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Vicious Girl Scout Conspiracy Threatens to Stoke “Stealth” Inflation

madhedgefundtrader's picture




 

When I visited the local Safeway over the weekend, I was snared by some uniformed pre-teens, backed by beaming mothers behind a card table selling Girl Scout cookies.  I was a pushover. I walked away with a bag of Thin Mints, Lemon Chalet Crèmes, Do-Si-Dos, and Tagalongs.

I have to confess a lifetime addiction to Girl Scout cookies. During the early eighties, one of the managing directors at Morgan Stanley’s equity trading desk had a daughter in this ubiquitous youth organization. One day, she pitched to all 200 traders on the floor, going from desk to desk with sheets of paper taking orders.

I used to buy two of everything she offered, as some clients preferred a few boxes of these delectable treats over lunch at the Four Seasons any day. Others ordered hundreds. I later heard that the girl was the top performing scout in the greater New York area, two years running.

But this year, when I got home and opened the boxes I was shocked. While the price was the same, the number of cookies had shrunk considerably.  I knew it was not my waist line the scouts were concerned about. I was seeing the dastardly hand of “stealth inflation” at work.

In this deflationary environment, companies are loathe to raise prices. Food companies are especially hard hit, with many commodities like wheat, corn, sugar, soybeans, and coffee up 50%-300% in a year. Any attempt to pass these costs on to consumers is punished severely. So companies cut costs, quantity, and quality, instead, by shrinking the size.

I think you are seeing stealth inflation breaking out everywhere. It is not just in food. Many products seem to be undergoing a miniaturization process while prices remain unchanged. Ever notice that your home appliance now last only six years, instead of the original 20? It also extends to services, where a dollar buys you less and less. This is how the consumer prices index is staying in low single digits, despite abundant anecdotal evidence everywhere to the contrary.

To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.

 

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Fri, 03/25/2011 - 23:20 | 1102118 New_Meat
New_Meat's picture

"Ever notice that your home appliance now last only six years, instead of the original 20?"

Actually, GE Appliances in their "Six Sigma" religion, looked at standard warrantee that they offered to the mega-home builders of McMansions.  3 year OEM warranty to the home buyer?  Then, large scale statistical studies to take out all costs that would extend the appliance life beyond 3 years + 10%.

GE guys that I knew were wise to this situation and advised against.

- Ned

Fri, 03/25/2011 - 18:40 | 1101477 ZeroConfidence
ZeroConfidence's picture

Nothing is super-sized anymore except the bill & the taxes added onto it...

 

Fri, 03/25/2011 - 15:12 | 1100813 Ura Bonehead
Ura Bonehead's picture

I hear that next selling season they're changing the name of the [Swiss] Chalet Crèmes to Sub-Prime Depression Cookies.

Fri, 03/25/2011 - 14:55 | 1100727 onlooker
onlooker's picture

Walmart fruit and veggie contents are reduced. Pour the fluid out of the can and it is maybe 70% or less product. Name brands seem to have 80% or better.

Bought oil for an oil change. Valvoline synthetic $7.99 a quart. Regular $4.49 a quart.

Fri, 03/25/2011 - 14:41 | 1100634 no2foreclosures
no2foreclosures's picture

"Ever notice that your home appliance now last only six years, instead of the original 20?"

That's not due to inflation of the money supply.  That is due to GREED and something called Built-In Obsolescence.  Kind of like iPad 1 and iPad 2 and iPad 3, kind of.

Fri, 03/25/2011 - 13:48 | 1100334 boiltherich
boiltherich's picture

A $1.29 gallon (1.03 cents an ounce) of Clorox bleach at WalMart has recently gone to a $1.87 for 3 quarts (1.95 cents per ounce).  Almost 90% increase just in a few months. 

