U.S. Economy: All ain't well, Uncle Sam-flation

This morning, the Produce Price Index (PPI) report was released and fanned the idea than inflation is well on its way.

From the PPI report:

From January 2007 to January 2008, the index for finished goods moved up 7.4 percent. Over the same period, prices for finished energy goods climbed 22.6 percent, the index for finished consumer foods rose 8.3 percent, and prices for finished goods other than foods and energy advanced 2.3 percent. For the 12 months ended January 2008, the index for intermediate goods increased 8.8 percent, and prices for crude goods jumped 31.3 percent.

This year-over-year increase was the highest reported since 1981 - during a recession and after 70's stagflation period. Meanwhile, our brothers-in-Iraqi-arms, The British, also reported serious inflation worries: "The Office for National Statistics said producer output prices for January rose 1% from December, making for a seasonally-adjusted annual increase of 5.7% -- the biggest year-to-year jump since July 1991 and much faster than market expectations for a rise of around 5.1%. The measure of inflation at the factory gate posted a 5% annual rise in December. "

Commodity prices on wheat posted a single day record move on shortage concerns due to a weather and bad harvest in other parts of the world. Below list commodity prices in the recent past

To go along with wheat, corn (due partly to ethanol production), soybeans, gold, copper, platinum and oil are all stalking all-time highs or creating new ones daily. These raw inputs go into your cars, your food and your technology. As Laura Mandaro, ferretted out these responses:

What's happened in the commodities space, particular in food stuffs, has a direct impact on inflation expectations," said Dan Shackelford, a T. Rowe Price portfolio manager whose team manages $14 billion in bond assets. "We should care about what's happening, not only to gasoline prices but what's happening with corn or stuff that ends up on the grocery shelf or at T.G.I. Friday's," he said.
In the United States, the steady drumbeat of higher-than-historic consumer inflation, overlapping with mounting evidence of a slowdown or possible recession, has reignited fears that the nation is flirting with a return to 1970s-style stagflation. As Tony Crescenzi, the influential bond-market strategist at Miller Tabak & Co., put it in a research report this past week, "Inflation has now become the new bogeyman, adding to many other concerns."

Of course, others are not so sure that we are going back to the stagflation 1970's, even when they worked back then, as Richard Berner relates more opinion than analysis in an Morgan Stanley article:

To be sure, there are similarities to that bygone era, and we are revising our 2008 inflation forecast higher by almost a full percentage point, from 2.2% to 3%. As then, soaring energy and food quotes are clear culprits today. Crude prices have touched $100 and are unlikely to retreat significantly. Quotes for grains and other foodstuffs have jumped by anywhere from 10% to 250% from a year ago, and the supply/demand balance favors further increases. Moreover, as in the period when President Ford handed out WIN buttons and Arthur Burns was Federal Reserve Chair, it’s not just energy and food; the persistence of inflation lately has been broad-based. Steve Roach and I worked together under Burns in the 1970s and watched with alarm as monetary policy contributed to an era of stagflation (see “The Curse of Arthur Burns,” Global Economic Forum, October 22, 2004). It’s now clear that bringing inflation back down will require more slack in the economy and more time than we thought previously. But in my view, the similarities with the 1970s are more superficial than real. Here’s why.

First, let’s focus on global forces. By now it’s a commonplace, as articulated by former Fed Chairman Alan Greenspan, that globalization for much of his tenure was a disinflationary force, but that Ben Bernanke is unlucky... when global forces are turning inflationary. I think that view overstates the influence in both directions. While globalization almost surely reduced US inflation over the past decade, domestic forces —
inflation expectations, the extent to which costs from all sources are rising, and the degree of slack in the economy that shapes companies’ pricing power —still dominate the inflation prognosis. Conversely, as in the 1970s, US policymakers must now be attentive to the potential for global forces to boost inflation, but I think the influence will be small. Unlike in the 1970s, that’s because global companies now tend to “price to
market,” absorbing the effects of currency or import price changes in margins; in other words, the “pass-through” from such cost increases has declined (see “Globalization and Inflation,” Global Economic Forum, June 19, 2006).

