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March Inflation Rises 0.3%, As Expected, And A Primer On CPI For Energy

Tyler Durden's picture


No surprises in today's release of US CPI, which unlike China's still searing inflation (which is the PBoC's way to check to Bernanke on more easing) came just as expected at 0.3% headline and 0.2% core, or 2.7% Y/Y.  From the release: "The indexes for food, energy, and all items less food and energy all increased in March. The gasoline index continued to rise, more than offsetting a decline in the household energy index and leading to a 0.9 percent increase in the energy index. The food index rose 0.2 percent as the index for meats, poultry, fish, and eggs increased notably. The index for all items less food and energy rose 0.2 percent in March after increasing 0.1 percent in February. Most of the major components increased in March, with the indexes for shelter and used cars and trucks accounting for about half the total increase for all items less food and energy. The indexes for medical care, apparel, recreation, new vehicles, and airline fares increased as well, while the indexes for tobacco and household furnishings and operations were among the few to decline in March." The items rising the most in March sequentially: fuel oil at 2.7%, gasoline at 1.7% and apparel at 1.3%. The only decliner was electricity at -0.8%, courtesy of nat gas plunging. With a record hot summer approaching, this is a good thing.

For those who eat and use energy, so not the Fed, here is a drill down:



The food index rose 0.2 percent in March after being unchanged in February. The index for food at home, unchanged in February, rose 0.1 percent in March. The index for meats, poultry, fish, and eggs rose 0.8 percent, its largest increase since May. The index for other food at home also rose  in March, increasing 0.3 percent. The other four major grocery store food groups declined. The fruits and vegetables index fell 0.4 percent, its sixth consecutive decline, as the fresh vegetables index fell 1.6 percent. The index for cereals and bakery products fell 0.2 percent, as did the  index for nonalcoholic beverages. The index for dairy and related products fell 0.1 percent, its fourth decline in five months. The food at home index has risen 3.6 percent over the last 12 months; this was its smallest 12-month change since last March. The fruits and vegetables index has declined 3.9 percent over that period, its largest 12-month decline since November 2009. The other five major grocery store food group indexes have increased over the past year, with the dairy group posting the largest increase at 6.3 percent. The index for food away from home rose 0.2 percent in March after a 0.1 percent increase in February and has risen 3.0 percent over the last 12 months.




The energy index, which rose 3.2 percent in February, increased 0.9 percent in March. The gasoline index rose 1.7 percent following its 6.0 percent February increase. (Before seasonal adjustment, gasoline prices increased 8.1 percent in March.) The fuel oil index also continued to rise, increasing 2.7 percent in March after rising 2.8 percent in February. In contrast, the index for energy services (comprised of electricity and natural gas) fell 0.4 percent. The natural gas index rose 0.9 percent after declining in each of the previous five months. The electricity index, however, fell 0.8 percent, its largest decline since June. Over the last 12 months, the gasoline index has risen 9.0 percent and the fuel oil index has increased 5.3 percent. The electricity index, however, has only increased 0.6 percent and the index for natural gas has declined 9.1 percent.

And since the CPI number was a snoozer, here is a great primer on breaking down the all critical CPI for Energy courtesy of Stone & McCarthy:

The CPI for Energy accounts for roughly 10% of the composition of the All Items CPI for Urban Consumers. It receives high focus by the media, market players, and economists because it is a topic of controversy since it is excluded from 'Core' measures of inflation. It also represents the prices of a package of goods that are vital to consumers. This Chart of the Day examines how Energy Prices are organized in the CPI.

The CPI for Energy is a "Special Aggregate" in the BLS's database. In other words, it is a separate aggregation for informational purposes rather than an integral one within the main All Items CPI organization scheme. It is not one of the Eight Major Groups that compose the All Items CPI: parts of the CPI for Energy can be found separately in two of the Eight Major Groups.


Specifically, the CPI for Motor Fuel category can be found in the Transportation grouping, and the CPI for Household Energy can be found in under the Housing category.


