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Headline ISM Beats Expectations Even As Core Components Continue To Deteriorate
And so the baffling them with schizophrenic BS modus operandi continues. After virtually the entire world confirmed it was contracting overnight, the US once again pulls the rabbit out of the hat, and the ISM comes at a slightly better than expected 50.6, a modest decline from July's 50.6, but better than a consensus of 48.5: even Joe Lavorgna was looking for 49. The problem is that the beat was once again on purely artificial data, with Inventories and Customer Inventories posting the largest increase in the month, or basically the two most hollow economic series. Far more important - Production, dropped to 48.6, the lowest since May 2009. Another Pyrrhic victory was the increase in imports and decrease in exports: we all know what that means for GDP. Lastly employment also fell. The only saving grace was that prices declined too. That said, this response does not make the QE3 case easier, and now this report will have to be offset with a much weaker NFP number tomorrow, in order to keep the speculators guessing as to what is really going on with the economy. One final note: according to the ISM, all responses were received before Hurricane Irene, which means that if next month we see the long overdue sub 50 print, it will be all due to the wind.
From the report:
"The PMI registered 50.6 percent, a decrease of 0.3 percentage point from July, indicating expansion in the manufacturing sector for the 25th consecutive month, at a slightly slower rate. The Production Index registered 48.6 percent, indicating contraction for the first time since May of 2009, when it registered 45 percent. The New Orders and Backlog of Orders Indexes edged up slightly from July, but both indexes are indicating contraction in August at slower rates than in July. The rate of increase in prices slowed for the fourth consecutive month, dropping another 3.5 percentage points in August to 55.5 percent. The overall sentiment is one of concern and caution over the domestic and international economic environment, which is affecting customers' confidence and willingness to place orders, at least in the short term.":
More details:
COMMODITIES REPORTED UP/DOWN IN PRICE and IN SHORT SUPPLY
Commodities Up in Price
Aluminum (12); Aluminum Products; Butadiene; Caustic Soda; Copper* (13); Copper Based Products (10); Corn; Diesel Fuel; Electric/Electronic Components (2); Freight Rates; Glycol Ether; Hydraulic Components/Motors; Paper; Rubber; Rubber Products (7); Silver; Stainless Steel; and Steel* (12).
Commodities Down in Price
Cold Rolled Steel; Copper*; Natural Gas; Plastic Products; Plastic Resins; Polyethylene Resin; Polypropylene Resin; and Steel* (4).
Commodities in Short Supply
Electric/Electronic Components (8); Hydraulic Components/Motors/Pumps; and Titanium Dioxide.
Note: The number of consecutive months the commodity is listed is indicated after each item.
*Reported as both up and down in price.
And the always amusing respondent selection:
* "Earlier chemical price increases are beginning to soften." (Chemical Products)
* "Business is soft, confidence is down, and we are cutting inventory and expenses." (Machinery)
* "Exports continue to be strong — domestic weak." (Computer & Electronic Products)
* "Domestic sales are showing small improvements. International sales are showing larger improvements." (Fabricated Metal Products)
* "Demand remains constant and strong." (Paper Products)
* "Current headwinds in the national and international economic environment have increased uncertainty, and are affecting our customers' willingness to commit to high-dollar equipment purchases." (Transportation Equipment)
* "We continue to post solid numbers, but the situation seems tenuous." (Plastics & Rubber Products)
* "Automotive business (represents 52 percent of our sales portfolio) continues to be strong. Core business has pulled back slightly." (Apparel, Leather & Allied Products)
* "Sales continue to be sluggish." (Furniture & Related Products)
The Production sub-index continues to nose-dive...
And New Orders - Inventories remains stubbornly low and indicative of further pain to come for the Composite...
Lastly, after the initial euphoria, the market seems to be realizing that Goldilocks is actually not good.
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"Demand remains constant and strong." (Paper Products)
NO SHIT.. thanks benny
ALX
+1
the paper demand for money printing..
Better than Expected= Crash decent slightly slower
The problem for the market with these numbers is that they might be just good enough to stay the Bernank's hand in Sept. And as the numbers are getting worse, it could be a very bad Oct market with no Fed action until the end of the year. Just speculatin.
when will you and (most) other zh losers get it? stock market has turned UP! hoping for a crash-depression so that everyone will be like you-broke,worthless wont make it happen!!!
Right the stock market has turned UP! Due to pricing in QE3 about 30 times since January, and it wont be delivered since all is well now, so party on and quite your sour pussin!