Nonetheless, two global factors are pushing inflation higher today. First, rising energy, food and commodity prices – the product of still-strong global growth and limited gains in supply – are
boosting overall inflation. Energy prices rose by 20.4% over the past year, while retail food quotes rose by 4.9%; the latter is the fastest pace in nearly two decades... If Brent averages $90/bbl this year, US retail gasoline prices (all grades) seem likely to average about $3.25 for the year, and in the spring driving season could hit $3.50. Likewise, the jump in wholesale food prices has yet to show up fully in retail products, and a continuation of 4-5% food price hikes seems highly likely for the balance of
2008...
A rise in import prices apart from food and energy — the product of a weaker dollar and gains in non-dollar import prices — is a second current source of inflation pressure...But there are lags between the time the economy weakens and the degree of pass-through declines, and slack hasn’t yet increased by enough to mute the impact of such price hikes by as much I thought a few months ago.
And import prices have also risen over the past few months by a bit more than I thought — not solely because of the weaker dollar but also because costs have escalated. The upshot: While pass-through has been incomplete, import price hikes have given a lift to US inflation...

Domestic factors also have worsened the inflation picture. Inflation expectations, partly reflecting the global forces mentioned above, are moving higher...

Richard Berner does alot of talking, a lot of thinking, tending, assuming and talking around the inflation vs. stagflation problem.

I don't feel we are going to grow much at all, and certainly not in relationship to the burning-up market in China or India, unless Barack Obama has some economic magic wand to undo several years of economic Russian roulette we have been playing.

Meanwhile prices will rise, people will tighten their belts, the housing sector will only get worse, and of course, a few top cats will reap huge rewards.

The signs are just not getting any better.

In the News: Nader, Newspapers and the Nadir of My Success

Ralph Nader has gone ahead and decided to run for office once again. After his 2000 Election run likely had the negative outcome of getting Bush put in charge, I would think he would have learnt something. I have nothing against him persay, I just think he ought to realize that the votes he gets are often doing the opposite of what he alleges to want accomplished.


A Few of His Positions:
Supports NOW's agenda on Reproductive Rights. (Feb 2008)
Half of federal budget is now military spending. (Jan 2008)
Get rid of gay discrimination fully, not halfway. (Jul 2004)
Corporations have too much control over people's lives. (Jan 2008)
Corporations control government; that defines fascism. (Jan 2008)
Opposed 1996 expansion of the federal death penalty. (Feb 2008)
The drug war has failed, despite $50B annually. (Feb 2008)
Rehabilitation, not incarceration. (Jul 2004)
It is time to break our addiction to fossil fuels. (Feb 2008)
End subsidies of entrenched oil, nuclear, & coal interests. (Feb 2008)
US lags behind Europe & Japan in renewable energy. (Oct 2004)
US should be the world's humanitarian superpower. (Feb 2008)
Most of these are obviously liberal/Democratic stances.
2000 Presidential Election Results as of December 2001:
Florida - Bush: 2,912,790, Gore:2,912,253


Other Candidates: Buchanan:17,484, Browne:16,415, Hagelin:2,281, Harris:562, McReyolds:622, Moorehead:1,804, Nader:97,488, Phillips:1,371.



Certainly seems Florida would have been a different story if Nader's votes were by in large to go to Gore. The other parties, though each could have "swung the vote," however, Nader's total far outstrips the remaining candidates, and his was the most liberal - robbing Al Gore of an obviously, like-minded electorate.



Where would we be now? How different would America all ready be? Energy policies? Civil Rights? Katrina aid and response? Fight against terrorism? The list goes on.
Of the other close states, all went to Gore. (Percentage equals margin of victory)
New Mexico, 0.06%
Wisconsin, 0.22%
Iowa, 0.31%
Oregon, 0.44%
In a wiki quote: According to the Washington Post, exit polls there showed that "47 percent of Nader voters would have gone for Gore if it had been a two-man race, and only 21 percent for Bush," which would have given Gore a margin of some 24,000 votes over Bush.[44] Some Democrats claim that had Nader not run, Gore would have won both New Hampshire and Florida and won the election with 296 electoral votes. (He only needed one of the two to win.) Defenders of Nader, including Dan Perkins, argued that the margin in Florida was small enough that Democrats could blame any number of third-party candidates for the defeat, including "Workers World Party" candidate Monica Moorehead, who received 1,500 votes.[45] Nader's reputation was still hurt by this perception, and may have hindered his future goals as an activist. For example, Mother Jones wrote, "For evidence of how rank-and-file liberals have turned against Nader, one need look no further than the empire he created. Public Citizen, the organization (Nader) founded in 1971, has a new fundraising problem—its founder. After the election, contributions dropped... When people inquire about Nader's relationship to the organization, Public Citizen sends out a letter that begins with a startling new disclaimer: 'Although Ralph Nader was our founder, he has not held an official position in the organization since 1980 and does not serve on the board. Public Citizen—and the other groups that Mr. Nader founded–act independently.'"[46]

Ralph, if you really wanted to change things, how about developing a contending political party to run for the House and Senate, or find some way to gain credentials via holding public office. Maybe then your bid for President would have inspired instead of causing unintended results.
Maybe this time, it won't.
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The above is the new payscale for my nightly job of delivering the news for the Hammond Times - aka The Northwest Indiana Times - nwi.com. It is a paper without a real competitor since the Post Tribune was bought by the Chicago Sun Times, and both, are taking a Sonny Liston dive to the canvas as Ali delivers the phantom blow.

