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Goldman On Durable Goods: Encouraging, But Doubt Recent Growth Rates Will Be Sustained

Tyler Durden's picture





 

Today's core durable goods number is being desperately spun as yet another inflection point for the economy. Alas, nobody buys it any more. Enter Goldman Sachs, which says that while encouraging, is quite dubious if the "recent growth rates will be sustained." Growth of what? Stainless steel scaffolding for lies and rumors that reach to the sky? If so, then yes absolutely. Otherwise, with China rumored to be gearing up to downgrade the CNY (and finally push Schumer over the cliff), we wish the optimists the traditional dose of good luck with their daily hopium.

From Goldman Sachs

BOTTOM LINE: Total durable goods orders about unchanged, but core orders and shipments up significantly. While an encouraging sign, we are not sure recent growth rates will be sustained.

MAP:
Durable goods orders 0 (4, 0)

KEY NUMBERS:
Durable goods orders -0.1% (mom) in Aug vs. GS Flat, median forecast -0.2%.
Durable goods orders ex-transport -0.1% (mom) in Aug vs. median forecast -0.2%.

MAIN POINTS:
1. New orders for durable goods fell by 0.1% (month-over-month) in August, about as expected. The composition of the report was generally favorable. In particular, "core" capital goods orders (nondefense capital goods excluding aircraft) rose by 1.1%--more than the consensus forecast-and estimates for earlier months were revised up. Core shipments rose by 2.8%, and are now up more than 20% on a three-month annualized basis. The rapid increase in core shipments over the last few months has been concentrated in machinery shipments, which are up roughly 50% on a three-month annualized basis. We will get more details on the drivers of this increase in the August factory orders report (October 4). Although it is an encouraging sign that shipments have not turned over, we doubt that the recent surge in machinery shipments will be sustained, given signs of deterioration in many manufacturing surveys and the fact that machinery orders growth has slowed in recent months.

2. Durable goods inventories increased by 0.9% (month-over-month), pointing to some upside risk to the inventory assumption in our Q3 GDP growth forecast. The inventory-to-shipments ratio in the sector has trended higher in recent months.

 


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Wed, 09/28/2011 - 09:33 | Link to Comment Moneyswirth
Moneyswirth's picture

You look at the C+I+G+Exports equation and its anemic.  The government is the only thing capable of holding up the whole damn thing.  I'd be shocked if unemployment is below 9% come 2012.

Wed, 09/28/2011 - 09:44 | Link to Comment GetZeeGold
GetZeeGold's picture

 

GS runs the world.....I'd listen to them.

..........I'm just saying.

 

Wed, 09/28/2011 - 09:54 | Link to Comment boom goes the d...
boom goes the dynamite's picture

maybe they run the world only because people listen to them?

Wed, 09/28/2011 - 10:58 | Link to Comment DeadFred
DeadFred's picture

They may run the world but they don't tell the truth. 

Wed, 09/28/2011 - 10:47 | Link to Comment kito
kito's picture

listen to them and do the opposite. remember that gold to 2500 call? they are liars. manipulators, and always always to the opposite of what they recommend.

Wed, 09/28/2011 - 12:00 | Link to Comment pelican
pelican's picture

Perhaps they are preoccupied.  Apparently, Anonymous posted the home address of the CEO of GS on the net.  

Wed, 09/28/2011 - 09:44 | Link to Comment boom goes the d...
boom goes the dynamite's picture

The gooberment will changed the calculation for unemployment to exclude anyyone who is currently on foodstamps or other welfare programs bringing the new unemployment rate down to 6%, making a check from the gov in return for doing nothing the new form of sustainable employment.

Wed, 09/28/2011 - 09:49 | Link to Comment Quinvarius
Quinvarius's picture

Heh.  That might work.  Count all the people receiving unemployment benefits as government employees.

However, it only works for the purposes of spreading BS.

Wed, 09/28/2011 - 09:53 | Link to Comment Clueless Economist
Clueless Economist's picture

But I saw Steve Liesman on CNBS and he says this is actual a very solid report.  His analysis shows this is a big positive in the ongoing recovery.

Wed, 09/28/2011 - 09:43 | Link to Comment Conventional Wisdumb
Conventional Wisdumb's picture

Can anybody out there translate this crap?

Wed, 09/28/2011 - 09:45 | Link to Comment Robslob
Robslob's picture

 

Don't be shocked...they just goalseek numbers that equate to Obama being re-elected...I can hear it now...

