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Is This The Chart That Has Bernanke So Worried?

Tyler Durden's picture





 

Earlier we described why it is clear that the Fed will need to print exponentially to fill the void of the crunch in consolidated credit money but why does Bernanke remain so hedged and guarded in his optimism when the market is tearing bears' arms-and-legs off and every talking head from here to Tokyo is claiming we have reached the nirvana of self-sustaining recovery (with, we note one such reconstituted deal-maker claiming "we don't need the Fed's help anyway" after the FOMC meeting). It's the data stupid. Simply put, as the chart below shows, the strength of trend of key US data over the past three months has been disappointing in aggregate (of course one can cherry pick BLS prints or sub-indices of ISM) and the worrying similarities between 2011 (when the same overshoot of optimism occurred) is only too real a problem for Ben and his buddies if they take away the Kool-Aid too early once again and let us drink our own stale sugar-free water. So the next time you hear some long-only asset manager or octogenarian wealth adviser say the 'data has been very strong' so buy-and-hold big-tech or dividend-payers, do them a favor and remind them of this chart and what happened last year.

 

 


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Thu, 03/15/2012 - 01:35 | Link to Comment infiniti
infiniti's picture

Will EUR/USD break below 1.30 tonight? Will AUD/JPY break 88.50? What will Ben do to counter any relative strength in the Federal Reserve Note?

Thu, 03/15/2012 - 01:40 | Link to Comment Harlequin001
Harlequin001's picture

Print money, give it to the banks, banks buy stocks et voila, stock markets rise.

Stock markets stop rising, investors sell and buy commodities, stock markets crash, commodities shoot and hyperinflation is just a simple matter of opinion away.

Fuck it, I'm buying gold.

Thu, 03/15/2012 - 01:49 | Link to Comment a growing concern
a growing concern's picture

Why don't we all band together and form ZH Bank?  Then we can get huge loans from the Fed at .5% and throw the cash into Treasuries at over 2%!  Or, we could put the Fed money into a bunch of gold bullion, buy insurance on the gold, and then have a "fishing accident" over the Marianas Trench with the gold on board.

 

So, how do we become a bank?  I'm looking at you, TDs.

Thu, 03/15/2012 - 02:12 | Link to Comment Manthong
Manthong's picture

Golly gee whiz..

I wonder if it is possible to figure out where QEII and then Operation Twist for here and Euro Swap for there happened on that chart.

All that Fake Fed Fiat to Feed a Fraud.  

Thu, 03/15/2012 - 02:24 | Link to Comment 4xaddict
4xaddict's picture

and the divergence between the ASX200 and the DAX30 and the divergence between the DOW and the Dow Transports and the divergence between Stocks and risk currencies and...... ad nauseum.

What hs been an orchestrated large fund move higher this year will also be an orchestrated move lower in correction.

I fail to see how anything can spook the market and create a wholesale stampede selloff when every major economy has been proven to immediately run their presses.

The only outliers out there at present are Japan going tits up in a ditch, China crashing, significant conflict in the ME or Weimar hyperinflation.

 

Given we are in an election year I think they are listed in order of likelihood until November at least. Large players know now that they are only going to make returns by coaxing money off the sidelines using oscillations rathen than an ECG style of price action and fool folks back into a buy n hold mentality. They have already been out shilling for the dividend paying stocks so it's obviously distribution season at the moment but Obama and the Bernanke are not going to let the Dow see 6k before an election. You can bank on that sans one of the possible exogenous events listed above.

Folks are going to quickly learn this year that by being a perma bear or perma bull you are being an ingnorant fuck tard. These markets are going to go sideways and the only thing that matters is timing.

Thu, 03/15/2012 - 02:59 | Link to Comment resurger
resurger's picture

going side ways!

they dont even allow a correction, any red is not allowed, why?

Stock Pockets are so fucking huge, which is indicated in the chart above!

a small selloff will dip this mother fucker 5% or 6%

Thu, 03/15/2012 - 04:09 | Link to Comment AldousHuxley
AldousHuxley's picture

poor bernank. inherited green span's fuck ups.

