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Tag Archives: Inventory

Yep, There’s A New ‘V’ In Town And The Locals…Don’t Seem To Much Care For It

They should be drooling over the prospects of a clearing path toward normality. The pain and disaster of 2020’s economic hole receding into a more pleasant 2021 which would have been in position to conceivably pay it all back before any long run damage. Getting back to just even with February instead is becoming a distant probability, the kind of non-transitory shortfall with which we’ve grown far too accustomed. Therefore, “they” now salivate (reported to be salivating) for more where no...

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That’s Probably Why Only Half a “V”

Why only half a “V?” If the latest PMI’s are anywhere close to accurate, and they don’t have to be all that close, then the production side of the economy may have stalled out somewhere nearer the trough of this contraction. The promise of May’s big payroll report surprise has dissipated in more than just the bond market. This isn’t quite what people were thinking when they euphorically celebrated that number being published. Though the data is one month behind the sentiment estimates...

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The Smallness of the Most Gigantic

These numbers do seem epic, don’t they? It’s hard to ignore when you have the greatest percentage increase in the history of a major economic account. Just writing that sentence it’s difficult to deny the power of those words. Which is precisely the point: we already know ahead of time how the biggest economic holes in history are going to produce the biggest positives coming out of them.Whether that constitutes an actual recovery as opposed to the simplistic and more troubling rebound is...

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Three Straight Quarters of 2%, And Yet Each One Very Different

Headline GDP growth during the fourth quarter of 2019 was 2.05849% (continuously compounded annual rate), slightly lower than the (revised) 2.08169% during Q3. For the year, the Bureau of Economic Analysis (BEA) puts total real output at $19.07 trillion, or annual growth of 2.33% and down from 2.93% in 2018. Last year was weaker than 2017, the second lowest out of the six since 2013. And that’s where the good news ends. Underneath the headline, not all that far into the details is a...

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The Inventory Context For Rate Cuts and Their Real Nature/Purpose

What typically distinguishes recessions from downturns is the inventory cycle. Even in 2008, that was the basis for the Great “Recession.” It was distinguished most prominently by the financial conditions and global-reaching panic, true, but the effects of the monetary crash registered heaviest in the various parts of that inventory process. An economy for whatever reasons slows down. That leads to inventory piling up across the various levels of the supply chain. Most businesses will remain...

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The Inventory Context For Rate Cuts And Their Real Nature/Purpose

What typically distinguishes recessions from downturns is the inventory cycle. Even in 2008, that was the basis for the Great “Recession.” It was distinguished most prominently by the financial conditions and global-reaching panic, true, but the effects of the monetary crash registered heaviest in the various parts of that inventory process. An economy for whatever reasons slows down. That leads to inventory piling up across the various levels of the supply chain. Most businesses will remain...

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US Industrial Downturn: What If Oil and Inventory Join It?

Revised estimates from the Federal Reserve are beginning to suggest another area for concern in the US economy. There hadn’t really been all that much supply side capex activity taking place to begin with. Despite the idea of an economic boom in 2017, businesses across the whole economy just hadn’t been building like there was one nor in anticipation of one. The only place where there was a truly robust trend was the oil patch. Since the last crash a few years ago, Euro$ #3, the oil sector...

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COT Black: Not Transitory, The Landmine In Crude Means A Lot More Than Crude

Supply glut or demand disappearing? We are back to asking that question again after four years. In late 2014 and early 2015, the conventional answer was shale. The US had begun producing so much oil there was a glut of supply. Without an outlet for it, all the crude began building up primarily in Cushing, OK. All that was true but also never came close to explaining the oil crash. What changed wasn’t supply it was demand. The oil futures market had known about the onrush of additional crude...

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Real Estate Perfectly Sums Up The Rate Cuts

It’s only a confusing when you just accept the booming economy of the unemployment rate. From this perspective, 2018 was, and more so 2019 is, a downright conundrum. By all mainstream accounts, this just shouldn’t be happening. Home sales are running at a pace similar to 2015 levels – even with exceptionally low mortgage rates, a record number of jobs and a record high net worth in the country. Not only that, 2015 levels were substantially less than 2005 levels despite more than 30 million...

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Durably Sideways

Next month, in the durable goods series, the Census Bureau will release the results of its annual benchmark changes. In May 2019, the agency will revise the seasonal adjustments going back to January 2002. Unadjusted data will not be, well, further adjusted. None of this, apparently, will include any information gleaned from the comprehensive 2017 Economic Census. I haven’t closely followed the progress of the latter, though it does seem to me to be taking longer to wind its way into the...

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