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Dallas Fed Beats On Hope Alone As Prices Paid Jump Most In 19 Months

Tyler Durden's picture




 

Following last month's plunge in the Dallas Fed Manufacturing data (which was its biggest miss in 14 months and lowest print in 10 months), today's -1.6 print was the biggest jump in 7 months. From last month's -13.2, against an expectation of -7 this month, the -1.6 'beat' was very 'impressive' though obviously still negative. Critically though, once again, much of the rise in the index is predicated on the hope-section of the survey as while current activity indices such as production, new orders, and growth rates fell (and inventories rose), their corresponding future expectation indices all rose (even though expectations of the general activity index were mixed). Notably, the Prices Paid index jumped the most in 19 months. Once again it appears that good is bad, bad is better, but terrible is awesome; as the market's entirely lost discounting mechanism has no idea what to do with this flashing red headline.

Dallas Fed beat...

 

on hope alone...

 

helped by the biggest jump in Prices Paid in 19 months...

 

Chart: Bloomberg

 

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Mon, 08/27/2012 - 10:42 | 2740839 vote_libertaria...
vote_libertarian_party's picture

...and that is the best region (oil and gas)...

Mon, 08/27/2012 - 10:43 | 2740840 otto skorzeny
otto skorzeny's picture

"Hope Alone" isn't that a new movie about Obummer in the WH?

Mon, 08/27/2012 - 10:43 | 2740841 LawsofPhysics
LawsofPhysics's picture

The "market" has not been a vehicle for true price discovery since the 70's.

Mon, 08/27/2012 - 10:49 | 2740860 Abraxas
Abraxas's picture

The "market" has the memory span of a goldfish.

Mon, 08/27/2012 - 11:26 | 2740930 DrDre
DrDre's picture

You are offending the goldfish ... 

(sorry, I could not resist)

Mon, 08/27/2012 - 10:43 | 2740843 gjp
gjp's picture

Hope is the number one, really only, investment strategy these days.  Look at the response to earnings disappointments from AMZN, AAPL, CRM, all well up from the disappointment.  And today, in the retail sector, look at TIF.

Hope is a good investment strategy it seems when it can be funded with free Benny Bux.  Shambolic.

Mon, 08/27/2012 - 10:46 | 2740849 Rainman
Rainman's picture

We all know the drill...less worstest is bullish.

Mon, 08/27/2012 - 10:47 | 2740852 caimen garou
caimen garou's picture

along with the vix they should have the B.S. index or the fubar index along with the hope index.

Mon, 08/27/2012 - 10:59 | 2740880 Cdad
Cdad's picture

Your suggested index additions already exist.  You can trade B.S. Furbar and Hope by simply buying SPY.  This broadest index measure has already priced in all of these things...and the proof is in just how stupid this index trades each and every time some desperate banker speaks publicly.  

Mon, 08/27/2012 - 11:34 | 2740952 Cdad
Cdad's picture

...and as if the S&P heard me, it just rose 7 points in 30 minutes.  The move was neither technical nor fundamental [in this case there being NO news].  It simply rose because it could, and owing to the desperate zombie banks that are currently bloated with equities that have been put back to them almost every single week for the last two years as average Joe does nothing but sell.

It is all pathetic...tragic even...that the market is no longer a market, but instead simply a measure of the will of those known as the financial services status quo, whom daily pervert the market instrument towards their own ends...that of holding onto power.

More banker pink slips, please.

Mon, 08/27/2012 - 10:49 | 2740857 LongSoupLine
LongSoupLine's picture

"hope"...it's what's for dinner.

Mon, 08/27/2012 - 10:53 | 2740868 Dr. Engali
Dr. Engali's picture

The robots had it priced in before it came out.

Mon, 08/27/2012 - 10:55 | 2740872 bnbdnb
bnbdnb's picture

So Dallas Fed beat expectations because of commodity pricing?

How stupid.

Mon, 08/27/2012 - 10:56 | 2740875 Dick Darlington
Dick Darlington's picture

Hope is a strategy. Ask "professional investors".

Mon, 08/27/2012 - 11:00 | 2740884 adr
adr's picture

The inventory numbers are staggering. Up 14.7% and materials up 11.9%. Prices paid for materials is shooting up faster than the price that finished goods can be sold. Delivery times are dropping back massively.

This report is not good at all. In fact it is more than terrible.

Manufactures are sitting on massive loads of inventory they can't sell and the prices they need to pay to manufacture more goods is skyrocketing. If they can't sell old inventory, they can't generate the cashflow to purchase materials to build products to fulfill new orders.

