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CPI Drops 0.3%, Largest Decline Since December 2008

Tyler Durden's picture




 

If yesterday's better than expected initial claims numbers were bad for the market (as they implied the approach of the Fed's QEnd), today's CPI should dissolve some fears of an imminent, and very unrealistic, end to easing. Because as the Fed explained, employment is only one component of the QEnd calculus, inflation is another. And with November CPI dropping 0.3% sequentially (up 1.8% Y/Y), on expectations of a -0.2% M/M, and +1.9 Y/Y, also the biggest sequential decline since 2008, there is not much to worry about on the inflation front... as long as one doesn't count other inflation "expressions" such as modern art, insurance costs, student tuition, or even the S&P and other credit funded items into account. Core CPI also missed the expected rise of 0.2%, growing at 0.1%. Biggest components of the price drop were energy prices, declining (-4.1%) from October, Apparel (-0.6%) and Used cars and trucks (-0.5%) - thank you GM channel stuffing. Alternatively, prices rose for food at home (+0.3%), Electricity (+0.7%) and food away from home (+0.3%). We may need some more QE4EVA+1^? soon if this continues.

 

Chart: Bloomberg

 

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Fri, 12/14/2012 - 09:46 | 3062314 GetZeeGold
GetZeeGold's picture

 

 

Only four more years for the nightmare to end........buck up campers. Our parole draws neigh.

Fri, 12/14/2012 - 09:51 | 3062330 El
El's picture

Do you really think so? Assuming in four years some knight comes riding in on a charger to save us by changing direction, you could be right. I'm not so optimistic, but I sure do like positive people. +1 for attitude. ;)

Fri, 12/14/2012 - 10:02 | 3062356 GetZeeGold
GetZeeGold's picture

 

 

Well......it's either that or lay down and die.

http://www.youtube.com/watch?v=mHyKDrGzn-I

Fri, 12/14/2012 - 11:03 | 3062573 economics9698
economics9698's picture

Obama will be president for life, Hugo Chavez style, or Hillary will get the blessing of the Yids.

Pray for revolution.

Fri, 12/14/2012 - 10:06 | 3062370 SheepDog-One
SheepDog-One's picture

A few months ago we 'only had 1 month left', because remember 'it was all pumping for the election', now that it's over we have 4 more years to pump?  

Fri, 12/14/2012 - 10:08 | 3062384 GetZeeGold
GetZeeGold's picture

 

 

If you've got their playbook......it shouldn't be too hard to pull off the win.

Fri, 12/14/2012 - 11:10 | 3062589 ejmoosa
ejmoosa's picture

In four years, college graduates 32 and under will never have been in a healthy economy.  This IS the new norm.

Fri, 12/14/2012 - 10:29 | 3062464 buzzsaw99
buzzsaw99's picture

sorry zee, this depression will only get worse and it will NEVER end

Fri, 12/14/2012 - 11:07 | 3062577 economics9698
economics9698's picture

When China undercuts the dollar and the fiat dies so does the ZOG.

 

Fri, 12/14/2012 - 09:47 | 3062317 johnQpublic
johnQpublic's picture

electricity up 12% here...delawho, bidens home state

Fri, 12/14/2012 - 09:50 | 3062323 LawsofPhysics
LawsofPhysics's picture

Yes, take a look at water and sewage as well.

The underlying debt and energy problems continue to be ignored.

Fri, 12/14/2012 - 10:24 | 3062334 Longing for the...
Longing for the old America's picture

Property and sales taxes shooting up rapidly while unaccounted for in the official CPI. Health insurance going wild to the upside too.

Oh, and don't forget the fast rising state income tax rates and the coming jump in cap-gains and dividend confiscations.

Lies, lies, lies from the BLS.

Fri, 12/14/2012 - 12:29 | 3062883 akak
akak's picture

FUCK THE CPI!

Tyler, why are you even posting this bullshit?  We get enough official propaganda from the corporate-controlled media already.  Please do not even post such crap in the future, and give ANY credence to these wildly, insultingly and laughingly manipulated and lowball figures from the Bureau of Lying Statistics.

