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Factory Orders Rise 1.3% In February, Miss Expectations, Inventories At Fresh Record

Tyler Durden's picture





 

Following the durable goods miss at the end of March, there were some who were expecting another Schrodinger print in today's Factory Orders report, which was expected to post a 1.5% increase (even as the Durable Goods miss was revised from 2.2% to 2.4%, still short of the +3.0% expectation). Alas, no such luck, and instead the weakness from March is spilling over into April as February new factory orders rose 1.3%, missing expectations, but an improvement from January's print which was revised lower to -1.1%. Shipments however declined 0.4% in February, following two consecutive monthly increases. "Transportation equipment, also down following two consecutive monthly increases, had the largest decrease, $1.3 billion or 2.5 percent to $49.2 billion." Finally, and in what will be no surprise to anyone, Inventory stockpiling continues, and is now up twenty-eight of the last twenty-nine months. "This was at the highest level since the series was first published on a NAICS basis in 1992 and followed a 0.6 percent January increase." Finally, the inventories-to-shipments ratio was 1.33, unchanged from January. We will likely see some modest downward GDP revisions based on this data.

Unfilled orders to shipments ratio at 6.23 is the highest since February 2010.

And this is how the new normal works:

 


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Tue, 04/03/2012 - 10:20 | Link to Comment jus_lite_reading
jus_lite_reading's picture

Thomson ticker ran "Factory orders up 13%" ROTFLMAO!! I SPIT MY COFFEE OUT!!! Obviously a typo!

Either way, its nothing more than inventory stockpiling and the "hope" that there will be some massive buying of this crap in the future... to a bigger sucker!! LMAO

Tue, 04/03/2012 - 11:04 | Link to Comment walküre
walküre's picture

Just like their equities. There are no buyers. Demand across the board is way down.

Tue, 04/03/2012 - 10:23 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Stacking boxes on top of other boxes, calling the goods "sold" and waiting for customers - winning.

I seem to remember a Monty Python skit about such "success" in business.

Tue, 04/03/2012 - 10:43 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

Teh Bernank is stockpiling AAPL. All hail teh Bernank!

Tue, 04/03/2012 - 10:21 | Link to Comment William113
William113's picture

Channel stuffing? What channel stuffing. HOPE AND CHANGE IS WORKING.

Tue, 04/03/2012 - 10:24 | Link to Comment Conman
Conman's picture

Suprised the algos didn't ramp up on the keywords "orders rise".

Tue, 04/03/2012 - 10:34 | Link to Comment I Am Not a Copp...
I Am Not a Copper Top's picture

Wait for Europe close

Tue, 04/03/2012 - 10:24 | Link to Comment Cdad
Cdad's picture

I am sure that this chart does not matter:

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=A103600001&f=M

The true economic indicator of gasoline continues to signal that, per the economy [ie the hopeful's that think all this other inventory build out will eventually be bought at full retail price...lol], it is already over, folks.

Tue, 04/03/2012 - 10:27 | Link to Comment LawsofPhysics
LawsofPhysics's picture

That chart certainly speaks to the relevance of the U.S. market and the dollar moving forward.  FAIL.

Tue, 04/03/2012 - 10:33 | Link to Comment Cdad
Cdad's picture

I am not at all sure what you mean.  That chart, in relation to the real underlying US economy, is more relevant than things covered during 99% of the BlowHorn's [CNBC] full day of financial comedy coverage.  And maybe make that 100%.

Seems quite popular to suggest that today's market is mirroring 1998, and there is nothing but uber joy ahead.  Well, check gasoline deliveries during that period.  Not so alike.

Next up, in about 10 days, the Ceridian Index will confirm that the economy is contracting at a rapid rate...false GDP guesses aside.

 

Tue, 04/03/2012 - 10:35 | Link to Comment SheepDog-One
SheepDog-One's picture

But Cdad, doesnt that just mean everyone must be buying a new Obama Volt for $45,000? HA HA HA this is SO over...$5 gas and demand dropping thru the basement will grind this old hoopdie to a halt and it will be sudden! 'Factory orders' schmactory orders....hell, show me a FACTORY where??

