I realize my blog posts are getting rather... dark... lately. I wish I could talk myself into a contrarian worldview on the economy, because I love bargain-hunting during financial pukes. I just don't see the path there right now. And I am not sure how many investors are willing to get into the business of … Continue reading Electric utilities will be an even bigger mess than usual out west this summer
The post-Afghanistan-and-Iraq foreign policy orthodoxy in Washington is that economic and financial sanctions are a bona fide alternative to direct war with a country. This is an ideological, not empirical position. The United States has not engaged in a direct war - or proxy war, for that matter - with an enemy that has posed … Continue reading Why US sanctions have failed to collapse the Russian economy
From Jack Kemp, a well-established energy analyst - Global diesel shortages herald imminent economic slowdown (emailed financial commentary): Global distillate fuel oil shortages signal the business cycle is peaking and a period of slower growth or even a recession is imminent to bring consumption back in line with production.Middle distillates including diesel and gas oil … Continue reading Reuters energy analyst expects diesel and gas shortage, imminent economic slowdown
Blue-chip stocks like Walmart and Target, among others, have been decimated this week. Target's stock was down 25% (!) yesterday after the company reported dire earnings. Not only did Target reinforce Walmart's message that inflation is cutting into consumer spending, they mentioned that even the higher-income, bourgeois households are getting an inflation shock. Walmart and … Continue reading Does wholesale inflation suggest consumer prices are headed up significantly?
Here is a chart from geopolitical strategist Peter Zeihan providing a useful overview of the global market for oil and its physical and political vulnerabilities. It's somewhat dated, but still good. Analysts at JP Morgan say they expect the average price of gas nationally to hit $6 by the end of summer. This week it … Continue reading Understanding the market for oil
A few posts back, I mentioned how the first truly shocking price increase from ongoing inflation was seeing a 6-pack of beer for $16 at our local South Florida grocery store. Well, yesterday, my brother in Denver sent me a picture of a 6-pack of Voodoo Ranger for $19 in Sam's Club. This was an … Continue reading The price of beer as a crude economic indicator, revisited
Here's a lesson in why people like Elizabeth Warren and Robert Reich are cranks on inflation and the profitability of corporations. So Walmart's stock is tanking today. Last I checked, it was down 9%. If these greedy corporations have been so proficient at gouging their customers, why aren't investors scrambling to own shares? What an … Continue reading Walmart’s earnings – a lesson on the difference between profits and profit margins
Just to pile on to my last post - someone made the argument for me in this excellent chart. Here's your demand destruction.
I have seen a lot of people online puzzling about retail sales. Despite inflation being at a 40-year high, consumer spending does seem to be holding up. How can that be? Also, with so many economists and business leaders suggesting that we are headed into a recession, why aren't people cutting back on spending? One … Continue reading It’s all going on credit cards
You know, there are not many things about politics that really chap me anymore. I feel like we have been living in an artificial boom-bust-boom-bust cycle more or less since the 1990s, both economically and intellectually. We have an election industry now, bent on convincing folks that each upcoming election is "the most important election … Continue reading Some thoughts on the baby formula shortage