Has The US Been Living In A 'Field-Of-Dreams' Since Mar09?

Tyler Durden's picture

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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YesWeKahn's picture

Fear it or love it, this eventually will trigger a QE(n++)

trav7777's picture

summing up China too...all central planning systems.

Malinvestment as far as the eye can see

qussl3's picture

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.

dlmaniac's picture

Since 1990's I'd say after US became a net-debtor nation.

nyse's picture

We're basically in the Age of Malinvestment. When does it end?

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LeonardoFibonacci's picture

"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!

LeonardoFibonacci's picture

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!

common_sense's picture

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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SheepDog-One's picture

 

 

1) Print money.

2) Hand to banks and Corps to build up inventories.

3) ???

4) PROFIT!

GeneMarchbanks's picture

Matters not. We're a 'service' economy remember?

SheepDog-One's picture

Pizza delivery drivers in Hummers, bitchez.

J 457's picture

No, we're a bankrupt economy that needs to find a way to pay back 15 trillion.

Steel_Preacher's picture

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.

Andy_Jackson_Jihad's picture

Q: What do you call a service economy with a trade deficit and no world-reserve currency?

A: A 3rd world shithole!

firstdivision's picture

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 Axe's picture

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.

Tsar Pointless's picture

Supply-side economics.

Epic fail.

srsly-wtf's picture

you are so clueless, not worth the time...

Tsar Pointless's picture

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

Andy_Jackson_Jihad's picture

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?

SheepDog-One's picture

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

Tsar Pointless's picture

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!

JustObserving's picture

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

srsly-wtf's picture

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.