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Has The US Been Living In A 'Field-Of-Dreams' Since Mar09?
While the immensity of both fiscal and monetary stimulus in the US has been exponentially covered by any and all with some suggesting too much and some suggesting too little, we remain somewhat nonplussed by the disconnects we see from what seem 'sensible' and intuitive relationships of days gone by. We noted yesterday the retail sales vs confidence/sentiment disconnects continue to amaze but today's piece-de-resistance is the Inventory-to-Shipments ratio which continues to rise back towards Mar09 peak levels as GDP growth disconnects entirely. The 'if-we-build-it' mentality seems to have created nothing in terms of real demand and as we noted earlier this morning, absolute inventories continue to rise rapidly. Given, the empirical relationship between Inventories-to-Shipments and GDP growth, we would expect significantly weak economic performance (but we guess government-sponsored student lending or GM channel stuffing will continue to create the illusion of growth required for equity managers to pump).
The dislocation from the March 2009 lows is incredible as the Inventory-to-Shipments ratio (inverted in the chart) sends very different signals than the entirely goal-seeked GDP growth figure which appears to be back-stopped by transfer payments and band-aids.
Chart: Bloomberg
(hattip @andrewyorks)
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Fear it or love it, this eventually will trigger a QE(n++)
summing up China too...all central planning systems.
Malinvestment as far as the eye can see
As long as they run a surplus, and can keep the masses fed, that malinvestment can continue longer than we think.
Most likely the ME blowing up is what brings the charade down.
Since 1990's I'd say after US became a net-debtor nation.
We're basically in the Age of Malinvestment. When does it end?
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"If you build it, they will come"
In the movie field of dreams, Ray Liotta tells Kevin Costner the above phrase.
On Wall Street the CEO's tell their salesforces, if you create CDS's and weapons of Fiancial Mass Destruction, the masses (sheeple) will gobble it all up. But most of all everyone on WS will get rich creating garbage products except the sheeple that get fleeced!
At least real sheep & lambs feel little or no pain cause the blade of the Kosher butcher cuts the jugular. Our jugular has been cut the last 3 years and the pain has become unsupportable & as sheeple it is simply not kosher! Ask a Rabbi!
A bearish market needed asap to clean every financial excess, sooner than later will be better for all of us. but politicians still playing with ambition only and they don't care. good trouble.
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1) Print money.
2) Hand to banks and Corps to build up inventories.
3) ???
4) PROFIT!
Matters not. We're a 'service' economy remember?
Pizza delivery drivers in Hummers, bitchez.
Um.. a Bradley might be more appropriate.
http://www.google.com/webhp?hl=en&tab=ww#hl=en&sugexp=kjrmc&cp=21&gs_id=2a&xhr=t&q=pizza+delivery+robbed&pf=p&sclient=psy-ab&rlz=1W1ADFA_en&site=webhp&source=hp&pbx=1&oq=pizza+delivery+roffed&aq=0l&aqi=g-l1g-lv1&aql=f&gs_sm=&gs_upl=&fp=1&biw=1411&bih=698&bav=on.2,or.r_gc.r_pw.,cf.osb&cad=b
Apparently, pizza delivery guys are being robbed like hot cakes
http://www.google.com/webhp?hl=en&tab=ww#hl=en&sugexp=kjrmc&cp=21&gs_id=...
armored, armed, and a blood test will be required if you want cheese.
SD-1...that's funny!
No, we're a bankrupt economy that needs to find a way to pay back 15 trillion.
Domino's is hiring...
We are the Borg. You will be assimilated. We will add your Financial and technological distinctiveness to our own. You will exist to service US. Resistance is futile.
Q: What do you call a service economy with a trade deficit and no world-reserve currency?
A: A 3rd world shithole!
This is what happens when there is ultra-cheap liquidity pumped into a system. Momo's are showing what happens when that lidiquity starts to dry up.
The amount of money that is hidden in the GSE's is nuts, add in the amount of disposal money people now earmark for personal spending vs paying their mortgage, also include the amount of money that is hidden on balance sheets, because of mark-to-market doesn't exist.
Supply-side economics.
Epic fail.
you are so clueless, not worth the time...
No, please, I beg of thee - waste time for both of us and others.
Provide the reasons for how clueless I am.
Enlighten us.
Thank you.
TP
Because fed easing in response to output gap is designed to address Ag. DEMAND. Supply side economics attempts to raise....guess now.... Ag. Supply! Which tsar position did black jesus appoint you to?
THANK YOU.
;)
Nevermind cops open fire on protestors....yea Im sure all this ends well, as long as more money printing is accomplished!
OCCUPY OAKLAND - PROTESTERS FIGHT BACK POLICE - EXCLUSIVE VIDEO - YouTube
Apparently, one "bad apple protestor" began throwing rocks, prompting the violent police response.
Who wants to lay odds that this "bad apple protestor" was a policeman in disguise?
Like they would ever do something like that.
http://www.nytimes.com/2005/12/22/nyregion/22police.html
And we have 9/11 - the PNAC gift that keeps on giving - to thank for the massive expansion of the Amerikkkan police state.
What a country!
Greenspan wants to bulldoze excess housing inventory. Now he can extend the bulldozing to all excess inventories - after all the Fed can generate a trillion dollars or two with a few keystrokes.
