tyb
The CPI Is Under-representing Food Inflation By 40%: Here's The Proof
CPI is Consumer Price Index as reported by….surprise!…The FRB.
The "muzzle" on reported inflation has policymakers and analysts perplexed.
Here are two reasons why this is so:
First, a little more than 20 years ago the Bureau of Labor Statistics (BLS) introduced a number of new measurement techniques in the estimation of consumer inflation (see Boskin Commission).
Statistical changes have been made to account for product substitution, a greater degree of quality changes in products and services and faster introduction of new outlets or ways in which people shop.
Odds are high that the impact on reported inflation varies year to year, with some years at the upper end of range of estimate and others at the lower end. This "forces" the Fed to maintain an unnecessarily easy monetary policy, which results in asset bubbles and wealth inequality, when in fact the only applicable consideration is that the BLS and the Dept of Labor are measuring inflation incorrectly.
Second, research conducted by the Federal Reserve staff has found that the shift in the measurement of shelter costs two decades ago to only use only prices from rental market and exclude those from the owners housing market systematically removed the largest single "driver" of cyclical inflation, while it also simultaneously reduced the volatility in reported inflation.
Accordingly, one of the reasons why the trade-off between changes in unemployment and reported inflation has been so benign in the last 20 years is due to changes in price measurement.
The missed signal* from housing inflation was readily apparent in the 2000s when core inflation peaked at a relatively modest 2.5% even though house price increases were recording double-digits increases.
-
was not missed, just ignored
These findings strongly suggest that price measurement issues are important to consider when looking at trends in the reported inflation data. For all of the conceptual changes and measurement issues the key question policymakers should be asking is whether the "muzzle" on reported inflation still makes it a useful benchmark for the price-targeting framework.
That's the theory. Now, courtesy of Bloomberg, here is a dramatic observation of the practical implications of erroneous inflation measurements, which suggests that the US government is under-representing arguably the most important aspect of the consumer price inflation basket, that of food, by as much as 40%.
Ignoring such volatile series as cell phones or haircut prices, he instead focused on groceries, and specifically cereals and bakery products, "the kind where you can buy the same thing in every grocery store in the country." He notes that there are six components to this subindex:
all-purpose flour,
long-grain rice,
white bread,
wheat bread,
pasta
chocolate chip cookies.
Then, to figure out what the real world prices are (i.e. not the "extorionate prices we pay in greater New York"), he signed up for supermarket delivery services in Columbus, Ohio, and Murfreesboro, Tennessee, because "while they may not represent the exact national average, they nevertheless seem like a reasonable proxy for middle America."
Once the representative middle-America venues had been picked , a selection was made of an identical basket of six goods, converting them to a unit price per pound ala the CPI basket. And while the products chosen "aren't bargain-basement" value'' generics, they aren't premium foodstuffs either." The results, as Crise, notes, "were pretty compelling."
As the chart shows, the CPI is chronically misrepresenting the price of every product in the food basket, with the gap between the government "price" and the average real-world price ranging from 14% in the case of chocolate chip cookies, to as much as 64% for a pound of white bread.
Overall, in the specific case of cereals and bakery goods, the difference between the CPI price for the basket of six core food products, and the average price of the same products in Ohio and Tennessee, is a whopping 39%. This same execrise extended to all other goods and services in the basket would reveal a similar bias to misrepresenting prices to the downside relative to reality.
The FOMC believes they are paying far less, the reality is that monetary conditions have to be far tighter for reality to catch down with the BLS's woefully incorrect price assumptions.
And the conclusion: "perhaps if the Fed wants to see higher inflation, they should just send a few staff economists to the "social Safeway" in Georgetown."
https://www.zerohedge.com/news/2019-05-25/heres-proof-how-cpi-underrepresenting-food-inflation-40
it's a double now. No way you let that one see the light of day after all the shit he pulled. In any case have watched him jerk off wall st for 25 plus yrs- the one on the fox sunday show is/was not him imo.
Fiat Chrysler and Renault in Talks on Possible Alliance
Fiat Chrysler Automobiles and the French carmaker Renault are holding discussions about a possible alliance aimed at strengthening both companies’ competitiveness in Europe and other parts of the world, a person familiar with the matter said on Saturday.
The talks are still in early stages and could still collapse, but they come amid significant technological and regulatory changes that are pressuring automakers and spurring some to join forces. Ford Motor and Volkswagen recently agreed to work together in pickup trucks and commercial vans and are in talks about combining their efforts to develop self-driving cars.
