• Sprott Money
    05/26/2016 - 05:58
    How many “emergency” “secret” meetings do the central planners around the world need to have before the citizens of the respective countries begin to fully understand and take notice that something...

Texas Economy Collapses - Dallas Fed Survey Crashes To 6-Year Lows As "D" Word Is Uttered

Tyler Durden's picture




 

For the 13th month in a row, The Dallas Fed Manufacturing Outlook was contractionary with a stunning -34.6 print following December's already disastrous collapse back to -20.1, post-crisis lows. With "hope" having plunged back into negative territory (-2.2) in December, January saw a complete collapse to -24.0 as one respondent exclaimed, "we expect the continued depression in the oil and gas industry to negatively impact our customer base and result in significant demand reduction."

Bloodbath...

 

And its across the board with production, employment, and shipments all collapsing...

 

As hope is crushed...

Chart: Bloomberg

But the punchline was the respondents, virtually all of whom confirm the recession, and one even casually tossed in the "D"(epression) word:

Primary Metal Manufacturing

  • The impact of the continued decline in the energy sector, compounded with several new regulations from both the Environmental Protection Agency and Occupational Safety and Health Administration, is depressing economic conditions even further from 2015. Our top 10 customers continue to indicate declines in manufacturing and new capital expenditures for 2016. Outlooks continue to be adjusted down from six months ago, and we are seeing several foundry closings in our industry due to the state of our industry and strong offshoring projects.
  • Our projected increase in business is related to market-share gains at the expense of our main competitor (foreign owned) who is having service problems.

Fabricated Metal Product Manufacturing

  • We expect the continued depression in the oil and gas industry to negatively impact our customer base and result in significant demand reduction.
  • I believe that if the stock market continues to deteriorate, spending on housing replacement products will decrease. Large purchases on housing seem to parallel consumers’ 401k performance.
  • It is getting pretty ugly, and the strength of the dollar is really making us noncompetitive.

Machinery Manufacturing

  • The continued downturn in the energy sector and its impact on oilfield services companies is brutal and financially punishing, leading to significant reductions in our labor force and facility closures.
  • Seasonally, it is a slower time of the year currently. There aren’t any indicators of any big change in the next six months.
  • Our increases in volume do not stem as much from ideal economic conditions as much as from breadth of development in multiple states. Brand expansion and awareness are more of the catalyst than the typical industry indicators. Our customers in Texas are experiencing significant decreases in business volume. As a whole, I would rate the economic conditions in Texas and many other parts of the country as poor.
  • Oil and gas prices and their impact on capital spending by our customers continue to be our biggest concern.
    I expect the Fed to recognize the weakness in the economy and the fact that we are in recession and drop interest rates again.

Computer and Electronic Product Manufacturing

  • Demand slowed more quickly than is typical in December. Early demand is weaker in January, leading to the belief that growth in 2016 may be elusive.
  • It is time for Congress and the president to work on tax reform. Small businesses, especially in manufacturing, are suffering due to the high dollar, high taxes, and regulations.

Transportation Equipment Manufacturing

  • The drop in offshore oil production globally affects helicopter flight activity, reducing equipment turnover from large fleet operators.
  • Our outlook is contingent on the energy sector not completely ruining budgeting activity for most Texas municipalities. If that happens, the six-month outlook may turn negative.
  • Our business is cyclical, with our main selling season happening in March through June. Our production will increase during the winter months in anticipation of the spring selling season.

Food Manufacturing

  • Domestic sales have softened across our channels and category. The strong dollar remains a challenge to our export business. Agricultural raw material costs have decreased, helping with other cost challenges.

Apparel Manufacturing

  • July will be when we start getting busy for our Christmas shipments.

Paper Manufacturing

  • We see a slight downward bias at this point.