 

bernanke should do a gregg smith and resign from the Fed after massive deflation. banksters will be out of business, homes would be cheaper, and politicians will be run over by mad mobs who won't have the easy credit to hold them up to decency.

Thu, 03/15/2012 - 06:37 | Link to Comment Stoploss
Stoploss's picture

That smacks of capitalism. WE WILL HAVE NONE OF THAT.

Thu, 03/15/2012 - 08:08 | Link to Comment Chief KnocAHoma
Chief KnocAHoma's picture

Seems like I read somewhere there is $3.6 trillon hole to fill!

To quote the late great Slim Pickins - "Somebody go back and get a shit load of dimes!"

Thu, 03/15/2012 - 08:11 | Link to Comment espirit
espirit's picture

Even the basic fundamentals don't matter anymore, or analysis as evidenced by the ramp and run outside the upper bollinger band.

Rainbow skittles, kool-aid, hopium, ad nauseum.

Gimme that blue pill.

Thu, 03/15/2012 - 02:25 | Link to Comment spiral_eyes
spiral_eyes's picture

s&p is decoupling from reality. it's the new normal! things are different this time! central planning triumphs again!

or, not.

Thu, 03/15/2012 - 03:38 | Link to Comment Likstane
Likstane's picture

You shouldn't joke about having a fishing "accident."  There are quite a large number of people here on ZH who really have had their stashes fall into the ocean or sea or river or lake.  I would hope someone who is at least a little familiar with the ZH crowd would be more sensitive regarding their folly.  I myself having experienced such misfortune am not amused with your callous indifference.

 

 

Thu, 03/15/2012 - 03:43 | Link to Comment Likstane
Likstane's picture

I almost forgot; you are corrupt.

Thu, 03/15/2012 - 04:06 | Link to Comment andrewp111
andrewp111's picture

Your "fishing accident" idea reminds me of the story of the Brit who took his billions with him (and cheated Her Majesty's Taxman) by having his coffin made of solid platinum and then buried at sea over the Marianas Trench.

Thu, 03/15/2012 - 04:34 | Link to Comment mortiis
mortiis's picture

seriously... how do we start our own bank?

Thu, 03/15/2012 - 07:54 | Link to Comment Ruffcut
Ruffcut's picture

Go to bed with the fed, buy abunch of politicians and forego any morals you have or ever had.

Kennedy didn't go to bed with fed and got shot in the head. splattered.

Maybe a zeroheadge credit union, but more regulations need to be heeded and would be a tuff and ruff road. Dipshit dodd and buttfuck barney bill only applies to peons.

Thu, 03/15/2012 - 08:26 | Link to Comment Chief KnocAHoma
Chief KnocAHoma's picture

Come on... the FED didn't kill Kennedy... the Honorable Arlen Spector told us it was that magic bullet.

Surely he wouldn't lie about something as important as that.

Fri, 03/16/2012 - 15:49 | Link to Comment mkkby
mkkby's picture

Just being a bank won't do.  You have to be a prinary dealer, which requires Rothschild ownership.  Nice try though.

Thu, 03/15/2012 - 02:24 | Link to Comment spiral_eyes
spiral_eyes's picture

inflation? what inflation? 

Thu, 03/15/2012 - 02:45 | Link to Comment Hopeless for Change
Hopeless for Change's picture

Morningstar?  

Thu, 03/15/2012 - 02:17 | Link to Comment vast-dom
vast-dom's picture

We are still bothering to look at stinkin charts like reality and funduhmentals have anything to do with hopium delusion fueled markets? Come on Ty! All is farce. The center held...for now...

Thu, 03/15/2012 - 01:37 | Link to Comment JohnSilent
JohnSilent's picture

Good things come to those who wait...  unless you're Buffett with a port of sold naked puts.

Thu, 03/15/2012 - 01:41 | Link to Comment nestle
nestle's picture

who cares about fundamental!?

