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Destroying The "There Are No Signs Of An Imminent Recession" Meme In 4 Charts

Tyler Durden's picture




 

Day after day investors are treated to 5-Star Morningstar managers, so-called "strategists", economissseds with entire religions on the line, and circus barkers who proclaim that: a) The US is decoupled from the rest of the world; and/or b) The US is the cleanest dirty shirt; an/or c) There are no indications that the US economy is near a recession. Here are four simple charts - from, just today's data - that destroy this glass half full and rose-colored ignorance of reality...

 

1) Business Inventories-to-Sales are at recesssion-inducing levels...

 

1a) Sidenote 1 - Wholesale Inventories relative to sales have NEVER been higher...

1b) Sidenote 2 - here is why that is a problem...

2) Industrial Production is - as would expeted given the inventories - rolling over into recession territory...

 

2a) Sidenote - as Empire Fed confirmed this morning for August - inventories are collapsing (and along with that Q3 GDP)...

 

3) Retail Sales is not supportive of anything but a looming recession...

 

And finally,

4) The last 6 times Auto Assemblies collapsed at this rate, the US was in recession...

 

So - still think The US is "safe" - because stocks are certainly not priced for anything other than a hockey-stick of hope in earnings rebounds, let alone a collapse into recession.

Charts: Bloomberg

 

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Tue, 09/15/2015 - 15:43 | 6552144 ejmoosa
ejmoosa's picture

You failed to plot Corporate profits after taxes..

-2.69% for the last four quarters(year over year)

Tue, 09/15/2015 - 15:49 | 6552188 Creepy A. Cracker
Creepy A. Cracker's picture

Obviously a bullish sign...

Tue, 09/15/2015 - 16:01 | 6552240 KnuckleDragger-X
KnuckleDragger-X's picture

So is the giant pile of shit building up for the FOMC........

Tue, 09/15/2015 - 16:37 | 6552408 Secret Treaties
Secret Treaties's picture

BS on the Auto Assemblies - on a YoY percent change basis, we've been at these levels several times and no recession occurred:

https://research.stlouisfed.org/fred2/graph/?g=1Qzv

Tue, 09/15/2015 - 17:55 | 6552819 Secret Treaties
Tue, 09/15/2015 - 18:19 | 6552918 Crocodile
Crocodile's picture

Looks like we have to wait at least 2 more years.

Tue, 09/15/2015 - 18:21 | 6552924 Crocodile
Crocodile's picture

Define recession in terms of your purchasing power and you will find we have been in a continuous one since 1913.

Tue, 09/15/2015 - 18:40 | 6553000 Secret Treaties
Tue, 09/15/2015 - 15:42 | 6552147 indygo55
indygo55's picture

What ever happened to Dochenrollerbearing? He was in this kind of business, manufacturing, auto, etc and I wonder what he says.

 

Tue, 09/15/2015 - 19:29 | 6553173 r00t61
r00t61's picture

DCRB is posting under a new handle: 38BWD22

Tue, 09/15/2015 - 15:42 | 6552152 RobD
RobD's picture

"Is it Safe? Is it Safe" said with a thick German accent. Here have some clove oil with that recession(depression), that will make if feel better.

Tue, 09/15/2015 - 15:43 | 6552158 Element
Element's picture

Looks like USD rise killing manufacturing export base there.

Tue, 09/15/2015 - 15:43 | 6552164 RawPawg
RawPawg's picture

Recession

Depression

Tue, 09/15/2015 - 15:45 | 6552171 BlueStreet
BlueStreet's picture

Sensing some understandable frustration from the Tyler(s). Truth telling is a hard business when it goes against virtually everyone else's interests. It is, however, invaluable. 

Tue, 09/15/2015 - 16:06 | 6552260 adr
adr's picture

When everyone lies the truth becomes the greatest lie of all because absolutely nobody believes it.

Tue, 09/15/2015 - 18:17 | 6552911 Crocodile
Crocodile's picture

What is truth?  How can one know?

Tue, 09/15/2015 - 23:19 | 6553915 StychoKiller
StychoKiller's picture

"...I never want to forget. And then I realized...like I was shot...Like I
was shot with a diamond...a diamond bullet right through my forehead...And I thought:
My God...the genius of that. The genius. The will to do that. Perfect, genuine, complete,
crystalline, pure." -- Colonel Kurtz, "Apocalypse Now"

Tue, 09/15/2015 - 15:47 | 6552180 Greed is King
Greed is King's picture

The cracks are papered over on a daily basis, but still won`t go away.

Tue, 09/15/2015 - 15:49 | 6552192 Kolchak
Kolchak's picture

Nothing but air in these heads proclaimed a congressional speaker.

Tue, 09/15/2015 - 16:01 | 6552231 ebworthen
ebworthen's picture

And all those down arrow charts with $11+ Trillion in debt slathered on Wall Street, the banks/corporations/insurers, and the domed fantasy cities inhabited by the mandarins and parasitic class (New York, San Francisco, Cupertino, Denver, D.C., Seattle, etc.).

What's with the panic buying today?  Yellen have dinner with somebody special last night?

Tue, 09/15/2015 - 16:05 | 6552254 Praetorian Guard
Praetorian Guard's picture

Well its official... largest copper producer moving to shut down ops in usa and moving equip to latin america. Bean counters are shitting bricks for fy 2016

Come join us for free at www.gunsgrubandgold.com everyone welcome, and it is free...

