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There Goes GDP: Wholesale Inventories Miss, Weakest Since May 2013
With GDP now basically an exercise in inventory expansion and contraction (Q2 inventory estimate amounted to 40% of GDP), this 'miss' in July Wholesale Inventories provides a worrying glimpse into Q3 GDP. Against expectations on a 0.5% rise MoM, inventories rose only 0.1% (and June was revised lower) to the weakest inventory build since May 2013. This is the 3rd miss in a row.
Chart: Bloomberg
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It looks like somebody's diarrhea-filled ass is about to shoot into the proverbial fan. ;-)
Looney
That's a great image.
Durden. You need to clarify that Polands total gas consumption is only 15% of its total energy consumption. The fucking idiots on here dont understand that.
Links please to where the balance of its energy comes from. Not credible otherwise, thanks.
Search "Poland energy sources" and take your pick
Think of all the extra $$$ the europeans will have this winter as their gas/heating bills will go to zero! How is this not bullish!!?? : )
Someone, some day will need to come up with a better and more meaningful definition of GDP.
The current definition appears to be just for gaming.
Like all other Gubmin statistics??
The only number that really matters is profits after taxes. The rest is what it takes to get there.
And that's been dropping for the entire year so far....
Perhaps someone can explain to me why we do not look at GDP as gross income for an individual or family?
It's meaningless if not taken into context with all the expenses needed to actually get there. If you were to get a big increase in your salary(GDP) but all your expenses rose more, and your net income after taxes was less, you are not better off.
It seems to me, that the single best metric on the performance of the economy is what you have AFTER you have paid for everything, including taxes. Profits after taxes(remember profits-the reason you actually started a business) are down sharply this year.
Yet I do not see one economist discussing this.
We are looking at the wrong number for conformation of how things are going. Until we look at what is important, we will continue to do the wrong things to solve the problem.
GDP growth is not the answer.
Profitability after everyone has taken their slice of your sales is. And when there is no slice left for you, you'll shut your doors and move to the sidelines, just like so many wokers have.
You can never argue that things are improving if businesses have less after taxes in profit at the end of the day or the year.
"Perhaps someone can explain to me why we do not look at GDP as gross income for an individual or family?"
Because it would look awful.
And to answer your other question, your expense is somebody else's income. If we all had incomes of $1MM and matching expenses, the whole economy would be "bigger" than if we all had $100K in income and maching expenses. Profits matter to corporations and stock prices (OK, not so much lately, but they have in the past), but they don't mean shit to GDP numbers. Bigger is bigger in GDP, even if nobody's clearing anything at the end of the month.
Nobody talks about it because it would quickly bring up the subject of the phoney-baloney GDP deflator, which magically turns inflation into "growth" when you understate it. I could make the case our economy hasn't grown (in real terms) for over 30 years, but I'm a gurmpy old man and nobody listens to me. Now get off my lawn.
Profits matter as to whether or not businesses expand or contract.
And if, after all of your efforts, you have nothing more to show for it, what's your incentive to keep on that same path.
Yes the dollars I spend is income for someone else. But if that income they get by selling me products, good or services is not generating more profit when they finish the day, they will not do it for long.
Companies do not expand their businesses if they cannot generate more profits for the effort.
Profit growth collapsed in the first quarter of 2007. We know what occured after that.
This time is not going to be diferent.
Who cares about profits when you are an executive or investor who only cares about stock price?
Reference: .com bubble #1 and it's encore going on now. That's expansion without ANY profit, in many cases.
Also reference: Floating a bond issue to pay for dividends and buybacks to raise share price.
Final reference: P/E ratio growth.
If you want "real" expansion, I'd direct you towards CapEx numbers, which have been flat on their back for years now, even at companies that have good profitability.
Profit is no longer driving the growth bus, because it's being liquidated to shareholders and top execs, not reinvested in the future growth of the company.
You can't have Capex and stock buybacks at the same time and we already know which one pays the biggest bonuses to the CEO's.
So misses are good, no???? Man, I don't even know anymore now that the FEDs hand are all up in that shit.
Want to know what the market will do over the next 6-12 months? Have a look at the 2007-2008 chart and you'll know.
First came major economic headwinds, which weakened the market and caused 10-20% selloffs. Delusional bulls tried to keep the party alive but at best could only retrace losses 50%.