I also want to point out that while housing is not measured in the CPI except as some bent survey regarding what house owners believe they would have to pay in rents to lease a similar dwelling to the one they occupy (owners equivalent rents) which tends to track owners perceived home equity more than it does actual housing costs, in this region rents are up by 10-15% in just the last several months.  I am moving next week and I was pretty shocked at the rental market, a one bedroom is now more than an upscale two bedroom apartment was in 2008.  I paid 700 per month for a 2/2 at the best complex in town in 2006, now moving back there it has just gone up to 825. 

Being a disabled veteran on a fixed income I can say that I lived better on 2500 per month in 2006 than I am now living at 3600 per month.  Inflation has cost me over 1100 per month in living standards in just a few short years and that was while we allegedly had NO inflation.  Like the 6% raise the power company gave itself in 2010, and the 15% it gave itself for this year.  Or, the 32% raise in cable bills, oh I forgot, internet speed has gone up they tell me so the real price once you adjust for hedonics is lower.  All the same porn can't load fast enough!

Fri, 03/25/2011 - 12:54 | 1100125 JR
JR's picture

“If you can’t trust the Girl Scouts, who can you trust?” -- madhedgefundtrader

The growing controversy surrounding Girl Scout cookies may be more than just inflation; rather, it may be the political positions this organization has taken in recent years. Regardless of whether a person is for or against abortion, for or against gay marriage, for or against religion, the Girl Scouts have brought out powerful political opposition to their stands.  Here’s an example :

Thin Mints for Choice? | February 25, 2011 - By Leslie Tignor

You know that spring has sprung—or is about to—when the cute little girls from your neighborhood show up at the door in their crisp uniforms displaying colorful badges to take your order for Girl Scout cookies.  Samoas—those vanilla cookies coated in caramel, sprinkled with toasted coconut and laced with chocolate stripes—were always my personal favorite. I say “were” because I’ve had to give them up. I’ve done so because the Girl Scouts of America is not the same organization that I, or even my now-young adult daughter, used to be involved with.  The Girls Scouts of America has, over the last several decades, been infused with an anti-God, anti-family, pro-feminist (of the liberal and radical sort) and pro-choice mentality. 

In 1993, the Girl Scouts made God an optional part of its promise rationalizing that the word “God” could be interpreted in whatever way a girl wanted.  This followed on the heels of having already dropped loyalty to country from the oath (1972) and having been cut off from the first U.S. Catholic Archdiocese (Philadelphia, 1975) for its sex education program. 

Furthermore, the Covenant of the Goddess, a Wiccan web site, offers the Over the Moon Award (ages 8-11) and the Heart and Crescent Award (ages 12-18) to “any young person who is a member of any nature-oriented religion” (including Wicca, Druid, Asatru, etc.). These award patches are acknowledged by the Girl Scouts and are permitted to be worn on the Girl Scout uniform!

In the years that have followed, the Girl Scouts of America has been an advocate for achieving affirmative action for girls and mandating gender equality with badge work involving domestic violence awareness,   stress management and “girl power.” In addition to badges and ranks that indicate a mastery of useful skills like cooking, sewing, first aid and arts and crafts, girls are taught to support decisions for ending life support and given information on “ending a pregnancy.”   Today’s awards are now won by taking a series of “journeys” into the New Age. 

Girl Scouts (ages 8 and up) can attend workshops on puberty, “healthy practices” and sex education designed by Planned Parenthood—our nation’s largest provider of abortions.  Many troops not only work, but also affiliate, with Planned Parenthood.  Girl Scout Councils have given awards to local Planned Parenthood officials and some have sponsored Planned Parenthood’s sex education events in which the book It’s Perfectly Normal has been distributed. 

Most recently, the World Association of Girl Scouts hosted a panel at the United Nations and allowed Planned Parenthood to distribute a booklet entitled, Healthy, Happy and Hot—most of which was too sexually explicit to reprint and too disgusting to even discuss in polite company. 

While the Boy Scouts of America went all the way to the Supreme Court to defend against attempts by homosexuals to infiltrate its ranks and fill leadership positions, Girl Scouts has embraced lesbianism.  In one of its scouting books, there is an essay entitled, “All I really needed to know about being a lesbian I learned at Girl Scout Camp.”   
 
