Lowes is employing the Ark inventory system. They have 2 but only 2 of everything. They won't even order multiple cans of spray paint. You can't sell what you aint got.
I'll bet they're still selling lots of locksets for forclosured properties. Locksmiths are extremely busy these days (My brother-in-law sells locksets).
I'll second that. I tried to buy some grout this weekend. The selection was dismal. Couldn't get what I wanted.
This may not be all Lowe's doing.
It doesn't make sense that indy truckers could be feeling such pain and pulling off the road while the supply chains of the U.S. economy just keep humming along.
Just-in-time inventory management only works when there's plenty of truckers available.
CR, I've been thinking of the herculean efforts you & more recently Tanta have put into this site since I "found" it way back when. As hard as it may be, I hope you both are keeping one eye scanning the reality-based world for another extremely rare bird to help with the load. It's more obvious by the day the hole we've dug ourselves into (refuse to stop digging) will make for long and very trying times ahead.
Even Izzy Stone got tired.
"LEADING INDICATORS Six of the ten indicators that make up the leading index increased in April. The positive contributors beginning with the largest positive contributor were stock prices, interest rate spread, building permits, average weekly initial claims for unemployment insurance (inverted), index of supplier deliveries (vendor performance) and manufacturers' new orders for consumer goods and materials*. The negative contributors beginning with the largest negative contributor were index of consumer expectations, average weekly manufacturing hours, and manufacturers' new orders for nondefense capital goods. Real money supply held steady in April."
Just thinking about the traffic I got stuck in the morning outside the brand new Lowes located 6 miles up the road (Route 1) from the existing Lowes. I'll still prefer shopping at the existing store with the now mostly consumer-free aisles.
So in the LEI there was a "positive constribution" from average weekly initial claims for unemployment insurance?
True, the 4 wk MA of initial claims declined somewhat in April. It went from 374,750 to 364,500. However, the 4 wk MA of continuing claims went from 2,905,000 to 3,001,750.
Recently a new Lowes opened near the Sf airport. Completely empty and this Lowes is huge equal in size to home depot with 30 foot ceilings and all. Counted the cars in the lot. It was about 30in a lot that easily hold 150. I don't know how many were employees cars but it looked depressing.
Sonic Seuss, the LEI is juiced by the stock market gains of April. Take that out and the LEI is down.
You really have to just marvel at this. We are told the stock market is happy to hear that leading indicators show the economy is growing and is going up. Of course the reason the indicators show the economy is growing is because the market is up. I'm sure that is a sustainable and valid model.
Distortion seems to have become the norm instead of the exception. Just look at the U.S. Government numbers for the economy. They actually had the balls to say that gas prices fell in April and construction jobs increased. They call it seasonal adjustments. I call it bllsht!
"12th Percentile writes:
We are told the stock market is happy to hear that leading indicators show the economy is growing and is going up. Of course the reason the indicators show the economy is growing is because the market is up. I'm sure that is a sustainable and valid model."
It worked for the NASDAQ in 1999, right? The rising tech stocks predicted that the outlook for technology spending was bright!
I do wonder how the home improvement giants will do against more traditional hardware stores. We've absorbed two new home depots without losing any of the "locals," who have their own niches -- full-service lumber, superior contractor service, giant garden centers.
If bad times really come, I expect the locals to hang in there, and at least one of the HDs to convert to a roller rink.
The "US is in a recession camp" has simply not proven their case so far. Could there be a US recession in 3, 6, 12, 24 months? Sure. Run that time frame out long enough and I'll guarantee it.
Howvere, 2 things are clear:
(1) Taking the world as a whole, there is no recession nor are we even close. Even Canada, as closely linked as it is to the US, is not in recession.
(2) The major indices have crossed or are crossing, their 200 day MAs. Anyway you slice it, that is technically bullish.
If you are a permabear (or a permabull) you will always be right at some point in time. The trick is knowing when.
"Sonic Seuss, the LEI is juiced by the stock market gains of April. Take that out and the LEI is down."
Yes, but the stock market IS A LEADING INDICATOR.
Out of curiosity, when the LEI was falling in Jan-Mar, what would your reaction have been if someone suggested taking out the stock market because it was dragging down the index?
Ahead -
I dont think either side - the recession camp or the no recession camp - has proven their case. Although based upon what I see in my business and am hearing from my customers in the past couple months I'd be betting on the recession camp. If we avoid a recession (which I am rooting for) my customers better change their mindset and behavior quickly and severely. I and other businesses I know are seeing sales slow and inventories build. Please get your message out to the masses so I can move some of this stuff!!
"I dont think either side - the recession camp or the no recession camp - has proven their case. Although based upon what I see in my business and am hearing from my customers in the past couple months I'd be betting on the recession camp."
