Macrobius
05-15-2009, 11:33 AM
http://globaleconomicanalysis.blogspot.com/2009/05/wholesale-prices-post-largest-12-month.html
The Producer Price Index for Finished Goods increased 0.3 percent in April, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This rise followed a 1.2-percent decline in March and a 0.1-percent increase in February. At the earlier stages of processing, prices received by producers of intermediate goods moved down 0.5 percent following a 1.5-percent decrease a month earlier, and the crude goods index advanced 3.0 percent after declining 0.3 percent in March.
The index for finished goods less foods and energy edged up 0.1 percent in April following no change in the previous month. In April, higher prices for light motor trucks, pharmaceutical preparations, and consumer plastic products slightly outweighed lower prices for civilian aircraft, tobacco products, electronic computers, primary batteries, and non-wood commercial furniture.
Price declines are inevitable when fewer people have money to buy things, and demand is slack.
What is shocking though is that crude goods are off 30-40%.
http://4.bp.blogspot.com/_nSTO-vZpSgc/Sgxvl2O2PMI/AAAAAAAAGFU/NTJSqIbFPdw/s1600-h/PPI-2009-04-intermediate.png
In many ways, this is just cancelling out the 2008 absolutely incredible runup of Food/Energy prices, under-reported, of course, in the jewspapers.
Perhaps 'volitile' is the operative word here.
ADDED: also from this Mish's blog:
California is just scary:
http://globaleconomicanalysis.blogspot.com/2009/05/californias-budget-deficit-what-hell-is.html
According to Schwarzenegger, California faces a deficit of $15.4 billion (growing to $21.3 billion if voters reject the propositions). Also according to Schwarzenegger, California faces a $17 billion shortfall by July (with assumptions unknown as to the propositions).
If you prefer, Treasurer Bill Lockyer estimates the cash flow shortfall in fiscal 2009-2010 will be more than $13 billion.
Note that propositions 1A through 1F are supposed to raise $16 billion. However, it's important to remember that the $16 billion supposedly raised by the propositions will be spread over 4 years to miraculously end at that point in time as if every California problem will be cured.
How much of this is front loaded is anyone's guess. If you can untangle that mess, please be my guest.
I have been tracking California for quite some time and this is how I look at the situation: California is sinking further into the hole at a rate of $2 billion per month. I see no end in sight to the carnage. Thus, if California passes the propositions raising $16 billion, it will need another $24 billion (minimum) a year from now.
...
Slackening job prospects and deflation mean less money for states, as the price-deflation-shock works through the the system. Plenty of evidence it has bottomed though -- don't you think? The the consequences in the long term have by no means played out, given the 1-2 year timescale for the reaction. The longer term, and prospect of an eventual *inflation* are much harder to discern.
My personal political advice on funding states is that one should, on principle, do anything that strengthens states, financially, vis-a-vis the FedGov. Dependence on FedGov funding is bad, and even if you have to pay for it, creating a countervailing power base is a good strategy. This isn't a question of loyalty or desserts, but prudent funding of alternative bureaucratic enemies. So if you are a voter still [and I am not], at least be wise and hedge your bureaucratic bets.
The Producer Price Index for Finished Goods increased 0.3 percent in April, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This rise followed a 1.2-percent decline in March and a 0.1-percent increase in February. At the earlier stages of processing, prices received by producers of intermediate goods moved down 0.5 percent following a 1.5-percent decrease a month earlier, and the crude goods index advanced 3.0 percent after declining 0.3 percent in March.
The index for finished goods less foods and energy edged up 0.1 percent in April following no change in the previous month. In April, higher prices for light motor trucks, pharmaceutical preparations, and consumer plastic products slightly outweighed lower prices for civilian aircraft, tobacco products, electronic computers, primary batteries, and non-wood commercial furniture.
Price declines are inevitable when fewer people have money to buy things, and demand is slack.
What is shocking though is that crude goods are off 30-40%.
http://4.bp.blogspot.com/_nSTO-vZpSgc/Sgxvl2O2PMI/AAAAAAAAGFU/NTJSqIbFPdw/s1600-h/PPI-2009-04-intermediate.png
In many ways, this is just cancelling out the 2008 absolutely incredible runup of Food/Energy prices, under-reported, of course, in the jewspapers.
Perhaps 'volitile' is the operative word here.
ADDED: also from this Mish's blog:
California is just scary:
http://globaleconomicanalysis.blogspot.com/2009/05/californias-budget-deficit-what-hell-is.html
According to Schwarzenegger, California faces a deficit of $15.4 billion (growing to $21.3 billion if voters reject the propositions). Also according to Schwarzenegger, California faces a $17 billion shortfall by July (with assumptions unknown as to the propositions).
If you prefer, Treasurer Bill Lockyer estimates the cash flow shortfall in fiscal 2009-2010 will be more than $13 billion.
Note that propositions 1A through 1F are supposed to raise $16 billion. However, it's important to remember that the $16 billion supposedly raised by the propositions will be spread over 4 years to miraculously end at that point in time as if every California problem will be cured.
How much of this is front loaded is anyone's guess. If you can untangle that mess, please be my guest.
I have been tracking California for quite some time and this is how I look at the situation: California is sinking further into the hole at a rate of $2 billion per month. I see no end in sight to the carnage. Thus, if California passes the propositions raising $16 billion, it will need another $24 billion (minimum) a year from now.
...
Slackening job prospects and deflation mean less money for states, as the price-deflation-shock works through the the system. Plenty of evidence it has bottomed though -- don't you think? The the consequences in the long term have by no means played out, given the 1-2 year timescale for the reaction. The longer term, and prospect of an eventual *inflation* are much harder to discern.
My personal political advice on funding states is that one should, on principle, do anything that strengthens states, financially, vis-a-vis the FedGov. Dependence on FedGov funding is bad, and even if you have to pay for it, creating a countervailing power base is a good strategy. This isn't a question of loyalty or desserts, but prudent funding of alternative bureaucratic enemies. So if you are a voter still [and I am not], at least be wise and hedge your bureaucratic bets.