Each component of the CPI has its own Aggregation Weight, derived from a calculation based on the Consumer Expenditure Survey conducted by the BLS. Items that are more heavily purchased by consumers get a larger weight in the CPI aggregation. For example, the component indices are multiplied by their Aggregation Weights and summed to generate the CPI for Energy. An Index times its Aggregation Weight is called a Cost Weight, and all of the Cost Weights within a category sum together to form the category's index. We can look to the Cost Weights to measure the size of each component within a category.

Another transformation of the data is the Contribution to the Percent Change of the Category Index. This is noteworthy because a large change of a small component might have less of an impact on the overall index compared to a small change of a large component. The following graph displays the Contributions of each component of the CPI for Energy to the month-over-month change in the Energy Index, in Percentage Points. The contributions sum to the month-over-month percent change of the category. In other words, if the contribution of a component is one percentage point, than the category would have increased one percentage point less if the component had remained unchanged in the month.

We can perform the same operation to learn about each component's impact on the CPI for Energy over the past year.



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Fri, 04/13/2012 - 08:47 | 2341185 cossack55
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I'm sure glad it was a good week to quit eating.

Fri, 04/13/2012 - 09:34 | 2341312 Gully Foyle
Gully Foyle's picture

As David Carradine, playing Woody Guthrie, once stated " The more you eat the more you shit".

Fri, 04/13/2012 - 09:59 | 2341390 ghengis86
ghengis86's picture

Whatever happened to that MIT billion price project? Didn't it track prices, like actual super market prices, of thousands/millions of products only to show the world that the gov's CPI numbers were/are complete and utter bullshit?

Fri, 04/13/2012 - 10:07 | 2341418 MassDecep
MassDecep's picture

HyperInflation here we come..., Just can't wait until I can open my stored foodstuffs, open fire my FN Scar, and stack my silver. Ohh, did I mention reading my Bible?

This is not [Sarc].....


Fri, 04/13/2012 - 10:09 | 2341430 xtop23
xtop23's picture

Well, looks like it's time to rework how the CPI is calculated.

Beef for ...... soy patties?

Gas for ...... pig shit Master Blaster?

Air conditioning bill ........ a midget holding an ice cube through a damp rag and exhaling in your direction really hard?

"Oy, where's the fucking bar John?"



Fri, 04/13/2012 - 10:35 | 2341542 CrashisOptimistic
CrashisOptimistic's picture

Spend some time on the .gov site and read how they compute CPI.

These are not a bunch of guys who go to work each day with a plan to lie to everyone.  Their measurement method is sound.  They take a survey of citizens and ask them what % of total month's expenditures are spent on various categories, from housing to gasoline to food to clothing to healthcare/insurance and an incredibly detailed list of other items.

Then they go out and they independently survey the price change of each item.  

Then they weight those price changes as a % of overall household budget to get an overall inflation measure.  And they also review their procedure continuously to look for errors.

Frankly, if I was tasked to measure inflation, I can't think of a better way.  Any other thing I might do would risk measuring wrongly.  It doesn't matter if I think gasoline is more important.  What matters is what the average household shows mathematically is important, and in the US that number is housing costs (rent).  It is that number that holds inflation reports down.

Fri, 04/13/2012 - 10:44 | 2341574 algorerhythm
algorerhythm's picture

ZH had an article on how they weighted cost of health insurance as far too low of a %.

Fri, 04/13/2012 - 10:53 | 2341611 xtop23
xtop23's picture

I appreciate your comment and to a certain extent I agree.

My feeling is that the old way we computed the CPI and the current CPI model are both inaccurate.

Inflation is somewhere in the middle and continues to get worse. 

You can substitute all you want, but eventually, nothing is going to make that headline number digestable to the plebs.

You cant polish a turd, but you can cover it with paper towels for a LONG time.

Fri, 04/13/2012 - 11:45 | 2341821 SheepDog-One
SheepDog-One's picture

Do they calculate the price increases and also factor in that a pound now = 12 oz? 


