Karl is spot on. If this filters down watch out. This is Identical to the DG report in 2008 and fall of 2011 when gas broke the 4$ barrier on the west coast..


He rightfully excludes defense and aircraft.

That said, maybe it is just a one off. But if history is any indicator then we are in for as ugly set of data for 2Q

>.The spin on Bloomy is that this was all pulled ahead from Dec do to depreciation. I think we'll need to see the next few months to get a better view.>>

We'll then see just how F'd we were then (meaning now), and how much worse we're F'd at that point.

It's all lies. Every damned thing they say.

Lincoln, perhaps you haven't noticed but data sets are not allowed to look ugly anymore no matter how disconnected from reality they may appear.

Eaglewwit. Im not willing to go full out conspiracy yet on all the data sets. I know that whistleblowers would come forward eventually, especially during this political season. You can see the one time gimmicks being played in certain data series. But these are actually completely allowed (unemployment for example)

Its grimy and childish but they show you the real data behind the headline. That is how we know this. If this were the Soviet Union, we would never know. Things like the labor participation rate would never be whispered.

The most unfortunate part about the gimmicks is I HAVE to read Market Ticker, Zerohedge and Blogs to catch this. The media is not doing its job.

None of these fictions are going to put money in the average Joe's account. The FSA is going to vote Obama, save for those that are embarrassed they are getting the FS.

Pater Tenebrarum posts a chart of the ratio between durable capital goods and durable consumer goods. The aim of all capital investment is to have an end product of consumer goods. This ratio is evidently the prime evidence of a capital goods bubble. A lot of capital goods are good for years and years and replacing them merely throws them in the garbage before their time. This is consuming capital. It is also producing jobs that in the end have to go away if the bubble isn't maintained. More durable goods indicates the bubble is getting larger. Less is evidence the bubble is bursting. Europe is a big deal, but to hear the bull**** on CNBS and other propaganda machines, the US is all that matters. Capital goods are a big part of the US economy, the part that filters up or down through the economy. In normal times, these jobs are steady. In bubbles, the jobs are temporary and the investments made are often a waste of capital. It is like trying to maintain home construction.

In the 1920's, Wall Street created a huge capital goods bubble by financing exports and financing capital expenditures in foreign countries. When the depression hit and the financing went in the tank, the capital goods industry collapsed. This is where Keynes came in and decided the capital goods industry needed to be resurected by government spending. The problem was the business was a bubble and it broke, not that it was normal and fell off the face of the earth. We have come full circle.

Mannfm11,

I think this is a link to the chart you were referring to:

http://www.acting-man.com/blog/media/201....

Quote:

Lincoln, perhaps you haven't noticed but data sets are not allowed to look ugly anymore no matter how disconnected from reality they may appear.

I came across an early example of this just recently, and these people may have been among the first to set the standard for fakery to create a false illusion: the College Boards (SATs). Apparently in 1995, they adjusted the test so the scores would be higher. In order to convert a pre-1995 score to the new scoring system, add about 100 points to your old score. Prior to that I recall a lot of hand-wringing about the decline in the quality of education evidenced by falling SAT scores. The 1995 change is instituted and voila, no more decline.

yeah, notice the ratio is about double normal. The purpose of durable capital goods is to make consumer goods. Looks like a law of diminishing returns.

Anecdotal - your comments appear correct. I've got 1/2 dozen large clients who use big, heavy, expensive equipment. Trucks, road equipment, CNC stuff, etc. I worked with all of them last summer through fall on what their needs would be over the next couple of years. They went on a buying binge to take advantage of the tax law.

Better yet, some are not exactly stellar credit risks after losses the past few years. But guess what, Deere, CAT and others were HAPPY to offer captive finance in order to make a sale appear on the 2011 books. No future issue there, right?

Why does that sound familiar?