I appreciate your open-minded bullishness. But the economy is quite fragile. I have seen estimates that up to 30 percent of American households now live paycheck to paycheck. A couple of bumps in the road could cause quite a disruption in the consumer economy with ripple effects wide-ranging.
Reduced hours, layoffs, higher energy prices, tight credit, higher food prices -- the bumps are already there. From my vantage point, things are already under weight downward.
Equity markets haven't been a LEI in a classical sense for some time. The only reliable indicator has been volume, which was heavy when sliding and low in recent trend change. It's risen, but zero conviction.
"Aheadofthecurve writes:
The "US is in a recession camp" has simply not proven their case so far. ...
However, 2 things are clear:
(1) Taking the world as a whole, there is no recession nor are we even close. Even Canada, as closely linked as it is to the US, is not in recession."
Actually, that's unclear, and probably wrong. Canada's economy is dominated by the eastern provinces, with large manufacturing bases. The east is already in a recession. Only the western parts of the country (with energy and other resources) are doing well, but they have a small weight. The Canadian dollar has stopped strengthening as a result.
Anyway, it's unlikely that anyone in the markets treats the "leading indicators" seriously, despite what you read in news stories. The LEI is just a combination of already-released data, after all. It is useful for story-telling economists who want to explain what has happened with a single summary indicator.
Those news stories you see bear little resemblence to what actually is happening in the market; they just plug in the latest economic number and change the headline whether the markets are up or down. On a day with swinging markets, the headline changes can be pretty funny.
bond guy- Although I live in the US, I'm Canadian and follow Canada closely and go there very frequently. As of a few weeks ago, the Bank of Canada was not prepared to say the country was in recession, though some private economists differed. Jobs are still growing and with the recent rise in commodity prices and the TSX at all-time highs, my guess is Canada will avoid recession. Anecdotally, when I go to Montreal (my daughter lives there) there is construction everywhere and downtown stores are crowded. I have been there in many previous recessions and this does not feel like one.
The more general point regards the US consumer. No question they are feeling stress. However, unlike in the past when they were often the sole locomotive, now the train has several locomotives. If US spending is flat, BRIC and associated countries are up 8-10% and Europe is up 2-3% the aggregate is still positive. I would point out that many countries have very high savings that can cover short-term weakness and have considerable pent-up demand for products that they have only had access to recently.
"Out of curiosity, when the LEI was falling in Jan-Mar, what would your reaction have been if someone suggested taking out the stock market because it was dragging down the index?
I thought so....
(And they say the MSM is 1-sided)
Aheadofthecurve"
Nice straw man, and answering the question yourself, even.
Many of the large cap companies that make up the DOW and S&P 500 are seeing better earnings only because of a favorable exchange rate from foreign sales, especially the EURO. Many of those products are made and sold outside of the USA. This does nothing for the U.S. economy or its citizens. Americans are fairing poorly and it shows.
As my SRS falls to Earth, this rally compells me to now start a position in TWM.
Official recession or no, Joe&Jane consumer are in bad shape and there is plenty of reason to believe they'll be in even worse shape a year from now.
Sorry, I'm sure this has been covered before, but don't you have to be careful when inferring reduced economic vigour from same-store sales numbers, as there is a risk of competitive inhibition from new stores?
Overall I think home improvement sales will go up. Have you seen the shape most of the sold REO's are in? Lots of trips to the closest home improvement store are in a lot of new homeowner's future.
What if we throw into the economy cash from millions of people with more to spend because they aren't paying their mortgage. That would help stave off the recession and might rival the contribution of the "stimulus" checks.
Lowes is employing the Ark inventory system. They have 2 but only 2 of everything. They won't even order multiple cans of spray paint. You can't sell what you aint got.
I'll second that. I tried to buy some grout this weekend. The selection was dismal. Couldn't get what I wanted.
Leading indicators up 0.1%
The recession that never happened is over! Stocks to the moon!
So, what about the 150bn stimulus checks ? We are supposed to see the good times ROLL! Someone please forward the memo.
This sure is a funny recession. I think the bears are losing this one.
I'll bet they're still selling lots of locksets for forclosured properties. Locksmiths are extremely busy these days (My brother-in-law sells locksets).
Sonic Seuss, the LEI is juiced by the stock market gains of April. Take that out and the LEI is down.
This may not be all Lowe's doing.
It doesn't make sense that indy truckers could be feeling such pain and pulling off the road while the supply chains of the U.S. economy just keep humming along.
Just-in-time inventory management only works when there's plenty of truckers available.
