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Charting Premature Jubilation - The US Economic Growth Momentum Is Now Over

Tyler Durden's picture




 

It is funny to hear the talking heads preface virtually every bullish statement with "the US economic data is getting better." It's funny because it's wrong. We have been tracking economic data based on our universe of indicators and as of today we have seen a miss rate of about 80%. And now, Deutsche Bank has joined us in keeping track of economic beats and misses, with their own universe of 31 economic indicators. The results are shown below and the verdict is in: the US economy has officially turned the corner... lower, now that the seasonally adjusted boost from a record warm winter fades and becomes an actual drag (not to mention the fading of the $2 trillion in central bank liquidity).

From DB:

As can be seen in the chart above, using this basket the beat:miss ratio for January was a fairly solid 55%:42% (3% in line) before improving to a strong 65%:35% in February. March, however, is seeing a rise in misses with the ratio now running at 37%:56% (7% in line) with 27 out of 31 releases now in. Regional manufacturing surveys and some housing related data are leading the misses in March. Indeed in February we saw all regional surveys (NY, Philly,  Richmond, Chicago Fed, Kansas, Dallas, Chicago PMI) better relative to market consensus. We will get the Kansas Fed data today and Chicago PMI tomorrow, but we have so far seen misses in Richmond, Chicago and Dallas Fed surveys this month. In terms of the housing market, existing home sales, the house price index, pending home sales, and new home sales all disappointed in March while all of these (except for new home sales) were better than expected in February...

Remember: we have been saying since December that 2012 is a carbon copy of 2011. As a reminder the market peaked in April 2011 after a virtually identical diagonal ramp higher, only to be followed by the August debt ceiling fiasco which sent stocks to their lows. And as we showed yesterday, this year we expect the debt ceiling to be breached in mid to late September. Just in time for the elections.

 

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Thu, 03/29/2012 - 10:21 | 2300439 kito
Thu, 03/29/2012 - 10:26 | 2300452 SilverIsKing
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Green shoots as far as the eye can see although when one looks through a pair of binoculars, all they can see is a steaming pile of dog shit.  Funny how that works.

Thu, 03/29/2012 - 10:34 | 2300492 Dr. Richard Head
Dr. Richard Head's picture

From those green shoots comes peas.  Eat your fucking peas!

Thu, 03/29/2012 - 10:39 | 2300515 Fukushima Sam
Fukushima Sam's picture

If this warm and dry weather continues then it seems likely we could be looking at real problems come harvest time...

Thu, 03/29/2012 - 10:47 | 2300537 Dr. Richard Head
Dr. Richard Head's picture

This hit/miss index is showing a frost is taking over those green shoots as well.

Thu, 03/29/2012 - 10:59 | 2300583 rosiescenario
rosiescenario's picture

"From the dung heap the lily grows".

Thu, 03/29/2012 - 20:34 | 2302385 RussellChester8
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my friend's sister makes $74/hr on the computer. She has been out of a job for seven months but last month her check was $17871 just working on the computer for a few hours. Read more on this site .... http://bit.ly/wYpMrv

Thu, 03/29/2012 - 10:28 | 2300464 LawsofPhysics
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"Fed economist to soon meet with an unfortunate and untimely end" will be the next headline.

Thu, 03/29/2012 - 11:05 | 2300610 AN0NYM0US
AN0NYM0US's picture

here is the actual presentation from Emmons of the St Louis Fed on Mortgage Debt

 

http://www.mortgagebankers.org/files/Conferences/2012/Servicing/Servicin...

Thu, 03/29/2012 - 10:22 | 2300443 LawsofPhysics
LawsofPhysics's picture

A comparison of volume between 2011 and 2012 will be useful.  More HFT and Fed/PD traders in "control" now.

