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Previously, I’ve observed that S&P 500 revenues are highly correlated with both world industrial production and world exports. The same goes for these revenues and the CRB raw industrials spot price index. I am predicting that revenues will be up 5%-7% this year and next year.
If commodity prices weaken further, I will have to reassess this outlook, especially if the dollar continues to strengthen. There is a strong inverse correlation [...] From Azizonomics: This is a post in three sections. First, I want to outline my conception of the price level phenomena inflation and deflation. Second, I want to outline my conception of the specific inflationary case of hyperinflation. And third, I want to consider the predictive implications of this. Inflation & Deflation What is inflation? There is a vast debate on the matter. Neoclassicists and Keynesians tend to define inflation as a rise [...] Retail stores charge up to 350% more for products than online. A study shows online shops have enjoyed the lowest inflation level in five years due to the lower costs and high competition. The research, carried out by the UK internet service provider TalkTalk and the Centre for Economics and Business Research, found that online prices fell by 0.7% in the second quarter of 2012 compared to 2011, while in-store prices [...] That former San Fran Fed chairman Janet Yellen would demand more easing is no surprise: she used to do it all the time. That Fed Vice Chairman, and Bernanke’s second in command, Janet Yellen just hinted that she is “convinced that scope remains for the FOMC to provide further policy accommodation either through its forward guidance or through additional balance-sheet actions“, and that “while my modal outlook calls for only a [...] From Patrick Chovanec: As a prelude to a broader analysis of China’s GDP, and the accuracy of its official GDP figures, I want to start by examining the national real estate statistics for the first four months of 2012. This discussion feeds into the broader GDP picture, but the property story that has been unfolding is important and interesting enough to be worth taking a close look at on its own. Getting [...] It is funny to hear the talking heads preface virtually every bullish statement with “the US economic data is getting better.” It’s funny because it’s wrong. We have been tracking economic data based on our universe of indicators and as of today we have seen a miss rate of about 80%. And now, Deutsche Bank has joined us in keeping track of economic beats and misses, with their own universe [...] We also note that the average price for a gallon of gas across the EU is inching ever closer to the $10 mark.
Chart: Bloomberg
- ZH From All Star Charts: The CRB index represents a basket of commodities ranging from coffee and cotton to silver and natural gas. This is an important one guys. For over 50 years, this index has served as the most widely-recognized measure of the global commodity markets. “The Thomson Reuters/Jefferies CRB Index,” as it is more formally known, is comprised of 19 commodities. The ups and downs in the prices of these commodities [...] As WealthCycles.com pointed out in June last year, in The Price is Right, the index measuring price inflation from the point of view of the consumer, the CPI, has some stiff unofficial competition. Google has tracked web-traded goods in the Google price index (GPI), the Massachusetts Institute of Technmology tracks over a billion prices in the Billion price project (BPP), and the American Institute for Economic Research calculates the everyday price index [...] This is one of the clearest signs yet that the mood in Europe has totally changed. European banks are on fire. The STOXX Europe 600 Banks Price Index is up 3.3% right now. The big Italian bank UniCredit is up nearly 10%. Reuters’ Scotty Barber just posted this fantastic chart showing how low bank PEs are relative to the rest. Lots potential for them to rise, just if things don’t totally collapse. Source by ZH From the report: All Imports: The price index for overall imports fell for the second time in three months in August, decreasing 0.4 percent following a 0.3 percent upturn in July and a 0.7 percent drop in June. Import prices declined 0.6 percent over the past four months after rising 13.7 percent between September 2010 and April 2011. Overall, the index increased 13.0 percent for [...] From Jim Quinn of The Burning Platform QE2 – The Bernanke Chronicles Our self proclaimed “expert” on the Great Depression, Ben Bernanke, seems to be feeling the pressure. His theories worked so well when he modeled them in his posh corner office at Princeton. He could saunter down the hallway and get his buddy Krugman to confirm his belief that the Federal Reserve was just too darn restrictive between [...] The ailing US housing market passed a grim milestone in the first quarter of this year, posting