If you’re still not convinced, take a look at the organizations that Girl Scouts is promoting: CARE (leading lobbyist for abortion worldwide), UNICEF (population control - see here also ), MTV  (think recent controversy over
Skins ) the Susan G. Komen Foundation , (see here also), the Women’s Media Center (founded by Gloria Steinem and Jane Fonda) and Media Matters (funded by George Soros).

Granted, there are still many troops that observe the traditional moorings of Juliette Low and practice family- and God-centered activities, but they are fewer and farther between as the philosophy filtering down from national headquarters is spreading.  Parents, youth leaders, churches, pro-life and pro-family groups need to understand that there are almost four million Girl Scouts throughout the country, each of whom pays a yearly membership fee directly to the national office.  Membership dues accounted for $32.5 million being funneled into national accounts in 2009 alone!  Add to that the profits from the sale of Girl Scout cookies (yes, some of which is sent to National).

Parents need to do their homework before registering their daughters in the Girl Scouts of America and, as difficult as it might be to pass them up, the rest of us need to boycott the cookies!

Fri, 03/25/2011 - 13:37 | 1100288 Uncle Remus
Uncle Remus's picture

Are you Mormon?

Fri, 03/25/2011 - 18:09 | 1101393 falak pema
falak pema's picture

without an 'm' in the middle...

Fri, 03/25/2011 - 22:37 | 1102035 JR
JR's picture

Dear Wordsmith:

Since our conversation shows that you are intensely interested in this subject, to entertain your friends, I include a segment from the Planned Parenthood pamphlet used at the "for girls only" U.N. conference of the Girl Scouts :

“Some people have sex when they have been drinking alcohol or using drugs. This is your choice. Being drunk or high can affect the decisions you might make about sex or safer sex. If you want to have sex and think you might get drunk or high, plan ahead by bringing condoms and lube or putting them close to where you usually have sex.”

It’s a jolly way of life, of course; I’m just sorry that with my taxes I’m the one who has to pay for the consequences.

Fri, 03/25/2011 - 15:12 | 1100804 JR
JR's picture

No. But as I understand it, the Mormons do not accept the Girl Scout programs because of the GS’s lesbian and strongly-based feminine platforms.  It’s not the same with the Boy Scout programs, which are a part of many LDS communities, I understand.  Therefore, your question. :-))

 

Fri, 03/25/2011 - 12:45 | 1100077 apeakunderthehood
apeakunderthehood's picture

http://www.apeakunderthehood.blogspot.com/


Is Bernanke Going to Announce a Fragrance Line?

 

Fri, 03/25/2011 - 12:34 | 1100017 Stuck on Zero
Stuck on Zero's picture

Girl Scout cookies are the vilest concoctions made with Trans-fats.  Eeeewww.  They will kill you faster than Fukushima. 

Fri, 03/25/2011 - 18:08 | 1101390 falak pema
falak pema's picture

you mean the palm oil kind...from malaysia..

Fri, 03/25/2011 - 13:29 | 1100259 Uncle Remus
Uncle Remus's picture

You're a communist.

Fri, 03/25/2011 - 15:44 | 1100930 Big Corked Boots
Big Corked Boots's picture

Yeah, but he's a healthy communist.

Fri, 03/25/2011 - 12:31 | 1099990 Antarctico
Antarctico's picture

The crap coffee brand I buy when it is on sale just dropped from 12oz to 11oz per bag.  Was there ever a time when you could buy a full pound of coffee in a coffee bag? Another fun one is the change in whole wheat pasta at my local DuperMart which just dropped like a stone from 16oz to 11.5oz.  11.5oz?  What sort of new math did it take to come up with 11.5oz?  The whole 16oz of pasta to one jar of spaghetti sauce got thrown overboard so I either buy two friggen boxes and end up with too much noodle, or one box and end up with a quarter of a jar of sauce wondering why it missed the party.  What the fsck man, it's time for revolution!

