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Durable Goods Big Miss -4%, Expected -1%, Biggest Sequential Drop Since January 2009
And so the transition to the QE3 "economic disappointment" regime begins. Because after the ECB is done with the LTRO it's over for global QEasing, and the Fed is next. Remember- Bernanke's semiannual testimony to Congress is tomorrow. Whatever will he say....
- Headline Durable Goods plunges from +3.2 to -4% on expectations of -1%
- More painfully, Durable goods non-defense ex aircraft down a whopping -4.5% on Exp of -1.3%, down from +3.4%.
Digging between the numbers, via Bloomberg:
- Decline in shipments of non-defense capital goods, ex. aircraft, suggests “weak business investment” for 1Q GDP report, says Bloomberg economist Rich Yamarone
- Overall decline "mostly" due to contraction in civilian aircraft orders, "slightly" slower pace of new motor vehicles bookings, defense orders, says Bloomberg economist Joseph Brusuelas
- Slowdown ex. transport "consistent with the broader slowdown in growth in industrial production"
And a recap from Stone McCarthy:
January new durable goods orders were reported down 4.0%, following a slight upward revision in December to up 3.2% (previously +3.0%). The January performance was below most expectations, and reflected widespread softness across components, not just the expected drop in transportation due to a decline in civilian aircraft orders. Although the fall in new orders was steep, it was also after two months of solid gains. Since these numbers tend to see-saw from month-to-month, a one-month decline is should not be worrisome. Strong orders for civilian aircraft in February are likely to boost the next month's report.
Expectations in a Bloomberg survey centered for a 1.0% decline. Estimates fell across a range of down 4.3% to up 1.5%. Our forecast was for a decline of 1.8%.
Transportation orders were anticipated to fall in January due to fewer civilian aircraft orders. Boeing reported 150 new orders for the month, which was a drop of 137 from the prior month Overall orders for transportation equipment were down 6.1%, with declines of 19.0% in nondefense aircraft and 5.6% in defense aircraft. Motor vehicle orders rose 0.9%, reflecting the steady demand for new autos and trucks.
Nonetheless, new orders excluding transportation were still down 3.2%. There were notable declines in primary metals (-6.7%), machinery (-10.4%), computers (-10.1%), and electrical equipment (-1.9%). With the exception of computers, these were all higher in the prior two months, so this is consistent with the direction of total new orders. There was a modest gain of 0.7% for fabricated metals and communications equipment of 1.4%.
Visually, this is the biggest decline since January 2009.
Source: Census Bureau
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Let's pare some gains, bitchez!!!
Op robo-kill entering phase 2 now.
This isn't possible.
The Geithner, Brian Wesbury, Warren 'Taxpayer Buffet' Buffett, Mark Zandi, Barton 'Smally' Biggs, Joe LaVorgna, Abby Joseph/Sacha Baron Cohen, and the real legends of prognositication, James Altucher, Joe Wiesenthal & James Glassman all said so.
Recovery Summer 3.0?
It would have....
It should have...
but it didn't....
THAT DAMNED WINTER!!! DAMN YOU SNOW!! DAMN YOU WIND!! DAMN YOU SHUNSHINE!!!
Recovery Bummer 3.0? IT spending seems off across the board with my clients. Locally(FL Suncoast) businesses that produce for the Global market are either hiring or expanding manufacturing out of the local airport park but two other small businesses in the medical and electronics areas shuttered in the past 4 months. What equipment clients are buying they are asking me to source it used as so much is available on the secondary market. I don't see much of anything happening in my area that looks like a Recovery. And food and gas along with animal feeds are up significantly which hurts alot of locals. People are giving away livestock or abandoning it if you look at CL.
I'm sure this is bullish for some reason that I haven't figured out yet.
Its a durable depression. Onward and upward because those inflated dollars mean ever increasing profits. Right?
Nothing to see here .... move along .... get your sunglasses out 'cause our future is bright ...
Call Cramer quick! I need to know what to short.
one wonders how much horse shit they will keep telling us about oil speculators causing the high oil prices...
http://www.youtube.com/watch?v=klvsD9AUSFc
Keep your shovel handy, 'cause I suspect the answer is A LOT.
Is this considered durable goods ?
http://arstechnica.com/gadgets/news/2012/02/linux-computer-the-size-of-a-thumb-drive-now-available-for-preorder.ars
http://www.fxitech.com/products/
Yes, no doubt manufacturing is contracted out to China....
How many goods are actually durable these days?
I think they meant "adorable"
Like my new adorable refrigerator that is a piece of #$%.
Completely "priced in"...in 4...3...2...
Gotta reach DOW 14,300 for the Emperor...nothing else matters of course.
As long as our headline number looks good, then national pride and security are intact
Futures are yawning.
Bullish
so a neg was expected (i beleive some capital investment tax credits expired 12-31-11), but was there anything else we need to weed out of the data or is that miss "clean"?
