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Where I live, they closed the local whirlpool factory. I am not sure where they even produce whirlpool appliances anymore. If it isn't overseas yet it might soon be lol.
Exactly - qe seems to be failing at creating job growth , in fact its possible companies will relocate part of their business due to US policy. The US is one of the least attractive countries in the developed World right now for starting a business. Who'd have thought that possible 20 years ago.
Also consider that the current government officials in place are considering taxing the rich to help with budget problems, this will just further send the money away to other countries. I would be interested to find out when some of the major U.S. brands finally decide to put their corporate headquarters in other countries all together.
Don't worry QE is going to drive full employment!
Let me see, inflation crimps corporate profits, reduces volume of goods consumers can buy....then jobs are created, riiiigght
I speak from experience when I state that "Whirlpool" label dehumidifiers are "manufactured" in Los Estados Unidos Mexicanos. Why the quotation marks you ask ? The unit promptly died one month out of warranty.
Viva Mexico. Viva Whirlpool.
Yup, they are moving just about everything to Mexico.
This is a mistake of epic proportions by Ben. Anyone who still manufactures in the USA will outsource in order to get some margin back that is being annihilated by increasing commodity prices and the inability to soak people with higher prices all while maintaining volume.
If we write this enough and it gets published enough, perhaps one day Ben will really have to eat his words.....possibly more than words.....
Does Bernanke's printing press make 'get out of jail free' cards?
stock up on bricks and exercise those throwing arms bitchez.
Surgical tubing and a piece of canvas...brick-a-pult.
Use a pitching machine.
Yes, and plenty of "money" of varying colors and convenient denominations. The new currency resembles that colorful scrip which our friends across the pond circulate throughout the Continent.
and so it begins to become official..consider those tea leaves read my friend
FYI - my firm is offering a structured product that tracks the price of Corn, Wheat, and Soybeans over the course of 1 year. 150% participation on the upside, 100% participation on the downside.
These structured products typically come out very late in a trend, as the firm tries to capitalize on the headlines.
+1. This is good info, thanks.
'Headwind' and snow are synonymous these days, aren't they?
It's the new terminology:
SNOW storm ~= SNOW job
"Innovative" wage cuts coming
Let's see if they "innovate" away some of upper management.
Cute... spot on and succintly put
Those of us who believe in biflation have been warning about this for over a year. There's no pricing power into a constrained US consumer. Input costs will continue to rise because of a fateful combination of demand-pull and cost-push inflation involving not just reckless Fed monetary policy but global competition for resources. And the US consumer's real income and net worth will continue to sink through structurally high unemployment, offshoring and downsizing of entire industries, the continued effects on the housing market, and declining retirement benefits which are competing with the rising cost of middle class existence.
The disconnect between the Fed's view of the economy and the reality will continue to cause biflation and crush consumer buying power as well as business margins.
Although i prefer the old fashioned term Stagflation
There is no "cost push" inflation. If Whirlpool thinks they can raise prices in this environment, unless there is another cash-for-appliances subsidy or the Fed starts handing out checks to consumers, good luck. We will see how it works out for them.
Not downstream cost-push, upstream: Reckless monetary policy put so many dollars in so many hands that the stuff that industrial raw materials, energy and natural resources will keep going through the roof. The people in the middle will get squeezed hard
The prior 3 days of large red distribution candles on the WHR chart makes it seem almost like somebody knew this was coming - but that never happens does it?
All major appliances have been produced in China for years. Whirlpool is just another scum sucking outsourced (formerly) US corp. Watch them twist in the wind and die. Laugh if you like. They contribute nothing to the USA except maybe their executive salaries.
They contribute nothing to the USA except maybe their executive salaries.
They contribute nothing to the USA except maybe their executive salaries.
And they never seem to stop crying about that either...
Innovation? How about cardboard washing machines produced in North Korea?
I've got another good one.
These last 2 Q's in our company, sales is picking up really strong.
So strong actually that now our problem is that since we fired about 1500 people those last 2 years, we can't follow anymore and everybody is so stressed out that there isn't a single day without 20 confrontations on the workfloor and people who constantly quit their job to go somewhere else.
And now we have to refuse orders because of the workload, but we can't refuse them because we need those for our topline.
And it's not possible to hire people fast because the jobs are very technical.
THERE ARE SO MANY COMPANIES THAT JUST CAN'T KEEP UP WITH ANY GROWTH BECAUSE THEY ARE STILL OPERATING ON A SKELETON CREW!
Like scotty would say: THE ENGINE IS WORKING AT 120% CAPACITY CAPTAIN BUT SHE'S GONE BLOW ANY TIME NOW! SCREW YOU GUYS I'M TAKING THE LAST EMERGENCY LIFE POD!
At least they have a profit, eh?
(Accounting) paper profit from the looks of things.
Of course, that is driving the banks higher as well. All those funds set aside for write downs that are magically brought back on to the profit side of the ledger even though the risk of write downs are once again increasing.
I wish I could have my cake and sell it and eat it too.