Sat, 04/14/2012 - 03:12 | 2343766 MeelionDollerBogus
MeelionDollerBogus's picture

"Then they weight those price changes as a % of overall household budget to get an overall inflation measure. "

That's the lying part. That's where numbers go out the window and replacements are put in which have no relation to what is in a survey or grocery store. It does matter that I think gasoline & rice are important: 1% of the population may disagree with me and 99% won't.

If I was reporting inflation I'd always use 2 methods and never consider one more important than the other.

#1 how much did the money supply grow including revolving credit

#2 how much more did a household have to spend on all essentials (all travel, all food, all rent, all utilities)


Fri, 04/13/2012 - 10:15 | 2341449 rufusbird
rufusbird's picture

A good week to quit eating pork anyway. It looks like Israel just declared Ham and Bacon their national food or something...

Fri, 04/13/2012 - 08:50 | 2341194 tarsubil
tarsubil's picture

Why does my ass hurt?

Fri, 04/13/2012 - 09:37 | 2341322 Gully Foyle
Gully Foyle's picture


Jerri Blank: Stoney and I would go over to Buckle's and Puff would turn us on to a hot load of mescaline crumbled into a tumbler of ether with a float of Percocet jimmies. I'd wake up with blood on my ass, and then we'd get high. Those were some good times.

Fri, 04/13/2012 - 08:51 | 2341198 Ralph Spoilsport
Ralph Spoilsport's picture

People who have to use fuel oil for heating are more pissed off than the average motorist even. Good thing it was a mild winter and spring has sprung.

Fri, 04/13/2012 - 08:54 | 2341204 Dick Darlington
Dick Darlington's picture

     April 13 (Bloomberg) -- The following table shows the consumer
price index for health insurance from the Bureau of Labor Statistics.
        March   Feb.   Jan.   Dec.   Nov.   Oct.  Sept.   Aug.   July
         2012   2012   2012   2011   2011   2011   2011   2011   2011
YoY%    11.3%   9.3%   8.0%   6.1%   4.3%   2.1%   0.1%  -0.7%  -1.4%
NOTE: Base period Dec. 2005=100, Data is not seasonally adjusted.

Fri, 04/13/2012 - 08:57 | 2341209 thebigmozey
thebigmozey's picture

  What - no one else is getting these rate increases from their work insurance? Or does that only come into play every 6 months or so?

  My insurance costs have not gone down - where do they come up with these figures? Oh, right - magical land!

  These guys should come live in reality - prices are gettting damn ugly!


  The Big Mozey

Fri, 04/13/2012 - 08:58 | 2341211 Flakmeister
Flakmeister's picture

TD, No guarentees that this will be a record hot summer...

That being said NOAA did declare the April-11 to Mar-12 as the warmest 12 month period on record in the US...

Fri, 04/13/2012 - 09:01 | 2341225 LawsofPhysics
LawsofPhysics's picture

LOL!!  two months into planting and we have experienced 5-15% warmer and drier than average conditions.  Yeah, I am sure the next 6 months will be 20% below average.  Come on Flak,

Fri, 04/13/2012 - 09:19 | 2341250 Flakmeister
Flakmeister's picture

Yeah... it is very dry for this time of year in the NE..

Look out if the ENSO Index goes into a postive El Nino phase....

If that happens all the asshats that say "Look no warming since 1998 (the last major El Nino)" are going to be eating serious crow... then again, they'll just brush it off and keep shovelling their bullshit using a new shovel....

As an aside interesting article came out this week, connecting the loss of artic ice with changes in the Jet Stream and some recent abnormal weather...

the figures are included if you get it here

Too early to tell if this is indeed the cause (but if it quacks like a duck....)

Fri, 04/13/2012 - 09:26 | 2341289 Calmyourself
Calmyourself's picture

Flak it does not matter one way or the other..  Fossil fuels will HAVE to be used or we go 18th century in a day.  Nothing else will drive this civilization with enough energy to keep us from starving.  So if true start adapting not trying to throw out the baby with the bathwater..  How did London adapt during the little ice age when they held winter fairs on the Thames as it was frozen solid..  Some people just want, no need to believe in something larger than themselves and it cannot carry any personal morality just a general call for other people to change otherwise a good session in the mirror is called for..

