I ran across this blog entry from Peter Schiff. I think he nails it in 11 minutes. While this blog really is a collection of my thoughts and a tool to organize information into actionable strategies, I sometimes run into stuff that states exactly how I feel and what I'm thinking. This is one of them. I believe you can hear the frustration in Peter's voice and it resonates with me because the entire "government shutdown" charade is a complete joke.
Budget cuts amounting to $40 Billion are 1% of the travesty contained in our budget. If we had ANYONE that was a real leader (and not a play one in some game called politics) we'd start at 20% across the board cuts and end up with 15% in a "compromise". What kind of message would it send the world if we cut $600 Billion from the budget this year? That would get someone's attention. To walk around and believe that government is so essential and helpful is just deception. Does anyone remember how effective all that government was in preventing 9/11? What about saving everyone in New Orleans in Hurricane Katrina? How's all that government doing in Japan with all of their compliant citizens? (God forbid anything like that happening in the USA, people would be killing each other in the first 2 hours.).
There are several key roots to the problem that create this cancer called government.
First, we have professional politicians. Full time politicians have nothing to do but legislate FULL TIME. We must change the system to require them to have real jobs and only work 1/2 a year. This should apply to cities as well. Is it any wonder that government encroaches on every facet of our lives? With full time city council members working full time to enact laws, it is no wonder you need a permit to open a coin shop, to be an internet blogger (Philadelphia), or have a lemonade stand.
Second, we must have term limits of 2 terms maximum for Congress and the Senate. Without this you end up having crooked, connected, and out of touch oligarchs that don't represent anyone other than lobbyists, much less the people and wishes of their districts.
Finally, Bill Gross came out on Friday stating that he wasn't just completely out of US Treasuries, he is actually short US Treasuries. In response, futures are going nuts in all the inflation related assets. Gold and Silver will go bonkers next week. The Fed is trapped and it won't be long before the bond market finally snaps the trap shut. Speculators have probably been laying these positions for some time, and all it has taken was a big boy to get in and finally talk their own book. Since the Federal Reserve actually owns around 1.2 Trillion of bonds, the Fed is subject to interest rate risk and significant losses. In the industry we measure the sensitivity of $ losses to an increase in interest rates by measuring something called the DV01 or Dollar Value of 1 basis point. As of February the calculation of the DV01 was that if treasuries lose value and rates move up by 1bps, the the Fed would lose $1.7 billion! Isn't that nice, if interest rates move up a mere 23 bps the Fed loses that $40 Billion in savings that was so hard to find. If interest rates rise 3%, the Fed loses $500 Billion! These are figures based on February's holdings, so we know that the figures are much worse.
It's hard not to be cynical. These politicians are disgusting.
Sunday, April 10, 2011
Thursday, April 7, 2011
APRIL UPDATE - IS IT REALLY THAT GOOD?
TOTAL RAILS
Rails continue to be greater than last year. This statistic confirms that things are better, but I'm remaining intent on seeing a move up in the rate of change of the tonnage rather than just a parallel shift higher. If it remains where it is, we get to suggest that we're recovered, but not getting better.
RAILS / AUTOS -
Auto shipments continue to outpace last year, and interestingly the rate of increase in the data suggests that we may see an increase in sales too (an increasing push higher). I reviewed Ford and GM's charts and there is nothing there that would make me want to gamble on a bet that this increase will translate to higher prices.
RAILS / SCRAP TONNAGE -
The freight shipping for scrap continues to be flat and equal to last year's performance.
CANADIAN PACIFIC -
I highlighted CP last month as a target for a short simply because in comparison to the rest of the rails, the tonnage versus last year is weak. Canadian Pacific continues to under perform and if we would have made a trade on it, we would have been rewarded handsomely. The trend remains intact this month and based on the stock charts, I am seeing continued weakness. I will not post a chart of CP yet, but it is pretty close to signaling a long-term short signal on the weekly chart. When I see this, I will post it.
SCRAP COMPOSITE INDEX -
The last month has ushered in a drop in scrap prices. Perhaps this is a function of additional supply coming in driving prices lower?
MOODY'S / MIT - REAL TRANSACTION DATA - http://web.mit.edu/cre/research/credl/rca.html
As of March 30th, 2011 the Moody's / MIT Transaction Index shows that prices slipped by another 1.25% in January for their total property index.
