Stagflation Myth
06-17-2009, 06:42 PM
#1
Карты убийцы
Thread Starter
Stagflation Myth
WRAPUP 3-U.S. consumer prices confirm inflation in check
Wed Jun 17, 2009 4:57pm EDT
* U.S. consumer prices edge up in May from April
* Prices post largest 12-month drop since 1950
* Q1 current account deficit smallest since Q4 2001 (Adds details, updates with market closings in paragraphs 9 and 10)
By Lucia Mutikani
WASHINGTON, June 17 (Reuters) - U.S. consumer prices rose slightly in May, but over the past 12 months prices registered the biggest drop in nearly 60 years, allaying fears that inflation could threaten prospects for economic recovery.
The Labor Department said on Wednesday higher gasoline prices contributed to the smaller-than-expected 0.1 percent rise in May's Consumer Price Index from April when the CPI was unchanged from the previous month. Financial markets had expected a 0.3 percent increase in May.
Compared to the same period last year, the CPI fell 1.3 percent, the largest decline since April 1950. The pace of the price decline also accelerated -- the CPI dropped 0.7 percent year-on-year in April.
The data soothed worries that massive spending by the U.S. government and the Federal Reserve to pull the economy out of an 18-month-long recession -- the longest since the Great Depression -- may end up fueling inflation.
The U.S. central bank has been aggressive to ward off the risk of a disabling deflation and might not feel it is fully out of the woods yet.
"There is no sign that there has been widespread inflation because of the Fed's quantitative easing regime. In fact, long-term inflation expectations haven't budged and the Fed is still ahead of curve on inflation," said John Canally, an economist at LPL Financial in Boston.
FED MAY SCALE BACK TREASURY PURCHASES
Analysts reckon the Fed could play down the market's inflation expectations at its policy meeting next week and signal some scaling back on its purchases of U.S. Treasuries. It has held overnight rates near zero since December.
"They may signal that they are going to pull back from more aggressive quantitative easing. The deficit we need to finance is so out of control," said Howard Simons, a strategist at Bianco Research in Chicago.
U.S. government bond prices initially rose on the data as traders trimmed bets the Fed could be forced to bump up interest rates by year end, but bonds stumbled as a five-day rally ran out of steam.
Stocks on Wall Street ended mixed .DJI, with the benign inflation report overshadowed by a gloomy forecast from package delivery company FedEx Corp (FDX.N: Quote, Profile, Research, Stock Buzz), which some view as a bellwether for the broader economy.
A separate report from the Commerce Department showed the deficit in the U.S. current account, the broadest measure of the United States' international trade, shrank in the first quarter to $101.5 billion, the smallest gap since the fourth quarter of 2001. For related news click [ID:nN17329437]>.
The Labor Department said core prices, excluding food and energy, also rose only 0.1 percent in May, slower than April's 0.3 percent monthly gain, as prices for tobacco and smoking products fell after surging the last two months on the back of a federal excise tax increase.
It was the smallest monthly rise in the core CPI since December. The gain reflected a fifth straight monthly increase in new vehicle prices. Shelter and medical costs also rose.
Over the past 12 months, core prices have increased 1.8 percent, slower than the 1.9 percent rise in April.
http://www.reuters.com/article/bonds...32991520090617
Wed Jun 17, 2009 4:57pm EDT
* U.S. consumer prices edge up in May from April
* Prices post largest 12-month drop since 1950
* Q1 current account deficit smallest since Q4 2001 (Adds details, updates with market closings in paragraphs 9 and 10)
By Lucia Mutikani
WASHINGTON, June 17 (Reuters) - U.S. consumer prices rose slightly in May, but over the past 12 months prices registered the biggest drop in nearly 60 years, allaying fears that inflation could threaten prospects for economic recovery.
The Labor Department said on Wednesday higher gasoline prices contributed to the smaller-than-expected 0.1 percent rise in May's Consumer Price Index from April when the CPI was unchanged from the previous month. Financial markets had expected a 0.3 percent increase in May.