Tue, 09/15/2015 - 18:17 | 6552906 Crocodile
Crocodile's picture

Every site that uses that black back-drop is almost always full of deception from my experience.

Tue, 09/15/2015 - 16:05 | 6552255 adr
adr's picture

BUY STAWKS, GET RICH!!!!!!!!

 

whah, that can't work for everybody????

Can you even believe this upcoming election?

Right now it looks like we are going to get to choose between an insane multi time bankrupted clown and Santa Clause promising voters everything they wish for.

 

Tue, 09/15/2015 - 16:25 | 6552344 Professorlocknload
Professorlocknload's picture

The next POTUS has already been selected. The election is just a triviality.

Janet will install her candidate. After all, she's driving this Wurlitzer.

Tue, 09/15/2015 - 16:56 | 6552454 InnVestuhrr
InnVestuhrr's picture

Interesting concept, the FED has !@#$% up the entire monetary, financial and economic system,

but

how does the FED cause a majority of voters to cast votes for the election-winning candidate vs the election-losing candidate ?

Tue, 09/15/2015 - 18:15 | 6552899 Crocodile
Crocodile's picture

That is Mrs. Claws.

Tue, 09/15/2015 - 16:08 | 6552270 q99x2
q99x2's picture

Hey can't you put up logic diagrams for FED software applications or something meaningful--something that relates to stock markets.

Tue, 09/15/2015 - 16:09 | 6552277 venturen
venturen's picture

how about a chart of banker bonuses to GDP?

Tue, 09/15/2015 - 16:25 | 6552345 emorybored
emorybored's picture

 

George Bernard Shaw “My way of joking is to tell the truth. It's the funniest joke in the world.”
Tue, 09/15/2015 - 17:01 | 6552521 Magooo
Magooo's picture

Now that 495 of the S&P 500 companies have reported second quarter earnings, something has become abundantly clear: 2015 is going to be a nasty year for corporate revenues.

 

Blended revenue for the S&P 500 companies dropped 3.4% in Q2, according to FactSet. “Blended” because it includes estimates for the five companies that have not yet reported. This follows the first quarter, during which reported revenues also declined. The last time year-over-year revenues declined two quarters in a row was in Q2 and Q3 2009 during the Financial Crisis.

 

And analysts blamed energy companies whose revenues have totally collapsed. But company by company outside the energy sector reported declining, and in some cases plunging revenues, including in Big Tech and financial services.

 

Here is a sample of revenue losers:

 

Caterpillar (-13%), Dow Chemical (-13%), MetLife (-12%), Microsoft (-4%), Intel (-5%), International Paper (-21%), JPMorgan Chase (-3%), Johnson Controls (-11%), Oracle (-5%), PepsiCo (-6%), Pfizer (-7%), Procter & Gamble (-12%), Union Pacific (-10%)….

 

Then there’s former tech darling QUALCOMM (-14%), insurer ALFAC (-9%), and of course IBM, always, at least for longer than anyone can remember, well, for the thirteenth quarter in a row, strong dollar, weak dollar, hot China, cold China, nothing matters…. Its revenues decline through thick and thin, this time -15%.

Then there’s GM (-3.5%). It gets the vast majority of its revenues from its number one market, China, and its number two market, the US. Over that 12-month period through the end of June, the yuan lost less than 1% against the dollar. And GM sells practically nothing in Japan whose currency lost out against the dollar.

 

http://wolfstreet.com/2015/09/07/us-corporate-revenue-recession-spreads-past-dollar-energy/

 

Tue, 09/15/2015 - 18:14 | 6552895 Crocodile
Crocodile's picture

Just lowered expectations makes it all seem good.  Bad news is good news and evil is the mans best friend.

Tue, 09/15/2015 - 17:44 | 6552766 Occams_Razor_Trader
Occams_Razor_Trader's picture

The only caveat to a market collapse would be the FEDs willingness to continue to infuse money on top of the 4.5 trillion that it has  infused over the past 6 years. And why wouldn't they? Once you're committed- it's all in. And remember, the money WE have is the result of providing goods and services to the market. The FEDs money is the result of pressing a few keystrokes on a computer and viola!

Tue, 09/15/2015 - 17:49 | 6552790 starman
starman's picture

Don't you worry 70,000 Syrian refugees are ready to buy mansions Mercedes's and they'll be shopping at SAKS on  5th! 

Tue, 09/15/2015 - 18:08 | 6552868 Crocodile
Crocodile's picture

The US has manufacturing; where may I ask?  Is that what it means when you see on a tag "Assembled in the US"?  Which is rare to see and "Made in the US" makes you take a double-take you were seeing things.

----------------------

The power of QE & ZIRP; holding up markets everywhere and anywhere.

Tue, 09/15/2015 - 19:55 | 6553271 Redart
Redart's picture

U.S. Companies are producing in China and India, are selling to europe and rest of the world, and paying taxes =0 in Luxemburg. Add the Gaat, and other trade agreements, and you have a way to shift recessions and or if they exist, they are always very light, this in terms of S&P and stuff. Why, well, equity indexes are composed by listed companies operating and paying taxes overseas. But also dividends..

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