We got AAPL, CB, and big daddy FED (waiting for his term to juice)

Shit is going to the Moon!

Newt will be our governor there!!

Thu, 03/15/2012 - 01:49 | Link to Comment urbanelf
urbanelf's picture

OK, I'll be the first to admit that I'm stupid.  What is "US Trend Data Index(1)"?

Thu, 03/15/2012 - 01:51 | Link to Comment a growing concern
a growing concern's picture

Let's just say it's representative of "reality".  And then we'll just say that S&P 500 is representative of "Icharus".  All clear?

Thu, 03/15/2012 - 08:30 | Link to Comment JPM Hater001
JPM Hater001's picture

Well, let's say this Twinkie represents the normal amount of psychokinetic energy in the New York area. Based on this morning's sample, it would be a Twinkie... thirty-five feet long, weighing approximately six hundred pounds.

Thu, 03/15/2012 - 21:36 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

#winning - if only there was a +10 vote button. That really is one

Thu, 03/15/2012 - 01:53 | Link to Comment ebworthen
ebworthen's picture

Yes, the Wells Fargo Advisors and "now is the time to invest" commercials are going viral on T.V. and online.

I've been hearing the "take out a home or auto loan today" commercials too.

Reflating the bubble part deux, tres, who knows - just as long as they get more retail money in there so they can re-distribute wealth all over again.

Even if a large % of the retirees, pensioners, and retail crowd go to bonds and munis CONgress will wait until after the election and slip in some dandy new taxes and withdrawal penalties to make certain it doesn't leave the market prison.

Thu, 03/15/2012 - 05:15 | Link to Comment The Navigator
The Navigator's picture

You got that right - there's no place to put your money to make money, pay the taxes on the growth, and come out ahead.

PM's, yes - but risky when you consider the guvmint may soon shut off that avenue (i.e. register to buy or sell PM's)

Stock market casino - not with my money.

Bonds - hard to decide, US @ 0% or Greek bonds @ 1,000+%, both about the same risk, and liklihood of seeing returns abou the same (0%)

For now, just PM's in a safe, guarded by dogs and shotguns, hoping no new legistlation requiring registration of the PM's (dogs and shotguns require registration, sorry for the non-compliance of those 2 on my part).

Thu, 03/15/2012 - 01:53 | Link to Comment q99x2
q99x2's picture

The Fed upgraded its PPT since last year. We may have further to go. Or worse it might not matter at all because the bankers are going in for the kill this time.

Thu, 03/15/2012 - 01:53 | Link to Comment Essential Nexus
Essential Nexus's picture

Does anyone have any suggestions for what website I could go to in order to get the knowledge to get the full benefit from these articles?  This article wasn't tough, but some others get complicated in the first sentence and show indexes I've never heard of.

Thank you for your help.

Thu, 03/15/2012 - 02:03 | Link to Comment Tuffmug
Tuffmug's picture

Just keep reading and you'll catch up in no time. There are many bright minds posting here and explaining things. Also might try a few of the Zero Hedge reads on the left. My fav is Jesse and he has daily links to some very good articles and blog posts.

Thu, 03/15/2012 - 02:14 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

you signed up six weeks ago and you've been posting about 1 week

you say this about yourself: Just trying to learn as much as I can before investing.

you're not spending enuf time and focus here;  and you can't be in a hurry;  new ideas take time to be chewed and digested

what the hell you do you with all your money i don't care;  just try to hang onto it until you learn more about it b/c "money doesn't come with directions"

you can begin here, but this isn't for beginners.  this is for fighters

so either get in or get out, but get off the fuking fence!

Thu, 03/15/2012 - 03:08 | Link to Comment Deo vindice
Deo vindice's picture

Well one thing Essential just learned ...

You better have thick skin if you ask a question.

