Remember back in early 2008 when the Presidential election was in full swing and the majority of financial and political pundits were hailing the booming American economy, record home ownership and never ending growth?
By the end of the year everyone had changed their tune and the United States of America was, as former Treasury Secretary Henry Paulson said, “on the brink” of an unprecedented collapse.
When the stock exchanges turned, credit markets froze up and the U.S. was in the midst of its worst recessionary environment since the Great Depression the oft repeated phrase “nobody saw it coming” was being peddled by the mainstream on every front in an attempt to convince Americans that the crash simply came out of nowhere.
The following analysis from The Market Ticker is a blaring alarm.
This time no one can say we didn’t see it coming.
An interesting paradigm shift is happening here.
I monitor lead times and vendor fill requirements on a fairly regular basis, including from some big e-Commerce folks.
In the last couple of months I’ve noted a rather dramatic shortening of inventory lead times from them — that is, expectation that if you are a vendor you will be able to ship product to them much faster than before.
Some of these shortenings are really dramatic — 50% or more. Amazon, in particular, is getting extremely aggressive in this regard.
This implies that the inventory drawdown we saw in 1Q GDP revisions is going to continue.