Clipmarks | BobbyDelray's 'inflation' clips

CNBC Bonus Bucks Answers for Monday, May 12, 2008

Mon, 12 May 2008 17:31:46 GMT

clipped by: BobbyDelray
clipper's remarks: Get the answers at EF Hutton.

CNBC Portfolio Challenge Bonus Bucks Answers

CNBC Million Dollar Portfolio Challenge Bonus Bucks Answers

In his Trader Talk blog, Bob Pisani had one April entry entitled Hot Fertilizer. Name one of the stocks he discussed.

On Monday, April 28, James Altucher of Formula Capital recommended which food-inflation trade to CNBC viewers?

Oil Hits $100 a Barrel for the First Time

Wed, 02 Jan 2008 18:17:24 GMT

clipped by: BobbyDelray
clipper's remarks: $102 equals all time inflation adjusted price.

Clip Source: www.nytimes.com

Oil prices rose above the symbolic level of $100 a barrel for the first time on Wednesday, a long-awaited milestone in an era of rapidly escalating energy demand.

The rise in oil prices in recent years has been driven by an unprecedented surge in demand from the United States, China and other Asian and Middle Eastern countries. Booming economies have led to more consumption of oil-derived products such as gasoline, jet-fuel and diesel. Meanwhile, new oil supplies have struggled to catch up.

Oil is now within reach of its historic inflation-adjusted high reached in April 1980 in the aftermath of the Iranian revolution when oil prices jumped to the equivalent of $102 a barrel in today’s money.

Unlike the oil shocks of the 1970s and 1980s, which were caused by sudden interruptions in oil supplies from the Middle East, today’s surge is fundamentally different.

Prices have risen steadily over several years because of a rise in demand for oil and gasoline

Tags: oil, price, record, inflation

Gold on its way to $2,130 an ounce?

Wed, 02 Jan 2008 18:11:58 GMT

clipped by: BobbyDelray
clipper's remarks: Gold stocks anyone?

Clip Source: www.bloomberg.com

Gold rose beyond $850 an ounce in London, breaching the record set more than a quarter-century ago

Prices advanced 31 percent last year, the biggest gain since 1979, when U.S. inflation was more than 13 percent.

Unless the world suddenly becomes a wonderful place to be, the gold price will continue to move higher,'' said Jeremy Charles, global head of precious metals in London at HSBC Bank

Bullion also advanced for a seventh consecutive year in 2007 as investors sought an alternative to the declining value of the dollar.

Gold rallied 12 percent in the fourth quarter, climbing to a 27-year high since mid-September, when the U.S. Federal Reserve cut interest rates.

JPMorgan Chase & Co. predicts gold will strengthen to $950 within six months.

Based on 1980 dollars, the January 1980 record of $850 is the equivalent of about $2,130 today, according to an inflation calculator on the Web site of the Federal Reserve Bank of Minneapolis.

Tags: gold, bullion

Why Baseball Players Might Be Underpaid

Wed, 14 Nov 2007 16:29:23 GMT

clipped by: BobbyDelray

Clip Source: blogs.wsj.com

First, a dollar just isn’t what it used to be. When Mr. Rodriguez signed his previous 10-year, $252 million contract in December 2000, the Federal Reserve’s index of the dollar’s value relative to other currencies was over 105. Now it’s barely over 71. I

The dollar’s decline on the currency markets has been more dramatic than overall inflation, but that, too, eats into the value of the greenback. A lump sum of $252 million in 2000 is equivalent to $305.1 million today, according to the Bureau of Labor Statistics’ inflation calculator.

In 2001, the first year of the first Rodriguez mega-contract, major-league players were getting 56% of their sport’s $3.5 billion in revenues.

Yet this year, Jeff Passan notes on Yahoo Sports, players made only about 41% of baseball’s $6 billion in revenue.

What do you think? Are baseball players overpaid or underpaid?

Should more dollar figures in the media be adjusted for inflation?

How much does the weak dollar affect the true value of salaries?

Tags: baseball, salaries, inflation, dollar, alex rodrigues, bureau of labor statistics, basebakll, value

Purging the rottenness--Recession

Thu, 08 Nov 2007 02:50:57 GMT

clipped by: BobbyDelray

Clip Source: krugman.blogs.nytimes.com

Robert Samuelson,

Recessions also have often-overlooked benefits. They dampen inflation. In weak markets, companies can’t easily raise prices or workers’ wages. Similarly, recessions punish reckless financial speculation and poor corporate investments. Bad bets don’t pay off. These disciplining effects contribute to the economy’s long-term strength, but it seems coldhearted to say so because the initial impact is hurtful.

Andrew Mellon

The ‘leave-it-alone liquidationists’

felt that government must keep its hands off and let the slump liquidate itself. Mr. Mellon had only one formula: ‘Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate’.He held that even panic was not altogether a bad thing. He said: ‘It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people’

Tags: recession, samuelson, mellon, dampen inflation, speculation

Go-Go Gold (and Oil)

Mon, 05 Nov 2007 18:37:31 GMT

clipped by: BobbyDelray

Clip Source: blogs.wsj.com

A few years ago, $100-a-barrel crude oil and $1,000 gold would have seemed completely ridiculous. But the markets are on the cusp of grasping the former, and at this rate, the latter isn’t too far off. (Many will say, “c’mon, $1,000 gold is ridiculous,” but admit it - you hesitated before saying that this time.)