Fri, 12/14/2012 - 09:48 | 3062318 LawsofPhysics
LawsofPhysics's picture

Right, if you leave out food, fuel, and healthcare.  Guess what schumcks, when the comsumer is tapped out on these essential items there isn't anything left fo icrap.  No surprise "prices" are coming down.  In a word, "bidless".

Fri, 12/14/2012 - 09:49 | 3062322 goldfish1
goldfish1's picture

Infinity and beyond, bitchez.

Fri, 12/14/2012 - 09:55 | 3062340 ShorTed
ShorTed's picture

Laws,

I have it on good authority ('cause President Obama said so) that healthcare costs won't go up if we got onboard with ObamaCare.  So forgive me for disagreeing with you, ya know, becasue the President wouldn't lie to us.  

/sarc

Fri, 12/14/2012 - 10:17 | 3062421 pinqy
pinqy's picture

They are all included. Do you not know how to read a report, or even the article you're replying to????

Fri, 12/14/2012 - 10:46 | 3062452 LawsofPhysics
LawsofPhysics's picture

My healthcare is up 15%, food and fuel are both running around 8%, electric bill at home up 6%, must simply be my "lying eyes".  The report is very much weighted towards consumer purchases in terms of the sampling.  Statistics are great for "showing" whatever you want to.  Go look at the MIT prices project for a better read on real prices.  Go look at corn and various grains being sold on the open market.  Go ahead put up a chart of those prices paid over the last year.  They sure as hell are not flat.  Moreover, insurance and local taxes are not reflected.  Please, pull your head out of your ass.

Fri, 12/14/2012 - 11:45 | 3062747 Bay of Pigs
Bay of Pigs's picture

Lots of US doelarr and deflation bulls that populate fianace boards love to point to the CPI data and never factor in real world prices in their bullshit ecocomic theories.

I used to bust Mish's balls on this topic every month. He only questioned the stats that didnt fit his model. 

 

Fri, 12/14/2012 - 10:33 | 3062479 DUNTHAT
DUNTHAT's picture

I think inflation is understated by the difference between "real GDP growth=2.7 %" and the true growth number ( both PMI and Chi Fed Index flat at ZERO, meaning of course, real inflation is at 2% PLUS 2.7 % or around 4.7 % .

Fri, 12/14/2012 - 09:49 | 3062324 FreeMktFisherMN
FreeMktFisherMN's picture

Inflation is rampant and will show up in prices even more than it has been. 

Fri, 12/14/2012 - 09:54 | 3062338 magpie
magpie's picture

The inflation will show up as massive tax hikes in the future

Fri, 12/14/2012 - 09:58 | 3062343 LawsofPhysics
LawsofPhysics's picture

Riiiiiigggggghhhhhttt.  Look to Greece for the precisely how this is dealt with.  Just spoke with my accountant yesterday on how to arrange the books so it appears we are just making ends meet.  Unfortunately, it was easier than I thought.  In fact we may be in the red next year (depending on what diesel does).  Guess I'll have to fire the accoutant.   The point being; go long black markets, because suddenly everybody will be "poor".

Fri, 12/14/2012 - 10:07 | 3062358 magpie
magpie's picture

I know you are being sarcastic LoP, but that was one of the ways how beginning hyperinflation was also dealt with temporarily in the past - perhaps in this case however the "austerity" primarily serves other purposes and this effect is i honestly believe an unintended consequence for the central planners.

Funny that today i had the idea to even write a book on the "black market", the hero of the next decade...

Fri, 12/14/2012 - 10:10 | 3062392 LawsofPhysics
LawsofPhysics's picture

Sarcastic?  Sort of.  If you really don't think folks make serious efforts to hide their wealth or net worth, you really haven't been paying attention and probably pay way more taxes then you have to.  So long as I will be rewarded for investing in my own employees and business I won't complain too much, but take that away or make it impossible to deal with the increasing input costs (margins fucking matter) and it's game over.  People need to eat, I'd be happy to go off grid and start a sharecropping operation.