Thu, 03/15/2012 - 04:12 | Link to Comment msamour
msamour's picture

I've been reading ZH for 3 years, but I just got an account last year so I could reply to some Jerk. I am probably one of many that are sitting on the fence. It is quite large, and comfortable at this point in time. I don't have any money to invest, so I invest in knowledge, supplies, and ammunition. When the time comes, I won't need money, or a ROI. I will put my neighbours in my freezer, and I'll live off of that. From where I am sitting on the fence, you are looking pretty tasty. Fight club indeed...

Thu, 03/15/2012 - 09:53 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

L0L

another toy-boy pretending to have lotsa "ammo"

Thu, 03/15/2012 - 05:25 | Link to Comment The Navigator
The Navigator's picture

 

Fuck the fight club bull shit - I come here to learn; I'm trying to learn what Tyler is posting and what ZH'ers are saying about it. Most times, I learn more reading the comments.

So lighten up - we all started here with Zero Knowledge.

 

Thu, 03/15/2012 - 10:01 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

no, fuk YOU!

you are talking outa yer ass, as usual;  we are born w/ zer0 knowledge;  here, yes, some can learn if they have not been taught not to, which is far more prevalent than most suspect

since you don't understand the psychological dynamics of fightClub and why they are important, you little cunts just turn this place into a pre-school or la social venue to kiss tyler's ass and pretend you are "learning"

but for some shitforbrained moron to ask where else he can go to understand tyler et al is just weak trolling, i don't give a fuk what 300 trolls "think"

or you either, you puddin-headed retard!

Fri, 03/16/2012 - 13:18 | Link to Comment PrinceDraxx
PrinceDraxx's picture

Slewie is dumber than when he first came here. What a troll he is today.

Fri, 03/16/2012 - 16:01 | Link to Comment mkkby
mkkby's picture

No, he's not.  I'll be a LITTLE nicer to the dumb ass newbies. 

Do your own research.  You should be able to google anything and get answers.  There is a long list of blogs in the left hand margin.  If you come here claiming to want to learn, but expecting to be spoon fed like a child, you will get flamed.  And rightly so. 

Grow the fuck up.  Post questions and comments when you can be intelligent, not just helpless.

Thu, 03/15/2012 - 07:21 | Link to Comment Dr. Engali
Dr. Engali's picture

Hey Slewie, if you remember correctly in Fight Club they where also a community that helped each other. If somebody needs help understanding then it is incumbent upon us to help and educate. What they do with that is then up to them. I posted the index composites below.

Thu, 03/15/2012 - 10:52 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

go play with million-dollarCunt, you asswipe troll

how the fuk are ya gonna "help" somebody here when you won't lift a finger to protect the site from string-jumpers, but instead encourage their "behavior"?

this twerp was asking where ELSE he could go to 'get up to speed'

so i gave him the required gut-check; do it here or don't let the door hit you in the ass on the way out

this, of course, makes gutless wonders appear like cockroaches when the lights go down, with testimonials about how "smart" they are getting by "blogging" here and being nice to the trolls, airheads, and disinfo types like yourself who are quick to post "data" and then sneer at lesser beings who do not worship mammon as "successfully" as yourself

personally, i tell these children here to learn to stand on their own two feet and think for themselves;  then i push them on their fat asses

and to stop pretending that "making money" is proof that one can do so

more frequently it indocates that you can not do so

if a man hasn't learned to stand as a man, he needs to be encouraged to get offa momma's backyard fence and start trusting his own perceptions and thought;  no matter how fuked up he has "learned to be"

since very few appreciate the "psychodynamics of selfhood" which is the actual "story" of  "fightClub", most simply have learned to pretend they are still capable of "learning" or they know how to "teach" others, to "help" them

so, i tried to wake the kid up, docSvengali;  tell him he's in charge of himself, win or lose;  he doesn't need more ideas from "elsewhere" to try to pack or re-pack between his ears at this point, whether you can see that or not

other, while junking me, are kind enuf to write a few words to coddle the misshapen thing

fuking douchnozzle morons!

