Industrial Production Plunges Most Since March 2009

Tyler Durden's picture


In one more example of why we are going to need more-er and open-ended-er QE from the Fed, today's dismal data rolls on. Industrial Production dropped 1.2% MoM - its largest drop since March 2009 - and missed expectations by the most since December 2008. The market (expectedly) is unimpressed and stable - fully aware that the Fed's new infinite QE will simply be expanded to an infinte-er QE should things go from worse to worse-er. To add more salt to the wound, Capacity Utilization dropped to its lowest of the year and missed expectations by its most in 16 months. 15x P/E multiples here we come - all supported by moar hockey-stick growth trajectories, infinity +1 printing, and a status quo who needs moar commissions. So much for cleanest dirty shirt, eh? It seems 'they won't come' in our 'if we build it' economy - as factories go quiet from the over-exuberant mal-investment of channel-stuffers.

Industrial Production plunges....


as does Capacity Utilization....


Charts: Bloomberg

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Fri, 09/14/2012 - 09:28 | 2794331 docj
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Fri, 09/14/2012 - 09:29 | 2794338 GetZeeGold
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Do you believe in miracles?


Fri, 09/14/2012 - 09:30 | 2794341 Thomas
Thomas's picture

Maybe Krugman is right. Maybe we need more QE. You can read about it at his blog:

Fri, 09/14/2012 - 09:50 | 2794485 camaro68ss
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looks like there braking alot of windows in the middle east. Im sure there economy will be booming in no time.

Fri, 09/14/2012 - 11:41 | 2795174 BeetleBailey
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Hey..thanks for the new link.

I was trolling his old site;

Fri, 09/14/2012 - 09:41 | 2794424 trebuchet
trebuchet's picture

So Fed GDP forecast released yesterday was - 0.4% for 2012  compared to June forecast.


Next year and the year after they rvised it UP   !!!   Coz QE3 is gonna put the economyback on track.

Dont worry folks we got it covered nothing to see here, move along now....

Fri, 09/14/2012 - 09:35 | 2794381 Punct
Punct's picture

I'm curious if Egan Jones has the balls to downgrade United States. 

Fri, 09/14/2012 - 09:30 | 2794336 Cult_of_Reason
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"Yes, Virginia, based on the household survey, and manufacturing reports, the regional Fed surveys the US is in recession."

Fri, 09/14/2012 - 09:31 | 2794359 docj
docj's picture

Nah - no panic at all. Benron was just channeling his "Inner Nero"

Fri, 09/14/2012 - 09:35 | 2794386 Cult_of_Reason
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So what is Bernanke panicked about? One word: "jobs". If you want a second word it's "recession".

Fri, 09/14/2012 - 09:48 | 2794470 Whoa Dammit
Whoa Dammit's picture

Bernanke already has a job. He is not about to panic over anyone else's. The only thing he is in a panic about is the true balance sheets of the TBTF banks.

Fri, 09/14/2012 - 10:30 | 2794645 Just Ice
Just Ice's picture


And to claim they were doing it for the benefit of Main Street?   What hypocrisy!   New tarp in disguise.

Fri, 09/14/2012 - 11:41 | 2795163 nofluer
nofluer's picture

And he's planning to leave his secure FED job and go back to Princeton... talk about CLUELESS!!!

With the current direction of things, the place certainly won't be paying the big bucks for "honored" emeriti. The question is, between now and then, will enough people figure out that today's college is a scam and abandon those hollow-ed poison ivy halls?? And even if it's still there and still in business, who would want to take a class from HIM?

Fri, 09/14/2012 - 09:34 | 2794384 Arnold Ziffel
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We are seeing a decline in the global economy. China has slowed down dramatically, so any commodity exporters which export to China are slowing down as well. We’re already seeing this happen in countries like Australia. We are also starting to see the Australian housing market begin to crash.”