Fri, 04/13/2012 - 09:40 | 2341326 Gully Foyle
Gully Foyle's picture


CARLIN: Let me tell you about endangered species, all right? Saving
endangered species is just one more arrogant attempt by humans to control
nature. It's arrogant meddling. It's what got us in trouble in the first
place. Doesn't anybody understand that? Interfering with nature. Over
90%, way over 90% of all the species that have ever lived on this planet,
ever lived, are gone. They're extinct. We didn't kill them all. They
just disappeared. That's what nature does. We're so self-important, so
self-important. Everybody is going to save something now. Save the
trees, save the bees, save the whales, save those snails. And the
greatest arrogance of all, save the planet. What?

I'm tired of these self-righteous environmentalists, these white
bourgeois liberals who think the only thing wrong with this country is
there aren't enough bicycle paths, people trying to make the world safe
for their Volvos. There is nothing wrong with the planet. Nothing wrong
with the planet. The planet is fine. The people are (bleep) --
difference, difference. The planet is fine. Compared to the people, the
planet is doing great. It's been here four and a half billion years. Did
you ever think about the arithmetic? The planet has been here four and a
half billion years. We've only been engaged in heavy industry for a
little more than 200 years.

Two hundred years versus four and a half billion, and we have the
conceit to think that somehow we're a threat, that somehow we're going to
put in jeopardy this beautiful little blue-green ball that's just
a-floatin' around the sun? The planet has been through a lot worse than
us, been through all kinds of things worse than us, been through
earthquakes, volcanoes, plate tectonics, continental drift, solar flares,
sunspots, magnetic storms, the magnetic reversal of the poles, hundreds of
thousands of years of bombardment by comets and asteroids and meteors,
worldwide floods, tidal waves, worldwide fires, erosion, cosmic rays,
recurring ice ages, and we think some plastic bags and some aluminum cans
are going to make a difference? The planet isn't going anywhere. We are!
We're going away.


“We’re so self-important. Everybody’s going to save something now. “Save the trees, save the bees, save the whales, save those snails.” And the greatest arrogance of all: save the planet. Save the planet, we don’t even know how to take care of ourselves yet. I’m tired of this shit. I’m tired of f-ing Earth Day. I’m tired of these self-righteous environmentalists, these white, bourgeois liberals who think the only thing wrong with this country is that there aren’t enough bicycle paths. People trying to make the world safe for Volvos. Besides, environmentalists don’t give a shit about the planet. Not in the abstract they don’t. You know what they’re interested in? A clean place to live. Their own habitat. They’re worried that some day in the future they might be personally inconvenienced. Narrow, unenlightened self-interest doesn’t impress me.

The planet has been through a lot worse than us. Been through earthquakes, volcanoes, plate tectonics, continental drift, solar flares, sun spots, magnetic storms, the magnetic reversal of the poles … hundreds of thousands of years of bombardment by comets and asteroids and meteors, worldwide floods, tidal waves, worldwide fires, erosion, cosmic rays, recurring ice ages … And we think some plastic bags and some aluminum cans are going to make a difference? The planet isn’t going anywhere. WE ARE!

We’re going away. Pack your shit, folks. We’re going away. And we won’t leave much of a trace, either. Maybe a little Styrofoam … The planet’ll be here and we’ll be long gone. Just another failed mutation. Just another closed-end biological mistake. An evolutionary cul-de-sac. The planet’ll shake us off like a bad case of fleas.

