Don’t Give Me Any of Your Crap. I have Enough!
First, let me start with an explanation for my most typo-ridden editorial of all time yesterday (for those who didn’t see the repaired version I put out at the very end of the day around 11PM). It had even more than the usual number of typos (which tend to exist because I do all I can to squeeze out four hours a day to read and gather the news and write what I hope will be a meaningful editorial down to the last minute available).
Here’s what happened—just for the fun of it: I was finishing up the first draft of the article, and I heard the sewage sump pump, which services only the bathroom down in our basement, surge on and go off with a loud clunk of the backflow prevention valve. I thought, That’s odd. No one has been using any water in the basement or even been in the basement all day, and Erin (my wife) isn’t home yet, so she hasn’t gone down there. Since the pump is sometimes a little weird that way, I hammered on to finish the first draft of the article.
Erin arrived home about ten minutes later, and said, “What’s that smell? It stinks like sewage.” I thought, Uh oh. Maybe the sewage pump backed up, but how could it when no one has used any of the fixtures down there? I went to the basement, and announced, “We have a problem! A BIG problem!” Not our sewer, but the city’s sewer – as in the mainline for all the sewage of our surrounding neighbors had come gushing into our basement.
Yes, the city had delivered us an early gift for Christmas. So, I went upstairs and pushed “publish,” so you’d, at least, have something, and hoped they taipos wuld knot bee as bd as thy were. Well, they were as bad as they were. (I type at 80 words per minute to get the thoughts out, then come back through and clean things up. The text looked almost as messy as my basement.) You see, after hitting publish, I spent the rest of the evening getting the city out to fix its major plug in the street line, talking with them, getting Servpro to come out and start cleaning, lining up a plumber for the morning to check out the sewage pump to see if the massive backflow had damaged it, making sure all the neighbors checked their basements in case it had also backed up into other homes, etc.
Now I sit in a pleasant hotel room built inside of a windmill, writing today’s article because the whole house smells riper than one can stand. There are some things, as it turns out, about my neighbors in this nice Dutch town that I don’t like. One of them is their sewage. But it all becomes an ample example of how I deal with all the sewage that flushes through the financial news that is full of crap almost all the time.
I deal with finding the ugly stuff the news buries, and here’s how: I’m still happy today and was happy and joking about things yesterday while it was happening because … what can you do? Shit happens. Sometimes quite literally. (OK, you saw that one coming, but I didn’t see that one coming yesterday, even though I spend hours on this computer writing about the nasty stuff that’s coming down the pipeline before it gets here, thanks to Papa Powell, et. al.)
Yet, now my wife and I are having a nice vacation away from home for a few days as others get paid to deal with it, which we had debated doing during the Christmas season. Now we have to do what we had decided not to for financial reasons, making this a blessing in disguise that forces us to take that time away from home while the insurance company pays us to do it. Some stuff gets replaced or tossed, I suppose. We have more stuff than we need anyway.
What makes it easier is that we were prepared for the bad times. We had excellent insurance, and we’re letting them handle as much of the burdens as we can because we know that bad stuff happens sometimes — really ripe, smelly bad stuff. I’m not saying it is the way I’d like to take vacation, but we had prepared to make such a time as this as easy as possible if it happened … and it did right in the middle of writing to you. Now we are taking the Christmas vacation we had decided to put off, and someone else is paying for it.
Depending on how our insurance and city’s insurance work things out we may come out ahead on carpet upgrades we were thinking about making anyway, as the full labor will be covered, and we’ll just pay the difference in material costs for the carpets we choose v. the ones we had, or we may come out worse as they pay only depreciated costs because we have replacement-cost insurance, but the city does not. So, maybe we’ll just put the whole claim on our insurance. Moving costs for the furniture and storage will be paid now, too, by either insurer, which was the big factor making us not want to replace the carpets. Ah well, you deal with it, and move on. It changes the Christmas plans, but we’re making sure they are positive changes. We won’t have to make dinner. We’ll have Chinese fa-rah-rah-rah-rah Peking Duck.
Having paid the insurance expense to prepare for years and accepted it as just a cost of living, it’s all much easier. In fact, it just became worth every penny we ever paid on insurance because the costs of sanitizing everything, even the air — the upholstery that absorbs the smell, the bedding, the clothes, etc., which were not even in the sewage but just hanging or stored above it, is huge, likewise cleaning the HVAC system; but we are told by both the city’s insurance and our own that Servpro does an outstanding job, including the air in the house.