There was a stiff wind that hit the east coast and slowed down production.
Total one off.
There will be a statement soon that the previous 1% decline that had been forecasted has been revised down, after the actual release, to a 10% decline, thus making today's 4% decline (i.e. 6% better than the post-release revised forecast) an extraordinarily shocking upside surprise.
We're going to need Greece to ramp up their purchases of our exports.
Green shoots!
Gangrene shoots...
Who needs durable goods? If the AAPL model is any indication, nothing should last more than a year or two before requiring an upgrade.
"Would you like to buy a one year warranty with that brand new product?"
ES ticked down 2.5 pts last tuesday, so this was already well priced in.
I love when a recovery comes together. Everbody buy a toaster or something and keep this party going.
My previous toaster didn't make a year. Not to durable.
The road to recovery is going well.
It's pretty hilarious to me, that the White Hut propaganda machine, AKA: ABC, NBC, CBS, CNN etc. keeps running with stories that disingenuosly proclaim that the economy is indeed recovering, when no one observing the real world buys it for one second. Most people know that reports of the so called recovery, are something to point at and be sarcastic about (like you). If gas prices do reach $5.00 a gallon or more this summer, we will quickly fall into another deeper substratum of recession, if not depression. People will strengthen their already (saving) approach to our economic future. Until Obama is dragged out of office, and replaced with his mirror opposite, the economy will be at risk of unrecoverable status, and most understand that, and are in fear of it.
@Atomizer
Yes, people are foregoing rent AND a washer and dryer. People ate resorting to a bar of soap and the bathtub or sink.
After consulting my economics texts, charts, and formulas, I can say with conviction...Rut Roh Raggy....err I mean we need a gigantic stimulus of $5 Trillion NOW.
Are you sure that's big enough. Better make it 8...I mean it's only monopoly money after all.
Hmmm my numbers come out to eleventy trillion. You need to update your models.
Eleventy, Bilbo?
My numbers say at least 707 trillion.
Come on LOP, that is a tad high, I mean we can't have any leak out to Main Street lest it trigger inflation that can't be erased from the price stats can we?
Ridiculous, since when is 5 Tril 'gigantic'?
Not anymore it ain't!
This means stocks go up...right?
Correct. They will also be delivering your Unicorn eggs...I shipped overnight for before 10 AM delivery.
Disagree. Ben needs risk assets (most notably oil) to sell off before he can implement more QE.
Ben doesn't need to implement more QE with Dow 13,000 and the ECB printing like mad. He's doin' his part with the Twist and the discounted currency swaps with Europe.
Very, very difficult for the complex to get oil and PMs tamped down without diffusing the hopium of the equities.
Big question is whether ISDA lets the CDS underwriters or buyers hold the bag come Mar. 20th...and then how fast is the sinkhole filled with fiat and where do the liquidations come from - equities, commodities, or elsewhere?
Yup, up is the new down.
" Cyclical Trends "
That's the spinning effect introduced by the toilet bowl we're in...there's a goldfish and a dead hamster in here too. Bully!
It's amazing how these numbers just happen to come in soft or strong depending on what the fed needs for either cover to ease or proof that their policies are working.
Sawtooth pattern suggests a lot of "play" in the reported values. Not sure it helps illuminate reality.
...but the "play" is reality.
also inflation in germany higher than estimated. im guessing inflation in the whole of euro is now over 2%. when will they care about this? or is the ecb now politically controlled?
Wait, the USA still makes "durable goods"??
Exactly. I thought we were a post-industrial, service based economy. Who needs this manufacturing crap anyway. QE4?, here we come! (I'm not sure what number we are officially on)
Yep, give me a hot towel, and a cleanup on aisle 5.
Wait, the USA still makes "durable goods"??
Yes, they are called "Treasury Bonds." They're nice.
Ah yes...
They'll make a great building material one day. Insulating.
Like anything real matters. The street will push itself until it collapses...as usual.
Blame the Weather.........
Silver's got an early chubby goin'. This is all setting up to be PM a *marg*in ca*ll (algo-proofed), red-turn-green, all is well afternoon. This report will be a distant memory by 3:01 post meridian EST.
It's starting to look like this time last year for Ag. 10% up days are still ahead of us, unless of course Marge and her 'calls'.
another useless stat that doesn't measure the micro. it only measures big government and big corporate expenditures which are tied at the hip with false money. it is showing that the two are running out of steam. this is good for the micro which is lost in the big noise in that time series.
Rest assured, the actual number is worse than reported! The last couple of months of hopium may have started to change ignorant folks' perception of the economy but people with any insight know things are slowing up further. It will be real intersesting to see what happens with the snapback to reality hits.
So this means Chevy made negative 20 Volts this quarter?
"So this means Chevy made negative 20 Volts this quarter?"
They shorted out.
*crickets chirp*
guess tax breaks were important as part of last year's growth!
Not related but it is new news:
Agreed. This is very not related...