The planet will be here for a long, long, LONG time after we’re gone, and it will heal itself, it will cleanse itself, ’cause that’s what it does. It’s a self-correcting system. The air and the water will recover, the earth will be renewed. And if it’s true that plastic is not degradable, well, the planet will simply incorporate plastic into a new paradigm: the earth plus plastic. The earth doesn’t share our prejudice toward plastic. Plastic came out of the earth. The earth probably sees plastic as just another one of its children. Could be the only reason the earth allowed us to be spawned from it in the first place. It wanted plastic for itself. Didn’t know how to make it. Needed us. Could be the answer to our age-old egocentric philosophical question, “Why are we here?”

 George Carlin
“We’re so self-important. Everybody’s going to save something now. “Save the trees, save the bees, save the whales, save those snails.” And the greatest arrogance of all: save the planet. Save the planet, we don’t even know how to take care of ourselves yet. I’m tired of this shit. I’m tired of f-ing Earth Day. I’m tired of these self-righteous environmentalists, these white, bourgeois liberals who think the only thing wrong with this country is that there aren’t enough bicycle paths. People trying to make the world safe for Volvos. Besides, environmentalists don’t give a shit about the planet. Not in the abstract they don’t. You know what they’re interested in? A clean place to live. Their own habitat. They’re worried that some day in the future they might be personally inconvenienced. Narrow, unenlightened self-interest doesn’t impress me.

Fri, 04/13/2012 - 10:00 | 2341399 Stoploss
Stoploss's picture


Fri, 04/13/2012 - 10:36 | 2341541 Rockfish
Rockfish's picture

Bees, who needs them.

(sarc off)

Sat, 04/14/2012 - 02:51 | 2343665 MeelionDollerBogus
MeelionDollerBogus's picture

Humans are the ones endangering so many species & not for any real benefit.

It's just a matter of being less of an asshole to nature so that nature doesn't do funny things like rob of us our food supply, killing us all.

Just the little things.

Sat, 04/14/2012 - 11:14 | 2341373 Flakmeister
Flakmeister's picture

The sad thing is that you are very likely correct and trying to change anything is akin to tilting at windmills...

Just as long a people realize the implications of what they are doing so when they explain to their grand kids what the hell happened that  they can fully appreciate the folly of the early 21th century...

I think we are well past the point of no return...

Finally, dont put words in my mouth, the only fossil fuel I am against is coal... tax it so that the true cost is reflected and so to level the play field with alternatives so the market can figure out what is best. The philosophy is not to pick winners, only losers...

Fri, 04/13/2012 - 09:46 | 2341347 Gully Foyle
Gully Foyle's picture


49 Former NASA Scientists Send A Letter Disputing Climate Change

Amount of ice in Bering Sea reaches all-time record

Hippies get it wrong again

Global Warming wipes out all polar bears except the increasing number of them
Fri, 04/13/2012 - 10:19 | 2341385 Flakmeister
Flakmeister's picture

Pinched from SKS...

Note that NASA Chief Scientist Waleed Abdalati has issued a response with very similar points and suggestions as our post:

"NASA sponsors research into many areas of cutting-edge scientific inquiry, including the relationship between carbon dioxide and climate. As an agency, NASA does not draw conclusions and issue 'claims' about research findings. We support open scientific inquiry and discussion.

"Our Earth science programs provide many unique space-based observations and research capabilities to the scientific community to inform investigations into climate change, and many NASA scientists are actively involved in these investigations, bringing their expertise to bear on the interpretation of this information. We encourage our scientists to subject these results and interpretations to scrutiny by the scientific community through the peer-review process. After these studies have met the appropriate standards of scientific peer-review, we strongly encourage scientists to communicate these results to the public.

"If the authors of this letter disagree with specific scientific conclusions made public by NASA scientists, we encourage them to join the debate in the scientific literature or public forums rather than restrict any discourse."

One of posters paraphrased as sucg, 'Hey, you guys are full of it... and feel free to publish some actual scientific research on the subject if you want anyone to take you seriously.'

And this nugget as well.....

Love the way that 49 retired astronauts and administrators (and one meteorologist) suddenly become some all-encompassing 'NASA scientists'. Especially since they haven't actually provided any specific example of what they are complaining about, and despite the fact they are calling for the bureaucracy to censor the ability of real NASA scientists to talk about their work.

