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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (9829)	3/10/2004 10:14:20 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

So today's quiz: how do they build up from record low business inventories without inexpensive and readily available input goods and raw materials? Wall Street has little clue about this Train Wreck dynamic. Economy is in a serious bind here. Reuters January Wholesale Stocks Below Forecast Wednesday March 10, 10:02 am ET WASHINGTON (Reuters) - Inventories at U.S. wholesalers rose less than expected in January, Commerce Department data showed on Wednesday, and the pace of sales more than halved as demand for cars posted the largest fall in over six years. Commerce said wholesale stocks of goods rose 0.1 percent after a revised 0.6 percent advance in December, and below the 0.4 percent monthly gain expected by Wall Street. Wholesale sales rose 0.6 in January after gaining a revised 1.5 percent the previous month, but car sales fell 6.6 percent in their weakest performance since December 1997. The closely watched inventory-to-sales ratio, which measures how long it would take to run down stocks at the current sales pace, was steady at a record low of 1.17 months' worth. The ratio indicates the leanness of inventories compared to sales and is a guide to how much wholesalers will have to ramp up sales to rebuild stocks.

To: mishedlo who wrote (9829)	3/10/2004 12:19:54 PM
From: russwinter	Read Replies (2) \| Respond to of 110194

Contrary Investor excerpt 3-9 issue about little correlation now between jobs and consumer credit expansion: "When it comes to coincidental household credit expansion for this cycle of contracting payroll employment, our current experience could not be more distant from what was seen in the early 1990's. In January of 1991, the year over year change in payroll employment when negative and stayed there until April of 1992. During this period, consumer credit outstanding in this country actually contracted by ($8.9) billion. It represented a (1.1%) contraction relative to the January 1991 base of $806.6 billion in outstanding consumer credit. In the current cycle, the year over year rate of change in payroll employment first went negative in July of 2001 and has stayed there until the present. Over this period of time, total consumer credit outstanding has risen by $255 billion, a 14% expansion relative to the $1.77 trillion base in July of 2001. Despite a complete lack of job growth, are households continuing to take on additional consumer debt comfortable in the fact that a significant turn in labor markets lies just ahead? Or is household leverage acceleration happening simply to meet basic living expenses for those caught in the unemployment maelstrom? In terms of this being an atypical economic recovery, the current period takes the cake in terms of the relationship between the payroll employment and consumer credit growth."