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PatriotG
05-20-2008, 10:57 AM
Good morning.

What a way to start the day. I did my usual cup of coffee and browsed the headlines of the day. What do I find today? Something that compelled me to go outside and scream at the top of my lungs. Maybe it was the caffein, but I dont think so

Please read the following 2 articles written by 2 different reporters From AP, and tell me, whats wrong with the picture?

Oil crosses $129 for first time, heads for $130 (http://news.yahoo.com/s/ap/20080520/ap_on_bi_ge/oil_prices)

Wholesale inflation slows in April after March increase (http://news.yahoo.com/s/ap/20080520/ap_on_bi_go_ec_fi/economy)


Ok, I will tell you what drove me to lose it momentarily:

Quote from article 1: "Inflation at the wholesale level slowed in April following a huge increase in March although prices for a number of items from prescription drugs to pasta shot upward.

Quote from article 2: Oil's trek toward $130 coincided with the Labor Department's report of an unexpectedly sharp rise in wholesale inflation last month.

So I pose the question to anyone out there:

What is the story here?

It states in article 2 that "The overall moderation in prices primarily reflected how the government adjusts its data to compensate for seasonal changes."

Do you know what I think, the government just "adjusts its data" to create the perception that everything is OK. And in its endeavor to do this, it suffers from the typical ill that most liars do. It becomes confused, and cannot remember what it said 1 hour ago.

This seems to be the truth.

Sorry just venting.....

moostraks
05-20-2008, 12:12 PM
Interesting catch...If all else fails then cook the books. Nothing to see here, move along...

There is a radio guy in Atlanta who keeps saying we are not in a recession. Almost like a chant, saying only housing is experiencing a slump. Uhh...when people's livelihood is wrapped up in their houses then you have a huge problem with a lending bubble. The chain reaction is just beginning to take effect. He ignores the trickle down effect it is having to other industrys that depend on the extra cash that is no longer available. He also uses these cooked book numbers to rationalize his speeches. He was major anti-Paul.

Any-who, npr then had someone on saying how the mortgage crisis is over, although house prices were going to continue to fall for sometime in the future. So how much more jingle mail do they think they will see as long as more homeowners become upside down in the house they purchased?? Just more of the same illogical propaganda to entice us in spending our money frivolously...:(

Zippyjuan
05-20-2008, 04:41 PM
Wholesale inflation attempts to measure how much the costs of inputs are increasing for producers. The largest component of that is labor costs which have not been rising lately. Energy prices are a much smaller percent so get a smaller weight when the wholesale price index is calculated.

Seasonal adjustments can be confusing. People demand more gas for driving on vacations and there are also gas formulation changes in some states which take place in the spring and summer so prices for gas goes higher that time of year. They try to account for the normal, expected changes and look at changes above the normal expected ones to get a more realistic measure of what is going on.

OptionsTrader
05-20-2008, 05:38 PM
It all depends on where you want to draw your prices from. I can pick a handful of commodities that decreased if I am defining CPI, and I can also pick things I actually buy like soy beans and gas, and see that prices ballooned.

Wheat has corrected to November support levels:
http://i31.tinypic.com/2zp70ja.png

Corn is on fire
http://i29.tinypic.com/noee74.png

Beans are on fire:
http://i29.tinypic.com/jueixw.png

Gasoline, well you know
http://i27.tinypic.com/2aim2qd.png