Thu, 03/29/2012 - 11:00 | 2300584 DeadFred
DeadFred's picture

All the index levels are now sitting on their trend lines. Each time this has happened in the last few months 'something' has magically appeared to ramp things back up. Will this time be different? The next 30 hours will tell. It has to break sometime, but when?

Thu, 03/29/2012 - 10:23 | 2300445 BudFox2012
BudFox2012's picture

You know things are getting bad when they lie on every indicator yet still miss their expections...

Thu, 03/29/2012 - 10:34 | 2300491 chunga
chunga's picture

LOL

...even their estimates on how wrong they always are aren't ever right.

Thu, 03/29/2012 - 11:02 | 2300591 tekhneek
tekhneek's picture

Fuckin' A right.

When you determine the score how bad do you have to suck at the game to get it wrong, time after time again?

Thu, 03/29/2012 - 11:10 | 2300632 MachoMan
MachoMan's picture

close enough for government work

Thu, 03/29/2012 - 10:25 | 2300448 ejmoosa
ejmoosa's picture

In 2009, year over year profits rose 6.29%

In 2010, year over year profits had risen 32.17%

In 2011, that rate of improvement was 7.91%.

 

Draw your own conclusions about whether or not the economy is getting stronger.

 

Thu, 03/29/2012 - 10:33 | 2300484 tmosley
tmosley's picture

And how do you think you know that?

Thu, 03/29/2012 - 11:03 | 2300593 ejmoosa
ejmoosa's picture

How?

 

Go to the BEA Report, and do a little math....

 

http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=43&ViewS...

Thu, 03/29/2012 - 12:30 | 2300940 toady
toady's picture

.gov says it all....

How can you tell if a politician is lying?

His lips are moving.

Or he's posting a paper on a .gov site!

Thu, 03/29/2012 - 10:54 | 2300548 Quinvarius
Quinvarius's picture

No they didn't.  When the government gives a bank money, or overpays a bank for worthless assets, it isn't a profit.

Thu, 03/29/2012 - 10:25 | 2300449 lolmao500
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Romney : closing factories and laying off thousands is funny

http://livewire.talkingpointsmemo.com/entries/romney-laughingly-recalls-...

At the outset of the call, Romney said he has some connections to Wisconsin.

“One of most humorous I think relates to my father. You may remember my father, George Romney, was president of an automobile company called American Motors … They had a factory in Michigan, and they had a factory in Kenosha, Wisconsin, and another one in Milwaukee, Wisconsin,” said Romney. “And as the president of the company he decided to close the factory in Michigan and move all the production to Wisconsin. Now later he decided to run for governor of Michigan and so you can imagine that having closed the factory and moved all the production to Wisconsin was a very sensitive issue to him, for his campaign.”

Romney said he recalled a parade in which the school band marching with his father’s campaign only knew the Wisconsin fight song, not the Michigan song.

“So every time they would start playing ‘On Wisconsin, on Wisconsin,’ my dad’s political people would jump up and down and try to get them to stop, because they didn’t want people in Michigan to be reminded that my dad had moved production to Wisconsin,” said Romney, laughing.

What a piece of shit.

Thu, 03/29/2012 - 10:33 | 2300485 Dr. Engali
Dr. Engali's picture

Looks like a Romney lover junked you. The issue that you point out is why Obummer is going to be reelected if Romney is the nominee. The "Mr. Wallstreet" will catch up with him.

Thu, 03/29/2012 - 10:36 | 2300502 lolmao500
lolmao500's picture

Obama and Romney are total trash and shouldn't be elected.

Thu, 03/29/2012 - 10:42 | 2300521 Dr. Engali
Dr. Engali's picture

   +1

Thu, 03/29/2012 - 10:48 | 2300539 Things that go bump
Things that go bump's picture

Yes, but which piece of trash do you prefer?

Thu, 03/29/2012 - 11:10 | 2300635 lolmao500
lolmao500's picture

Whoever people hate the most.

