richjoy

PPI Shows Enormous Squeeze on Profits

Corporate profits (non-financials) being "crushed"? I certainly agree that you are directionally correct that rising materials costs are hurting profits.

The problem with these charts is that they lump all industries together. Clearly, some producers serve markets where input costs matter less than others (and thus are more easily passed through).

I would think you might have mentioned a few of the cost-mitigating factors available to producers who determine input cost increases are not temporary:

What about substitution with cheaper inputs -- like plastic for metals, cheaper packaging, and so forth?

What about redesign to use less of the expensive inputs?

What about buying new machines to increase productivity?

What about moving production closer to raw materials, or to a cheaper labor market?

Finally (though the above is not an exhaustive list), what about passing on those costs to wholesallers, and retailers? They can decide what portion to pass through to consumers, and what to absorb.

My point is that most producers are not without tools to respond to high input prices, though it takes time.

Bill Gross: Inflation and Higher Food Prices for the Next Decade

There should be not a single citizen left in the USA who doesn't know that our CPI data has been highjacked, so compromised that it has no credability...it is a lie, perpetrated on us by our own elected government.

(Do you remember when Alan Greenspan testified before Congress in the 1990s again and again that it was 1.1% overstated, and needed to be changed?...it was changed so that your parents/grand parents Social Security payments would not keep pace with inflation!)

The unintended consequence of that action is that now ALL government data is questioned...what do we have left when we question the honesty of our own government?

Obviously, this is a much bigger issue than inflation data.

Foreclosures Prove Loan Modification Isn't Working

What?...an article on home forclosures with 11 responses...and no one has mentioned the obvious solution?

All we need to do is give courts the authority to change mortgage contracts (that's right, lower the rates to whatever the borrower thinks he can afford...presto! problem solved!)

Of course, there will be consequences. First, mortgage rates will go up several percentage points; second, qualifications (credit histories, down payments, etc.) will be tightened so fewer people will qualify; third, there will be vastly more people signing rental contracts where rent payments apply to the eventual purchase; fourth, (what the hell, does it matter?)

I absolutely assure you, those who think they will lower the price of gasoline by adding more taxes to the oil companies, are just the people who will be pushing legislation to give courts authority to modify mortgate contracts.

Want to Fix the Fed? Get Rid of It

Disolve the Fed?...Count my vote in the "Nay" column...and it isn't even close!

OK, the Fed isn't perfect...yes, in 20/20 hindsight, Greenspan received more adulation than he should have, and he certainly stuck with low rates too long (and should have used Fed powers to curtail those stupid lending practices).

However, dispite it's faults, we need the Fed to put on the brakes when necessary, and also lubricate our economic machine when needed.

They're still learning. I am not ready to step into the abyss just because they are not yet perfect.

As for Volker, one must wonder...what is his agenda?...Maybe he feels pressure to defend his legacy (for example: might he have been more innovative in addressing inflation than those horrendously high interest rates and awful recession?). Why has he moved from background and near-obscurity and retirement to seeking a microphone at 80-something?

Barry Ritholtz Sees More Upside in Commodities

To: USER68127
I read a few weeks ago on Barry's blog that he was considering withdrawl from Seeking Alpha because they had edited his material (whereas he said his agreement with them specifically stated they would publish his material without edits)...So make of it what you like.

Barry Ritholtz Sees More Upside in Commodities

I like to check in on what Barry Ritholz is thinking (bigpicture.com)...we need him to keep us from getting too exurberant!...I'm serious, he always makes his case with facts.

As Home Sales Plunge, Some Say the Crisis Is Almost Over

Trader Mark -- My rant follows, but please understand that it is not only directed at yourself, as the average article writer/talking head seems to enjoy making the worst possible case with current housing statistics. Let me take home prices for example:

OK, home prices have fallen when compared to last year's prices...we get it! OTOH, you also stated (correctly) that home prices benefited from a 5-year boom. So, how about we expand our scary statistics to recognize that home prices rose to wild and speculative bubble levels over the last 5 years; let's compare last month's home prices to pre-bubble (2002?) prices, plus 2% or 2.5% annully for inflation...what does that say about last month's home prices?...wouldn't that be a more reasonable and fair comparison?

Oh, I get it...that wouldn't be as scary, thus not worthy of writing about. Who would pay attention?

Economic Downturn: How Long, How Deep?

Frankly, this article left me wondering why it was written. If one doesn't have more to say, one should just wait until one does.

Another Market Friday: Risk or Opportunity?

I appreciate those who can change their views.

As for shorting oil, it may well be profitable for VERY short period, as there clearly has been some speculation in the price for some time; and oil's price seems to be moderating just a touch off its $120 high. However, the key, it seems to me, is that the market is anticipating an economic recovery later this year, and when one considers oil and a growing global economy at the same time, all of oil's supply/demand concerns re-surface; thus, I suspect the price of oil will not go so low as to squeeze out the speculation, and will soon start to rise again. So, if you are convinced supply is equal to or greater than demand -- you can safely short oil.

Economic Drubbing Should Subside - Temporarily

Seems to me we need people with a negative view to keep us grounded in reality...but to predict "another drubbing" without mention of the unforeseen factors causing it seems negative for the sake of being negative. (Also, it seems "i Think Big" is thinking very small to suggest that the US is going from tail that wags the dog, to dogshit in only 4 years). In summary, this kind of negativity lacks credibility, and is therefore a waste of my time.

Staunch Government Intervention Needed to Avoid Full-Blown Depression

This guy is a nutjob...the field is crowded with those predicting a recession; so he thinks if he predicts a depression, we will read his remedies.