Econ 2009

[cheesehead]

Originally Posted by ewmayer

My Comment: Barry Ritholtz thinks team Obama made a huge blunder by punting on any serious fiunancial-industry reform and instead attempting an overhaul of healthcare:

Tactical Error: Health Care vs Finance Regulatory Reform

Now, there's a sound reason not to have pushed through health-care insurance reform this year.

Republicans should have been arguing on that basis all along instead of making up distortions!

Hmmm... but that would've required admitting the need for financial regulatory reform, wouldn't it? Too close ... much too close, for today's GOP to admitting responsibility for the financial crisis. They should ask themselves, "What would Barry Goldwater (http://en.wikipedia.org/wiki/Barry_Goldwater) have done?"

[ewmayer]

Daily mail: The Ghost Fleet of the Recession

The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination - and is why your Christmas stocking may be on the light side this year.

My Comment: Some great pics in that article. I'm not convinced that there is in fact anything particularly "secretive and nefarious" about the giant floating pod of idled container ships, but the fact is, in a normal year those ships would be busy right now shipping billions of Asian-made goods to the West for the Christmas shopping season.


Judge Rejects "Sweetheart Deal" Between SEC and BofA For Merrill Bonus Case

[U.S. District Judge Jed] Rakoff, in his ruling, found that the proposed settlement "suggests a rather cynical relationship between the parties: the SEC gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger, the bank's management gets to claim that they have been coerced into an onerous settlement by overzealous regulators. And all this is done at the expense, not only of the shareholders, but also of the truth."

My Comment: Meanwhile, NY attorney general Andrew Cuomo is preparing civil charges against several high-ranking Bank of America executives over the bank's alleged failure to disclose details about its acquisition of Merrill Lynch. Now all we need is someone with the clout and the cojones to file the much-needed and thoroughly justified *criminal* charges of securities fraud against BofA CEO Ken Lewis for violating his charge to shareholders in re. the Merrill acquisition, and conspiracy to commit securities fraud against former Treasury Secretary Henry Paulson and Fed Chair Ben Bernanke for coercing Lewis into going through with the Merrill deal even after Lewis discovered that Merrill`s balance sheet was rotten to the core.

[cheesehead]

Originally Posted by ewmayer

Daily mail: The Ghost Fleet of the Recession

Wow!

[R.D. Silverman]

Originally Posted by ewmayer;189787[i

My Comment:[/i] Meanwhile, NY attorney general Andrew Cuomo is preparing civil charges against several high-ranking Bank of America executives over the bank's alleged failure to disclose details about its acquisition of Merrill Lynch. Now all we need is someone with the clout and the cojones to file the much-needed and thoroughly justified *criminal* charges of securities fraud against BofA CEO Ken Lewis for violating his charge to shareholders in re. the Merrill acquisition, and conspiracy to commit securities fraud against former Treasury Secretary Henry Paulson and Fed Chair Ben Bernanke for coercing Lewis into going through with the Merrill deal even after Lewis discovered that Merrill`s balance sheet was rotten to the core.

Yep! Add the senior execs at UBS to the list. They need to be
charged as well. Did you see my "bank fraud" post? There were no comments.

[garo]

From Barry Ritholz:

My friend Scott is a hedge fund manager who noted the following, with just a trace of irony in his voice:

Joe Stiglitz, in an interview from Paris with Bloomberg over the weekend, noted that “if workers do not have income, it’s very hard to see how the U.S. will generate the demand that the world economy needs.”
With all due respect to a Nobelist who’s been on the right side of many of the economic debates of the last few years, I’m surprised that the obvious and simple answer to declining worker incomes in the United States escaped him: We all become banks, borrowing short from the Fed at zero interest, and lending long to the Treasury at 330-370 basis points. The profits from that trade can be invested in the stock market, so that we can all diversify our income streams.
Presto, household balance sheets repaired, and we’re off to the races again.

Sounds like a plan, Scott!

[ewmayer]

Originally Posted by R.D. Silverman

Yep! Add the senior execs at UBS to the list. They need to be charged as well. Did you see my "bank fraud" post? There were no comments.

Saw it ... there's been no shortage of UBS-related ink in this thread, either ... I fear you alienated our regular econo-addict readers by "posting off the ranch", though. It makes it harder to engage in "one stop news shopping" when the discussion gets fragmented across multiple threads.

