Strange Inflation News

CPI gets released this morning at 8:30.

Consensus forecast for September 07 — both the headline number, and the Core — are for +0.2%.

Meanwhile, in one of those weird coincidences, three odd inflation anecdotes crossed my path this week.

Travel: On the LIRR yesterday, officials handed out flyers about the upcoming hearings for price increases, ranging from 8% to 11.1%. Obviously, the cost of fuel is impacting the railroad’s ability to keep its deficit closed — a feat accomplished after the last fare increase, passed 18 months ago.

Food Costs: Domino’s Pizza (DPZ), the nations largest pizza chain,missed on both revenues and earnings yesterday. Why? Let’s go to the company’s CEO: "Unprecedented cost pressures and a weak consumer environment negatively impacted our domestic results in the quarter, which made striking the right balance between increasing prices, while operating in a period of declining traffic, very difficult."

Unprecedented. Cost. Pressures.

The firm noted that higher labor, food and packaging costs, as well as higher interest expenses, were only part of the problem: The company’s own pizza price increases could not implemented fast enough by franchisees to outpace their rising input costs.

That’s right, inflation has been running faster than their ability to print new menus!

Works of Art: No, this isn’t another screed about how high prices are in the Art world. This is a different type of observation. It comes from the What’€™s Offline section of the weekend NYT:

prices for metals are being blamed for an increase in the theft of
sculptures worldwide, Art & Antiques Magazine reports. More than
300 bronze, aluminum and copper sculptures have been registered with
the Art Loss Register, an industry database, since January 2005."

Works of art are being stolen not to be resold them into the
high priced collector’s market, but rather, because the underlying
metal has increased so much in price, they are valuable for the scrap metal alone.


All I can say is, thank goodness inflation is contained! Imagine what would be going on if it were actually elevated!


Domino’s Pizza profit down 55 pct, shares tumble
Aarthi Sivaraman
Reuters, Oct 16 2007

What’s Offline
The Revolt of the Childless
NYT, October 13, 2007

Category: Data Analysis, Economy, Federal Reserve, Inflation

The Weirdest Product Endorsement Ever

Category: Consumer Spending, Technology

Read It Here First: China’s Next Big Export: Inflation

Category: Financial Press, Inflation

Forex Keynote Speech (Las Vegas)

Category: Data Analysis, Economy, Employment, Markets, Real Estate

Options and Monday’s Lows

Category: Markets, Options, Trading

Repeat After Me: Spending Surveys Are Meaningless

Category: Consumer Spending, Data Analysis, Economy, Financial Press, Retail

Repeat After Me: There is NO Inflation

Category: Commodities, Energy, Inflation

1987 Crash Revisited

Rob Fraim is a reader of mine who puts out his own
amusing comments each day via email. On the 17th anniversary of
the 1987 stock market crash, he put out his recollections from that
day, and we are republishing them today, the 20th anniversary of Black Monday.

I found them so interesting that I suggested Rob (who is
blogless) post them here. He gladly agreed. Without further adieu, here
is Rob’s version of 1987 Crash Revisited

October 19 – the day that each year gives old-timers in this business a renewed facial tic and post-trauma flashbacks.

What?” you say.  “You mean you were actually there, Grandpa?  You remember the Crash of ’87?

Yes, I was, and yes I do.  Confirming rumors that I am, in fact,
older than dirt I note that I was in this business in 1987 – and had
been for a few years prior (I started in 1983.)

I was having dinner last week with a friend who runs a hedge fund
(another graybeard, although he looks younger than me) and we ended up
talking about 1987.  He had a great story about the whole thing (which
I’ll let him tell you about someday if you ever get to have dinner with

So I thought I would take a moment to reflect on my own Crash
Experience – and perhaps some of you will share your October 19, 1987
story (provided you’re not a whippersnapper who would be relating what
was on freakin’ Sesame Street that day!  I really hate you guys.
You’re svelte and unwrinkled and smart and energetic and I’m just
liable to whup you if you’re not careful.)    Maybe we’ll even get a
recounting of the aforementioned dinner tale from last week.  So if you
feel like it, drop me a note with your recollections.  If I get enough
to make it worthwhile, perhaps I’ll compile them for sharing.)

Read More

Category: Investing, Markets, Psychology, Trading

The Bubble Man

Category: Digital Media, Federal Reserve, Inflation, Psychology

Only TV Reporter at the 1987 Crash

Category: Derivatives, Financial Press, Markets, Psychology, Television, Trading