LG posts Q4 results, 2010 profit down 93 percent, cellphone sales down 15 percent:
Nokia smartphone market share shrinks to 31 percent, operating profit takes a beating too
Simple: they're going to start stealing their inputs instead of buying them!
Also a lack of demand for their machines and lower sales price & you have a prfct storm.
Like ch11 perfect. They can't raise prices and in fact their machines are 50% lower than they were 3 yrs ago.. wow.
ITW and CMI said the exact same thing this week, and after a small dip in the stock..boom right back up.....the Fed bid is just to strong to pay attention to any other metric
Look at MCD teetering on the daily chart. LOL. You know it.
Sorry Mr. McLoughlin, since QE3 will arrive some time in June, your headache will be very, very long-term. We are 100% confident in that.
Given enough time, perhaps Ripplewood will get Maytag (and a lot more) after all...
WHR is a great barometer of the health of a post-recession recovery: in good times, new household formation, new home construction and upgrade cycles provide huge demand for appliances.
This 'recovery' sucks, in a word. Prices are surging BEFORE demand had a chance to surge. That's a KEY point. It means normal forces of the business cycle aren't operative. Reckless Fed money printing is one thing ultimately pushing input costs. But global economics are too.
Yep, Ben should have watched Fight Club to know stickin feathers up your butt does not make you a chicken.
I hope this image gets Banzai'd, if it has not been made already.
We are going to need some serious productivity improvements to mitigate this. Roach at morgan stanley used to.discuss the global labor arbitrage and the great rebalancing. Well we are right in the thick of it now. However he neglected the next step which was global margin arbitrage. Unless we have huge productivity numbers these record corporate profits may regress.further to the mean. Hmm....I like that...global margin arbitrage....maybe I can get a job at a bank.
Does anyone think it's a possibility that commodity prices collapse when the stock market does? Considering the amount of speculative money that's poured into them, it seems like a strong possibility to me. Happened in 2008.
Stock market won't collapse again. This time it is artifically raised through government money.
Like in Japan in the 1990s?
The example of Japan is the only argument in the deflationist camp. And that's quite sad, actually, because there is no other historical example. On the other hand, you have hundreds of hyperinflation examples across modern history.
Japan did not finance its own debt through printed money, Japan did not target stocks through QE, Japan wanted "good" inflation (otherwise they would just have to send a 1 billion yen cheque to every Japanese), the entire financial system of Japan was not risking death, thus demanding strong measures, etc, etc.
And rest assured that the money printed by the Bank of Japan is still there... sleeping in the balance sheets of banks. At the slightest sign the Japan economy is restarting, the ersatz money will flow into the economy and cause hyperinflation (unless the central bank tries to drain liquidity).
Great Depression - massive deflation there. Many similar themes (consumer leverage, bank leverage) except this is more global and our response this time is a bit different from the early responses then. Look at post-war rates too, 3% mortgages deep in the 1950s.
Hyper-inflation in a major developed country in modern history is tough too. Germany but that was kind of an odd setup, okay though. Others, Russia maybe but classifying their economy as developed at the time would have been a major stretch.
At this point I don't think anything is set for sure. High commodity prices will eventually crush global demand and return them to sustainable levels, it's not like they will continue to rise forever. Commodities are the governor on any kind of recovery (nicely thought out on QE2 there Ben) and underlying deflation is always waiting. This is why the Fed fears deflation so much, they went all in during the 1930s, directly revalued the gold standard and everything, and did they really beat it? Not with the ugly results 1938 when they backed off on stimulus. Only the war decisively pulled it out and even then inflation was pretty tame despite massive debt/money moving. Congrats - we live in interesting times.
"Great Depression - massive deflation there."
The deflation was ridiculous, just look at the CPI for these years.
And I don't know why you bring the Great Depression into the debate, as the gold standard was in place during the crash.
Not really debating, just pointing it out. I have looked at the CPI basket - that's why I say it and mention 1938. Look at the spiral getting continually worse 1930, 31, 32 and then roughly flat after 1933 when they went another direction including on the gold standard (big dip in 1938 when they pulled back).
You figure that if you are on the gold standard, cut the value of said standard massively in a year/1933 (similar to printing money/inflating/default), and the run up massive debt, it's not that dissimilar to today. The gold standard was not constant during this and was deliberately used. This is also when they abbrogated contract clauses allowing settlement in gold and prevented private ownership outside dental/jewelry (gold seizure act).
Another interesting time.
I do. I think you can count on it. We need at least a cameo appearance of the deflation monster to hold back the core so that my favorite horse gdp can start to pull ahead. This is the greatest horse race of all time, core versus gdp. It is not a foregone conclusion that core will win. Even a tie for my horse gdp is a win because it allows the great global muddle through to proceed peacefully, except for the third world, but who cares?
If the thought on ZH is that stocks will eventually collapse because of the speculative runup, I don't know how that same logic doesn't apply to commodities -- particularly industrial and soft.
Plus, I use history to guide lots of my investment decisions. And if you compare this current crisis to what happened in Japan, the similarities are remarkable. And while Japan experienced bouts of inflation, the longer trend was deflationary.
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