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Factory Orders Add Insult To Economic Injury
Nobody could have predicted that today's April Durable Goods number (and key component of where Q2 GDP is headed) just over two weeks from the FOMC's June 20 meeting, will be a slaughter. NOBODY. Printing at -0.6%, the number was a huge miss to expectations of a 0.2% rise, and is the 3rd drop in the last 4 months. The previous number was also revised lower from -1.5% to 2.1% so at least it rose. Still, this was miss number 5 out of the past 7 reports. Excluding transportation, new orders plunged 1.1%, after falling another 0.7% in march.. The main reason for the headline collapse: a 21.5% plunge in defense orders. As Bloomberg's Rich Yamarone said, "Crummy" start for 2Q investment component of GDP report as shipments of nondfense capital goods ex-aircraft fell 1.5%. Expect Q2 GDP forecast cuts from Goldman et al within minutes: we expect Hatzius to trim his 2.1% Q2 GDP estimate to about 1.8%.
The red bars below show the miss to expectations. Via BBG.
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Ouch! My portfoli-hole!
Do you need TP for your portfoli-hole?
If TP is "Treasury Paper," then NO!
are you threatening me??
Of course not, sir -- I wouldn't dream of it! After all, I'm not a tropical island type, and I look terrible in orange.
As for my admitted aversion to US fiat...well...um...I would just say that clearly, it is our wise leadership's policy to boost the velocity of money and avoid deflation -- with which I'm just doing my part. By holding as few Federal Reserve Notes as possible, I contribute to keeping the velocity of money high and the trend in the value of the currency down.
I'm just doing my patriotic best to help O, Ben & Co. advance their policy. Always trying to be a team player.
By the way, I like your boots -- very Hugo Boss. ;-)
Look for the herd to suddenly realize it is headed for a cliff. Sad. Just sad.
Must beat the lemmings and get to the front..
Don't worry, the fall from said cliff will be seasonally adjusted to soften the blow...
and with the proper twist from the msm, this could just turn into a bullish indicator.
Guess we know the reason for the pop.
CTRL-P
People who mortgaged their homes to lock-in a 4% rate will regret not having waited for 3%.
And people who bought houses at a 30% discount from 2007 will cringe every time they look at the real estate section of the local paper. Those same houses will be down 40%...and 50%.
Looks as if Bill Bonner wrote at The Daily Reckoning agrees with shiller and Dr Housing Bubble.
Shocking! Who saw this current crash coming? (besides 98% of this board, Ron Paul, Peter Schiff, Gerald Celente, Marc Faber, Jim Rogers, every other Austrian Economist, anyone who has been looking for a job the past 4 year, and anyone who bought anything at a grocery store or gas station)
Dow will be green within minutes of this news.
The spin will be "it cannot get any worse"
LOL....
Welcome back Robo.
Ron Paul, Peter Schiff, Gerald Celente, Marc Faber, Jim Rogers, and 95% of all the "experts" failed to see the epic rally in muni-bonds, Treasuries, and corporate bonds.
In fact, Peter Schiff's account has been decimated by a surging dollar, runaway bond prices, and an outright collapse in commodity prices and his favorite BRIC stocks.
Jim Rogers and Doug Kass saw their accounts wiped out by shorting Treasuries.
March orders were revised to 2,1% DECLINE, not rise.
"The main reason for the headline collapse: a 21.5% plunge in defense orders."
The reality of the defense spending cuts is going to hit hard. A lot of people don't realize how much of our economy is propped by our $1+ trillion deficit. (Disclaimer: I agree with these cuts. Just making a note.)
Look at this amazing suprise index.
http://www.bloomberg.com/quote/CESIUSD:IND/chart
@oak
Growth Slowdown Seen for Third Year in U.S. Dodging a Recession
By Rich Miller and Shobhana Chandra | Bloomberg – 10 hours ago
The U.S. economy looks set to deliver a repeat performance in 2012: for the third straight year, it may suffer a swoon yet not slip into a recession.
"I don't think the slowdown will be any more consequential than the past two years," said John Ryding, a former Federal Reserve researcher who is chief economist at RDQ Economics LLC in New York. "There are positives out there in the economy. We'll avoid a recession."
It's all good.It just gives Ben more cover to print, and precious metals wil take off.
watch the Fed Govt make every facebook comment a 'durable order' since it's the only thing US manufactures
This just shows how sad the MSM have become.
Bloomberg was headlining "US stocks climb before factory orders data". I clicked on the link and it took me to an article with the headline "US stocks decline as investors await factory orders".
This is soooooooo 1984.
When is Ben going to ramrod the market higher anyway?
Looks like he's just toying with it right now. I'm guessing high noon will be the time when he dials up another $10B dump of e*money into the ES.
Obviously, it's in the script today that it can't be down.
"a 21.5% plunge in defense orders".
That would be funny, if it was not very serious. (Hi CD, nice to see your comment, if a bit understated?)
Anyhow 'defense' has been double-think for WAR, for several decades now.
Washington (and its NATO satraps) has been on a war footing since 1939.
Take Boeing, GE, Westinghouse, etc. OK some civilian spin-off, but the core business is/was war machines. Think on how the entire nuclear industry has been weapons-based ... nuclear reactors did nt HAVE to be fueled with uranium, but how else to get plutonium for weapons?
War was always a 'good' way to make money for shysters and banksters in the short run, but never long term.
"a 21.5% plunge in defense orders"
Millions of people get killed or badly injured during wars, but also when economies fail.
Ike did, belatedly, warn about the military/industrial complex (fascism).
Too late now to point out that "a 21.5% plunge in defense orders" translates into even greater unemployment and social turmoil.
plunge in defense orders heralds the last days, months, years of the us dollar as a world currency. there is only one thing that holds the fed together today. it is the us army. lose the army, the fed will evaporate in an instant. as a matter of fact, nothing sudden will happen. as time goes by the army will get smaller and smaller until it no longer poses a danger for the gold-oil barter scheme.
We aren't heading for a cliff, we're already off of it. We're in the space between the rocky edge and the hard ground below.
Feel that breeze!
Yep! Numbers of cartoon images come to mind and other humour from way back, e.g. "That's another fine mess you've got us into."
As a child I found all that very funny and could afford to, because I was innocent and so was the whole world still, relatively speaking. With all its horrors (and I can remember some) WW2 could be considered a "just war against fascism/nazism", but since then ...............?
"We aren't heading for a cliff, we're already off of it. We're in the space between the rocky edge and the hard ground below."
I venture to say that this has been the case since the Korean War, or at least the Vietnam War. WW2 never really ended and we are all now just waiting for whatever the final drop will be.
WW3 centred on Iran, via Syria? Fuckyoushima? Global economic collapse? (I leave out cosmic conspiracy stuff, like UFOs, because we are obviously able to make a "fine mess" ourselves.)
Community Standard is dead on. The deficit is the stimulus! 1.2 Trillion in deficit equates to 30 million jobs at $40,000 per year. It doesn't matter how the deficit is eliminated; tax increases, cost cuts, the impact to the economy will be roughly the same. 30 million jobs in a 150 million job economy is 20% additional employment......Great Depression levels. This is why so many leaders do not want to cut the deficit.
That elegant little equation $1.2T=30m@$40k/yr is exactly why we are in so deep.
Factory orders down, NY ISM WAY DOWN, Japan TOPX back to 1983.
http://confoundedinterest.wordpress.com/2012/06/04/ny-ism-and-factory-or...
Is the ticker on the chart the "thingamajig" index obama was talking about? He said 3k up, what happened?