Tue, 04/03/2012 - 10:42 | Link to Comment Cdad
Cdad's picture

Do you understand Law of Physics response to my comment, Dog?  What is it with guys on this site that jump in with entirely disconnected thoughts?  I don't get it.  ADD?  Diffusion agenda?

There are those who have actually tried to suggest that the collapsing demand for gasoline is an improved fuel economy thing...which is utterly laughable.  That chart is a chart of collapsing demand...period.  And yet, no one really talks about it.  To truthy, I guess.

Tue, 04/03/2012 - 10:48 | Link to Comment LawsofPhysics
LawsofPhysics's picture

It isn't that hard to comprehend the comment.  Just because american demand is collapsing that does not mean that demand is coming from elsewhere.  That is the point, welcome to the world market.  Now all we need is for the folks on Mars to start buying some GM cars and trucks, get it?

Tue, 04/03/2012 - 10:53 | Link to Comment Cdad
Cdad's picture

Ummm...well....considering that the storyline driving the "global growth story" [lol] is that America has decoupled and is carrying the world on its shoulders, I rather think your point is NOT GERMANE.  

As for what is going on in China, that isn't a story of growth but of contraction.

My point, of course, is that this single chart debunks the entire 5 month lie that America's economy is in good shape...that the economy is improving.  Now, perhaps your point is that China will now decouple from the US...which will cause me to laugh yet again.

 

Tue, 04/03/2012 - 11:08 | Link to Comment walküre
walküre's picture

The US economy is a mirage. Europe is delusional. China is a master of propaganda.

We'll soon find out when the elevator goes down. Lots of wailing and gnashing of the teeth yet to come.

Tue, 04/03/2012 - 11:16 | Link to Comment LawsofPhysics
LawsofPhysics's picture

We agree then.  Now where are those aliens?

Tue, 04/03/2012 - 11:50 | Link to Comment Cdad
Cdad's picture

There comes a time in many of these extended comment threads to simply call bullshit...and I call it here.  In what world language does the summation of the above thread arrive in agreement between the two of us on the following words:

That chart certainly speaks to the relevance of the U.S. market

It doesn't.  I don't even think you have a clue what point you are trying to make, so why don't you just shuffle along now.

Tue, 04/03/2012 - 12:06 | Link to Comment giddy
giddy's picture

Ouch... To quote a famous modern philosopher "can't we all just get along"???

The point is demand destruction is the only driver in this economy...  

Tue, 04/03/2012 - 12:10 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Still have not found a job with that Ph.D. in philosphy yet have you?  You fail to see the forest for the trees, not my problem.  Good luck.

Tue, 04/03/2012 - 10:42 | Link to Comment SheepDog-One
SheepDog-One's picture

Yea last time the DOW was just a bit higher than here at 14,000, gas was $1.60? Yet they want to say its all just the same and we're entering sprintime for Bernanke? 

Just insane.

Tue, 04/03/2012 - 10:40 | Link to Comment SheepDog-One
SheepDog-One's picture

Its all about gasoline to me, Lawsofphysics. Theyre trying to deny any ill effects to the Ponzi here, but I know that gas is already grinding down this machine that Ben built. Theyre desperate for retail to buy their pumped-up stocks, and running headlines that $5 gas is GOOD for you, yes you LIKE it! Well thats just bullshit.

Tue, 04/03/2012 - 10:54 | Link to Comment Cdad
Cdad's picture

Well thats just bullshit.

And everyone knows it.

Tue, 04/03/2012 - 11:22 | Link to Comment FlyoverCountryS...
FlyoverCountrySchmuck's picture

Do they?

Is NBC/MSNBC doing nightly live reports from the highest-priced stations for miles around, like they did NIGHTLY in 2007/2008?

Any sob stories on the New York Times front page about the poor Marina Owner that can't take his kids to Aruba this fall because people aren't paying $7 a gallon for boat gas this summer, like in 2008?

