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Why The Richmond Fed Better Not Be A Harbinger Of Non-Farm Payrolls To Come

Tyler Durden's picture


The chart below, which compares the change in the Richmond Fed and the Non-Farm Payrolls print, is self-explanatory. Of course, if we are indeed about to get a -400,000 NFP print, then the prayers of all those newsletter sellers whose only "thesis" is more easing, are about to be answered.

h/t Brad


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Tue, 07/24/2012 - 11:21 | 2645516 slaughterer
slaughterer's picture

July F=MC easing already leaked yesterday. 

Tue, 07/24/2012 - 11:22 | 2645517 veyron
veyron's picture

While the F=MC may be easing, the FOMC has no plans to ease.


Tue, 07/24/2012 - 11:29 | 2645552 The Monkey
The Monkey's picture

Between Apple and the Fed for the next few days.

As usual, the worse the economic data, the better the market will do.

Tue, 07/24/2012 - 11:35 | 2645569 idea_hamster
idea_hamster's picture

F=ma, !=mc.

F*0*M*C = 0, so maybe that's been the message all along:  It's not an acronym where O=Open; it's math, with a zero:  The Federal Zero Market Committee.

Sure connects some dots....

Tue, 07/24/2012 - 11:43 | 2645593 ZerOhead
ZerOhead's picture


We are all going to die...

Tue, 07/24/2012 - 11:44 | 2645605 azzhatter
azzhatter's picture

on a long enough timeline...............oh never mind

Tue, 07/24/2012 - 11:54 | 2645647 Yikes
Yikes's picture

Time for Goldman to come out with another GDP revision.

Tue, 07/24/2012 - 12:16 | 2645766 Carl Spackler
Carl Spackler's picture

It's simple.

After perusing American Thinker this morning...

I am now convinced that the President's Communist beliefs are the real cause of the velocity of money having continually slowed, despite all of Bernanke's shenanigans.

The Richmond Fed index is just showing us that -indeed- the velocity has slowed and looks to continue to do so unless fundamental change takes place (i.e., a reversion to real capitalism). 


Tue, 07/24/2012 - 12:36 | 2645879 Mark Noonan
Mark Noonan's picture

Dying wouldn't be so bad - at least the Mrs would get the insurance...but losing the job, that could be a bit of a problem...

Tue, 07/24/2012 - 14:02 | 2646255 Silver Bully
Silver Bully's picture

'Dying wouldn't be so bad - at least the Mrs would get the insurance...but losing the job, that could be a bit of a problem...'

Load 16 tons and what do you get, Another day older and deeper in debt,

St. Peter don't you call me cuz I can't go, I owe my soul to the company store . . .

Tue, 07/24/2012 - 22:02 | 2647781 HungrySeagull
HungrySeagull's picture

And a long way to go and a short time to get there...

Tue, 07/24/2012 - 12:15 | 2645768 patience...
patience...'s picture

The "Story of O" I like it.

Tue, 07/24/2012 - 11:40 | 2645584 Tippoo Sultan
Tippoo Sultan's picture

Perhaps not an NFP print of - 400,000, but a negative number appears to be a foregone conclusion, if the historic correlation is used as a predictor.

Minus 150,000 to - 200,000 will be ample "cause" for Bernanke to issue forth several hundreds of billions in fresh intaglio scrip.

Tue, 07/24/2012 - 11:58 | 2645631 Randall Cabot
Randall Cabot's picture

I'm seeing a decoupling of NFP from the Richmond Fed coming and going starting about the middle of 2010.

Tue, 07/24/2012 - 16:16 | 2646816 SDShack
SDShack's picture

Actually you seem to be correct Cabot. The Richmond Fed moving average trend line has been negative since 09, but the NFP momentum has essentially been flat. The real question is the Richmond Fed number acting as a forward looking indicator, or has the BLS simply corrupted the NFP so much to make any correlation meaningless. We will know in a few days.

Tue, 07/24/2012 - 12:23 | 2645809 MillionDollarBoner_
MillionDollarBoner_'s picture that's bearish for PMs, right?

Tue, 07/24/2012 - 12:31 | 2645845 Bananamerican
Bananamerican's picture

"make it so"-JPM

Tue, 07/24/2012 - 12:49 | 2645947 Missiondweller
Missiondweller's picture

I would think that would also be the end of Obama's campaign. How the hell could he ever recover from that politicially?

