16-11-2004 21:18									#1
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quote: Wholesale prices soar Report shows biggest jump since 1990, driven by surge in energy costs. November 16, 2004: 10:59 AM EST By Chris Isidore, CNN/Money senior writer NEW YORK (CNN/Money) - A key inflation gauge soared in October, the government reported Tuesday, as higher energy costs helped fuel the biggest increase in prices at the wholesale level in nearly 15 years. The producer price index, which measures prices before they reach consumers, jumped 1.7 percent last month from September, when they showed a slim 0.1 percent gain, the Labor Department reported. Economists surveyed by Briefing.com had forecast a 0.6 percent increase. Citigroup's forecast of a 1 percent gain was the highest, according to a Reuters survey. The so-called core-PPI, which excludes often volatile food and energy prices, rose 0.3 percent, the same as the increase in September, and closer to economists' forecasts. Briefing.com had a consensus forecast of 0.1 percent. The jump in the overall reading was the biggest since PPI rose 1.9 percent in January 1990, the department said. The rise means prices at the wholesale level were up 4.4 percent last month from a year earlier, versus a 3.3 percent year-over-year increase in September. And while energy prices jumped 6.8 percent, but they weren't the only culprit. Food prices rose 1.6 percent. But it remains to be seen if the jump in wholesale prices works its way through to consumers, with some analysts saying the big jump in the headline number wasn't as bad as it seemed. "Clearly some of the earlier increases in the price of crude is beginning to percolate through the economy. We knew it was going to happen," said Sung Won Sohn, chief economic officer of Wells Fargo Banks, noting the recent decline in oil prices also suggests that energy costs would not spark renewed inflation. "I'm reasonably sure we've seen the peak (for oil) and it's beginning to trend down and that should do a lot to decelerate inflation," he said. Sohn and other economists noted the increase in energy prices was probably working its way through the economy before October, but had not been fully captured accurately until Tuesday's report. The September PPI report, for example, had shown a 0.9 percent decrease in energy prices, despite rising crude oil prices. Still, concern about inflation is one reason the Federal Reserve has been raising interest rates from artificially low levels, even while most inflation measures had shown prices staying in check. On Wall Street, stocks fell after the report. And in the Treasury market, bond prices edged lower, pushing the yield on the 10-year note up to 4.21 percent from 4.18 percent late Monday, as traders bet interest rates would rise further. Bond prices and yields move in opposite directions. Robert Brusca at FAO Economics noted that about two-thirds of the categories outside of food and energy showed actual declines or just modest price increases at the wholesale level last month, and that many of the categories that showed a spike in prices were not seasonally adjusted. "It's a bad headline and poor core, but it's not as bad as it looks," he said. Still, the report will mean that the consumer price index report due Wednesday will be watched even more closely than usual. Economists expect an increase of 0.4 percent overall and a 0.1 percent increase in core CPI, on average. In September, CPI rose just 0.2 percent while the rate excluding food and energy prices rose 0.3 percent. CPI is the government's main gauge of inflation. Traders were betting Tuesday's PPI report increased the chance of another Fed rate hike when the central bank's policy-makers meet next month. Fed Funds futures contracts at the Chicago Board of Trade showed about 88 percent of traders were betting on another December rate hike, up from about 84 percent after the Fed raised short-term rates Wednesday. Top of page

Check out the markets... they're getting nailed because of this news.

http://money.cnn.com/2004/11/16/new...dex.htm?cnn=yes

	16-11-2004 21:20									#2
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This is good. It means that the wealth of the rich is now worth less.

JM

	16-11-2004 21:22									#3
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This means I can soon come for a shopping spree with my 5 euro bill

	16-11-2004 21:24									#4
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Wow, you guys are so optimistic

	16-11-2004 21:27									#5
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wanha
W's deficits ain't news, are they?

quote: This is good. It means that the wealth of the rich is now worth less.

Rich don't keep their money sleeping at bank accounts anymore. They hire their own economists and invest in stocks. It's the middle class who usually keep their money resting in banks, to help them in case of emergency situations.

