Supply Chain Slowdown Signals US Economic Slump Ahead

Tyler Durden's picture

The American Chemistry Council's chief economist Kevin Swift created a 'Chemical Activity Barometer' which tracks chemical production and prices, hours worked at producers, and manufacturing output among other factors. As indicated in today's Bloomberg Chart-of-the-Day, this indicator, based on its 'earliness in the supply chain' provides a signal that "the outlook for the economy is slowing during the next six to nine months" since 96% of manufactured goods are derived in part from materials produced by the US chemical industry. Three-month declines of 3% or more have preceded all but one recession since 1947 and it is currently down over 2.5% from its highs in March suggesting sub-par growth is coming.



Source: Bloomberg

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slaughterer's picture

See you in the NEW RECESSION soon.  

thad78's picture

But I haven't worn out my old recession yet!

cougar_w's picture

Okay I musta missed this one.

Can someone pleez explain to me the origins of the "bath salts" meme? I'm lost.

Xibalba's picture

"Bath Salts" = "Risk ON"

Manthong's picture

Bullish for pet food stocks now..

Man on K-2 eats K-9

dwdollar's picture

Please do tell where you've been living for the past month.

Conman's picture

maybe he was a face eating zombie for the past month. hint

dwdollar's picture

Ah damn... I thought that maybe, just maybe, there was an isolated part of society out there which wasn't de-evolving into cannibals.

AnonymousCitizen's picture

At BASF, we don't make recessions, we make recessions recessionier.

blunderdog's picture

Head shops have been selling bath-salts which are heavy-duty intoxicants (poisons?) and folks have been getting profoundly fucked up by snorting them.

TheFourthStooge-ing's picture

cougar_w asked:

Can someone pleez explain to me the origins of the "bath salts" meme? I'm lost.

Sure, no prob.

The "bath salts"/"plant food" label:

Abstract: Novel drugs--novel branding

Abstract: Synthetic Cathinones (Bath Salts): Legal Status and Patterns of Abuse (March)

The chemicals:

MDPV (3,4-methylenedioxypyrovalerone)
(includes links to more resources and media coverage)

Methylone (3,4-methylenedioxymethcathinone)
(includes links to more resources and media coverage)

Abstract: (MDPV): Chemistry, pharmacology and toxicology of a new designer drug of abuse marketed online

Abstract: Synthetic cathinones: Chemistry, pharmacology and toxicology of a new class of designer drugs of abuse marketed as 'bath salts' or 'plant food'

Abstract: The Toxicology of Bath Salts: A Review of Synthetic Cathinones

The effects:

Abstract: Illicit bath salts: not for bathing

Abstract: Recurrent Acute Kidney Injury Following Bath Salts Intoxication

Abstract: Emergency department visits after use of a drug sold as 'bath salts'

Abstract: Paranoid psychosis induced by consumption of methylenedioxypyrovalerone: two cases

Abstract: Bath Salt' Ingestion Leading to Severe Intoxication Delirium: Two Cases and a Brief Review of the Emergence of Mephedrone Use

Cursive's picture


The Florida cannibal who ate the homeless man's face off was reportedly high on bath salts.  Thus, the phrophecy has been fulfilled.  We WILL have zombie roving the planet and they will be high on bath salts.

azzhatter's picture

These recessions don't bother me a bit, I was a failure during the boom

Conman's picture

Maybe thingamagigs are being created at the Fed from thin air, much like fiat. That explains all, nothing to see here. move along.

Let The Wurlitzer Play's picture

The FED needs to start buying chemicals NOW!


Zero Debt's picture

Air-dropped from helicopters as usual, Sir?

caimen garou's picture

I did'nt think we left the old one

Tuco Benedicto Pacifico Juan Maria Ramirez's picture

The establishment media told us that the recession ended in June, 2009.  What!?  You don't believe the establishment media!?  Shame on you!  You are definitely a terrorist and an enemy of the state!


Jason T's picture

next down leg will take employment to population ration from 58.7% where it is in latest reading to 55.7%, which will shed another 10 million jobs.

good luck finding tax revenue there

slaughterer's picture

Tax revenue is for pussies.  

Poetic injustice's picture

I like pussies more than taxes, is that normal?

azzhatter's picture

liking pussy is good, liking pussies is a bit sketchy

RallyRoundTheFamily's picture

since 96% of manufactured goods are derived in part from materials produced by the US chemical industry.

Including the food.

azzhatter's picture

things are booming at my meth lab

Offthebeach's picture

Meth use cuts down on food use, farm land use thus soil erosion and increases cop,court, child services jobs thus helping the economy, and medical care/ rehab service raises the GDP!
( Now with no teeth lisp).....Uf.. F.. A!, ....Uf ..F..A! Weref..Umba Won!