Tue, 07/24/2012 - 11:35 | 2645565 The Swedish Chef
The Swedish Chef's picture

F=MC, is that the equation for QE? Fucked is equal to Much Currency?

Or rather: fucke equals too much currency.....

Tue, 07/24/2012 - 11:37 | 2645578 idea_hamster
idea_hamster's picture

Well, f=force, m=mass, and c=the speed of light.

Perhaps it means that the force of QE = the mass of money printed times 186000mps.


Tue, 07/24/2012 - 13:46 | 2646192 fnordfnordfnord
fnordfnordfnord's picture

Hey, you just gave me a great idea for a new hypothesis. The Monetary Theory of Relativity. Who knows, we may find monetary parallels for both General and Special Relativity. This could be a groundbreaking new paradigm for economics! It could, perhaps even lead to stable solutions for (bear with me) infinite monetary inflation! Or even, gasp, infinite infinite monetary inflation! Climb back from down from those ledges; economics may no-longer be known as the "dismal science", but, rather, our savior! Or, I could be wrong, and we're all doomed, one-fifth of us will starve, and the rest of us will have to eat beans (except the 1%, of course). But never-mind that! All we need now are some big fat research grants. How can you afford to pass on this? You can't!

Tue, 07/24/2012 - 16:17 | 2646821 SDShack
SDShack's picture

How does the Black Hole of Debt factor into this?

Wed, 07/25/2012 - 09:50 | 2648943 fnordfnordfnord
fnordfnordfnord's picture

Black holes might be problematic!

Tue, 07/24/2012 - 11:40 | 2645586 azzhatter
azzhatter's picture

The equation goes something like- S(savers)+B(bend over)-P(pigmen)+OE(obama election)-FD(fuck the dollar)= Fuck You Ben Bernanke

Tue, 07/24/2012 - 11:51 | 2645627 SheepDog-One
SheepDog-One's picture


Tue, 07/24/2012 - 12:39 | 2645880 Nobody For President
Nobody For President's picture

F= m x a


And the Force may not be with us on this one.

Tue, 07/24/2012 - 11:22 | 2645523 HelluvaEngineer
HelluvaEngineer's picture

...because if it is, Potter's gonna have to put in a slightly larger buy order at 10:30 every morning.

Tue, 07/24/2012 - 11:23 | 2645525 zero19451945
zero19451945's picture

Not a chance. They can make the payroll report say whatever they want.

Tue, 07/24/2012 - 12:04 | 2645700 Gene Parmesan
Gene Parmesan's picture

Sad but true. It might take another 4 months for NFP to catch up just this once...

Tue, 07/24/2012 - 11:23 | 2645529 bob_dabolina
bob_dabolina's picture


Tue, 07/24/2012 - 13:01 | 2646002 Missiondweller
Missiondweller's picture

Agreed. The correlation is high but not perfect. Seems we'll get a negative jobs print but not likely to be -400k.

Tue, 07/24/2012 - 11:24 | 2645531 Jlmadyson
Jlmadyson's picture

Between this and PMI the data is crystal clear.

Ole Benny and friends are going to be way too late this time.

Tue, 07/24/2012 - 11:28 | 2645547 Al Huxley
Al Huxley's picture

As usual.

Tue, 07/24/2012 - 11:24 | 2645532 darteaus
darteaus's picture

It's almost time for Barack Chavez to shriek, "To the barricades!!"

Tue, 07/24/2012 - 11:25 | 2645539 dwdollar
dwdollar's picture

Thank you Ben for decoupling the real economy from the stock market (which is now nothing more than a betting game on your next statement).

Tue, 07/24/2012 - 11:27 | 2645540 the not so migh...
the not so mighty maximiza's picture

Fed is fucked; QEIII will destroy purchasing power globally.  

Tue, 07/24/2012 - 11:29 | 2645553 Cursive
Cursive's picture

@the not so mighty


DOW 20,000 - MOGAS $5/gal.  Something's gotta give. 

Tue, 07/24/2012 - 11:35 | 2645573 OutLookingIn
OutLookingIn's picture

Thats why the next easing will not be announced.

It will be behind the scene.

Besides, who says the easing has stopped? Where do you think Washington is getting all the money to continue the giveaways to all the gimme, gimme, gimmes?

With 50% of the population receiving fed aid in one form or another, from the ever diminishing productive half.

The concrete wall is approaching ever closer.  