	16-11-2004 21:31									#6
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That's right, the real rich are not taking a big hit, they own in real estate and concrete. There are really rich people but only few have 3029840935 million dollars in the actual accounts. Or even in stocks. Besides, I bet if you're real rich, you can cut a nice deal with the bank that takes some of that inflation into account. This mostly hits the people who already makes low salary.

	16-11-2004 21:33									#7
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quote: Originally posted by JimmyCracksCorn Wow, you guys are so optimistic

They are making the word "optimism" into a synonym for "idiocy."

	16-11-2004 21:36									#8
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I can hear the squishy sound of the masses being grinded into mincemeat.

	16-11-2004 21:37									#9
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I'm waiting for Ned or DanS to come and tell me "this is nothing".

	16-11-2004 21:37									#10
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quote: Originally posted by JimmyCracksCorn I'm waiting for Ned or DanS to come and tell me "this is nothing".

again, "optimism" = "idiocy"

	16-11-2004 21:38									#11
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quote: Originally posted by Tripledoc I can hear the squishy sound of the masses being grinded into mincemeat.

Well, the only thing I hear, is the blood-curdling scream of the middle class people as they being squished to death in a giant vise.

	16-11-2004 21:40									#12
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quote: I'm waiting for Ned or DanS to come and tell me "this is nothing".

Certainly a wait-and-see whether it is anything. The PPI is notoriously volatile and is weighted heavily to commodities, such as oil and natural gas. Oil prices have come well down from their highs in the last couple of weeks -- almost a 20% drop. We'll just have to see where they go from here.

As for Bush's role in all of this, it is precisely zero. His only action has been no action -- he decided to not tap the strategic oil reserve for short-term political gain, unlike Clinton did.

	16-11-2004 21:46									#13
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quote: As for Bush's role in all of this, it is precisely zero.

So, is your argument either:
(a) President has precisely zero control over the federal budget or
(b) Budget deficits have precisely zero to do with inflation?

	16-11-2004 21:50									#14
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Well, maybe not precisely zero.

But almost zero. Bush's deficits may be pushing this a tenth of a percent or less. Most of the remaining is energy price increases over which Bush's role in pricing is extremely limited.

	16-11-2004 21:51									#15
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Certainly the president ought to be held responsible for what happens four years after he's been elected.

quote: His only action has been no action

Exactly! When it comes to domestic issues, this is a do-nothing president. Thats why he sucks.

	16-11-2004 21:53									#16
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quote: Bush's deficits may be pushing this a tenth of a percent or less.

Yeah, sure. Bush's inability to spend money like a rational human being is probably a cheif cause behind most of this country's economic problems right now.

	16-11-2004 21:58									#17
	Lose 30 kilos (of popups)

quote: Inflation up, stocks down Major gauges stuck in the red after surprisingly strong PPI read sparks profit-taking. November 16, 2004: 11:48 AM EST NEW YORK (CNN/Money) - Stocks fell near midday Tuesday, with a bigger-than-expected jump in wholesale inflation sparking a wave of profit-taking on the market's three-week rally. The Nasdaq composite (down 15.75 to 2,078.34, Charts) fell 0.7 percent after around two hours of trading. The Dow Jones industrial average (down 45.08 to 10,505.16, Charts) and the Standard & Poor's 500 (down 6.11 to 1,177.70, Charts) index both lost around 0.5 percent.

And so it continues...

http://money.cnn.com/2004/11/16/mar...wyork/index.htm

	16-11-2004 22:03									#18
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quote: Originally posted by DanS Well, maybe not precisely zero. But almost zero. Bush's deficits may be pushing this a tenth of a percent or less. Most of the remaining is energy price increases over which Bush's role in pricing is extremely limited.

The price of energy for the US is aggravated by the weakness of the $.

The weakness of the $ is caused by the state of the US.

The state of the US is under the responsibility of the President who delivers, once a year, a speech before the Congress precisely on that subjet.

Therefore, I would say that, directly and indirectly, the role of the President in the inflation acceleration is about 9O%.

