Philly Fed: Collapse


We’re done folks.

Responses to the Business Outlook Survey this month suggest that regional manufacturing activity has dipped significantly. The survey’s broad indicators for activity, shipments, and new orders all declined sharply from last month. Firms indicated that employment and average work hours are lower this month. Price indexes continued to show a trend of moderating price pressures. The broadest indicator of future activity also weakened markedly, but firms still expect overall growth in shipments, new orders, and employment over the next six months. The collection period for this month’s survey ran from August 8-16, overlapping a week of unusually high volatility in both domestic and international financial markets.

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from a slightly positive reading of 3.2 in July to -30.7 in August. The index is now at its lowest level since March 2009 (see Chart).

This resulted in an immediate dive in the market, which was already down 300+, to more than -450.

The fraud and phony games are over.

The “Tea Party” claims to have taken the high ground.  They’re lying.

All I hear is Bachmann and others wrapping themselves in the “cause of the day” but failing to stop it, and the idea that somehow “Guns, Gays and God” will carry the day or that we should have “Dominionism” in the Federal Government is an outrage.  That’s utter and complete bullshit; having “dominion” over a smoking crater will be cold comfort in January of 2013.

Where the hell were these people in 2008?  Where were they in 2009?  Where was the attempt to stop Bush, Paulson or Kanjorski?  Oh I know, they were all elected in 2010.  Ok, it’s 2011 now and I’ll give you the benefit of the doubt in that you can’t do anything until you get into office (despite, I note, your utter refusal to run on these issues in 2010 – I did call you all out on that) so let’s start there.

Has anyone heard any demands to lock up the fraudsters stealing homes with fraudulent documents?  To break up the “too big to fail” banks and toss their executives in prison where they belong?  To put a stop to the fraudulent issuance of credit economy-wide?  To take Bernanke out behind the woodshed and stuff a sock in his mouth via adding an “or else” to The Federal Reserve Act so that he cannot debase the currency and he and his cohorts will all be imprisoned (or hang on The Mall, which seems more appropriate to me) if they do?  To enforce a zero-inflation mandate?  To end ZIRP and distortions in the bond market?  To balance the budget right damn now, and quit playing Ponzi with the Federal Budget, Medicare, Medicaid, Student Loans and more?  To tell the truth to our Seniors and everyone else – you will NOT GET what you were promised, because YOU CAN’T – the money does not exist!


You have not heard any of this.  Not one damn word.

Oh sure, there are the token claims, such as those from Southerland and Bachmann.  That’s very nice, but it’s both insufficient and immaterial.  Without legislation and regulation, which means punishment for those who have screwed the American public serially for 30 years none of this will change and you will keep getting bent over the table and serially violated.

Unfortunately for Congress it’s too damn late now.  In 2007 I faxed a letter to all 535 members of Congress.  I urged them to set aside a couple hundred billion dollars – cash, not bogus credit – to provide “three hots and a cot” for up to 25% of the population for a period of at least one year.  NOT subsidy via unemployment, food stamps or any such thing.  A soup line, a bunch of cots in formerly-closed military base hangers and barracks, and a place to take a shower and a crap.  One quarter – or less – than what we would spend now on the same thing.  This would have allowed the housing market to collapse and subsequently clear, the banks would have blown to bits, but from the rubble entrepreneurs would have started new banks, houses would have been resold into the market to new owners and the economy would have cleared the bad debt on its own through bankruptcy and liquidation, which is the essential purpose of recession.

I was not only ignored I was called a lunatic and crazy, that things couldn’t get that bad.

Then 2008 happened and some eyes opened – a bit, because it sure looked like it might get that bad.  The response?  More fraud.

By 2009 the callers of “fool”, “lunatic”, “haha” and “clown” began again.

Well, how’s it look now folks?

Need it in pictures?  Here it is:

Gee, almost back to the depths-of-hell 2009 lows, eh?  So what’s this crap about “no recession”?

Oh wait – there’s no recession: This is a continuing Depression that our government, conspiring with the banksters and media, have intentionally and fraudulently covered up and it is no longer working.

Did you get back into the market America?

More to the point if you did get back in: Did you get out in time this time around or were you listening to “Tout TV” again?

Gee, all bad numbers in that table on the current situation.  New orders collapsed by twenty-six points, shipments collapsed by almost ten points, and both employee count and workweek collapsed by nearly 14 and 9 points, respectively.

Worse, on a forward basis inventories, delivery times, unfilled orders and the employee workweek collapsed on a six-month forward look, with employment numbers remaining only mildly positive.

This means that personal income is going to collapse as well and with it tax receipts, exactly as I have forecast.  The government’s revenue forecasts, to be blunt, are screwed.

To our government: Either get your arms around this now and consolidate, meaning massive cuts in spending and a fundamental reorganization of tax and trade policy (and no, not more “free trade” either), or we will go “overcenter” on that nasty little debt table I’ve been talking about – at which point there will be nothing you can do about it.


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