For another perspective we can look at a recent article in the WSJ that describes a drop in occupancy rates in commercial space, namely in malls. http://online.wsj.com/article/SB10001424052748704101604576246972728969548.html . One might initially think that the big reits would be suffering, but the point of the article is that the suburban malls are getting hit fully by the never-ending recession that supposedly ended. The truth is that while Mom and Pop haven't been able to return to the crazy life-style that happened before the crash and those malls that sold them stuff they never could afford are feeling the pinch.
HOME PRICE DATA - http://www.realtor.org/research/research/ehsdata
So you thought that foreclosure you bought was going to be your ticket to a lavish Robert Kiosaki life-style huh?
Perhaps it may be, perhaps not. But with the falling average home price you better hope that things turn around or that you can rent that thing out quick! Once again we find that home prices continue to drop. There are so many issues that are hurting the housing sector. Here are just a few;
A) Rising interest rates
B) Tougher lending standards (can you say down payment anyone?)
C) Lots of inventory including foreclosures on the market
D) Lots of shadow inventory consisting of;
1) Foreclosures that banks have actually foreclosed on because there is no where for it to go
2) Homeowners that want to sell that haven't listed because it won't sell or they are waiting for higher prices.
3) Homes that people are paying mortgages on, but are underwater.... when prices continue to drop, they'll quit.
E) That government shut down thing. Because almost 1/3 of all mortgages receive a Federal Loan Guarantee, all those home transactions that might have been completed are now dead in the water if the shutdown is not averted in the next day.
CNN contributes the following uplifting story stating that a full 11.4% of all homes in the US are vacant! Isn't it great that we have all those home builders adding more to the pot?
http://money.cnn.com/2011/03/28/real_estate/us_housing_vacancy_rates/index.htm
MONSTER EMPLOYMENT INDEX - http://about-monster.com/employment-index
The Monster Employment Index has been a pretty good indicator of jobs data and we see a big move up in the recent release of figures from Monster.com. This index powered higher to 136 which is the highest reading since July of 2010.
Recall that this is an index of the number of job postings that employers put on their sites, essentially measuring online availability of jobs.
6 MONTH EURIBOR - http://www.homefinance.nl/english/international-interest-rates/libor/usdollar/libor-rates-1-week-usd.asp
Pimco's Andrew Balls wrote an interesting article calling the ECB strategy into question (just as I have for months).
http://www.pimco.com/Pages/EuropesNotBackToNormalSoWhyIsTheECBHikingRates.aspx . No matter what, the ECB raised rates by 25 basis points to 1.25%. 6 Month Euribor has been expecting this as we see it climbing significantly over the last couple of months.
6 MONTH US LIBOR -
Funny though, look at the magic done here in the US! Oddly enough our USD Libor hasn't moved a bit! I wonder why? Perhaps it is just a tsunami of electronic money. Nothing can withstand something as powerful as a printing press.
COPPOCK TURN INDICATOR - (For entertainment purposes only)
As I've noted quite often over the last months, I'm about to drop the Coppock Indicator, but have kept it around for entertainment purposes only. As I mentioned last month, the DJIA had to really drop and stay dropped to continue in it's bearish stance (which has been absolutely wrong). We did get a pretty sizable dump, but the resilient markets didn't stay dumped. Therefore, the Coppock has now turned bullish, signaling that all the kids can safely get back in the pool! If we would have listened to the indicator we'd have missed out on about 2500 Dow points.
FCI - http://www.bloomberg.com/apps/quote?ticker=BFCIUS:IND
The Bloomberg Financial Conditions Index continues to recover. We are now at levels which are equal to the highest points we've seen throughout this entire recovery. While we saw a substantial drop, all has been made back. Levels above 0 indicate that there is a recovery in the works and expansion is underway. Below zero shows that we are in a contraction.
BDI - http://www.bloomberg.com/apps/quote?ticker=BDIY:IND
The Baltic Dry Goods Index is still in the basement. Not much going on here. Shippers like DRYS, FRO, GNK, and DSX all have very ugly looking charts. Continued weakness here in these names could easily push these guys down to their 4th quarter 2008 lows (which were much lower than the March 2009 lows.) GNK is already below those March levels.
USD - http://www.bloomberg.com/apps/quote?ticker=DXY:IND
Bucky is still pegged at the lower end of it's range and is still at a critical juncture. With all of this dollar weakness are we really amazed to see oil, gas, grains, food, and metals lift off?