CR, I've been thinking of the herculean efforts you & more recently Tanta have put into this site since I "found" it way back when. As hard as it may be, I hope you both are keeping one eye scanning the reality-based world for another extremely rare bird to help with the load. It's more obvious by the day the hole we've dug ourselves into (refuse to stop digging) will make for long and very trying times ahead.
Even Izzy Stone got tired.
"LEADING INDICATORS Six of the ten indicators that make up the leading index increased in April. The positive contributors beginning with the largest positive contributor were stock prices, interest rate spread, building permits, average weekly initial claims for unemployment insurance (inverted), index of supplier deliveries (vendor performance) and manufacturers' new orders for consumer goods and materials*. The negative contributors beginning with the largest negative contributor were index of consumer expectations, average weekly manufacturing hours, and manufacturers' new orders for nondefense capital goods. Real money supply held steady in April."
The Conference Board Leading Economic Index™ (LEI) for the U.S. Increases Again
With sales trending down for some time now, these businesses are trying to lean up and refrain from carrying high inventories. As they should IMHO.
Inventory is materialized from cash.
Cash is oxygen for housing related companies I would think right now.
"So, what about the 150bn stimulus checks ?"
I still haven't received mine. For that matter I still haven't received my tax refund.
Interesting comment about the independent truckers.
Building permits were up????
Given the overhang, if true, this is bad news not good news.
And the stock mkt is totally irrational,so how is that any kind of news at all?
Sonic Seuss, the LEI is juiced by the stock market gains of April. Take that out and the LEI is down.
Oh, I know. My comment was more a parody of Sebastianism than the authentic pump-the-fist-in-the-air variety.
Just thinking about the traffic I got stuck in the morning outside the brand new Lowes located 6 miles up the road (Route 1) from the existing Lowes. I'll still prefer shopping at the existing store with the now mostly consumer-free aisles.
So in the LEI there was a "positive constribution" from average weekly initial claims for unemployment insurance?
True, the 4 wk MA of initial claims declined somewhat in April. It went from 374,750 to 364,500. However, the 4 wk MA of continuing claims went from 2,905,000 to 3,001,750.
sonic
they consider more unemployed people as a positive. Those people now have more time to shop.
Recently a new Lowes opened near the Sf airport. Completely empty and this Lowes is huge equal in size to home depot with 30 foot ceilings and all. Counted the cars in the lot. It was about 30in a lot that easily hold 150. I don't know how many were employees cars but it looked depressing.
Sonic Seuss, the LEI is juiced by the stock market gains of April. Take that out and the LEI is down.
You really have to just marvel at this. We are told the stock market is happy to hear that leading indicators show the economy is growing and is going up. Of course the reason the indicators show the economy is growing is because the market is up. I'm sure that is a sustainable and valid model.
Distortion seems to have become the norm instead of the exception. Just look at the U.S. Government numbers for the economy. They actually had the balls to say that gas prices fell in April and construction jobs increased. They call it seasonal adjustments. I call it bllsht!
"12th Percentile writes:
We are told the stock market is happy to hear that leading indicators show the economy is growing and is going up. Of course the reason the indicators show the economy is growing is because the market is up. I'm sure that is a sustainable and valid model."
It worked for the NASDAQ in 1999, right? The rising tech stocks predicted that the outlook for technology spending was bright!
I do wonder how the home improvement giants will do against more traditional hardware stores. We've absorbed two new home depots without losing any of the "locals," who have their own niches -- full-service lumber, superior contractor service, giant garden centers.
If bad times really come, I expect the locals to hang in there, and at least one of the HDs to convert to a roller rink.
The "US is in a recession camp" has simply not proven their case so far. Could there be a US recession in 3, 6, 12, 24 months? Sure. Run that time frame out long enough and I'll guarantee it.
Howvere, 2 things are clear:
(1) Taking the world as a whole, there is no recession nor are we even close. Even Canada, as closely linked as it is to the US, is not in recession.
(2) The major indices have crossed or are crossing, their 200 day MAs. Anyway you slice it, that is technically bullish.
If you are a permabear (or a permabull) you will always be right at some point in time. The trick is knowing when.
Just one further point,
"Sonic Seuss, the LEI is juiced by the stock market gains of April. Take that out and the LEI is down."
Yes, but the stock market IS A LEADING INDICATOR.
Out of curiosity, when the LEI was falling in Jan-Mar, what would your reaction have been if someone suggested taking out the stock market because it was dragging down the index?
I thought so....
(And they say the MSM is 1-sided)
rich: Are you suggesting the truckers are turning down business?
At best I can imagine they quote "new" prices, and their customers "consolidate" shipping so that shelves and warehouses are restocked less often.
That would plausibly lead to more volatility in supplies.
Ahead -
I dont think either side - the recession camp or the no recession camp - has proven their case. Although based upon what I see in my business and am hearing from my customers in the past couple months I'd be betting on the recession camp. If we avoid a recession (which I am rooting for) my customers better change their mindset and behavior quickly and severely. I and other businesses I know are seeing sales slow and inventories build. Please get your message out to the masses so I can move some of this stuff!!
The improvement in the initial UI claims was something like .1%, beyond statiscally significant.
If Lowe's has caught a cold HD has bird flu. Bad locations, bad biz decisions
"I dont think either side - the recession camp or the no recession camp - has proven their case. Although based upon what I see in my business and am hearing from my customers in the past couple months I'd be betting on the recession camp."
I appreciate your open-minded bullishness. But the economy is quite fragile. I have seen estimates that up to 30 percent of American households now live paycheck to paycheck. A couple of bumps in the road could cause quite a disruption in the consumer economy with ripple effects wide-ranging.
Reduced hours, layoffs, higher energy prices, tight credit, higher food prices -- the bumps are already there. From my vantage point, things are already under weight downward.
Equity markets haven't been a LEI in a classical sense for some time. The only reliable indicator has been volume, which was heavy when sliding and low in recent trend change. It's risen, but zero conviction.
"Aheadofthecurve writes:
The "US is in a recession camp" has simply not proven their case so far. ...
However, 2 things are clear:
(1) Taking the world as a whole, there is no recession nor are we even close. Even Canada, as closely linked as it is to the US, is not in recession."
Actually, that's unclear, and probably wrong. Canada's economy is dominated by the eastern provinces, with large manufacturing bases. The east is already in a recession. Only the western parts of the country (with energy and other resources) are doing well, but they have a small weight. The Canadian dollar has stopped strengthening as a result.
Anyway, it's unlikely that anyone in the markets treats the "leading indicators" seriously, despite what you read in news stories. The LEI is just a combination of already-released data, after all. It is useful for story-telling economists who want to explain what has happened with a single summary indicator.
Those news stories you see bear little resemblence to what actually is happening in the market; they just plug in the latest economic number and change the headline whether the markets are up or down. On a day with swinging markets, the headline changes can be pretty funny.
bond guy- Although I live in the US, I'm Canadian and follow Canada closely and go there very frequently. As of a few weeks ago, the Bank of Canada was not prepared to say the country was in recession, though some private economists differed. Jobs are still growing and with the recent rise in commodity prices and the TSX at all-time highs, my guess is Canada will avoid recession. Anecdotally, when I go to Montreal (my daughter lives there) there is construction everywhere and downtown stores are crowded. I have been there in many previous recessions and this does not feel like one.
The more general point regards the US consumer. No question they are feeling stress. However, unlike in the past when they were often the sole locomotive, now the train has several locomotives. If US spending is flat, BRIC and associated countries are up 8-10% and Europe is up 2-3% the aggregate is still positive. I would point out that many countries have very high savings that can cover short-term weakness and have considerable pent-up demand for products that they have only had access to recently.
"Yes, but the stock market IS A LEADING INDICATOR."
Which is why it's down YOY and for the year.
Some smart cookies valuing that market last summer, that's for sure.
"Out of curiosity, when the LEI was falling in Jan-Mar, what would your reaction have been if someone suggested taking out the stock market because it was dragging down the index?
I thought so....
(And they say the MSM is 1-sided)
Aheadofthecurve"
Nice straw man, and answering the question yourself, even.
Wow, you are a big man.
Many of the large cap companies that make up the DOW and S&P 500 are seeing better earnings only because of a favorable exchange rate from foreign sales, especially the EURO. Many of those products are made and sold outside of the USA. This does nothing for the U.S. economy or its citizens. Americans are fairing poorly and it shows.
As my SRS falls to Earth, this rally compells me to now start a position in TWM.
Official recession or no, Joe&Jane consumer are in bad shape and there is plenty of reason to believe they'll be in even worse shape a year from now.
Sorry, I'm sure this has been covered before, but don't you have to be careful when inferring reduced economic vigour from same-store sales numbers, as there is a risk of competitive inhibition from new stores?
Overall I think home improvement sales will go up. Have you seen the shape most of the sold REO's are in? Lots of trips to the closest home improvement store are in a lot of new homeowner's future.
Re: Mystery of continued economic growth
What if we throw into the economy cash from millions of people with more to spend because they aren't paying their mortgage. That would help stave off the recession and might rival the contribution of the "stimulus" checks.
Cyclista
Cyclista: Yes! Free housing for all the people! Down with the rentier class! Viva la revolución!
Bailey: I never really expected anyone here to ever mention Izzy Stone. Maybe I'll stick around...