Posted on 12/17/2014 7:01:23 AM PST by blam
Tyler Durden
12/17/2014
Great news: The prices consumers pay dropped 0.3% MoM in November - the biggest deflation since Dec 2008. Of course, The Fed will be in "considerable" panic mode at this data and may choose to crush the hope of so many that rate hikes are coming in mid-2015 as definitive evidence that the US economy is well on the road to recovery. Ex-Food-and-Energy, prices rose 1.7% YoY - slightly missing expectations of +1.8%. Of course, a big driver of this 'transitory' disinflation is a 10.5% YoY drop in Gasoline and 6.6% MoM drop in November. Despite this huge drop, and thge promises of various talking heads, airfares rose 1.36% in November (after also rising 2.39% in October) - so much for the benefits to the consumer.
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(Excerpt) Read more at zerohedge.com ...
Bingo.
How is this bad news? Isn’t this good news for cashed strapped consumers?
CommieCare is a drag on the economy.
This is WHY analysts strip out volatile food and energy prices to look at “core” inflation. They are at times exogenous price moves that don’t accurately reflect domestic fundamentals.
Zero Hedge is a website that only looks at negative news and finds a way thus to make all news look negative. It’s entertaining, and a great way to miss out on 8000 points of Dow Jones upside over the past 5 years.
Yes. But, (I think) the government has an annual goal of about 2% inflation.
Higher prices are bad. And now lower prices are bad. Got it.
Recovery? Delusional idiots. Take this deflation cycle into account with all the other things going on and you have a very big and nasty strom cloud moving in. Keep your powder dry.
Is it deflation or reduced transportation costs?
Of course, ‘strom’ = ‘storm’.
It’s run by someone who thinks he’s smart from his mom’s basement. Yawn.
Deflation is bad for cash strapped consumers because it causes a rise in interest rates. If interest rates rise too quickly the consumer gets stuck in an endless cycle of paying interest and is not able to make new purchases because the cash flow is too slow.
http://www.businessinsider.com/why-deflation-is-a-bad-thing-2013-11
Zero Hedge is comedy.
Did Mr Durden not see the rise in part-time jobs compared to the fall in full-time jobs?
Paid $50 for a thanksgiving turkey.
IMHO it’s not deflation. Outside of fuel, pretty much everything else is on a steady creep up.
Also, while everyone is sporting wood over the oil decline, the war on coal is seriously driving electricity prices for a lot of us. 10% increase just announced out this way. So where is the $15 less I spend on gas yesterday going? Directly to my power bill. BFD.
Real deflation is going to be across the board (large) drops in nearly everything, including a collapse in commodities. That isn’t happening (yet).
Truth is, the micro managers of our centrally run economy haven’t got a clue what is going on. A goal of 2% inflation? WTH? How about a goal of no inflation? 2% a year for 20 years murders our purchasing power and well being.
People have less money to spend. So of course prices are going to drop. Businesses have no choice but to drop prices ... they’ll go out of business if they don’t.
While falling prices are good for the consumer, I don’t see how this indicates a recovery.
For example: If I’ve cut my per/person Christmas gift allowance from $50/person to $25/person ... just because I can get more for my $25 doesn’t mean that the economy is getting better. It would only indicate that if I were still spending $50/person because prices were lower.
Essentially correct. However, the data is still there, simply colored by ZH interpretation. And I don't need their analysis to look at certain stats and know they are ugly.
And yes I missed the boat on the market, big time. But not because of ZH. Mostly because I am stunned that "they" have managed to kick the can further for this long. I sincerely believed it would have unraveled by now. I still believe it will, but I admit to being clueless as predicting when. Primarily because I think it will be triggered by an unexpected event of just the right sort.
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