The specifics of the discussions between Fiat Chrysler and Renault were unclear on Saturday. They could potentially combine operations in Europe, where the companies compete directly in small and midsize cars. One option could be developing the underpinnings of cars jointly and manufacturing vehicles in each other’s plants, both money-saving moves. Working together could also allow both companies to close plants.
In Europe, the two companies face tighter environmental regulations that are forcing carmakers to invest billions in electric vehicles and other new technologies that cut tailpipe emissions. Both are also struggling to gain ground in China, the world’s largest auto market, and have been slower than some rivals in developing autonomous vehicles.
An alliance with Fiat Chrysler could give Renault access to the American market, where it currently has no presence. It was not clear how Nissan, Renault’s partner of nearly 20 year, would fit into a tie-up with Fiat Chrysler.
Renault needs Nissan, the dominant performer in the alliance, to continue contributing to Renault financially as the French automaker’s performance slips in Europe. Carlos Ghosn, the former chief executive of both Renault and Nissan, had sought to tie the two companies more closely by floating the idea of a merger or the creation of a joint holding company to face stiffening market competition. But the ties between the companies have frayed since November, when Mr. Ghosn was arrested and charged with financial wrongdoing in Japan, then ousted from his posts by both companies.
News of the talks between Fiat Chrysler and Renault was first reported by The Financial Times.
Until recently, Fiat Chrysler had been openly seeking merger partners. In 2015, its chief executive at the time, Sergio Marchionne, publicly proposed combining with General Motors but was rebuffed. Fiat Chrysler also explored the possibility of linking up with Chinese automakers. But since then, rising sales of pickup trucks and Jeeps have bolstered its coffers. And in January, Mr. Marchionne’s successor, Mike Manley, said he was confident Fiat Chrysler no longer needed a merger or an alliance, although he stopped short of ruling one out.
In recent months, vehicle sales have slowed, and Fiat Chrysler’s net profit fell 47 percent in the first quarter to 508 million euros.
Although auto companies are spending heavily on new technologies, it is unknown when or how their investments will pay off, especially as a global slowdown in car sales and concerns over trade wars cloud the horizon.
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Compared with its rivals G.M. and Ford, Fiat Chrysler has been slower to develop electric and self-driving vehicles, and may now need partners to share the costs of research and development. It currently cooperates with PSA Groupe, Renault’s French rival, in small delivery vans in Europe.
https://www.nytimes.com/2019/05/25/business/fiat-chrysler-renault.html?emc=rss&partner=rss
rough translation
Golf is welcomed as a State guest of Reiwa's first Trump President and Chiba. Good Times with new Reiwa Alliance and thinking of nothing else
4 missing after 2 ships collide in Pacific off Chiba
YOKOHAMA, Japan (Kyodo) – Four people are missing after two Japanese cargo ships collided Sunday on the Pacific Ocean to Japan's east, the coast guard said.
The 499-ton Sumiho Maru and another 499-ton ship, the Sensho Maru, collided about 12 kilometers off Inubosaki in Chiba Prefecture around 2:10 a.m. The Sensho Maru, based in Imabari, Ehime Prefecture, sank and four of its five crew are missing, said the Japan Coast Guard which is conducting a search operation.
The Sensho Maru put out a call for assistance. All four crew on board the Sumiho Maru, based in Kure, Hiroshima Prefecture, are safe, according to the coast guard.
The Sensho Maru was carrying about 1,300 tons of steel from Kashima in eastern Japan to Osaka, it said.
Visibility was low in the area at the time of the accident due to fog, it said.
https://mainichi.jp/english/articles/20190526/p2g/00m/0na/005000c
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here is moar, was wondering the same thing so went looking
https://www.secform4.com/insider-trading/16918.htm
believe it's asset seizures as if you look at the daily avg volumes in some, not all, these amounts would account for nearly all the trades in a single day. Walmart stands out as the best, most recent example. It does something like 6.4mx a day and the family sold about that amount over may 20-22. You would certainly see it in a daily chart so these most likely going on in the background. Using darkpools so to speak.
np anon, am waiting till we get to 'watch the wives' in that arena. Major shit with them imo.
It's a slippery slope with this stuff as what you see is not always the case. Have wrestled with it for a bit but over last 2-3 months it's become clearer. We own most of them because of how they were created and funded. I am almost certain that the recent meeting with POTUS and dorsey was also a shareholders meeting…certainly could have been.