Rails continue to be greater than last year. This statistic confirms that things are better, but I'm remaining intent on seeing a move up in the rate of change of the tonnage rather than just a parallel shift higher. If it remains where it is, we get to suggest that we're recovered, but not getting better.
RAILS / AUTOS -
Auto shipments continue to outpace last year, and interestingly the rate of increase in the data suggests that we may see an increase in sales too (an increasing push higher). I reviewed Ford and GM's charts and there is nothing there that would make me want to gamble on a bet that this increase will translate to higher prices.
RAILS / SCRAP TONNAGE -
The freight shipping for scrap continues to be flat and equal to last year's performance.
CANADIAN PACIFIC -
I highlighted CP last month as a target for a short simply because in comparison to the rest of the rails, the tonnage versus last year is weak. Canadian Pacific continues to under perform and if we would have made a trade on it, we would have been rewarded handsomely. The trend remains intact this month and based on the stock charts, I am seeing continued weakness. I will not post a chart of CP yet, but it is pretty close to signaling a long-term short signal on the weekly chart. When I see this, I will post it.
SCRAP COMPOSITE INDEX -
The last month has ushered in a drop in scrap prices. Perhaps this is a function of additional supply coming in driving prices lower?
MOODY'S / MIT - REAL TRANSACTION DATA - http://web.mit.edu/cre/research/credl/rca.html
As of March 30th, 2011 the Moody's / MIT Transaction Index shows that prices slipped by another 1.25% in January for their total property index.
For another perspective we can look at a recent article in the WSJ that describes a drop in occupancy rates in commercial space, namely in malls. http://online.wsj.com/article/SB10001424052748704101604576246972728969548.html . One might initially think that the big reits would be suffering, but the point of the article is that the suburban malls are getting hit fully by the never-ending recession that supposedly ended. The truth is that while Mom and Pop haven't been able to return to the crazy life-style that happened before the crash and those malls that sold them stuff they never could afford are feeling the pinch.
HOME PRICE DATA - http://www.realtor.org/research/research/ehsdata
So you thought that foreclosure you bought was going to be your ticket to a lavish Robert Kiosaki life-style huh?
Perhaps it may be, perhaps not. But with the falling average home price you better hope that things turn around or that you can rent that thing out quick! Once again we find that home prices continue to drop. There are so many issues that are hurting the housing sector. Here are just a few;
A) Rising interest rates
B) Tougher lending standards (can you say down payment anyone?)
C) Lots of inventory including foreclosures on the market
D) Lots of shadow inventory consisting of;
1) Foreclosures that banks have actually foreclosed on because there is no where for it to go
2) Homeowners that want to sell that haven't listed because it won't sell or they are waiting for higher prices.
3) Homes that people are paying mortgages on, but are underwater.... when prices continue to drop, they'll quit.
E) That government shut down thing. Because almost 1/3 of all mortgages receive a Federal Loan Guarantee, all those home transactions that might have been completed are now dead in the water if the shutdown is not averted in the next day.
http://money.cnn.com/2011/03/28/real_estate/us_housing_vacancy_rates/index.htm
MONSTER EMPLOYMENT INDEX - http://about-monster.com/employment-index
The Monster Employment Index has been a pretty good indicator of jobs data and we see a big move up in the recent release of figures from Monster.com. This index powered higher to 136 which is the highest reading since July of 2010.
Recall that this is an index of the number of job postings that employers put on their sites, essentially measuring online availability of jobs.
6 MONTH EURIBOR - http://www.homefinance.nl/english/international-interest-rates/libor/usdollar/libor-rates-1-week-usd.asp
Pimco's Andrew Balls wrote an interesting article calling the ECB strategy into question (just as I have for months).
http://www.pimco.com/Pages/EuropesNotBackToNormalSoWhyIsTheECBHikingRates.aspx . No matter what, the ECB raised rates by 25 basis points to 1.25%. 6 Month Euribor has been expecting this as we see it climbing significantly over the last couple of months.
Funny though, look at the magic done here in the US! Oddly enough our USD Libor hasn't moved a bit! I wonder why? Perhaps it is just a tsunami of electronic money. Nothing can withstand something as powerful as a printing press.
As I've noted quite often over the last months, I'm about to drop the Coppock Indicator, but have kept it around for entertainment purposes only. As I mentioned last month, the DJIA had to really drop and stay dropped to continue in it's bearish stance (which has been absolutely wrong). We did get a pretty sizable dump, but the resilient markets didn't stay dumped. Therefore, the Coppock has now turned bullish, signaling that all the kids can safely get back in the pool! If we would have listened to the indicator we'd have missed out on about 2500 Dow points.