I’m telling you all of this, not as an excuse for typos, but as an example that applies to all prepping. I’m sure there will be some miserable parts of this, but one makes the best of it they can, and being prepared helps. We kept basement storage in plastic totes just in case the basement ever flooded (because even nicely finished basements can do that), so those can now just be sanitized on the outside, and everything inside is fine.
Another point beyond just prepping is that I’d rather know what crap is in my basement so I can start dealing with it right away than let it sit there overnight and grow deeper and do more damage as it rises above the legs of the furniture because no one called the city to fix the plug, so it kept on flowing our way. That’s my example of why I take all the bad news straight up and deliver it that way, too. I want to know what I’m dealing with. I want others to know what they are dealing with.
Another point is that, you may be up to your ankles in other people’s crap, but you can still find plenty about life to be thankful for. I’ve got a nice hotel and a pleasant wife who is bearing up well under it, and we just had a very nice breakfast at the attached bakery, and we have that good insurance to cover all the costs and professional people who can deal with all my ____. (Thought I’d use a blank and spare you more of that bathroom humor.)
The things you might have to be happy for in such circumstances may be different than mine, but you have them. You focus on those as much as you can, and that is how you get through bad times while recognizing life is work, and sometimes it is more work. This, too, shall pass. Our Christmas will continue with adjustments, but we’ll be enjoying the same people in different settings. (It won’t be at our house, though I told my sister she could come with hip waders if she still really wanted to join us to stay in our guest room, which was ground zero for the discharge. She took a raincheck.)
It happens; you deal with it. I take my truth straight up, and that is how I write for you. Truth straight up, no sugar coating.
Now, on to the news
One story, where I have maintained what I believe consistently against the flow of pubic opinion, shows I am not, by any means, always down on the American economy. That is with respect to the popular notion in the mainstream financial press AND the alternative press that China is going to overtake America economically and monetarily. For several years now, I’ve said that, because China is a centrally planned economy (even more so than America) it was going to make some big central mistakes that would harm it. (Those kinds always do.) It would go the way of Japan – the last major threat that was going to overtake the US economy. And we are now living through the time where we watch that great global shift unfold. China screwed up! Bigly.
In today’s news stories, aside from another story about the yuan supposedly supplanting the dollar, we have good evidence of China’s major economic failure from a guy who keeps his finger directly on the daily pulse of supply lines -- Craig Fuller – more so than almost anyone because he is CEO and Founder of FreightWaves, which monitors freight traffic and conditions. Like me, he says he never bought the story that China was going to overtake America economically, even though he tends to be bearish on the freight situation because he chooses to point out the problems and choke points, and he lays out how their badly mistaken Covid lockdowns were so much more draconian than our own in the US that they did far more lasting damage and brought about a calamitous (for China) change in the way the entire business world looks at China as a place to do business (back to how corporations should always have looked at a fundamentally communist country as a place to do business). They showed their true colors.
It was greed that caused US corporations to lose their heads and entrapped American businesses capitalists into moving their vast wealth to manufacturing in Communist China in order to get cheaper labor and easier regulations, but it backfired—something I’ve long warned would happen. The Chinese, I’ve said, would take all knowledge and investments of those capitalists and eventually manufacture without them. They might even nationalize some businesses like they nationalized Hong Kong. Communist countries especially do that when things go bad.
Now those business have become a huge tide, moving manufacturing back into the United States, which offers a far more stable business environment, righting their own massive and greedy mistakes. So, there is some good news for your Christmas. Not everything is wrong with America. Many in the alternative press sound like they absolutely hate America all the time, blame it for all wars, etc. I’m not one of them. I refuse to write anything just because it is popular in the alternative press, which is the only place where I get published, and there are few nations I see as morally superior to America, even with all of its many moral flaws. Call it the human condition.
Still, where there is sewage in America’s business basements, I’ll point it out and tell my neighbors; and there is plenty of that in any country. I just focus mostly on the one I know best, but it often represents what is wrong with a lot of the world, so applies generally.