	16-11-2004 22:05									#19
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quote: Originally posted by Pekka That's right, the real rich are not taking a big hit, they own in real estate and concrete. There are really rich people but only few have 3029840935 million dollars in the actual accounts. Or even in stocks. Besides, I bet if you're real rich, you can cut a nice deal with the bank that takes some of that inflation into account. This mostly hits the people who already makes low salary.

If I had
30.298.840.935 Million Dollars,
I would buy the USA and fire Bush as CEO.
30 Quadrillion Dollars should be enough to do this and still have cash for some other decent countries to buy

	16-11-2004 22:06									#20
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quote: As for Bush's role in all of this, it is precisely zero. His only action has been no action -- he decided to not tap the strategic oil reserve for short-term political gain, unlike Clinton did.

Leave it to DanS to supply the voice of reason.

	16-11-2004 22:10									#21
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quote: Originally posted by VJ wanha W's deficits ain't news, are they? Rich don't keep their money sleeping at bank accounts anymore. They hire their own economists and invest in stocks. It's the middle class who usually keep their money resting in banks, to help them in case of emergency situations.

Stocks are demonated in dollars, and therefore are affected by inflation.

	16-11-2004 22:12									#22
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quote: Originally posted by DanS Certainly a wait-and-see whether it is anything. The PPI is notoriously volatile and is weighted heavily to commodities, such as oil and natural gas. Oil prices have come well down from their highs in the last couple of weeks -- almost a 20% drop. We'll just have to see where they go from here. As for Bush's role in all of this, it is precisely zero. His only action has been no action -- he decided to not tap the strategic oil reserve for short-term political gain, unlike Clinton did.

inaction doesn't mean you aren't responsible.

	16-11-2004 22:14									#23
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If this is the peak in energy prices it is so only in the short run. Energy prices are going to keep going up and up.

	16-11-2004 22:14									#24
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quote: inaction doesn't mean you aren't responsible.

ask yourself: what have you done to curb inflation?

	16-11-2004 22:14									#25
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The pres has had "almost no impact"???

Did I hear that right?

* Bush practically rammed the war with Iraq down the world's throat.

* One side effect of said war was to basically shut down the world's 2nd largest oil reserve

* Predictably, this sent oil prices higher

But this had "almost no impact?"

Just making sure I understand....

-=Vel=-

	16-11-2004 22:19									#26
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quote: Stocks are demonated in dollars, and therefore are affected by inflation.

Correct me if I'm wrong here, but:
Stocks are parts of a corporation. If inflation occurs, and the absolute value of the corporation stays the same, the stock price goes up along with inflation.

quote: But almost zero. Bush's deficits may be pushing this a tenth of a percent or less. Most of the remaining is energy price increases over which Bush's role in pricing is extremely limited.

So, now your position is either:
(a) Bush had an extremely limited role when the US decided to occupy Iraq, or
(b) US' occupation in Iraq has an extremely limited role regarding oil prices.

BTW, I'm not saying that the occupation was a wrong decision to make, I just find the way how you're constantly trying to defend Sonny Bush hilarious.

	16-11-2004 22:23									#27
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quote: (b) US' occupation in Iraq has an extremely limited role regarding oil prices

This is true. The US occupation in Iraq has an extremely limited role regarding oil prices, mainly limited to a small short-term increase in volatility. Iraq is exporting about as much as it was before the war. Over the long run, Iraq may have additional production capacity because of the war, but that hasn't happened yet.

	16-11-2004 22:28									#28
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quote: The weakness of the $ is caused by the state of the US.

As a thought exercise, compare the relative impact of the Fed's actions versus the president's actions. Then consider the relative impact of the congress's actions versus the president's actions.

The US presidency is a very weak institution. Many people outside the US don't realize this fact. And this doesn't even bring out the fact that economic actors (companies, individuals) make most of the economic decisions in the US. The US isn't like France.

	16-11-2004 22:33									#29
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quote: Originally posted by Japher ask yourself: what have you done to curb inflation?

I've been buying less and making less money.

	16-11-2004 22:33									#30
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quote: BTW, I'm not saying that the occupation was a wrong decision to make, I just find the way how you're constantly trying to defend Sonny Bush hilarious.

You get used to it.