Thu, 03/15/2012 - 11:28 | Link to Comment Ar-Pharazôn
Ar-Pharazôn's picture

what an arrogant idiot you are

Thu, 03/15/2012 - 11:57 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

here, styooooipid: 

Does anyone have any suggestions for what website I could go to in order to get the knowledge to get the full benefit from these articles?  This article wasn't tough, but some others get complicated in the first sentence and show indexes I've never heard of.

Thank you for your help.

this is the guy's actual post, ok, mrNew&Knows-it-all

YOU take some TIME and answer him according to what YOU think he might actually need, here, ok?

we eat shitheads like you for breakfast and spit out your ancient "pharonic" bones as tasteless and without marrow, btw

but, please, offer something to the other new asswipe, ok?

that FACT that you have nothing to offer hasn't stopped you, yet

and, btw, how do YOU plan on dealing with that little, tiny, yet obvious deficiency?  not having anything to offer here?  why don't you just leave, too?

re-read you own posts on the way out, toy-boy!  Ar-Pharazôn | ZeroHedge

here's one from 3 hours ago!: 

maybe a fuck! sorry ;)

 chf is for Switzerland and nobody else :P

what a clueless fuking moronic shitheaded little toy-boy asswipe troll!

Fri, 03/16/2012 - 13:15 | Link to Comment PrinceDraxx
PrinceDraxx's picture

Slewie, shut the fuck up! You are acting like a gold plated douche bag today. Sit in the corner, beat your meat or whatever it is that you do when not suffering from diarrhea of the mouth transmitted through your keyboard.

Thu, 03/15/2012 - 03:28 | Link to Comment Better_late_tha...
Better_late_than_never's picture

Just go buy silver bullion and don't read this stuff. It will give you nightmares. Why, oh why, didn't I take the blue pill. 

Thu, 03/15/2012 - 03:32 | Link to Comment UP Forester
UP Forester's picture

Cuz then the pink slime you're eating would still taste like steak, and not pink slime.  Or chicken.

Thu, 03/15/2012 - 07:11 | Link to Comment Dr. Engali
Dr. Engali's picture

Do you know what tasty wheat tastes like?

Thu, 03/15/2012 - 11:19 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

he can't think for himself, yet

he doesn't need to be told what to do, as he wonders what to do, even where to turn

he needs to be allowed (yes allowed!) to trust himself, even to make mistakes, which he will then begin to learn from

it is like a styooopid game show where he can take a first step in any direction

but he must choose which step to take, himself

this is, apparently, a completely new idea to many people?  well, ok;  but please consider it, carefully, if you have not done so before...

given most "upbringing", this is a revolutionary idea to many highly-conditioned mommy-minds

Thu, 03/15/2012 - 07:14 | Link to Comment Dr. Engali
Dr. Engali's picture

Investopedia is a good place to help you make sense of components and definitions.

Thu, 03/15/2012 - 01:55 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

where the hell did all this unfudged data come from?

securiteee'!!!

Thu, 03/15/2012 - 02:00 | Link to Comment chump666
chump666's picture

ZH  just topped it with this post.

wow...

Thu, 03/15/2012 - 02:03 | Link to Comment resurger
resurger's picture

 

 

Dee Kuha' Pole

Thu, 03/15/2012 - 02:05 | Link to Comment DeLoong
DeLoong's picture

Where does the US data trend index comes from? I tried google it and it seems that US data trend index is undefined.

Thu, 03/15/2012 - 02:22 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

tyler makes it up while exhausting cocktail servers

if he starts drawing fire, he has diapson publish it...

Thu, 03/15/2012 - 02:18 | Link to Comment FXPortent
FXPortent's picture

Buy. Buy. Buy

I wonder how long it will take for this sentiment to be derailed again.

Will Europe be the suspect this time around or a new suspect like Japan?

I'm amazed how this train of bulls keeps going with gas in NY at practically mid $4 and rising (every week or so I might add) and that's with decreased US demand too.

I'm scratching my head at the moment.

