Wall Street Kneejerk Responses To This Morning's Disappointing Economic Data Barrage

Tyler Durden's picture

The economic data this morning was bad across the board, as it has been for the past month, and without even looking at the futures we are certain that it is green across the board: nothing reflects reality any more, least of all the stock market, which is now trading based purely on short squeezes (as we warned two days ago), and a spike in hopes for QE4 (QE3 is already priced in). Regardless, here is a compilation of kneejerk Wall Street responses courtesy of Reuters.


"We got a lot of data that cannot be spun in any way other than we are continuing to see weakness, we are continuing to see a complete dearth of growth and frankly, it's not a surprise. Markets reacted pretty much in-line, these numbers are not good, but they are not apocalyptic either. They are not good, they are trend confirming, so the recent rally we've seen this week is probably going to come under a little bit of pressure."

"Look, these numbers don't instill confidence and any policy wonk that comes on the tube that tries to make these numbers look better than they are -- there is nothing but sellers on the Street. Not for the markets, per se, but for that whole concept to try to make this look better -- it's unattractive."


"Overall we see that activity is slowing down, and core inflation is a surprise on the upside, which is not a good combination when you think that Fed has to consider both sides of the mandate.

"The Fed can still do some additional easing given the weakness of the forward indicators. We can at least see a passive 'Operation Twist' next week. I think at this point business activity has slowed and confidence has fallen. But we haven't slipped into a recession yet."


"The overall picture from the three data releases we are looking at is not very good. Empire State continued to deteriorate in a month where many were expecting to see a slightly less negative picture. That is really not an encouraging sign.

"Initial claims had a pretty big increase, that really offsets any of the downside progress we had seen over the past few months. The layoff side of the equation is really starting to pick up now and that is a very bad sign on the employment side.

"CPI was larger than expected and that looks like a temporary boost from energy, but still inflation is not going down and activity is not doing well."



"While there are sure to be some hurricane-influenced claims embedded in the level, Hurricane Irene does not appear to be the catalyst for the elevated filings. For starters, the states reporting higher-than-usual claims (of more than 1k) in the week ending September 3 were not along the East coast (Irene's path). These included states like Washington, Nevada, Texas, and the highest change, Kansas. Secondly, the actual number of filers fell, just not as much as seasonals expected, so the seasonally adjusted number rose. Whenever a survey week carries a holiday, seasonals expect a decline in claims. This year, the NSA drop was about 8k smaller than forecast. Initial claim's moving average has also risen about 16k in the past four weeks. Now at 419,500, the average is 4k higher than last week's."


"Consumer prices rose by 0.4% in August, showing an increase larger than the market was expecting (0.2%) after prices rose 0.5% in July. The same items contributed to increase, especially within the core group. Core CPI rose by 0.2% for the second month. Prices are 3.8% higher than what they were 12 months ago. Prior to August, the CPI's annual change had held for three months at 3.6%....

"Core prices have been alternating between 0.2% growth and 0.3% for the past five months as an emerging trend of consistent growth in certain items has taken shape. Apparel, being one of those items, rose by 1.1% in August, its fourth month of above-1% advances. The rent index experienced its largest increase in roughly three years (June '08), up 0.4% thanks to a 0.2% rise in owners' equivalent rent."



"The internals looked somewhat worse than the headline on net. The new orders index edged down from -7.82 to -8.00, shipments plunged from +3.01 to -12.88 (the weakest since March 2009), and the current employment index fell from +3.26 to -5.43. Despite the general economic softness and slowdown in manufacturing, both price indices moved higher, with prices paid rising from +28.26 to +32.61 and prices received going from +2.17 to +8.70. It was the first increase in both for four months. The slight silver lining was that the expectations indices improved modestly, with the future activity index rising from +8.70 to +13.04 -- but that's a small dead cat bounce after falling from July's +32.22... This is a disappointing reading, seemingly confirming that the weakness in manufacturing is more durable than the turbulence of last month's debt limit battle, S&P downgrade, and market swings."

