Dec

14

The market goes where it wants

December 14, 2021 |

the bonds were up as usual on the inflation number, -10 today but up 48 ticks yesterday. but stocks went down on the ppi number which presumably has wholesale prices of 1 month ago. as always the market goes where it wants regardless of the news.

James Lackey writes:

Mr Vic Wrote: "calumniate, traduce - wrongfully accuse." the 6.8% inflation rate announced on the cpi for friday was good enough to raise the S&P futures to an ATH on a 1% rise. as mentioned repeatedly the inflation is not a problem. bonds and mortgages predict a 5 year rate of 1.5%.

what's worse is that the current administration is being wrongfully accused of driving inflation up by miles to this rate. when it comes down as will be seen on all future cpi's and eci, one should not credit with the great miracle of driving it down. its was front page news about the horrible spike. its not the fault of bbb so much, what's wrong with all these programs is the opposite of capitalism (i dare not use the word for fear of total cancelation). in any case a great opportunity to go long sp on future releases like last friday.

There is something I need to say. This statement took 20 years to pass. Guys I have never agreed with Victor Neiderhoffer publicly because I had to or for any other reasons than this one: He’s correct.

If we need a reason inflation isn’t ever a problem outside of the printing press or the rigged short term rates set by the central’s for their 12 and only 12 clients, when businesses are left alone to do their thing it is this one which probably comes from Vics books but the gist is: Business men drive profit to Zero!

If you can’t wrap your head around that one think of Trucks in transportation services. There are times in history where Trucks have lost money. It’s not that truck drivers cost too much or fuel or repairs. It’s the business. A truck will take a lower load vs no load at all dead head.

That’s easy to understand. What is driving me more insane, more crazy or best stated by my bmx racing kids is your crazier than usual Mr Lack. Why do industries as a whole seemingly lose on purpose? An example is BBBY or cars in general like Autonation, Sonic et al? Why would any business not.

Text book "pure competition" was described as agriculture in my old books. Why? How why what in the world are they doing driving profit to zero? Please help with anecdotal evidence and stats if we get them.

Here is why: Covid rigged shortage some of these old line businesses like food service Carz and others are running 10% non levered margin profit or triple of what was stasis and as usual driven to zero.

My hypothesis is men never learn as a people. A person is smart but people can be toxic as hades and let’s not forget Every day is better than the years 1942 to 45 at least for Americans.

Duncan Coker observes:

5-year TIPS yield -1.6%, with 5-year Treasuries yield 1.2%, implies a 2.8% inflation rate over the period. Wake me up when it hits 5%.


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