Tue, 07/24/2012 - 11:26 | 2645541 Sutton
Sutton's picture

Trojan Horse-destroy it from the inside

Thanks white libs for making the conman dictator

We're doomed

Tue, 07/24/2012 - 11:36 | 2645574 pods
pods's picture

I won't disagree that we are doomed, but it has little to do with who resides in the white house.


Tue, 07/24/2012 - 12:24 | 2645813 cougar_w
cougar_w's picture

It's going to be really funny if Mitt gets the vote and nothing changes for another 4 years. Probably nobody will notice, 4 years is a long time.

Tue, 07/24/2012 - 12:28 | 2645831 Divine Wind
Divine Wind's picture



The current occupant might not be single handedly responsible for our doom, but he sure as hell has accelerated things exponentially.

This financial charade could have continued for another decade if POTUS had not gotten greedy.

Remember: Physics theory says that as you approach the speed of light things begin to bend inward.



Tue, 07/24/2012 - 13:49 | 2646202 fnordfnordfnord
fnordfnordfnord's picture

Blue team, red team, he said, she said. When will you proles ever learn?

Tue, 07/24/2012 - 15:32 | 2646610 earleflorida
earleflorida's picture


there is no such thing as a straight line in the universe

parallel lines eventually meet

the shortest distance between two points is a curve, not a line

time is a curve

time is an illusion


Tue, 07/24/2012 - 11:28 | 2645545 HD
HD's picture

How is keeping the S&P at 1400 for a few more weeks going to create any more Mcjobs exactly?

Tue, 07/24/2012 - 11:33 | 2645555 fuu
fuu's picture

Fucking magic.

Tue, 07/24/2012 - 11:35 | 2645570 Jlmadyson
Jlmadyson's picture

Wingardium Leviosa

Tue, 07/24/2012 - 11:44 | 2645601 RSloane
RSloane's picture


Tue, 07/24/2012 - 11:36 | 2645575 HelluvaEngineer
HelluvaEngineer's picture

Because if we print enough money and give it to the Banksters, they will hire us to clean their pools.

Tue, 07/24/2012 - 11:42 | 2645590 azzhatter
azzhatter's picture

You just don't understand the wonderfulness of the current shitshow

Tue, 07/24/2012 - 11:30 | 2645554 The Swedish Chef
The Swedish Chef's picture

Come on, Tyler, don´t worry. You know we´ll never see a -400,000 NFP print, regardless of reality.

Tue, 07/24/2012 - 11:41 | 2645588 Coast Watcher
Coast Watcher's picture

Not this side of November, at least.

Tue, 07/24/2012 - 11:31 | 2645558 Stuart
Stuart's picture

Default or Print.   Chewed by Zombies or Lethal injection.

Tue, 07/24/2012 - 12:41 | 2645903 Nobody For President
Nobody For President's picture

I'll take 'Shot by a jealous husband' please.

Tue, 07/24/2012 - 13:21 | 2646099 csmith
csmith's picture

Alex, I'll take fined by the NCAA for $60 million...

Tue, 07/24/2012 - 11:32 | 2645561 buzzsaw99
buzzsaw99's picture

the schumer already told the bernank to get to work that means more banker bonuses. the employment numbers are just a ruse to that end.

Tue, 07/24/2012 - 11:35 | 2645563 Dr. Engali
Dr. Engali's picture

There is no way we will get a -400,000 print,especially in an election year. Even if it were the case the ministry of truth wouldn't tell us.

Tue, 07/24/2012 - 11:42 | 2645589 DogSlime
DogSlime's picture

"When it gets serious, you have to lie..."

Seems like the mantra for all these fuckers.  Libor, Europe, Wall Street, City of London, Government.

We're drowning in bullshit.

No laws against lying, it seems.

Tue, 07/24/2012 - 12:48 | 2645941 Sofa King Confused
Sofa King Confused's picture

Didn't you know....lying is just free speech.

Wed, 07/25/2012 - 02:18 | 2648181 StychoKiller
StychoKiller's picture

Hmm, perhaps -- but it SHOULD COST you something!

Tue, 07/24/2012 - 14:00 | 2646244 fnordfnordfnord
fnordfnordfnord's picture

Sigh, why do you hate America so much?

Tue, 07/24/2012 - 11:42 | 2645591 Stuart
Stuart's picture

it doesn't really matter what the payroll figure is, it's rolling over and no politician is going to allow any default, let alone meaningful default.  The public can't stand for it and can't take it.  Printing is inevitable.   Gold is an absolute buy at these prices.  The paper gold manipulators better load up on new sets of Johnsons and start going to confession. 