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oobrien's picture

Good citizens of Metropolis!

Even Superman can't save us.

Let's shave our heads and wait for the mothership!


Clueless Economist's picture

Liesman says the jobs # is due to "the effects of hurricane irene" lol

Josh Randall's picture

Liesman's analysis only goes as far as whats on the Shoney's buffet, or what type of sandwiches the gas station is selling

Snidley Whipsnae's picture

Lie sman's analysis is on the teleprompter in front of him.

I am more equal than others's picture

This market is like the fat guy eating pork every meal topping it off with a gallon of ice cream, and a bag of chips.  The heart attack is coming and because there is so much fat - over valuation - the condition is terminal even if the fat guy lived across the street from the hospital. 

dizzyfingers's picture

In the areas of the worst destruction, which is pretty bad, wouldn't MORE people be working...on roads, bridges, broken hightways??? Just drove from New England to Chicago, USDOT gravel and other road-building trucks on the highways everywhere.

Bwahaha WAGFDSMB's picture

Seriously, just listen to Krugman.

bankruptcylawyer's picture

celente always sounds angry ...which makes him sounds stupid. regardless of the content of his words.

Cassandra Syndrome's picture

Perhaps we can sort this all out with a telephone conference call? Seems to be the new real McCoy.

King_of_simpletons's picture

Associated Press (AP) is surprised ! Those jokers and their headlines.....

dizzyfingers's picture

Doesn't it frost you how stupid they are? I've been ranting about AP as the fount of all incorrect information since about 1965.

Cdad's picture

Speaking of knee jerk, I just saw a 12+ point ES reversal in less than one minute.

Price stability.

SheepDog-One's picture

GOTTA love the spectacular Bernank price stability Cdad! It really is wonderful...dont get me wrong, not nearly as wonderful as my pink unicorn that shits mounds of delicious Skittles and pees yummy chilled lemonade, but CLOSE!

Cdad's picture

That ES move I just saw was clearly a "horse fixing" moment.  And as I said last night, GLD is being jammed up...a last desperate attempt to give the short bus algos the all clear to buy the market...because gold is falling, so therefore fear is gone now that Europe had a conference call.

Nummy unicorn skittles...mmmmmmm.

**and check the shank job on the Dixie.  Criminal syndicate Wall Street bankers doing what they do best**


SheepDog-One's picture

You know I actually thought for a minute the whole Europe problems Eruo down Dollar up thing was being orchestrated to give Bernank QE cover....nah not so much.

The fact is its all at point of implosion and all they have is carrots and sticks, and only dumb mules believe in a carrot on a stick for more than a few minutes.

Ruffcut's picture

The TF went up in a flash pump too. Wow. Did they set the algo timer right at 9?

Iriestx's picture

So they're blaming the jobless number on the weather again.  That never gets old.

Aductor's picture

WTF just happened?

SheepDog-One's picture

'We think the FED can still do at least some additional 'easing' next week...maybe an Operation Twist lite or something'....

WHOA there Wall St dude! This QE3 trillions has been priced into every bit of lousy news daily since February! These people cant do MATH, you cant price in $3 trillion to equities since DOW 9,800 and then say 'we're good here...maybe a minor Op Twist' thats about it'.

'Operation SUBTRACT' has to happen one way or another next!

dellbalboa's picture

Yeah right, & i'm from Missouri

Belarus's picture

It's too bad JPM and HSBC can't get short squeezeed when they are so very on the wrong side of the trade silver trade....but with endless supplies of manipulation paper don't hold your breath. 



dellbalboa's picture

I think going after JPM is futile, because they are a custodian bank of the Federal reserve, they have direct access to 0% credit.

NEOSERF's picture

This market is on life support and denial...really amazing with ALL this bad data in the last 12 weeks which was completely expected given the end of QE2, that S&P is pushing 1200 again, the dow is only down 10%.  Back when central banks didn't rule the world we would be at 850 and down 35% respectively...where is the SEC?

