tag:blogger.com,1999:blog-6616959642391988608.post3103506392257416990..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: ISM: what deflation?Scott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-6616959642391988608.post-540088247635007412010-01-04T11:04:18.303-08:002010-01-04T11:04:18.303-08:00Supposedly, we are enjoying rather large gains in ...Supposedly, we are enjoying rather large gains in worker productivity (esp. in manufacturing). Even if there are wage increases (and that is dubious), they will be mitigated.<br />Factory rents are very soft (they'll give space to you in many regions of the country). <br />Utility prices stable.<br />Equipment prices are soft.<br />Hard to see inflation in this mix, at least in manufacturingBenjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-17394549305517436412010-01-04T10:08:26.913-08:002010-01-04T10:08:26.913-08:00everything you cited is not the driver of prices t...everything you cited is not the driver of prices though might have correlation with them. Prices are defined by equilibrium between demand and supply. Supply side is in abundance atm, demand side is missing and in fact is still in destruction mode due to increasing unemployment, rising savings, deleveraging and all talk about scary budget deficits. All this means to me that any conclusion about Игры рынкаhttps://www.blogger.com/profile/12001273098690387194noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-30025981332284382602010-01-04T09:53:38.972-08:002010-01-04T09:53:38.972-08:00Deflation properly defined is a decline in the gen...Deflation properly defined is a decline in the general price level. Most, if not all, prices fall in a deflation. What we see instead is that almost all commodity prices are rising (strongly), the majority of manufacturing firms are paying higher prices for their inputs, corporate profits are rising (suggesting rising margins), and incomes are rising (i.e., labor costs are rising). Plus, monetaryScott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-5682135768773440812010-01-04T09:44:18.921-08:002010-01-04T09:44:18.921-08:00what relevance does it have for inflation/deflatio...what relevance does it have for inflation/deflation defined as CPI which goes into Taylor rule used by Fed and so on? Your assumption of stable or increasing margins is just that - assumption.Игры рынкаhttps://www.blogger.com/profile/12001273098690387194noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-72674920829204630182010-01-04T09:23:30.461-08:002010-01-04T09:23:30.461-08:00If a majority of manufacturing firms are paying hi...If a majority of manufacturing firms are paying higher prices for their inputs, then there is certainly no deflation for the sellers of those inputs.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-14795866161457753052010-01-04T09:09:27.427-08:002010-01-04T09:09:27.427-08:00sorry but deflation is defined by "prices rec...sorry but deflation is defined by "prices received" and not by "prices paid". So no connectionИгры рынкаhttps://www.blogger.com/profile/12001273098690387194noreply@blogger.com