The Times is looking to gain more income via weekend (Sunday onlys mostly) subscriptions. However, it was sold as "nothing has changed," or "you'll get the same amount." Bullshit. The future reflects that they will garner the greater benefit from certain subscriptions, while I get the same or less for my weekly toils.

As a result, I will cut back on my usage of plastic to protect the paper whenever possible. (I deliver to tubes for most of the route. During good weather, forget it.) Unfortunately, I can't afford a hybrid or a 40+MPH car to improve on my usage of nearly 5 gallons of gas per night. For every $.50 swing in gas, I get $75 (less) per month, or $900 per annum.

The Times answer: "get more customers." Yes. That's fine. But it also takes more time - which they also reduced. I get to 5AM to deliver, 6AM on Weekends, and it takes 2 1/2 hours per night, if weather cooperates. ( Times often can't get papers to distribution center until 3AM or later.)

So, be good to your papermen and women. They sometimes are fighting things you are unaware of.

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Lastly, John Wooden's Pyramid of Success has often been used as tool for sports and life itself. One time, several years ago, I pulled this out of a newspaper somewhere:

Words like industriousness, ethusiasm, skill, loyalty, competitive greatness, self-control, initiative, confidence are among the building blocks, while assisting in your climb are ambition, adaptability, integrity, reliability, patience and faith that make up the pathways to the top of the pyramid, ultimately: Success.

Most of these are described in Wooden: A Lifetime of Observations and Reflections , The Essential Wooden: A Lifetime of Lessons on Leaders and Leadership , Wooden on Leadership and 5 other titles published over the years. A quote from Grantland Rice's "How to Be a Champion" is tied into industriousness at Wooden's website.


At his zenith, Wooden had won 10 Basketball National Championships with the likes of Lew Alcindor, Walt Hazzard, and Bill Walton at the helm of his mighty UCLA Bruins. He retired after 1975 National Championship win, yet, he probably could have coached plenty more - as he is still alive, 33 years after his last game. When Wooden came out of Purdue University in 1932, he was an Indiana basketball legend as a 3-time All-American and 3-time All-State player. But he didn't think he was going to be a coaching legend - in fact, it took him 32 years to win his first NCAA title at age 54.


So while I am at the nadir of Success, maybe in 25-30 years the Zenith will present itself - if I can follow some of what John Wooden defined in his Pyramid.

Movie Review: Charlie Bartlett

In my monthly need to leave out of the house in the hopes of stumbling into a worthwhile book, movie or real person, I might have shot too high in hoping Charlie Bartlett would be somehow an uplifting event or cinematically memorable. I also figured with Robert Downey Jr. in the cast, I could expect something to catch my eye. Well, it did, and didn't.




It starts with a typical fantasy-to-reality check in Charlie's last school of privilege. His mother (Hope Davis) is a completely unconcerned parent as she just goes along with her bright high school boy's antics, while using alcohol and meds to get through her husband's incarceration for tax evasion. (But they are still wealthy...)


After another typical 1st day-at-school lesson, Charlie adapts quickly, uses his considerable charms, wits for high schooler and entrepeurial nack to gain popularity, first with the school bully, and soon the entire high school.


What Charlie (Anton Yelchin) offers is instant advice and 'meds', which come via his own instant access to psychiatrists, who are in turn prescribing various medications to Charlie like a preacher does The Bible to 'The Sinner.' In one fairly funny montage, Charlie shows the dangers of what these professionals often engage in (by poking fun at it), and foreshadows bad things to come...


The kids are more adult usually, than all the adults are combined. They are looking for answers via Charlie, or acknowledge quickly their shortcomings and problems. The adult characters hide behind various mechanisms instead of facing their issues. Charlie buts heads with the Principal (Downey) while, of course, wooing the principal's daughter in an all-too-honest way.


The reason this movie often falls short is that it goes too far in pushing the "instant transformation" idea without "teaching lessons" in a high school/coming-of-age movie. In fact, you don't really see the kids in a 'normal' school setting at all - and the problems are far more mature (not always) than what I believe some high schoolers would be talking about. Teachers and parents of kids don't exist. Only the principal - a quasi-authority figure since his job is in jeopardy.