TonyCoitus's picture

Is "crack" considered a manufacured good?  If so, Detroit is booming!

lotusblue's picture

Great Posting Tyler!

This is fascinating indicator though I think in hyper wacko world we're in,reccession is already here! Just using up old inventory and very slow to reorder.

Just working hard to use best instrument to profit.

ParkAveFlasher's picture

I got an instrument for you, China bot, right here! 

Abraxas's picture

Slump? No! Who could have seen that coming?

Seize Mars's picture

If the Fed wants to prop up chemical prices they had better put a major bid in Crude and Natty!


JR's picture

In my opinion, all economic decisions in this election year should take into account the possibility of war with Iran.

The implications of an extremely pro-Israel session at Romney’s retreat over the weekend is now being used as evidence that he may be even more pro-Israel on the ME than John McCain.

The closer Gov. Romney comes to being the Republican GOP candidate for president, the greater the criticism has become that he favors military action in the Middle East to support Israeli interests. For those hoping for a defeat of Obama in November, it’s important to remember that Obama edged out both Hillary Clinton and John McCain primarily because of the widespread of opposition to the Iraq War and Obama’s congressional vote against the war.

Ron Kampeas reports for JTA:The Global News Service of the Jewish People:

Romney to Jewish donors: ‘I get Israeli briefings’

By Ron Kampeas · June 24, 2012

Mitt Romney told donors attending his campaign's Utah retreat that he is briefed on the Middle East by Israeli government officials.


About 50 of the 700 donors who attended the retreat this weekend in Park City were Jewish, according to one in attendance.


..,Romney dropped in on the session, and said he had just been briefed by the Israeli ambassador, Michael Oren, speaking about, among other issues, the situation in Syria, the elections in Egypt and the effort to isolate Iran.


Romney, the former Massachusetts governor and the Republican presidential nominee, said he has such conversations with Israeli officials to be kept up to date on the region.


Such briefings are not an unusual once it becomes clear who the major party candidates are...


Addressing the U.S.-Israel session were William Kristol, a founder of the Emergency Committee for Israel which recently ran ads accusing Obama of not doing enough to stop Iran; Michael Chertoff, the Bush administration Homeland Security Secretary, who is Jewish; and Norm Coleman, the former U.S. senator from Minnesota, who is also Jewish.


To attend the retreat, donors either had to have donated $50,000 to the campaign or had to have raised $250,000.

roadhazard's picture

Speaking of Iran, Oromney may be too late for the party. 


It's probably not true because oil is not spiking and it's Debka.

cougar_w's picture

Debka is only good for teh lulz

roadhazard's picture

When the hunt for Saddam was on they had him hiding everywhere but in a hole. They had Osama hiding in a container apartment on a tanker floating around the world.


JR's picture

Could this be the British connection in a NYT’s story today that “Syrian Insurgents Strike a Nerve with Attack on Elite Damascus Guards”?

“The Syrian Observatory for Human Rights, an anti-Assad group in Britain with a contact network in Syria, reported that 10 people were killed in Qudssaya. The Local Cordination Committees, an anti-Assad group in Syria that has been documenting casualties in the conflict, reported 33 killed in the Damascus suburbs of Qudssaya, Al Hameh and Dummar, as well as two killed in the capital. The group also released a list of people it said were among 21 massacred by Syrian forces in Al Hameh.”

Savyindallas's picture

Ron Paul supporters and many indenpdents would never vote for another Neocon. Looks like gary Johnson will get the third party vote--doesn't matter-I think the powers that be are about to  throw Obama under the bus-so Romney won't need their votes.. He has been so discredited (except among retards) that another fresh face will have to come in. Matters not -they control both parties.

CosmicDebris's picture

Obama would do what he's told by big money, when he is told, just as Romney would. We're screwed either way.

Hype Alert's picture

That's old school data.  The Bernanke Put fixes all.  Hah [/sarcasm]

Hype Alert's picture

Speaking of the Bernanke Put, it looks like it takes a dip well below the 200 day before that gets called.  Tomorrow's durable goods numbers may get that started.

prodigious_idea's picture

With the Euro at $1.25-ish, what would it need to get down to in order to promote export sales to offset these figures?

Lore's picture

Ah. Another gauge to co-opt / compromise / suppress / manipulate. Go get 'em, my pretties!

joebren's picture

You can add the Architectural Billing Index to those indicators rolling over.

cougar_w's picture

Just going from the charts looks to me like chem is more of a trailing indicator than a leading one.

Conman's picture

Hard to tell but if you really did look the lines start to drop at the beginning of 08. PRE-recession. Again hard to say with this chart need better resolution and maybe some grid lines.

blunderdog's picture

Don't be such a square.

i8emallup's picture

Reading from left to right, CAB made the first move in 90-91, and clearly in 07-08. 99 looks like concurrent.  I wont dismiss this indicator. Thanks for sharing.