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Wholesale Inventories Miss Expectations Of 1%, Print -0.2%, First Decline Since November 2009
Is the biggest driver to GDP growth (aside from the government's transfer payments of course) starting to ebb? November wholesale inventories printed at -0.2%, the first decline since 2009, a miss of expectations of 1.0%, and a drop from October's revised 1.7%.
From the release:
Total inventories of merchant wholesalers, except manufacturers’ sales branches and offices, after adjustment for seasonal variations but not for price changes, were $425.5 billion at the end of November, down 0.2 percent (+/-0.4%) from the revised October level, but were up 8.4 percent (+/-1.2%) from a year ago. The October preliminary estimate was revised downward $0.7 billion or 0.2 percent.
Just as importantly the inventories/sales ratio was down to 1.15, compared to 1.19 a year ago
Arguably, this is not good news for the coming advance GDP look.
Full report link.
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Bob Pisani said this number was better-than expected When the number comes in higher its better, and when it comes in lower is better, wait...what?
PIS-ON-ME is a conformist uber-shill. Hasn't had an original thought for decades....
Thank you Dr. Doom for saying what I would have said were it not the case that I have been sleeping late and napping today as the market tries to pretend, once again, that everything is super great.
About Bob Pisani, you are correct. Everything is bullish no matter what. That is because Bob Pisani sold his credibility sometime back knowing that the Blow Horn [CNBC] was taking a long walk on a short pier. Hell, what does it matter anyway since he has his application in at L. Blankfein Wildest Dreams Park [oil futures]? Bob has a new catch phrase to announce his condition, which is exactly, "I think the important thing here is..." The Bob decides all important things now.
BTW, Loyd, nice mini crime wave there on EUR/USD, DXY, and Wildest Dreams Park...all at once...sweet! Average Joes all over the country are loving just how obvious it all is...and some of us are actually betting that even Mary Shapiro can figure this one out.
And more market credibility dies face down on the street at the corner of Wall And Broad...while Ben Bernanke rewards criminal syndicate Wall Street bankers everywhere...at Average Joe's expense....double sweet!
Did anyone notice that CNBC teleprompter readers are now being included on panels as financial experts in the lame stream media? It's laughable. They are talking like they have been running billions themselves for years. They get on the sunday morning NBC talk shows and each others shows on CNBS as experts.
This is good news. A drop in Inventories means a bounce in consumer spending.
You obviously have a good understanding of economic matters so perhaps you could expand on why this is good news.
Hamy is using sarcasm here....He's Harry's amped-up ego
damn, i missed that
There have been several alter ego street performers by multiple names appear on ZH since Harry jumped the shark. Like Pavlov's dogs, we are all tuned to jump at the American flag and glance at the name. Yup that's Harry all right, still bouncing off the insane asylum walls.
The way things are going, we'll all be eating dog food soon enough anyway.
rice and lamb for me CD!
LOL
But the difference with you my fine Shakespearean friend is that the original hasn't been seen in ages. At least Harry shows up now and then. :>)
Unless of course you are.............
I vote for a steel cage grudge match between Harry and Hamy. Sarcasm receives the highest points and dreamy eyed drooling in the POMO cup the lowest.
what about Harny Wanger...where did he go?
I think Harny and Hamy are the same guy/gal.
There was also a Harry Wanker at one point. I suspect the Wanker farcical alter ego was just a training op for the Harny/Hamy iterations. Think of the endless possibilities.
Of course old Harry could be pulling all our chains. But based upon Harry's posts, he lacks the imagination.
Fair, balanced ...and unafraid
And why would he be afraid? Harry seems to have an unlimited supply of the natural painkiller "dopamine". Even when the brain senses Harry's had enough and begins to Bogart the level of dreamy dopamine delivery, Harry just seeks out information that fuels his confirmation bias...which primes the dopamine pump once again. Then it's off to the races.
Who would have thought the good Lord was The Pusherman?
http://www.youtube.com/watch?v=jMqVrUSz62o
Only problem is you'd say its good news if inventories were up too.
These 'fake' accounts are getting really old.
Personally I think they provide a ZH public service, forcing us all to slow down and carefully re-read a comment that's just triggered us before rolling out the battle tanks.
But that's just me.
Expect equities to trade even higher on this
"Expect equities to trade even higher on (insert good or bad economic news here)"
No, no, no. This is great news! It means that retail cannot keep the stuff in their warehouse or on their shelves. Seems like nobody here is getting the right memos and talking points. We gotta fix that
No, according to the BDI, warehouses are not being replenished.
