Inventories Miss As Non-Durables Drops Most Since Sep09

The headline wholesale inventories number missed +0.6% expectations, rising only 0.4% (from 0.8% prior) with its lowest build since Nov 2010. Under the covers though, non-durables were the most troublesome - unless of course the spin is that a falling inventory implies future growth as inventories 'have' to be rebuilt, right? Non-durables inventories dropped 0.6% - its biggest drop since Sep 2009.

Inventory-to-Sales ratios remain relatively low here (and stable) on average but we do note that significant builds are occurring in Chemicals (near 2009 record highs), Farm Products, and Furniture while Lumber, Paper, and Petroleum appear to show drops in inventory relative to sales.

Chart: Bloomberg

Comments

[Long-John-Silver]

I've noticed local economic conditions are mirroring 2007 and 2008. Everyday I see people with their belongings loaded up in the truck and moving. Business are closing everywhere in mass numbers again. The downtown retail area looks like an abandoned Gold town from the 1800's. The mall paid retailers to move so they could shutdown an entire wing to save on utility costs.

[Quinvarius]

Yeah.  There is some definite weirdness going on where I live too.  There is a huge Mall here that became deserted almost overnight.  I don't know the details.  But I suspect the owners went under and told everyone to get out.  In 2008, some of the strip malls in my area took a huge loss in store front usage.  But they seemed to be able to stay in business.  Now I am seeing some of store fronts closing in those areas again.  I guess we will see if they can take the double whammy.

Imagine how much time and money could have been saved if they had just forced the banks to refi everyone into low or no interest loans when they did the TARP program.  They could have relieved the consumer and made a lot of the toxic mortgages viable.  It is probably too late now.  They treated the cancer by rubbing butter on it.  Both nonsensical and not helpful.  It can't be saved anymore because the cancer is all that is left. 

[papaswamp]

Your local observations look to be a rather nationwide issue...

http://www.reuters.com/article/2011/10/07/usa-retailproperty-idUSN1E7951...

"NEW YORK, Oct 7 (Reuters) - The average vacancy rate for large U.S. shopping malls reached its highest level in 11 years in the third quarter, as department store closings took effect and retailers scaled back their floor space due to shaky consumer sentiment, according to a report issued on Friday.

Preliminary figures by real estate research firm Reis Inc show the average vacancy rate at regional malls rose to 9.4 percent in the third quarter, the highest level since Reis began tracking regional mall vacancy rates in 2000 and up from 9.3 percent in the second quarter."

[ptoemmes]

My sons' car service business hit a wall in Sept and that is extending into Oct.  Mostly corporate/business.  One consultant customer in particular was on the bench all of Q3 and so far all of Oct, too.  Also do not see the early booking for airport to cruise ship traffic.  Definitely seeing a slow down.

Pete

[covert]

eventually fundamental sanity must rule the day.

http://covert3.wordpress.com

[papaswamp]

uber tight margins bitchez

http://3.bp.blogspot.com/-fGFYDTfg3lc/TePKlcTodvI/AAAAAAAABwo/wW-N0oIXN7...

[SheepDog-One]

Highly bullish somehow or other Im sure....probably due to 'massive easing and stimulus back on the table' or something.

Although I wouldnt bet on it with my money. 9-11 part II anyone?  Beck Has 'Verified ... An Attack On Wall Street Next Week' Tells Listeners To Have Cash And Food Rea - YouTube

[papaswamp]

..wow...looks like I need more popcorn.

[DeadFred]

SD1 I watched the clip but basically all it said was he'll tell us what the threat is at the top of the hour. ???

[HelluvaEngineer]

Damn, I can't wait that long!

[moonblue]

its that anon hacker thing ...get a life

[rubearish10]

Would one reason be that "stimulus" is not in the cards?

[Fips_OnTheSpot]

Brilliant *manic laugther*

[GeneMarchbanks]

They won't need to spin this because the NFP number has them doin' lines off of CNBC anchors' genitals.

