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2022-11-15 08:38 by Karl Denninger
in Macro Factors , 513 references Ignore this thread
[Comments enabled]

So why was the Ticker late this morning?

The PPI was due at 0830 ET, and it has now dropped.

The Producer Price Index for final demand increased 0.2 percent in October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.2 percent in September and were unchanged in August. (See table A.) On an unadjusted basis, the index for final demand advanced 8.0 percent for the 12 months ended in October.

Hmmm..... the market added quite a bit -- and ex food and energy it was flat and on goods, less food and energy, was down 0.1%.

Final demand services was down 0.1%.

On the 12 month run-rate basis it was up 5.4% ex foods, energy and trade -- and up 8% gross.

Intermediate tells an interesting story; foods and feeds are down, three months running now.  Unprocessed energy was down materially, which stomped on the index generally.

These are reads on a forward basis; unprocessed goods are in front of intermediate and this looks like a three month trend.

Services, however, advanced on a 12 month basis and our economy is much-more service-oriented than goods.  On that basis we're still running three times the 2% "target" and, equally-importantly the last three months is accelerating higher.  That's bad.

What do I expect out of this?

50 bips in December and no, we're not done -- the market's exuberance is nuts.

Go to responses (registration required to post)

Comments on PP-Insanity
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Calrissian 118 posts, incept 2021-04-12
2022-11-15 08:43:39

Hell, it only took you 9/10mins to post.
In any case... yes, the market is still s/t rally, on the vain hope of a Fed pivot.

The bigger issue, is when does Print Central raise their inflation target from 2% to 3, or even 4% ?
Tickerguy 190k posts, incept 2007-06-26
2022-11-15 08:44:13

Not gonna happen @Calrissian -- the Gorilla in the Room is the inflation expectations figures, which are going northbound and that is a much bigger concern for Fed policy makers than current numbers.

The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.
Cmoledor 1k posts, incept 2021-04-13
2022-11-15 08:50:09

Morning Karl. Ill just hang out and read today. Try to learn a bit as I usually do here. Cheers.

The whole world is one big fucking scam
Why are you giving a vulgarity warning here? Our genial host is an advocate of both skullfucking and sodomy via rusty chainsaw. Credit to Rollformer
Takewhatyoucan64 85 posts, incept 2022-08-30
2022-11-15 08:50:13

Do you follow shadow stats Karl? Righteous info or not?
Tickerguy 190k posts, incept 2007-06-26
2022-11-15 08:50:21

Williams is drunk on his own KoolAid.

The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.
Calrissian 118 posts, incept 2021-04-12
2022-11-15 09:00:41

I'm rooting for the Gorilla!

... and none of this assumes any 'wild cards' in the weeks/months ahead. I have to expect something big to occur, which will be the excuse for a more powerful equity drop.

yours... awaiting a delivery of popcorn... for the big show.
Takewhatyoucan64 85 posts, incept 2022-08-30
2022-11-15 09:00:45

LMAO...duly noted
Greenacr 693 posts, incept 2016-03-15
2022-11-15 09:00:54

The market is going to take this "inflation is easing" news like it's time to Party like it's 1999.

I still maintain that even if the inflation rate returns to 2 percent or, even zero that the damage to the consumer is already done. Unless there is price deflation among ordinary goods people are going to continue to fall behind as wage growth has not kept up.

Look for the Biden admin to continue to press their knee on the neck of energy and possibly inject more $$$$ into the economy and they are going to continue to expand (not deal) with Medicare... Karl's 2024 Super Nova date is getting closer!
Kokobeware 409 posts, incept 2010-05-04
2022-11-15 09:07:00

Any thoughts on Walmart's #s in conjunction with PPI/CPI? WMT really surprised to the upside. How much is it a function of families shopping at a cheaper destination? I haven't looked at the gory details but I wonder if more and more families are buying their groceries there.
Tickerguy 190k posts, incept 2007-06-26
2022-11-15 09:09:25

WMT is pure trade-down and what I've noted is that most of the people doing it are stupid.

They've historically been a good trade down choice when it comes to groceries, but not so much anymore, specifically in all fresh categories (meat/cheese/eggs/dairy/produce.)

In fact you'd spend MORE there than at the local Kroger here in those categories provided you used a bit of discernment on what you buy in those areas in both stores (that is, choose sale choices in the category over not, etc.) Its not even close and hasn't been for close to a year.

But -- the PERCEPTION is that they're cheaper and if you're coming out of, for example, Publix or (god forbid) Whole Paycheck oh yeah it is. That's where it came from.

The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.
Tappedout 189 posts, incept 2020-09-21
2022-11-15 09:13:26

I read where 49% of restaurants missed rent payments for October.

I don't know if that's accurate, or what the usual number is, since so many restaurants fail anyway.

But like my Dad used to say when working on machinery that sounded off: "I'm not sure what it is, by I'm sure it's not good."
Quik49 13k posts, incept 2007-12-11
2022-11-15 09:14:27

Yep KD, noted that a few weeks ago, and the place was strewn with pallets lying around and priduct all on the floor...the one you walk on....in a Saturday. Nothing I really saw was lower than Kroger and as stated, meat was crap. Perception indeed.