Fri, 04/13/2012 - 10:32 | 2341530 Calmyourself
Calmyourself's picture

Uh,uh and what was James Hansen's degree in again, I mean other than self promotion..

Physics and astronomy qualifies him as a climate scientist, I much prefer Singers academic credentials but that would throw off the narrative wouldn't it..

Sat, 04/14/2012 - 13:47 | 2345429 Flakmeister
Flakmeister's picture

This is how you define credentials....

Yeah, I'd say he has done a little peer-reviewed climate science....

His Ph.D. is in Physics...from Wiki

After graduate school, Hansen continued his work with radiative transfer models, attempting to understand the Venusian atmosphere. Later he applied and refined these models to understand the Earth's atmosphere, in particular, the effects that aerosols and trace gases have on Earth's climate. Hansen's development and use of global climate models has contributed to the further understanding of the Earth's climate.

I say radiative transfer models would be appropriate for studying the climate....What do you think?

Fri, 04/13/2012 - 10:37 | 2341548 chrsjrcj
chrsjrcj's picture

You clearly understand nothing about meteorology. 

Fri, 04/13/2012 - 08:59 | 2341212 swissaustrian
swissaustrian's picture

British PMI came in significantly higher than expected this morning.

Fri, 04/13/2012 - 09:02 | 2341214 LawsofPhysics
LawsofPhysics's picture

There is it.

I like some of Rick Santelli's calls, but his whinning and crying about debt is getting lame.

Hey Rick,

What about the debt from private companies that got bailouts that has been placed on the backs of the taxpayer?

The inflation in food and energy that has come from capital creation to backstop the elite's investment is not felt by the elite/wealthy/politically connect.  These same fuckers don't feel inflation and yet the complain their taxes are too high.

Apparently, rick has no problem with the socialization of losses.  This is not capitalism, it is fascism.

I want capitalism to be brought back, you know where the shareholders and leadership of a private company get to keep their wealth, BUT, when the company goes bust those same mother fuckers are reasponsible for paying off the creditors with their own PRIVATE wealth.

It is amazing to me how many low class idiots think that they are really "wealthy" and buy into the shit the MSM spouts.

Stupid mother fuckers all of them, LOP- out.

Fri, 04/13/2012 - 09:25 | 2341285 SeattleBruce
SeattleBruce's picture

"What about the debt from private companies that got bailouts that has been placed on the backs of the taxpayer?...Apparently, rick has no problem with the socialization of losses."

That's not what you get when you watch and hear his rants.  Rick Santelli's original rant happened in response to obummer's ostensible bailout of underwater mortgage holders, his 3rd bailout barely 2 weeks into his admin, following hard on the heels of his Government Motors and Chrysler bailouts.  Even in his initial rant, Santelli makes reference to cars and homes being subsidized for people that can't afford them.  I see his rant as decrying the insane government/private crony corporate (you can read FED into this too) cabal that was 'sticking' it to the common man - and at the end enjoining Franklin and Jefferson and the nation's founders.

Fri, 04/13/2012 - 09:36 | 2341318 LawsofPhysics
LawsofPhysics's picture

Rick is a scared paper-pusher.  He knows the real value of his labor is fucking zero. 

So apparently many people are okay with the socialization of losses, fucking morons.

Fri, 04/13/2012 - 09:55 | 2341375 LowProfile
LowProfile's picture

Not sure why you're getting junked, perhaps it's because you're saying do away with the whole "money at RISK should get a bigger REWARD"...?

Otherwise, spot on.

Fri, 04/13/2012 - 11:19 | 2341732 Shizzmoney
Shizzmoney's picture

 BUT, when the company goes bust those same mother fuckers are reasponsible for paying off the creditors with their own PRIVATE wealth.

Wish you could tell the folks who ran Full Tilt Poker that......those motherfuckers owe me $4500!!!1111

The sad part is, responsibility at the top that is ignored, filters down to the bottom.  See: London Riots.

