Having risen to its highest level since the middle of the last two recessions, wholesale inventories-to-sales ratio remains at cycle highs at 1.31x. With wholesale sales and inventories both rising 0.5% (both more than expected), however, the absolute difference between sales and inventories has never been higher, leaving either major inventory liquidation ahead (or a miracle in sales). Wholesale inventories have now risen 4.7% YoY, as Sales have fallen 3.9% YoY. Finally, Auto inventories-to-sales ratio dropped very modestly (thanks to the surge in sales), but remains deep in 2008/9 crisis territory.

If we keep building it... they are just not coming...

Recession anyone?

As Automakers inventories remain at cycle extremes...

The absolute spread between inventories and sales has never been wider...

What happens next? The Fed is the only thing "enabling" zombie firms to carry such huge amounts of inventory... and they are about to leave the party.

Charts: Bloomberg