Thu, 03/29/2012 - 10:42 | 2300523 Dr. Richard Head
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Regardless of Newt Romtorum or Obama residing in the Oval Orifice Office, the story will remain the same.  Debt will expand exponentially, wars will be fought over resources, and the assmuncher media will do their best to split the population into arguing over red team/blue team, white/black, poor/rich, welfare/tax payer and the vast majority will eat it up or ignore it all together.  The story remains the same. 

Thu, 03/29/2012 - 10:47 | 2300536 Dr. Engali
Dr. Engali's picture

You're preaching to the choir brother. The people who need conversion are the reds and the blues.

Thu, 03/29/2012 - 10:49 | 2300543 Dr. Richard Head
Dr. Richard Head's picture

After over 5 years of trying to preaching to the red and blue team members, I have decided that giving myself my own root canals is much more pleasurable and actually gives me quantifiable results.

The blue teams tell me, "There is this pile of money...." Red team tells me "The debt is a problem unless we need to bomb brown people...." 

Thu, 03/29/2012 - 10:58 | 2300578 Dr. Engali
Dr. Engali's picture

I feel your pain there. The only caveat I have is that both sides are okay with bombing brown people...as long as it is their side dropping the bombs.

Thu, 03/29/2012 - 13:17 | 2301096 OpenThePodBayDoorHAL
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Actually the US wars are not about resources any more, as Paul Craig Roberts points out. It used to be that empires went to war to extract resources from other countries. But the US did not win any resources from Iraq or Afghanistan. The resource that was won, bigtime, was taxpayer money flowing to military/corporate coffers. It's not required to "win" a war like that...just to keep it going.

http://www.counterpunch.org/2012/03/27/how-the-new-american-empire-reall...

Thu, 03/29/2012 - 10:57 | 2300569 Quinvarius
Quinvarius's picture

I am sure the only song they new was the Wisconsin fight song and that was not being done purposely.

Thu, 03/29/2012 - 10:36 | 2300451 DormRoom
DormRoom's picture

US GDP growth is not strong enough to pay off debt in the long term.  Fed cannot print before Israel bombs Iran.  QE stimulus before this event will be offset by oil spikes; also adding accelerant to oil speculation.

 

Will the Fed wait on QE until after Isreal bombs Iran?

 

Also, another QE may push USDJPY below 75, and ruin Japan's economy.  Japan goes, global economy goes.

 

Debt Jubilee.  War with China coming within 5 years.

 

 

Thu, 03/29/2012 - 11:13 | 2300643 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

DR,

"another QE may push USDJPY below 75, and ruin Japan's economy"

Japan's economy (post Fukushima) and soon ours are already ruined. The twitching does not mean were still alive.

"War with China coming within 5 years" We have been at war with Red China (an economic war) since we started "trading" with them. I assume you are talking about a shooting war? Just wait until the Zionists attack Iran...

Thu, 03/29/2012 - 10:26 | 2300454 Dr. Engali
Dr. Engali's picture

Looks like old Benny better start floating some rumors either that or Obummer needs to launch his distraction.

Thu, 03/29/2012 - 10:29 | 2300465 stickyfingers
stickyfingers's picture

Many earnings estimates that "beat", were on lower forecasts.

Thu, 03/29/2012 - 10:38 | 2300510 Ahwooga
Ahwooga's picture

Yep, I would be very interested in a comparison chart showing beat/miss ratio on intial earnings estimates. Anyone out there been keeping that data or know where it could be tracked down?

Thu, 03/29/2012 - 11:06 | 2300615 ejmoosa
ejmoosa's picture

Estimates are not worth anything.  You are really just evaluating how good the guesses are versus how well the economy is performing.

 

Only 63% of companies are reporting higher earnings than the same quarter one year ago.  Last summer we were at 72%.

 

And the rate of improvement has dropped sharply.The most recent quarter up less than 6 %.  Last summer, the rate of improvement was more than 12 %.