FCI - http://www.bloomberg.com/apps/quote?ticker=BFCIUS:IND
The Bloomberg Financial Conditions Index continues to recover. We are now at levels which are equal to the highest points we've seen throughout this entire recovery. While we saw a substantial drop, all has been made back. Levels above 0 indicate that there is a recovery in the works and expansion is underway. Below zero shows that we are in a contraction.
BDI - http://www.bloomberg.com/apps/quote?ticker=BDIY:IND
The Baltic Dry Goods Index is still in the basement. Not much going on here. Shippers like DRYS, FRO, GNK, and DSX all have very ugly looking charts. Continued weakness here in these names could easily push these guys down to their 4th quarter 2008 lows (which were much lower than the March 2009 lows.) GNK is already below those March levels.
USD - http://www.bloomberg.com/apps/quote?ticker=DXY:IND
Bucky is still pegged at the lower end of it's range and is still at a critical juncture. With all of this dollar weakness are we really amazed to see oil, gas, grains, food, and metals lift off?
WRAP UP -
I've actually done a few things differently in this post than normal, so why stop there? Tonight I will not actually leave you with specific trades or much more commentary about specific areas other than to say that this data just isn't that good. We do have some improvement in jobs listings with Monster and also a move higher in the FCI. Beyond those items we see flat rail shipping, a collapsing housing market, falling commercial real estate still, and a really nasty spot shipping market for bulk goods. Is all of the recovery on the back of the falling dollar? Perhaps.
If this is the case, it is not a wonder that commodities continue to perform well and the entire market too is being supported by the Fed's wealth effect. For the first time in a long time I'm seeing opportunities for to genuinely short where the charts look pretty weak and their current position in the recovery since the early March drop is well below the highs. Stocks need to regain that high point or are at risk for a reversal.
I'm discussed at great length that portfolio managers and other big money will not wait for the end of QE II to be repositioning money and anticipating that the liquidity infusion will end. If that is the case, we could actually see a rotation from the high-flying stocks into more defensive names over the course of the next couple of weeks. Those would be companies in health care, utilities, and would certainly be out of technology leaders.
I do have a number of stories ready to go in the next few days, so many that I actually inserted a few in the text here. So much is going on in the world that I really do feel that we are at an inflection point. Be Careful!
GOATMUG
Tuesday, April 5, 2011
INSIDE JOB - WATCH A REAL LIFE HORROR MOVIE - FREE
INSIDE JOB - HOW WALL STREET GOT YOUR MONEY
Are you still wondering about the 2007 and 2008 Financial Crisis and what exactly happened? This acclaimed documentary has a great view of the causes of the collapse that threatened to shatter the ponzi scheme that governments and the financial industry have been running for years. While I'll be the first to admit that not all of what they show is spot on (everyone has an angle and prejudice), I'll say that they nail a heck of a lot of it.
I suggest that you hit full screen to get the most enjoyment of your viewing.
(I took down the embedded video because the source video was nailed by Sony for copyright infringement.) Here is another link to a blog I found that had the video still in tact. http://www.distressedvolatility.com/2011/04/watch-inside-job-full-video.html )
It's odd to think that this is all past, that with the simple creation of the TARP fund, QE I, and QEII we are suddenly all fixed and ready to get back to life as usual. Where are the losses? Where are the handcuffs? Nothing has changed, you just got scammed as a taxpayer. "Each crisis has caused more damage while the industry has made more and more money". I can't wait to see the next one, it should be on schedule in about 3 to 4 more years.
If you have about an hour and a half, you will agree that it is not a waste of time. Be careful!
Are you still wondering about the 2007 and 2008 Financial Crisis and what exactly happened? This acclaimed documentary has a great view of the causes of the collapse that threatened to shatter the ponzi scheme that governments and the financial industry have been running for years. While I'll be the first to admit that not all of what they show is spot on (everyone has an angle and prejudice), I'll say that they nail a heck of a lot of it.
I suggest that you hit full screen to get the most enjoyment of your viewing.
(I took down the embedded video because the source video was nailed by Sony for copyright infringement.) Here is another link to a blog I found that had the video still in tact. http://www.distressedvolatility.com/2011/04/watch-inside-job-full-video.html )
It's odd to think that this is all past, that with the simple creation of the TARP fund, QE I, and QEII we are suddenly all fixed and ready to get back to life as usual. Where are the losses? Where are the handcuffs? Nothing has changed, you just got scammed as a taxpayer. "Each crisis has caused more damage while the industry has made more and more money". I can't wait to see the next one, it should be on schedule in about 3 to 4 more years.