[SheepDog-One]

The CNBC floozies for Wall St criminals will be back to weeping soon enough.

[buzzsaw99]

already loaded up on spam bitchez

[dracos_ghost]

Shhhh, the Verizon workers are back from striking and the NFP looks good. Stop posting bad numbers that matter -- it's a real downer.

[Prairie Fire]

The supply side is tight, but I think it's a reaction to poor demand, not increased sales/turnover.

[SheepDog-One]

'Bullish...because of course they have to 'rebuild'...the same reason 9-11 part Deux next week will be deemed 'highly bullish', hey gotta rebuild Wall St after the nuke strike...think of all the new JOBS!!

Beck Has 'Verified ... An Attack On Wall Street Next Week' Tells Listeners To Have Cash And Food Rea - YouTube

[junkyardjack]

Hopefully they throw him in jail for this, is it legal for him to go on the radio and report terrorists attacks?  Isn't that like screaming fire in a crowded theater?

[CvlDobd]

He's just as much a part of the status quo as any other media figure. It's like Immortal Technique says, the media is the fourth branch of the government.

Of course they want to talk about an attack on wall street to scare the protesters off the streets. DUH.

[baby_BLYTHE]

New Report Details Sexual Relationship Between Ayn Rand and Alan Greenspan, Proving Most Americans Have Therefore Slept with Ayn Ran! lol

(from Greenspans recent found diary)

Ayn Rand became a stabilizing force in my life. It hadn’t taken long for us to have a meeting of the minds -- mostly my mind meeting hers -- and in the fifties and early sixties I became a regular at the weekly gatherings at her apartment. Exploring ideas with her was a remarkable course in logic and epistemology. I was able to keep up with her most of the time. But exploring that graying tangle of hair which thatched a fissure too chapped and arid for most men -- a rank and leathery and constricted hollow normally reserved for life, but here only a place for death and ruin -- well, keeping up in the bedroom posed more of a challenge. For my efforts in plundering this slimy tomb, I was awarded the moniker “the undertaker.”

My inability to bring myself to the fullest realization of Ayn’s rational self-interest, the taking of another human life at my own hands, kept us locked at a permanent impasse. And while I applauded the broader truths of Objectivism, I disagreed that without taxation people would voluntarily contribute to critical social programs. Ayn made me dress in petticoats and frocks after that as punishment, and would admit me only if I called myself Gertrude. It’s true, our physical love grew merely from a violent symbiosis of mutual disgust and self loathing. She once implored me to urinate on a pile of her manuscripts, in order to pursue my own happiness and self-interest, which happened to be defiling her ponderous and unlikely fiction. This was integrity according to Ayn -- the non contradiction between my thoughts (hatred of her prose) and my action (soiling her books).

I had also, in the throws of the shared enmity that drove our abusive and degrading coupling, referred to her early concept for ‘Atlas Shrugged’ as ‘Atlas Farted.’ She then demanded that I fart on her, as James Joyce had commanded of his precious wife. Again, I could not. She ordered me to eat crumbs of government cheese from her thighs; and when I did as she directed, I was chastised for partaking in entitlement programs. For those reasons, I came to accept that we would never be together spiritually. But I vowed one day to make Ayn proud.

[GeneMarchbanks]

I voted you down only because of the visual. Otherwise it's all love.

[baby_BLYTHE]

it is indeed quite unpleasant to visualize. (although so is Warren Buffett in a bathtub). The story just confirms what many have hypothesized. 

[Caviar Emptor]

Ayn, ultimate dominatrix. She could even make such powerful men as Atlas shrug. Perhaps the solution to the crisis lies in just letting women dominate.....just a thought 

[Henry Chinaski]

No.