a further deterioration that means the fall in house prices is now greater than that suffered during the Great Depression. The brief recovery in prices in 2009, spurred by government aid to first-time buyers, has now been entirely snuffed out, and the average American home now costs 33 per cent less than it did [...] It looks like The Billion Prices Project @ MIT brought back the USA inflation index? http://bpp.mit.edu/usa/daily-price-index… Richard Russell – China on Massive Gold Accumulation Program http://kingworldnews.com/kingworldnews/K… Global market pulp production increased by seven percent in 2010, which increased demand for wood raw-material. As a result, prices for wood chips and pulplogs were up in most regions of the world, according to the Wood Resource Quarterly. The Softwood Wood Fiber Price Index (SFPI) has increased 16.5 percent the past two years, while the Hardwood Wood Fiber Price Index (HFPI) went up 17.7 percent. For Immediate [...] The Credit Suisse proprietary survey of real estate agents showed a decline in homebuyer traffic for March. Homebuyers are seemingly waiting for more signs of a stabilising market. Importantly, the majority of activity is still concentrated across distressed listings (lower priced existing homes), which are driving the price of newly constructed homes down. Unfortunately, falling prices do not bode well for underlying construction activity, where builder margins [...] by ZH From Jan Hatzius’ instanalysis on Personal Consumption data. 1. Nominal consumer spending increased by 0.7% mom in February, but part of the large increased reflected price gains. Real consumer spending increased by 0.3% mom after an unchanged reading in January. The latest real consumption figures – including revisions to earlier months – point to growth for Q1 as a whole of approximately 1.75-2.0% qoq annualized. [...] The Billion Prices Project @ MIT The Billion Prices Project is an academic initiative that collects prices from hundreds of online retailers around the world on a daily basis to conduct economic research. We currently monitor daily price fluctuations of ~5 million items sold by ~300 online retailers in more than 70 countries. This webpage showcases examples of average inflation indexes that we created to illustrate the [...] by ZH We thank Sean Corrigan of Diapason Securities for bringing our attention to the MIT Billion Price real time inflation Index who points out that based on the ongoing surge in prices, which have increased by 1.25% in the last 25 days (December 31, 2010: 101.085, February 14, 2011: 102.353), a simple annualization indicates a 10.6% increase in prices in 2011! With all undue respect to the [...] by ZH The Dallas Fed prints at 10.9 and misses expectations. Stocks ramp as the miss would have been bigger if it had snowed in Texas, and so you must acquit. In the meantime, GETCO buying not just every single INTC share in Level 2 – 200, but moving on to everything not nailed down. Melt up must proceed as planned. Since this index missed and is thus [...] by ZH Below is an example of 20% inflation in the span of a few weeks, which will most certainly not be captured in government statistics of food inflation. Additionally, with cotton just opening 470 ticks higher and 30 away from limit up, we hope readers took our advice from a month ago. Courtesy of Survival Blog Carlos in the U.P. wrote: “I noted with interest that the Wal-Mart I [...] By Charlie Weston Thursday October 21 2010 THE average price of a house dipped below €200,000 for the first time since 2002, new figures reveal. A buyer of a house can now expect to pay €190,698, a national house price level not seen for eight years. House prices peaked at €311,000 three years ago. But since then they have continued to fall and are now down 36pc from their peak at the start of 2007. Prices [...] Consensus has been ratcheted down across the board. The economy is slowing to a snails pace and the jobs picture is getting worse. September and October look weak. Date Reports Time Previous Consensus First, if it is same store sales, a lot is due to the loss of competition and driving the same number of total consumers to fewer stores. That may or may not be part of this number but, it is a factor. What is also going on is a growing number of people who stopped paying the mortgage and are now spending the mortgage payment on other things while they wait [...] |
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Jim Grant On Inflation: 4% Would Mean That The Party Is Over
by ZH
One of our favorite economic commentators – Jim Grant of Grant’s Interest Rate Observer – was on Consuelo Mack continuing his ongoing crusade against Ben Bernanke’s lunacy, and the monetary central planning of the Federal Reserve, particularly focusing on the topic of pernicious inflation which for good reason has received much attention of the past year. Grant, who unlike Steve Liesman correctly observes [...]