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Wholesale Inventories Below CONsensus Even As UMich CONtinues Trying To CONvince CONfidence Surging
The ephemeral inventory-based GDP bounce story just keeps getting getting delayed over and over: after an expectation of a 1% decline, the number came in at a disappointing to the green shootists -1.4%:
Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $387.2 billion at the end of July, down 1.4 percent (+/-0.4%) from the revised June level and were down 12.8 percent (+/-1.1%) from a year ago. The June preliminary estimate was revised downward $1.4 billion or 0.4 percent. End-of-month inventories of durable goods were down 1.5 percent (+/-0.4%) from last month and were down 13.0 percent (+/-1.2%) from last July. Inventories of metals and minerals, except petroleum, were down 4.4 percent from last month and inventories of furniture and home furnishings were down 2.7 percent. End-of-month inventories of nondurable goods were down 1.0 (+/-0.4%) from June and were down 12.4 percent (+/-1.4%) compared to last July. Inventories of farm product raw materials were down 5.1 percent from last month and inventories of beer, wine, and distilled alcoholic beverages were down 2.8 percent.
The destocking in alcohol beverages strikes us as not very surprising.
The only ray of sunshine was a slight improvement in the Inventory/Sales ratio which declined slightly from 1.25x to 1.23x.
The full release by the Census Bureau can be found here.
In other news, surprisingly ignored by the headline-only reading momo crowd, the CONsumer CONfidence number from Reuters/UMich, which apparently has decided to delete all non Wall-Street terminating numbers from its survey rolodex, has surged to a preliminary September read of 70.2 from 65.7 in August. Contrast this number with the weekly ABC Consumer Confidence Index which is stuck at a post-Lehman low, and derive your own conclusions.
"Confidence rebounded in early September as consumers increasingly
expected the economy to improve despite their reluctant conclusion that
their own financial situation would remain quite problematic for some
time," the Reuters/University of Michigan Surveys of Consumers said in
a statement.
Reluctant conclusion indeed, sparked by an ongoing freeze in consumer lending and a surging savings rate. But at least the talking heads tell the optimistic/pessimistic consumer all is good.
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Who are these consumers who are so optimistic? Another day for the bulls to run I guess.
I can't tell you how many clients of mine tell me they are worse off but the economy is better. When I ask them how they know the economy is better, every last one of them points to the news or the government spin.
You can fool all the people all the time if they are willing to believe the lies.
You must first must believe in heaven if you desire entrance through the pearly gates.
S&P 2000? Praise my Bloomberg terminal I do believe! Someone get me some TARP money stat. I gots some heathen stocks to save.
They will keep denying until basic expenses outstrip the ability of a 2 income family to afford a one bedroom apartment with a steady diet of peanut butter, no jelly.
P.T. Barnum had it right
Which one?
"Many persons are always kept poor, because they are too visionary. Every project looks to them like certain successes, and therefore they keep changing from one business to another, always in hot water, always ‘under the harrow’."
or "there's a sucker born every minute?"
What they fail to disclose is that the Reuters/UMich survey is NO LONGER taken in America. It is a survey taken in Cramerica.
TD, you silly goose, I thought you knew this.
-----------------------------------------------------
All Hail The Messiah 2.0!
Wal-Mart Stores Inc. (WMT) expects another challenging Christmas for the retail industry, with shoppers holding off purchases until late in the season after they have been able to research where they can get the best prices and values.
Sentiment rising???
gosh I sure miss old FZ
A consumer can have all the confidence in the world, but if his credit cards are maxed, his house is under water, and his pay isn't going up, he's not going to spend another dime.
Want to see what consumers are actually doing:
http://www.gallup.com/poll/112723/Gallup-Daily-US-Consumer-Spending.aspx
If the government provides a backstop for all these people underwater then confidence is good.
Me, still have my middle class job, never went into debt beyond my means, have money in the bank earning shite and the 401k way down. Oh not to mention that I bought a new car last year and lost out again. Play buy the rules and get screwed! I am playing it close to the vest, if they think me as a possible consumer will buy buy buy they are wrong. I am waiting for my sugar or else I will continue to save for the big crash.