There are too many of these instant transformations, no struggles or conflicts in achieving success, which would naturally be apart of a real alteration. I think the movie actually could have used 30-35 minutes extra (1hr 37 minutes) to fill in gaps in story lines and take a dramedy to a higher plane of existence. (Flush out the other story lines: the panic attack kid, mentally challenged guy, the dealer, the cheerleader, classroom interaction, parents, etc.)


It works, and it doesn't. Maybe if it would have taken some scholastic clues from Gross Anatomy, another dramedy that reflects on medical school via the eyes of a could-care-less fisherman's son with C grades, as an undergrad (but perfect MCATs) turned 1st-year med student that has to deal with his classmate's desires, his professor's critiques and his own willingness "to do the work."


Though different movies, the med school detail as Roger Ebert noted was flawless and built tension throughout the movie. Bartlett lacked tension.


I remember watching Gross Anatomy as a 16-year old who had just got a 3-day suspension from high school for telling the Dean of Students to "Fuck Off." My mother was at work, so I took off to the theatre and the mall.


I was in many respects like a Charlie Bartlett (watch the movie to understand): disrespectful of authority, assisting my mother too much (I worked from age 13 through high school approximately 25 hours per week) and sometimes too much of an adult, but still a child.


I think all of us can relate to Bartlett; but I think the movie had more - just needed a gentle push.

Environment, Infrastructure and Energy: Need Engineering and Energetic People to Fix

Today is an interesting day: Fidel Castro stepping aside, new JFK files 'suddenly' appearing after 44 years + in cold storage and President Bush 'in the Bush' of Africa. But this post won't discuss those things.

This morning on The History Channel they played a 30+ year old segment on Energy development and challenges. You know the type: the ones we watched in class on the days the substitute teacher brought in a reel-to-reel projector, had difficulty in setting it up and told us we were to stay awake during it because she would quiz us on the information. (Never doing it because the bell rung.)

In several voice-over passages, "The United States dependence on foreign oil may continue for the next 15-20 years," and "new technologies are just around the corner, including nuclear fusion," and finally, "it is important to make sacrifices to ensure our energy needs are meet."

What I find interesting is exactly how we haven't addressed the problems seen in 1975, when I was 3, but instead have only become more dependent and deeply entrenched in the same geo-political world that was at the crux of the 1970's Oil crises.

Certainly, it is more than oil and the prices (again above $100 today) that bother me. It is the entire landscape of this all-encompassing American & World problem.

Infrastructure. I noticed daily that our highways and byways are progressively getting worse. Most were assembled during the 1950's, and only a specific few have seen major overhauls during the last 20 years. Locally, we see the damages every year (in the north) due to water sabotaging roads creating potholes and damage to vehicles. Bridges are also deficient, as was horribly seen in the Minneapolis tragedy. Water & Sewage is also going south, as California, the largest American state economy, is in a dilemma.

We find ourselves lacking the ability to change over to new technologies and better investment in right-thinking avenues. The ability to give up single-passenger vehicles to go to work. Using public transport and developing those options in suburban areas.

Envisioning sound Urban, County, State and Federal planning to properly use the resources we have. Things like multi-story (more than 3) housing in the suburbs, tight restraints on development of agriculture & forest areas and saving rivers and lakes from over commericalization and capitalistic greed. We also might have to acknowledge that historic landmarks that are costly to maintain or serve only a modest purpose, are available for destruction. To offset this, we have the technology to give virtual tours of entire buildings and structures, right now. We can salvage so much, but we have to fix wherever we can, our infrastructure in order to compete in the world.

Energy & Environment. Much of what is written about the dangers of nuclear energy is overblown and worst-case scenario thinking, ignoring actual near-zero probabilities. Exactly how many people died as a direct result of 3-Mile Island in Pennsylvania? None.

But to hear it from proponents of coal and oil industries, you might believe thousands perished.
Meanwhile, in 2006 and 2007, at least 2 mining accidents in Utah and West Virginia took place, killing 16 men in West Virginia alone.

The Nuclear Industry is likely the most regulated of all American Industries. It has a nearly flawless safety record - meaning no major catastrophies or numerous violations at a particular plant. We currently receive nearly 20% of our energy from nuclear power, and barely think about it due to the efforts of people in that industry.

Yet, we are still locked into coal & oil-based energy platforms due to politics and money. (The Republican party is supported heavily by St. Louis-based energy giant Peabody Energy, the largest coal company in the world, and supplier of 10% of the United States energy and 3% of the World Output. Bush placed 3 Peabody executives on his transition team after his 1st nomination.)

