• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Philly Fed Craters

Tyler Durden's picture


One word to explain the Philly Fed which just printed at -16.6, or the weakest since August 2011, on expectations of an unchanged print: abysmal. Basically every subcomponent of the index was negative except for number of employees, although luckily we already know that US jobs (even part-time ones) are collapsing too. In short: if this horrendous print does not boost stocks higher, nothing can.

Oh and the market continues to be bathed in hopium. While the current conditions cratered, the 6 month forward looking index... rose.

From the Survey:

Indicators Suggest Decreases in Activity


The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, fell from a reading of ?5.8 in May to ?16.6, its second consecutive negative reading (see Chart 1). Nearly 40 percent of the firms reported declines in activity this month, exceeding the 22 percent that reported increases in activity. Indexes for new orders and shipments also showed notable declines, falling 18 and 20 points, respectively. Indexes for current unfilled orders and delivery times both registered negative readings again this month, suggesting lower levels of unfilled orders and faster deliveries.


Firms’ responses suggest steady employment this month but shorter hours. The percentage of firms reporting higher employment (14 percent) edged out the percentage reporting lower employment (12 percent). The current employment index increased 3 points this month. Firms indicated fewer hours worked this month: the average workweek index decreased 14 points and posted its third  consecutive negative reading.


Indexes for prices paid and prices received both decreased and were negative this month, suggesting that price pressures have moderated notably. The prices paid index fell to ?2.8, its first negative reading since July 2009. Nearly 16 percent of firms reported declines in input prices; 13 percent reported increases. Firms also reported that the prices received for their own  products fell: For the second consecutive month, more firms reported a decrease in product prices (17 percent) than reported  an increase (10 percent).

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Thu, 06/21/2012 - 10:11 | 2546917 Squishi
Squishi's picture

are we there yet?

Thu, 06/21/2012 - 10:16 | 2546953 slaughterer
slaughterer's picture

PhillyFed is nothing that a good EuroRumor can take care of. 

Thu, 06/21/2012 - 10:20 | 2546978 jus_lite_reading
jus_lite_reading's picture

Ponzi ponzi!!!

I know at this point in time it seems redundant but... the WHEELS ARE COMING OFF THE GLOBAL ECONOMY and NO AMOUNT OF FRESHLY PRINTED FIAT PONZI CAN FIX IT!!!


Thu, 06/21/2012 - 10:25 | 2547006 vast-dom
vast-dom's picture

when the the 99% roam like zombies and devour each other across charred dystopian landscapes the markets will be breaking all-time highs. and then we shall know that the vampiric ponzi truly worked.

Thu, 06/21/2012 - 10:44 | 2547093 vast-dom
vast-dom's picture

a little IQuit test:


ponzi is to zombie


hopium-rigged markets are to (_________)

Thu, 06/21/2012 - 10:48 | 2547113 idea_hamster
idea_hamster's picture

Soma for us gammas?

Thu, 06/21/2012 - 11:40 | 2547401 NotApplicable
NotApplicable's picture

Crater in order to cater.

Hopium 2.0, where bad news is the best news you can get!

Thu, 06/21/2012 - 11:01 | 2547181 BlandJoe24
BlandJoe24's picture


Thu, 06/21/2012 - 12:31 | 2547602 Lednbrass
Lednbrass's picture

A Delusional addled population and political/financial structure?

Thu, 06/21/2012 - 10:34 | 2547042 EscapeKey
EscapeKey's picture

Doesn't mean they won't try to "fix" it that way.

And no doubt a substantial part of the "fix" finds its way to insiders' pockets.

Thu, 06/21/2012 - 10:53 | 2547147 DosZap
DosZap's picture


Using the SWIFT system the supreme commander screwed the pooch.( what else is new?)

Now China,India,Russia, and several other BRIC nations are forming their OWN system of SWIFT.

They are pooling their currencies and end arounding the SWIFT weapon used by Obiewan.

This is going to backstop any issues they have because China has a 3 trillion reserve fund.

They will use it to backstop each other, for when we go up in flames.Plus this is setting the Yuan up for the New reserve currency........


www.jsmineset for article

Thu, 06/21/2012 - 10:32 | 2547023 Cognitive Dissonance
Cognitive Dissonance's picture

"are we there yet?"

Sadly, very sadly, the bus ride to hell has barely begun.

While many here on ZH have at a minimum a basic understanding of the economic damage wrought by the last Great Depression, other than seeing a few black and white photos in our high school history textbooks of lines outside soup kitchens, tent cities and barter towns, of hungry children and distraught parents, few here really have a mental or emotional grasp of the coming wide spread human misery coming round the bend.

It won't slam into us at full speed. Rather it will slowly creep up upon us until finally one day, while looking out our window or walking down the street, we will be shocked to our very cores by what we are seeing, hearing and feeling. Only at this point will we finally be rid of all our false hopes, the real chains that bind, and truly be ready to hold ourselves accountable for cutting our masters' leash and getting to work rebuilding. 