Belarus's picture

where is the SEC?

They're hanging out with the CFTC drinking vino and eating caviar.....at yes, 10:00 a.m., collecting the easiest paychecks known to mankind since the only job mandate is to close your eyes and shred some docs every once in awhile.

SheepDog-One's picture

Well NEOSERF you and I know that, but the general public? Its a success, everyone believes in it. No matter who I talk to about whats really going on, they come back with, 'Well I heard the DOW closed up +100 today, so things cant be bad as you say'.

Smiddywesson's picture

Well, doggie, that's your problem, hanging out with the sheep.  I have a friend who is very intelligent and knows a lot about the market.  He has denied all that I have been saying for four years.  Everything I said came true to this point, but his belief in the markets is a religion. 

You are either born with enough scepticism to think for yourself, or you are not.  No amount of reasoning can overcome someone's true nature.

buzzsaw99's picture

there is no data there is only the bernank.

monopoly's picture

Lets see. Economic data this morning all sucks. Check

Inflation ticking higher. Check

NFLX collapses (no surprise to us here) Check

UBS close to blowing up. Check

Dollar lower. Check

Greece will default and nothing fixed in Europe. Check.

We still have the 3 stooges running this country. Check.

Gold gets hit for 36 dollars at 1,787. Yup. it all makes sense does it not. Amazing markets. Broken is too kind a word.


ww2vet's picture

all you zh fools in denial -- look at the markets, not "news." gold finished going up, stocks finished going down. losersssssssssss!

SheepDog-One's picture

WTF are you mumbling about?

eddiebe's picture

the markets aren't broken, they are just managed.

Smiddywesson's picture

Gold gets hit for 36 dollars at 1,787. Yup. it all makes sense does it not. Amazing markets. Broken is too kind a word.

Well, it makes perfect sense to me, and I said so last week when I sold my paper gold position.

  1. Options expiration
  2. Fed meeting next week
  3. Europe:  We traded in a channel for a month, and kept drifting back to $1900.  That seemed to be ok with TPTB, until now.  Something bad for the markets and good for gold is about to happen, hence gold must be pushed down as far as possible or we will shoot right past $2000, and they won't give up that line without a fight.

I also said we would see a margin hike, but have been wrong so far, so what do I know anyway.  The price action with respect to gold has been pretty much predictable, and will remain so in the future as TPTB become more desperate to kick the can and buy up cheap gold.  Everything else is window dressing. 

I Got Worms's picture

Gold got kicked in the balls.

SheepDog-One's picture

Im reading emails from goldbug friends who are freaking out on their gold, everyone convinced the next stop was going to be $10,000, but I warned them from long ago youre in with the Bernank central banksters and theyll screw them out of their gold any way they can think of.

If people dont have the nuts to hold gold now without chewing their nails to bloody stumps, then they should just get out of it because its all only going to get far worse.

Snidley Whipsnae's picture

Not to worry SD1, some weak hands will be shaken from their positions by huge paper manipulations to take down gold for a time. Volitality...

Be right and sit tight... none of the fundamentals have changed. Benny and the other central bankers are in the markets dumping on gold and bouying equities and suppressing bond yields... They will only blow up the world financial system with their manipulations.

Smiddywesson's picture

Absolutely SD1, focus on your physical, and if you have paper, expect to feel a whole lot of pain if you trade based on logic.  Gold is moving on anti-logic because the paper price is fixed.  Any bad market event will cause it to do exactly what it did BEFORE the Swiss "pegged" the franc, drop like a stone.  Now gold is dropping like a stone, what do you suppose is going to happen soon?  My guess is something bad for TPTB who want to kick the can and buy cheap gold. 

Paper gold is for trading, not investing, or whining.  Physical is for investing, planting in your garden, and rolling around on naked. 

