofPhysics's picture

Yes, we continue to beat expectations, all the way down... a third world standard of living.


BullyBearish's picture

Such bad news, so: with a double punch: Yellen and $4B Pomo today, GO LONG

mayhem_korner's picture



What about the tent-city folks who are buying cat food and then using the empty cans to construct "housing"?  Doesn't that qualify as capex?  Jus sayin' these numbers are way underreported.  /s

Pareto's picture

The FED can chage what things look like, but, the FED can never change what things are. (J. Grant, Dec. '13 - handing Steve Liesman his ass).  I dunno.  Just felt like saying it.......again.

mayhem_korner's picture



You can twist perception, reality won't budge.

-N. Peart, Show Don't Tell

Pareto's picture

+1 awesome album - whoosh - going back to what.....89?

Iam Yue2's picture

But, but, MS, GS, ML and CS said ......

search's picture

Makes me think, maybe the reality is:

1%: Credit means you can have things you haven't built enough assets to afford, but hey keep workin!

98%: Where do i sign???!!!

Zerohege 1%: There's been some mistake, that's a shitty deal, i don't belong here.

ejmoosa's picture

Take a balloon filled 3/4 to capacity with air.  Now twist it gently in the middle until you can put your finger around the twist.  Now squeeze air from one side to the other.  One side deflates and the other side inflates towards a breaking point.  

On average, one can say "No Inflation!"

Point to the other side and say "Deflation!  We need moar!"

But the overinflated side can indeed burst.  And when that happens?  Nothing can be done to fix it.

The Fed is the hand squeezing the ballon AND the fingers around it's center. 


search's picture

Sorry, that would be Zerohedge 1%

buzzsaw99's picture

don't worry about lampert. he got plenty.

TheRideNeverEnds's picture

What do fundamentals have to do with the stock market?  


Look man, just buy the dips, I know we have covered this; it works every time.

Staplegun's picture

Someone found what I can only assume is a ZHer's hoard...


Vote on whose stash this was?

Staplegun's picture

Certainly not MDB's either. Though I fully expect him to be a California type.