ScottEX

Commodity Price Inflation Is Inflation and Is Happening Now

Mad Hedge Fund Trader... Here is some great summer journalism here.. Roasting the Pig...

www.youtube.com/watch?...


On Jun 10 11:04 AM Mad Hedge Fund Trader wrote:

> But up is up. First of all, let me warn you that reading this paragraph
> is a complete waste of time. Still interested? There is chatter about
> that the Fed is considering raising interest rates at its next meeting.
> After all, where can they go from zero, but up? The bond market is
> certainly telling us that rates should go higher, with yields on
> ten year Treasuries jumping from 2.45% to 3.95% since March. This
> is the usual kind of gibberish you get from financial journalists,
> who deep into a summer with no real news, resort to making stuff
> up out of thin air. US industrial capacity utilization is terrible
> and still falling, while unemployment is still rising at a record
> pace. Sure, commodity prices have doubled this year. But this is
> happening because investors are looking for an alternative to the
> sick dollar, not because there is huge underlying demand by end users.
> This is one of the reasons why I have recently become cautious about
> all of my long positions. So I can say with complete confidence that
> the chances of an interest rate hike are less than zero for the foreseeable
> future. This discussion did have the one benefit that it did enable
> me to fill this space in my newsletter.

Commodity Price Inflation Is Inflation and Is Happening Now

A, I am an Ass. B. I spell drivle with six letters as and when they appear, got a problem with that?

"hedge funds, derivatives, repeal of glass-steegal, and "regulation
> is bad" policy of W and cheney is at the center of the problem."

100% Agree. Facism doesn't work.

Inflation people, look at today's WSJ. More firms cut pay, apple halves iphone, small firms revise pricing.

A recent study of the five commodity bull markets going back to the 70s and compared the run up in the CRB to the surge in CPI. Historically there is a 37% pass through. In the most recent cycle, 2002-2007 the pass through was only 18%.

During that cycle the US received billions in dollars from the Chinese through repression of the Yuan, which our out of control greedy pigs on Wall Street converted into trillions of derivatives paper. I'm proud of the regulation in my great free country. Let's not confuse democracy and regulation. Without it what we have is a sick monkies gone mad orgey. Had Bush and in his cronies not been so diehard in deregulating WS, the credit bubble could have been averted.

During the bubble-leveraged (unregulated derivates orgy) economy of 2002-2007 unemployment went as low 4.4% and industry capacity utilization ran at 83%. Today CAPU rates are 69% and unemployment is pushing 10%.

If anybody here is seeing commodity driven inflation I would like to be on what you are on.

Let's face it, the republicans squandered quite irresponsibly an advantage the US has that all countries would enjoy, being the world's central bank. The political and economic clout the US derives from the world's central banks holding 70% of their reserves in USD is enormous. You can thank Regan and Bush for blowing that. I don't think it's going to be completely devastating but I do see the rest of the world reducing their holding to something like half that in the nearish term. But who knows what the communists in China are really thinking.

Unfortunately, with all the writing clearly on the wall, the US is missing the opportunity to really fix up it's banking system. See Cohen-Lewis in last weekends New York Times.

Anyways, I hate republicans, sorry, look what they've done to the world economy. And for any good reason, unless you count greed as one of them, I count 0.









On Jun 07 10:22 PM Missing_Link wrote:

> On Jun 07 03:35 PM backtoreality wrote:

Commodity Price Inflation Is Inflation and Is Happening Now

Gold... right.. Gold=Inflation. Can I have my phd now, the 30 second online phd in modern economies! Yay...


On Jun 07 09:01 AM Jimmy James wrote:

> What inflation? Who'd a thunk?
>
> Gold and silver have generally and sustainably tripled in 8 years.
> Inflation is just continuing. Inflation is actually the increase
> in the M1 number anyway, and that has gone from .8T to 1.7T in 7
> months. THAT is the physical source of the inflation. The rest
> are just side effects.
>
> AUDIT THE FED. Please help support HR 1207 THIS WEEK!

Commodity Price Inflation Is Inflation and Is Happening Now

Hey Genius, where did you get your phd in Economics? It would be nice if the non-educated types would just read and not type. It really ruins these columns.

There is nothing more important to the inflation story than wages. If you had any research ability or actual knowledge of economics you would see that Krugman's view is based on the 'FACT' that companies are continuing to cut salaries.

Maybe save your anti-left politics for a politics bashing forum, I'm sure there are many your type can have fun in. But please keep the uneducated drivle out of this forum about economics, which clearly you know nothing about.


On Jun 07 09:16 AM SageNot wrote:

> Isn't Professor Paul Krugman a Liberal commentator, what else would
> you expect from the far left?
>
> Of course commodity price increases are inflationery, didn't $140/brl
> crude oil help blow up our economy less than two years ago? While
> Silver may have many commercial purposes, it's a long, long way from
> $50./ounce, while gold is still the relic that it's always been,
> but indexed for inflation it's worth what, less than $400./ounce
> vs the '80's?
>
> Now grains & meats, there is your inflation, with a weakening
> buck, "look out below!"

Changing TARP Rules Changes Market Direction

TARP.. My first thought when Paulson announced his team of expert auditors was, good luck. I was an early casualty of the crisis as a fresh and idealistic MBA in the CFO's office at Merrill Lynch.

I was truly shocked by what I found there. I sat within earshot of the CFO in a then temporary office in Hong Kong. I was on a desk of ten controllers charged with managing the book and records for the regions equity derivative books. Under-trained, low skilled, and put to a task that a team of 100 would have trouble accomplishing.

When I arrived there my new boss was frantically trying to make sense of the trading records. Why not let the new guy do it. A typical day for me went something like this. An incomprehensible ream of data was dumped on my desk. I was instructed to flatten and comment. The trading managers are quite skilled at deception and experts in the game of hide and seek. The data I was given was on average about 10% complete. Combined with the byzantine web of accounting entities and trading books, I was left guessing most of the time as to what was on a book or off a book, and just what the hell “it” was. Mr. CFO is having lunch again with this or that millionaire in town for a game of golf, but I know he is actually from Krypton and assumes super human powers of intelligence. He has a perfect grasp on the accounts, I’m sure. So there I went with my team slashing and hacking and writing my vague comments all over the place. The product controllers were earning about 50,000USD down there.

My theory is this. The TARP people went in and saw the same impossible mess that I got a glimpse of and said forget about it. I don’t think it has anything to do with how to value complex securities. What we are talking about here is how to value smoke mirrors lies and deception. With Citi axing 52,000 jobs this week I'm left to wonder whether those people might be worth saving. At an average of 50,000/year, the total savings to the company in annual salaries is pretty close to the amount that could be saved axing about 20 or 30 directors and execs. I know these Kryptonian white shoe Ivey leaguers at the top have superhuman powers, but I’m still thinking that the 52,000 workers would be more useful to the company and society.