Once you strip out the huge contribution from inventories, you can see what is really happening in the economy and it is far from encouraging. Real final sales are now estimated to have come in at a tepid 0.8% annual rate – down from the prior revision of 1.4% and the 1.6% rate of growth when the data were first released at the end of April. Over the past four quarters, real final sales – the key guts of demand in the economy – have registered the grand total of 1.2% at an average annual rate in what is the weakest recovery in modern history and must be viewed in the context of an unprecedented amount of bailout, monetary and fiscal stimulus lavished on the economy from the benevolent Uncle Sam. To put this 1.2% pace in perspective, this is less than one-third of the 41⁄2% bounce in real final sales that is typical of a post-WWII recovery. If a one-handle is the ‘new normal’ rebound, someone better tell the consensus bottom-up crowd who cling to the view that we are miraculously heading back to peak corporate earnings as early as next year.