IN other words they are royally screwed. Wages were also cut way back.

Wall Street doesn't understand manufacturing principals or anything resembling actual business anymore. The trades are made on headlines and nothing else. I don't think a single trader could run a business, which is why real business is failing everywhere. A MBA is a degree in bullshit stock scamming, not running a successful corporation.

EVERYTHING IS BULLISH!!!! Amazon and Apple to new highs!!!!

Mon, 08/27/2012 - 11:01 | 2740885 Snakeeyes
Snakeeyes's picture

Classic. The underlying numbers like new factory orders and capacity utilization fell, but optimism increased. Albeit to a negative number.

http://confoundedinterest.wordpress.com/2012/08/27/dallas-fed-index-rises-from-13-2-to-1-6-but-factory-orders-and-capacity-utilization-fell/

Mon, 08/27/2012 - 11:04 | 2740896 madcows
madcows's picture

Numbers are meaningless when the estimated "Future" values are added into the equation.

All they have to do is crank up the anticipated numbers and shazaam!  it's positive.

Mon, 08/27/2012 - 11:07 | 2740900 rosiescenario
rosiescenario's picture

Shipments -10%

Inventories of finished goods +15%

Nothing else to say..........

Mon, 08/27/2012 - 11:22 | 2740924 Stoploss
Stoploss's picture

Hurry up Samsung, 4B coming soon.

Mon, 08/27/2012 - 11:13 | 2740909 Flaming Ferrari
Flaming Ferrari's picture

Cheer up lads. BTFD, kick back, relax and let the profits flow.......Draghi & Ben have got your back.

Mon, 08/27/2012 - 11:30 | 2740928 Element
Element's picture

Gee, what causes this?

--

Deposits at US commercial banks approaching $9 trillion
http://soberlook.com/2012/08/deposits-at-us-commercial-banks.html
 
Deposits at US commercial banks (source: FRB)
 
"Here is another reason QE3 will do little to change bank behavior or encourage lending. US commercial banks are awash with liquidity these days as deposits hit a new high (approaching $9 trillion).
 
Banks are already struggling to put cash to work. The rate of deposit growth exceeds that of new loan demand and credit approvals. The bottleneck is not the availability of liquidity - there is $1.77 trillion of available lending capacity waiting on the sidelines. If the Fed were to implement a new asset purchase program, the level of liquidity in the banking system would increase even further without any material change in the rate of credit expansion."

--

And it's not just a change bank behaviour that's the underlaying problem there.  People have changed behaviour, and how are you going to induce savers to spend and ALSO borrow?

Give them a thingamajig handout?

Yeah, that'll change things ... NOT.

Chipmunks do it before winter.

But humans may be better off not storing their acorns with banksters who steal acorns.

Mon, 08/27/2012 - 11:32 | 2740950 Fox-Scully
Fox-Scully's picture

Ignorant Algos that have not learned to read!

Mon, 08/27/2012 - 11:41 | 2740974 Crabshacker
Crabshacker's picture

Sooo..when I'm selling 10% less crab and my tanks are over filled aaannnd the price is rising cutting father into any profits, I should rejoice. Ahh so thats where I went wrong..

Mon, 08/27/2012 - 11:43 | 2740977 q99x2
q99x2's picture

Prices are going up here in LA too. A Lot. Parking for Spring semester was $20 now for Fall Semester it is $85 because of the DHS. It must be expensive to take over a country like the US.

Mon, 08/27/2012 - 12:20 | 2741071 SemperFord
SemperFord's picture

Yup yup, they keep hiring more drones. Sometimes I ride my bike part way to work while taking the metro and see about 10-12 sheriffs, chilling and laughing while checking tickets, no shit. I would be laughing to if I got paid 100K a year for sitting around laughing at stupid taxpayers that actually work to support them. They also have some down syndrome looking punks as "Metro Police" This place is not going to hell, we are already here.

Mon, 08/27/2012 - 13:40 | 2741305 adsanalytics
adsanalytics's picture

Similar unexciting story with other macro activity indicator (e.g. CFNAI after the jump or Philly Fed). The economy is clearly in a slowdown phase - whether it comes out on the side of expansion or contraction is historically a 50/50 proposition. Barring policy madness (e.g. fiscal cliff brinkmanship), best thing we can do is an unsatisfying wait-and-see.

http://www.adsanalytics.com/dashboard/docs/dashboard.php?treepage=tree_d...

J.S.

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