Read more at Thanks, Cult, for the link. Great info.
Fri, 09/14/2012 - 11:35 | 2795132 nofluer
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Sounds like the S. African PM miners picked a bad time to strike. I mean... if nobody's working, then nobody's buying. As to the Mega-rich - they can buy gold until they turn green - but what good is it if there's nothing to buy?

So they go to the slave market (aka Union Hall) to pick up a few dozen "workers"...

Fri, 09/14/2012 - 09:29 | 2794337 Shizzmoney
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"The jobs are coming"

Fri, 09/14/2012 - 09:43 | 2794434 Whoa Dammit
Whoa Dammit's picture

Swallowing is not recommended. :-)

Fri, 09/14/2012 - 09:30 | 2794344 Dr. Engali
Dr. Engali's picture

I knew it! I just knew it!....Ben is not printing enough! Print until your eyes bleed Ben.

Fri, 09/14/2012 - 09:31 | 2794353 Jlmadyson
Jlmadyson's picture

Clearly the good times are back.

Everything firing on all cylinders.

Fri, 09/14/2012 - 09:31 | 2794355 Whoa Dammit
Whoa Dammit's picture

No need to make things when no one can afford to buy them.

Fri, 09/14/2012 - 09:31 | 2794357 Arnold Ziffel
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Remind me again please, what things do we produce ?

Fri, 09/14/2012 - 09:34 | 2794376 docj
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Weapons. Lots of them.

And Kardashians.

They're related.

Fri, 09/14/2012 - 09:34 | 2794383 yrbmegr
yrbmegr's picture


Fri, 09/14/2012 - 09:37 | 2794405 Dr. Engali
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CDOs, MBSs, Credit default swaps ,, weapons ..and American Idol..  Wait forget that last one we stole that idea.

Fri, 09/14/2012 - 09:46 | 2794453 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Beer, wine, whiskey and firearms.

Fri, 09/14/2012 - 09:32 | 2794365 SheepDog-One
SheepDog-One's picture

OH so actually Ben's little announcement yesterday was to cushion the blow that was coming today....see this shit isnt for years out its to buy another month maybe 2.

Fri, 09/14/2012 - 09:33 | 2794374 jtmo3
jtmo3's picture

What a box these fucker have put themselves and us in. No QE and the bottom falls out and we pay. QE and inflation explodes and the bottom falls out and we pay. 


I guess the best question is...why is no one storming anything here?

Fri, 09/14/2012 - 09:46 | 2794437 dwdollar
dwdollar's picture

Because people here still have the delusion of hope. Two hundred years of "good times" can do that.

Fri, 09/14/2012 - 09:50 | 2794483 pods
pods's picture

Here?  In the land of the free and the home of the brave?

The shining city on a hill?

Beacon of freedom, and land of opportunity?

Amerika is the capital of self delusion.  And ironic as it is, I will quote a hollywood character to best describe it:

"Jerry, it's not a lie if you believe it."


Fri, 09/14/2012 - 11:03 | 2794912 MachoMan
MachoMan's picture

land of the home, free of the brave?

Fri, 09/14/2012 - 09:40 | 2794416 yogibear
yogibear's picture

So Benny Bernanke and the fed throw more money at the banksters to boost stocks and commodity prices.

Manufacturers must raise prices to reflect the increases in the price of raw materials while trying to maintain or reduce labor costs. 

Add in Obamacare and taxes in a few months.

Bernanke and the Fed will trigger more layoffs.

People will be willing to work longer and harder to  keep their jobs will be doing the work of those laid off.

Fri, 09/14/2012 - 10:05 | 2794540 otto skorzeny
otto skorzeny's picture

great post- but i hate it when logic gets in the way

Fri, 09/14/2012 - 09:42 | 2794433 Jason T
Jason T's picture

This is awesome.. epic failure on the Feds part.  Epic!


we have had the shittiest 4 years of fixed investment... future productivity is going to suck suck suck

Fri, 09/14/2012 - 09:43 | 2794441 BrigstockBoy
BrigstockBoy's picture

Love how you keep at it Tyler! Awesome

Fri, 09/14/2012 - 10:01 | 2794458 Yen Cross
Yen Cross's picture

Man I smell a nasty squeeze on the longs coming! This ramp up is so overdone!

