The Signs and Portents Are Starting to Pile Up

Chicago PMI Collapses To 13-Month Lows, Biggest Miss On Record | Zero Hedge

We warned last month that under the covers Chicago PMI looked a lot weaker than the headlines and this morning’s collapse confirms that. Against expectations of a small rise to 63.0, Chicago PMI plunged from 62.6 to 52.6 (13-month lows) for the biggest miss on record. According to the release itself, “A monthly fall of this magnitude has not been seen since October 2008 .” The was an 8 standard-deviation miss from analyst expectations (Joe Lavorgna was on the high side at 63.0). New orders, inventory, production, order backlogs, and prices paid all dropped (but employment rose?). This is the biggest 2-month drop since Lehman (and 2nd biggest since 1980). We await the seasonal adjustment “correction” as MNI get the call from Yellen.

I’m getting a bad feeling about all of this.

The unspoken conviction is that the US economy is so strong that nothing can really damage it in any non-recoverable way, and that whatever happens, the government and Keynesian policies can always bail us out.

I think that, like most other beliefs, it will remain true right up to the moment it isn’t.

Also:  Time to add Zero Hedge back onto my list of daily reads, along with Denninger.


About Bill Quick

I am a small-l libertarian. My primary concern is to increase individual liberty as much as possible in the face of statist efforts to restrict it from both the right and the left. If I had to sum up my beliefs as concisely as possible, I would say, "Stay out of my wallet and my bedroom," "your liberty stops at my nose," and "don't tread on me." I will believe that things are taking a turn for the better in America when married gays are able to, and do, maintain large arsenals of automatic weapons, and tax collectors are, and do, not.


The Signs and Portents Are Starting to Pile Up — 7 Comments

  1. Nothing to worry about Bill. It was just the weather. It was hot in Chicago in June. Or cold. Or something. It will all even out come the fall when the temperature moderates. It just requires the Government spend more of their money (like you think it’s yours?) and the Fed to print the difference once they start running out of OPM. Just ask Krugman. He won a Nobel, so he knows everything about everything. Us ordinary folks just can’t comprehend the expertness of his credentialed mind. So just keep Hope alive. We’re in the very best of hands. I understand Obama and Yellen have top people working on it right now. Top. People.

    Move on.

    • No no no, any downward adjustments will be caused by intransigent Republicans (they’re all racists, you know) blocking the Lightbringer’s attempts to care for the new Americans (they came here out of love, you know) and therefore adding uncertainty to the markets and the working class Americans (they need the steady hand of government to guide them, you know).

  2. That’s what they’ll say in the Autumn when temperatures moderate and we’re in the midst of stagflation. Again. Still. Permanently. Unexpectedly!

    Same old song and dance actually since that is exactly what they’ve been saying over the last 5 years of stagflation, rolling through its sixth year.

  3. March 2000 to be exact. Of course, Easy Al Greenspan goosed the market with 1% Fed Funds and fed the Freddie/Fannie/Loan to Those That Couldn’t Afford It Clinton Mandate bubble in Housing. Remember when CPI, even after being dumbed down, rose around 4% per year in 2007 or thereabouts?

    The rot began when Bush Sr misread his own lips and raised taxes, thereby reversing one platform from the Reagan miracle. Then Goldbug Al became Easy Al and dropped rates to decades long lows of 3%. EM bubbles soon sunk the Tequila Countries and Easy Al stepped up the money supply growth. This set off a bubble in Asia/Russia/Latin America which popped in 1997 – 2000. Reinflating to prop up those bubbles gave us the Tech/Media/Telecom bubble and during its subsequent burst cue the 1% low rates. So yes, the groundwork for today’s stagflation was laid in the 1990’s.

    Breaking ground for the stagflation for Carter was laid with Eisenhower (Read Conscience of a Conservative by Barry Goldwater in 1960)! JFK actually tried some supply side economics but LBJ soon went all guns and butter Keynesian on us. Nixon famously said “we’re all Keynesians now”. It didn’t absolve Carter for taking it to unprecedented heights during his one term. It also doesn’t absolve Obama and the Fed today. Like I said, the groundwork for stagflation may have been laid in the past but it is still a mistake for Carter to have doubled down on stupid in 1976 and it has been a disaster for Obama to have doubled down, again and again every two years of his term so far.

  4. To summarize by using a saying from my youth when one follows the other idiots and does something stupid. Your parents would say, “If little Jimmy (names have been changed to protect the stupid) and his friends jumped off the Brooklyn Bridge would you follow them?”

    Well Carter climbed up the stanchions of the Brooklyn Bridge and jumped from the tippy top. Obama seems intent on climbing into Air Force One and pushing US out from 30,000 feet without a parachute. He’ll probably throw an anvil out with us. Or a set of golf clubs. (I bet the bastard bought the heaviest golf bag and loads it with 100 tees and 5 dozen golf balls just to screw the caddy too).

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