Quote from Nuvo.net:

After winning the 2000 presidential election, George Bush named three Peabody Energy executives to his transition team as advisors for the new administration’s energy policies. Steve Chancellor, president of Black Beauty Coal, was named as an advisor to the Bush-Cheney energy policy transition team; Irl Engelhardt, Peabody Energy chairman of the board, was named to the transition advisory team for the EPA and for a while his name was in the running for secretary of energy; John Wootten, Peabody Energy VP served with Chancellor on the energy advisory panel.
In addition to serving as policy advisors, Peabody and its executives were also some of the Bush-Cheney team’s biggest campaign contributors. Since 2000, Peabody Energy has donated nearly $2 million, Irl Engelhardt has personally donated $350,000 and Steve Chancellor has donated another $350,000. So generous are the Peabody executives that Engelhardt has been called “a major player” by the Republican National Committee, and Chancellor was invited to go on a golf trip to Spain with George Bush Sr. and other “friends” of the campaign.

In reading, "Power to Save the World" by Gwyneth Cravens, who was not a supporter of Nuclear Energy prior to her research, you get a broader and yet detailed account of what Nuclear Power is and what it can do to supplant coal as the major player, without being overly preachy.

Anti-nuclear activists focus on the instability of uranium-235 and plutonium-239, saying it cannot be trusted given it is used in weapons of mass destruction. Even our current President shined on America in a State of the Union saying that the terrorists had plans of our nuclear facilities. Nuclear facilities are filled with security measures and numerous shutdown protocols that no terrorist or group of terrorists could set off anything like a China Syndrome tragedy. But the myth will continue nonetheless.

Of course, each side of the energy debate wants to play up its advantages. And money is part of that advantage. As it was once said, "the only real danger of Capitalism is Capitalists." Greed has kept the same players doing the same things, regardless of the impact it has on America.

Another viable avenue could be the usage of Automotive Industry layoffs/payoffs to explore Wind, Solar, Wave, Tidal and GeoThermal Energy avenues with the support of our U.S. government. We currently subsidized heavily the Agriculture industry to produce inefficient ethanol, when you compare it to Brazilian ethanol production. Why not use the experienced labor force to generate the new generation of energy producers?

We face difficult decisions on the Infrastructure, Energy and Environmental fronts. If the United States does not make a plan, go a direction and leave behind ill-suited, environmentally-dubious and ineffective policies, we may find ourselves moving backward to 1900 more than forward to 2100.

A 'little' song spectacular: In honor of St. Valentine

Music will sooth the savage beast, so I'm told. (I'm a beastly sort, being a Lion via the zodiac.) So why not some tunes for the holiday that give men reasons to buy chocolates, roses, rings and Lexuses for their significant others/girlfriends/Heather Mills' wannabe brides. (Cynical...I wonder why?)


So in honor of said performance of showing true (and often untrue) affection for your love, I put together a few lists of songs, and if you like, vote once per each group that is displayed for the BEST SONG/ARTIST. Kinda like a belated grammy award across several years. Realize, I could go on for a while, but I just put this together. Slapdash as it were.


So here goes a few lists:
Funk/R&B/Soul:
Sex Machine - James Brown
Papa Was a Rolling Stone - The Temptations
What's Going On - Marvin Gaye
Cantaloop - US3 (Herbie Hancock sampled)
Can't Get Enough of Your Love Babe - Barry White
SuperGroups:
Behind Blue Eyes - The Who
Heartbreaker - Led Zeppelin
Turn it on Again - Genesis
Hotel California - The Eagles
Speed of Love - Rush
Great Gig in the Sky - Pink Floyd
Black - Rolling Stones
Love Me Do - The Beatles


Slow, Sappy & 1-hitters
Don't Dream It's Over - Crowded House
Never Tear Us Apart - INXS
Stand By Me - B.E. King
Joey - Concrete Blonde
Somebody - Depeche Mode
(I'd Just) Died in Your Arms Tonight - Cutting Crew
Black Velvet - Alana Miles
Wishing Well - Terence Trent Darby
Rock Me Amadeus - Falco
Silent Lucidity - Queensryche

Alternative Groups
Girlfriend in a Coma - The Smiths
Pictures of You - The Cure
Wonderwall - Oasis
Black - Pearl Jam
Low - Cracker

Early Rap/HIP HOP Legends
It Takes Two - Rob Base & DJ Easy Rock
Bust A Move - Young MC
Humpty Dance - Digital Underground
Changes - Tupac (Bruce Hornsby sample)
Mama Said Knock You Out - LL Cool J (video below)

I missed a few genres or avenues or songs, but it takes plenty of time to just link these things. I hope you all can survive a winter of too much 'weather.' And Happy Valentine's Day!!!
KEEP IT FRESH TO DEATH!!!