Thu, 03/15/2012 - 02:31 | Link to Comment 4xaddict
4xaddict's picture

Gas prices didn't derail things till 150/bbl mark in 2008 and there was no army of printers across the globe waiting to devalue any losses. Being a bear in this market is an expensive game. Trading with the printers but maintaining a very cautious attitude is the only way to make a buck. Armageddon may come however with stops in place you're fine unless your risk management is non existent.

People will make more money sitting aside at moments like this that being in the market at all. If we wait for the sell offs and then jump back in stream with the QE current you can't lose unless of course you care about the purchasing power of your currency :)

Thu, 03/15/2012 - 02:24 | Link to Comment bennyboy43
bennyboy43's picture

I have the same question - what on earth is the US Data Trend Index?? lol

Thu, 03/15/2012 - 03:02 | Link to Comment bluebare
bluebare's picture

(1)

Thu, 03/15/2012 - 03:11 | Link to Comment Deo vindice
Deo vindice's picture

My guess (after deep meditative thought and philosophical ponderings) is that it is an Index that purports to show the trends of data in the U.S.

Or not.

Thu, 03/15/2012 - 07:01 | Link to Comment lewy14
lewy14's picture

Exactly.

I mean Tyler says do them a favor and remind them of this chart and what happened last year,  except there is no source given (not even the customary "Source: Zero Hedge" attribution on house charts).

Google reveals exactly one document for "US Data Trend Index" - this post.

Pray - what exactly would I be referring some kind octogenarian too, exactly.

Some of us not only can read, Tyler. We do.

Thu, 03/15/2012 - 03:09 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

 

 

                       http://bible.cc/genesis/2-17.htm

                                            0

               http://www.youtube.com/watch?v=qdSaYHAk3jc

 

                                             .

                                            ...

                                          .......

                                       Apple 666

                                            to

                                        S&P 666  

                                           and  

                                        Dow 6666  

                                       ................

                                       .................

               http://www.raidersnewsupdate.com/washmoncirc.jpg 

                   http://www.youtube.com/watch?v=daCOlJ3hr1g

 

Thu, 03/15/2012 - 03:24 | Link to Comment 4xaddict
4xaddict's picture

quick someone get a towel Dan Brown is explosively ejaculating.

omfg

6660+6 = 6666

6666 is the square root of the number of FAILS that represent when plied on top of each other the scale of the fucking load of shit you are talking.

Thu, 03/15/2012 - 04:00 | Link to Comment StychoKiller
StychoKiller's picture

2 X 4 X 666 = The lumber of the beast!

Thu, 03/15/2012 - 06:20 | Link to Comment DontNeedNoStink...
DontNeedNoStinkinUsername's picture

4 x 2 (we say "4 x 2" in New Zealand - oh, actually, its 100mm x 50mm) x 666 = the lumber of the Beast . . Very droll, but I like it !!

Thu, 03/15/2012 - 08:35 | Link to Comment russo
russo's picture

668 the neighbour of the beast.

Thu, 03/15/2012 - 05:31 | Link to Comment BlackholeDivestment
BlackholeDivestment's picture

...is he from the tribe of Dan? Lol. You will have to forgive me, I have not read any of Mr. Brown's fiction.

    ....and why are you freaked out by shadow of ''S&P 666'' death ...to the ''Apple 666'' peak of insanity? I'm not a ''market maker''. Lol, just crazy. Oh, crazy me, you are hysterical because of the big penis? LMAO. What? you work for Carlyle Group or something? Is that you David Rubenstein? Awe, didn't mean to freak you out, well, yes I did. Lol. I did not build the thing, but it's not as if the quake was not well timed, after Rosemary's Baby's White House ''raise the debt'' ceiling speech. LMAO. http://www.youtube.com/watch?feature=player_embedded&v=L7vbsqID5JE 

...I did not place the 2012 stars back in the same order as they were in the sky during the days of Noah either. Lol 

http://www.youtube.com/watch?v=busvHBkT-6U&feature=related 

http://visionsoftomorrow2012.blogspot.com/2012/02/riddle-in-stone-time-and-space.html 

Thu, 03/15/2012 - 03:29 | Link to Comment zebra
zebra's picture

and the divergency between US government and Americans...

