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Industrial Production Plunges Most In 3 Years As Auto-Maker "Nightmare" Comes True
Industrial Production missed expectations notably, dropping 0.4% MoM (the 6th of the last 8 months) missing expectations of a 0.2% drop (and notably weaker than the +0.9% upward revised July print). Thjis is the biggest MoM drop since August 2012. The big driver of the decline - just as we warned of nightmares ahead - was auto assemblies which plunged to a 4-year low by the most since Jan 2009. The year-over-year rise in IP is just 0.9% - flashing yet another recession-looming indicator.
Worst MoM drop in 3 years...
It appears yet another US macro indicator is flashing a recessionary warning... as YoY IP flashes red!!!
Why? Simple - just as we have explained... Manufacturing output fell 0.5 percent in August primarily because of a large drop in motor vehicles and parts that reversed a substantial portion of its jump in July
This is the biggest MoM decline in Auto Assemblies SAAR since Jan 09 (and Mar 96)...
Manufacturing output fell 0.5 percent in August, as the production of durable goods fell 0.9 percent and the production of nondurable goods was unchanged. The output of durables other than motor vehicles and parts rose 0.1 percent, with gains of more than 1 percent for nonmetallic mineral products, machinery, and miscellaneous manufacturing and with losses of more than 1 percent for fabricated metal products and for aerospace and miscellaneous transportation equipment. Among the nondurable goods industries, the indexes for petroleum and coal products and for chemicals each fell about 1/2 percent, while the indexes for food, beverage, and tobacco products and for plastics and rubber products each rose about 1/2 percent. The production of other manufacturing (publishing and logging) edged down 0.2 percent.
Charts: Bloomberg
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BULLISH!
I CONCUR, good sir... BTFD!
30,000 is in reach!
Save us Obie!
MOAR immigrants and a bigger racial divide, more taxes and regulation to the rescue. And more Free Shit.
Always more free shit, got to promise something to buy that vote. At least I may be able to get a good deal on a new 2015 Tacoma leftover late this year or early next year.
Tyler,
Your numbers don't match the commentary in the WSJ. Are those numbers not seasonally adjusted? Did you adjust the data yourself?
To sell more cars, just make the loans easier to get, common sense.....Is </s> even needed anymore?
Dow 30,000 hat ordered from Amazon. I used standard shipping, so I hope it's here on time.
http://www.amazon.ca/Dow-36-000-Strategy-Profiting/dp/0609806998
Some great reviews:
"This book was one of the reasons I got completely out of the stock market in late '99 early 2000. When I read this pustulous piece of putrescent puffery I just knew I had to get out. THANK YOU KEVIN AND JAMES!!!!!"
+1000 for 'pustulous piece of putrescent puffery'
... Because OBungler!
guess that means market up 500 today. between retail sales, ny empire, and now this - the "50/50 chances of a rate increase" just went to 100/0 ... time for the quants to re-calculate
I am saying red by 150 today on the DOW.
The Bad News Bears become the Good News Bulls in the opposite-world of central planning. Government interventions and profit opportunities are ripe.
You can't see what you ain't looking for.
C4C's Part Deux, on the way.
O'Bama gunna buy me a new car!!!
The best way to have a great NEXT year (election year) is to have a terrible THIS year....
It looks to me like the odds of a great election year are slim.
The dumocrats are going to nominate a corrupt warmongering grifter, and when the republirats have their debates, it looks like a convention of Inspector Clouseau impersonators. No matter who wins, we lose.
Our economic model is no longer viable...produce, consume, produce, consume....perhaps this is a sign of healthy relization and change. Are we going to produce cars until they cover every corner of the globe and call it good?
There's a "produce" in our economic model? Aside from the debt based fiat currency, the fact that we produce virtually nothing is the problem.
I thought it was Gross Domestic Free Shit?
Agreed, but mass automobile production is not the answer or some kind of disasterous indicator. It's not the 50's. ZeroHedge like to paint everything as a "black swan" event.
Around here, there are very few actual manufactures. Plenty of 'distribution centers' that are the size of 5 football fields or even larger. These warehouses have non descript names like 'consolidated distribution'. Unless you work there, you'd have no idea what's inside these gigantic buildings. Also, very few cars in the parking lots. They must be automated to the hilt.
We still do plenty of Heavy equipment. And don't forget about the mind control, excuse me ADHD ADD "treatment" drugs, we pump out tons of those. I always wanted to make the Made in the USA toaster oven though. One can dream.
Industrial production? In ameriKa? Well,,, it is a slow period for the war mongers?
"Sub-Prime auto loans are contained."
Sure, student debt is too.
For many.........................NO JOB = NO CAR NEEDED
But ... I thought free trade was supposed to make things better for everyone?
Are you suggesting that we've been lied to?
Word has been leaked
Fed raises rates tommorrow: Stocks go Up
Fed leaves rates unchanged: Stocks go Up
any questions?
The ole catch 22 where mfgs need and want scale to demand source pricing and ability to satisfy projected demand but competition and market conditions forces discounts pulling forward demand, and so here we are.
Will be interesting to see how the union negotiations go, suspect won't go well for either side.
Speaking of auto production, does anyone have the inside scoop on the UAW and FCA negotiatations?
That was crazy last night at midnight... I heard nobody had heard a word last night and everybody was walking off the lines on strike, but the news says they are still negotiating.