Are these the same american's that that tell people they are a size 8, yet they weigh 200lbs?
Lizzy! LOL! God Bless you for the laugh, I needed that.
Well there are Size 8s and there are Size 8s. As Hillary stated when she had her "In By Nine & Out By Five, $29.95" makeover, "It depends on the meaning of the number eight."
Heathen, ye shall be vaccinated forcibly with kool-aid.
Quite witty and oh so true...
It works with shoes.
Yes. And the same ones where 95% of whose children are "above average intelligence" from self-report.
The best part of this investment thesis is that it just keeps on giving - every month inventories keep dropping it just means next month's rebuild will be all that much more robust. Taken to logical conclusion when inventories finally go to zero and economic activity near-ceasing SPX should be comfortably 5000.
So.... did you not proofread the title... It appears that the letters "con" have been left in all caps, while the rest of the title is not in all caps... puzzling. Look man, I know you're busy and all, but damn... spellcheck would probably have caught that multitude of abuses. I'm sure you guys are too busy placing margin buy orders for gnm, fre and fnm, C, and BAC to care. Once those quality holdings go back to their dizzying heights, you'll have enough money to get a version of word with spellcheck. I'm CONsumed by the appearance that someone is loving up on some quality built to last U.S. govt. debt, and the implications on CONdition of the markets as a whole.
CONflation
I assume the author capitalized CON to emphasize the conned consumer. Personally I prefer massive amounts of pertinent information with a few spelling/grammatical errors to fewer articles that spelling/grammar Nazis would appreciate.
um... this is why we need a "sarcasm font".
Perhaps a font with drips falling from the letters
Internet sarcasm is very similar to captcha... it just weeds out the robots.
Great idea for a new captcha...
It is very disCONcerting that you did not automatically pick up on the use of caps in the title and then still had the balls to comment....but whatever dude.
Stock market rising, health care insurance for all (maybe, soon), stimulus 2.0 being rumored and possibly by early next year (a mid term election year, 2010 so Mr Grantham fully expects his portfolio to do really well), more cash for clunkers and hopefully for Christmas too, more tax credits for housing, more accounting rules bending, and so much fed money printed that each american can claim $10k (had the banks not taken them for their private use first). Need more reasons for U Mich above 80 soon?
The inventory number is not of huge importance as it is for July but this is a positve number in terms of GDP growth. All it needs to do to contribute to GDP growth is get less negative and it went from -2.1% in June to -1.4% in July.
well people might be feeling really confident, but they are definitely confidently putting their money into LQD which has also been on a tear (as a bond fund goes) during this crazy time. Seems strange to me that people are pouring into high grade corporates with the same zealous appetite as they are lapping up aig, fnm, fre, c, etc...but that's been beaten to death.
"It's hard to believe but, It's all good..." - Bob Dylan
The UMich statement doesn't surprise me, I'm 30, most of my friends have expressed almost that exact sentiment recently, and are starting to hit the "full speed ahead" button for flat screens, motorcycles, home remodeling, etc.
In every case, they all point to the Dow as evidence that everything's roses again. When I turn the focus to what they're really seeing out there in their jobs: layoffs, salary cuts, furloughs (which are being referred to as "mandatory sabbaticals" in a lot of firms in my area.) But none of this registers with them.
Most of them think I'm the one with a mental defect because I've been 100% focused on debt elimination with only the occasional small indulgence.
If I try to have a discussion on what's really happening, their eyes glaze over and they'd rather talk about Cancun vacations in March. It's disheartening, to say the least.
I'm not a perma-bear, but how can anyone outside of FOPP's (Friends of the Printing Press) think true a recovery has begun?
Your second sentance answers your last.
You crack me up sometimes... lol
It's laugh or cry Minne.
There it is. Most folks refuse to think
I've noticed this too, and I see it as a function of people getting their information from TV and the standard media outlets where everything is a regurgitated press release. If all you had to go on was CNBS then you would probably have the same CONfindence that the study shows.
