The Morning Call--The rising risk of cost push inflation

 

The Morning Call

 

10/19/21

 

 

The Market

         

    Technical

 

            Monday in the charts.

            https://www.zerohedge.com/markets/bitcoin-bonds-big-tech-bounce-dollar-drops-key-support

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

September industrial production fell 1.3% versus expectations of +0.2%; capacity utilization was 75.2% versus 76.5%.

                          https://www.advisorperspectives.com/dshort/updates/2021/10/18/the-big-four-industrial-production-down-1-3-in-september

 

September housing starts declined 1.6% versus forecasts of +2.5%; September building permits were down 7.7% versus -2.3%.

                                                   https://www.zerohedge.com/economics/us-housing-starts-building-permits-plunge-september

 

                          The October housing market index came in at 80 versus predictions of 76.

https://www.advisorperspectives.com/dshort/updates/2021/10/18/nahb-housing-market-index-strong-demand-boosts-builder-confidence-despite-     supply-chain-disruptions

 

                        International

 

August YoY EU construction output was down 1.5% versus +3.5% in July.

 

                        Other

 

                          Logistical sandpiles.

                          https://www.advisorperspectives.com/commentaries/2021/10/15/logistical-sandpiles

 

                          Behind the energy crisis.

    https://www.wsj.com/articles/energy-crisis-fossil-fuel-investment-renewables-gas-oil-prices-coal-wind-solar-hydro-power-grid-   11634497531?mod=hp_lead_pos1

 

 

            The Fed

 

              Monetary policy is a slow motion train wreck.

              https://scottgrannis.blogspot.com/2021/10/monetary-policy-is-slow-motion-train.html

 

            Inflation

 

I have argued for some time that the widening gap between executive pay and the average income of the labor force would end unhappily.  This is one of the issues raised in this article looking at the strike at Deere and its potential negative impact on corporate profitability.  It fails to mention the effect a big wage settlement will have on (cost push) inflation.  As I have said numerous times, cost push inflation is not transitory.

              https://www.nakedcapitalism.com/2021/10/the-john-deere-strike-organized-labors-turning-point.html

 

            China

 

              More on China’s energy problems.

              https://www.linkedin.com/in/edward-yardeni/detail/recent-activity/

 

     Bottom line

 

            More on valuation.

            https://twitter.com/Jesse_Livermore/status/1450067855106617379

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

The truth about tyranny.  This is a bit apocalyptic in its conclusion but there is a point.

            https://brownstone.org/articles/the-truth-about-tyranny/

 

            Hunting the Satanists.

            https://marginalrevolution.com/marginalrevolution/2021/10/hunting-the-satanists.html

 

            Two ways to tell the story.

            https://gregmankiw.blogspot.com/2021/10/two-ways-to-tell-story.html

 

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