There is no Left left here.
Getting Pushy: The Producer Price Index for finished goods has risen 3.6% in the last year, and has increased 0.7%, 0.9, and 0.8% in the last three months. That is pretty close to a 10% annualized increase in the cost. In the costs for intermediate goods (which will become finished goods soon) the rate is 20% (annualized). Either margins shrink (and profits with them) or prices increase (and sales fall). It looks like inflation, it smells like inflation, Bernanke maintains it's a duck.
P-KB4: Obama threatens to veto GOP budget.
Numbers Game: The NAR says sales of existing houses fell 5% last year, to 4.9 million units. CoreLogic can find only 3.6 million houses that were sold last year, down 12% from 2009. Would it help you to understand this discrepancy if I reminded you the first set of numbers came from the realtors?
Belaboring the Obvious:Madoff maintains that the banks he dealt with "had to know" he was running a Ponzi scheme. So? The willing suspension of disbelief is more than a literary conceit.
Qualifications: Banks are beginning to insist that purchasers make 20% down payments in order to get a loan. Liberals are up in arms because this means people who shouldn't be buying a home won't be allowed to. Conservatives are worried that this will kill the profits from the mortgage securitization industry. Maybe the way to get Fannie and Freddie out of the mortgage business is to make the mortgage business go back to being a business, not a social project. Why would anyone with 20% to put down on a house buy in a market where prices are still falling? That level of stupidity should disqualify them for a loan.
Chinese Puzzle: Will China's inflation – now at 5% per annum – be shipped to the US in containers bound for Walmart? Sure.
On the Other Hand: The punderati are split between those who buy the GOP mantra that Social Security is killing the budget and running up the deficit, and those who understand that this is a myth and that the real villains are healthcare and defense. What none of them want to talk about is the fact that people make money from our outrageous healthcare costs and military budgets, and that paying back the money borrowed from Social Security to bail out the rest of the government for the last 20 years will result in higher taxes.
'Nuff Said: “Dear Poor People, Thank You For Going Without Heat So We Can Buy Another Week of War”
Porn O'Graph: Housing Starts, stopped.