Originally Posted by garo

From Barry Ritholz:

Profound statement there by Mr. Stiglitz ... interestingly, such hyper-technical economic subtleties (the technical phrase here is "broke consumers spend less than flush ones") appear to have escaped 90+% of "mainstream economists" - meaning the ones directly or indirectly on the Fed's payroll, as Garo's recent link describes.

One of the regular reader/commentators over at ZeroHedge had an interesting take on why it's so important for the government to peddle the we are in recovery mode, though it will be difficult fiction for all it's worth. Ostensibly it would appear to be about instilling consumer confidence, thus getting tight-fisted fraidycat consumerBots to open those wallets - erm, I mean whip out those brand-new 29.9% APR TBTFBancorp credit cards with their "new, improved - now even higher!" $50 late fees - and start buying Asia-made crap to fill up their SUVs and McMansion garages again. But c'mon, these folks running the White House EconoShow (Geithner, Summers, Bernanke et al) may be venal but they aren't stupid - surely they realize that the hyperaccumulation of debt of the past 2 decades was simply not sustainable, and that it has left Americans with an unprecedented, crushing load of debt. They can try and hope to reflate the housing market on the hope that gains in paper values of housing will at least reduce the fear factor, but they cannot seriously believe that rampant spending-way-way-way-beyond-our-means consumerism is coming back any time soon, especially with real wages flat-to-negative for at least a decade now. (A fact which the debt explosion helped masked - but only temporarily). So why the huge propaganda push to sell "Green shoots" on credulous economist and media? Here's a more-plausible (at least to my jaded sensibilities) reason:

If Team Obama convinces most folks that the recovery myth is real, then, knowing that equity markets are currently being propped only by trillions in Fed-supplied liquidity seeking a home and (to a lesser extent) by late-to-the-recovery-myth fund managers cahsing yield and trying to make up for having missed the first few months of the Green Shoots Rally, they also realize that such markets are basically running on smoke and mirrors, there is really no wizard behind the curtain, and there will inevitably be some serious bad news hitting the proverbial fan in the coming months. The precise trigger is unclear (and perhaps unimportant) - failure of a large European bank with Eastern Europe bad-loan exposure (names like Fortis and Raiffeisen spring to mind), possible collapse of an Eastern European government, a collapse in the even-more-bubbleicious Asian stock markets once their investors realize just what dire straits the Asian export economies find themselves in, possibly political instability related to any of the global hot spots (Iran, Afghanistan, Iraq, N. Korea), maybe a major terrorist attack, what have you - bottom line is that the current stock market valuations have in effect baked in a near-term huge economic rebound which just ain't happening, and at some point the punch bowl *will* be taken away, and TSWHTF once again. So what then? Well, *then* the green-shoots peddlers can trot out fiction #2:

"Here we were well on the way to an economic recovery - our measures to stabilize the banking system and credit markets were working - just look at the prices of bank stocks for proof, folks! - and the president's stimulus plan was beginning to turn the dire jobs situations around, having Created or Saved^TM a million jobs already^* - when ___________________ unexpectedly occurred and nipped the incipient economic recovery in the bud. We can fix it and prevent Great Depression 2, but owing to the shock and fear caused by ___________________, we will require another round of heroic money-printing measures and several Trillion dollars more in bailout stimulus funding. Seriously, everything was going just peachy, and no one could have possibly foreseen ______________ happening - it was quite simply the Perfect Storm^TM that knocked a fragile (but very real) economic recovery flat on its back again."

---

^*At least according to our own internal models, which we can't reveal to you but whose reliability is beyond question - and you can take that to your nearest TBTF bank.

[ewmayer]

My fellow Americans, this wonderful news from comrade and hero-of-the-Party Ben means that you can immediately go back to spending 200% of your disposable income ... and make sure to thank your heroic saviors, comrades Obama, Bernanke, Geithner, Summers et al. Give 'em all Medals of Freedom (like the one comrade Greenspan got from Dubya Bushchenko, but these here should be solid gold) and start naming babies after `em.