Now, if you want headlines that are full of the same stuff that has caused me to surrender my house for the time being, we have some in the news today. Look at the first headline under the inflation section. It tells you that prices fell last month for the first time since 2020. Plug your nose and hold on a minute. This is from one of the many outfits (CNN) that have been telling you for the last four months that prices were continually falling when I said they were rising, month-on-month. So, how can they be said to be falling for the first time since 2020?
I will tell you the trick, and it is precisely what ticks me off even when a basement full of sewage failed to because it is SO dishonest that it stinks even worse. What the articles now claim is that prices fell for the first time in month-on-month readings. For months now I have pointed out how the entire financial media has doggedly avoided looking at the MoM figures because that was where prices were going higher and higher each month. The mainstream media through that time chose, instead, to focus on year-on-year inflation figures. Now that prices actually did come down month-on-month for a single month, they are suddenly glad to focus on the monthly figures and even tell you …
Last month, for the first time since April 2020, prices fell on a monthly basis, according to a closely watched report released Friday by the Commerce Department.
US inflation slowed further in November, and consumer spending continued to outpace expectations, lending further credence to the idea that the US Federal Reserve could stick its “soft landing” of bringing down inflation with a barrage of interest rate hikes while not throttling the economy into a recession.
Now they tell you that the monthly figures for the very first time are showing you that the Fed is sticking its soft recession-free landing and that it means the battle with inflation is over. They didn’t tell you when they kept rising.
To be fair, what they say in the article is that actual prices, not just the inflation rate, dropped by a tiny amount, 0.1%. The report shows an actual month-on-month drop in prices. However, that still leaves prices 2.6% higher than they were a year ago. That’s because, just as I said it would take several months of a rising inflation rates MoM to get the YoY rate to put in a turn, it will take a few months of declining prices to get that longer rate to come down more now that we are right at that point where monthly changes could swing YoY inflation either way with one more month’s news. Well, the news was minutely good for November.
However, the articles in the news today bill this as the “end of inflation,” as I said yesterday you’d probably hear most articles crowing about as they reach for blinding optimism that is unmerited. Here’s why: The big decline was, again, due to energy, but all of the upheaval in the Middle East that has been driving oil prices back up happened after the period being reported. So, the negative impact on CPI/PCE prices from oil that we see in the PCE report for last month is going to turn into a positive impact on inflation, driving it back up when December gets reported. That is why the Fed ignores energy for its target inflation rate because it is so volatile (even though the prices certainly impact you and me more than just about any other price category). This means that this report is not the end of the Fed’s inflation fight BECAUSE the Fed ignores any contribution from energy anyway.
Tumbling gas prices — energy prices dropped 2.7% from October — drove the swing into negative territory, according to the report.
This trend is as graceful and encouraging as anybody could have hoped for when the Fed started lifting rates,” Matt Colyar, Moody’s Analytics economist, told CNN. “It’s another good, solid report, and it’s becoming increasingly [evident] that what the Fed has done has not initiated a recession and has coincided with their main goal, which is prices back down toward their 2% target.”
Well, be of good cheer then. The departing of the Red Sea by all ships is apparently not happening, given those sweeping claims, and oil will not be going back up, according to these short-sighted writers who always hear what they want to hear. Everything is apparently on schedule, then, for the Santa Claus Cruise through the Christmas-red sea.
I’d be more enthusiastic about an actual negative change in overall prices if not for the fact that I am almost certain energy will be rising in the December report, the healthcare adjustment is total chicken(stuff-in-the-basement), as Wolf Richter called it, and the departing from the Red Sea by shippers is creating new supply-line snarls and significant added costs, along with the closure of the Panama Canal, to where we are likely in 2024 to see the kind of trade chaos at ports we saw in 2020-2021. Both problems look like they are going to be around for a few months, plenty of time to cause boatloads of supply snarls.
With news like this last inflation report, one might expect to see stocks off to the races and bond prices rising in value, too, but things were subdued today and bond prices have actually settled back down a little (yields rose).
If there is more to say on this inflation report when I have time to dig deeper into the numbers, I may let you know in a “Deeper Dive,” but with sewage problems and the Christmas holiday, that will only be if the deeper truth is big. Otherwise, see you after the holiday (since The Daily Doom is not published on actual holidays or holiday weekends).