Compared to the same period last year, the CPI fell 1.3 percent, the largest decline since April 1950. The pace of the price decline also accelerated -- the CPI dropped 0.7 percent year-on-year in April.
The data soothed worries that massive spending by the U.S. government and the Federal Reserve to pull the economy out of an 18-month-long recession -- the longest since the Great Depression -- may end up fueling inflation.
The U.S. central bank has been aggressive to ward off the risk of a disabling deflation and might not feel it is fully out of the woods yet.
"There is no sign that there has been widespread inflation because of the Fed's quantitative easing regime. In fact, long-term inflation expectations haven't budged and the Fed is still ahead of curve on inflation," said John Canally, an economist at LPL Financial in Boston.
FED MAY SCALE BACK TREASURY PURCHASES
Analysts reckon the Fed could play down the market's inflation expectations at its policy meeting next week and signal some scaling back on its purchases of U.S. Treasuries. It has held overnight rates near zero since December.
"They may signal that they are going to pull back from more aggressive quantitative easing. The deficit we need to finance is so out of control," said Howard Simons, a strategist at Bianco Research in Chicago.
U.S. government bond prices initially rose on the data as traders trimmed bets the Fed could be forced to bump up interest rates by year end, but bonds stumbled as a five-day rally ran out of steam.
Stocks on Wall Street ended mixed .DJI, with the benign inflation report overshadowed by a gloomy forecast from package delivery company FedEx Corp (FDX.N: Quote, Profile, Research, Stock Buzz), which some view as a bellwether for the broader economy.
A separate report from the Commerce Department showed the deficit in the U.S. current account, the broadest measure of the United States' international trade, shrank in the first quarter to $101.5 billion, the smallest gap since the fourth quarter of 2001. For related news click [ID:nN17329437]>.
The Labor Department said core prices, excluding food and energy, also rose only 0.1 percent in May, slower than April's 0.3 percent monthly gain, as prices for tobacco and smoking products fell after surging the last two months on the back of a federal excise tax increase.
It was the smallest monthly rise in the core CPI since December. The gain reflected a fifth straight monthly increase in new vehicle prices. Shelter and medical costs also rose.
Over the past 12 months, core prices have increased 1.8 percent, slower than the 1.9 percent rise in April.
http://www.reuters.com/article/bonds...32991520090617
06-18-2009, 06:41 PM
#4
Карты убийцы
Thread Starter
Oh,
, Leo talks without cutting and pasting... (Since you like the black talk), you righ' on everything masser... that FORD is payin' ya, ain't it. That comin' next.
03-25-2010, 06:40 PM
#5
I feel the need...
Pimco’s Bill Gross Says Bonds Have Seen Best Days
Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., said the almost three-decade bond market rally may be drawing to a close.
Excess borrowing in nations including the U.S., U.K. and Japan will eventually lead to inflation as governments sell record amounts of debt to finance surging deficits, Gross said. Pimco, which announced in December that it would offer stock funds for the first time, is advising that investors buy the debt of counties such as Germany and Canada that have low deficits and higher-yielding corporate securities.
“Bonds have seen their best days,” Gross said in a Bloomberg Radio interview today from Pimco’s headquarters in Newport Beach, California. “We are focused more in spread space than in yield space. Durations should be shorter than index and you should be taking a little more risk in terms of spreads.”
Yields on two-year U.S. Treasury notes are likely to rise to 1.25 percent to 1.5 percent from 1.08 percent in the next year as the economy strengthens and the Federal Reserve begins to increase interest rates, Gross said.
“Real interest rates are moving higher,” said Gross, who co-founded Pimco in 1971. “That’s the main bear element in the bond market.”
Real yields, which take into account inflation or deflation, have increased to 1.71 percent on 10-year Treasuries from 1.12 percent at the end of last year.....
