Profit Optics

Kobayashi Maru The end of a 40 yr bond run.

The US economy has been in a recession for (at least) 3 years. Take official data on inflation growth and deduct it from the US “Real” GDP published by the BLS. What's grown the most? Personal Consumption Expenditures Government Spending For the consumer, financed all on credit and nothing left in the tank. For the US government, monetized by global FED bankers. Mass deleveraging and washout of zombie companies incoming. GDP = C + I + G + NX C = Personal Consumption Expenditures I = Investments G = Government Spending NX = Exports – Imports

FED mistake summed up in one chart. How will this sudden shift to risk off positioning alter your Executive Planning, CapEx Investments, and Inventory Control in the near future?

#AI all you want, but people just won't want to work anymore.... However, the real harm will come with the loss of critical thinking subsidized by the crutch of #AI #NGMI

Inflation, were you late or prepared for the challenge? How were so many on the wrong side of inflation (or perhaps just late in adjusting prices, expectations, or executive guidance) and just how predictable was it? First chart - Blue line is supply, red line is effective demand, and the black line is labor. Small drop in supply and a giant spike in demand (labor), but it is incorrect to call this supply side inflation. Manufacturers don't unnecessarily create supply as an effort of hopium. No, it was the relaxed conditions in place that supported and drove the fervor in demand. Second chart, inflation (if we believe the FED Data). Price, being a construct of demand, very tight lag effect to the large swell in demand. Predictable. Loose monetary policy coupled with Unlimited Fiscal Spend... The perfect setup to achieve inflation. FYI - QE is a fancy term used to conceal reality "QE = Inflation Target" the interesting part is that QE largely has not resulted into inflation until late 2020 / early 2021 and beyond. 2AM Thoughts... The demand within the economy is as close to supply as it has ever been with rates of demand slowing faster than supply. Yikes. What does that mean for future price expectations? Will the adjustment be Subtle Disinflation or Mad Max Deflation? How will this alter your Executive Planning, CapEx Investments, and Inventory Control in the future?

As long as you don't need to eat, #inflation isn't a problem. Time to start fasting?

Jerome Powell is Arthur Burns 2.0 Super core inflation 3 months annualized hits 8%. Ouch... Jerome played with fire by declaring victory against inflation prematurely. Unfortunately, we pay the price for his recklessness. Management Mistakes/Neglect: -Rush to declaring victory. -Manipulating data to fit a predetermined model vs. transposing data into useful information to understand the actionable levers of the model. -Underappreciating the gap between "How you feel and reality."