It does not need to be this way. We have a choice. When will we find the inner courage to make that choice and stop this utter madness?

Thu, 06/21/2012 - 10:43 | 2547091 WatchingIgnorance
WatchingIgnorance's picture

Heck CD, I already have people living in the parking lot at my Wal-Mart down the street. I see more and more homeless people every day wandering out of the fields in the morning in search of food or a handout. These are not just what the mainstream would call 'homeless bums.' These are young people with that blank look of hopelessness and dispair in their eyes. We have families with young children on our corners begging for change.

The air hasn't smelled right all year. Am I finally detecting that faint smell of a rotting carcus in the distant? Time is drawing near folks . . .

Thu, 06/21/2012 - 12:34 | 2547617 Lednbrass
Lednbrass's picture

I wish it were drawing near, but suspect we wont see a real cratering for another 5 or 6 years.

Professinal illusionists with media and printing presses behind them working a crowd that desperately wants to believe that magic is real can stretch this out awhile longer Im afraid.

Thu, 06/21/2012 - 14:22 | 2548105 Freewheelin Franklin
Freewheelin Franklin's picture

Christ you guys are depressing. Y'all need some fine bitches and blow.

Thu, 06/21/2012 - 12:26 | 2547587 mick_richfield
mick_richfield's picture

The people who really understand what they expect from the near future are building very large underground shelters in inaccessible areas.  Paid for with printed money.

It strikes me as an ominous development when a lot of governments around the world, like the Fed (which is the government of the United States) starts spending money like there is ... um .. no tomorrow.


Thu, 06/21/2012 - 12:54 | 2547712 cougar_w
cougar_w's picture

Walking down that street someday and seeing that misery first-hand, we won't recognize it as an echo of a darker time ... because it won't be a grainy photograph in black-and-white.

I guess a picture says a thousand words but being there in person says nothing. That's why great challenges and heroic efforts only exist in history books.

Thu, 06/21/2012 - 19:11 | 2549101 TheFourthStooge-ing
TheFourthStooge-ing's picture

CogDis said:

"are we there yet?"

Sadly, very sadly, the bus ride to hell has barely begun.

True, although our bus has finally made it to the edge of the parking lot.

It does not need to be this way. We have a choice. When will we find the inner courage to make that choice and stop this utter madness?

After relieving the black raspberry patch of a handful of ripe berries and talking with the neighbors for a few minutes, I pulled a radish from the garden while walking back to the house. Mmmmm, crunch time.

Thu, 06/21/2012 - 10:12 | 2546925 Conman
Conman's picture

Teflon markets say "meh". Incredible.

Thu, 06/21/2012 - 10:12 | 2546927 FieldingMellish
FieldingMellish's picture

Gold seeing a rise but stocks not so much.

Thu, 06/21/2012 - 10:13 | 2546928 nobusiness
nobusiness's picture

Here comes the fed.  i mean bulls.  How is there an endless supply of stock buyers that this market never falls.

Thu, 06/21/2012 - 10:16 | 2546948 Cursive
Cursive's picture

This is an election year.  Good things always happen in an election year.  Nevermind 2008.  /sarc

Thu, 06/21/2012 - 10:27 | 2547017 DeadFred
DeadFred's picture

The next FOMC is in August, correct? Bad news won't be good news until a bit closer to meeting time. QE rumor-ramps are sooo yesterday.

Thu, 06/21/2012 - 10:13 | 2546930 ihedgemyhedges
ihedgemyhedges's picture

Cue Jan Hatzius on GDP..............

Thu, 06/21/2012 - 10:13 | 2546932 kralizec
kralizec's picture

Huh, what?  There's a turd in the diaper?  How did that get there?

Thu, 06/21/2012 - 10:39 | 2547071 JPM Hater001
JPM Hater001's picture

Jamie Dimon put it there.  More to come.

Thu, 06/21/2012 - 11:37 | 2547385 Osmium
Osmium's picture

I think Jamie Dimon is the turd.

Thu, 06/21/2012 - 10:15 | 2546937 HaroldWang
HaroldWang's picture

At some point the market has to realize they're caught in a loop. Stocks HAVE to crater to get QE3. So any bad news is good news, is nonsense for the QE3 seekers. They need a terrible stock market to have their QE dreams come true.


Thu, 06/21/2012 - 10:18 | 2546970 Cursive
Cursive's picture


Logic?  There's a reason they are called "Muppets" or "Bulltards."  What we are dealing with now is the moral hazard of addiction to the federally supported backstop of all problems.  Nothing can go wrong because nothing will be allowed to go wrong.  What, I ask you, could go wrong with THAT kind of thinking?