But, what is that the "lunatic fringe" of economic naysayers are whining about? Sorry, my poor misguided nattering negativists, your cries of "Not a single one of the underlying issues at the root of the crisis has been addressed in any meaningful way" and "Most of the too-big-too-fail banks are now bigger and taking even more risk than before last year`s debacle" are falling on deaf ears among the party apparatchiks. Like this Shedlock fellow ("Mish" ... as if merely taking a self-styled Russian-style nickname could get you an "in" with the party) who whines about credit-card default rates hitting ever-new highs:

Bank of America, Citigroup, Credit Card Defaults Soar To New Highs

Bank of America Corp and Citigroup Inc customers defaulted on their credit card debts in August at the highest rates since the onset of the recession, a sign that the banks' consumer lending woes are far from over.

"The defaults are a wake-up call for those expecting a V-shaped recovery," said Elliot Spar, options market strategist at Stifel Nicolaus & Co.

Bank of America said its charge off-rate -- loans the company does not expect to be repaid -- rose to 14.54 percent in August from 13.81 percent in July.

Citigroup, the largest issuer of MasterCard-branded credit cards, said its charge-off rate rose to 12.14 percent in August from 10.03 percent in July.

The charge-off rates for both Citi and Bank of America, two of the biggest recipients of U.S. government bailouts, were the highest yet during the financial crisis.

Or this Denninger fellow here - probably a closet Teabagger or socialist (with a name like "Karl" with a "K" he's probably a national socialist, if you get my drift):

Geithner, Paulson, Bernanke, Bush, Obama: all have emphasized that "we must get more credit to consumers and businesses" as their primary mantra ever since this crisis began.

They are pressing this position because if we do not expand credit further the existing banks and other institutions that have bad debt on their books will collapse - and they know it.

The correct action to take in 2000 was to force the bad credit from the system and accept the impact on GDP. It would have caused about a 10% contraction in GDP at that time - a mild Depression (or a really nasty recession, depending on how you count it.)

Now, having instead blown another credit bubble, we essentially doubled the debt in the system over the last ten years, while GDP grew by about 40%.

The result of this was a horrible stock market crash, 6.7 million jobs lost (and underreported), personal income tax receipts are down 21%, corporate tax receipts are down 58%, the deficit is tracking at $1.8 trillion this year alone (and $9 trillion more predicted over the next decade), government is now spending nearly 200% of taxes taken in, 13% of mortgages are either delinquent or in foreclosure, more than 20% of all FHA loans are delinquent or in foreclosure, home prices have fallen by half in many places and are not done declining and the rest of the world is wondering if we're going to try to hyperinflate and destroy our currency.

If we try to double our debt once again over the next ten years we won't make it there. The available free cash flow cannot support the interest payments now, and won't be able to if we add more debt to the system.

I understand the political difficulty of closing all the major banks in the United States, selling off their assets and making good on their deposits when required. I recognize the damage this will do to pension funds and bond investors. I am fully cognizant of the fact that this means taking an intentional depression here and now.

But if we don't it will in fact be worse later.

Not "might" be worse.

WILL be worse.

The odds are high that if we attempt to add more debt to the system, instead of clearing debt through defaults and bankruptcies, that we will precipitate not only a Depression but a full-on monetary collapse.

Or this nutty fellow Chris Martenson here, who presents some amusing "horror fiction" tales about playing shell games with debt:

The Five Horsemen

believe that a diminished standard of living is in the future for each of the major economies across the world especially those where the inhabitants have been living beyond their means.

Another belief I hold is that any period of living beyond one's means must certainly be followed by an equivalent trough of living below one's means. For example, if you produce 100 but consume 110, then at some point you will need to produce 100 but only consume 90.

There are two ways that we might expect this period of adjustment to unfold economically. I laid out the basic elements in Crash Course: Chapter 12 - Debt. When too many claims (debts) are laid upon the future the only question is whether those debts will be defaulted upon or paid back (with "inflated away" being a form of default). If all those claims are destroyed by default, then the reduction in future living standard falls to the holder of the debt(s). If the debts are paid back, then the debtor must accept that they will have less money to spend on consumption. Either way, somebody has less coming to them in the future than they either expect or currently enjoy.

Stretched across an entire nation, too much debt becomes an unsolvable problem, a predicament, due to the fact that no benefit accrues from shifting the burden of bearing the impact of default from one sector to another. Shifting a promissory note from one pocket to the other does not change the net worth of the individual and this tactic is equally ineffective for an entire country.

