Where did the story about the "durable" goods report go?
Y'know, the one that I found out about in this CNNMoney e-mail this morning....

Even with a search warrant, the word "durable" could not be found once the reader got past the CNNMoney index page earlier today (middle story, middle column in the graphic that follows):

In the "Highlights" from this morning's Census Bureau announcement, the underlying news source, the word "durable" appears seven times.
But "the AP report" referred to in the e-mail, as CNNMoney carried it, did not contain the word "durable" once, either in its headline or its content.
Here are the first few paragraphs from that CNNMoney story:
Factory orders strongest in five months
Commerce Department says big-ticket orders jumped 5.2% in December, well above forecasts.Orders to factories for big-ticket manufactured goods soared in December by the largest amount in five months, welcome news for an economy buffeted by talk of recession.
The 5.2 percent increase in orders was a surprise finish for the manufacturing sector at year's end -- a segment of the economy considered to have had a poor year.
The increase in orders, as reported Tuesday by the Commerce Department, was far larger than had been expected. The strength came from a big increase in demand for commercial aircraft, but even excluding the transportation sector, orders posted a solid 2.6 percent gain.
The December orders increase was more than double what had been expected.
This, by the way, is very good news for the economy, indicating that the weakness shown in manufacturing in December's Institute for Supply Management report might be a very short-lived.
But getting back to this "durable" thing -- A visit to the full-length AP story by Martin "Talk of Recession" Crutsinger reveals that he at least put the word "durable" into the final paragraph, while whoever wrote AP's headline had the sense to use the correct descriptive word ("Durable Goods Orders Rise by 5.2 Percent"). CNN edited out Crutsinger's final few paragraphs, changed the headline to refer uninformatively to "Factory Orders," and eliminated the word "durable" in the process.
Am I making a mountain out of a molehill? Perhaps. But it seems that first Crutsinger, and especially CNN, were trying very hard to avoid using the word that actually describes the underlying report. Why?
The fact also remains that if CNN, and to a lesser extent the AP and Crutsinger, had set out to make it difficult to find their stories, they could hardly have done a better job. A search done on "durable goods," with or without quotes, probably won't pull up the full AP report in its primary results (other stories using the word "durable" more often will come in ahead of it), and almost definitely won't list what CNN posted at all.
So these "durable dodges" are either examples of sloppiness that at the same time hurt CNN and AP (because of fewer page hits), or "clever" hiding (conscious or subconscious) of pretty good economic news. You make the call.
Cross-posted at BizzyBlog.com.
—Tom Blumer is president of a training and development company in Mason, Ohio, and is a contributing editor to NewsBusters