The fact is, most people are fiscally ignorant. They don't teach basic economics in High School (at least they didn't when I went), and its not required for liberal arts, yet in my view it should be mandatory.
Depends on what kind of economics they get taught. In college, the kids get taught that big government is the great stabilizer, that the Federal Reserve is wonderful, that big government helps us all get rich by stimulating the economy when there is a recession, that government regulation often needed and is wonderful.
Is that the kind of economics you want the kids to learn?
What if we take this to another level: What if positive news here is only "designed" to keep Asia positive and they in turn pump out propaganda that the European's see fit to rally on, then we see the Europeans are ok so we of course must be doing better than them and so on.
I watch a lot of Bloomberg at night and match it off with what's on Bloomberg.com and I see a lot of critical thinking falling through the cracks.
Charles Pierce, contemplating the advent of forced schooling in the 1870s:
Let the will of the state act, then, instead of that of the individual. Let an institution be created which shall have for its object to keep correct doctrines before the attention of the people, to reiterate them perpetually, and to teach them to the young; having at the same time power to prevent contrary doctrines from being taught, advocated, or expressed. Let all possible causes of a change of mind be removed from men's apprehensions. Let them be kept ignorant, lest they should learn of some reason to think otherwise than they do. Let their passions be enlisted, so that they may regard private and unusual opinions with hatred and horror. Then, let all men who reject the established belief be terrified into silence. Let the people turn out and tar-and-feather such men, or let inquisitions be made into the manner of thinking of suspected persons, and, when they are found guilty of forbidden beliefs, let them be subjected to some signal punishment. When complete agreement could not otherwise be reached, a general massacre of all who have not thought in a certain way has proved a very effective means of settling opinion in a country. If the power to do this be wanting, let a list of opinions be drawn up, to which no man of the least independence of thought can assent, and let the faithful be required to accept all these propositions, in order to segregate them as radically as possible from the influence of the rest of the world.
Source: http://www.fordham.edu/halsall/mod/peirce.html
Pierce Bio: http://plato.stanford.edu/entries/peirce/
That's a good theory till you get some little shit smart ass in your class making you look like a moron and then you have to run home and cry and find a new job. :)
April 20th, 1994
Dear Mrs. xxxxxxx:
You may already know this, but in case Alex has neglected to tell you, I am assigning him to detention for one hour this Friday, April 22nd. The reason is as follows:
Alex consistently defied me. During class he conradicted me numerous times when I insisted that the length of one kilometer was greater than that of one mile. Every other student in clsss accepted my lesson without arguement, but your son refused to believe what I told him, offereing such rebuttals as, "You're lying to the class," and commanding other students to challenge my curriculum.
Although he was correct, Alex's actions show a blatant diregard for authority, and a complete lack of respect for his school. In the future, Alex would be better off simply accepting my teachings without resistance.
Please see to it that your son understands this.
Regards,
Adam Hilliker
To go off of my earlier rant:
1 in 8 in poverty -> but the Dow proves we should all party like rock stars in Cabo this weekend!
http://washingtontimes.com/news/2009/sep/11/poverty-hits-1-in-8-american...
I'm stressed out.
Several years ago, I heard a guy say that stress was the gap between expectations and reality. My problem is I keep expecting people not to be stupid. The stress I am experiencing is the result of the gap between my expectation and reality, which is that people are stupid.
This is my new mantra: "People are stupid, people are stupid, people are stupid."
Next week, I work on my breathing technique.
I stay in state of amazement with all the agendas and predictions. The prior couple of weeks Cramer and everyone else was getting us ready for the big crash that so far has yet to appear. This week Cramer was talking S&P 1200.
Now, hardly anybody on the TV shill parade seems to be talking crash and their mostly making higher predictions such as 1120 etc.
Say we get to these predictions, then what? So far none of the shill facilitators has had the balls or breasts to ask that question...
chart of abc vs. michigan any time in history the gap has been this wide?