Thus the fact that the US government is assuming massive piles of bad debt from stricken financial corporations does nothing to solve the underlying problem, which sprouts from a nation that has overconsumed for decades. But this is exactly what the government is doing, and the goal seems to be to preserve the status quo at all costs.

He also whines in pathetically unpatriotic fashion about government "stimulus" money nearly always being a gross misallocation of capital (or more properly, misallocation of capital which is accompanied by increased debt):

The problem and the mindset of the economic elites are neatly revealed in this quote:

May 30 (Bloomberg) -- World Bank President Robert Zoellick warned policy makers that fiscal-stimulus plans are insufficient to turn around the “real economy” and rising joblessness threatens to set off political unrest across the globe.

“While the stimulus has given an impulse, it’s like a sugar high unless you eventually get the credit system working,” Zoellick said in an interview yesterday

I like this quote because it distinguishes between the "real economy" and the economy resulting from excessive government borrowing and spending. Stimulus money is almost by definition wasted money because the probability of it resulting in proper investment is so low. The gains from stimulus money run out the very second the juice is turned off.

But it is the second part of the quote that is revealing - "...unless you eventually get the credit system working..." - apparently those in charge find it unthinkable that an economy could be built on anything other than credit.

An alternative quote expressing a more fundamental view would read, "While the stimulus has given an impulse, it’s like a sugar high, unless it is followed by growth in wage-based income".

The difference between the real quote and the one I provided is like night and day. The Zoellick quote assumes that our past period of living beyond our means is recoverable and extensible, and mine does not. Mine assumes a long-term relationship exists between what people earn and what they can spend. In order for us to service our past debts, we need to grow our incomes, not our access to easy credit.

There is a mathematical limit to this "game," at which point it cannot be carried on any longer. I think we have reached the outer limits of our debt-fueled fantasy, although I recognize that the extreme efforts to carry it on a bit longer may well produce short-term results.

The most obvious and mathematically-defendable end of a credit economy comes when interest payments exceed all income. However, things rarely progress that far, as the trouble becomes painfully obvious far earlier and creditors withdraw their continued support.

How will I know that the participants in this game have finally caught on to the fact that it's over? Here are the five game-changing events that will indicate that the rules have changed and a new reality is about to take over. As I mentioned, I have been tracking these for years and, unfortunately, been watching them unfold one by one...

[cheesehead]

Originally Posted by ewmayer

Or this nutty fellow Chris Martenson here, who presents some amusing "horror fiction" tales about playing shell games with debt:

The Five Horsemen

Ernst,

Thank you for linking to Chris Martenson. I've read through most of his "Crash Course" (http://www.chrismartenson.com/crashcourse) and find it sensible and well-written, connecting key concepts quite well.

I think the Post Carbon Institute and he are slightly premature in their Peak Oil timing

Originally Posted by http://www.postcarbon.org/manifesto/

The world almost certainly experienced peak oil production last summer

Originally Posted by Chris Martenson

You have to find oil before you can produce it, and Key Fact #1 is that world oil discoveries peaked in 1964. US discoveries peaked in 1930, and 40 years later production peaked. We are now 44 years after the global discovery peak. Key Fact #2 is that world production of conventional crude has been flat for the past four years, even as prices have increased by 140%. Taken together, Key Facts #1 and #2 suggest the possibility that Peak Oil is already upon us.

but by only a few years.

(My most specific prediction yet: the year with peak global oil production will eventually prove to have been either 2013, 2014, 2015 or 2016. Of course, it may take several more years to have widespread agreement that that peak will not be surpassed sometime after 2016.)

I do agree that the next twenty years are not going to be like the past twenty years.

[garo]

So the Irish government announced its plan to purchase 47 billion Euro of assets for 54 billion Euro from a bunch of banks yesterday. To keep things in perspective, the population of Ireland is about 4.25 million so this amount to 12,000 Euro for every man, woman, child and dog.

Knowledgeable people (http://irisheconomy.ie ) know this is a ripoff and a wholesale transfer of wealth from the taxpayer to the shareholders. Irish bank shares are up 15-25% so evidently the market agrees. Ireland is so so screwed!

[ewmayer]

Originally Posted by garo

So the Irish government announced its plan to purchase 47 billion Euro of assets for 54 billion Euro from a bunch of banks yesterday. To keep things in perspective, the population of Ireland is about 4.25 million so this amount to 12,000 Euro for every man, woman, child and dog.

