We Built It - But They Did Not Come

Tyler Durden's picture

While everyone loves a good inspirational movie - Rudy (every underdog has his day), Field of Dreams (if you build it they will come), Million Dollar Baby (be relentless); it is a somewhat sad reflection of reality that in fact - hope and trying hard is simply not enough (especially when you are a debt-saturated global economy). Two data points highlight this better than any others. Today we see wholesale inventories relative to sales at multi-year highs (aside from the great recession's peak) - having risen for almost two years now as we have built 'stuff' but the buyers just haven't come. And to rub a little more salt into the eternal optimist's wounds, it appears that Small Business Optimism has continued its divergence from equities (which notably saw stocks crash the previous two times). Equities remain the hope-driven liquidity-fueled home of the algo-optimist while all around struggles '300'-like with economic reality. Are stocks about to have their "I see dead people" moment?


Wholesale Inventories-to-Sales suggest that the 'Field of Dreams' economy is broken...


and no wonder - as Small Business Optimism indicates we are due for a dose of reality...


(h/t Brad W at NewEdge)

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Shizzmoney's picture

Wait, so you're saying that consumers (over worked and underpaid) eventually have to stop using the credit card to buy plastic junk made in China, and start paying down debt, as they try to escape the over flowing hand of serfdom?

You are shitting me.

Snoopy the Economist's picture

I think you forgot about the consumers that are underworked (don't work) and overpaid (via gov't money).

Spastica Rex's picture

They buy iGadgets and Escalades.

What's good for GM/Apple and whatnot.

francis_sawyer's picture

You didn't build that ~ somebody else did... But they still didn't come anyway...

vast-dom's picture

index is sub SP 600. please correct.

inevitablecollapse's picture

this next 'dip' is going to be spectacular!

orangedrinkandchips's picture

Ben is going to say they are finally going to corner the Treas market once and for all....not this 60% garbage...they will control it all.


Im going to get me an obama phone!

SheepDog-One's picture

YES people are finally getting it! The WHOLE point for years has been to monetize every bit of the whole clownshow, then they OWN everything and pull the rug out! Making a few 100% owners of the WORLD by deed! And they bought it all with money imigined out of thin air and didnt cost them a CENT! Sure wish people could have seen it far earlier, too late now.

CH1's picture

The WHOLE point for years has been to monetize every bit of the whole clownshow, then they OWN everything and pull the rug out! Making a few 100% owners of the WORLD by deed!


Or maybe the Wall Street boys just realized that they could get a slice out of everything they could monetize, and went nuts with it.

Slippery slopes don't need plans in order to produce their ultimate doom.

gmak's picture

Supply side does work, because we can only consume what we produce. ie if I'm a baker, I can only consume what I can exchange for my loaves that I made.  Unfortunately, using credit means that 'we' have borrowed from our future production and now stand at the point where we can only give away what we produce to make up for that accelerated consumption.

This is why the increase in inventories is not leading to a pull of greater consumption.

LFMayor's picture

No wonder it didn't work: Where's the Magical Brown Person?

 Not enough sauce to clear the bar? Then try a Magical Retard.

 And if that still won't do it, go balls in and use the thermonuclear grade Retarded Magical Negro, just like in The Hand that Rocks the Cradle.

Cursive's picture

The economy is personally depressing to me (half the people I meet constantly complaining about lack of money, small business owners and farmers constantly bitching about Obama, and almost everyone is a coupon clipping, half-price-or-more-off sale shopping consumer) and we haven't even gotten to the really tumultous part yet.  If it's this bad now, what is next year going to look like?  Heaven help us.

Badabing's picture

all the chanel stuffed GM trucks will be Gov Vehichles and the tax payer will pay

inevitablecollapse's picture

'updated' gov't vehicles with armor plating, self sealing tanks and bullet proof glass - how else do you expect a fine gubbmint employee to get from A to B while dodging molatovs and .223 ???

Glass Seagull's picture



Jubilee on aisle five

Father Lucifer's picture


All is well, just buy stocks.

TruthInSunshine's picture

Ben & Timmmmmmay!!! are buying MOAR stocks with truly reckless abandon. Krugman can hardly wait for QE Eternity Deja Vu. Forward!