Printing and Related Support Activities

  • We are part of a company with four separate, very different businesses. They are all business to business, and they have all struggled with sales growth the past year. We’ve been able to improve profitability on a 1 percent sales increase, but sales have just stalled. Our old customers have shrunk, and we’ve managed that meager 1 percent only by on-boarding a lot of new business.

And now cue to the career Goldman banker recently put in charge of the Dallas Fed...

0
Your rating: None
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 01/25/2016 - 11:40 | 7092824 Baron Munchausen
Baron Munchausen's picture

Well clearly they need more undocumented Democrats to take the jobs that dont exist that Americans wont take.

Mon, 01/25/2016 - 11:43 | 7092836 Four chan
Four chan's picture

and more longer red spikes.

Mon, 01/25/2016 - 11:46 | 7092854 ParkAveFlasher
ParkAveFlasher's picture

Long south-pointing-dotted-red-arrows, bitchez!

Mon, 01/25/2016 - 11:55 | 7092900 NoDebt
NoDebt's picture

Hope is always the last thing to die.  It just died.

Mon, 01/25/2016 - 12:02 | 7092923 Dr. Engali
Dr. Engali's picture

There's always Bernie.

Mon, 01/25/2016 - 12:07 | 7092950 MillionDollarBonus_
MillionDollarBonus_'s picture

So Texas is finally realizing that trickle down economics doesn't work? Who would have thought? 

Mon, 01/25/2016 - 12:10 | 7092955 NoDebt
NoDebt's picture

If anything I think it proves that it DOES work.  In both directions.  C'mon.  You can do better satire than that.

Mon, 01/25/2016 - 12:12 | 7092968 Tom Servo
Tom Servo's picture

STFU you fiction peddlers!

 

The economy is GREAT!

 

just axe President fail!

 

Mon, 01/25/2016 - 12:48 | 7093154 pods
pods's picture

Biggest bloodbath since Lehman!

Mon, 01/25/2016 - 13:56 | 7093473 MalteseFalcon
MalteseFalcon's picture

You'd think Texas is fundamentally about oil.

Nothing could be further from the truth.

Texas is about being conservative.  And as long as Texas stays conservative, it will be great.

So when you get laid off or your family is hungry or your retirement plan has gone up in smoke or the market tells you to stick your subsidized oil sideways, just contemplate your basic conservative values and hug yourself to sleep.

Hook 'em, sheep.

Mon, 01/25/2016 - 14:01 | 7093495 Antifaschistische
Antifaschistische's picture

anyone who thinks the hopium has left Texas doesn't live in Houston.   My office windows downtown look west and north...and much of my view north is block by buildings...and I still count 19 cranes looking toward the galleria.  The malls are still full and they were packed on the holidays.

understand...i have much to lose in a Texas collapse, however, I do feel that this entire city is operating on two things 1) burning through cash and 2) hopium.   When #1 burns out...#2 will evaporate.

Mon, 01/25/2016 - 19:46 | 7095090 Blano
Blano's picture

I live in the south end of mid-cities DFW.  I see nothing slowing down.

Was at Parks Mall this afternoon.  The parking lot was nearly full.  On a weekday afternoon.

People everywhere all over, shopping and eating.  If it's coming, it won't be seen for a while.

Mon, 01/25/2016 - 20:25 | 7095247 max2205
max2205's picture

Texas on the receiving end of Barry's Painconomics 

 

Mon, 01/25/2016 - 12:25 | 7093035 gatorengineer
gatorengineer's picture

MDB troll big or go home, Bring your A game man, afterall this is "The CollapseTM" we are Talking about

Mon, 01/25/2016 - 13:18 | 7093301 In Ze No
In Ze No's picture

Trickle down economics works just fine for those upstream.  