If you have about an hour and a half, you will agree that it is not a waste of time. Be careful!
GOATMUG!
APPLE RESTING OR "SHIFT" IN PLAY?
APPLE IS A ONE DIRECTION STOCK
If there is one stock I never trade it would have to be Apple. This beast is simply one that defies logic and somehow only trades in one direction. Yes, admittedly I missed the bottom around $86 just a mere 2 years ago, so perhaps I am sore about that, but there are times when we must look around and examine trades that go against the grain.
ANDROID MOVING IN?
Please review the article in Business Insider which contends that there is a shift going on in the smart phone and smart gadget business where the Android operating system is dominating.
http://www.businessinsider.com/android-iphone-market-share-2011-4
Overall, the article is suggesting that the Android is becoming The Standard and now controls about 1/3 of the market share and it is gaining at the expense of the other players.
5 REASONS TO PAY ATTENTION AAPL LONGS
The post got me thinking about other things that Apple should be concerned about and I've compiled a list that just jumped out to me.
1) AAPL is priced for perfection (despite it's recent $20 drop).
2) The NASDAQ 100 is repositioning and is reducing the percentage that AAPL represents which will force all indexers to reduce their holdings of AAPL. Right now, APPL represents about 20.5% of the index, it will be rebalanced to fill only 12.3%. http://money.cnn.com/2011/04/05/markets/apple_nasdaq_rebalance/?section=money_latest
3) Steve Job's health is still a factor
4) Despite being a late technology adopter, Goatmug still owns only 1 Apple device (IPOD shuffle) and has no intention of buying a Iphone. I am going to get an EVO in the coming weeks though. I have heard the EVO SHIFT is decent so perhaps I'll go that direction too.
5) Ipads look awesome, but I have no desire to sign another contract to hook me into more monthly costs for telecom services. At this point my telecom and data costs are almost $400 a month, why add more?
Now don't get me wrong, I'm not calling for the death of Apple. My kid likes them and loves to download new stuff all the time from their Itunes store. However, this doesn't mean that they can't correct a bit. Have a look at the chart.
Even a test down to the lower portion of the channel due to pressure from the rebalancing mandate could take the stock down another 10% to $305.00. A stop at $358 would be a good place to keep you from blowing up if you were planning on shorting.
While I see this as a pretty good opportunity to go short, I probably won't have the guts to engage Apple here. Just so you know, the ones I study and don't trade typically tend to be the homeruns.
Oh yes, I almost forgot. While playing with fire is fun (shorting AAPL for instance) it might just be safer to short the other loser in this scenario. Yes, RIMM, the maker of Blackberry. As Android based phones catch the interest of business users like myself the clear loser will be RIMM. Think about it, I not only ditch my Blackberry, but I also ditch the $10 connectivity fee they charge monthly. (Yes, Sprint will get me somewhere else).
As far as trading a short on RIMM goes, it is really at a critical place. A move below $55 could me a drop to $44 with almost no pause.
Be Careful!
If there is one stock I never trade it would have to be Apple. This beast is simply one that defies logic and somehow only trades in one direction. Yes, admittedly I missed the bottom around $86 just a mere 2 years ago, so perhaps I am sore about that, but there are times when we must look around and examine trades that go against the grain.
ANDROID MOVING IN?
Please review the article in Business Insider which contends that there is a shift going on in the smart phone and smart gadget business where the Android operating system is dominating.
http://www.businessinsider.com/android-iphone-market-share-2011-4
Overall, the article is suggesting that the Android is becoming The Standard and now controls about 1/3 of the market share and it is gaining at the expense of the other players.
5 REASONS TO PAY ATTENTION AAPL LONGS
The post got me thinking about other things that Apple should be concerned about and I've compiled a list that just jumped out to me.
1) AAPL is priced for perfection (despite it's recent $20 drop).
2) The NASDAQ 100 is repositioning and is reducing the percentage that AAPL represents which will force all indexers to reduce their holdings of AAPL. Right now, APPL represents about 20.5% of the index, it will be rebalanced to fill only 12.3%. http://money.cnn.com/2011/04/05/markets/apple_nasdaq_rebalance/?section=money_latest
3) Steve Job's health is still a factor
4) Despite being a late technology adopter, Goatmug still owns only 1 Apple device (IPOD shuffle) and has no intention of buying a Iphone. I am going to get an EVO in the coming weeks though. I have heard the EVO SHIFT is decent so perhaps I'll go that direction too.