Fri, 03/25/2011 - 13:16 | 1100201 johnQpublic
johnQpublic's picture

a five pound can of coffee is less than 2 lbs now

i still have one marked five pounds from the early eighties/empty can

Fri, 03/25/2011 - 14:12 | 1100473 Antarctico
Antarctico's picture

*sigh*  You know, maybe I should just play along with the gag and put away all my over sized coffee mugs and go back to using the few old style 6oz coffee cups I have in the back of the cupboard.

Fri, 03/25/2011 - 12:29 | 1099964 Broomer
Broomer's picture

Oh no, not the Girl Scouts cookies.

Edit:

Personal note: here in Brazil there's a widespread plague of shrinking products. Toilet paper, by law, must have the size printed on it... the paper is getting thinner with each passing day.

Fri, 03/25/2011 - 12:21 | 1099926 Bob
Bob's picture

The Little Caesar's $5 "Hot and Ready" pizza went to $5.55 this past week.

Burger King eliminated the $1 "Buck Double" cheeseburger from its menu a couple weeks ago.

Fri, 03/25/2011 - 12:17 | 1099914 boiltherich
boiltherich's picture

A one pound loaf of bread has 12.3 cents worth of wheat in it at this mornings price of $7.38 a bushel.  The bread I buy is heavier whole wheat, but still has only 17 cents worth of wheat.  Tell me again Safeway why it went up from $2.50 a loaf to almost $4.  And why my old favorite, Oroweat honey wheatberry is now $4.79 a loaf. 

Consumer price increases as I am experiencing them are rising faster than they were in the 1970's and early 80's which was pretty horrendous, for those of you that are too young to remember.  And I doubt that monetary inflation has a lot to do with it.  I know this will not be popular here but as long as the ongoing monetization remains electronic and mostly within banking circles it can't be the cause of the price rises.  In order to have consumer inflation you still have to have too many circulating dollars chasing too few goods, yet both wages and household wealth in the lower 98% of Americans has dropped, significantly. 

We could cast about for reasons, and there are many things contributing to price rises, but for the most part commodities while up are nowhere near enough to explain the retail increases we see.  I say follow the money, Carlos Slim had a net increase in wealth last year of well over 20 billion dollars, while he is Mexican a lot of that increase came from US sources, and of the Forbes 400 the cumulative increase in wealth was 8% last year, to 1.37 trillion dollars.  Guess where they got it? 

 

Fri, 03/25/2011 - 12:03 | 1099846 GFORCE
GFORCE's picture

Maybe Bernank follows the lapdance indicator?

Shadowstats is where you'll find the real CPI.

Fri, 03/25/2011 - 11:59 | 1099820 NERVEAGENTVX
NERVEAGENTVX's picture

Just wait until those thin mints are the size of M&M's.

Fri, 03/25/2011 - 11:53 | 1099798 Triggernometry
Triggernometry's picture

So thin mints got thinner?

Fri, 03/25/2011 - 11:22 | 1099632 Debtless
Debtless's picture

Gee that's funny - my tagalongs had like 5 extras in it. They must have been yours MHFT.

Fri, 03/25/2011 - 11:21 | 1099615 MikeNYC
MikeNYC's picture

What about all the other little girls out busting their butts to be a top seller, and little Muffy's dad walks her into Morgan Stanley and in one easy afternoon she kicks all their little hard-working Girl Scout asses.

 

Don't seem right.

Fri, 03/25/2011 - 11:38 | 1099708 jesse livermoore
jesse livermoore's picture

welcome to the real world.....

Fri, 03/25/2011 - 13:25 | 1100240 Uncle Remus
Uncle Remus's picture

Yep, that about sums it up.

And shouldn't that end with "bitchez"?

