Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Even The Good Economic Numbers Are Bad

Economics / US Economy Jun 03, 2015 - 08:06 AM GMT

By: John_Rubino

Economics

US factory orders tanked again this morning, and were generally reported that way at first. To take just a few of the low-lights:

  • Factory orders have declined in eight of the last nine months.
  • Orders for transportation equipment fell 2.4 percent while orders for computers and consumer goods-related equipment also fell by varying amounts.
  • Last month’s durable goods orders were revised to -0.3% from the original +1%.
  • Business inventories remain at near-record high levels.

Then the Census Bureau reported better than expected car sales, leading some outlets to revise their factory orders stories with a positive spin. Here’s a representative snippet from Reuters:

WASHINGTON (Reuters) – New orders for U.S. factory goods fell in April as demand for transportation equipment and other goods weakened, suggesting that manufacturing remained constrained by a strong dollar and spending cuts in the energy sector.

But the outlook for manufacturing and the broader economy got a lift from another report on Tuesday showing automobile sales in May on track for the quickest pace in more than nine years.

Strong auto sales could boost May consumer spending, which was flat in April after households cut back on purchases of motor vehicles. A rebound in consumer spending, which accounts for more than two-thirds of U.S. economic activity, is being eyed after slowing down sharply in the first quarter.

But — illustrating the power of reporters and headline writers to shape the news by deciding what goes where in an article — further down in most of these stories is something like this:

Analysts have pointed to easier consumer credit as one reason for increased sales since the recession. On Monday, Experian reported the average length of loans for new and used vehicles in the United States in the first quarter hit record highs, and nearly 30 percent of new-vehicle loans have pay-back periods longer than six years.

The fact that nearly a third of today’s car buyers are locking themselves into loans that run until at least 2021 would seem to be the most important part of the story, since it’s not what you buy but how you pay for it that matters going forward. With car loans, as with student loans, money borrowed and spent today comes at the expense of spending that might otherwise have happened tomorrow. Students graduating with crushing debts won’t be buying houses anytime soon, while today’s new car buyers won’t be back in the showroom until their “car mortgages” are paid off.

So the auto industry’s strength, driven as it is by long-term subprime lending, is actually a sign of weakness. These days even superficially good numbers are bad.

By John Rubino

dollarcollapse.com

Copyright 2015 © John Rubino - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in