Next up, inflation

This week we saw the dollar take a beating and the talk started to move back to the problem of printing money which means inflation unless something changes. Will the US reinvent itself and start building a new economic cycle before inflation kicks in or will inflation take over and bury the economy?

On a less serious note, a favorite Fast Show clip featuring Channel 9 TV. For those who have never had the pleasure of watching TV around the world, Channel 9 bundles the best of the worst into one make believe television channel in a make believe country. The target word of the show is inflaytion. Read More......

'Twelve days of Christmas' up almost 11%

Bah humbug!

Given the economic downturn, even the most romantic might balk at the $86,609 price tag for the items in the carol "The Twelve Days of Christmas."

That's this year's cost, according to the annual "Christmas Price Index" compiled by PNC Financial Services Group Inc., which tallies the single partridge in a pear tree to the 12 drummers drumming, purchased repeatedly as the song suggests.

The price is up $8,508 or 10.9 percent, from $78,100 last year.

"True loves may take it on the chin for a peck on the cheek," said Jim Dunigan, managing executive of investment for PNC Wealth Management, which has been calculating the cost of Christmas since 1984.

In this tight economy, what's a romantic to do?

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Bailout feeds oil increase, dollar decrease

The dollar had been making a reasonably good recovery until Wall Street started to struggle. It's clear that the bailout is going to mean a heavy cost to the US so the dollar has started to slide once again against the euro, giving up almost ten cents in recent days. The cost of oil, which also had been dropping to a "cheap" high 90's is back up in the mid-teens and beyond. The $25 spike today was connected to the bailout. This bailout is not helping average Americans and we haven't even signed the damned thing yet.

Oil extended last week's massive gains and rose above $104 a barrel on Monday, on hopes that the U.S. government's $700 billion rescue plan would restore stability in the financial system and support global energy demand.

Sweeping government measures to rescue the financial system and restore confidence in shaky markets spurred gains across markets Friday, when oil rose almost 7 percent to cap its biggest three-day rally in a decade.

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Oil sets single day record increase

Inflation probably isn't going to be an issue with a failing economy and record setting debt for the Wall Street bailout and war in Iraq. Yep, that who deregulation program that McCain brags about has been a success.

Crude futures leaped more than $16 per barrel Monday to score their biggest daily gain in dollar terms since 1984 -- when crude began trading on the New York Mercantile Exchange.

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OPEC cuts oil production, prices up

Surprise! (Not really, but what the heck.) The Saudis were leaking stories the last few days that they would never go along with a cut, but in they joined the others. It looks as though the Saudis have either lost clout or are liars.

After hours of wrangling, OPEC on Wednesday agreed to revise its complex output targets and said the move would effectively cut supplies by half a million barrels per day (bpd).

Ministers of the Organization of the Petroleum Exporting Countries (OPEC) had been widely expected to stick to existing production allocations, which have been in place all year.

But they had voiced concern about a growing surplus of oil on the market and prices on Tuesday sank to a five-month low below $102 a barrel, around 30 percent below a record hit in July above $147.

The market rallied by a dollar after OPEC's announcement.

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Bush/McCain economy: Inflation hits "99 Cents Only" stores

Sure, prices are going up for everyone, but don't they know John McCain is a hero and more patriotic than everyone else? It's not really appropriate to talk about inflation or any other economic issue during the campaign because McCain's personal history (outside of his first marriage, Keating Five, Phil Gramm or lack of vetting with Palin) is much more important than any trifling money worries. John McCain doesn't think it's important enough to discuss, so let's just stop all the fuss. Read More......

OPEC President: oil oversupply in market by end of year

Who else is smelling another increase in prices?

Speaking to reporters on his arrival for Tuesday's OPEC meeting in Vienna, he said there was plenty of oil in the market and the group will discuss the possibility of cutting back.

When asked if the group will decide to cut, he replied: "I don't know, there will be a discussion on that."

"There is plenty of oil in the market, stocks are pretty good," Khelil said. "We're going to have an oversupply by the end of year."

Goldman Sachs still believes oil will be at $130 in the final quarter of 2008 and $140 for the year. Read More......

Misery index going up, again

The misery index is a combination of inflation and unemployment and in general, as the two head upwards during an election year, the incumbent party in the White House struggles. Obviously both are rising quickly this year and to date, McCain has managed to avoid discussing the economy and separate himself from Bush. The Clinton campaign hammered away with "it's the economy, stupid" in 1992 to victory and this year it's hard not to be aware of friends, family and neighbors being weighed down by this nasty combination. Read More......

Will OPEC cut oil production?

And why wouldn't they? Prices have plummeted to barely over $100 per barrel so one has to wonder how OPEC producers are even making ends meet. Besides, with the world on the edge of a recession, there's obviously a few more dollars to squeeze out before the money disappears. No matter, we can surely count on our good friends, the Saudis, who believe the oil floor ought to be around $80. That would naturally be higher than the average price of oil for 2007. Thanks! Read More......