Fri, 03/25/2011 - 11:19 | 1099610 Eagle1
Eagle1's picture

My wife made a chocolate tort with a Sara Lee pound cake last night. The pound cake seems to have shrunken by 50% or so from a few years ago and now you need two of them to achieve the same thickness and size. Not a lot of bread to slice into layers anymore. Fred Meyers raised the price on hoagie rolls from 3 for $1.00 to 2 for $1.00 last week. No inflation here, move along.

Fri, 03/25/2011 - 18:35 | 1101461 ZeroConfidence
ZeroConfidence's picture

"Poundcake" shall henceforth be known as QuarterPounder cake.

This is part of the new Stealth Health initiative to reduce America's obese asses down to being merely fat again.

Those who are wealthy enough to remain obese will be singled out for additional tax increases.

 

Fri, 03/25/2011 - 14:04 | 1100441 Zero Govt
Zero Govt's picture

last 'dip at the well' for retailers/manufacturers profits and i reckon they know it!

Fri, 03/25/2011 - 11:15 | 1099590 ZackAttack
ZackAttack's picture

One day, she pitched to all 200 traders on the floor, going from desk to desk with sheets of paper taking orders.

 

Teaching the child a valuable life lesson to prepare her for a career as a FIRE rent-seeker.

Fri, 03/25/2011 - 11:17 | 1099589 Dan The Man
Dan The Man's picture

....lapdances are still $20

 

Yah, but boobs are getting smaller.   See?  Stealth Inflation!  Or Rack Deflation. 

Fri, 03/25/2011 - 18:07 | 1101385 falak pema
falak pema's picture

less silicone...

Fri, 03/25/2011 - 11:11 | 1099559 falak pema
falak pema's picture

Maybe king size steaks will become normal sized like in europe. And stretched cars and hummers will soon be a thing of the past. There are good sides to inflation. The young people may even read more books and play less on 'play station' or Ipad...but that is such a pipe dream... like eating less candy sitting in front of the Tv!

Fri, 03/25/2011 - 11:07 | 1099544 dark pools of soros
dark pools of soros's picture

lapdances are still $20

Fri, 03/25/2011 - 15:17 | 1100823 Ura Bonehead
Ura Bonehead's picture

$20.00!!??  When the hell did THAT happen??  I must spent too much time in developing world countries.

Fri, 03/25/2011 - 23:12 | 1102103 New_Meat
New_Meat's picture

it's "inflation" for your ... er ..., well, "inflation." - Ned

Fri, 03/25/2011 - 11:38 | 1099698 jesse livermoore
jesse livermoore's picture

now three mintutes instead of five...............

Fri, 03/25/2011 - 14:03 | 1100424 Zero Govt
Zero Govt's picture

so you can pack more girls in of an evening

Fri, 03/25/2011 - 11:27 | 1099643 Hook Line and S...
Hook Line and Sphincter's picture

lapdances from a girlscout?!

Fri, 03/25/2011 - 11:35 | 1099694 Azannoth
Azannoth's picture

I take 2 please :)

Fri, 03/25/2011 - 13:23 | 1100233 Uncle Remus
Uncle Remus's picture

You do realize that is wrong on so many levels....

Fri, 03/25/2011 - 11:25 | 1099635 Careless Whisper
Careless Whisper's picture

yeah but the songs are shorter

http://www.hulu.com/watch/115027/family-guy-lap-dance

 

Fri, 03/25/2011 - 11:23 | 1099622 Debtless
Debtless's picture

The songs are getting shorter.

Fri, 03/25/2011 - 11:45 | 1099749 CPL
CPL's picture

And the dancers are getting skinnier...is that a bad thing?  Good taste...good flavor...we'll let the philosophers decide.

Fri, 03/25/2011 - 13:35 | 1100283 OldPhart
OldPhart's picture

The dancers are younger every year.

Fri, 03/25/2011 - 14:00 | 1100414 Zero Govt
Zero Govt's picture

that's private sector productivity for you

Fri, 03/25/2011 - 14:30 | 1100564 UGrev
UGrev's picture

...private sector...  lol :)

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