Rising Prices and Inflation, with Dollars and Houses caught in the undertow.
Convinced the Fed has failed now, Amurkn shit-eater?
"Maybe Inflation Is More Than a Sideshow" by PAUL J. LIM
By many measures, inflation is rising — yet investors seem to be thinking less about it.
The most recent Labor Department inflation report, based on September data, shows the Consumer Price Index climbed 2.8 percent over the past year. Gold prices are now around $780 an ounce. Oil recently hit $90 a barrel for the first time. Yet even against this grimmer backdrop, less than a third of fund managers now think that inflation is a threat.
Of course, these fund managers aren’t alone in believing that inflation is either dead, dying or no longer a serious concern.
Even the Federal Reserve is talking less about inflation as it focuses on trying to stoke an economy that’s being pressured by ailing credit and housing markets. Inflation went from being a front-burner issue to almost an afterthought.
To be sure, many investors and economists are convinced that inflation is under control. And a number of government statistics support this.
Believe these rose-colored liars?
A turd still smells like a turd!
For instance, so-called core inflation readings, which strip out volatile food and energy prices, have been mild for some time.
They strip out "volatile food and energy prices" when they calculate inflation?
Then it is a LYING, LOWER-than-REALITY, BULLSHIT number!!!
Those things are poking the Amurkn people in the ass!
Paul L. Kasriel, director of economic research at Northern Trust in Chicago:
“Inflation, despite some sharp increases in food and energy prices, has really been fairly tame on a year-over-year basis.”
Maybe for you, richer! I'm getting stuck! And I'm hungry!
Michael J. Cuggino, manager of the Permanent Portfolio, a mutual fund, says we shouldn’t rely exclusively on core C.P.I. data because “in reality, businesses need energy and people need to eat.”
And government data show that the costs of food and energy are going through the roof.
Poke, poke, OWWWW!!!
For example, in the first nine months this year, food and beverage prices rose at a seasonally adjusted annual rate of 5.7 percent. Transportation costs jumped at a 6 percent annual clip. For energy, the figure was even higher: nearly 12 percent.
Translation: You've been fucked, Amurka!
There are a couple of reasons that investors may want to keep an eye on inflation:
RISING PRICES IN CHINA In the past few years, the United States economy has essentially been importing deflationary pressures by buying goods from China. And that’s kept overall prices in check.
But Thomas H. Atteberry, co-manager of the FPA New Income fund, notes that inflation in China has begun to soar as the economy grows and as millions of new workers a year join China’s burgeoning urban labor market:
“Given that we import so much from China, this certainly doesn’t help.”
Looks like the Wal-Mart Smiley-Face will be spinning prices UP this year!!!
THE FALLING DOLLAR A weakening currency has always been thought to be inflationary, because consumers and businesses require more dollars to buy goods from overseas.
Over the last 12 months, the dollar has fallen more than 10 percent against a basket of foreign currencies.
Of course, this relationship isn’t perfect. After all, the dollar has been tumbling for nearly six years, and inflation has been rather benign throughout this decade. But Gordon B. Fowler Jr., chief investment officer at Glenmede Investment Management, an institutional money manager based in Philadelphia, says that “if there’s a run on the dollar, that would be very bad for inflation.”
That brings us back to the Fed. Robert D. Arnott, chairman of Research Affiliates, an investment management firm in Pasadena, Calif.:
"[The Fed is caught between a rock and a hard place. [If the Fed leaves rates alone, it] risks the markets cratering and the economy going from slowdown to possible recession. [But if it lowers rates again], the dollar would be at further risk.”
And that could prompt more inflation, which would be just as bad for the economy."
And your dollar will be worth less and less.
Better get used to a diet of shit the, Amurkn (chomp-chomp).
At least you have had a lot of practice!
"Beware of the Housing Fallout" by NELSON D. SCHWARTZ
THE official story on Wall Street last week was that subprime chickens may have finally come home to roost — in the form of an $8 billion write-down by Merrill Lynch — but that earnings growth in technology and other sectors was strong enough to insulate the overall market from the housing meltdown. After all, profits at favorites like Apple blew past expectations, pushing the iPod-driven shares up 8 percent.
But bubbling beneath the surface of the stream of quarterly earnings reports are worrying signs of just how far the pain of the housing bust may ultimately extend.
Instead, companies in sectors with less obvious connections to housing — like appliance manufacturers, carpet and furniture makers, and even chemical companies — are starting to feel the sting. That’s because their fates are closely linked to new home construction as well as sales of existing homes, both of which have fallen off a cliff this year and show no sign of coming back anytime soon.
Known as a RIPPLE EFFECT!
Toss a stone into a pond and see what happens.
You'll know what I mean!
Whirlpool shareholders got an unpleasant surprise when that appliance maker met profit projections but announced that sales were weaker than expected because of the housing slowdown. Whirlpool shares promptly fell 5 percent, and its stock now trades at $84, down from nearly $120 as recently as this summer.
New housing starts, meanwhile, are off 31 percent from where they were a year ago, according to Steven Wieting, an economist at Citigroup Global Markets:
“If you build one-third fewer homes, you’re going to sell one-third fewer washers and dryers into the new construction market. There’s a nine-month lag between building permits and housing-related durables, so we’re seeing that now.”
The housing abyss is also among the reasons that P. J. Juvekar, a Citigroup chemical industry analyst, is cautious about paint companies like Sherwin-Williams and Valspar, which sells paints for Laura Ashley and under its own brand. Valspar’s stock has been weak lately, but over the long term Sherwin-Williams has held up better: at $64, its shares are up 40 percent over the last two years.
In part, that’s because Sherwin-Williams sells heavily through contractors rather than the big-box stores that cater to do-it-yourselfers, who have been among the hardest hit by the housing slump.
So it is the LITTLE GUY taking it IN the SHORTS AGAIN!
Mr. Juvekar: “But 88 percent of Sherwin’s sales are in the U.S., and we think that eventually housing will catch up with them. And we’re keeping an eye on whether the weakness in residential construction is spreading to commercial construction.”
Alas, it could get worse. Mr. Wieting says he’s not optimistic about an immediate recovery in the housing sector, despite Wall Street’s hope that things may be bottoming out or that the Federal Reserve will come to the rescue with another rate cut:
“I think we could easily see new construction down again next year.”
Add the fact that mortgage rates have risen even as demand has weakened, Mr. Wieting says, and you’ve got an especially bleak picture.
Other groups that are vulnerable to fallout of the housing bubble’s implosion, Mr. Wieting says, include furniture makers, toolmakers, mattress companies, and glass and tableware manufacturers. Well-known furniture companies like Ethan Allen and Herman Miller are near 52-week lows, yet it still looks way too early to go bottom-fishing in even those sectors.
Somehow the richer-elites make out anyway, huh?
Wall Street is looking for earnings growth of 19 percent for the consumer discretionary sector in the coming quarter, according to First Call, which tracks earnings estimates. That’s down from projections of 22 percent at the beginning of October but still appears very rosy, given the recent round of earnings reports."
Can't you smell the turd in the room, though, Wall-Street shitters?