Tue, 07/24/2012 - 11:33 | 2645564 mademesmile
mademesmile's picture

Behold the Invisible Hand

Seen through the charts of the Man

Revisions be damned

Arithmetic stands

While Fed fingers die in the sand



Tue, 07/24/2012 - 11:35 | 2645572 Yikes
Yikes's picture

Correlation is not causation but Damn!

Tue, 07/24/2012 - 11:36 | 2645576 Seasmoke
Seasmoke's picture

do you need the number to go UP or the number to go DOWN ?? ....... BRB !

Tue, 07/24/2012 - 11:56 | 2645651 island
island's picture

Good one.  You work for BARC?  LOL.

Tue, 07/24/2012 - 11:37 | 2645577 JackT
JackT's picture

Naaa...more like -100k

Tue, 07/24/2012 - 11:37 | 2645579 Seasmoke
Seasmoke's picture

 i predict    -399,999.9999999999999

Tue, 07/24/2012 - 11:47 | 2645618 wonderatitall
wonderatitall's picture

eggxactly.....and its bush or cheney or atms or romney or somebody dammit

Tue, 07/24/2012 - 11:39 | 2645583 The Gooch
The Gooch's picture

Vote to Audit the Fed could hit the floor as soon as tomorrow... H.R. 459 Vote YES

I'm not much of a believer that they listen, but

Urge them to vote yes on HR 459

Tue, 07/24/2012 - 11:44 | 2645603 Trying to Understand
Trying to Understand's picture

Thanks, shared

Tue, 07/24/2012 - 13:52 | 2646215 FRBNYrCROOKS
FRBNYrCROOKS's picture

Wow! 271 co-sponsers to HR 459!!!!!!

I called my Congressman, talked to his secretary and told her that I voted for him in the last election but, if he did not support the bill he would not get my vote this year.

Saw Ron Paul on C-Span and he said there was no way it would get through the Senate.

Tue, 07/24/2012 - 11:52 | 2645634 SheepDog-One
SheepDog-One's picture

This is Robo Cosell....unfortunately, my previous 'Buy IBEX, its bottomed here' call was tragic indeed....I'll be away for a while, licking my wounds.

Tue, 07/24/2012 - 11:59 | 2645666 ebworthen
ebworthen's picture

What, no Chipotle or Green Mountain Coffee?

I bet Cramer would lend you his Margarita salt.

Tue, 07/24/2012 - 11:54 | 2645638 monopoly
monopoly's picture

Unless there is a Tsunami on the jobs report, Ben will do nothing. The Dow is near 13,000, spoos over 1,300. Nope, he will get ostracized if he tries it. Just not gonna happen. He is surviving just the way the markets are, no matter what that idiot Schumer wants.

Tue, 07/24/2012 - 11:58 | 2645664 monopoly
monopoly's picture

And watch SLV, looks like it may finally be breaking down. This could get ugly today. Bonds, amazing.

Somebody know something about AAPL???

Tue, 07/24/2012 - 12:05 | 2645708 ebworthen
ebworthen's picture

iPhone 5 to have new docking connector, obsolescing ten years or so of accesories:

Demand for iPads and iPhones likely remains strong and still riding the coat tails of Steve Jobs.

Besides, AAPL appears to be the equity equivalent of U.S. Treasuries.

Tue, 07/24/2012 - 12:35 | 2645836 MarsInScorpio
MarsInScorpio's picture

Jobs never invented anything; he merely took existing technology and repackaged it into new iGadgets.


People who buy Apple computers are chumps. There's a reason why less than 10% of the computer market is Apple.


If it hadn't been for the iPod, Apple would be gone. Then came the iPhone SmartPhones.


But the latest numbers on SmartPhones don't look too good for Apple either.


Regardless, you're right - time to make everything obsolete so Apple can sell revisions of already existing products. That's the scam they run down every time they release a so-called "new" OS, a la OS X, that wasn't backwards compatible with OS 9 software or hardware. (Note to Bill Gates: You weren't ruthless enough. You should have taken Intel computers, put Windows on them, and told the world you can only run Windows on a MS machine. That's what Jobs did - Apples are nothing but Intel PCs running Apple's OS. Anyone who buys one is an idiot - proprietary everything, and incompatibility galore. Of course, don't look to the Just Us department to force them to sell the OS to everyone . . . Apple owns the Just Us department.)


