Green Shoots Are Parched

The Fed’s Beige Book Report is out and should dispel most talk of “green shoots” at least for a day or two.

The report said that overall, the economy remained weak or deteriorated further from mid-April to May. There was some talk of second derivatives — the pace of decline is abating — and improving economic expectations, but that’s about the extent of the good news.

From Fox Business:

Five of the Fed’s 12 districts said that economic conditions in their regions were still deteriorating, but the rate of deterioration had moderated. The commentary is similar to the last survey put out by the Fed six weeks ago.

In the manufacturing sector, the Federal Reserve said activity during the period declined or remained very weak levels in most of the central bank’s districts. The surveys done by the Atlanta and Kansas City banks indicated that the rate of decline moderated or slowed, while New York and Dallas described the sector as stabilizing or having stabilized.

The Fed said that tight credit conditions were “hampering” the auto sector and vehicle sales, which remained at depressed levels during the period.

The service sector remained weak, according to the Fed. Select districts reported some moderate increases in activity for certain specific sectors, but “for the most part activity continued to decline.”

As noted in other separate reports, the Fed said that a number of Districts reported home sales increasing and that new home construction appeared to have stabilized at very low levels.

Across the country, the Federal Reserve said they did not experience any signs of inflation, saying that all its districts reported that “prices at all stages of production were generally flat or falling.” The only exception was the highly reported story of rising oil prices.

Throw that in with a weak 10 year note auction and a coupon now barely below 4% and this becomes a day to forget. Throw some water and fertilizer on those plants. They’re starting to look a little parched.

Comments

[Tomcat101:]

Obama is spraying Round Up all over the green shoots. Then he's going to cover them with a thick layer of mulch. Then some black plastic. Then bulldoze the whole garden and cover it in 12 inches of cement.

Something like that.

Just think "Jimmy Carter".

Jun 11 09:23 AM

[Larry House:]

Higher taxes, more spending, and more regulation is all that awaits the green shoots. They don't stand a chance.

Jun 11 10:06 AM

[thiazole:]

You guys obviously don't understand what "green shoots" are. Green shoots happen when the rate of deterioration is moderating. That is why they are called shoots and not plants. If they happened when the GDP reversed to positive, they wouldn't be shoots since the recession would already be over. Green shoots are yesterday's news so I don't understand why bears keep bringing them up. It is like obsessing about Lehman Brothers. Water under the bridge. Get with the program. We are already starting to see the plants from the green shoots that indicate that GDP is on the verge of turning posititive.

Yes, Obama is spewing terrible economic policy. Creating more government jobs to leach on the economy is never a good thing, but none of that has even happened yet but the cycle has already begun reversing. The economy will recovery IN SPITE of Obama. In fact, the GDP will probably be positive before hardly any of his "fixes" can even be incorporated. All his stimulus spending will do is prompt inflation.

Jun 11 10:19 AM

[john redmond:]

Green shoots, yeah, I saw some last night, my wife had asparagus for supper.
No inflation ? I want to find out where Ben does his shopping for groceries.

Jun 11 10:28 AM

[xxxx:]

The problem is that the "green shoots" were a mythin to being with . manufactured to imporve consumer confidence and approval rating within the adminstration. To also get retail investors to bail out the banks by buying stocks.


On Jun 11 10:19 AM thiazole wrote:

> You guys obviously don't understand what "green shoots" are. Green
> shoots happen when the rate of deterioration is moderating. That
> is why they are called shoots and not plants. If they happened when
> the GDP reversed to positive, they wouldn't be shoots since the recession
> would already be over. Green shoots are yesterday's news so I don't
> understand why bears keep bringing them up. It is like obsessing
> about Lehman Brothers. Water under the bridge. Get with the program.
> We are already starting to see the plants from the green shoots that
> indicate that GDP is on the verge of turning posititive.
>
> Yes, Obama is spewing terrible economic policy. Creating more government
> jobs to leach on the economy is never a good thing, but none of that
> has even happened yet but the cycle has already begun reversing.
> The economy will recovery IN SPITE of Obama. In fact, the GDP will
> probably be positive before hardly any of his "fixes" can even be
> incorporated. All his stimulus spending will do is prompt inflation.

Jun 11 03:02 PM

[thiazole:]

They weren't a myth, though. Below are links to charts showing that the data was "leveling off" early this year. Now I think many will become positive or have already become positive. Either all this data is made up (and I won't beleive that) or it represents green shoots turning into plants.

www.briefing.com/Commo...

www.briefing.com/Commo...

www.briefing.com/Commo...

www.briefing.com/Commo...

www.briefing.com/Commo...

www.briefing.com/Commo...

www.briefing.com/Commo...

To me the evidence is overwhelming.


On Jun 11 03:02 PM xxxx wrote:

> The problem is that the "green shoots" were a mythin to being with
> . manufactured to imporve consumer confidence and approval rating
> within the adminstration. To also get retail investors to bail out
> the banks by buying stocks.

Jun 11 03:43 PM

[Alphameister:]

The best "green shoot" of all, because it is one of the best of the leading economic indicators, is the action of the world stock markets since early March. It may not be powerful or long-lived, but an economic recovery is definitely in the works, even in the US.

Jun 12 03:38 PM