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Producer Inflation Declines Just In Time For Op Twist; Retail Sales Dive As US Consumers Withdraw
Nothing good on the US economic front as usual. After all, this is fact and data driven, not based on headline and rumors (even though the BLS does enjoy fudging the data to an extent to make a Chinaman blush). PPI came at 0.0%, in line with expectations, but PPI ex food and energy increased just 0.1%, missing expectations of 0.2%, down from July's 0.4%; it was also tied for lowest since November 2010. The 12 month change in the PPI for finished goods was up 6.5%, the lowest since March 2011. And while finished goods still retained their inflation power, it was in the intermediate space that we saw a major drop of 0.5%, the biggest in over a year and the first decline since July 2010, mostly due to energy goods: "Most of the August decline can be attributed to lower prices for intermediate energy goods, which dropped 2.3 percent. The index for intermediate materials less foods and energy also contributed to this decrease, edging down 0.1 percent. By contrast, prices for intermediate foods and feeds advanced 1.7 percent. On a 12-month basis, the index for intermediate goods moved up 10.3 percent in August." Overall, this gives more leeway for Op Twist and an IOER cut to be announced in one week by Bernanke. Which according to the Fed will be needed: Advance retail sales printed at 0.0%, below consensus 0.2% and down from a downward revised 0.3% in July. Retail ex sales and autos was the lowest since December 2010. Some comments from Bloomberg on this latest miss: Clothing sales down 0.7%, department stores down 0.3%; consumers likely cut purchasing due to rising cotton, other materials costs, says Bloomberg economist Joseph Brusuelas. "Sales disappoint as households deleveraging, real incomes decline." And scene.
Total PPI :
Core PPI (Source: Bloomberg)
PPI Table:
And Advance retail sales:
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but consumers are still out there buying according to Tom Chin from Telsey advisors
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Attack Watch by my.BarackObama.com
Terrible numbers. Should be good for a pop of 300 points on the Dow. As my five-year old always says, "It's opposite day today." Fun times.
"opposite day", huh? that's quite brilliant
Kids say the darndest things. Amazing what is apparent to a 5 year old that Wall Street economists are blind to.
I thought the ZH position was that we needed a >= 20% drop in equities before QE3. Now we just need a minor drop in inflation?
all we need is GS telling we need QE3, biatch
Right, keep cutting the target distance down, a couple weeks ago we had to see the SP tank to 900 or so for QE, now ust a little % drop in inflation or 'consumer spending' opens the QE floodgates.
Personally I think its all a big pile of bullshit...no Skittles there at all.
a dip in the aug cpi tomorrow and it's in the bag. since the ptb make up those numbers it isn't even in doubt.
Whats in the bag!
QE3 OT2 some red ones, some blue ones...
That's the only thing I'm wondering as well.
Operation Twist 2.0 won't work...So when does the plunge begin? My guess is Europe is about to royally fuck the rest of the world.
Those numbers just might force Brian Sack to sell more SPX cash puts the a few days before expiry. Best stimulus around. Bring down vol while bringing the mkt up at the same time. Nothing on the books when cash settled. Perfect.
All gasoline and govt subsidized auto purchases...man that is an ugly report.
WOW! What a coincidence inflation dips right before the FOMC meeting.. almost like the boys are changing the numbers around to suit there needs.. hmmm
"tradition"
http://www.youtube.com/watch?v=5I-SbwCHJ80
Alter the lyrics a bit: Can't Stop Deflation!!!! OooOOo OOOO!!!
1 week to go beforeoperation twist...I guess based on this trend we will see a week of rallying in expectation of QE3 to infinity, it will last a couple months and then greece will default, then a couple more months of rallying, then france is downgraded, more rallying, then italy defaults, more rallying, then the US raises its debt limit, more rallying, then uncle warren takes a bath and quess what...more rallying, and then finally some time in 2013 or 2014 complete implsion and we all follow zimbabwe in a gold backed currency.