Excess borrowing in nations including the U.S., U.K. and Japan will eventually lead to inflation as governments sell record amounts of debt to finance surging deficits, Gross said. Pimco, which announced in December that it would offer stock funds for the first time, is advising that investors buy the debt of counties such as Germany and Canada that have low deficits and higher-yielding corporate securities.
“Bonds have seen their best days,” Gross said in a Bloomberg Radio interview today from Pimco’s headquarters in Newport Beach, California. “We are focused more in spread space than in yield space. Durations should be shorter than index and you should be taking a little more risk in terms of spreads.”
Yields on two-year U.S. Treasury notes are likely to rise to 1.25 percent to 1.5 percent from 1.08 percent in the next year as the economy strengthens and the Federal Reserve begins to increase interest rates, Gross said.
“Real interest rates are moving higher,” said Gross, who co-founded Pimco in 1971. “That’s the main bear element in the bond market.”
Real yields, which take into account inflation or deflation, have increased to 1.71 percent on 10-year Treasuries from 1.12 percent at the end of last year.....
Trending Topics
04-10-2011, 04:33 AM
#8
I feel the need...
Global economy: An inflated outlook
The Chinese province of Guangxi might be almost 9,000km from Frankfurt, home of the European Central Bank. But in today’s globalised economy, the two are much closer than they first appear.
Two months ago Zhu Xinzhi, head of a lighting manufacturers’ association in the industrial city of Foshan in southern China, set off for Guangxi on a recruiting trip. Offering a monthly wage of Rmb1,600, he hoped to attract 500 workers; he got 10. Alternative opportunities, high inflation and a recent trend of rising wages made his jobs unattractive. “The workers felt the salary was relatively low and that it’s better to stay home and run their own small business or go to cities with higher pay,” he says. “The salary we offered has no advantage any more. It was a very unsatisfactory trip.”
The reverberations from China’s rising wages, alongside rapid economic growth there and in fellow emerging economies, were felt in far-off Frankfurt this week.....
Two months ago Zhu Xinzhi, head of a lighting manufacturers’ association in the industrial city of Foshan in southern China, set off for Guangxi on a recruiting trip. Offering a monthly wage of Rmb1,600, he hoped to attract 500 workers; he got 10. Alternative opportunities, high inflation and a recent trend of rising wages made his jobs unattractive. “The workers felt the salary was relatively low and that it’s better to stay home and run their own small business or go to cities with higher pay,” he says. “The salary we offered has no advantage any more. It was a very unsatisfactory trip.”
The reverberations from China’s rising wages, alongside rapid economic growth there and in fellow emerging economies, were felt in far-off Frankfurt this week.....
http://www.ft.com/cms/s/0/335141d6-6...#axzz1J33MukD3
04-10-2011, 08:30 PM
#9
Inflation is coming and it is going to be staggering.......
04-10-2011, 11:18 PM
#10
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04-11-2011, 10:43 AM
#11
The sizzle in the Steak
...but commodities are a bubble!!!!!!
04-11-2011, 04:56 PM
#12
I feel the need...
04-11-2011, 04:58 PM
#13
I feel the need...
Dejected Workers Stop Fed From Taking Comfort in Jobs Data
April 11 (Bloomberg) -- The sharpest drop in unemployment in more than a quarter century obscures a simple fact: The jobs market still isn’t working for many Americans.
Some 6.3 million people have been out of work and looking for a job for more than six months. The employment-to-population ratio is lower than it was when the recession ended as companies have been slow to add to payrolls. And big sources of hiring in the past -- government, health care and retailing -- may not be able to reprise that role in the future as lawmakers limit outlays and consumers curb spending.
“The trends are a little bit scary,” said Nobel laureate Michael Spence, a professor at New York University. “There’s been a break in an important part of the social contract” for many Americans who are finding they can’t get ahead.....
Some 6.3 million people have been out of work and looking for a job for more than six months. The employment-to-population ratio is lower than it was when the recession ended as companies have been slow to add to payrolls. And big sources of hiring in the past -- government, health care and retailing -- may not be able to reprise that role in the future as lawmakers limit outlays and consumers curb spending.
“The trends are a little bit scary,” said Nobel laureate Michael Spence, a professor at New York University. “There’s been a break in an important part of the social contract” for many Americans who are finding they can’t get ahead.....
04-11-2011, 05:54 PM
#14
^ a major factor is the Obamacare thing, no way companies are going to hire with is large burden placed upon them......
04-12-2011, 06:36 PM
#15
I feel the need...
Exports, Imports, "Everything Weaker Across the Board"
I will "take the under" on that 4.4% global growth estimate by the IMF.
*The ECB is hiking and that will not do Europe much good.
*Japan is obviously hurting.
*In the US, state budgets are a wreck and little or no help is coming from Congress.
*In the US, mall vacancies are high and rising
*Residential housing in the US remains an absolute disaster
*China is hiking to stave off property bubbles and inflation
*The Australian housing bubble has popped.
*The UK is a fiscal disaster.
The overall global economy is much weaker than most think and the global macro picture is awful.....
*The ECB is hiking and that will not do Europe much good.
*Japan is obviously hurting.
*In the US, state budgets are a wreck and little or no help is coming from Congress.
*In the US, mall vacancies are high and rising
*Residential housing in the US remains an absolute disaster
*China is hiking to stave off property bubbles and inflation
*The Australian housing bubble has popped.
*The UK is a fiscal disaster.
The overall global economy is much weaker than most think and the global macro picture is awful.....
04-25-2011, 06:47 PM
#16
I feel the need...
A bout of inflation could be the tonic for ballooning debt
Short of default, a bout of inflation similar to that of the 1970s may be the only way for the U.S. to reduce its debt burden if lawmakers fail to pass deficit-reduction measures, according to a Bloomberg Government Study released Friday.
The study projects the debt would fall to 61.8 percent of gross domestic product in 2020 under a scenario that repeated the 1970s, when consumer prices climbed 8.1 percent a year on average. A return of the 1980s, 1990s or 2000s would result in debt levels anywhere from 96.4 percent to 102.4 percent of GDP.
"The above scenarios paint a bleak picture of the trajectory of government debt to 2020, assuming no measures are taken to reduce the deficit," Bloomberg Government economists Christopher Payne and Ted Buckley wrote. "Given recent economic history, it does not look likely that the U.S. can grow its way out of the debt problem....."
The study projects the debt would fall to 61.8 percent of gross domestic product in 2020 under a scenario that repeated the 1970s, when consumer prices climbed 8.1 percent a year on average. A return of the 1980s, 1990s or 2000s would result in debt levels anywhere from 96.4 percent to 102.4 percent of GDP.
"The above scenarios paint a bleak picture of the trajectory of government debt to 2020, assuming no measures are taken to reduce the deficit," Bloomberg Government economists Christopher Payne and Ted Buckley wrote. "Given recent economic history, it does not look likely that the U.S. can grow its way out of the debt problem....."
04-25-2011, 06:51 PM
#17
The sizzle in the Steak
Inflate, cut, & tax is the only way out.
04-25-2011, 06:59 PM
#18
I feel the need...
04-25-2011, 07:01 PM
#19
The sizzle in the Steak
^^ Both Conservatives and Socialists on the whole (except for a very few) want to anything really meaningful.
They want to kick the can down the road again.....however this time the road is short, and the can is to big to kick.
There love and desire for one thing: Being re-elected will doom us all.
They want to kick the can down the road again.....however this time the road is short, and the can is to big to kick.
There love and desire for one thing: Being re-elected will doom us all.
04-25-2011, 07:05 PM
#20
I feel the need...
^^ 
You hittin' the sauce early tonight in prep for the big game. Two spelling errors in one post, that's unlike you.
/threadjack.
Sounds like you already have your PMDS trade on like me. :wink:
You hittin' the sauce early tonight in prep for the big game. Two spelling errors in one post, that's unlike you.
/threadjack.
Sounds like you already have your PMDS trade on like me. :wink:
04-26-2011, 06:28 AM
#21
If I had my way our government would be like this
1. KILL all meaningless departments starting with the EPA and return that stuff back to the state level...
2. Terminate Medicare and Social Security for anyone under 40 that is working and force them to contribute to a retirement plan by the virtue of not having a safety net. If you do not contribute then they have no retirement. Contrary to what all of the liberal weenies out there tell you, there are PLENTY of Charities out there that are willing to help people with their monthly expenses.......
3. If you do something to discrace your office, you're outta there IMMEDIATELY none of this "I'm so sorry" crap and some politically motivated hearing where you may or may not stay in office IE
President Clinton giving Monica a pearl necklace = you are toast
Randy Cunningjham taking bribes = you're outta here*
Sandy Burger stuffing his pants with documents = addios amigo
William Jefferson taking bribes (90K freezer man) = you gotta go*
Tom DeLay laudering money = someone take HIM to the cleaners
James Traficant using campaign funds for personal use = don't come back*
* = lost office
3. Lobbyist have to go. No longer accepting what amounts to a legal bribe....the government is here to serve the people, not to rape the people.....
4. No more lavish expense accounts, self voted raises, using tax payer money to go to and from work, etc.....
How can we expect the government to deal with inflation when they cannot even keep their own house in order?
1. KILL all meaningless departments starting with the EPA and return that stuff back to the state level...
2. Terminate Medicare and Social Security for anyone under 40 that is working and force them to contribute to a retirement plan by the virtue of not having a safety net. If you do not contribute then they have no retirement. Contrary to what all of the liberal weenies out there tell you, there are PLENTY of Charities out there that are willing to help people with their monthly expenses.......
3. If you do something to discrace your office, you're outta there IMMEDIATELY none of this "I'm so sorry" crap and some politically motivated hearing where you may or may not stay in office IE
President Clinton giving Monica a pearl necklace = you are toast
Randy Cunningjham taking bribes = you're outta here*
Sandy Burger stuffing his pants with documents = addios amigo
William Jefferson taking bribes (90K freezer man) = you gotta go*
Tom DeLay laudering money = someone take HIM to the cleaners
James Traficant using campaign funds for personal use = don't come back*
* = lost office
3. Lobbyist have to go. No longer accepting what amounts to a legal bribe....the government is here to serve the people, not to rape the people.....
4. No more lavish expense accounts, self voted raises, using tax payer money to go to and from work, etc.....
How can we expect the government to deal with inflation when they cannot even keep their own house in order?
05-16-2011, 06:57 PM
#22
I feel the need...
Threat of stagflation rears its head
Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/21d6545c-7...#ixzz1MYxpDsQX
High inflation, low growth. Sound familiar? The spectre of 1970s-style “stagflation”, banished for decades, has crept back into investors’ consciousness.
Oil prices may have tumbled from recent highs, but crude remains well above $100 a barrel. Sharp rises in the price of food staples are already causing pain in many of the world’s emerging economies. Now, central banks in the US and UK have downgraded their growth forecasts and raised those for inflation.
With recovery still fragile in the US and many parts of Europe, there are fears rapidly increasing prices for fuel and food could begin to push up prices of other goods and services more quickly. Such a scenario, combined with weak growth, could lead to stagflation reminiscent of the seventies.....
High inflation, low growth. Sound familiar? The spectre of 1970s-style “stagflation”, banished for decades, has crept back into investors’ consciousness.
Oil prices may have tumbled from recent highs, but crude remains well above $100 a barrel. Sharp rises in the price of food staples are already causing pain in many of the world’s emerging economies. Now, central banks in the US and UK have downgraded their growth forecasts and raised those for inflation.
With recovery still fragile in the US and many parts of Europe, there are fears rapidly increasing prices for fuel and food could begin to push up prices of other goods and services more quickly. Such a scenario, combined with weak growth, could lead to stagflation reminiscent of the seventies.....