Thu, 03/29/2012 - 10:31 | 2300475 disabledvet
disabledvet's picture

I do agree the US economy is slowing. Also ECRI still stands by its recession call...which is a bigger deal than "slowing." moreover "stocks markets don't go to zero" because of "slowings"...unless you are Spain apparently. "all heat and no light" as they say. The real question to chew on is "is 200 dollar a barrel oil in fact GOOD for the American economy?" History states "it is an axiom that high oil prices doom the US economy." What if history is wrong this time though? What if indeed "this time is truly different"? (must be all that Government help finally paid off er... I mean "paying off"... of course. Besides only an idiot in the world of finance would want a solution to America's dependence on oil, right?)

Thu, 03/29/2012 - 10:33 | 2300487 Al Huxley
Al Huxley's picture

This could all be fixed if they'd just make up some more positive numbers.

Thu, 03/29/2012 - 10:35 | 2300489 the not so migh...
the not so mighty maximiza's picture

I can't see them holding this all together till the elections or selections whetever it is. .

Thu, 03/29/2012 - 10:36 | 2300505 mayhem_korner
mayhem_korner's picture

 

 

The bubble gum & chicken wire have reached their half-life.

Thu, 03/29/2012 - 10:45 | 2300533 Dr. Richard Head
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I just identified the problem the US is having structurally based on the materials used to patch this economy up.  They have been using chicken wire and bubble gum, whereas duct tape and permanent marker proves to be much more effective. 

Thu, 03/29/2012 - 10:34 | 2300490 Hansel
Hansel's picture

Bullish.

Thu, 03/29/2012 - 10:38 | 2300508 BlueCollaredOne
BlueCollaredOne's picture

What do you say we settle this on the runway Han Solo?

Thu, 03/29/2012 - 10:35 | 2300494 the 300000000th...
the 300000000th percent's picture

It amazes me that they were able to hit any numbers based on lies, fuzzy numbers, BLS fraud, channel stuffing. Well iguess it depends on who "they" are.

Thu, 03/29/2012 - 10:41 | 2300517 mayhem_korner
mayhem_korner's picture

 

 

"Hitting" a number is simply a function of the time frame over which they can amortize the spread between the lie and reality.  I think that's what their ivy league PhD math doods do.

Thu, 03/29/2012 - 10:35 | 2300495 mayhem_korner
mayhem_korner's picture

It's funny because it's wrong.

 

Usually things are funny because they're true.  This must be more of a Joe-Pesci-in-Goodfellas kind of "funny"...

Thu, 03/29/2012 - 10:36 | 2300501 Tyler Durden
Tyler Durden's picture

It's also funny cause it is Bizarro day.

Thu, 03/29/2012 - 10:43 | 2300524 mayhem_korner
mayhem_korner's picture

 

 

You ought to come up with a name for the miss:hit ratio - maybe the Farce Index or sumpin.  Could be some royalties in it for the Tylers.  :D

Thu, 03/29/2012 - 10:50 | 2300547 Totentänzerlied
Totentänzerlied's picture

you mean The Ben Bernank's batting average

Thu, 03/29/2012 - 10:35 | 2300496 monopoly
monopoly's picture

Well, agree with all of the above that we are slowing and moving lower....but, until AAPL breaks I will not and have not shorted this market. It has been so long since I shorted with gusto I will need a refresher course from Tyler. Forgot how.

Thu, 03/29/2012 - 10:41 | 2300519 Dr. Engali
Dr. Engali's picture

I had the same thesis about AAPL. Apple was looking weak around S&P 1350 so I decided to short then.  I got my ass hande to me.

Thu, 03/29/2012 - 10:51 | 2300550 Village Smithy
Village Smithy's picture

Perhaps a good sign that shorting may be possible again came between 9:40 and 9:50 this AM when the QQQ took an almost 40 cent ride up in that 10 minute span, then a controlled ride all the way back down. I don't call that a short squeeze, I call that a short confiscation. You got shorts, we're bigger and we want em. Just a thought.