Fri, 12/14/2012 - 10:16 | 3062420 magpie
magpie's picture

It isn't really that hard, like in Greece pay your taxes or we shut down your utilities, and if you are off the grid, we start levying more tolls.

That sort of thing, the market starts fragmenting by itself nonwithstanding the rhetoric of globalization and free trade.

Fri, 12/14/2012 - 10:29 | 3062438 LawsofPhysics
LawsofPhysics's picture

Riiiiiiggggghhhht, because thing sort of approach has worked out so well for Greece.  LMFAO!!!!  I'd say Americans are potentially a bit better armed as well.  We have some solar and wind capabilities, many cisterns and wells.  Go ahead, please try and come onto the property attempt to shut anything down.  I know the commissioners and sheriffs very well.  They all like to eat, and really don't care too much for the Feds.  You are dead on as far as the fragmentation goes.  All economies are really local at the end of the day.  Everyone needs to look around and assess their neighbors and the available resources.  Nice work magpie, get your tribe in order.

Fri, 12/14/2012 - 09:53 | 3062331 slackrabbit
slackrabbit's picture

 

What’s the bet xmas figures will also suck....until after revision, where we leave out retail, toys, socks and iPads...then its a success!

 

Fri, 12/14/2012 - 09:53 | 3062333 Glass Seagull
Glass Seagull's picture

Must be all the expensive beef, grain, healthcare, education, and improving housing prices helping with this "drop."

What a joke.

Fri, 12/14/2012 - 10:06 | 3062376 hugovanderbubble
hugovanderbubble's picture

SHORT REITS 

Fri, 12/14/2012 - 10:00 | 3062350 disabledvet
disabledvet's picture

Still trying to make sense of falling energy prices as on the hand great for the economy on the other the end of the economy as we know it.

Fri, 12/14/2012 - 10:40 | 3062503 LawsofPhysics
LawsofPhysics's picture

Don't think about energy in terms of the price at the delivery point.  Think about how much it will cost (in terms of capital, energy, and resources) to build the next powerplant or tap the next well or extract the next ton of coal in order to grow (required by the current economic ponzi) or even keep things the way they are.  The reason nothing makes sense is due to a major decoupling and shift in capital flows around the world.  My hypothesis is that this is due in large part to many western countries failing to treat capital, talent, and resources with respect (hence it goes elsewhere) and failing to address the underlying structural problems.  Same thing happened to the Soviet Union in the 80's.  America's collapse will follow a similar path.

Fri, 12/14/2012 - 10:02 | 3062352 SheepDog-One
SheepDog-One's picture

.01%...whoa thats HUGE! Too bad girls are not so easily impressed.

Fri, 12/14/2012 - 10:03 | 3062360 hugovanderbubble
hugovanderbubble's picture

I like the deflation napalm power blast

Fri, 12/14/2012 - 10:03 | 3062362 tooriskytoinvest
tooriskytoinvest's picture

We Are Witnessing The Death Of Small Business In America

http://investmentwatchblog.com/we-are-witnessing-the-death-of-small-business-in-america/

I think the business onwers gave up so called the hope and change...

Fri, 12/14/2012 - 10:13 | 3062408 LawsofPhysics
LawsofPhysics's picture

Margins matter!!!!!  If you can't adjust in order to deal with rising input costs, you fold or get "creative".  Long black markets.

Fri, 12/14/2012 - 10:04 | 3062364 ekm
ekm's picture

There is only one component of Fed's decisions and only one:

 

Order from White House.

Fri, 12/14/2012 - 10:07 | 3062380 SheepDog-One
SheepDog-One's picture

FED global central bank takes its orders from the White House? No, the FED is the real 'prezdent'.

