That’s Deflation! Value of Manufacturers’ New Orders For Consumer Goods Goes Negative (Along With CPI YoY)

To paraphase Dean Martin, ‘When the value of manufacturers orders go negative, that’s deflation.”

The Value of Manufacturers’ New Orders for Consumer Goods Industries has gone negative YoY.

vneworders

Has The Fed’s QE policies helped the American consumer as soon media talking heads have opined? In the words of Germany’s Angela Merkel, “Nein!”

qe3dr

And the Value of Manufacturer’s New Orders for All Manufacturing Industries seems to be on a downhill trajectory,

vmanpng

And the Consumer Price Index YoY is deflating as well.

cpiyoyThat’s deflation.

deani

 

Release The Hounds! ECB Ready To Buy Bonds (And Unleash Fury On Pensioners And Savers)

ECB’s Mario Draghi:”Release the hounds!” On pensioners and savers.

(Bloomberg) — Mario Draghi primed investors for an initial bond-buying salvo on Monday as he signaled European Central Bank officials are convinced they will succeed in choking off the threat of deflation.

Six years after the U.S. Federal Reserve began quantitative easing, the ECB’s Governing Council committed to its first asset purchases next week in a program amounting to 60 billion euros ($66 billion) a month.

The ECB president also unveiled forecasts showing higher economic growth with an inflation outlook that puts officials on track to reach a goal of just below 2 percent.

“Our monetary policy decisions have worked, and it is with a certain degree of satisfaction that the Governing Council has acknowledged this,” he said at a press conference in the Cypriot capital of Nicosia on Thursday. “We see objectives are gradually being obtained.”

Yesterday, we saw the Polish National Bank lower their reference rate to 1.50 percent and their bank deposit rate to 0.50 percent.

polandratecbThe ECB didn’t change their primary interest rate today, but … look out!

ecbneg

The ECB deposit rate is now in negative territory. (The deposit rate is the interest rate paid on the surplus liquidity that credit institutions may deposit overnight in an account with a national central bank that is part of the Eurosystem.)

ecbsepo

ECB bond purchases may widen pension deficits by up to 18 percent. Thanks a heap, Mario!

 

Pensioners_bllomberg

We already have 90 percent of industrialized countries with near zero or below target rates. How many more eggs do the Central Banks have to break to make their omelet?

negrates

Of course, savers and small businesses are under siege by Central Banks. As Arthur Cutten of Jesse’s Cafe Americain reminds us ..

mario-draghi-ecb-president

I was considering Shakespeare’s “Cry havoc and let slip the dogs of war!”, but the thought of Draghi and IMF’s Lagarde on an Italian tank doesn’t inspire much fear.

m14-41

Grim FINdango: Q1 GDP Forecast QFalls To 1.2 Percent On Collapsing Construction

The Atlanta Federal Reserve disturbed quite a few folks where it announced that Q1 Real GDP growth is forecast to be an abysmal 1.2 percent.

gdpnow-forecast-evolution

The Atlanta Fed provided a spreadsheet of the breakdown (or evolution) of the Q1 GDP forecast: GDPTrackingModelDataAndForecasts

What sticks out like a sore thumb is Fixed Investments: Structures.

grimfinango

It is indeed a Grim FINdango for the commercial real estate market.

grim_fandango_by_domigorgon-d31w0ct

 

Kielbasa Krisis: Poland Central Bank Cuts Key Rate To 1.50 Percent To Combat Deflationary Spiral an (Follows The Central Bank Pack)

Poland is experiencing a deflationary spiral and is cutting their Central Bank reference rate to combat it. Or as Bruce Willis said in Die Hard, “Welcome to the party pal!”

(Bloomberg) — Polish central bank cuts benchmark 7-day rate to record-low 1.5%.

The Polish Central Bank is joining the Bank of England, The Federal Reserve, the Swiss National Bank and the ECB in rate slashing that would make Freddie Krueger jealous.

polandratecbWhy? It appears that Poland is caught in a deflationary spiral.

polandinfl

The poor Poles. They have Angela “Jigsaw” Merkel on one side and Vlad “The Impaler” Putin with troops in Ukraine on the other.

sawtriciclodeformado (1)

It is indeed a Kielbasa Krisis.

kielbasa

 

 

Subterranean Homesick Blues: Mortgage Purchase Applications Same As Last Year Despite Credit Easing and Fed’s Continued Intervention

I keep hearing about lenders and the government mortgage purchasers/insurers talking about loosening credit standards and the rebirth of 100 percent LTV lending. Perhaps, but the mortgage market is still singing the same “Subterranean Homesick Blues” as last year at this time.