2 + 2 =5
Winesorbet 762 posts, incept 2010-08-23
2022-11-15 09:21:31

If you think it was annoying to watch the Dems celebrate the midterms romp, wait until they do the same for "beating inflation" and sending markets back into the stratosphere smiley
Synopsis 76 posts, incept 2010-02-05
2022-11-15 09:21:40

Regarding Walmart. I was reading the key takeaways from the CEO that CNBC has listed.

CNBC wrote..
Chief Financial Officer John David Rainey said consumers are watching how they spend and trading down to cheaper items, such as hot dogs and beans.

LOL. Its not good when everyone is trading steaks and burgers for beans and weenies.
Greenacr 693 posts, incept 2016-03-15
2022-11-15 09:35:49

Yep, Walmart is benefiting from perception only. Produce is crap as well as their meats. Kroger Sale items are much cheaper than their competitors. Our rule is that we buy extra of anything that we use if it is on sale. Generally 6 - 8 weeks of supply to get us to the next sale (Produce and Dairy excluded).

Around here it is Aldi's who seems to be benefiting the most. Parking lot is full. One thing I've also noted is that a lot of shoppers now have lists and seem to be sticking to them
Shadowmask 4k posts, incept 2021-05-24
2022-11-15 09:36:10

Good time to begin intermittent fasting, it'll save money and people can still have steak or hamburger instead of beenie weenies.
Greenacr 693 posts, incept 2016-03-15
2022-11-15 09:43:09

Just noticed that Walmart announced a $20BN share buyback as part of their announcement this morning. How much of their jump is due to this as opposed to their core customers buying more beans and weaners?

Just another attempt to goose their share price before year-end bonuses are calculated.
Scottj175 623 posts, incept 2010-09-06
2022-11-15 10:02:23

Using sales and coupons my family has been beating Wallyworld on price shopping at Publix and Winn Dixie going on 5+ years now.

With WMT you also have to look at item size. For example I recently bought some flavored seltzer waters as part of a pastor appreciation gift. Compared WM to a buy 2 get 1 free sale at Publix. WM had 8 packs. The Publix sale was on 12 packs. Worked out about 10 cents cheaper per can to do the Publix thing.
Kf7psm 57 posts, incept 2021-09-12
2022-11-15 10:02:42

I have to agree, you have to be a smart shopper Coupons and all. Even though most of the Coupons are for processed foods, you know if it comes in a bag or a box it's gonna kill ya! I've noticed as well prices at Wally World are higher than Kroger when it comes to certain items, actually quite a few. But isn't Albertsons trying to buy Kroger for something like 24 Billion? If that merger is allowed watch out you will get Albertsons Pricing. I do like some of their produce and meat choices better at times but their prices are always the highest from what I've seen. Back to the Hotdogs...
Charles.haddock 8 posts, incept 2022-11-02
2022-11-15 10:04:17

There's no way the Neo-Keynesian narrative of "inflation was historically low until recently" (around 2% they typically claim) to anyone who was paying attention to prices in the last couple of decades. Arguably it would've been high since the 2000s, albeit there were periods of deflation from the two crashes that decade. In the 2010s, with the heyday of QE, it was high except for the period of 2014-2015 when I actually saw prices broadly drop. Of course it's true that it's much worse now, but it has not been a good deal for a long time.

The fallout of the Trump years is becoming clearer, and I should probably mention that Powell was going to hike rates several years back but the Trump admin applied pressure to stop it. There's no way to reverse the pain we have now without continuing the hikes. As for the recent rallies, this market is injecting copium, bigly. Crazy Wally is right.
Ndp 107 posts, incept 2021-04-21
2022-11-15 10:07:26

Regarding grocery buying and Walmart. Everything is a case by case basis. As others have noted, their produce sucks and is overpriced. Same with the meat for the most par. However their chicken beast is consistently a couple bucks per pound cheaper than our local grocery store's. Their milk and eggs are also much less. Some canned foods, spices, and frozen foods have a slightly better base price, but sale items at the grocery beat their prices.

We've taken to hitting Walmart for a few staples and the grocery store for the rest.

Remember everyone, shop smart. Shop S-Mart.
Flappingeagle 4k posts, incept 2011-04-14
2022-11-15 10:28:25

Around here it is Aldi's who seems to be benefiting the most.

We are finding that, for the items they stock, that Aldi's meat is generally cheaper and always better quality.

Re rate hikes and something breaking. There is on average a financial crisis every ~15 years. The system is designed at its core to have breaks. Attributing them to the FED is just a smokescreen.


OK, who is the asshole who gave me a thumbs-down? VBG

Here are my predictions for everyone to see:
S&P 500 at 320, DOW at 2200, Gold $300/oz, and Corn $2/bu.
No sign that housing, equities, or farmland are in a bubble- Yellen 11/14/13
Trying to leave

Reason: Thumbs-down comment!
Cluelessinfl 287 posts, incept 2011-01-08
2022-11-15 10:43:49

Every time I go to WalMart (which is not often) it feels like I'm in an episode of The Walking Dead.

The difference between Americans and Europeans is our ancestors threw off the yoke of tyranny, theirs embraced it.
Tickerguy 190k posts, incept 2007-06-26
2022-11-15 10:43:58

Well, you are.

The difference between "kill" and "murder" is that murder, as a subset of kill, is undeserved by the deceased.
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