Mon, 01/25/2016 - 14:54 | 7093761 Sanity Bear
Sanity Bear's picture

bend over and get ready for the change

Mon, 01/25/2016 - 13:02 | 7093217 upWising
upWising's picture

Gentle Readers:  What some America-Haters here mischaracterize as "down red arrows" and "down red bars" are, in reality, nothing of the kind.  In reality, these are GREEN SHOOTS which, in a completely transitory move, have changed colour and are, however briefly, growing DOWN into the soil.  Surely, this is a brilliant evolutionary move, designed to absorb the Inherent Strength of the American Economy©® which is just below the surface.  Once "super-charged" on The America Strong nutrients which are "just there for the taking," these Green Shoots will literally leap out of the ground and soar towards the Heavens.  Just you wait!

U S A!!   U S A!!   U S A!!!

Mon, 01/25/2016 - 11:48 | 7092863 waterwitch
waterwitch's picture

Interesting to see no mention of housing.  Lots of underwater mortgages in the oil patch.

Mon, 01/25/2016 - 11:52 | 7092885 Son of Loki
Son of Loki's picture

The oil crash is crushing Houston's housing market

The oil crash has hit Houston, Texas so hard that virtually nobody wants to buy a house there anymore.

 

The monthly survey of business owners conducted by the Dallas Fed has for several months chronicled how even businesses not directly linked to the oil industry are buckling under the price crash.

One analyst estimates that it will take up to four years to clear the supply of houses priced at $400,000 and above in Houston, according to the Journal. 

 

http://www.businessinsider.com/oil-crash-hits-texas-housing-market-2016-1

 

Mon, 01/25/2016 - 11:55 | 7092898 Navymugsy
Navymugsy's picture

That supply of houses above $400,000 will soon be $375,000 then $350,000 then...

Mon, 01/25/2016 - 12:03 | 7092924 SERReal1
SERReal1's picture

But, I thought that the economy is great???? The President said so!!! /sarc.

Mon, 01/25/2016 - 12:26 | 7093041 gatorengineer
gatorengineer's picture

More like $300K, then 200K, and 18 months from now $125K.....

Mon, 01/25/2016 - 19:43 | 7095082 CheapBastard
CheapBastard's picture

Check out the internet RE sites and compare the original listed price with the final sale price. My brother moved there awhile back and found a 20-30% difference (lower sale price) for used home sales. So even a few years ago it looked like many houses were overpriced. That area near Woodlands is going to take a huge hit with oil so low however, no area of Housotn will go unscathed since oil is at least 40% of Houston's GDP according to some professor at UH I read.

 

Sorry, I mean "pre-existing" homes.

Mon, 01/25/2016 - 15:53 | 7094099 Antifaschistische
Antifaschistische's picture

Hey, if you can get it for $350,000 then your rent payment to the tax man will only be around $1,000 per/month.  Of course, until they have to raise taxes...which is coming.

Mon, 01/25/2016 - 19:16 | 7095003 azusgm
azusgm's picture

That is teardown price inside the loop.

Mon, 01/25/2016 - 12:03 | 7092921 EddieBurgerPie
EddieBurgerPie's picture

Oh come on now! You're just an other one of those peddling fiction! 

 

 

 

Ringo Sarc!

Mon, 01/25/2016 - 12:48 | 7093148 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

I knew Houston was an enclave of wealth sitting high atop the Financialization mountain far away from any sort of reality, but I had no idea that they were this mathematically challenged when it comes to Ponzi schemes, Son of Loki. Many thanks for pointing these information bits out, eh.

 

" I'm a war time President." George W. Bush 2001

 

Good luck with the financial war that will wipe you, and your entire family off the face of the planet, Mr. war time president.

Mon, 01/25/2016 - 14:22 | 7093592 cro_maat
cro_maat's picture

Don't put too much into the Dallas Fed's doom porn. Houston and Texas have seen a few oil & gas boom / bust cycles. There are many who have invested wisely and / or kept their powder dry for the next cycle. Mom and Pop shops, retail, oil & gas infrastructure / service companies and RE will suffer but the HFs, FoFs, RIA's, Trust Companies, Cattle Industry, etc. will chug along fine. Oh, and money will still find it's way into the high tech sector of Austin.

