09/16/22

Embedded Inflation

Do y’all recall when inflation was “transitory?” When the Secretary of the Treasury and the POTUS used to assure us that inflation was going to come and go? That the target would continue to be 2% – which, in fact, it had been?

Well it’s more than a year later and, clearly, that is not going to happen. In fact, we are in this inflationary spiral for the long term — meaning three years until there is any relief.

How did we get here, Big Red Car?

Let’s review the bidding to see how we got here, shall we?

This chart is not lying to you. Study it.

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08/11/22

Testing The Depth Of American Stupidity

Yesterday, the Consumer Price Index report came out showing that the CPI increased by 8.5% (seasonally adjusted) year-over-year. This means that the CPI is 8.5% higher than it was in July 2021.

Wages were 5.5% higher, so you only lost 3% in buying power. Haha. Sorry.

[I personally find this incomprehensible as every commodity and food stuff I look at is wildly more expensive over the last year than 8.5% — eggs are up by 40% — but that’s just me.] Continue reading

05/12/22

The Grinding Pound of Inflation

Ten minutes ago, the Bureau of Labor Statistics released its Producer Price Index numbers for April 2022 – this is, of course, a month in arrears. The print was 11% meaning the cost of final demand goods from producers was up 11% when compared to April 2021.

These are Jimmy Carter numbers.

This is the fifth month in a row in which the annualized increase was double digits — again, when compared to a year earlier. Continue reading

02/2/22

Governors and Jobs — The Big Tell

Lousy jobs report coming out on Friday showing the United States lost more than 300,000 jobs in January 2022. Hello, America! Not good.

The White House is working overtime trying to come up with some explanation as to why the “fastest economic growth in nearly four decades” misses the mark by more than 500,000 jobs in a single month [expected 200,000+ new jobs and will show a loss of 300,000+ jobs resulting in a 500,000 + jobs miss, ouch!]. This is a huuuuuuuuuuuuge miss.

In a storm of record inflation the Biden jobs record — primarily a dead cat bounce by all indications — was the only actual bright spot on the big picture.

A dead cat bounce has nothing to do with Catwoman, who is very much alive and contemplating a remake of her iconic movie. It is a technical term of financial art meaning that even a cat dropped from a great height bounces upward when it hits rock bottom. [It is presumed the cat dies from the fall.]

But, that is not the story I want to tell you today. Continue reading

12/15/21

The Power Shift — Workers Of The World Unite — Inflation

In the changing world in which we live, even the most Old School manufacturing companies are finding themselves having to change their ways to find, hire, and retain workers.

John Deere makes farm and construction equipment and its work force is unionized under the United Auto Workers.

Production lines at Deere are hard places to work and it takes a toll on a woman’s/man’s body.

The UAW has had a hard time convincing Deere management to increase wages and the UAW would admit that for the last 20-30 years they had their asses handed to them in every contract negotiation.

Meanwhile, the company has done well with a CEO making $16,000,000, a 160% increase when compared to 2019. This is 220X the average worker at Deere.

“My name is John May and I’m doing good. I’m the Chairman of the Board of Directors and the CEO of John Deere.  Let’s play 36?”

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12/13/21

The Inflation, CPI, PPI, Earnings Boogie

I think everyone in the United States understands we have entered a period of increasing prices — inflation. Nobody thinks it is actually going to be transitory.

Even the Biden admin says it’s going to be here through the end of 2023 after suggesting it would magically disappear by the end of 2021. Nay, not so.

Those who are students of the economy will fairly point at the extraordinarily naïve energy policy actions of the Biden admin as a trigger point or at least a milestone.

Nobody has missed that the price of gasoline has doubled since Joe Biden took office.

Glendale, California

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12/3/21

Inflation Is NOT A Headfake

It is too late already to unleash any definitive knock out punch against inflation. Damn it, it isn’t TRANSITORY. Stop that nonsense.

“Do not listen to this Big Red Car. Inflation will be 2%. Trust me. OK, maybe 4%. Sorry, PPI is 8.6%, so CPI will be double digit, but it’s TRANSITORY. It’ll come down in 2030 or 2035. I promise. My husband is one of the 17 Nobel economists who says Build Back Bolshevik will cure male pattern baldness. He can’t be wrong.”

It is here; it is deep; it is pervasive; and it isn’t going away any time soon. Continue reading

10/30/21

Tech City Rent As A Measure Of Inflation

I am a little fixated on inflation these days. I look at modestly obscure sources of data to try to track the old bitch so when I read an article on average apartment rents in tech city markets, I had to bring it to your attention.

Let me cut to the chase.

 1. Rents went down a little during the pandemic. The general sense is that rents went down about 5% nationwide.

 2. With the advent of the vaccine, rents began to turn around and climb upward as folks began to return to offices and the migration to tech meccas resurged, and folks began to quit jobs to get better jobs (and better apartments).

Rents are up 25% in Austin By God Texas. Hello, America, can you say INFLATION?

Austin By God Texas

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