Excuse me? Dude, I'm sitting here trading more money than you will ever see. I'm not "hoping for a crash-depression". I don't care what the market does I make money to get in front of it and be right, period. You may think this thing has "turned up", I think it is topping out and turning down. And that my friend is why we have a market. GOT IT?
Yay Stock Market! Buy Stocks! Buy YOUR Hysteria! Wait... I SELL hysteria and BUY panic. Right now the pikers are buying the dips because "everything is OK". Europe (where?) no longer matters and less-than-mediocrity is the new normal. Most ZHers are traders Sir. Your reasoning is met with incredulity here, sorry.
WE ARE NOT NOSEDIVING AND CRASHING!!!
It's just a tailpin.... and we'll crash... that means it will be a bit more slow motion.
MORE TIME TO BUY PM'S!!!!!! THANKS OBUMU!!!!
jISM Bitchez
The algos have gone absolutely ape-shit . The Dow has continuously gone up and down multiple times with 75 – 85 point swings since the report came out. Today’s chart is going to look like a seismograph if this keeps up.
You need to give the acid a break for a week or two.
Dow jumps 100 points in under a minute!
Didn't every regional report post numbers below 50?
Didn't every regional report post numbers below 50?
Yes, but when you add them together that's how you get the pop over 50...aw, hell, I can't do this CNBC/Fed double speak worth a damn!
Pay no attention to the man behind the curtain.
Algos went so apeshit(guessing weather it is good or bad, buy or sell :)) ), they are like hedless chickens, my VERY MUCH DISTORTED last price is more then .30 cents away from 1st bid and ask on ANY of my ticker symbols!!!! The 'economy" is in the proverbial shitter AND there is nothing THEY can do except lie to the bitter end! And bitter it will be!
Good old fashioned STOP LOSS price action.
Ahem, back to basics (I do admit that's a tough task given our high level of sophistication here on ZH, but hey, it'w worth a try, and especially so if it means staying solvent hehehe).
YOU ought to KNOW you re the MAN!
But TradingJoe, last nite a guy on here named 'Robert Paulson' was lecturing me on how I dont know what Im talking about and it IS all fundamentals and technicals driven markets! I for one am quite SURE he called that 'chicken with its head cut off' market move based upon this 'good/not so good at all' ISM report.
Since when do FACTS matter to this market?
All this "good" news and the DOW is barely moving up?!?!
What the markets need is BAD news because that really makes things bullish.
call it rabbit. call it chicken. call it DJIA. call it anything. BUT the F/undamentals remain TehFundamentals. And the air-plant levitation miracle can't keep hovering forever.
Looks like we're not yet in a recession just yet. I'll give it until Nov 2011.
It is a shitty ISM report, I don't see anything to celebrate by the retards
Knee jerk moron headline scanning computers pricing in 'QE3' which will never happen for the 30th time.
they know they're gonna get on zeroHedge if they nail the comments!
now, they're PMI~~~prb'ly making interoffice memos abt this!
" The Production Index registered 48.6 percent, indicating contraction for the first time since May of 2009, when it registered 45 percent."
sounds bullish to me.
Yeah, and I'd short the farm on the 1st downtick too!
LOL
Ring ring, hello good morning this is Mary at ISM, ahhhhhh hello this is Obama your president and Ben Bernanke, (Mary says under her breath "I wish these guys would stop calling here",)
"hello Mr President, let me grab John who is in charge of sending out the ISM report,"
"Hello Mr president this is John,"
"Hello John, we need you to put a happy face on that report this morning, make it positive"
"Mr president, this is the 5th time this year you have asked me to doctor this report, but at your command Mr President, but you know one of these days the public will find out"
....Bernanke chimes in, "they dont care anyway"
"ahhh thank you John, you saved a market sell off today, you should be proud of yourself", says Obama
John says, "I better get a promotion after all this doctoring"
Obama says" you will be in charge of BLS reporting next year, or we may find you a VP job at Goldman"
"I can't wait to lie even more" says John
Finest post of the week goes to Eireann go Brach
edit: the first version was better.
There is a high probability that we are world experts at manufacturing BS....
Sounds a little Anti-American Tyler... starting to worry about you
What is clear is that it is end demand that is lacking.
How exactly is QE3 going to help with that?
Brazils Mantega has already said QE3 is going to make "currency war worse" (well duh)
One wonders what the Chinese response will be to further money printing or whatever bernanke has up his sleeve in an attempt to further depreciate the USD.
>How exactly is QE3 going to help with that?