But but but, he just got nominated Obummer's Nobel Peace Prize...WTF?
We need MORE STIMULUS!
STIMULUS DAMNIT!
Love this recovery!!
Lamedom
WOW awesome! Why arent futures up at least a couple %?
Delayed reaction. We're up 500 points today on the DOW, most gains come after 2 pm. Just watch...
Maybe cutting $7000 checks to unionized workers making electric cars that nobody can drive or wants doesn't help the economy. Just sayin...
Fixed Your Post
LET THE PRINTING Bitchez
start go>>>>>>>>>>>>dow 100000
when it comes to qe3, tyler is like the little engine that could..... i think ben can, i think ben can....sorry tyler, that qe3 hill is a little too much...........
Heh heh 'QE3'....well as long as they dont mind $7 gas as well!
SD, please quote in US gallons, not litres. Thx.
Looks like time to get back into the vix..
So that re-shoring of manufacturing jobs is going well then.
Most all manufacturing is now in the media, making and spreading BS around in a nice even deep layer.
I think the dollor will rally for a change witha -300 printing on DOW
Really this is simply an anomaly. It is a non seasonally adjusted figure (fudge factor 1), not to mention labor force participation declines werent considered (fudge factor 2), plus they forgot the normal 'first read' overestimation which later gets adjusted down (fudge factor 3).
Dont forget the weather too. The weather !!!
As you can see, this number is all bullish when you take everything into account.
There's a big winter storm descending from the Rockies on to the Upper Midwest right now. There's a whole bucket of excuses! Yay.
*Start sarcasm* This sure is the sign of a great rebounding economy.
Sure, and Obama will be on screen taking all the credit for it in 3, 2, barf...
Flash CNBS: Durable goods down because world is hooked on disposable goods ..... details to follow (pesky details!)
I'm waiting to see if the robots will be buying the ES later this morning,
This news has to be bullish, right?
MSM bias alert: as of 9 EST, CNBC had gone to print with articles on the durable goods debacle and the continued housing price slump-a-thon...and neither had a quote from an "expert." Shocking.
So what will this equate to marketwise? A -50pt DOW drop with full recovery by EOD?
This market is consolidating, just as before. It is making bad news into non-issues and waiting on good news to breakout higher.
Rather it will or not I don't know, but so far nothing has changed.
Be interesting to see if they ramped this thing far too soon in the election and what shananigans "better than expected" bullshit we'll have to endure to keep it going.
Futures still green proving 'nothing matters' now. Bernank could climb up on the speech podium and take a huge dump and walk away, and markets would rise 1% on the news.
If the price of something goes up 10% on the first day, then down 10% (from the closing price of the day before), then back up 10% (from the closing price of the day before), etc, in perpetuity, does the price:
a) go up
b) stay flat
c) go down
c)
What's my prize?
Your prize is a DOW:Gold ratio of 1:1
If Bernanke creates a Trillion in one night and it all goes to insolvent banks, does inflation happen now or later?
Creation of the trillion doesn't cause deflation. Might defer it via transient inflation, but the deflation is a reset of assets to their values (i.e., insolvency meted out).
Careful with that axe, dw.
that would be c, but that's not how the game is played
the real game is: ramp up 2%, then on better than expected news ramp up another 2%, and on worse than expected news let it drop 1% and then squeeze the hell out of shorters to ramp it up another 2%
repeat this every week
then ask your multiple choice question
The reduction in durable goods orders was huge but I'm sure the actual number was partially offset by orders for Bond Printing Machines, which surely were up exponentially
All these comments and not one mention of the accelerated depreciation pull forward effect?
You dumb fucks couldn't punch your way out of a wet paper bag with scissors in your hand.
This was a bad number but it wasn't as bad as the headline implied.
Use your heads people.
Bwahahahaaaaaaaaa
What am I wearing? My Big Miss red dress. It still fits!
As goes durable goods so goes the DJIA - down:
http://chart.ly/9ky9n4l
How is a "defense" durable good distinguished from a "non-defense" durable good?
Is there an "offense" durable good category?
Is a military definition being used, or a political one? Who decides?
Is it logical even? Aren't any "military" durable goods "non-defense"? Aren't all military goods offensive, whether used for offense or defense?
And what is implied by "durable"? According to Webster's, durables are consumer goods "typically used repeatedly over a period of years". Is that the implicit expectation for military goods (good or bad)?
Or is "durable defense good" an oxymoron in so many ways?
I need another coffee.
"Remember- Bernanke's semiannual testimony to Congress is tomorrow. Whatever will he say...."
I'll hazard a guess that 'transitory' will again be THE word of the day
/Maybe he can have econophile talk about how the affect of higher oil/gas prices for the seen are offset by the unseen, its all transitory... [gotta read his article/comments on ZH if you have not]
Hey, do I hear water swirling round faster and faster?
Good economic news = rally
Bad economic news = rally ( because more stimulus coming )
Only the poor dollar is what goes down continously.