Knowledgeable people (http://irisheconomy.ie ) know this is a ripoff and a wholesale transfer of wealth from the taxpayer to the shareholders. Irish bank shares are up 15-25% so evidently the market agrees. Ireland is so so screwed!

Garo, given that U.S.-side "AAA rated" MBSes are currently trading (in cases where the owner is not in a position to offload them at par onto the Fed's balance sheet in exchange for U.S. Treasuries) at around 25 cents on the dollar, even the nominal 47 billion Euro valuation of the loans in question is likely a gross overestimate. have you seen any informed commentary on the "quality" of the so-called "assets" in question?


ZeroHedge has an excellent follow-through (which anyone with decent internet bandwidth can replicate themselves) on the above-linked "Ghost fleets of the recession" article:

Thousands Of Rusting Ship Hulls Are A Fitting Tribute To The Speculative Market Bubble

Zero Hedge decided to probe this idea further, and for that we took advantage of the very useful real time ship tracker functionality provided by vesseltracker.com (any reader who has Google Earth can easily replicate these results using the following data file).

[see above article for pics and region-by-region details]

The bottom line: world trade has collapsed, shipping lines, once flourishing, have become graveyard archipelagos populated by rusting ship skeletons. Yet all of this is beyond the land, and thus far from sight. Of course, who needs trade when you have a speculative market trading in its own bubble, hitting yearly highs day after day, thanks only and exclusively to the Chairman's printing press.

CNN Poll: U.S. still in a serious recession: Poll says 86% of Americans believe the U.S. is still in a recession, while Fed chairman is more optimistic.

WASHINGTON (CNN) -- Americans are not nearly as optimistic about the economy as the chairman of the Federal Reserve seems to be, a national poll released Thursday shows.

Eighty-six percent of those questioned in a CNN/Opinion Research Corporation survey said they think the United States is still in a recession, with 13% saying the nation's economic downturn has ended. According to the poll, 42% say the country is in a serious recession, 35% call it a moderate recession, and one in 10 characterize it as a mild recession.

Earlier this week, Federal Reserve Chairman Ben Bernanke said the recession is very likely over, although the job market will continue to struggle for some time.

My Comment: How dare they refuse the delicious Kool-Ade provided for them free of charge by comrade Bernanke and his cadres of Green-Shooters? I'm afraid it's an early bedtime without American Idol for you, young man!

The poll also suggests that only a small minority, 9%, say their family's financial situation is better now than it was a year ago. Nearly four in 10 say they're worse off now than they were a year ago, and just over half said their family's financial situation was about the same.

My Comment: A.k.a. "The roughly 9% of people polled whose income derives from the banking and financial sector say their family's financial situation is better now than it was a year ago..."


Benmosche Said to Be Rebuffed by AIG Board on Personal Use of Company Jet: American International Group Inc. Chief Executive Officer Robert Benmosche was rebuffed by the insurer’s board after saying he should be allowed personal use of the bailed-out company’s aircraft, according to two people familiar with the matter.

The board said flights will be limited to business purposes because an exception would require permission from the Treasury Department, said one of the people, who asked not to be identified because the talks were private. AIG posted an expense guideline on its Web site this week, saying personal use of corporate jets is “strictly prohibited.”

My Comment: Bob, I asked Timmay over at Goldman Sachs Government Operations Group Treasuray about this, and he says go ahead and fly the family (or the mistress[es], heh heh) around in style, but because of some wacky "appearance of impropriety" bullshit, ya gotta at least pretend you`re flying to some "industry conference" or "corporate strategic retreat", you know, the usual BS we spoon-fed the media before the crisis. And remember to stock a closet full of business suits to dress the hookers up in - I bet they`ll love playing "executive assistant", you naughty dog.

Breakdown of Today`s "Green Shoot"

So the markets liked this bit of alleged "good news" today:

Philadelphia-Area Manufacturing Beats Forecasts as Fed Index Jumps to 14.1: Manufacturing in the Philadelphia region expanded more than forecast in September as sales advanced at the fastest pace since the recession began.