 

Thu, 03/15/2012 - 03:52 | Link to Comment greensnacks
greensnacks's picture

As seen on CNBC.

Thu, 03/15/2012 - 08:20 | Link to Comment espirit
espirit's picture

CNBS.

There, fixed it.

Thu, 03/15/2012 - 04:16 | Link to Comment cnhedge
cnhedge's picture

 

This is why Fed should ease further.

 

http://www.cnhedge.com/thread-3032-1-1.html

http://www.jinrongbaike.com/

 

Fri, 03/16/2012 - 12:45 | Link to Comment PrinceDraxx
PrinceDraxx's picture

The Fed should ease further because I'm still long on mReits. Nuff said. lol

Thu, 03/15/2012 - 04:45 | Link to Comment CommonSense89
CommonSense89's picture

what the hell is the US Data Trend Index. I get it, it charts aggregate economic indicators or something..BUT TYLER, WHAT THE HELL IS IT?!

Thu, 03/15/2012 - 07:09 | Link to Comment Dr. Engali
Dr. Engali's picture

The components of the pretty chart:

1)Average weekly hours (manufacturing) - Adjustments to the working hours of existing employees are usually made in advance of new hires or layoffs, which is why the measure of average weekly hours is a leading indicator for changes in unemployment.
2)Average weekly jobless claims for unemployment insurance - The CB reverses the value of this component from positive to negative because a positive reading indicates a loss in jobs. The initial jobless-claims data is more sensitive to business conditions than other measures of unemployment, and as such leads the monthly unemployment data released by the Department of Labor.
3)Manufacturer's new orders for consumer goods/materials - This component is considered a leading indicator because increases in new orders for consumer goods and materials usually mean positive changes in actual production. The new orders decrease inventory and contribute to unfilled orders, a precursor to future revenue.
Vendor performance (slower deliveries diffusion index) - This component measures the time it takes to deliver orders to industrial companies. Vendor performance leads the business cycle because an increase in delivery time can indicate rising demand for manufacturing supplies. Vendor performance is measured by a monthly survey from the National 4)Association of Purchasing Managers (NAPM). This diffusion index measures one-half of the respondents reporting no change and all respondents reporting slower deliveries.
5)Manufacturer's new orders for non-defense capital goods - As stated above, new orders lead the business cycle because increases in orders usually mean positive changes in actual production and perhaps rising demand. This measure is the producer's counterpart of new orders for consumer goods/materials component (#3).
6)Building permits for new private housing units - Building permits mean future construction, and construction moves ahead of other types of production, making this a leading indicator.
7)The Standard & Poor's 500 stock index - The S&P 500 is considered a leading indicator because changes in stock prices reflect investor's expectations for the future of the economy and interest rates. The S&P 500 is a good measure of stock price as it incorporates the 500 largest companies in the United States.
8)Money Supply (M2) - The money supply measures demand deposits, traveler's checks, savings deposits, currency, money market accounts and small-denomination time deposits. Here, M2 is adjusted for inflation by means of the deflator published by the federal government in the GDP report. Bank lending, a factor contributing to account deposits, usually declines when inflation increases faster than the money supply, which can make economic expansion more difficult. Thus, an increase in demand deposits will indicate expectations that inflation will rise, resulting in a decrease in bank lending and an increase in savings.
Interest rate spread (10-year Treasury vs. Federal Funds target) - The interest rate spread is often referred to as the yield curve and implies the expected direction of short-, medium- and long-term interest rates. 9)Changes in the yield curve have been the most accurate predictors of downturns in the economic cycle. This is particularly true when the curve becomes inverted, that is, when the longer-term returns are expected to be less than the short rates.
10)Index of consumer expectations - This is the only component of the leading indicators that is based solely on expectations. This component leads the business cycle because consumer expectations can indicate future consumer spending or tightening. The data for this component comes from the University of Michigan's Survey Research Center, and is released once a month.