SheepDog-One's picture

Sure, we're well OVERdue for a 'dose of reality'....however it definitely won't be today as equities add on another cool +1% and stay there All. Day. Long.

madcows's picture

But, invetories are positive for the GDP calculator.  Up Up and Away!

slackrabbit's picture

I'm shocked!

Shocked and Dismayed!

How did this happen?

Did anyone see this coming?


SmoothCoolSmoke's picture

....and the SP is on helium.  What a f'n bunch of BS the markets are.

Snidley Whipsnae's picture

Gov needs to mandate 'broken window' policy on the channel stuffed inventories... sort of like a cash for clunkers but for new vehicles and other stuff sitting in warehouses.

Or, like is happening in housing, give lots of money to fund managers to buy up and lease out/rent the stuff sitting in inventory... sort of like rent to buy outfits that have been around for ever.

Turn those Army/Marine guys with the flame throwers loose on the excess inventory... create some scaricity... not that it would matter since few have jobs that allows purchase of the excess inventory.

Krugman should love this idea.

sarc off

johngoes's picture

Pet theory - The Fed (which is aligned to banksters) needs stock markets to keep levitating so (conspiracy theory) the fed instructs (or hints or whatever) their member bankers to keep the party rolling. Assuming HFT trading takes up a majority of trading these days and that most HFT trading occurs via TBTF bankers, they have their HFT algorithms weight "good" news higher than "bad" news and thus we get gradual levitation on low volume even with lots of "bad" news of late.

I can't think of any other reasonable explanation for the market's levitation in the face of all the negative news around these days?

If you've got a better theory, toss it out!

CH1's picture

If you've got a better theory, toss it out!

Well, it's not a theory, but here goes:

All the "they" entities we talk about are not coherent units, but large numbers of people and groups that often have divergent desires.

So, we have several groups of "Fed" players and many groups of "Guv" players. All are after their own slice of the pie as well as having some unity with their group.

The big question in my mind is this: "When and how does the Fed have to turn against the politicians and save the bankers?" (The bankers are, after all, themselves and their friends.)

MedicalQuack's picture

Yes some of this is getting old, agree.  I just wrote about the press releases that come out with negative overtones.  By the time you read the one I quoted here, it's all your fault that the economy is in the hole because you, as a consumer have a life that is too sedentary...subliminal negative approaches don't work either.  Good video at the link "It's all about context"...one of my favorites by Charlie Siefe, who wrote the book "Proofiness, the Dark Arts of Mathematical Deception".  It came out a couple years ago and is right on the money and on the outside, the public has no clue on the amount of manipulation and formulas and models that have worked the system for years.  Do you not just love how big business makes it the consumers fault?  If they can convince you it is your fault then the levy of power they have gets bigger. 


Certainly we didn't come because we don't have the money to show up:)  The Algorithms took it all as they move money to different pockets and it's not only in the financial markets, it is everywhere.  They play and manipulate risk with models and their math to make billions in profit.


Cortez's picture

Job creators, resilient consumers and unicorns.

ali-ali-al-qomfri's picture

In keeping with the movie meme;

When landing and aircraft (economy) hot (fast), ‘ground effect’ can make a pilot think they have sufficient lift to ‘go around’ as the runway quickly gets used up , however,'we are low on fuel' and ‘we are well below take-off speed’ with ‘not enough power to get out of this’,………’assume the crash position’.

 ‘Snakes on Plane’, ‘Flight’, ‘Con-Air’ and my personal favourite ‘Airplane’.

“Shirly you can’t be serious” 

toomanyfakeconservatives's picture

The stores and roads are empty... nobody is buying shit this holiday season.

Isotope's picture

Small worthless point to remember:


The actual quote form Field of Dreams is, "If you build it, he will come."

MagicMoney's picture

Americans are broke man. Record food stamps ain't going to buy you flat screens. Until you figure out where wealth really comes from, where purchasing power comes from, where growth comes from, may be we would know what to do for instance. Printing more money is the solution, more debt?

mind_imminst's picture

It should not be surprising to see the DOW (multi-national large-caps) rise in today's "economy". They have become quasi-governmental organizations. They generally have first access (directly or indirectly) to government (printed/debt) money. They get almost all of the large government projects (infrastructure & welfare). In a centrally planned world, the DOW companies should do well. Don't forget inflation as well. Stocks priced in fiat will go up in an inflationary environment. Small businesses are pessimitic because they operate in the real market, or a close as it gets nowadays. They are getting crushed - by design, I think.