Sounds pretty damn "positive for the economy", don`t it? Alas, the delusional look-only-at-the-headline-number-and-ignore-the-messy-details behavior here is so blatantly ignorant that it makes for an amusing exercise to (as we always strive to do here) look behind the numbers:

This is what happens when you listen to the fools on CNBC proclaiming "green shoots!"

*SEPT PHILADELPHIA FED INDEX: 14.1 V 8.0E
**sub-Indices:
- Prices Paid: 14.9 v 10.0 prior
- New Orders: 3.3 v 4.2 prior
- Employment: -14.3 v -12.9 prior**
- Inventories: -18.1 v 0.3 prior
- 6-month business conditions outlook: 47.8 v 56.8 prior

See the problems in here?

Prices paid up. By 50%. That's not good - what does that do to margins? Only two choices there, right? Pass it through or eat it.

New Orders: Down. That's not so good either, right?

Employment: Down. With what will consumers buy your products that now have input costs rising? Their disappearing paychecks or their good looks?

Inventories: Where?

6 month business conditions outlook: Flagging.

Given the above how tough is this one to figure out?

So this "improvement" is all prices paid skyrocketing?

This is good?

My Comment: Given that the only thing in the manufacturing index which actually "expanded" was PRICES PAID BY MANUFACTURERS, to characterize that as "manufacturing expansion" is beyond mere bullish spin - it`s a flat-out, bald-faced lie. Now I`m not surprised to hear the corporate-owned touts at CNBC make these kind of claims, but I used to expect better from Bloomberg, which has in the past year alas gone more and more down the CNBC route.

[cheesehead]

Originally Posted by ewmayer

My Comment: Given that the only thing in the manufacturing index which actually "expanded" was PRICES PAID BY MANUFACTURERS, to characterize that as "manufacturing expansion" is beyond mere bullish spin - it`s a flat-out, bald-faced lie. Now I`m not surprised to hear the corporate-owned touts at CNBC make these kind of claims, but I used to expect better from Bloomberg, which has in the past year alas gone more and more down the CNBC route.

Will you please link to some well-informed explanation of what each index and subindex means in that Philly Fed report?

That comment in "Idiot Parade (Philly Fed Index)" at The Market Ticker about the prices paid subindex
("Prices paid up. By 50%. That's not good - what does that do to margins? Only two choices there, right? Pass it through or eat it.")
seems based on a misunderstanding of what the "prices paid" subindex actually means.

It does NOT mean that prices paid rose 49% (10.0 -> 14.9) from one month to the next, as the idiot (Karl Denninger) at The Market Ticker seems to indicate. Is Denninger often so careless?

In fact, IT DOES NOT EVEN MEAN THAT THE AVERAGE PRICES PAID BY MANUFACTURERS ROSE AT ALL!!
(But there's probably a high correlation.)

Shouldn't the idea of a 49% increase in prices in just one month ring some interpretation-validity alarm bell?

Going back to the actual publication (http://www.philadelphiafed.org/resea...09/bos0909.pdf), we find that the monthly Philadelphia Fed survey is a poll (like a Gallup Poll) of opinions and expectations, not a measurement of objective numbers. The "prices paid" subindex is NOT some arithmetical average of prices.

It's a little bit like the election-night surveys of people exiting polling stations -- the figures are what people SAY they did, NOT the actual vote tallies of an election.

What the Philly Fed does is ask a sample of manufacturing businesses whether the prices they paid for their raw materials (actually, "purchased inputs") rose, fell or stayed the same last month compared to the month before that. Then they subtract the percentage of respondents who answered "fell" from the percentage of respondents who answered "rose", ignoring those who answered "stayed the same", and publish that figure as the Prices Paid Diffusion Index.

The current report shows that 24 percent said that their prices paid for "purchased inputs" increased, and 9.1 percent said they decreased.

24.0 - 9.1 = 14.9, and that's the Prices Paid subindex figure.

That's all it means.

Perhaps prices paid rose an average of 10% for 24% of respondents, but prices paid fell an average of 40% for 9.1% of respondents.

Or maybe the 24% of respondents had total "purchased inputs" of $1 billion, at higher prices, while the 9.1% of respondents had total "purchased inputs" of $56 billion, at lower prices.

Or maybe some respondents were lying.

- - -

BTW, the -18.1 figure for inventories is a bullish figure, not a bearish one, even if it is just what people are saying.