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Philly Fed Signals Worst Margin Compression Since Lehman

Tyler Durden's picture




 

With markets pricing in nothing but a "permanent plateau of margins," it appears the Philly Fed is about to ruin that meme too... Thanks to the collapse of the Prices Received (and Prices Paid) indices, margins are now implicitly the lowest since Lehman. The last 2 times "margins" were this low, the US entered recession.

 

 

Prices Paid Collapse...

 

But Prices Received Collapse-er...

 

Leaving the worst "margin" since Lehman...

 

 

Charts: Bloomberg

 

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Thu, 03/19/2015 - 12:12 | 5906306 Haus-Targaryen
Haus-Targaryen's picture

And yesterday Dear Leader claimed credit for the recovery we are all experiencing --- 

http://www.nbc24.com/news/story.aspx?id=1179565

 

Thu, 03/19/2015 - 12:43 | 5906456 madcows
madcows's picture

Right.  Except, this "recovery" has everything to do with the FED's monetary policy, and nothing to do with the President's Fiscal Policies. 

Even Yellen got pissy a few weeks back when some schlub congressman told her she wasn't doing enough.

Thu, 03/19/2015 - 13:19 | 5906595 SheepDog-One
SheepDog-One's picture

They're all actually saying 'wreckovery' but no one is getting it.

Thu, 03/19/2015 - 12:14 | 5906314 NoDebt
NoDebt's picture

Guys, just a smidge of QC before hitting the "post it up button".  Second graph should be prices RECEIVED.  You got it right in the text but not in the graphic.

I don't read text.  I only look at the pictures so this sort of stuff is important to me.

Thu, 03/19/2015 - 16:40 | 5907463 MortimerDuke
MortimerDuke's picture

Could someone please 'splain me how margins are collapsing?  According to the chart, prices paid are always above prices received, so I get this is a very loose proxy for mfg margins - there is no profit ever if taken literally.  The direction of the difference is the key.  But when the difference between what is paid and what is received is narrowing from a condition where prices paid are sometimes dramatically higher than prices received, shouldn't we interpret this to mean that mfg *losses* (rather than profits) are getting narrower and therefore a good thing?   What am I missing?  Thanks.

Thu, 03/19/2015 - 12:16 | 5906322 Dr. Engali
Dr. Engali's picture

Everything is the worst since Lehman.

Thu, 03/19/2015 - 12:17 | 5906330 NoDebt
NoDebt's picture

You forgot the little trademark thingie.  Like this: Worst Since LehmanTM

Thu, 03/19/2015 - 12:41 | 5906446 KnuckleDragger-X
KnuckleDragger-X's picture

Lehman brand dildo's for when you need a REAL fucking.....

Thu, 03/19/2015 - 13:21 | 5906601 SheepDog-One
SheepDog-One's picture

That's why my new saying is 'Worst since flapper girls were busting a move to The Charleston'.

Thu, 03/19/2015 - 12:17 | 5906325 maskone909
maskone909's picture

the last time margins were this compressed, the USA entered a recession? 

 

no prob, just change the way we define recessions.  the fed knows that they are risking a catastrophy if they announce another round of QE.

Thu, 03/19/2015 - 12:42 | 5906450 KnuckleDragger-X
KnuckleDragger-X's picture

They are working on it but there's still that pesky reality problem.....

Thu, 03/19/2015 - 12:18 | 5906333 williambanzai7
williambanzai7's picture

Margin compression? Is that you Reggie?

Thu, 03/19/2015 - 12:25 | 5906371 John Law Lives
John Law Lives's picture

I noticed he hasn't had too much to say lately about the imminent demise of Apple.

Thu, 03/19/2015 - 12:23 | 5906362 Bell's 2 hearted
Bell's 2 hearted's picture

margin compression?

 

sounds quite  tasty for capex, profits, and employment

Thu, 03/19/2015 - 12:25 | 5906372 sudzee
sudzee's picture

Make it up in volumn.

Thu, 03/19/2015 - 12:27 | 5906378 FranSix
FranSix's picture

I was thimkink the same thing!

Thu, 03/19/2015 - 12:29 | 5906389 Callz d Ballz
Callz d Ballz's picture

My testosterone levels are Worst Since LehmanTM

Thu, 03/19/2015 - 12:36 | 5906419 maskone909
maskone909's picture

meet bob.  bob has bitch tits.

Thu, 03/19/2015 - 12:52 | 5906488 Callz d Ballz
Callz d Ballz's picture

hi bob, meet neil

Thu, 03/19/2015 - 12:29 | 5906390 youngman
youngman's picture

I have this feeling Tyler used to work for Lehman,,,since everything is based on that date...event

Thu, 03/19/2015 - 12:37 | 5906428 thismarketisrigged
thismarketisrigged's picture

why not '' this is the worst since bear stearns?

Thu, 03/19/2015 - 12:40 | 5906441 Dragon HAwk
Dragon HAwk's picture

what we need is a New MADD.. MADA Mothers Against Bad Accounting.. 

 

Thu, 03/19/2015 - 12:49 | 5906479 pezhead
pezhead's picture

Knock, knock..

FED: Who's there?

Margin

FED: Margin who

Margin COMPRESSION mofo!!

Thu, 03/19/2015 - 12:55 | 5906503 praps
praps's picture

Don't worry.  There's a small exit over in the corner if you want to get out.

Thu, 03/19/2015 - 13:29 | 5906608 SheepDog-One
SheepDog-One's picture

Nevermind the chain and padlock, rest assured it will easily open.

Thu, 03/19/2015 - 13:38 | 5906671 Elio
Elio's picture

So maybe it is time for Goldman to collapse.

Thu, 03/19/2015 - 14:32 | 5906947 JoWazzoo
JoWazzoo's picture

Who cares? The market did not even blink cause the effing Zombies doan care. Jan Yelling and the Fed have placed a floor under stawks forever! Did you catch her comment yesterday about GDP?  She sure didn't mention HER Fed Staff in Atlanta number:  0.3 %.  Nope but she did mention something about 2 % - or maybe I was dilusional from all the Hopium she was injecting.

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