Bullish for CAT
No...Ben should buy all excess inventories and ship to Greece. It would create lots of jobs and give everyone something to do while Rome burns.
Great. First "Cash for Clunkers" to take perfectly good, cheap, used cars out of service. May as well bulldoze homes, too. Though some of the homes that have been vacant for 3 years probably aren't worthy of much else but the front end of a CAT dozer.
Ironically, I suggested the same thing back in 2008. As stupid as it sounds it really does cut to the chase in a just way. Anyone not leveraged gets price pressure relief by eliminating the money pit shadow inventory houses and the finance and insurance industries get left eating a shit sandwich. Win win!
infinite growth models meet the laws of physics. As usual, nice catch tyler, now how do we trade this?
walk in front of a GM car. You will stimulate the economy in so many ways!
My GM beater has 177,000 miles on it. Parts are all over the place at any junkyard, so I'm not complaining.
tyler writes of: "GDP growth figure which appears to be back-stopped by transfer payments and band-aids."
go long stars n' stripes band-aids b/c you are gonna lose some skin trying to slide home on asphalt and broken glass
exactly what part of productivity gains into falling wages for the bottom 70-80% is still a surprise.
When you don't pay peeps they won't consume after the credit is gone.
Buy now.
hahaha
field of dreams since at least 1970 or so, but at least the drugs still mask their pain when they can afford them that is.
The US has been living in a Field of Dreams since the Fed brought rates down to 3% in the early '90s. Or to go further back, since 1945 the US has been able to export dollars to the world's central banks in exchange for the world's goods.
EVERYONE MUST UNDERSTAND that GDP/SHIPMENTS/INVENTORIES/ETC are entirely crappy figures that being calculated / reported w/ only one purpose..
SHOW IMAGINARY GROWTH IN GDP.. period...
on the contrary , real indicators AKA taxes and anything that money involved SHOWS AT BEST STAGNATION FOR LAST 10 YEARS.. or downright in decline..
personal income, oil imports /etc.. everything that related to real economy is stagnant for last 10 years... why is so huge divergence? EASY.. DEBT..
US FED GOV PRINTS MORE THEN 10% OF GDP AND CONSIDER IT AS ITS NORMAL WAY AND KEEP ON DOING FOR Foreseeable FUTURE until whole ponzi scheme collaps
alx
Occupy Oakland pays a visit to a local JPMorgan branch.
Many are upset believing they have no voice in govt or media.
The longer they are ignored by both, the louder they will become.
Then the shooting will start.
See 1776.
http://www.youtube.com/watch?v=dVIhOtxdA5A&feature=related
land of the free ! but not for you and me
Alasdair Macleod explained why GDP is a false statistic:
http://www.financeandeconomics.org/Articles%20archive/2011.10.08%20GDP.htm
blows my mind how ZH chooses to ignore the apparent 4.5 month backlog in unfilled orders. nearly 860 billion worth. that's the number going parabolic
'build it and they will come' is entirely different than the reality of 'we can't build it and ship it fast enough'
a tractor salesman might have waited until he sold a tractor before he sent an order to replace it. but now, if he has to wait six months to get the new one ... well, forget just-in-time inventory way of eliminating warehousing ...
i've read where the trucking industry has someting like 200,000 driver shortage. if you build it but can't ship it, better figure a new inventory method instead of just-in-time.
Capital good orders are being brought forward from 2012 to 2011.
http://www.moneyweek.com/investments/stock-markets/us/no-us-recession-th...
HTH.
“Gloom holds back the US economy,” says the FT.
"Fat bankster, corporate, & politician trash hold back the US economy," says the Incubus.
All that's happening is predictable, as there are 7 stages that any major economy goes through. Those who know how it works profit & massive wealth is transferred to them. You can see what one millionaire has to say about the 7 stages countries go through & how you can profit like the ultra-rich during these tough times. His free video "How To Create Incredible Wealth in Today's Economic Crisis" is at:
http://theelevationgroup.net/presentation/register.php?a_aid=160667&a_bi...
Hope this helps everyone as it has me.
Dr. Nancy
welcome to zH, you fuking troll!
here is yer styoopid post from 10.24:
All that's happening in the economy is predictable, as
there are 7 stages that every
major economy goes through.
Those who know how it works
profit & massive wealth
is transferred to them.
Several months ago
I learned this information
from a millionaire
whose site I found
& am sharing it with
everyone I know.
You can see how
you too can profit
like the ultra-rich
during these uncertain times.
His free video-
"How To Create Wealth in Today's Economic Crisis"
is at:
http://theelevationgroup.net/presentation/register.php?a_aid=160667&a_bi...
Hope this helps everyone
as much as it has me.
Dr. Nancy
and here is yer styoopid post from 10.25:
All that's happening is predictable, as there are 7 stages that any major economy goes through. Those who know how it works profit and massive wealth is transferred to them. See what one millionaire has to say about the 7 stages countries go through & how you can profit like the ultra-rich during these tough times. See his free video "How To Create Incredible Wealth in Today's Economic Crisis" at:
http://theelevationgroup.net/presentation/register.php?a_aid=160667&a_bi...
Hope this helps everyone as it has me.
Dr. Nancy
dear "dr nancy":
fuk you and the horse you are riding, too!
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