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16 February 2012

Should the Fed be Fighting Deflation or Inflation?

 Economy         No comments

Welcome to 2012; it’s either time for Ben Bernanke to start QE3 or raise interest rates. Figuring out which one is the best move is not as easy as you’d think.

It was so simple when I was taking classes for my economics degree. When the economy did “X” you, as the Fed, embark on expansionary policy. When the economy did “Y” you retract the money supply. No professor ever made the point that figuring out whether economy is doing “X” or “Y” is not as obvious as you’d think.

15 February 2011

Get Ready for More Inflation Pain at the Checkout Counter

Hooray for quantitative easing… By the fall, people will most likely be paying more … as rising prices hit most consumer goods, say retailers, food companies and manufacturers of consumer products. Cotton prices are near their highest level in more than a decade, after adjusting for inflation, and leather and polyester costs are jumping as [...]

5 January 2011

Chartology: Setting Up for Commodities Bubble Part Deux?

Right on cue, I’m starting to field reader questions about commodities. In particular, are companies who sell oil, fertilizer or any other raw commodity might need to fuel their rapidly growing economy. Making money is always the prime objective, just remember that the last time these were in play — the 2008 commodities bubble — [...]

3 January 2011

2010 Remembered as the Year of (Hyper)Inflation?

2010 will likely be remembered as a year of the melt up recovery and as a return to all things financially sanguine, but for commodity traders and chartists who keep watchful eyes on the commodities market, 2010 could arguably be considered a year where inflation (perhaps even hyperinflation) took home the blue ribbon. The only [...]

12 November 2010

Thanksgiving Dinner, Food Inflation, & the Grocery Store Shrink Ray

Interesting segment here from CNBC’s Jane Wells, who does an annual cost comparison of what a proper Thanksgiving dinner cost her in 2009 versus 2010 in southern California. What doesn’t get mentioned, amidst all the hoopla of rising commodity prices causing food inflation, a very calm agriculture economist assuring us that food inflation is a [...]

17 October 2010

Too Big To Fail Banks Turning into REITs

If you don’t know Chris Whalen of Institutional Risk Analytics, you should… The banks are trying to stretch this process out over years. And the problem is, when we we muddle along, which is exactly how I would characterize the Obama administration, you end up with no credit, with banks that are shrinking, and an [...]

7 October 2010

How the Great Recession Changed Our Spending Habits

Excellent chartporn from the Wall Street Journal in how the Great Recession altered American’s spending habits broken down in income quintiles (five 20% groupings). [click to enlarge image] Notice the change in elastic commodities (alcohol, retail apparel, etc.) versus inelastic commodities like food for a healthy home cooked meal. Not to delve too deeply into [...]

8 September 2010

Academic Inflation: The Mother of All Investment Bubbles

I keep a fairly watchful eye for investment bubbles, but the rise of America declaring war on work and degree factories pumping out diplomas (subsidized by Federal & State governments) not worth the paper their printed on have created an unsustainable academic system if Generation Y, and the generation behind them, can’t get a job [...]

22 August 2010

Total Equity Fund Flows Negative vs. Total Bond Fund Flows Positive

Not surprisingly, the plethora of negative economic news and pessimism has investors fearing a double dip recession and/or a second Great Depression. Few metrics exist that can express this bearish sentiment better than the money flow numbers (e.g. where the money is moving and what investors are buying). One can only speculate, but it would [...]

20 August 2010

Google Insight Search Trends: U.S. Population’s Confidence & Pessimism

I’m a subscriber to the thesis that one can gauge how a population is thinking, and what they may or may not do, by using Google Trends or Google Insights for Search. The premise being that, if you can peer into what people are searching for, you can get an idea of what’s hot and [...]

15 August 2010

The Economic Dangers When Banks Can’t Collect

Fantastic real estate and banking article in The New York Times today entitled Borrowers Refuse to Pay Billions in Home Equity Loans regarding the fallout of America’s popped real estate bubble: Each deal financed the next. “I was taught in real estate that you use your leverage to grow. I never dreamed the properties would [...]

14 August 2010

Rick Santelli Dropping Knowledge Bombs on Real Estate, Deflation, & Government Stimulus

 Politics,Real Estate         3 comments

Rick Santelli’s knowledge bombs are one of the few reasons I watch CNBC. He’s one of the few who refuses to hype the pro-confidence, “sell the hope” marching meme that CNBC is promoting these days. If there are any politicians out there reading this blog — and I know there are — you would do [...]

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