Thu, 03/29/2012 - 10:36 | 2300506 kahunabear
kahunabear's picture

The only stat that matters his how much QE is being done.

Thu, 03/29/2012 - 10:37 | 2300507 monopoly
monopoly's picture

And how does any human put money into a bank. That is so absurd. Buy BAC. You have got to be on drugs to do that.

Thu, 03/29/2012 - 10:44 | 2300529 Quinvarius
Quinvarius's picture

You have to be on drugs to deposit your savings money at a bank too.

Thu, 03/29/2012 - 10:44 | 2300527 Curt W
Curt W's picture

Saturday Night Live used to have a little 30 second skit, Two fat ugly people walking around the lake at sunset, "Lowered Expectations"

Thu, 03/29/2012 - 10:45 | 2300532 adr
adr's picture

To say that things are slowing now is to admit that the economy actually did "grow" over the past three years.

Based on real evidence the economy hasn't grown at all. Any synthetic growth was taken from the future to put on the books today. Trillions to eventually pay leaving future workers with nothing, just so Bernanke and Obama could claim they presided over the greatest stock run in history.

Well unless you believe valuations requiring every person on Earth to buy into a company are somehow low.

Thu, 03/29/2012 - 10:54 | 2300561 DUNTHAT
DUNTHAT's picture

Not only are the numbers cooked, but the crazy bastards think the unemployment problem is a business cycle problem solvabe by throwing money at it.

The unemployment is structural, and has been for over 15 years, slowly deteriorating without any intelligent response.

How's those cheap products working out for everybody at WalMart??  Bet now you'd be willing to pay a few extra bucks for the items in exchange for a stable job.

Economic theory is very poorly constructed when it comes to accounting for global economics.  essentially, it is biased to explain domestic economies, not global.

Some day soon someone will realize that currency manipulation can overcome a host of structural disadvantages, and give permanent unfair advantage (jobs) to mercantile countries.

So much for free trade.

Thu, 03/29/2012 - 11:05 | 2300605 riphowardkatz
riphowardkatz's picture

The unemployment problem is a wealth problem. Wealth is redistributed through tax and inflation to unproductive members of society from the productive rich and poor. 

Without this theft there wouldn't need to be as much employment and we could be enjoying the low cost products with a stronger dollar that buys more. As it stands we are heading to subsistance and living hand to mouth which will require pretty much everyone except the politically connected to work and work hard (see China 1 in 8 of the worlds population is  a Chinese rice farmer)

 

Thu, 03/29/2012 - 12:12 | 2300888 mbarido
mbarido's picture

riphowrdkatz - please explain - (see China 1 in 8 of the worlds population is  a Chinese rice farmer)

1.  Last number I saw 80 something % of Chinese live in cities

2. Unemployment sux at 25% - 40% if under 25 years old

Explain to me how an unemployed city dweller can grow rice.

If meant to be funny, I fail to see the humor.  Chinese are suffering just as much or more than us.

Thu, 03/29/2012 - 14:09 | 2301283 riphowardkatz
riphowardkatz's picture

The stat may be incorrect. I heard it on PBS newshour during a story about China.

CIA fact book states 36% of people employed in agriculture (this isnt working for your dads corn farm in Iowa) they have 1.3 billion people (although employable is listed at 800million) there are 6 billion in the world. The math comes close to 1 in 8 or if you use the 800 million number is is 1 in 20

The point remains valid.

Reducing employment is a ridiculous goal. That doesn't mean I don't understand the value of being employed. As a thought experiment try to imagine a world fully employed but the employment only creates enough wealth to sustain the population for a few days. Is that what you want? That is the direction we are headed. I reference China because that is their state.  On a much grander scale they have destroyed the savings of both their productive rich and poor through increasing the total amount of their fiat currency. When you take from the savings (through inflation) from productive members of society and redistribute to unproductive members (inevitable in a central planned economy) the productive have no insurance or capital with which to employ in the further creation of wealth. This leads to a downward spiral where there is less wealth for everyone.