[dracos_ghost]

I had also, in the throws of the shared enmity that drove our abusive and degrading coupling, referred to her early concept for ‘Atlas Shrugged’ as ‘Atlas Farted.’ She then demanded that I fart on her, as James Joyce had commanded of his precious wife. Again, I could not. She ordered me to eat crumbs of government cheese from her thighs; and when I did as she directed, I was chastised for partaking in entitlement programs. For those reasons, I came to accept that we would never be together spiritually. But I vowed one day to make Ayn proud.

Chastised for partaking in entitlement programs!!!. Thanks Baby_Blythe, that was friggin funny.

[baby_BLYTHE]

the irony is Ayn later in life partook in both Social Security and Medicare when she needed them.

http://www.alternet.org/teaparty/149721/ayn_rand_railed_against_governme...

[adr]

I have never seen a smaller holiday inventory in my life.  Stores are loading up on small low cost items to push up sale volume.

Did you know the average American is supposed to spend around $67 a day on consumables. Wow that is over $24k  just on crap. I find it amazing since half the people in this country make under $25k a year total.

Wow that group of millionares and billionares must spend a shitload every day.

[Caviar Emptor]

That's why averages are such misleading figures. The median is prob closer to $27

[YesWeKahn]

Only this time they can no longer spin these numbers. The green shoot shiet is over.

[Belarus]

The market is on the verge of a cliff-dive. There is virtually no confidence and the plebs are getting restless, as events such as Occupy Wall Street picks up, and a total disdain for crony capitlism sweeps the country. Ever since the buy-back announcement from Berkshire, that they can buy back stock under 110% of book, with dry powder being that of roughly $20 billion, the lack of conviction from outside money is most interesting. 

What you'll notice is every time Berkshire A shares trade up or slightly past 110% of book, which ironically happens to be 110,000 per A share, the stock underperforms the market. Now, here is the spokeperson, the iconic figure, for virtually every mom and pop and fundamental investor in the country. Yet, literally, no one, and I mean no one, is willing to buy the stock above 110% of book. Furthermore, when the stock does dip to roughly 105% of book, you can litterally see it in the tape when Buffett is in the market. This speaks volumes for market sentiment, and it is also all too indicative that these huge, sharp, violent rallies are convictionless: short covering, algo-driven, full-retard upticks. 

So, expect this fron-run, short covering rally to fade quickly into next week. America is waking up, and out of digust and apathy, want nothing to do with this casio. To this end, they don't even want to follow in the footsteps of the man they once worshipped who swears it is still all-America and Apple Pie around these necks of the woods. Good luck to that one, because apple pie lost its luster when High Fructose Corn Syrup took over the filling.

[warchopper]

Malls in my area are dead, and have been so for some period in time. I don't understand how Sears remains in business.

[freeasabee1]

yeah, I've noticed the same thing here in Brantford, Ontario, Canada....the local mall is dieing, resently the empty stores are more and more.  just an observation from a small city in canada.

[jerry_theking_lawler]

long time ZHer here...haven't posted much lately b/c for our business things are looking up....the weak dollar along with inventory reduction starting in '08 has helped out alot with inbalances...so much so that we are restarting a plant in the US and re-hired about 100 workers. the inventory in the WH fell to extremely low levels and the asian producer could not keep up with production. that along with weak dollar is slowly driving manufacturing back to US.

i think it may be too little, too late, however, on the actual "wealth creation" side, aka manufacturing, things are starting to slowly turn around (here in the US). if the .gov would stop all of its crazy regulations, remove some tax barriers, then things may actually start ?improving? what. yes, i said it, improving.

i'm mid-career in manufacturing and have see/lived through most of the decline in US manufacturing. lately, things are getting to a stable position (maybe a bottom? maybe not). but if .gov would keep its nose out of business and provide us with is intended functions then I think businesses would feel confident to spend again, driving costs down, and spurring more consumption..which is what we want.

but i think we are definitely at a "tipping-point" and things could fall off a cliff if conditions worsen and the .gov tries to "help" out any more. -jkl

[karmete]

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