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I don't know many people having a 747 parked in the back yard
January 29, 2008 - 17:34 ET by Lame CherryBig ticket items reflect one thing in December and that is TAXES.
Companies always look at their profit structure at that time and asses their coming income tax bill. As aircraft, trucks, industrial improvements are all tax deductions it is a win for any business or person to buy the big ticket item and DDR it out on a 5 year scale.
While the MSM is trying to hide anything positive, this reflection does not really help people except at Boeing or similar marketers doing tax upgrades.
At least though Boeing will not be laying people off and that is good for their people.
Hedge funds are what must be watched.
*HIC IACET ARTORIVS REX QVONDAM REXQVE FVTVRVS
Orders v. Purchases
January 29, 2008 - 18:11 ET by Tom BlumerYou don't get a tax deduction for an order, or even for a down-payment on an order.
You have to make a purchase.
The ordering for a pre-year-end purchase would have to have been done anywhere from a month to many, many months ago, depending on what's involved.
More likely is that people got their 2008 budgets approved ahead of year-end and placed their orders as soon as they got the OKs. If I'm right, that bodes very well for early 2008 and for capital spending in general.
This is just priceless.
January 29, 2008 - 21:56 ET by Evil CapitalistThis is just priceless. What is an order according to you?
Since you claim to be a CPA could you kindly backup your claim with an IRS publication?
Starting point
January 30, 2008 - 01:25 ET by Tom BlumerThe starting point for tax reporting is a company's financial statements.
The first line on any business tax return (1120, Sch. c, or the partnership return) is what the IRS calls "income," which is their parlance for "sales," not "orders." You as a seller could get billions of dollars in orders on December 31, but you owe no tax on them, because you haven't made them; thus, you haven't sold them.
As a buyer, you can't deduct something until you, well, buy it. You can issue billions of dollars in purchase orders on December 31, but you can't deduct anything unless you receive the goods or services involved.
I think your confusion may have to do with percentage of completion situations like airplanes and buildings. In those situations, yes, as the seller you ordinarily recognize revenues as a job progresses (but if you're clever and the rules allow it, you'll use the "completed contract" method for tax purposes), and as the buyer you may be able to deduct a what you've incurred.
But that's the exception. Ordinarily, you don't get to deduct expenses for widgets until you receive them, and you don't have to recognize revenues as a manufacturer of widgets until you ship them.
Does not this contradict
January 30, 2008 - 09:21 ET by Evil CapitalistDoes not this contradict accrual method of accounting?
And, especially since buyer gets durable goods, they can't be expensed and have to depreciated anyway?
No, it IS the accrual method .....
January 31, 2008 - 11:17 ET by Tom Blumer..... becasue income is recognized in sync with the flow of the goods.
The alternative would be the cash method, where you don't recognize income until you get money and you can't recognize expenses until you spend money.
Most businesses above a certain size, IIRC, have to be on accrual accounting for tax purposes. Most smaller bizzes are on the cash method.
And you're right than many durable goods end up being capitalized and depreciated. Unless on the %-complete method, the seller can't recognize income until the goods are shipped, regardless of when he gets paid (in advance or in arrears, it doesn't matter).
Did you check under the
January 29, 2008 - 17:51 ET by mattmDid you check under the carpet?
matt, I was going to suggest
January 29, 2008 - 18:13 ET by Chris Normanmatt,
I was going to suggest he look under the tab of "Good Economic News We Won't Willingly Report". Your suggestion is more succinct. :)
I know...
January 29, 2008 - 18:35 ET by c5thenIt was overshadowed by the Ted (hic) Kennedy endoresement of Obarack Abama.
The day that "politician" became a career choice is the day we started losing the Republic. Let's get it back! Alan Keyes '08.
THE SKY IS FALLING!!!!!!!!
January 29, 2008 - 18:46 ET by TinianOkay, it's time again for the doom and gloom NewsBusters scheißehaus economists to spout off with their gloom and doom predictions!
Tom... in 2000
January 29, 2008 - 20:13 ET by Gary HallTom, in 2000, Durable good orders were in free fall and a good indicator of the coming recession. Here's a nice graph: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/durord.htm
One will have to look closely becasue the dates are spread out - but on close inspection it's easy to see that 2000 was "tank year."
While we are at it, Industrial production, had reached it's peak just about on Jan. 1st, 2000, and also spent the entire election cycle of 2000 in free fall (now there's some global cooling off here).
Accompanying the show of indicators in decline during that election cycle during 2000 were: gasoline prices would be up about 56% in the 12 months preceeding Bush taking his seat in the oval office; GDP was in deep decline; hundreds of companies would be going out of business; NASDAQ would be down 56%; inflation was on the rise; home sales and new home construction was slipping; profits had been in decline since 1997; CA was in the middle of an energy crisis; there was no plan in Iraq and no inspectors; US targets were getting hit left and right by Bin Laden; average CEO pay to average worker pay was at historic highs (The Dems love that one);initial jobless claims increased steadily during last 3/4's of year, and millions of Americans were loosing their life savings in the the bubble crash - those that still had a job were also.
The MSM's view of all of these horror signs about the economy -- "Shhh. Hold it off folks, we've got to talk up the economy cause we've got to get Al Gore in the White House."
exactly
January 30, 2008 - 01:34 ET by Tom BlumerI've stumbled across those numbers from time to time, and it really is stunning how the economy was coming apart in the summer of 2000, and NO ONE was reporting it. In addition to what you cited, the ISM mfg. index began 18 consecutive months of contraction in August 2000.