Chart Of The Day: Garbage Shall Set You Free... From GDP Manipulation

Tyler Durden's picture

It is no secret that just like the Achilles heel of China's goalseeked GDP number is the country's ever declining electric output, so the best coincident indicator of what is really going on behind the scenes with US GDP is railcar loadings of waste and scrap: i.e., garbage. As Bloomberg explains: "One closely watched economic indicator is the rail car loads of waste and scrap materials." Logically: "The more we demand, the more waste is generated by that production." In other words, if one is seeking validation that numbers reported by the BEA are even remotely credible, the best place to turn to is railcar loads of garbage. However, not surprisingly, such validation will not be found in the actual data. As the chart of the day, courtesy of Bloomberg Brief, demonstrates, if garbage is the benchmark, the US economy is now contracting faster than it has at any one point in the past 3 years and is on pace to recreate the economic collapse last seen after the Lehman bankruptcy. Perhaps another reason why central planners have latched on to stock markets and will just not let go.

Some more from Bloomberg:

Two railroad companies made mention of this weakness. Norfolk Southern talked of “reduced shipments of municipal solid waste,” while CSX claimed “aggregate and waste shipments will remain challenged.” Waste Management talked about improving volumes, but said it would remain soft while residential business is still negative.

One wonders just what would happen if at some point reality is once again allowed to peek into and set the "market" prices of assets. Sadly, if the JPM CIO's precedent is any indication, where the endless push on IG9 actually meant keeping spreads for single name intrinsic credits far tighter that where they should have been (the same as what the ES and SPY are doing with all the intrinsic stocks) this will never again be allowed to happen.