  Crude Oil 99.60 +1.29 +1.31%  
Fri, 09/14/2012 - 09:46 | 2794461 Zgangsta
Zgangsta's picture


Fri, 09/14/2012 - 11:28 | 2795097 nofluer
nofluer's picture

"Please, sir. I want some... more?"

Fri, 09/14/2012 - 09:52 | 2794492 pods
pods's picture

Wile E. Coyote has figured out that the reason he falls off a cliff is not that he has nothing under his feet.

But the cause of his falling is looking down.

Now I know where the saying "Don't look down" comes from.


Fri, 09/14/2012 - 11:27 | 2795071 nofluer
nofluer's picture

Well... I know that if you look down while riding a motorcycle you are more likely to crash... Maybe it's the same sort of thing here?

I wonder if that would hold true if your motorcycle was going off a cliff? Evil Ka-kneevil just didn't apply the correct outlook... maybe? ("Don't look DOWN! Don't look DOWN! Look at the clouds and you can fly forever!!!")

Fri, 09/14/2012 - 09:56 | 2794507 marcusfenix
marcusfenix's picture

don't worry, it's all covered under the new QE3 mandate...

Ben will simply print "more stronger" industrial production.

Fri, 09/14/2012 - 09:56 | 2794510 grid-b-gone
grid-b-gone's picture

I'm ready. Only some small parent loans before being 100% debt-free - and enough cash (and like-cash) reserves to cover taxes and food. 

I can get even smaller inversely to intervention.

You want to debase the currency and inflate? Go for it.

Fri, 09/14/2012 - 09:57 | 2794514 ejmoosa
ejmoosa's picture

I completed my preliminary jobs forecast for 2013 and as of now I see a loss of 0.75% of the NFP.  That equates to about 1 million jobs lost.

I can uderstand the panic in Bernanke's eyes.  I don't get that he keeps trying the same basic approach.

Year over year profit growth for the 3rd quarter 2012 report I expect to be around $1.86 trillion, down from $1.91 trillion in the second quarter.

This leaves the annualized rate of year over year profit growth for the four quarters ending 9/2012 at 6.72%.

While the actual numbers from the BEA will not be released  until the end of November 2012, I feel confident in these profit forecasts.





Fri, 09/14/2012 - 10:03 | 2794534 otto skorzeny
otto skorzeny's picture

but don't good feelings like "CONSUMER SENTIMENT HIGHER THAN EXPECTED" trump things like-you know- shit actually being produced?

Fri, 09/14/2012 - 10:36 | 2794670 ejmoosa
ejmoosa's picture

Do good feelings about the weather change the actual temperature? I do not think so.

Those making the hiring decisions are doing so based on their financials.  I don't know anyone running their businesses based on polling data. 

Well, other than Government Motors.

Fri, 09/14/2012 - 10:43 | 2794737 hedgehog9999
hedgehog9999's picture

Pls reset you trading
clocks to September/October
2007, same shit will unfold only a heck of a lot more faster!!!!

Fri, 09/14/2012 - 10:54 | 2794836 yogibear
yogibear's picture

Talk this morning by a former Fed governor (CNBC this morning) about Bernanke not seeking another term and going back to Princeton. He said Bernanke has had enough.

Fri, 09/14/2012 - 11:20 | 2795030 nofluer
nofluer's picture

He shouldn't have had a first or second term...

Let me see....  where'd I put that time machine... can't find anything these days...

Fri, 09/14/2012 - 11:37 | 2795144 hedgehog9999
hedgehog9999's picture

Good luck to him, he'll need it.  A lot of pissed off people out there.

Fri, 09/14/2012 - 11:18 | 2795015 nofluer
nofluer's picture

And now here's Fabian for tomorrow's closing market reports...

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