5) Ipads look awesome, but I have no desire to sign another contract to hook me into more monthly costs for telecom services. At this point my telecom and data costs are almost $400 a month, why add more?
Now don't get me wrong, I'm not calling for the death of Apple. My kid likes them and loves to download new stuff all the time from their Itunes store. However, this doesn't mean that they can't correct a bit. Have a look at the chart.
Even a test down to the lower portion of the channel due to pressure from the rebalancing mandate could take the stock down another 10% to $305.00. A stop at $358 would be a good place to keep you from blowing up if you were planning on shorting.
While I see this as a pretty good opportunity to go short, I probably won't have the guts to engage Apple here. Just so you know, the ones I study and don't trade typically tend to be the homeruns.
Oh yes, I almost forgot. While playing with fire is fun (shorting AAPL for instance) it might just be safer to short the other loser in this scenario. Yes, RIMM, the maker of Blackberry. As Android based phones catch the interest of business users like myself the clear loser will be RIMM. Think about it, I not only ditch my Blackberry, but I also ditch the $10 connectivity fee they charge monthly. (Yes, Sprint will get me somewhere else).
As far as trading a short on RIMM goes, it is really at a critical place. A move below $55 could me a drop to $44 with almost no pause.
Be Careful!
GOATMUG
Monday, April 4, 2011
TREND CHANGE IN THE WORKS? LOWER COST GOVERNMENT CHEESE?
WHERE'S MY CHEESE?
The monthly release of food stamps recipients didn't change it's trend one bit (still heading higher), but the proverbial rate of change certainly is slowing. The January 2011 SNAP program data released last week indicates that we have over 44.18 Million folks receiving food stamps in our country, which includes some 20.7 million households.
GOOD NEWS?
If there is good news to be found in the report, we'll find it in two places. First, the annualized cost for the program dipped below December's number so the annualized cost of the program is now pegged at $5.7 Billion dollars! (Not much more than a few hundred Tomahawk missiles eh?) More importantly though, the rate of growth of the number of people utilizing these benefits is actually slowing. In January, the increase was a paltry +.24% or a monthly increase of 24 bps. This is the slowest rate of increase since February of 2008!
Before we get all giddy, the print for January 2011 is still a 12.1% increase from last January, but heck, I'll gladly applaud any metric that shows that things ARE getting better and less people are drawing on benefits that provide only a subsistence living. We need folks back to work as soon as possible and we need these SNAP figures to decrease.
FOOD INFLATION / DECLINING COST OF SNAP?
I'm not really sure how we pulled off an increase in participation in the program and a decrease in costs, but heck who am I to disbelieve any government data release? Odd that the cost of the program would go down when we are seeing significant food cost inflation too? As usual, government numbers confound me, I'm just here to report the errrr..... facts.
Be careful!
The monthly release of food stamps recipients didn't change it's trend one bit (still heading higher), but the proverbial rate of change certainly is slowing. The January 2011 SNAP program data released last week indicates that we have over 44.18 Million folks receiving food stamps in our country, which includes some 20.7 million households.
GOOD NEWS?
If there is good news to be found in the report, we'll find it in two places. First, the annualized cost for the program dipped below December's number so the annualized cost of the program is now pegged at $5.7 Billion dollars! (Not much more than a few hundred Tomahawk missiles eh?) More importantly though, the rate of growth of the number of people utilizing these benefits is actually slowing. In January, the increase was a paltry +.24% or a monthly increase of 24 bps. This is the slowest rate of increase since February of 2008!
Before we get all giddy, the print for January 2011 is still a 12.1% increase from last January, but heck, I'll gladly applaud any metric that shows that things ARE getting better and less people are drawing on benefits that provide only a subsistence living. We need folks back to work as soon as possible and we need these SNAP figures to decrease.
FOOD INFLATION / DECLINING COST OF SNAP?
I'm not really sure how we pulled off an increase in participation in the program and a decrease in costs, but heck who am I to disbelieve any government data release? Odd that the cost of the program would go down when we are seeing significant food cost inflation too? As usual, government numbers confound me, I'm just here to report the errrr..... facts.
Be careful!
GOATMUG
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