It’s not just the flood of never-ending inventory. That’s a huge and growing problem, sure, as the chickens of last year’s short-termism overordering finally come home to their retailer roost. Being stuck with too many goods isn’t necessarily fatal to the global and domestic manufacturing sectors.The scale of the burden is one key worry, though equally so is demand. When [...]
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 [...]
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 [...]
Empty shelves at the grocery store are an easy way to get likes and clicks. The highest CPI in decades, like there almost certainly will be at tomorrow’s release, relatedly a hot news topic. On the contrary, hardly anyone will publish therefore notice that wholesale inventories during October 2021 increased by the largest monthly amount on record.It just doesn’t fit [...]
Some call it the accordion effect while others refer to it in terms of a bullwhip. Whatever the terminology, the supply chain mess has created a set of perverse incentives leading to a positive feedback loop: the greater the mess, the longer the times for delivery, the more product gets ordered if in only to increase the chance something, anything [...]
This is yet another one of those crucial recent developments which should contribute much clarity about the economic situation, yet is exploited in other ways (political) adding only more to the general state of economic confusion. The shelves may be empty in a lot of places around the country, leaving anyone with the impression there just aren’t enough goods. Shortage [...]
The inventory saga, planetary in its reach. As you’ve heard, American demand for goods supercharged by the federal government’s helicopter combined with a much more limited capacity to rebound in the logistics of the goods economy left a nightmare for supply chains. As we’ve been writing lately, a highly unusual maybe unprecedented inventory cycle resulted (creating “inflation”).The worse the shipping [...]
One reason why I still believe the US most likely would have entered a recession at some point in 2020 even without COVID wasn’t just the yield curve inversion that popped up several months before then. In August of 2019, the small part of the Treasury curve most people pay attention to (2s10s) did send out that dreaded signal, suggesting [...]
A tale of two retail industries. In the one, the well-known chip problem holding back what is already a monstrously robust (if artificial) sales environment. Automobile dealer lots are nearing empty and carmakers are unable (perhaps unwilling, too?) to produce near sufficient volumes to keep up let alone restock.This view of the situation, though, has clouded perspectives particularly as they [...]
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 [...]
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