First time ever a President re-elected with unemployment above 9%!

 

Another does of Hopium: Greece to face inspectors, Merkel hints at bailout

Wed, 09/28/2011 - 09:50 | Link to Comment disabledvet
disabledvet's picture

Yeah. Inspectors' Clouseau. And rather than declare martial law they're going to declare "hanky-panky." GREEK hanky-pancky no less!

Wed, 09/28/2011 - 09:49 | Link to Comment Oh regional Indian
Oh regional Indian's picture

What a bunch of lies. They lie by hinting.... like above..... strong appreciation, yes, in Bomb making material and other sundry orders from the bottomless pit of spending known as the Pentagon. 

So now, it's just so clearly a Headline Nudging the bots play. 

Meanwhile, India is watching all this with bated breath, the collapse of the US/EU is the prompt implosion of the credit obese, great Indian Service delivery Indian middle class. Who currently will nto be denied in teh face of rising rates. 

Sheep to the adman's slaughter.

ORI

Mall Mauling and Gandhian Tales

Wed, 09/28/2011 - 09:49 | Link to Comment LongSoupLine
LongSoupLine's picture

Noise...

The real news is Bob Pisani said, "What's important here is stocks are attractive."

I'm all in on this news and more importantly, Amazon has a new "food item" (see: list of FRBNY nutrition) being released this morning.  This is obviously going to save the economy according to how CNBS is acting.

Wed, 09/28/2011 - 09:51 | Link to Comment Village Smithy
Village Smithy's picture

Seriously, I think that reading flyers can be great for economic forecasting. I am not surprised this core number was OK, the flyers during August were full of discounted crap and there were lots of "buy now, don't pay a cent until next year" deals being handed out. Once again we see this slight of hand trick where demand is pulled forward to pad the numbers.   

Wed, 09/28/2011 - 09:57 | Link to Comment Caviar Emptor
Caviar Emptor's picture

The multi-trillion dollar stimuli given in various forms in 08-10 are already sputtering! 

The stimulus is Keynesian, yes, BUT it was done with the supply-side monetarist school philosophy of boosting coporations and the FIRE sector to prime the pump. 

WHat they didn't count on: the core of the economy has been rotted out and continues to be as the middle class finally did get tapped out, unable to extend the reach of credit any further, with fallling incomes and net worth, and the limits of the era of cheap anything. Worse, the more they print dollars, the thighter this biflationary trap constricts demand. Like a Boa. 

Wed, 09/28/2011 - 09:58 | Link to Comment Moneyswirth
Moneyswirth's picture

The journalism students on CNBC said stocks are attractive?  Nah....couldnt be...

Wed, 09/28/2011 - 10:19 | Link to Comment Ellesmere
Ellesmere's picture

HA !! Love the crack about the scaffolding...

Wed, 09/28/2011 - 10:55 | Link to Comment I did it by Occident
I did it by Occident's picture

May we assume some of these numbers are reflective of propensity of some suppliers doing channel stuffing? 

Wed, 09/28/2011 - 11:13 | Link to Comment NEOSERF
NEOSERF's picture

With Rosh Hashanah starting tonight, window dressing is over and no volume grind ups starting this afternoon through Fri are likely with a BIG downdraft on Monday as the lack of a super bailout become evident.

Wed, 09/28/2011 - 11:15 | Link to Comment PulauHantu29
PulauHantu29's picture

Don't count yoru chickens before they hatch!

Wed, 09/28/2011 - 11:58 | Link to Comment Zero Govt
Zero Govt's picture

 "Goldman On Durable Goods: Encouraging, But Doubt Recent Growth Rates Will Be Sustained"

More importantly Goldman Sucks, will your stagnation and Turnover-Collapse-Rate continue?

My how the mighty fall.. so hard and so fast! Just a small point but how does 1st Class on the Titanic, like Captain Calamity Lloyd Blankfein, rake in such heavenly bonuses while his bankrupt Banks Turnover sinks so quickly?

Did the 'Almighty' that 'Guides Him' set the Bonus pool rates to markedly diverge as the companies sales drown?

Message to all Go' Suck employees: there aren't enough lifeboats and 1st Class aren't going to organise anymore either as they've reserved them all for themselves so real soon 'Learn to Swim'

Go Suck by Name and Just Sucks by Nature

 

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