Mon, 01/25/2016 - 15:23 | 7093899 Omen IV
Omen IV's picture

you are underestimating what is happening - we are talking about a complete shutdown of the supply chain - especially metal related and support services.

"see thru" buildings was the standard in 86' from Tulsa to Houston -  today the leverage is much much greater than those days - the deflation of assets will impact bank first liens and free cash flow are coming in at levels below core support for business and people - in 86' interest rates for treasuries was substantially north of 10% - today zero so where will the income come from even if you have cash reserves?

this is a firestorm

Mon, 01/25/2016 - 13:12 | 7093272 prcat3vet
prcat3vet's picture

Zillow search of all Houston homes for sale:

Houston TX Real Estate

Must be pedalling falsies.

Mon, 01/25/2016 - 20:35 | 7095288 FreedomGuy
FreedomGuy's picture

So, how many home-flipping seminars are going on in Houston? I must have a dozen ads for them here in my city...where about 20% of all office space is leased by oil and gas.

 

Mon, 01/25/2016 - 13:19 | 7093306 TwoHoot
TwoHoot's picture

Texas doesn't allow second mortgages in excess of 80%. Foreclosing on a second mortgage is near impossible under Texas law. As a result, Texas home owners don't get in as deep as they do in some states. Home prices don't go up as much in good times or down as much in bad times.

Don't get me wrong - there will be foreclosures and prices will come down. Most oil patch home owners are either paid off and set to live where they are until prices come back or mortgaged to the hilt waiting to dump on the lender.

Texas is accustomed to the boom and bust nature of the oil business. The last bust was in the 80s. It usually takes about 15 years to go from bottom to normal and another 15 to go from normal to boom. Most Texas oil pros have sold their crap to somebody else (uninformed investors, funds and pensions) and kept the best for themselves. They are set to wait for for the next go round. Right now is extended vacation time.

Mon, 01/25/2016 - 13:52 | 7093463 azusgm
azusgm's picture

Houston saw some softness in the oil patch around 2000 or so. The petroleum engineers seemed to have taken the brunt of it. They were getting laid off or sent to charming places like eastern Russia or Nigeria where their bodyguards were known as "drivers".

Mon, 01/25/2016 - 19:46 | 7095092 CheapBastard
CheapBastard's picture

The median salary of an energy engineer in Houston is $185,000 so that absence will trickle down to restaurants, retails, etc

Mon, 01/25/2016 - 11:48 | 7092866 BandGap
BandGap's picture

I thought the D word was Dalio today.

Give Texas moar, too.

Mon, 01/25/2016 - 13:45 | 7093436 TheDanimal
TheDanimal's picture

Maybe, just maybe, we ought to improve the jobs so Americans will take them again.  Lame pay, menial boring shit to do, shithead coworkers.  No thanks, I'm alright out here on the streets collecting free shit.  I'm not gonna have a kid, I'm not gonna pay taxes.  I'll be a net drag on this shitshow until it collapses.  By then I'll have all the equipment and skills I need to thrive in the aftermath.  I picked up a nice, sturdy, warm hiking shirt from Cabella's today for absolutely nothing! I didn't steal it either.  The funny thing is, you'd barely even know it if not for my backpack that I always have on.  I look like I just came straight out of a house in the suburbs.  I smell good too! I got a hold of some Bath & Body Works lotion.  Now I need to find some hippie chicks.

Mon, 01/25/2016 - 11:40 | 7092825 kato
kato's picture

awww too bad. there will be less of that so called "daddy's money" flowing around the armpit state to help stimulate the economy. back to being dirt farm ranchers.

Mon, 01/25/2016 - 11:44 | 7092837 Baron Munchausen
Baron Munchausen's picture

I suspect that if you began to learn about Texas, its cities, and economic activities apart from energy, you would marvel at your former presumptively east coast latte ignorant nigger faggot cunt assessment of that captive sovereign nation.