Then it got ugly.
This will look very similar, but will be far more extreme.
just look at implicit deflatior vs cpi--cpi over the years is twice as high as implicit fdeflator and neikther includes food or energy, so the inflation taken out of gross gdp is way too low meaning gdp was too high as reported.
Selloff stopped dead in it's tracks.
*golf clap*
No more taper. Yellen and her Fed crowd will be yellen to double the QE to $2 tillion/year. That should send stocks to ultra highs.
Shit, these fuckers can make "GDP" whatever the fuck they want it to be. Neded more GDP, just sell more financial "products" of mass destruction and count them in the GDP. Push more fucking paper (no calories are required to do that), so fucking what. The paradigm shift that is occuring will continue regardless, fuck em.
Hey, the new iPhone is out...... it will save us....... Bwahahahahahahahaha
Raising the Chinese population into the middle class one shitty cell phone at a time. Of course, every phone that gets imported is actually a NEGATIVE for our GDP, but what the fuck, it makes a great narrative.
Just more wobble, with the frequency and amplitude increasing.
The interesting thing to consider is how the fabric of all of this has been a bit stronger than most of us realized and that perception has played a major role, i.e. - no one wants to believe the party is over. Given that, it will not end despite the reality. The government's "statistics" support the perception and not the reality. It has been amazing for me to see and to discuss this with the "believers". World events are all filtered, it is quite a system, really. At first I was shocked, then dismayed. Now I see it for it's intrinsic entertainment value and say a big hearty "thank you!" for the additional time I have been given to get my shit, and my family's shit, in order.
Carry on, bit-chez!
It is going to get worse and worse and worse, unless $4 trillion QE is fully unwound and another $10 trillion extinguished
Giving $4 trillion to insolvent bank lobby oligarchs harms the economy by design
Debt will be extinguished alright, but it will be us who pays for it with diminished buying power.
i see terms getting longer and interest rates going lower.
The Great Deleveraging following last recession?
$800 billion
(and most of that from write offs)
http://research.stlouisfed.org/fred2/series/TCMDO
No, it's opposite.
Few oligarchs gone and liberation of commodites and energy for consumption.
Higher purchasing power
Nope. History is our guide, and our owners will not give up power,,,, ever. It will be overnight and those caught off guard will be paupers. Ignore history if you want, but it will be to your own peril.
Our owners war against each other for control.
When they agree, it's peace
When they disagree, it's war
that is history
You have to use Government logic.
The Fed can print to infinity.
4 trillion is a small percentage of infinity.
So, no problem.
By the same logic …..
Wall Street is only 5 banks out of about 1 million in the world.
They must be saved because they are such a small percentage …. a sort of endangered species if you will.
/sarc/
Bullish-ish.
Q3 and Q4 are supposed to grow at 3% right? This just means additional effort is required to fudge the numbers.
No problem. Fudging numbers is what we're good at. Just look at the way we calculate nest year's pension fund returns.
That was the official Spring buying promo. Everyone reading ZH would know better and understand that growth in 2014 will be flat at best or negative at worst. Q2 was a bunch of idiots believing the Spring promo and replenishing inventories. Now they're sitting on inventories that cannot be sold into a market running on vapors and fumes. Pretty much like the stock markets.
THERE IS NO DEMAND
Gubmint issued bad news? must really be bad...............
no worries, just increase government spending to get that gdp number up!
claim the moon and include it in the gdp
add drugs and hookers and GDP will show green again
Italy did it, the UK is thinking about it and who knows what the idiots in DC have up their sleeves. Maybe counting riot theft and garage sales as GDP? Could be plenty (more) of that going forward.
Add on two more tittie twists for Yellen and 4 donkey kicks to Ben's nuts
What? Did they forget to add in the "intangibles" to GDP?
GDP DEF: [ The monetary value of all the finished goods and services produced within a country's borders in a specific time period ] okay...
Then the formula: GDP = C + G + I + NX
where:
"C" is equal to all private consumption, or consumer spending, in a nation's economy
"G" is the sum of government spending
"I" is the sum of all the country's businesses spending on capital
"NX" is the nation's total net exports, calculated as total exports minus total imports. (NX = Exports - Imports)
Someone want to explain how spending is considered finished goods or services. If you really twist and torture it maybe services,,, but product?
Hey idiot, wrong link.