Republican economy scorecard shows losses across the board

This is the economy that McCain thinks is "fundamentally strong." Sure, when you own 12 houses, I guess life is pretty good. The bright spot of this report is that if you have work, the workplace is a safer environment, which is great but hardly comparable to having employment is rising income.

The Rutgers labor scorecard offered other sobering findings:

* About 530,000 were subject to mass layoffs in the last year, growth of nearly 5 percent, but a lower rate than five and 10 years ago.
* The median weekly earnings for American workers have not grown in real terms over the last eight years.
* At $6.55, the federal minimum wage is worth 40 cents less per hour, in inflation-adjusted dollars, than it was a decade ago.
* While employer-assisted childcare and employee wellness programs have grown quickly over the last decade, they still cover less than one quarter of American workers.
* Roughly 4 percent of the workforce wants to work full-time, but is working part-time because they can’t find full-time work.

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Inflation up again, consumer spending drops

So you mean the "rebate" checks are finished already? No! I can't believe it! Let's face it America, we're a nation of whiners. Just imagine what a McCain/Gramm economy would look like in four years.

U.S. personal income tumbled unexpectedly in July and spending slowed as the effects of government stimulus wore off and an inflation measure was at a 17-year high, a government report released on Friday showed.

Personal income fell 0.7 percent in the month, the sharpest decline since a 2.3 percent plunge in August 2005 after Hurricane Katrina, the Commerce Department said. Analysts were expecting July income to stay flat.

Consumer spending, which accounts for about two-thirds of national economic activity, rose 0.2 percent, as expected, the slimmest gain since February, after gaining 0.6 percent in June. However, inflation-adjusted spending dropped by 0.4 percent, the sharpest slide in four years.

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Big Oil sets record for fiscal quarter - $51.5 billion

No wonder they have so much money to shovel over to the McCain campaign. McSame as it ever was. Why is McCain letting them dictate American energy policy as they did under Bush?

Oil giants Chevron Corp. and Total SA wrapped up a string of gargantuan, record-breaking earnings reports Friday, a stretch in which six of the major international oil companies topped $50 billion in combined profit for the first time.

While the profits of unparalleled size have brought withering criticism from Washington and disgust from consumers across the country, very few were surprised. Crude prices during the second quarter were nearly double what they were a year ago.

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Inflation to start increasing, even more

If you thought that the rising food and energy costs were bad, just wait for the next round. Many retailers and restaurants have held off on passing on inflation but those days are nearing an end. With all of the basic food costs going up, McCain is going to need a larger cheat sheet to keep track of prices. Perhaps Phil Gramm can give him the answers on the fly the way Lieberman does for Iraq. Now that's leadership.

Most inflation this year has come from food and fuel, as retailers resisted passing along to strapped consumers the higher prices manufacturers charged them, but coming increases from companies such as Johnson & Johnson and Hasbro Inc. may leave them with no choice.

"While these increases have not for the most part been passed on at the retail level, it is inevitable that they will be at some point," said Dean Baker, co-director of the Center for Economic and Policy Research. "Car dealers and other retailers cannot continue to absorb rising costs at the wholesale level and not pass some of these increases on to consumers."

Sherwin Williams Co. on July 17 announced its third price increase in eight months. The company has been having "difficult discussions" with retailers, Chris Connor, chairman and CEO, said on its quarterly conference call.

The price increases are "well supported with facts in terms of why the company needs them," he said. "Our customers, to the best of their ability, are passing them on."

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Bush-McCain economy continues to be top issue

No matter how hard John McCain tries, he can't break free from the Bush economy. Even yesterday McCain praised Bush for the drop in oil prices, despite a lack of any link. The list of Bush praisers is limited these days though McCain is only cementing the belief that most Americans already have, which is the McCain is Bush. Maybe McCain is simply confused again and thinks it's 2004. Either way, McCain is in trouble with the economy because not only is he deeply tied to the policies that brought us here via Gramm-O-Nomics but he admits that he knows nothing about economics. Well, except that he is reading Greenspan's book, as if that's comforting.

The economy is the nation's top concern by far, but anxiety about energy has grown more since spring than any other issue while the focus on Iraq continues to fade, according to a poll released Wednesday.

The findings by the Associated Press-Ipsos poll provide the latest confirmation of how economic woes — including job losses, rising inflation and the ailing financial and housing markets — are dominating voters' worries as this fall's presidential election approaches.