Thu, 03/15/2012 - 07:11 | Link to Comment Yardfarmer
Yardfarmer's picture

much obliged.

Thu, 03/15/2012 - 07:23 | Link to Comment lewy14
lewy14's picture

Indeed - thanks very much.

If I might ask - politely - where did you get this information?

Thu, 03/15/2012 - 07:34 | Link to Comment Dr. Engali
Dr. Engali's picture

I got it from investopedia.

Thu, 03/15/2012 - 08:41 | Link to Comment RomeoFayette
RomeoFayette's picture

I think Tyler owes us a link on this one.  I can't find anything on the US Data Trend Index; not on google, bing, or {gasp} Siri!?

Dr. Engali: would you be so inclined please?

Thu, 03/15/2012 - 12:04 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

do ya? 

tyler better pay up, huh?  if he owes you for writing this piece? 

what a buncha little twats here, today!

i hope you understood the article in spite of what you trolls are up to, here, and you do realize this is the second YEAR he has tried to show people something w/ this divergence

you do realize that, don't you?

Thu, 03/15/2012 - 09:58 | Link to Comment andyupnorth
andyupnorth's picture

It's odd that #7 - S&P500 is part of the US Data Trend Index, and this Index is compared to the S&P500.  Partially circular.

Also, what is the weighting of each of the 10 components? Or the formula?

A link would be nice.

Thu, 03/15/2012 - 06:54 | Link to Comment Stoploss
Stoploss's picture

Before you can understand pretty color chart, you first must master this site...

 

crayola.com

Thu, 03/15/2012 - 10:06 | Link to Comment Schmuck Raker
Schmuck Raker's picture

Thanks for the link.

:)

Thu, 03/15/2012 - 07:04 | Link to Comment BandGap
BandGap's picture

One of these days the cycle isn't going to head north again after a dip. Could be the one coming up, actually. And when we see the US Data Trend Index continue downward, that is when they release the Kraken.

Thu, 03/15/2012 - 07:58 | Link to Comment Jacque Itch
Jacque Itch's picture

My Bro works at a public technology company.  He called last night and said they are prepping for layoffs immediately.  I'm not talking small stuff either.  His dept alone is looking at going from 98 people to 73.   That's 25% folks. 

It's coming and its coming now and it's coming big! 

Thu, 03/15/2012 - 08:12 | Link to Comment junkyardjack
junkyardjack's picture

Layoffs are bullish now.  Who needs extra capacity to be able to explore new ideas?  Cut the business to the bone and run the well dry

Thu, 03/15/2012 - 08:03 | Link to Comment Jannn
Jannn's picture

This is why gold tumbled when Bernanke opened his mouth end Feb.  http://comments.cftc.gov/PublicComments/ViewComment.aspx?id=57019&Search...

Thu, 03/15/2012 - 08:08 | Link to Comment Dorky
Dorky's picture

This is the first time I come upon such a thing called "US Data Trend Index".

Thu, 03/15/2012 - 08:16 | Link to Comment DontShootTheMes...
DontShootTheMessenger's picture

How can this charade last for so long?

The fat lady's singin' her song.

                      It's the future I fear,

                      'Cause to me it's quite clear,

                      That O's got his lips on Ben's dong.

Thu, 03/15/2012 - 11:21 | Link to Comment Alpha Monkey
Alpha Monkey's picture

"Ben's tentacle" is more like it.

Fri, 03/16/2012 - 11:31 | Link to Comment innertrader
innertrader's picture

It's ALL about politics and this is the "re-elect oBama" year!  Nothing else matters!  All the numbers being put out by the FED agencies will ALL be corrected late in the day, the first Friday after the election.

Technically, this is the 5th (and last) wave of the rally after the collaspe.  Just like last year, it's all lining up perfectly!

I just love it!

Sun, 03/18/2012 - 10:34 | Link to Comment veyron
veyron's picture

Can you change the img tags so that they open up in a new window/tab instead of clobbering the current page?  Having to hit the back button gets old real quickly

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