Mortgage applications increased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 27, 2015.

mbastats030415

The Refinance Index increased 1/2 percent from the previous week on a seasonally adjusted basis. But on a NON seasonally adjusted basis, the Refinance Index increased 11.62 percent! Given the low levels of Refinancing Applications, you need an atomic microscope to see the 11.62 percent increase last week.

mbarefi030414

The NON seasonally adjusted Purchase Index decreased 13.67 percent from one week earlier. But there is no growth over the same week last year!

mbap030415

The seasonally adjusted Purchase Index decreased 0.2 percent from one week earlier. And continues to remain at 66 percent below housing bubble highs. Say, where is the predicted boom in the housing market from the relaxation of credit by banks, Fannie Mae, Freddie Mac, FHA, etc?

mbapurchsa030415

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.96 percent from 3.99 percent, with points decreasing to 0.30 from 0.33 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

So, mortgage purchase applications continue with the Subterranean Homesick Blues  as the collective efforts of The Federal Reserve and Wall Street have done little for the middle class.
mbapfed022515

And America’s youth continues to live in their parent’s basement.

millennialgraph3

“You don’t need a weatherman to know which way the wind blows.” Just look at the data.

Bob-Dylan-Google-Instant

S&P500 Index Continues To Climb As World GDP Forecast Plunges And Atlanta Fed Says Q1 Real GDP Grew At 1.2 Percent

Time to queue the ship’s band to play “Nearer My God To Thee” from the film “Titantic.”

The S&P 500 index has continued to climb over the past year as the World GDP Forecast YoY continues to sink (like The Titanic).

spxworldgp

And now the Atlanta Fed has joined the Titanic band and is playing a mournful tune of … Q1 2015 Real GDP growth of 1.2 percent.

gdpnow-forecast-evolutionAnd up on Constitution Avenue, The Federal Reserve swings into action!

Fortunately, Central Banks have flooded the globe with liquidity.

Maybe the Hindenburg Omen should be renamed The Titanic Omen!

titamicmen

 

“Lookout, do you see any icebergs ahead in this tranquil sea of liquidity?” “No Captain Yellen. Ocean is as still as a mill pond.”

titanic-526653642

Bernanke: Presidents Should Be Able To Declare Economic Emergencies (As Yellen Pleads “Don’t Audit Me, Bro!”)

Former Federal Reserve Chair Ben Bernanke recently suggested that The President should be able to declare ECONOMIC emergencies. What does that mean? Martial law? Prison camps? Probably not. But unlimited borrowing and spending by the Federal government to implement a recovery (and bypassing Congress) is the likely answer.

it might make sense to give “the president some ability to declare emergencies or take extraordinary actions and not put that all on the Fed,” Bernanke said at a conference. “The constitution gives the president significant flexibility to respond to military situations,” in part because they are chaotic, he noted.

This is a Keynesian’s dream! Imagine all the broken windows that will occur to justify the manufacturing and installation of new windows.

Yes and if The President can declare economic emergencies, then The President can spend unconstrained by Congress. No moral hazard problems here!!! [Cough, cough]

If this wasn’t bad enough, we have the current Federal Reserve Chair, Janet “The Shadow” Yellen screaming “Don’t audit me, Bro!” As in, DON’T audit The Fed.

Her argument? An audit would be overly political.

After I stopped laughing, I decided to lay out a few points.

First, The President nominates the Chair of The Federal Reserve Board and the US Senate confirms the nominee. The seven members of the Board of Governors are appointed by the President and confirmed by the Senate to serve 14-year terms of office. If this isn’t already political, I don’t know what is!

Second, losses on The Fed’s asset purchases are sent to the US Treasury for payment. As a taxpayer, I think I should be able to know what I am liable for in taxes. And since The Fed is the largest holder of US Treasury debt, I think knowing what is happening behind the curtain would be helpful.

fedholdingsThe standard comeback is “The Fed is already audited by others” and “The President would NEVER do that!” These comebacks are unconvincing.

Particularly after reading “Obama “Very Interested” In Raising Taxes Through Executive Action.”