Stagflation trifecta complete: May Industrial Production misses downward revised expectations of +0.2%, barely budging from last month's unchanged, printing at 0.1%, in line with our expectation from mid May, and in contrast with every lemming on Wall Stret. The bulk of the weakness was blamed on Japan. The balance is apparently due to tornadoes. Of course, since the economy is in a vacuu and is never impacted by such "one time" items, it is easy to assume there will never be any earthquakes or tornadoes going forward. From the release: "Industrial production edged up 0.1 percent in May, the second consecutive month with little or no gain. Revisions to total industrial production in months before May were small. In May, manufacturing production rose 0.4 percent after having fallen 0.5 percent in April. The output of motor vehicles and parts has been held down in the past two months because of supply chain disruptions following the earthquake in Japan. Excluding motor vehicles and parts, manufacturing output advanced 0.6 percent in May and edged down 0.1 percent in April; the decrease in April in part reflected production lost because of tornadoes in the South at the end of the month." And in other persistently weak news, Capacity Utilization for total industry was flat at 76.7 percent, a rate 3.7 percentage points below its average from 1972 to 2010. Two more months of data as week as this and QE3 is not only probable but inevitable.