Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: russwinter who wrote (18882)	12/17/2004 6:46:44 PM
From: mishedlo	Read Replies (3) of 116555

I'd highlight this part of that article: "The real risk to manufacturing is the rising cost of raw materials," said Lynn Reaser, chief economist with Banc of America Capital Management, pointing to the factor that some manufacturers have cited as a drag on earnings in recent warnings. LOL I was 100% positive of your reply, almost to the exact word. I should have posted your reply on another board to prove it. Then again this was pretty easy, then again, I had your words EXACT, except I would have posted "I would highlight this portion of the article" seriously At any rate where does it end? You saw what happened when Walmart tried to raise prices didn't you? Do you really think GM and F can raise prices? I simply can not understand the stock market rising as layoffs continue and price squeezes are screwing everybody but the top end. Did you see those housing numbers? OK so China keeps bidding up commodities but the consumer of last resort can not or will not pay for them. What is next? Now you think these prices are being passed on. To some extent they are, or CPI would not be rising. But... They are certainly not being passed on at the rate at which input prices are rising. I know full well your position: PPI increases will be passed on or companies will go out of business. Well why can't they go out of business and why can't that be part of China's stategy? 1 out of 37 people in Nevada went bankrupt last year. Amazing! Did you see that article? What happens when 1 out of 37 Californians goes under? IMO this train is about ready to wreck and it will have taken far less hikes than you think. The reason is leverage. FNM is about ready to implode now. One would never know it from the stock price. Even IF FNM does not implode, what happens to spending if housing stalls, given what we are looking at in housing starts and autos right now? Gasoline prices headed back up. You seriously want me to believe that is inflationary? Yeah yeah yeah circular argument again. No I do not want to go there. Where I want to go is what happens if GM and F can not pass on those steel hikes. Surely you 100% agree that they can not. Now what about Walmart that tired to pass on hikes and then BAILED? The end game is here Russ. You tell me what happens now. Mish

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