Had a guy at work recently drop a waffle on the floor, and refuse to clean it up.  We all got a "talking to" about it.

Kind of says it all.

Sat, 04/14/2012 - 03:00 | 2343675 AnAnonymous
AnAnonymous's picture

Apparently, rick has no problem with the socialization of losses. This is not capitalism, it is fascism.


It is not fascism. It is US citizenism.

US citizens like to masquerade US citizenism as being fascism or communism.

But it is all american all american as it one can be.

US citizenism has always supported a socialization of losses as lesser people were used to absorp the costs of US citizenism.

When the first ponzi failed after the nineteenth century, after running out of free willed Indians, generous sponsors to US citizen freedom, justice and truth project, it gave two world wars, communism taking root in Russia and China and so much more.

US citizen elite can not bring back US citizenism because US citizenism has never left.

Fri, 04/13/2012 - 09:01 | 2341219 overmedicatedun...
overmedicatedundersexed's picture

seems we need a deflation currency gage, the heck with inflation we have dollar deflation can we have both?

Fri, 04/13/2012 - 09:00 | 2341220 HurricaneMoney
HurricaneMoney's picture

You will be saving 2500 dollars a year, The president said so numerous times

Fri, 04/13/2012 - 09:02 | 2341227 overmedicatedun...
overmedicatedundersexed's picture

laws got short term memory loss?? Rick was yelling about this bail plan for TBTF years ago.

Fri, 04/13/2012 - 09:05 | 2341235 LawsofPhysics
LawsofPhysics's picture

Then he needs to include those bailout costs, including the interest on Federal reserve debt owed for all QE's  in his fucking discussion of DEBT.  IS that clearer for you, you stupid fuck.

Fri, 04/13/2012 - 09:10 | 2341249 Cursive
Cursive's picture

Electricity demand is down, but the corresponding price decline has been muted for utility customers because of widespread "hedging" programs that locked in much higher prices buying nat gas as a hedge when nattie was north of $5.

Fri, 04/13/2012 - 09:18 | 2341270 SheepDog-One
SheepDog-One's picture

Yea that is a bullshit aspect of utilities that 'hedge', if they want to do that it should protect against price increases, but not be a boon to them if prices drop so they can pocket $4 in profit for themselves. Theyve got no business doing that, it should benefit the 'consumer'.

Fri, 04/13/2012 - 09:12 | 2341252 overmedicatedun...
overmedicatedundersexed's picture

laws missed your xanax this moring?? he's got what 2- 3 minutes of air time? and you want a state of nation speech.

sorry I pissed in your coffee.

Fri, 04/13/2012 - 09:32 | 2341308 LawsofPhysics
LawsofPhysics's picture

All rick would have to do is write another number on the board.  What many FAIL to realize is that almost half the debt incurred since Bush signed TARP is simply due to capital mal-investment and capital mis-allocation.  The 0.01 % have profitted from this, NO ONE else.

My apologies, I just got another bill for diesel at one site, considerably more than I was expecting.  

One other thing to think about before I need to go.

Atlas is shrugging and basically all those of us who are trading now are doing is simply trading the dollar and inflation/deflation depending on what the CBs are doing.  This is not the role or function of a market and causes the capital mis-allocation and mal-investment to increase exponentially.

Pay close attention to supply lines.  atlas is shrugging, producers will start failing to deliver real goods, then shit gets real.

Hedge accordingly, (FYI- only paper-pushers fear a collapse because they know the value of their labor is zero, hence Rick is scared and angry).  Now go be productive, I am.

Fri, 04/13/2012 - 09:14 | 2341257 split4to1
split4to1's picture

Well in regards to inflation we all need to watch the greenback 

Chop Suey Markets, Watch The Greenback 

Fri, 04/13/2012 - 09:14 | 2341261 SheepDog-One
SheepDog-One's picture

Well Bernank is now walking a tightrope across the Grand Canyon, its not 2008 anymore not much room to maneuver here.