How does that sound, does it tickle your imagination?
so they will be buying which durations? 10 20 or 30's ????????????????????? my guess is that everyone already bought on the rumor. FED inspired bond moves from late 2009 and 2010 were COMPLETELY retraced, so why should 2011 be any different. I am short TLT here using TMV at TLT 114.
Worst... nightmare... always... something to do with... reality...
NEWS FLASH...BlowHorn [CNBC]....J. Cramer....
Revealing one dumb ass comment at a time, that he does not believe in free markets...not at all. After years of listening to this guy assert that he is a champion of the little people, all one needs to do is listen to his interview with T. Geithner to understand...he is a champion of bankers.
Just fix the interest rates and borrow more of the little guy's money...that is his message. Kill the dollar, ramp equities owned by Larry Fink...and all is well.
Hey as long as the billionaires at the top find SOME way of getting more free billions from bankrupted american people, hell thats all that REALLY matters!
What I find interesting is August clothing sales down, August is traditionally a spike in clothing sales for kids returning to school, this number is more telling than downward trend would indicate.
I read a couple of articles claiming retail raked it on on 'back to school'....hmmm maybe not so much. Or its all just a lie and no point in reading anything now.
Well, if retailers told the truth, where would their stocks be? Obviously the BLS is never truthful but typically (99.9999%) they are overly optimistic and downwardly revised...so for once it appears they may be closer to the truth.
wait until they "PASS THIS BILL" and all those schools will be refurbished, and, and, all those teachers will be rehired! then, and only then, will back to school sales rise! unless everyone smartens up, and all purchases are done online!
I still don't see an economic benefit at all from OpTwits, it just looks like a reacharound to me?
USA now so pathetic the week before the wheels fall off the VP goes hat in hand to China to beg for some money...USA hobo nation.
Mish must be right...we are in a deflationary depression...just nobody knows it yet...lmao...
Mish must be right...we are in a deflationary depression...just nobody knows it yet...lmao..
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None of these indicators point to inflation-they are indicative of a deflationary environment
New Ron Paul ad:
http://www.youtube.com/watch?v=VlYG6vh2T-M&feature=player_embedded
Back to school was terrible. The mass retailers brough in the lowest level of inventory I've seen in a long time. Haloween looks terrible as well. Past years they put in huge dis0plays and brought in tons of animatronic gadgets. None of those have been brought in this time.
The retail buyers I work with have all had their open buy budgets slashed. Once they buy the prduct they are told to buy there is nothing left for new product.
Oh, wonder how many people actually know that the new product buyer is the lowest guy on the totem. The upper level buyers have the job of buying 100,000 pieces of the large brands even though the quantity will never sell just to mke the numbers look good for the corporations that the CEO of the store holds stock in.
Our entire retail landscape is not made to sell product to consumers but to goose stock of corporations that are deemed worthy. Do you really need multiple level sporting good stores with escalators and climbing walls, no. But man do they look good when the pictures are put in an annual report.
Hurray for hyperbiflation! Watch the things you need to survive skyrocket in price while the things you own (like your home) plummet in value all while your wages stagnate or drop. Worst of all outcomes for the middle class.
Peak oil paradox, the price of everything rises due to higher oil prices, while all your expendable income disappears as your wages drop and it costs more just to show up for work.
I'm overwhelmingly bullish on Financial Repression rise.
Consumers withdraw but hotel occupancy rates look pretty well. How come?
Natural disasters cause folks to relocate to higher/safer ground. Many folks who were foreclosed on that still have jobs stay in long term stay hotels or sleazy motels depending on their means.
During the great depression many people lived in hotels for years.
Or it could be everybody is going to Disneyland to celebrate how fucking grand life is.
Some old folks actually live at Disneyland Orlando. They live at hotels on site if they are reasonably wealthy, or just a bit off-site if not so. Compare that to the costs of "assisted living" or at some of the retirement communities!
Redifining Mickey Mouse Healthcare.
enginneered by the FED for the FED