Global Manufacturing Collapse
By Barry Ritholtz - January 3rd, 2009, 11:13AM
I haven’t had a chance to comment on the ISM data, but a few charts are just about as much info as you need. Remember, 50 is the dividing line between expansion and contraction:
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December ISM Index
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via WSJ
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Source:
Manufacturing Tumbles Globally
KELLY EVANS and ROBERT GUY MATTHEWS
WSJ, JANUARY 3, 2009
http://online.wsj.com/article/SB123094144619950373.html
January 3rd, 2009 at 12:45 pm
This is too depressing. Please inform us that it ain’t this bad, numbers are screwy because of recent proximity to moon, whatever, make something up. please.
January 3rd, 2009 at 1:04 pm
These numbers are fugly. This recession is going to hurt longer and harder than expected. I knew all the bullish bullshit on CNBC/Bloomberg could only mean another leg down–way down. Equities, housing, consumer goods, unemployment, etc. Pretty soon, one could call this a depression.
January 3rd, 2009 at 1:06 pm
GDP = C + I + G + (X-M)
(consumption + gross investment + government spending + (exports − imports))
Obama will make the “G” as big as he has too, no matter the long term consequences.
January 3rd, 2009 at 1:08 pm
is 0 (zero) the lower bound of the ISM Manufacturing Index?
January 3rd, 2009 at 1:17 pm
YIKES! (that’s all I can come up with)
January 3rd, 2009 at 3:10 pm
@DL:
And what exactly would a supply sider do?
The consequences of not increasing the G for everything else (that is collapsing) would be irresponsible.
The supply side orthodoxy has failed, get over it Mr. Luskin.
BTW I am so glad I never listened to you and the rest of the PPP’s.
January 3rd, 2009 at 3:24 pm
Moss @ 3:10
I am very much in favor of providing financial support to the unemployed.
But at the same time, I’m not in favor of piling on endless amounts of government debt.
January 3rd, 2009 at 3:27 pm
Moss @ 3:10
Furthermore, while we are in the business of throwing trillions of dollars around like it’s confetti, how about eliminating the payroll tax for six months?
That’s something that would help the average “J6P”.
January 3rd, 2009 at 3:37 pm
Obviously the bottom is in and “the recovery is underway” (according to Dennis Kneale).
January 3rd, 2009 at 4:18 pm
Furthermore, while we are in the business of throwing trillions of dollars around like it’s confetti, how about eliminating the payroll tax for six months?
Substitute payroll tax and capital gains on savings with a retail gasoline tax… Phase in 50 cents a year for 4-6 years, kill demand for gasoline and you’ll put money in American workers’ pockets and sodomize the Arabs with a spiked plunger at the same time..
January 3rd, 2009 at 4:41 pm
@Mann:
yes…as Dennis points out, “people are sick of being negative and losing money, so they are now buying stocks.”
“I have never uttered a insightful thought on the air…I look like I hang out at strip clubs…I’m never negative…I am Dennis Kneale…I am CNBC.”
January 3rd, 2009 at 4:47 pm
The Chicago School created this mess; the Austrian School told us what would happen; the Keynesians will someday explain how their solutions would have worked if only….
January 3rd, 2009 at 4:49 pm
BTW, the sacry part of all this is not where we are now…as almost every commentator says , “this is not like 1930″…however, I have never heard the tagline “YET”. They assume this is the worst it will get…quite a leap of faith. If we were on a path to 1930, it would look an awful lot like what we have seen so far.
January 3rd, 2009 at 6:07 pm
Dr. Kenneth Noisewater @ 4:18
Sounds good to me. (And to Lawrence Lindsey).
January 3rd, 2009 at 6:07 pm
Obviously the bottom is in and “the recovery is underway” (according to Dennis Kneale).
—————
Someone prove to me that an Alt-A problem does not exist and I’ll believe that a bottom is near.
January 3rd, 2009 at 6:31 pm
Barry,
Just got in from hiking, and going out to supper with friends, but there is another very troubling feature to the ISM number…
http://briefing.com/Investor/Public/Calendars/EconomicReleases/napm.htm
The prices paid element has gone from 77 in August to 18 in December…I realize that much of that could be the commodity bust and gas price declines, but when I think about it at length it seems to me if company B sells to company A in August for 77 and pricing power is now 18, this is an awful sign. Not only has pricing power collapsed, but in the long run company A must sell to company C, etc….it is all a big virtuous family who sells to each other…and 77 to 18 tells me that many sales must not have profit associated with them.
Probably just too much fresh air today…….
January 3rd, 2009 at 7:01 pm
I think we are at a crossroads Bruce…the market is rallying, on putrid volume, because some feel this is like most recent recessions and it is about to turn around. I don’t see how that could be correct, given the mountain of debt we sit on…it is Mount Everest. So there is going to be a rude awakening this week. I foresee massive earnings warnings (the qtr is over) , terrible NFP and hedge funds will be blowing up left and right.
January 3rd, 2009 at 7:14 pm
What has happened to Paul Volcker? Did they lock him in a conference room after they trotted him out as “head of some obscure team”?
I cannot imagine Tall Paul willingly going along with the utter nonsense that has been proposed …
January 3rd, 2009 at 7:28 pm
constantnormal @ 7:14
They’ll listen to his analysis, but probably not his advice.
(Volcker is no fan of large deficits, or of a weak dollar).
January 3rd, 2009 at 7:30 pm
Steve Barry @ 7:01
Maybe Israel will give a temporary boost to QID and USO.
January 3rd, 2009 at 8:00 pm
Me-thinks far too many are following prior recessionary playbooks and are blithely assuming the same thing will play out here.
Either that or they’re just talking their book and lying to the sheeple……..AGAIN.
January 3rd, 2009 at 9:00 pm
@ Mannwich — I agree. Once you start talking trillions instead of billions, a lotta stuff becomes possible (regardless of whether it is wise or practical) that was previously inconceivable.
OTOH, I fail to see how the USofA stays solvent in that poker game. Maybe insolvency is part of the plan.
January 4th, 2009 at 12:51 am
I guess on the positive side no one has a job in manufacturing any more so who really gets hurt here?(end sarcasm)
Does this mean the price of being poor is coming down as all those manufacturers compete for customers or is this just going to be an excuse to cut the wages all the more?