Shhhhh...you're not supposed to discuss that. "No pea soup for you!!"
you're right, lizzie! i got it!
listen: remember when bush II was sending everybody those checks so that we yanks wouldn't mind how completely screwed up eveything was getting, and just go shopping? well, if they send all the poor people some magic number like $2001 and call it some kinda income:
ther'd be over 30 million foodstamp apps after abt 30-60 days, and the states cld just start furloughing the social workers and giving them extra time off w/out pay, kinda like now, only 30X worse! they could amp up the lost and misplaced apps past the currently-acceptable 33% and, by gollly, i tell ya, i think this would just about do it!
+10
It should be noted that the $24.3b of increased payments is not a result of a COLA (inflation) adjustment. There has been no inflation adjusted increases in the past two years for SS. The higher 2011 payout is exclusively the result of more retiring workers becoming eligible for benefits. The number of new beneficiaries is now growing by 10,000 a day, 7 days a week. That number is going up in fiscal 2012. It will go up every year for the next 14 (The boomers are coming on fast and steady).
Read more: http://www.businessinsider.com/social-security-cash-flow-gets-even-more-...
Set computers on stun and play the quick-in-and-out game until the post 11:00am creep sets in...
damn wind....
damn humidity...
Damn 'quakes.
Is this possibly the perfect report? Just weak enough for more QE but strong enough headline for the algos to have to buy?............just sayin'...........I am sure the brainyac's will allow for the perfect spin....no?
As for algos having to buy...you must be looking in your rear view mirror. I don't know if you noticed, but the last six days have been an algo special.
As for spin, the half life of that crap is now down to hours. As you look around at world markets all falling, their economies contracting, the only audience left for criminal syndicate Wall Street spin is criminal syndicate Wall Street bankers. If you need proof of what I say, just look into the ratings of the BlowHorn [CNBC].
In ANY case...good luck actually trying to position for anything, save for taking fundamental positions that are either ramped or collapsed on any given day depending on whether or not the lie detector goes off at Blight on America HQ, or Trichet passes gas.
There is no market left to invest in, but only this wasteland created by Ben Bernanke.
Good luck.
CNBC's only audience now is the 401K Bathrobe Brigades, kept calm and not selling by the leg crossing skirts babbling about who-cares-what, as long as green rolls by on the screen.
...agree with you, and not sayin' I agree with the reporting methods. This is all an effort to game the system, and it appears that some very intelligent people have it figured out currently....the algos will trade the short-term (headline) to keep the market propped, and the non-algo traders will trade the uncertainty (weaker underlying) with a skew toward QE3....so the bias remains well bid........and it all dovetails nicely with the "exta meeting day" BS announcement in J Hole that will get the technicals through yet another month.
....and yes.....CNBC is a cartoon.
* "Demand remains constant and strong." (Paper Products)
LOL. Thx, Benron.
God, do you see the shit the main stream media is writing. You would think the US suddenly jumped into boom times.
The Main Stream Media are pathological liars, so used to sucking off the banks and TPTB they think its the natural thing to do. They all deserve to go bankrupt and down the drain as they are now simply irrelevant to the truth.
There also is no market. This isn't a market, it is such a massive con job ponzi it makes Mardoff's ponzi scheme look like a game of bridge. These people are beyond criminals.
Do you think they ever get embarrassed about the shit that comes out of their mouths? I mean if Simon Hobbs was your mate (a long shot but bear with me) wouldnt you give him an absolute mouthful about the lies? How do they face their friends/family each week?
Simple.
Their friends/family don't believe them to be lies.
I hate to break it to you but once you get comfortable in a high 6 low 7 figure lifestyle, you don't care so much (if you ever did) how you spouse provides that lifestyle, just that he/she does. That is the thing about money/lifestyle, most subvert all to it.
Ignorance is a possibility, stupidity is final.
Yep fair enough on the spouse front but surely, to continue the example of SH, being British he must have grown up drinking in a pub with his mates. I'm therefore fairly sure some of them even shared an interest or two and maybe even had some professional overlap.
Wouldn't you just skin one of your friends alive if he came back from a few years in the big apple sprouting this continuous stream of utter drivel that he knew to be completely false?
I realise it is wildly optimistic of me, but I really do like to think that there are a few more people like me out there who do worry a bit about scruples, and not just how many last blood-soaked cents they can squeeze out of the lie stone.
I personally find them highly embarassing and they are one of the large reasons that I tell so few people exactly what it is I do for a living.
I realise this all has absolutely nothing to do with the article, sorry folks. Just been despairing a bit more than usual of late.
Birds of a feather... or should that be hyenas? Moral types wouldn't last long in their circle.
When you call them on the lies...you cease to be friends.
There is some "genius" floating around here in ZH that is claiming that there "never was a recession".