Fri, 12/14/2012 - 10:09 | 3062389 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

There is only one component of Fed's decisions and only one:

 

ORDERS FROM THE INTERNATIONAL BANKING CARTEL

Fri, 12/14/2012 - 10:05 | 3062365 hugovanderbubble
hugovanderbubble's picture

PUT CALL RATIO at lows 

VIX at lows

(MARKET SIGNAL = TOPPY, toppy)

Volume = Limbo Trading across the world

Market quoting 15% premium vs nav

Fri, 12/14/2012 - 10:04 | 3062367 Watching in Bal...
Watching in Baltimore's picture

In Baltimore MD everything is up and even while gas prices have eased they are still very high for many even for those of us lucky enough to have a job.  It is very had to believe any of these reports.  

Fri, 12/14/2012 - 10:05 | 3062371 hugovanderbubble
hugovanderbubble's picture

Sell and short Equities for a beautiful EOY Selloff

Fri, 12/14/2012 - 10:05 | 3062372 hugovanderbubble
hugovanderbubble's picture

Sell and short Equities for a beautiful EOY Selloff

Fri, 12/14/2012 - 10:06 | 3062378 ZFiNX
ZFiNX's picture

Just the inflation arrow being drawn in the bow.

Fri, 12/14/2012 - 10:08 | 3062382 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Yes!  I have complete and total confidence in all establishment statistics!  Ha. Ha!

Tuco

Fri, 12/14/2012 - 10:16 | 3062416 SheepDog-One
SheepDog-One's picture

Yea in particular when its a 'massive' .3% number....I look at that chart and see nothing but line noise for years while real world prices have at least doubled.

Fri, 12/14/2012 - 10:16 | 3062412 SilverMoneyBags
SilverMoneyBags's picture

Even Bernnake said on Wednesday that current CPI calculations were a joke.

Fri, 12/14/2012 - 10:21 | 3062430 phoolish
phoolish's picture

Why is my latest insurance bill 10% higher?

Fri, 12/14/2012 - 10:21 | 3062431 SheepDog-One
SheepDog-One's picture

Well, so far it appears no one is impressed, not even algobots.

Fri, 12/14/2012 - 10:25 | 3062443 mayhem_korner
mayhem_korner's picture

From (roto) Reuters...

 

U.S. consumer prices fell in November for the first time in six months, pointing to muted inflation pressures that should allow the Federal Reserve to stay on its ultra-easy monetary policy path as it nurses the economy back to health.

"Just a spoonful of sugar makes the medicine go down...medicine go down...medicine go down..."

Fri, 12/14/2012 - 10:27 | 3062449 orangegeek
orangegeek's picture

Government tinkering has run its course.  Deflation has been with us for many years, but government loves to alter the CPI formula to show inflation.

 

So what's next folks?  Deflation  - very painful.

 

We are taking another shot at a major down turn on the SP500 to below March 2009 lows.

 

http://bullandbearmash.com/chart/sp500-weekly-finishes-marginally/

 

 

Fri, 12/14/2012 - 10:27 | 3062455 ptoemmes
ptoemmes's picture

I really need to move to the planet/parallel dimension/universe the labor department lives in.  My fiat might go a bit further - and I don't mean car.

Maybe it's Planet O.

Fri, 12/14/2012 - 10:50 | 3062535 Shizzmoney
Shizzmoney's picture

People just need to stop buying crap. 

En masse that may not happen; I'm not hopeful.

Fri, 12/14/2012 - 11:25 | 3062675 balz
balz's picture

If people stop buying crap, the whole thing collapses overnight.

Fri, 12/14/2012 - 10:52 | 3062544 kill switch
kill switch's picture

USD Index DOWN  79.87

CPI DOWN  .3 Interesting...

 

When the dollar losses purchasing power the cost of things go down....I think I have it now...

BLS Brings clarity to your life... 

Fri, 12/14/2012 - 11:09 | 3062587 dvsteenk
dvsteenk's picture

So smells more and more like deflation (even though the current reported inflation numbers are fake, the real inflation is in 4-5 % range rather for most food items)

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