Hasbro, second largest toymaker in the US, confessed it would miss revenue estimates. Christmas wasn’t kind. Despite “double digit growth” in emerging markets, revenues fell by 2% for 2012 and by 3.8% for the quarter. Other corporations are in a similar predicament. But substantive inflation would have covered it up—not that the Fed hasn’t been trying.
Inflation & Devaluation
Making Heroes of Those Who Slash Jobs
by Wolf Richter • • 3 Comments
Especially of CEOs who parachute into the executive office. Wall Street’s knee-jerk reaction can be phenomenal. Citigroup’s massacre of 11,000 souls caused its stock to jump. But the same day, we learn that wages adjusted for inflation dropped 1.4% in the third quarter—a continuation of 12 years of declines that has hollowed out the middle class, pushed people into the lower classes, and devastated the poor.
From Horrid To Merely Dismal: Feeling Better About The New Reality
by Wolf Richter • • Comments Off on From Horrid To Merely Dismal: Feeling Better About The New Reality
The inexplicable American consumer, the strongest creature out there that no one has been able to subdue yet, has come to grips with a new reality, euphemistically called “New Normal,” though it isn’t normal by any means, but dismal. Feeling more upbeat, they nudged up the Consumer Confidence Index to a level not seen since February 2008—a level that caused people to tear their hair out at the time.
QE, Zimbabwe, And The Surreptitious 30% Haircut Every Decade
by Wolf Richter • • Comments Off on QE, Zimbabwe, And The Surreptitious 30% Haircut Every Decade
Dizzying QE gobbledygook is upon us once again. It would restart its big 480-volt money printer, in addition to the desktop machine it had been using recently, the Fed said, in order “to help ensure that inflation, over time, is at the rate most consistent with its dual mandate,” namely “maximum employment and price stability.” Thus, more inflation magically creates more jobs, and “price stability” requires more inflation in order to become more … stable maybe?
The Pauperization Of America
by Wolf Richter • • 8 Comments
It’s been an unrelenting process. Survey after survey has shown that wages haven’t kept up with inflation since the wage peak in 2000. Families earned less at the end of the decade than at the beginning, a phenomenon not seen since World War II—the process of hollowing out the middle class. But now there is a new phenomenon: the unmentionable class, the class that doesn’t exist in America, is ballooning.
Argentina: The Big Shrink
by Bianca Fernet • • Comments Off on Argentina: The Big Shrink
Contributed by Bianca Fernet. The winter weather is not the only thing chilling the bones of Argentina’s residents. Since late July, a new set of words has been showing up in the articles about the economy. Shrinks. Slows. Stagflation. These chilling terms are being used to describe the consequences of what some nasty looking economic indicators might have in store. Argentina, an alternative path for indebted Eurozone countries? Not so fast!
Is The Inexplicable American Consumer Rebelling?
by Wolf Richter • • Comments Off on Is The Inexplicable American Consumer Rebelling?
The strongest and toughest creatures out there that no one has been able to subdue yet, the inexplicable American consumers, are digging in their heels though the entire power structure has been pushing them relentlessly to buy more and more with money they don’t have, and borrow against future income they might never make, just so that GDP can edge up for another desperate quarter. But it’s been tough.
Piling Up: The Detritus of Failed Stimulus Policies
by Wolf Richter • • Comments Off on Piling Up: The Detritus of Failed Stimulus Policies
“Ugly” doesn’t even describe it. I’m not talking about today’s ISM index of US Manufacturing, which was quite ugly, dropping to the worst level since 2009; and whose all-important New Orders index was beyond ugly. And I’m not talking about today’s Global Manufacturing PMI, which was truly ugly, seeing its lowest level since June 2009. These are volatile indices that might turn around on a dime, though that appears to be wishful thinking.
Argentina: Inflation all I ever wanted
by Bianca Fernet • • Comments Off on Argentina: Inflation all I ever wanted
Contributed by Bianca Fernet. When I first moved to Argentina, I would joke endlessly about the little old ladies in line at the supermarket who would issue a constant stream of complaints regarding the price of meat. To me, this seemed ludicrous. The price of meat was low compared to what I was used to in the States. Over time however, these abuelas have come to represent for me a transformation.
The President of the Bundesbank Lashes Out
by Wolf Richter • • Comments Off on The President of the Bundesbank Lashes Out
Jens Weidmann, President of the German Bundesbank, ventured into a veritable lion’s den with an interview in Le Monde, largest liberal daily in France, supporter of President François Hollande and his “growth” policies. And there, he lashed out at Hollande, the ECB, Greece, at everything that smelled of a transfer union, at Paul Krugman even.