Thu, 06/21/2012 - 10:15 | 2546938 Bay of Pigs
Bay of Pigs's picture

No worries, all priced in.

Thu, 06/21/2012 - 10:15 | 2546942 youngman
youngman's picture

I wonder what the Philly fed guy said in the meetings the last two days....????

This isn´t a trending down...its a crash....October suprise anyone....something is up...

Thu, 06/21/2012 - 10:46 | 2547106 WatchingIgnorance
WatchingIgnorance's picture

Chance of no election happening: 20%.

Watching them fight over who gets to be captain of the sinking ship: priceless.

Thu, 06/21/2012 - 10:15 | 2546946 Paul Thomason
Paul Thomason's picture

Commodities have seen this coming for months VIDEO>> De-Bunking The Gold Price Manipulation Conspiracy?

Thu, 06/21/2012 - 10:15 | 2546949 nomorebuyins
nomorebuyins's picture

Ramp is not gaining traction today, there will probably be the ultimate super rumor this afternoon.

Thu, 06/21/2012 - 10:17 | 2546961 urbanelf
urbanelf's picture

ECB creates debt hunting unicorn?

Thu, 06/21/2012 - 10:39 | 2547075 JPM Hater001
JPM Hater001's picture

With rockets for shoes.  That would be wicked.

Thu, 06/21/2012 - 10:41 | 2547081 urbanelf
urbanelf's picture

I'm sorry.  I meant to say they drew up plans for a debt hunting unicorn.  My bad.

Thu, 06/21/2012 - 10:16 | 2546955 nobusiness
nobusiness's picture

Interesting how my June 22 135 SPY puts are going down in value the same time the SPY is dropping.  Someone know something.  Could it be obama care unconstitutional?

Thu, 06/21/2012 - 10:19 | 2546977 nobusiness
nobusiness's picture

This is where I go nuts.  Even if the horrible Philly numbers ment QE infinity, that wont happen until the next fed meeting so why would anyone step in and buy today???  Who are the idiots buying right now?

Thu, 06/21/2012 - 10:24 | 2546999 Alea Iactaest
Alea Iactaest's picture

Very rapid time decay. Falling volatility yesterday, flat today. Maybe hold on for tomorrow, some TBTF downgrades tonight? But likely priced in. Nothing is a black swan... until it is.

Thu, 06/21/2012 - 10:18 | 2546962 sudzee
sudzee's picture

Electionomics 101.

Thu, 06/21/2012 - 10:17 | 2546963 TrainWreck1
TrainWreck1's picture

On a happier note for the Philly Fed, they can always step outside for a lungfull of fresh air in the pristine, crime-free paradise they call home.


Thu, 06/21/2012 - 10:19 | 2546964 Jason T
Jason T's picture

aggregate demand collapsing.. Ben said in his 2002 speech if rates were zero, it was mistaken to think that the fed could not stimulate aggregate demand through other measures.


He thought low interest rates loans would induce americans to continue on with their debt binges.  YOU LOSE!  GOOD DAY SIR!


Thu, 06/21/2012 - 10:23 | 2546995 Cursive
Cursive's picture

@Jason T

The Bernank thinks the American public are all mice that can be bribed with some cheese.  Well, the American public have finally figured out that the cheese is lying in a debt trap.  The American people are a relatively disappointing lot, but we aren't that low.  Time to re-learn some old tricks.

Thu, 06/21/2012 - 10:26 | 2547010 Alea Iactaest
Alea Iactaest's picture

Maybe it would be stimulative if consumers actually got the loans (could afford the loans? could qualify for the loans?) but since the loans are going to the TBTFs there isn't a whole lot of stimulation going on outside Wall St or an SEC "strategy session".

Thu, 06/21/2012 - 12:52 | 2547695 optimator
optimator's picture

If they won't let us vote for Dr. Paul, at the very least Romney should have him head up the FED when he gets in.  That would add some excitement to everything.

Thu, 06/21/2012 - 10:18 | 2546971 lizzy36
lizzy36's picture

Romney is doing is happy dance again this morning. 

Thu, 06/21/2012 - 10:29 | 2547027 fonzannoon
fonzannoon's picture

Yes Romney is dancing. in a few months when it becomes pretty certain he will win he will have to be more careful with his rhetoric. He will need to start praising the Bernak. Maybe even mention Krugman as sec of treasury. This way the debt and pesky debt ceiling won't be so big of an issue once he is in.

Thu, 06/21/2012 - 10:34 | 2547044 lizzy36
lizzy36's picture

Krugman....SHIT in a GOP adminstration I have a better chance of becoming Sec TSY than Krugman.

Thu, 06/21/2012 - 10:38 | 2547067 LawsofPhysics
LawsofPhysics's picture

Yes indeed.  One party for the banks and financial houses, by the banks and financial houses.

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