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East Africa food crisis becoming urgent

As always, war and drought are driving the terrible conditions. And, as always, Europe, US and China keep selling (and giving) more and more military equipment to the region. In the West many like to throw the blame at Africa without ever bothering to look at how the West (and now China) contributes significantly to the problem. As long as we all have our lapdog government, everything is possible without any concern for what may be benefit the greater good. Add to that the free-market phonies who preach open markets but deliver destruction to local market and you have a serious problem. Food prices have increased beyond what is affordable to most. When you are living on less than $1 per day, massive price increases of anything becomes impossible.

It is the second serious drought in the region in three years, it says.

Oxfam is calling on donors to increase aid levels to the region.

The call follows another warning on Tuesday from the UN World Food Programme, saying that more than 14 million people in the Horn of Africa needed food aid because of drought and rising food and fuel prices.

"The cost of food has escalated by up to 500% in some places, leaving people who have suffered drought after drought in utter destitution," says Oxfam's Rob McNeil, who has just returned from the Somali and Afar regions of Ethiopia.

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US Air intimidating pilots to cut fuel

Not good. This from the same management team who showered themselves in millions in salary and bonuses all while going through bankruptcy. Twice.

Jet fuel has surpassed labor as the airline industry's greatest expense.

But US Airways recently crossed the line when it ordered eight pilots who requested "an extra 10 to 15 minutes worth of fuel" to attend training sessions, or "check rides," that could put their pilot licenses in jeopardy, Ray said. The pilots were supposed to report for their training sessions Wednesday, he said.

"We feel they're trying to set an example," Ray said. "Captains shouldn't be intimidated into thinking, 'If I say I need this fuel, they may send me for a check ride.' ... Cutting peanuts off the plane, that's one thing. But cutting a captain's fuel level below his comfort, that's another thing."

US Airways spokesman Morgan Durrant said the decision to bring in the eight pilots for extra training was not meant to be punitive. "That's totally not true," he said.

During the past few years, the carrier has required its planes to carry enough fuel to pad their flight times by 60 to 90 minutes, Durrant said.

"These eight pilots have routinely been above the 60 to 90 minute range. It just behooves us as a company to talk to these guys, figure out what they're seeing that we're not," Durrant said.

Blaming the pilots for flight time? Read More......

Next round of economic stimulus?

Bush is an optimist so he doesn't think any such actions are necessary. Yes, the same Bush who assumed business would act responsibly but they didn't, which is why we're in this situation today. For those grounded in reality it's obvious a follow up stimulus package is necessary. The longer this is delayed, the longer this cycle will drag out. Bush wants to avoid being pinned not only with two recessions, but he also wants to avoid any more spending as if he hasn't already broken the bank.

The Republicans spent years telling the country that they were business people so they could run the country like a business. What they failed to explain was that yes, they'd run it like Enron or Countrywide Financial or another failed model. Forget about what the Republicans want and let's think about what the country wants. For the next stimulus, forget about these tax rebates and let's refocus on the infrastructure of the US which is not worthy of a great country. Create new jobs for families and bring this up to date. Sure it's going to be expensive, but it needs to be done and we need to pump more cash into the system. The GOP and friends cashed in on the American population in recent years so tough luck if they don't like it. Read More......

Another after effect of inflation - school lunches

The fallout from bad economic and energy policies are eventually going to touch every part of daily life. For people who are working, there's the concern about employment, high cost of actually getting to work, fear of losing retirement money and so forth. For retirees on fixed incomes, the thought of paying more for food and gas are scary. For school children, they will either grumbling parents who will have to pay more (either in taxes or at checkout) or the high probability of more cutbacks for poor children. This story on school food increases is from Boston though it could be almost anywhere. It was Reagan who reclassified ketchup as a vegetable during a previous round of cutbacks. (Yes, what an asshole.)

None of the financial options that we face in the next few years are attractive. In all likelihood we will be paying more at the pump, more to heat and more for food until there is a major change in policy. We're also very likely to have tax increases to pay for the excesses of the past when we gave away everything to Republican special interests who promised the world but delivered rubbish. Read More......

Wholesale inflation jumps, surge hits 27 year high

What a nation of whiners. Can we get another inspirational pep talk from Phil Gramm? Tell us how you made millions from subprime loans again, Phil. Tell us that story one more time so we can sleep soundly tonight and turn that frown upside down.

Soaring costs for gasoline and food pushed inflation at the wholesale level up by a larger-than-expected amount in June, leaving inflation rising over the past year at the fastest pace in more than a quarter-century.

The Labor Department reported that wholesale prices jumped by 1.8 percent last month, the biggest one-month rise since last November. Over the past 12 months, wholesale prices are up 9.2 percent, the largest year-over-year surge since June 1981, another period when soaring energy costs were giving the country inflation pains.

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Oil hits new high at $145.86

To be fair to Phil Gramm and John McCain, it's probably a mental oil price increase. If only mental could pay at the pump or put food on the table then we'd be all set. Maybe Dr Phil can tell us how that works. Read More......