BNP Paribas On US Inventory Dreaming ...

I was looking at the chart prepared by the economists of BNP Paribas today...
Stunning feeling just thinking about the "green shoot screamers" of "extraordinary inventory adjustment" so far ...

Just to add the economic context, here is what the economists at BNP Paribas write:

The need to reduce inventories much further is very apparent from the lofty level of the present business inventory sales ratio. This ratio, which spans manufacturers, wholesalers and retailers, presently stands at 1.44% marginally down from a cycle peak of 1.46%. In the last cycle the I/S ratio plunged to 1.35% in the subsequent 2 years.

Business inventories are expected to plunge in the last two months of this quarter when major automobile manufacturers and all of their suppliers suspend new vehicle production for two months. While this period will include the normal 2 week retooling shutdown in July the present decision lasting for 9 weeks will affect all suppliers such as chip makers, tire, glass, leather, plastic, aluminium, steel, axel and wheel makers, paint suppliers and all those other industries too numerous to account for. Auto inventories account for 14% of the stock pile of unsold business inventories and approximately 70% of these inventories are held at the retail level.