Any CNBC stories about people putting gas on Credit Cards to get to work, because they can't buy gas and groceriews at the same time, like 2008?

2006/2008 proved a rule. If the Magic Sqwuaking Box in the living room doesn't tell the sheeple what's going on, they don't know it.

Tue, 04/03/2012 - 11:42 | Link to Comment Cdad
Cdad's picture

Yeah...pretty sure you are overestimating the influence of the BlowHorn [CNBC] on Average Joe's perception of his own economic misery.  Pretty sure about that, yes.

Now, if you are referring to all the Chinese guys that flood this board and others like it, you might have a point...as their insight into the market is whatever BlowHorn programming says, apparently.  Those guys are true suckers for that crap.

 

Tue, 04/03/2012 - 11:55 | Link to Comment walküre
walküre's picture

That is the crux right there. The crisis of 2008 was elevated into everyone's mind with the corporate media blowhorns because their masters, the banking sector needed fresh cash. They ran the sob stories 24/7 to get the people to understand that America was financially in trouble and that the best remedy would be to recapitalize the banks with freshly printed Benny bucks. The bailout was approved over night, then the focus shifted on that dreadful stimulus package. Neither of which America could afford or should have needed!!!!!

Now 4 years later, the people are poorer. The economy has not improved but this time, the FILTH at the top has made off like bandits and they fear not! They're well taken care of and besides, the Treasury is sucked completely DRY. They keep the myth of more QE alive so the suckers will stay in the game. There will be no further QE because everyone knows there is NO MORE MONEY.

Why do you think people like myself and many others here are venting their frustration with this corrupt system that has cost them much of their life savings and is not allowing them to get back on solid financial ground? We've been duped and it SUCKS! Improving economy my ass. The paycheques are smaller and people can't participate in this "improved" economy. Nobody bailed out the people. Nobody advocated a broad and effective RESET or JUBILEE for the people to restart the system. The rich got much richer, the middle class is nearly wiped out and the poorest are living one SNAP card to the next. Until the elite cuts that as well. Only revolution will fix this.

Tue, 04/03/2012 - 10:42 | Link to Comment SheepDog-One
SheepDog-One's picture

It is already over, the Maniacal Monetizers just locked in denial still....they believe surely bankrupt and unemployed 'retail' will appear any minute with huge bags of money to buy the stock pump and stockpiled inventory off their hands! Freakin idiots.

Tue, 04/03/2012 - 11:13 | Link to Comment walküre
walküre's picture

German indexes reported yesterday their trading volume was down 25% yoy. It would probably be the same for the NY exchanges.

Tue, 04/03/2012 - 10:32 | Link to Comment scatterbrains
scatterbrains's picture

kinda freaky..  so why is the price of gasoline via UGA outpacing even AAPL stock in the 1st quarter ?

http://fiatflaws.blogspot.com/2012/04/bennys-1st-quarter-printing-impact...

Tue, 04/03/2012 - 10:35 | Link to Comment Cdad
Cdad's picture

so why is the price of gasoline via UGA outpacing even AAPL stock

Answer:  Ummmm....because it is profitable, serf.

Tue, 04/03/2012 - 10:49 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Why isn't even important.  The fact that stuff people need & use is outpacing investment returns means that everyone is getting poorer by the day.

Tue, 04/03/2012 - 11:15 | Link to Comment Village Smithy
Village Smithy's picture

It's called collusion, and it's fast becoming the cornerstone of business success. Much as it was in the early 1900's.

Tue, 04/03/2012 - 10:48 | Link to Comment PaperBear
PaperBear's picture

Is there a chart for diesel ?

Tue, 04/03/2012 - 11:12 | Link to Comment walküre
walküre's picture

It looks ugly. How can the drop of 30% occur almost instantly from September to October 2011? Something doesn't add up here

Tue, 04/03/2012 - 10:27 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Missed it by >that< much.

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

Tue, 04/03/2012 - 10:29 | Link to Comment BrokeDayTrader
BrokeDayTrader's picture

I'm getting ready to lose it here.

