Drug Screens and Inventories

Inventories matter.

High inventories equal low demand or a bottleneck, meaning you can't get the stuff out faster than demand is building up or coming in. Think bathtub here. Low inventories are usually just the opposite, very little demand or can't keep up with what demand there is. If housing or energy, as in oil or natural gas, come to mind, you're onto to something. But you could just as easily toss in things like credit, money and jobs. Or Drug screening.

Drug screening is a huge part of employment these days. Companies routinely require it for many new hires. They also do random drug screening. Back when the economy was riping and roaring, a friend of mine who owns several industrial medical clinics used his own private economic indicator, pre-employment physicals. When the economy is good and firms are hiring, his daily numbers soared.

One day he called me, somewhat exasperated: "Man, I'm going to have to hire more staff.  It's so tight out there, a lot of firms are even hiring people whose tests are coming back positive. They don't care." They needed bodies. Supply wasn't keeping up. Anyone who really wanted a job back then could've had it. So much for the cry-babying-full employment crowd. They never get it. Not everyone wants a job.


A funny thing happened in late 2007. His numbers started to change. Like many things at first it was just a trickle. The rest of the story we already now know. With unemployment much higher than the government wants us to believe, an over-built housing market and a horde of tapped out consumers, an administration and a Congress that apparently haven't got a clue, the Ben Bernanke Printing Company, one could ask oneself: what's the nation's inventory?

Just for kicks, toss in the fact that the EU has a severe case of fiscal ptomaine poisoning and is looking for a place to conveniently upchuck; and you may get some idea that, as one of America's great metaphysical philosophers, Yogi Berra, said: "It ain't over until it's over."

How long is it going to take? As long as it takes. In the meantime, keep your eye on those inventories, especially your own.