Last week we opened the door on the anecdotal evidence narrative. (a computer glitch wiped the post out if you missed it) Today's WSj reads like a primer for Yellen and Co. to up their game:
1. Hidden Costs Frustrate Fuel Sector.
Speculators in the RIN are ginning up the price of Federal bio-fuel credits. Forcing foodstuffs into fuels (especially when glutted) always sounded idiotic to us. The story is a classic case of the unintended consequences of good intentions and what the WSJ cooly calls "hidden currency" trading.
2. Black Pepper
About a decade ago, Jim Rogers announced the onset of the "new inflation" and made a large physical bet on pepper. The ins and outs of the pepper market are nothing to sneeze at (ya, I went there) on the colorful drying fields of Madagascar, but McCormick calls the pricing shots. Today's Journal highlighted the "weight-out" case against the spice giant. Basically, the iconic red and white tin was reduced to 3 oz. from 4, which in days gone by was called 25% inflation
3. Mortgage Rates
Tipping back above 4%, the rate structure saw levels not posted since the Taper Tantrum.
In the Piketty-loving section called Mansion; really its called Mansion !, we learn Dr. McDreamy's Malibu Frank Gehry "pad" sold above ask in a bidding war for $15 million. Mr. Dempsey paid a paltry $7M in the blissful market of 2009 !
Chinese state owned monopolies continue to explore busting up inefficient and overpriced commodity industries. It all sounds good, but sugar tells us its not as easy as keeping the prices artificially jacked up.
We made a hypothetical "paired trade" call on Long labor, Short Capital about 6 months ago. In an article that must have Peter Schiff doing an extra stand up set at the Comedy Store Open Mic night, Gold producers are inking wage increases and cutting production. The article shows a Gold Field 3 year contract included a 21% pay raise. In the lower corner of the page, "Activist investors striking back at Executive pay"
We have not abandoned the "Too Much Everything" tilt that dominated the great credit super-cycle and post-meltdown denouement. But cycles have phases and inevitably begin to arc. As Isak Denisen wrote, "Perhaps he knew, as I did not, the Earth was made round so we never see too far down the road" The anecdotal case for higher rates continues to grow.