Before the rampant inflation the US experienced over the last 100 years or so it has become more necessary for everyone to work more and more because they can no longer save as much money and have very little  money left over after food and gas and housing is paid for. This is despite an increase in productivity.  We should be having to work less and less allowing people to divert their time to more risk, more creative endevours, more education without debt and more entrepneurship.

I was not suggesting you grow rice. I was suggesting that being employed as a rice farmer would not correlate with wealth.  Again employment is a foolish goal and is only used as a means of grabbing more power by central planners.

Thu, 03/29/2012 - 10:56 | 2300566 blu
blu's picture

There are eventual consequences to any long string of lies.

http://madscienceunlimited.com/fiction/uncomfortableWithTheTruth.html

You know it's time to worry when life starts to imitate art. Especially when the art is so utterly grim.

Thu, 03/29/2012 - 11:01 | 2300586 rosiescenario
rosiescenario's picture

On further examination, those green shoots are tulips.....

Thu, 03/29/2012 - 11:16 | 2300665 Implicit simplicit
Implicit simplicit's picture

Two lips not tulips, as in the bankers's two lips are sucking the economy dry after they finish sucking off Ben.

Thu, 03/29/2012 - 12:46 | 2300988 Equites
Equites's picture

From a Dutch export perspective, tulips would be great. However, more and more of our 'Dutch' tulips now come from Turkey (where they originated, by the way) and Kenya (where our imported peas come from too...)

Thu, 03/29/2012 - 11:15 | 2300660 NEOSERF
NEOSERF's picture

Analyst estimates should be recognized for what they are...self-serving cheerleading...estimates are attempts by the company to drive either the market or a company up or down...they realized a decade ago  that this wasn't working as well as it used to due to the fragmentation of media so they started using computers to do it but "missing" something that isn't real may be some sort of indication but I wouldn't trade on it...

Thu, 03/29/2012 - 11:20 | 2300687 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Mr. BurroDonkey will save us, relax. Go out and buy something, they've got you covered.

Thu, 03/29/2012 - 11:46 | 2300802 tony bonn
tony bonn's picture

forecasting errors reflect upon the forecaster, not upon the economy.....thus the only data which interest me are non-synthetic series which have y-o-y comparisons.....i don't even care about m-o-m because those deviations wash out over time.....there is way too much focus on the economists' skills or lacks thereof.....

Thu, 03/29/2012 - 12:59 | 2301035 q99x2
q99x2's picture

in line is not necessarily accurate 

Thu, 03/29/2012 - 13:25 | 2301117 RoadKill
RoadKill's picture

Need to go back another 3-6 months so we can see where the momentum built up from, and where we are now.

For example, where were the 30 leading indicators in Oct 2011 vs where are they now.  Are we actually better off then in Oct?  In the US - probably a bit.  In Europe and Asia - Probably worse.

Thu, 03/29/2012 - 13:33 | 2301152 RunningMan
RunningMan's picture

Good, if sobering, presentation. Worth reviewing. Makes it hard to believe housing markets have yet reached a bottom given the equity gap. Spontaneous recovery a remote possibility. We need to eliminate F/F and the FHLBs and let markets clear.

Thu, 03/29/2012 - 15:54 | 2301612 Westcoastliberal
Westcoastliberal's picture

Maybe I missed the news, but isn't the gov still giving tax breaks to companies that offshore jobs?  Please say no!

Thu, 03/29/2012 - 16:15 | 2301691 Eric L. Prentis
Eric L. Prentis's picture

My economic model, which is based on long-term trends in the stock market, predicts the US will slip back into recession in April/May 2012.

http://ccsenet.org/journal/index.php/ijef/article/view/7033

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