On 9/12/2022 at 4:15 PM, JohnSnowsHair said:

Official inflation report comes out tomorrow, but WSJ is expecting flat or even a drop in prices in August: WSJ: Inflation Showed Signs of Easing in Several Industries in August

 

Yeah, the markets didn’t take actual inflation report well. Core CPI is on the rise again. Looks like we’re in for a long road at this point. Inflation is alive and well.

On 9/12/2022 at 10:15 AM, JohnSnowsHair said:

Official inflation report comes out tomorrow, but WSJ is expecting flat or even a drop in prices in August: WSJ: Inflation Showed Signs of Easing in Several Industries in August

 

It didn't. But it's still down from last month, just below expectations.

Doesn't seem to add up IMHO. Why are food prices higher? Gas is down significantly, and borrowing costs are significantly higher than a couple mos ago.

@vikas83I'd be curious about your take. Lot of leaking early about a more positive report then this. Market manipulation? 

1 hour ago, JohnSnowsHair said:

It didn't. But it's still down from last month, just below expectations.

Doesn't seem to add up IMHO. Why are food prices higher? Gas is down significantly, and borrowing costs are significantly higher than a couple mos ago.

@vikas83I'd be curious about your take. Lot of leaking early about a more positive report then this. Market manipulation? 

Here’s the thing with commodities… they are very difficult to control through financial tools when the physical products are in short supply. Food is a very broad term, but there have been serious problems with agriculture in everything from corn to rice. This started with fertilizer issues even before Ukraine, which has only compounded the problem. That then rolls into livestock feed, which rolls into meat and dairy prices. And so on and so forth.

There have also been a weird series of fires at food processing plants around the country. And we’re about to get a rail workers strike, which will disrupt supply and elevate prices even further. 
 

On 8/10/2022 at 9:04 AM, JohnSnowsHair said:

"On a monthly basis, the CPI is estimated to have increased by 0.2% in July after rising 1.3% the prior month, the result of falling energy prices such as gasoline." -WSJ

That is a good thing. It's only one month though. We had a good month earlier in the year but that didn't become a trend.

Year over year inflation is going to stay high until we start getting a few months of low inflation like this. One data point is not a trend but every trend starts with one. The question of whether this is the beginning of the of high inflation won't be answered for months.

Spolier….its not

Good thread.

$80 Per barrel to fill Strategic Oil Reserve just two years after democrats blocked Trump from filling the reserve at $24 per barrel.

Biden ordered the release of a record 180 million barrels of oil from the reserve.

"Fill 'er up"

$14,400,000,000 😮

 

 

 

 

Quote

 

The most important factor for quickly expanding our exploitation of oil, gas, solar, wind, geothermal, hydro or nuclear energy is giving the companies that pursue them (and the banks that fund them) the regulatory certainty that if they invest billions, the government will help them to quickly build the transmission lines and pipelines to get their energy to market.

Greens love solar panels but hate transmission lines. Good luck saving the planet with that approach.

 

 

 

some good news for a change 

 

 

 

So now European consumers are going to have an extra mortgage payment every month. Demand destruction via energy inflation will bring a pretty stark recession, and will trickle into the global economy. China and the US have their own problems on top of this.

Keep in mind, gas is something like 70% of the input cost of agricultural products. So food in Europe is going to spiral as well, since either prices have to go up tremendously or production (and thus supply) has to be cut.

It’s going to be a rough year or two.

 

 

Apparently there are insurance caps against price increases of this size. She isn't gonna pay €1248 / mo

47 minutes ago, JohnSnowsHair said:

 

 

Apparently there are insurance caps against price increases of this size. She isn't gonna pay €1248 / mo

Stores have already shut down in England (and elsewhere) over this. But even if it’s insured, that insurance payout has to come from somewhere. It doesn’t just magically materialize and make all the problems go away.

This is economics: there is no free lunch.

So either the insurer is going to go belly up because suddenly they’re liable for a 20X increase in energy costs, the government is going to have to print hundreds of billions for a bailout, the premiums are going to have to increase to cover the massive payout, etc etc.

And that’s just the financial side of things. Regardless of if insurance caps consumer costs, you still have the problem of a gas supply shortage. You still need to input those costs into food.

Yeah, unfortunately there is no magic button to increase supply. Bringing new energy to market takes time. And the sh**libs fight it every step of the way.

Poor sap is trying to save face so bad for all his fails in the Russia thread.

I remember a previous thread that predicted $10 gasoline this summer…….

16 hours ago, TEW said:

Yeah, unfortunately there is no magic button to increase supply. Bringing new energy to market takes time. And the sh**libs fight it every step of the way.

The magic button is labelled "print”

21 hours ago, JohnSnowsHair said:

 

 

Apparently there are insurance caps against price increases of this size. She isn't gonna pay €1248 / mo

Govts will step in.  We are expecting 5-10x increase now this winter in Sweden.  The energy companies are telling small home owners to put an additional $6k away for the winter four months. and that's after they've lowered their thermostats, adjusted energy usage hours, etc.

It isn't going to be super easy but we will make it work.

 

edit: ...and TEW is right, we've already seen plenty of small business owners shutter their doors

6 hours ago, ToastJenkins said:

The magic button is labelled "print”

Riiiight… but while you can print more money supply, you can’t print more energy supply.

To wit: