Yesterday’s CPI report was good news, in the sense that it was lower than expected, which is obviously better than worse than expected. But I agree with this meme’s vibe, and don’t see any reason to celebrate based on the actual data.
▪️First, the CPI was up 0.4% in Oct, which was the same amount as Sept. Yet Sept was seen as “worse than expected” and terrible news. Meanwhile, the Aug CPI was flat and July was +0.1%, so if anything inflation is trending up in recent months, and 0.4% is a 5% annual rate, still high.
▪️Energy resumed its rise after 3 months of significant declines, up 1.8% in Oct. Energy’s decline was the primary reason for the recent slowing of inflation, but now seems unlikely to continue. If seems more likely that energy spikes again than that it falls.
▪️Shelter continues to climb, up 0.8% in Oct and 6.8% YoY, now a 40 year high. Remember, shelter makes up nearly 1/3 of the CPI, by far the biggest component, and it’s sticky. In the beginning of the inflation wave shelter actually kept numbers down, now it’s keeping them up.
▪️Even if housing prices come down, shelter could stay high due to higher interest rates and maintenance/material costs. Shelter is a function of the monthly payment, not just the value of the property.
▪️The major indexes that fell in price during Oct were used cars (-2.4%), energy services (-1.2%), apparel (-0.7%), medical care services (-0.6%) and airline fares (-1.1%). It seems doubtful these keep falling, but if shelter and energy keep climbing they must fall to keep inflation low.
▪️Despite record inflation, this past year saw the dollar strengthen considerably in relation to other currencies, as investors believed the Fed would aggressively raise rates to fight it. Thus, as bad as inflation has been, it was fighting a headwind of a strong dollar, keeping import prices down.
▪️If markets start thinking those high rates won’t materialize (which they’re currently indicating as the dollar index plunges) a weakening dollar would add a tailwind to inflation. Particularly since we import so many goods, a weaker dollar means we pay more for imported goods.
▪️Back in the 1970s, inflation went through a series of ups and downs, but was persistent. By 1974, it reached over 12%, but fell to just under 5% by 1976. This was short lived, though, and resumed its climb to 13% by 1979. Anyone cheering in 1974 was soon proven wrong.
▪️It’s naive to assume inflation will magically come down when the underlying fuel is still there. The Federal funds rate is still far below the inflation rate, and government spending is still running massive deficits in perpetuity. Declaring victory too soon ignores history and economics.
As with the leftist freak out over “banned books” this is not banning books, it’s still easy to get Harry Potter and bookstores should be able to limit whatever books they want for whatever reason. But not only does it show a double standard, the rationale is far less justifiable than removing certain content from school libraries. At least there the justification was the content of certain books are inappropriate for children, clearly not every book should be available in a school library. Here, there’s no argument about the content they just don’t like the author’s politics!
Because news came out about his letter to the FBI, revealing he was a nutcase. The letter was rambling and incoherent, claiming he was trained by the US military off the books, and that Walz had instructed him to kill Amy Klobuchar so he could run for Senate. None of it made any sense (Walz is not running for Senate) and none of the assassinations made any sense, even in a diabolical way.
Nearly all of his hit list was Democrats (including Walz) and abortion clinics, but he was supposedly working for Walz?! Plus, one of the guys he killed wasn’t even on his list, and others were no longer in office or deceased. None of it makes sense from any coherent angle.
Basically, it appears the guy was mentally ill and neither the left or right can use the incident to push their agendas anymore, so the story was dropped.
This is so dumb. First, this means LA began as Spanish land founded to support Spanish missions (i.e. colonialism). Which contradicts their entire premise. But the reality is that Los Angeles is a quintessential American city.
▪️When the US acquired California in the 1840s, LA was a small town of less than 2,000 people. It was basically nothing. It became large only after the gold rush and the railroads completed in the 1870-80s, which brought thousands of new settlers and a booming commercial center.
▪️But LA had a major issue limiting its growth, no water. It wasn’t until Mulholland found a water source and built an aqueduct down from Northern California that LA had the infrastructure to grow into a major city.
▪️Then, a combination of oil, real estate and the film industry caused it to boom in the early 1900s. Post WWII, industries like aerospace continued its spectacular growth. Calling this “Mexican land” is a brain dead take. Neither the Mexicans, Spanish nor ...