Mon, 01/25/2016 - 12:05 | 7092940 Dick Gazinia
Dick Gazinia's picture

I always said that Texas would be a great place to live....if it weren't for all the damn Texans.

Mon, 01/25/2016 - 12:43 | 7093118 Dave Thomas
Dave Thomas's picture

Texas would be a great place to live, if it wasn't for all the damn Texicans.

Mon, 01/25/2016 - 13:07 | 7093242 upWising
upWising's picture

The Story goes like this...

The Esteemed and August Minds that populate the Texas Legislature ("The Lege" -- thanks Molly Ivins) decided, after serious deliberations and public comment, that Texas needed a Big Wall around the entire state to keep "the undesireables" out of the Lone Star State.  Texas being Texas, the effort was privatized and Generous Free Will Love Donations were solicited from the public.

As it turned out, most of the donations came from OUTSIDE Texas, given by people who hoped the Great Wall of Texas would keep the Texans INSIDE Texas where they couldn't do any more harm to anyone, except themselves.

TEXAS!!  Jesus' Favorite Theocracy!!!

Mon, 01/25/2016 - 14:07 | 7093521 azusgm
azusgm's picture

Even better. A win-win for Texas.

Mon, 01/25/2016 - 15:02 | 7093803 economicmorphine
economicmorphine's picture

Yankee transplant to Texas who has since moved on. Spent some of the best years of my life there among some of the kindest, most decent people anywhere...white, brown, black, yellow, red...didn't matter.  Good decent people all of them.  So keep peddlng the backward narrative.  You make youself look ignorant which, I suspect, is pretty damn accurate.

Mon, 01/25/2016 - 15:02 | 7093804 economicmorphine
economicmorphine's picture

Yankee transplant to Texas who has since moved on. Spent some of the best years of my life there among some of the kindest, most decent people anywhere...white, brown, black, yellow, red...didn't matter.  Good decent people all of them.  So keep peddlng the backward narrative.  You make youself look ignorant which, I suspect, is pretty damn accurate.

Mon, 01/25/2016 - 20:19 | 7095208 Buster Cherry
Buster Cherry's picture

We're very glad you made the right call.

Mon, 01/25/2016 - 12:45 | 7093130 cheech_wizard
cheech_wizard's picture

Even after having been a member here for over 5 years, it's apparent to even the most casual observer that you haven't learned a thing.

Standard Disclaimer: Do they make deodorant for anal cavities?

Mon, 01/25/2016 - 11:41 | 7092826 williambanzai7
williambanzai7's picture

Ted Cruz and Rick Perry will fix that.

Mon, 01/25/2016 - 13:11 | 7093270 upWising
upWising's picture

So Ted and Rick are on a road trip together with,  unbeknownst to them, an Okie as their Official Driver.  As the two of them sail down the highway jabbering, the Okie spies something suspicious up ahead and slams on the brakes.  Sure enough, there is a sheep with its head stuck in a fence.  The Okie, absolutely beside himself with anticipation, hops out of the car and "has his way with the sheep." 

Ambling back to the car with  a big grin, the Okie says to Ted and Rick, "It's y'all's turn."

Whereupon, both Rick and Ted walk over and stick their heads through the fence in imitation of the sheep.

 

 

Mon, 01/25/2016 - 11:42 | 7092833 Rich from PDT
Rich from PDT's picture

Don't worry, any day now the PPT's and the BTFD algos will push it right back up! Sick of this sh*t? Yeah, me too!!! Vote Trump.

Trump 2016!!!

All Trump supporters visit: www.ptdradio.com
www.powerthroughdiscipline.com

Mon, 01/25/2016 - 11:54 | 7092894 Dr. Engali
Dr. Engali's picture

Voting..., Lol, that's a good one. Almost as funny as the word "markets". 

Do NOT follow this link or you will be banned from the site!