But There's No Margin Compression!

Posted 2010-11-02 09:58
by Karl Denninger
in Macro Factors

Uh huh.....

"Dear UPS Customer...

...Effective January 3, 2011, UPS Daily Rates will increase as follows: UPS Ground services will increase a net 4.9% through a combination of a 5.9% increase in rates and a 1% reduction in the UPS Ground fuel surcharge; UPS Air and International services will increase a net 4.9% through a combination of a 6.9% increase in rates and a 2% reduction in the UPS Air and International services fuel surcharge...

...In addition, effective January 3, 2011, the dimensional weight divisor used to calculate dimensional weight will change from 194 to 166 for domestic U.S. UPS Ground and Air services shipments, and from 166 to 139 for U.S.-origin export shipments..."

That, incidentally, is a ~16% increase in price on dimensional weight packages. If your box is light and large, you're going to get reamed by 16%.

But I thought there was no inflation - despite the fact that the GDP report showed a deflator of 2.2% - and thus Ben Bernanke was "all in the clear" playing his intentional dollar-debasement game?

Beware margin collapse folks. It's the elephant in the room that nobody's talking about, but not only current equity prices but forward expectations are predicated on margin expansion.

View with responses (registration required to post)

Main Navigation

Full-Text Search & Archives

Archive Access

Blogtalk 3:30 CT Mondays

Items To Look At

Discuss The Capital Markets along with daily technical analysis with our Gold Donor program.

Where We Are, Where We're Heading (2013) - The annual 2013 Ticker

Links and Blogroll

Our policy on reciprocal links: Send us an email with your information and why you think your blog or news site would make a good addition - in most cases reciprocal link requests will be granted.

Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.

NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.

The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Looking for "The Best of Market Ticker"? Check out Ticker Classics.

Visit the forum to discuss this and other investing-related topics; see the FAQ on the forum for information about Gold Donor status including access to our technical analysis video server.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

Market Ticker content may be reproduced or excerpted online provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media.

Submissions may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.

Leads on stories of current economic and political interest are always welcome. Our fax tip line is 850-897-9364; please include contact information with your transmission.