But sooner or later, Apple will be back to what it really is - a pretender to the technology throne - and it's share price will go back where it belongs - single digits. But it will take a generation of unbrainwashed consumers before it happens.


Tue, 07/24/2012 - 17:18 | 2647163 ebworthen
ebworthen's picture

I stand corrected, Apple misses on sales.

Perhaps the Apple acolytes are waiting for the iPhone 5, and bought their iPads at Christmas time.

Likely signaling the certainty of a global slowdown.

Jobs was a driving force in whipping the Apple teams to produce the products that turned things around.  Without his persona, and demand for perfection and improvement beyond what his employees thought possible, Apple is a risk.

I'm certain many will BTFD, and with FED QE3 being signaled AAPL will likely ramp up again.  However, if you have money in Apple sell into strength and put your money into cash, land, or gold and don't keep it in a company that has lost it's founder and visionary.

MarsInScorpio - sounds like a smart plan.

Tue, 07/24/2012 - 11:59 | 2645671 BigDeuceLittleToilet
BigDeuceLittleToilet's picture


Tue, 07/24/2012 - 12:00 | 2645677 crawldaddy
crawldaddy's picture

this easing as saviour rings incredibly stupid.  Its like the idiot who says.  If my business loses 400,000 dollar this year, its not so bad, its a tax write off. Totally ignoring that for most small businesses such a loss means there will be no next year.

Like a stupid housewife spending 50 buck she doesnt have on a product she doesnt need simply because she has a 10 dollar off coupon. 

Tue, 07/24/2012 - 12:02 | 2645694 knukles
knukles's picture

You callin' my wife stoopid?

Tue, 07/24/2012 - 12:28 | 2645835 cougar_w
cougar_w's picture

No no I'm sure he was talking about my wife. And if she has two coupons, she'll go thru the checkout twice just to use them both.

I sit outside. It's just too painful to watch.

Tue, 07/24/2012 - 12:00 | 2645680 monopoly
monopoly's picture

My daughter works FT at one of the AAPL flagship stores. For the first time, they cut FT hours from 40 to 35. Hmmmm.

Tue, 07/24/2012 - 12:02 | 2645690 jay28elle
jay28elle's picture

Yep, hearing rumors around here of the same thing.

Tue, 07/24/2012 - 12:32 | 2645851 cougar_w
cougar_w's picture

The fair valuation of AAPL is probably around $250. They do have a lot of cash. As I write this they are trading at $601.

When it goes ... if it goes ... it's gonna be epic.

Tue, 07/24/2012 - 12:01 | 2645684 jay28elle
jay28elle's picture

The Fed.  Our Fed, whose keeper is Big Ben?  The master of smoke n mirrors, manipulation and deceipt...?  Ha,  the audit will show nothing but puppy dog kisses and daisies.

Tue, 07/24/2012 - 12:02 | 2645691 Yikes
Yikes's picture

Looks like equities finally let the report sink in and they don't like it.

Tue, 07/24/2012 - 12:04 | 2645698 paint it red ca...
paint it red call it hell's picture

I say no QE3 until the market craps and timing is such oBama cannot benefit from easing in the election.

fed will let him take the blame for broad market drop and not be beneficiary  from them printing out of it again.

Tue, 07/24/2012 - 12:46 | 2645932 Nobody For President
Nobody For President's picture

Tyler, if you are not careful, you are going to make the "Chart of the Day" at Business Insider.

Tue, 07/24/2012 - 13:01 | 2646005 LMAOLORI
LMAOLORI's picture


Karl lays it out pretty well

Richmond Fed: Recession

Tue, 07/24/2012 - 16:59 | 2647090 Eric L. Prentis
Eric L. Prentis's picture

The US is probably now in a recession. To think otherwise is delusional.


US retail sales have declined for the past three months (April, May, June). That has not happen since WWII, unless the US is either in a recession or about to enter one. 22 of the 30 most important economic indicators in June, 2012 missed expectations. The Institute for Supply Management (ISM) reported that its monthly manufacturing index fell to 49.7 in June, 2012 from a 53.5 reading in May, its first under 50 contraction since 2009. ECRI’s Lakshman Achuthan predicts we are in a recession. ECRI has a perfect track record. The NBER Business Cycle Dating Committee takes about a year to identify the start of a recession—after a recession has already begun—so NBER is no help.


Now it looks like a negative NFP announcement on August 1, 2012. President Obama is trying to be reelected during a recession! Barack, how do you like your Wall Street BFFs now. I hope their money helps, NOT.

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