Much ado has been made about the European Union enacting a partial (90%) ban on Russian oil. I have written in the past about how sanctions have quite failed to cripple the Russian economy, but have contributed significantly to debilitating inflation and supply chain issues in the west. (I am certainly not opposed to sanctions, … Continue reading How the Russian oil ban charade is contributing to inflation
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
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
Be greedy when others are fearful and fearful when others are greedy.Warren Buffett Only when the tide goes out do you discover who's been swimming naked.also Warren Buffett If you listen to Biden, his Treasury Secretary, the Labor Secretary, and the chairman of the Federal Reserve, the economy is strong and there's nothing to worry … Continue reading How long will chaos in the financial markets last?