“The dollar is falling and is making dollar-denominated assets cheaper so you get gold and crude going up and that’s probably going to keep going for a while,”

Buying in at $100 oil seems a bit foolhardy, but then again, people said that at $70 and $80 as well

So, yeah, this inflation thing is nothing to worry about. Which is why investors continue to plunk money down in hard assets and buy up dollar-denominated products like oil and gold, both of which surged again to finish another day with those “highest price since Columbus” headlines.

Tags: gold, oil, inflation

Gold Tops $800 for 1st Time Since 1980 nearing all time high

Thu, 01 Nov 2007 04:43:07 GMT

clipped by: BobbyDelray
clipper's remarks: When gold went over $800 an ounce in 1980 it was all that investors were talking about. With gold approaching its all time high of $875 you really aren't hearing much if anything. Is gold the next oil?

Clip Source: ap.google.com

NEW YORK (AP) — Gold barreled above $800 an ounce Wednesday for the first time since 1980 as investors cheered the Federal Reserve's decision to lower its benchmark interest rate by a quarter point.

The Fed dropped its federal funds rate to 4.50 percent, as the markets widely anticipated. Lower interest rates tend to undermine the dollar and raise the allure of precious metals as an investment alternative. The dollar stumbled to another low against the euro following the Fed's decision on Wednesday, helping drive gold higher.

Gold last topped $800 an ounce in 1980, when prices reached as high as $875 an ounce in January. Adjusted for inflation, an $800 ounce of gold in 1980 would be worth more than $2,000 today.

While the $800 mark means something less than it did 27 years ago, gold prices have surged roughly $150 an ounce since mid-August

Tags: gold, investing, 1980, dollar, inflation

Helping the Fed Target Asset Prices

Tue, 23 Oct 2007 19:52:59 GMT

clipped by: BobbyDelray

Clip Source: blogs.wsj.com

Joseph Carson, director of global economic research at Alliance Bernstein, thinks he has the answer. He’s created a “broad price index” combining consumer prices, producer prices and asset prices. “The weighting scheme is designed to approximate the relative importance of each sector in the overall economy, with consumer prices given the dominant share, followed by smaller shares allotted to producer, real estate and equity prices,” he says.

The index registered strong surges in both 1999-2000 and 2004-2005, a signal that the Fed’s monetary policy was too easy at the time, he says. On the other hand, at present it is growing at about the same rate as core consumer prices, suggesting Fed policy is about right.

Tags: prices, inflation, asset, joseph carson, global economic research, alliance bernstein

Housing Boom Has Limited Effect on Growth

Fri, 19 Oct 2007 16:48:14 GMT

clipped by: BobbyDelray

Clip Source: blogs.wsj.com

Frank Smets and Marek Jarocinski, economists at the European Central Bank, focus their new paper on the run-up in house prices from 2000 to 2006 and note that it can’t be explained by GDP growth over that period.

Real housing prices grew at rates above 5% after the U.S. economy slowed in 2000 and 2001, and about 10% in 2004 and 2005, far above GDP growth during the period. “We find that both housing market and monetary policy shocks explain a significant fraction of the construction and house price boom, but their effects on overall GDP growth and inflation are relatively contained,” they write in the study presented at a conference hosted by the Federal Reserve Bank of St. Louis.

Tags: s&p/case-shiller home price index housing boom has

China Continues to Export Inflation

Fri, 14 Sep 2007 16:19:27 GMT

clipped by: BobbyDelray
clipper's remarks: Is this going to lead to an inflation tsunami down the road. My vote? Yes.

Clip Source: blogs.wsj.com

Prices of U.S. imports from China rose 0.3% in August, the fourth consecutive monthly rise of at least that magnitude, the Bureau of Labor Statistics reported this morning. Before May, they had never risen by more than 0.2% in one month since publication of the data began in December, 2003. The increase came in a month when total import prices fell 0.3%, or 0.1% excluding oil.

China’s shift from source of deflation to source of inflation appears to reflect a strengthening Chinese currency, upward pressures on wages and other costs there, and rising prices of energy and commodities used to make many Chinese goods.

Prices of imports from China are up 1.1% from a year earlier, the BLS said. Total import prices are up 1.9%,or 1.5% excluding oil. – Greg Ip

Tags: china, export, import, inflation, labor statistics, deflation, currency, wages, costs

Politicians React: ‘Troubling’ vs. ‘Comfortable’

Mon, 10 Sep 2007 03:50:12 GMT

clipped by: BobbyDelray
clipper's remarks: Economists have had their say on the weak U.S. payrolls number, now politicians weigh in.

Clip Source: blogs.wsj.com

The Administration’s failure to lead while thousands of Americans found themselves in danger of losing their homes is now affecting the broader economy, as thousands of workers lost their jobs this month for the first time in four years. To build an economy that spreads opportunity to every corner of this country, we need to invest in our workers, our infrastructure, and help struggling homeowners avoid foreclosure by cracking down on unscrupulous lenders with new penalties and disclosure requirements. –Sen. Barack Obama (D., Ill.), presidential candidate

Tags: obama, federal reserve, jobs report, inflation, foreclosure, spending, investment