Drawdown on inventory perhaps?
It's bad cuz inventories are restocked to keep pace with demand.
Its good cuz it's a coiled spring and leave room for more growth as inventory needs repurchasing.
If 1% was expected then GDP figures that in already. They need to be adjusted down.
inventory builds exceeded sales for 5 months prior to past two sales "outperformance"; catchup on sales and normalization of cycle. Inventory builds have averaged about 50-60B or so coming out of "recessions" vs. the 120B or so last Q. GS better hope PCE is 4%+
Up up we go. Should be good enough to take us to 12,000.
imo inventories on some stuff have been ridiculously low for many many weeks. Thrice I have been out chasing my tail looking for a retailer with a television or appliance in stock. They all have tons of the store name crap but were out of the higher end sonys and samsungs. Very long lead times to order as well. This could be construed as bullish or bearish and my town is something of an anomoly so it may mean nothing at all.
Consider Baltic Dry
I suspect faulty purchasing for some of it. the reasoning that nobody has any money so they will only buy the cheap crap on credit and nothing else so why buy a bunch of higher end inventory. Then there are the store like home depot that never have any inventory and others that are being very careful. As far as electronics they are also constantly changing technology and don't want to be caught with obsolete stock that they have to sell at a loss. Lately I have been buying whatever I want because I see empty shelves in the not too distant future. As for baltic dry they certainly have no lack of shipping inventory. lmao.
nevermind
precisly! this is why it is all good news /sarcasm
Good news will turn to bad and bad to good as the end of days approaches.
Ah yes, the ole cliff at the end of the world. Yes those were the days my friend and I will always cherish with fondness the memories thereof.
Any news is good news. Also, no news is good news.
Drink the Kook-AIDS birches!!!!!
Shocking, people bought Christmas presents.
Question is, will retailers restock because they see additional demand or will they leave their warehouses bare? Since we are hearing reports that retail execs are selling their shares...
The holiday shopping season wasnt that great! Retailers know it, and they know people going forward are buying BARE NECESSITIES on sale 2 fer 1! People are at all time record BROKE so talk of how the consumer is set to go on some kind of wild spending spree thru the year to rekindle 'Borrow and Consume' economic model is just the height of lunacy. As CD says above, 'whats any of it matter, we'll all be eating dog food soon anyway'.
Holding large inventories is dumb if one expects selling prices to decline...
POMO may have lulled it to sleep, but the deflation dragon is still out there.
The REITs have halted their sell-off (same as the last *insert huge number here* days) and, presto, at 10:45 have started their ramrod push back to parity.
Truly, truly, beyond belief at this point.
How the f**k will this matter?
You have QE3 scheduled in Mid 2011.
they've nursed us back to precrash levels just about everywhere, except employment. the inventory to sales ratio is right where it was 2003-2007, which was a period of decent economic growth, (and housing bubble economics). Just in time inventory has changed this dynamic quite a bit. but i agree with the basic premise that retailers are allowing inventories to drop because the business just ain't there. i notice this at the super, where merchandise at its expiration date is marked down, and lately there is a lot less of that.
but eventually if you are a supplier and you think prices are going higher (like crude oil) you would take oil off the market, and thusly Peak Oil is really Peek-A-Boo-Oil, today the field is empty, tomorrow its up and running. And gas is $5.
JIT at work.......
@paz
Exactly. Why should U.S. wholesalers maintain inventory (and bear the risk) when China and Japan will do it at no extra cost? Of course all bets are off if the 6000-mile supply chain experiences a disruption or backwardation.
"Arguably, this is not good news for the coming advance GDP look."
At the risk of being tarred & feathered by the group here, I'd argue it actually IS good news for GDP and stocks, albeit in the near-term only. Historically/empirically speaking, equities outperform when inventory-to-sales ratio is falling. (Changes in the absolute level of inventories are harder correlate to the business cycle.) Maybe this is relationship is the result of unsustainable Keynesian consumption, butm all things equal, destocking (relative to sales) usually implies increased economic activity, which in turn means higher stock prices. The data bear this out. The harder-to-reconcile period was earlier in 2010: when inv/sales was steadily rising and equities were levitating. But to Pazmaker's point, this relationship may be less robust in the future than in the past...but JIT inventory has been impacting the business cycle since the mid-1990s and the relationship btwn this ratio and stock prices/GDP has been reasonably stable.