If they do strike, I look forward to it. Because the unions and management deserve each other. Their timing couldn't be worse - for them.
My wife drives a 1999 Honda Civic (high miles). I drive a 2004 Hyundai Sonata. Nothing owed on either one. My big concern is what to do when the '99 Civic goes. Any suggestions? (will NOT buy a new vehicle, only used).
Btw, my Sonata is the one with the body style based on a Mercedes/Jaguar look. I replaced the front grill and I'm "a Mercedes coming, and a Sonata going". lol
going to be a LOT of good deals on used cars as the loan defaults are going to start coming faster
Thanks Bob and Venturen. {{{ And all others }}}
Nissan Maxima, 97-98 or so. Low bluebook prices (say $1800 for excellent condition with 150k miles) but high build quality. Most have no rust, the engine has been on Wards' "10 Best Engines" list for over 20 years . . . very smooth and sweet. Base level car was loaded. It was also badged as the Infinity i30. I just picked one up for $700 (needed valve cover gaskets, passenger door lock problem fixed and spoiler reattached) a couple months ago and am loving it. At the time, this car was a shot across the bow to BMW.
My wife has a 2013 Honda Civic, bought it new and drives the Hell out of it. No problems, reliable good car. I would stick with the Civic.
Buy a 99-04 Honda Accord. They are great cars. I like Ford trucks hwoever.
Used car market is tight, many people not buying new, holding onto their older cars. Plenty of used Mustangs to be had for around the $5000 point, cheap and available. If you're handy and can do basic maintenance and repair, you can save a lot of money with one. Trying to convince the old lady to get one for the kids when they start driving. First thing I'll do is take them to an empty parking lot when it snows, teach them how to control a rear-wheel drive car in the snow, a good life skill IMO. So far she's not on board. Not surprised. Someday I'm going to learn how NOT to use logic as a means for pursuasion.
I own a 97 Civic (manual transmission). It still runs like a champ. As long as you have been maintaining and taking good care of it, it should have a lot of good years left in it.
Buy a Honda Fit. We drove a loaner Fit when the wife's 2006 Civic Hybrid was getting the hybrid battery replaced. Would not buy another hybrid until batteries can last the lifetime of the car - 10-15 years instead of 4 years. We loved the Fit - easy to park, good acceleration, highly rated safety.
Buy a 1996 Honda Civic. We just got rid of ours but it still worked fine.
I'm only half joking.
who would think borrowing and printing trillions and giving it to Wall Street & richest would lead to the worst recovery in history?
Krugman announces plan to buy dozens of large car carrying ships....fill them and scuttle them offshore....Kenysians always find a way! Sanders endorses the plan. Janet has already printed the billions! Productions will go up!
Even with liars loans they can't give them cars away.
our economy is healthcare and education .. we've never been fatter and the kids SAT scores at the lowest since keeping score from 1971.
We barely make cars anymore so whats the point of keeping track of this anymore?
we make less than 2% of clothes we buy in the USA.
Can't raise rates in September, the economy in the US is signaling (already in) recession. Can't raise rates in December, Christmas season. Can't raise rates in 2016, presidential election. If they were going to raise rates would have happened, should have happened many moons ago.
I might be wrong, then again maybe we'll go back to mark to market at the same time the FED funds rate rises.
They will do it when its least expected. They do not care about stock prices.
When min wage is $15/hr nationwide then subprime auto will be contained...
Over on MarketWatch there's a report with the headline:
"U.S. industrial production falls 0.4% in August, matching expectations"
You know... There used to be a time when you sucked, people just simply said you sucked.
I guess its now like "U.S. industrial production" will at least get a "particpation trophy", or some shit like that...
Btfd, sell it befo christmas
I'm afraid you're right.
The manipulators know the Fed is looking at this data, and you can bet your last dollar those fucks are all threatening the Fed members over the phone this morning... threatening them that they will all sell out completely... all at the exact same time... if the Fed raises rates even .0000000000000000001 of one percent.
I'll tell you one damn thing: I don't want to hear one fucking word more on ZeroHedge about poor people collecting WELFARE.
Escape velocity Is in reach!!
US Production is led by the FEDs paying Q99X2 to study the dreams of 17th century American settlers and then buying things with the money. I don't know why they do that.
We here at ZH have overthought this whole thing. We've given 'them' too much credit. I keep subliminally thinking "We were somehow wrong; it's not going to happen." Not true. We're seeing the trees; we must not lose site of the forest. It is fucking massive. Get even more ready.
Whatever, don't ovethink this. Simply put, talk is fucking cheap, actions matter.
Bullshit walks and money talks...
The central planners can "decree" prices to be whatever the fuck they want them to be, taking delivery at the official price will be something else entirely.
If we only had the sense to cut all non-management salaries to fifty cents and hour, then corporate profits would soar, and the economy would be great. Unfortunately, while patriotic corporate management is doing everthing possible to restore America to greatness, the filthy moneygrubbing workers and their greedy (e.g. "Mommy, I'm hungry") kids continue their treasonous program of looting innocent corporations. Shame on them.
Here are more signs of a coming recession.
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record...
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
http://michaelekelley.com/2015/02/24/would-you-pay-39-more-than-asked/
http://www.zerohedge.com/news/2015-07-27/when-will-we-ever-learn/
Here is how to respond.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!