Saturday, August 1, 2009

Wall Street Journal Wrong About the Economy

High levels are bearish, meaning that businesses hold inventories that are too high. So they cut back on orders.

Yet, today's WSJ says "the need to rebuild inventories of everything from cars to furniture will by itself help to lift GDP for the rest of 2009."

This is WRONG. The chart shows a need to reduce them - by at least 10%, assuming sales stay the same.

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