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Inventory

Is It Recession?

By |2022-04-28T20:30:20-04:00April 28th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to today’s advance estimate for first quarter 2022 US real GDP, the third highest (inflation-adjusted) inventory build on record subtracted nearly a point off the quarter-over-quarter annual rate. Yes, you read that right; deducted from growth, as in lowered it. This might seem counterintuitive since by GDP accounting inventory adds to output.It only does so, however, via its own [...]

Historic Inventory Continued In March, But Is It All Price Illusion, Too?

By |2022-04-27T19:41:56-04:00April 27th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Census Bureau today released its advanced estimates for March trade. These include, among other accounts like imports and exports, preliminary results reported by retailers and wholesalers. That means, for our purposes, inventories. Oh my, was there ever more inventory. It was, apparently, widely expected that following an avalanche of goods building up over the previous five months the situation [...]

GDP (and GDI) Lays Out The Perfect Supply Shock Case, And Its Downside

By |2022-03-30T20:37:50-04:00March 30th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Though the fourth quarter US real GDP headline rate was left practically unchanged, there was some notable shuffling of its underlying details. In addition, we now have the full GDI estimates to work with, including the BEA’s figure for something called Net Operating Surplus, therefore some better (hopefully) understanding of the real story (in my view) behind why it’s not [...]

Inversions And Inventory, The Major Products of October

By |2022-03-28T18:21:31-04:00March 28th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

What happened in October 2021? Another year’s Halloween, sure, some beerfest gluttony around the world. For all the happy revelries in that month the financial markets took a decidedly ominous turn. It hadn’t exactly been all rainbows and unicorns in them before then, yet they were at least stable to slightly optimistic about the future for 2022 or beyond.The list [...]

A Whole Lot On Consumers

By |2022-03-08T20:15:57-05:00March 8th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

We’ve seen the combination of last year’s over-ordering together with some improvement in the transportation of goods become this year’s record surge (some of this prices) for inventories. Across the supply chain, retailers have been hit with the most recently but there’s been excessive builds for wholesalers, too, along with manufacturers. This potential problem compounds if or when consumer sales [...]

Houston, We Have An Oil (and inventory) Problem

By |2022-03-04T20:21:14-05:00March 4th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

If only, like in the aftermath of the Apollo 13 explosion, we could just radio Houston to get started in figuring out just the way out of our fix. Mission Control would certainly buzz all the right people with the right stuff, summoning the best engineers and scientists from their quiet divans to the frenzied and dangerous work ahead. Sadly, [...]

Briefing Even More Inventory

By |2022-02-28T20:03:49-05:00February 28th, 2022|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Retail sales stumbled in December, contributing some to the explosion in inventory across the US supply chain – but not all. Inventories were going to spike even if sales had been better. In fact, retail inventories rose at such a record pace beyond anything seen before, had sales been far improved the monthly increase in inventories still would’ve unlike anything [...]

From Container Prices To Inflation Expectations And The Yield Curve, They All Dwell On October

By |2022-02-07T18:44:00-05:00February 7th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This thing, this massive supply disruption is a perfect example of a positive feedback loop. It began with government (over)reaction to COVID, as noted here impacting both supply and demand. Those two curves have behaved in classic fashion, inelastic supply unable to efficiently respond to an artificial outward shift in demand. The resulting impact price-wise as pure economics (small “e”).A [...]

Heightened Conflict Of Interest (rates): When GDP’s Almost All Inventory

By |2022-01-27T20:30:10-05:00January 27th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Given yesterday’s Census Bureau data on retail and wholesale inventory, there was a solid though not necessarily good reason to suspect how today’s BEA report on US real GDP might surprise to the upside. The way GDP is tabulated, inventory contributes to the figured increase; the bigger the inventory build, the higher calculated output goes. The fourth quarter’s increase in [...]

FOMC Goes With Unemployment Rate While This Huge Number Happens To Far More Relevant Economic Data

By |2022-01-26T17:58:07-05:00January 26th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The first time I can consciously remember using the term landmine was probably here in February 2019. I had described the same process play out several times before, I had just never applied that term. There was all sorts of market chaos in the final two months of 2018, including a full-on stock market correction, believe it or not, leaving [...]

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