Gold is getting kicked in the stomach.  Next week, it will ramp based on what is happening in Europe OR something the Fed has to do here (QE3?).  In that case, expect margin hikes because "gold is getting too frothy" even though the price is only returning to trend from suppression levels.  TPTB goal is to keep it below $2000.

BetTheHouse's picture

Opposite day, bitchez!!!

monopoly's picture

Remember guys, do not let short term moves influence your decisions, it was just a while ago gold was under 1,000. Hit a high of 1,911 and now 1,787. Big freaking deal. No sells here.

Smiddywesson's picture

Good point.  That's a little over a 6% drop in a position trade whereas most position traders use a stop of 8%-10%.

Past successes in the gold trade have made people overly sensitive to losses.

dcb's picture

OK, you understand the markets are manipulated, teh data is bad, so work the charts.

Belarus's picture

Guys, I believe gold and silver at this point is trading based on a European liquidty run.....just like the U.S. in 08/09. That is something I believe Sprott may be missing at the moment, how it's not oh so different perahps this time. Think about it, you have a brokerage account in Italy or Spain or France where the banks are being taken to the woodshed and losing massive amounts of money....you're worried about any assets tied up in any institution, therefore you sell all and any brokerage paper Gold and Silver and what you have is paper markets tanking while the physical markets surge.

Waterfallsparkles's picture

I get the feeling that Bernanke is back in the Market.  The Market is trading the same way it did with QE2.  The huge ramp for the last 2 Mondays with the bad Greek news.  Then this Monday with the huge ramp at 2:00 PM and continuing higher for 3, now 4 days.  As you said with bad news every day.

Plus, the late day ramps like with QE2.  I am not sure how he is doing it but I do think he is in the Market again.

Smiddywesson's picture


Yes, gold has to go down, and markets have to ramp, immediately prior to bad economic events/announcements.  It's as simple as that if TPTB want to continue kicking the can and buying cheap gold.

TPTB have pretty much kept their powder dry up to this point.  Expect them to use both barrels to create a cushion between gold prices and $2000.

Snidley Whipsnae's picture

During Fed meetings 10% of the time is spent on policy discussion and 90% of the time is spent on 'how to word' the policy. Managed perception, propaganda, PR, call it what you will...

Which proves that when one has a bogus currency and totally managed asset mkts, one must spend lots of time convincing the sheeple that all is ok and 'the Fed is still firmly in control of the situation'...

Con artists that could sell any rube the Brooklyn Bridge.

catladdy's picture

The Great race to Reflate

-Fed announces 0 Funds, will sell short term/buy duration. I effect, we're announcing we are raising short term rates.

-Fed says they'll buy duration & talking heads parrot duration is going down in yield and will stay low for long time......here is where duration holders are going to be SLAUGHTERED. Smart duration buyers willl lock in less risk. I'd rather but Dollar general , or Hungarian junk than UST.

-Sure, Fed will buy duration, but will continue buying at decreasing prices. Look for duration yields to have bottomed THIS MONTH. UST yields will be back at 5% by end of Q1 2012.


Snidley Whipsnae's picture

"UST yields will be back at 5% by end of Q1 2012."

Strong call catlady... If it is true then the slaughter in real estate is going to be unbelievable.

I forgot the exact number but believe that for every 1% interest rate rise in Ts, funding the US deficit goes up by ~ $140Billion per yr... So... about a $700Billion rise in funding the deficit? Wow... Print faster Ben.

catladdy's picture

Expecting several 3-5 pont bond move days q4-q1 as opinions are made. Hell, we could print 5% & back at 2.6% as the struggle continues.

Probably have June 2007 yield highs as a back drop until 2015 when the Chinese truly take over the world with their RC & start a controlled distribution of our debt

catladdy's picture

ES shorts Still too early to reposition. Ample warning given since Tuesday about Mother of ALL SHORT SQUEEZES.

Just wait! We're going to see another retest of our Aug lows.  

firstdivision's picture

Frontrunning QE3 version 2.0 (since 1.0 was in August)