Fri, 04/13/2012 - 09:20 | 2341276 Vince Clortho
Vince Clortho's picture

Great Visual.

Fri, 04/13/2012 - 09:19 | 2341273 yogibear
yogibear's picture

More of Bernanke, Yellen and Dudley's QEing should help boost oil and food prices further.

Even the local fast-food hamburger joint has raised it's hamburger prices 42%.  With the Fed's continued QEing we should see $10 hamburgers in 4 years or less.


Fri, 04/13/2012 - 09:23 | 2341280 SheepDog-One
SheepDog-One's picture

Well considering the conclusion is that 'QE3' would have to be bigger than QE1 and 2, if he were actually to launch this QE turd we'd have those cost increases this year. It would be a disaster and its pretty obvious they know it or they'd have done it already.

Fri, 04/13/2012 - 09:27 | 2341286 yogibear
yogibear's picture


The price of the hamburger  jumped from almost $4.00 to over $5.00  a burger. Bernanke's comntinued QEing is esculating food prices and oil.


People are scurring to find the cheapest prices at grocery stores. One woman in front of me only took half the items when she found out the total costs. People are really being squeezed.

Put Dudley on a diet of I-PODs and see how long he last.


Fri, 04/13/2012 - 09:56 | 2341378 Hohum
Hohum's picture

If cattle and grain production weren't subsidized, you'd be wishing for a $5.00 hamburger.

Fri, 04/13/2012 - 12:05 | 2341900 Dingleberry
Dingleberry's picture

Tru dat.  I suspect that once the pink slime meat increases come, the unwashed will be clamoring "where's the slime? I want my slime!"

Fri, 04/13/2012 - 09:34 | 2341311 Calmyourself
Calmyourself's picture

"Hot summer" coming, Tyler apparently has earned himself a meteorology degree in his spare time..  Any other predictions for us Tyler, the market should be easy if you can predict the largest chaotic system on the plant with such ease..  4.22 cubic Billion kilometers and you know what is going to happen over an area of 9.6 Million sq. kilometers under that constantly moving volume.  Your talents are wasted, lets pick some penny stocks.

Fri, 04/13/2012 - 09:46 | 2341344 overmedicatedun...
overmedicatedundersexed's picture

laws, I got an oil bill myself-hoping we get more of this global warming as oil is going to cut deep into my retirement accounts - and the point you make about this tarp and mal investment I share.

Fri, 04/13/2012 - 10:12 | 2341436 Dingleberry
Dingleberry's picture

oh deflationistas.....where are you? Hello? Earth to deflationistas....can you read me?? Over....

Fri, 04/13/2012 - 10:42 | 2341562 CrashisOptimistic
CrashisOptimistic's picture

I think you'll find them with their arms crossed smugly and making money owning bonds, as the 10 yr paper rises in price with yield drops from 2.35% to its present 1.98% this moment over the past 2 weeks.

And you'll also find them noting that the day the US lost its AAA rating the yield was 2.58% and how holders of bonds have profited from the consequent increase in price from yield 2.58% to 1.98%.

Fri, 04/13/2012 - 12:04 | 2341799 Dingleberry
Dingleberry's picture that huge money they made smugly offsets their increased costs of living? They probably could have made more doing the inflation play of the DOW hitting 13k.  But I'm sure once they cash their bonds and spend it on food n' shit, that money will buy them so much more seein' how we deflatin'.  Thanks for clarifying though.....

Fri, 04/13/2012 - 11:17 | 2341717 Shizzmoney
Shizzmoney's picture

I posted this video on inflation on twitter, "Your Wages Will Be Cut In Half!", and the video has been blowing the fuck up:

It hasn't hit the black market too much yet, though. Weed is still $20 a gram, and has stayed steady.  For 1/8ths, they are $60, up from $40-$50 since the early 2000s.  But for the higher quality, I do see the $70 dollar price pop up (unless you buy in bulk; then your entrepreneur will cut you a deal). 

At least the black market, is still a "free market". 

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