Some hilarious shit…

NEW YORK (AP) — A quiet day on Wall Street turned into the worst sell-off in three months after a Federal Reserve official said he doubted the bank’s effort to boost economic growth would work.

Charles Plosser, president of the Fed’s Philadelphia branch, told an audience Tuesday that the Fed’s effort to support the economy would likely fall short of its goals.

The speech probably startled some investors who had faith in the Fed’s latest plan, said Jack Ablin, chief investment officer Harris Private Bank. The plan includes buying $40 billion in mortgage bonds each month until the economy improves.

“So many investors have bought into the illusion,” he said. “And it was like Plosser pulled up the curtain on the Wizard of Oz.”

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We may be creating a generation of savers.

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Check out just how far we came and fell back since 2008.

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$CAT lowered their profit range from $15-$18 to $12-$15 on lower commodity prices and consumption. Short of calling a recession the company sees poor economic conditions as far pout as 2015.

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“NEW HAVEN – Recent indications of a weakening global economy have led many people to wonder how pervasive poor economic performance will be in the coming years. Are we facing a long global slump, or possibly even a depression?

CommentsA fundamental problem in forecasting nowadays is that the ultimate causes of the slowdown are really psychological and sociological, and relate to fluctuating confidence and changing “animal spirits,” about which George Akerlof and I have written. We argue that such shifts reflect changing stories, epidemics of new narratives, and associated views of the world, which are difficult to quantify.

CommentsIn fact, most professional economists do not seem overly glum about the global economy’s prospects. For example, on September 6, the OECD issued an interim assessment on the near-term global outlook, written by Pier Carlo Padoan, that blandly reports “significant risks” on the horizon – the language of uncertainty itself.

CommentsThe problem is that the statistical models that comprise economists’ toolkit are best applied in normal times, so economists naturally like to describe the situation as normal. If the current slowdown is typical of other slowdowns in recent decades, then we can predict the same kind of recovery.”

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“WASHINGTON, Sept 20 (Reuters) – U.S. households increased their borrowing by the most since early 2008 in the second quarter, a development that could boost consumer spending and a lackluster economic recovery.

Household debt climbed $39.4 billion, the first gain in more than a year, to $13 trillion in the second quarter, the Federal Reserve said on Th ursday — just $2 trillion shy of the country’s total yearly economic output.

Economists said the rise in borrowing was an indication that the U.S. central bank’s accommodative monetary policy and easing financial market conditions were finally filtering through to the real economy.

“It’s encouraging news. With credit growth, one would expect to see an increase in spending and investment,” said Millan Mulraine, a senior economist at TD Securities in New York.

“While it may not necessarily be evident now, that is a sign that the recovery is likely to gain strength if this trend continues. The problem is, we are not getting strong job growth.” “

” This week’s rail data conflicts with some recent reports from some major transport firms like Norfolk Southern and FedEx who both said end demand was softening.  AAR reported a decline in carloads at -2.9%, but an increase in intermodal at 3.9%.  We tend to favor intermodal as it has a better track record of forecasting expansion/contraction in the economy.  The updated 10 week moving average dropped slightly to 4.8%, but remains near its highest levels of the year.  The AAR has more details:”

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“MoneyWatch) America is facing an unemployment problem far more complex than what emerges in government jobless statistics. Changes in who the unemployed are and what has happened to them in the aftermath of the 2008 financial crisis could mean a starkly different economy even after jobs have returned.

Going just by the numbers. it might appear things are getting better, or at least not getting much worse. The unemployment rate dropped in August to 8.1 percent, from 8.3 percent. Yet the main reason for that decline was that many job-seekers gave up looking for work. A more accurate picture is visible in the four-week average of the number of people applying for unemployment benefits. The Labor Department said today that nearly 378,000 Americans applied for jobless aid last week, the highest level in nearly three months and the fifth-straight week that figure has increased. ”

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“It isn’t every day that Ray Dalio opens up to the world and speaks.

Dalio is widely considered the most powerful hedge fund manager in the world.

Perhaps because his secretive Connecticut firm, Bridgewater, is the largest in the world with $130 billion under management.

Also, perhaps, because he does what many money managers are unable to do — navigate the choppy waters of today’s market and consistently produce alpha.

So his appearance on CNBC’s Squawk Box this morning deserves your rapt attention.

Follow it here.”

A study released by the Boston Consulting Group estimates that an export surge in the U.S. could create 5 million jobs.

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Tight liquidity and a global slowdown may prolong the slowdown in China for a longer period than was seen in 2009 a state researcher says.

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Car makers in Europe are echoing that the global slowdown is spreading as they see consumers clamp down on vehicle purchases.

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“The U.S. Flash Manufacturing purchasing managers index (PMI) from Markit Economics is out today, and the reading is unchanged at 51.5. Any number above 50 indicates that the economy is expanding.

Among the various components of the flash reading, there are nuggets of good news. Employment is expanding at a faster rate, with a reading of 52.7 in September compared with 52.4 in August. Output prices are rising, which indicates manufacturers can charge more to pay the also rising input prices. Unfortunately, input prices are rising faster than output prices.

The new order subindex reading rose from 51.9 to 52.4 a faster growth rate month-over-month. But Markit notes that new orders for exports fell at the steepest rate since October 2011.

Markit’s chief economist made some observations:”

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Source 

“We have seen a number of leading indicators recently (for example, we were first to note the FedEx implications for GDP) that point to a rapidly rising probability of recession. Today, via Bloomberg Brief, is a look inside the Philly Fed state economic indexes. To be specific, we look at the six-month ahead outlook for each state. Only once in the last 30 years did 20 states possess a negative outlook and the overall economy avoid recession.

“

” Bank of America is planning to cut 16,000 jobs by year end as it speeds up a company-wide cost-cutting initiative amid declining revenues, The Wall Street Journal reported on Wednesday.”

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“Earlier this morning, Markit published its Flash Eurozone PMI, a key indicator of economic activity.  And it was ugly.  The composite index fell to 45.9 from 46.3 in August.  This is a 39-month low.

The services sub-index was at a 38-month low of 46.0.

However, manufacturing Flash PMI climbed to 46.0, which is a 6-month high.

From Markit Chief Economist Chris Williamson:”

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“Investors were spooked by a report from HSBC that contained more dour news for China. HSBC’s initial purchasing manager’s index for Chinese manufacturing ticked up slightly to 47.8 in September from 47.6, the bank said Thursday. Any reading below 50 indicates that factory growth is shrinking rather than picking up speed.

Economists at Capital Economics said the data indicated a stabilization in China’s economy, but not a recovery.”

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In a effort to ease higher oil prices stifling a low growth global economy, The house of Saud has decided to ship more crude to consuming nations.

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“Sept. 18 (Bloomberg) — The world economy is sliding into a “twilight zone,” trapped between outright expansion and renewed recession.

“It could go either way,” said Joachim Fels, chief economist at Morgan Stanley in London, who coined the description in an Aug. 15 report. “It doesn’t take much to tip us into a global recession.”

The quandary is forcing central banks back to the fore, with the Federal Reserve last week embarking upon a third round of quantitative easing and the European Central Bank standing ready to buy bonds. While the moves were enough to propel the Standard & Poor’s 500 Index to its highest since 2007, the test is whether they can lift the global economy from its so-called stall speed.”

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Doug Short from Advisor Perspectives is out with a thought-provoking new article:

Until the past few months I’ve not routinely reported on monthly manufacturing data, regional or otherwise. However, now that I’m tracking the Big Four economic indicators, which includes Industrial Production, I’m watching these indexes more closely. This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions was not good.

Read the rest and see the charts, here.