Compared to this bozo...the MSM sounds almost reasonable.
I expect he'll chime in here any minute now.
Watch for him. He'll provide more laughs than a barrel of monkeys.
Check that Top Chart.. Do you see difference between
now and 2008???? Or what? As it showing on that chart
ISM on the same level as in 2006-2007..
So? At least for now, there is no recession, you are
correct. :))) While 2008 recession we were actual losing
50000+ jobs per month, got it?
Yep Kina, all is WELL! But not so well that we cant stay on our knees begging Bubbles 'Plleeeeease oh PLEEEEEASE more QE sir'!!
This is a horrible report, celebrating it would be anti-american. Tyler is a patriot.
Oh come now...What's more American than celebrating Horror? For fuck sake...it's our main export.
What horrible report? All I see is the media popping champagne corks over it, while stocks price in QE3 utter tripe for the 30th time. LOL, Sept 21 is going to be HILLARIOUS!
Everybody was saying the same thing for Jackson Hole. Why would this be different this time? The can cannot be kicked anymore?
Market? There is no market. Just a bunch of machines that react to headlines without any analysis to the data. What is worse is how it affects other markets which are filled with individuals who have given up using their brains and follow the machines like lemmings. It is depressing to see how the world financial markets have changed in the last 3 years to one that is completely driven by daytrading, momentum monkeys and short-term instant gratification. Even people with brains have completely stopped using them because their management berate them for not being a momo.
This will all end in tears
http://viewfromthewilds.blogspot.com/
the only thing HFT and 'Investors' care about is: Do we get QE3? If chances for QE3 rise: Buy. If chances for QE3 fall: Sell. Today chances fell, so sell :-)
People, Bernanke is not salivating to do QE3.
He has a dual mandate. Keep inflation low and keep unemployment low. QE2 triggered 0.4% Q1 GDP and in the current Q2 revision 1.0% GDP. This was right in the middle of QE2.
He doesn't understand oil scarcity, so he also probably thinks QE2 pushed oil up in price.
That suggests he hurt both his mandates.
Further Fed measures are just not going to happen unless there is overt and explicit evidence of negative GDP, and solidly negative. That evidence may be unfolding, but it's not overt yet. And keep in mind that given all the above, he is very much aware that anything he might do could be harmful rather than helpful.
He is not anxious and eager to QE3. It's almost a desperation move and no central banker wants to find himself flailing desperately.
In fact, Bubbles obviously knows he can NOT do QE, and so has designed 'QE carrot on a stick' method instead. He's obviously having a great time letting everyone believe a diamond encrusted Tiffany chest full of free money is about to be delivered, but oil, the dollar, stocks, and bonds say otherwise.
The empty vapors QE pump that is designed to let 'those in the know' distribute and short. Genius.
Speaking of diamonds, diamond prices are also up quite a bit. Easily transportable and hideable... take a peek at ajediam.com- I was stunned when told by a jeweler up in Canada what my wifes ring (bought in 1996) is worth in usd today.
I thought Bernank's mandate was "Keep inflation stable" and "Full employment", both of which could mean anything.
Better than expected brigade is creaming to their pants. Lol!
Everything is coming up roses, better than expected, we're doing GREAT! No QE Sept 21 faceplant will be great.
S&P500 big picture remains bearish and this will ALWAYS exert the most influence. The only thing GUARANTEED is that the bearish medium/long term cycle will have the upper hand.
FX medium to long term outlook continues: Euro bearish and USD bullish.
As mentioned many times - bring on the OVERDUE USD rally.
IMPORTANT CHART HERE.
http://stockmarket618.wordpress.com
Keep an eye on the Euro options...with everyone on the bear side of the trade could be an unexpected squeeze. Most lopsided I've seen. Of course it would require them to pull the proverbial rabbit out of the hat but something to watch.
If you compare the regional Fed reports and the ISM the ISM was a month behind the last time the regionals nose dived. Next month will be the next big leg down.
http://www.wunderground.com/tropical/tracking/at201193_model.html
Clear enough?
You can tell the economic health of any entity (corporate, human or government) by its balance sheet. Anyone who tried to convince you otherwise is just selling something.
There is only one "fix" for debt and that is value adding labor. AND, that was the original game, the original slave hook.
The entire mystery of the US financial deterioration is summarized in the above two statements.
Consumerism fixes nothing. Increasing debt fixes nothing. Austerity fixes nothing. Devaluing currency (printing money) fixes nothing.
So, if people are advocating the above then one must assume one of two things:
1. They are morons
2. They have a different goal
Take your pick
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