05-16-2011, 07:05 PM
#23
I feel the need...
Pimco Sees Financial Repression in U.S. Amid ‘Deteriorating Debt Dynamics’
Pacific Investment Management Co., which runs the world’s largest bond fund, said “deteriorating debt dynamics” will stoke faster inflation and financial repression in the U.S. as well as at least one sovereign-debt restructuring in Europe.
In a report aimed at establishing a worldview for investors in the next three to five years, Pimco Chief Executive Officer Mohamed El-Erian raised the prospect of U.S. policy makers trying to force savers to accept returns below the rate of inflation as the government grapples with a budget deficit the White House reckons will reach $1.6 trillion this year.
“It is a world where several governments in advanced economies, and the U.S. in particular, opt for financial repression and mild inflation as the major way to accommodate their deteriorating debt dynamics,” Newport Beach, California- based El-Erian wrote in a report published today on the firm’s website. “It is a world that heals slowly and unevenly and remains structurally impaired.”
Such tactics are evidence officials will continue to “hobble” through in their efforts to propel economies from the aftershocks of the global recession, he said. Europe will remain plagued by its fiscal crisis with “the virtual certainty of at least one, and probably more, sovereign-debt restructurings.”
El-Erian, whose firm promulgated the term “new normal” to describe an economy characterized by slow growth in developed countries and rapid expansion in emerging markets, made clear that Pimco is sticking with that outlook.....
In a report aimed at establishing a worldview for investors in the next three to five years, Pimco Chief Executive Officer Mohamed El-Erian raised the prospect of U.S. policy makers trying to force savers to accept returns below the rate of inflation as the government grapples with a budget deficit the White House reckons will reach $1.6 trillion this year.
“It is a world where several governments in advanced economies, and the U.S. in particular, opt for financial repression and mild inflation as the major way to accommodate their deteriorating debt dynamics,” Newport Beach, California- based El-Erian wrote in a report published today on the firm’s website. “It is a world that heals slowly and unevenly and remains structurally impaired.”
Such tactics are evidence officials will continue to “hobble” through in their efforts to propel economies from the aftershocks of the global recession, he said. Europe will remain plagued by its fiscal crisis with “the virtual certainty of at least one, and probably more, sovereign-debt restructurings.”
El-Erian, whose firm promulgated the term “new normal” to describe an economy characterized by slow growth in developed countries and rapid expansion in emerging markets, made clear that Pimco is sticking with that outlook.....
09-25-2011, 07:07 AM
#24
I feel the need...
Stagflation: Scourge of the ’70s stalks us still
As we teeter toward what could be the third U.S. recession in a decade, experts can’t help but sift through economic history to look for precedents. The eye is immediately drawn to the last decade of the recession trifecta – the 1970s.
That lost decade for the economy and the stock market was marked by a set of conditions so glaring that they popularized a previously obscure economic term: stagflation.
You’d think stagflation – the combination of high inflation and stagnant economic growth – would be of little help in understanding our current decade. After all, inflation rates in North America are running at a little over 3 per cent, compared with about 13 per cent at the end of the 1970s.
But veteran portfolio manager Don Coxe thinks there’s a new kind of stagflation. It may not be as dramatic as the stagflation that crippled the 1970s, but it may help explain the stalled economic and equity-market cycle.....
That lost decade for the economy and the stock market was marked by a set of conditions so glaring that they popularized a previously obscure economic term: stagflation.
You’d think stagflation – the combination of high inflation and stagnant economic growth – would be of little help in understanding our current decade. After all, inflation rates in North America are running at a little over 3 per cent, compared with about 13 per cent at the end of the 1970s.
But veteran portfolio manager Don Coxe thinks there’s a new kind of stagflation. It may not be as dramatic as the stagflation that crippled the 1970s, but it may help explain the stalled economic and equity-market cycle.....
