Inflation's V-Bottom

There are so many price charts like this now that it’s laughable to hear Ben Bernanke say there are no inflation expectations being priced into the economic system.  Assuming the depression historian has access to live quotes, we’ll assume he isn’t looking at the expectations being priced into TIPs, Oil, or Manufacturing Prices Paid.


In the chart below we highlight the V-Bottom in just that – the Prices Paid component of this morning’s ISM Manufacturing report. The month of April saw another sequential rise on a monthly basis (78 versus 75 reported for March) and another higher-high for this stage of the economic cycle.


Now some doves argue that prices are only inflating because they’d deflated so much on a y/y basis. To that point what we have to say is we agree. It’s math. But we’d also add that the 2008 prices from which we deflated were from are all time highs.


Is Bernanke daring you to speculate on reverting back to 2008 price levels? Maybe. With unemployment this high, that will take the low-end of this society right back to the poor house (they are actually there already). For that, I can’t imagine Bernanke’s conscience sleeps well at night. It’s his choice to pander and maintain an inflation policy.


At least Warren Buffett joined our camp this weekend in acknowledging that he is now “concerned about inflation.” Look for some consensus climbers to start following him to where the math has already gone.



Keith R. McCullough
Chief Executive Officer


Inflation's V-Bottom - 1

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more

Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more

We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

read more

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more