Day after day bad news comes out and the machines step up to buy, buy, buy

I need some bolt cutters so I can go down to the Wall St. machine houses and snap their cables and short circuit the whole NYSE.

Tue, 04/03/2012 - 11:10 | Link to Comment walküre
walküre's picture

are you day trading this market? you will be broke, just like your avatar says

Tue, 04/03/2012 - 10:29 | Link to Comment Jason T
Jason T's picture

What ever happened to JIT?  Just in time shipping or what not.  

 

 

Tue, 04/03/2012 - 10:30 | Link to Comment Dermasolarapate...
Dermasolarapaterraphatrima's picture
Senior citizens owe billions in student loans

 

http://lifeinc.today.msnbc.msn.com/_news/2012/04/02/10987401-senior-citi...

Grandma?

Grandpa?

Tue, 04/03/2012 - 10:39 | Link to Comment asteroids
asteroids's picture

Remeber, any goverment generated stat must be considered suspect. We've had years of inaccurate data. It'll take a long long time to get my trust back.

Tue, 04/03/2012 - 10:40 | Link to Comment Paul Atreides
Paul Atreides's picture

Warehouse inventory is marked as an asset and a plus on balance sheets, regardless if it can be sold or not. All one has to do is remember Crazy Eddies IPO and how they boosted the market value of the company by illegally 'doubling' their inventory. I am not saying that companies are lying about inventory but it makes total sense if you wanted to additionally inflate a companies true value alongside stockmarket manipulation.

Tue, 04/03/2012 - 10:50 | Link to Comment Cursive
Cursive's picture

@Paul Atreides

I had the pleasure of attending a conference with Sammy Antar as one of the speakers. Sammy was Eddie's cousin and CFO. He described himself as an animal, a predator to unsuspecting investors. I asked him, in 2006, if he would ever invest in equities. His simple answer - No.

Tue, 04/03/2012 - 15:17 | Link to Comment adr
adr's picture

The answer to your statement is yes, nearly every company is lying about inventory and counting millions of unsold garbage as assets on their books artificially inflating their value.

Crazy Eddie wouldn't be put in jail if they tried that in the market of today. Accountants learned of Crazy Eddie's scam and made massive donations to allow that type of accounting as accepted practice.

How the fuck do you think Select Comfort went from losing a few hundred million dollars to making a few hundred million dollars in less than three months. IT WASN'T FROM SELLING FUCKING BEDS!!!!

Tue, 04/03/2012 - 10:45 | Link to Comment PaperBear
PaperBear's picture

The cartel drove silver down from 32.98 to 32.73 and now it is back up at 32.98 - hahahaha

Tue, 04/03/2012 - 10:46 | Link to Comment MFL8240
MFL8240's picture

If they can continue to raise inventories, the phony recovery will look even better.  

Tue, 04/03/2012 - 10:55 | Link to Comment Village Smithy
Village Smithy's picture

With ZIRP you can stack alot of boxes on top of boxes and get away with it. But at some point...

Tue, 04/03/2012 - 11:52 | Link to Comment surf0766
surf0766's picture

My 60 year old greedy boomer neighbor just told me the economy is strong as he headed out on his second golf outing of the week.

Tue, 04/03/2012 - 12:25 | Link to Comment reasonisgone
reasonisgone's picture

Anybody think that maybe they are building inventories ahead of expected inflation? Although GM may be playing the election by building inventories and making the economy look stronger than it is.

Tue, 04/03/2012 - 13:07 | Link to Comment cnhedge
Tue, 04/03/2012 - 15:12 | Link to Comment adr
adr's picture

Wait, what, orders missed?

All I saw all over the financial farce was "NEW ORDERS FROM FACTORIES SURGE", "ECONOMY SHOWS STRONG SIGNS OF GROWTH DESPITE HEADWINDS"

 

Alas, the mouthpiece for the sheeple continues to try and paint massive unsold inventory surges as good news.

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