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Mike Shedlock

Mike Shedlock

Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Articles by Mike Shedlock

Shedlock: Inflation & Other Wildly Believed Economic Nonsense

July 17, 2021

PRINTER FRIENDLY VERSION
The CPI Measures Inflation and Other Widely Believed Economic Nonsense

The Fed, mainstream media, and others have a spotlight on the CPI and that’s the wrong spotlight.

Chart Discussion

In the chart above I plot the Case-Shiller national home price index, the Case-Shiller 10-city index, the CPI, Owners’ Equivalent Rent (OER), and the BLS Rent Index. 

I have produced this chart previously, but this month I added the BLS Rent Index. 

OER is the mythical price one would pay if one rented their own house from themselves, unfurnished and without utilities. 

Prior to the year 2000, housing, rent, OER, and the CPI all moved in sync. In 2000, home prices disconnected from the CPI, OER, and rent. 

In 2012 another disconnect developed in which both rent

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Mish's Talk 1970-01-01 00:00:00

May 13, 2021

Maven is a best-in-class technology platform empowering premium publishers who impact, inform, educate and entertain.We operate the media businesses for Sports Illustrated and TheStreet, and power over 140 brands including History, Maxim, and Biography. Maven is publicly traded under the ticker symbol MVEN.

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The FCC Aims to Stem Robocalls But ATT, Verizon and T-Mobile Say Wait

May 9, 2021

Billions of RobocallsConsumers get billions of robocalls and many if not most of them come from overseas locations including India and the Philippines.On September 28, the FCC seeks to implement foreign provider regulation that would block most of these incoming calls.  Under the proposal, foreign carriers have to be approved by the FCC and those spamming calls would be blocked.  Rule ChallengeSeveral big phone companies say they are On Board With Robocall Blocking, Just Not Now. “We strongly support the direction the FCC is going to address the foreign robocall problem, to police the edge of the U.S. telephone network,” Verizon associate general counsel Christopher Oatway said in an interview. “We would like to pause the process, reexamine what needs to be done and continue to work on

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Elon Musk Discloses Asperger’s on SNL, Monologue a Flop or a Success?

May 9, 2021

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Afghanistan Bomb Attack Targets Schoolgirls Killing 25: What’s Going On?

May 8, 2021

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Biden Comments on the Jobs Report and Gets the Key Message Wrong

May 7, 2021

American Rescue Plan – More Free Money“Some critics said we didn’t need the American Rescue Plan, that this economy would just heal itself. Today’s report just underscores, in my view, how vital the actions we are taking are.""Today’s report also puts some truth to loose talk that we’ve been hearing about the economy lately. "First, that we should stop helping workers and families out for fear of overheating the economy. Today’s report make it clear. Thank goodness we passed the American Recue Plan.""Second, today’s is rebuttal to loose talk that Americans just don’t want to work. What this report shows is there is a much bigger problem, not withstanding the commentary you might have heard this morning, is that our economy still has 8 million fewer jobs than when this pandemic started.

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Add David Rosenberg to List of Those Who Believe Inflation is Transitory

May 7, 2021

Inflation is TransitoryOn April 28, I posted Don’t Worry, the Fed Says the Recent Jump in Inflation is Transitory.The title sounds sarcastic, and it is in a way, but my huge disagreement with Powell is not in his transitory message but rather in the amount of current inflation.Inflation Consensus is Wrong Advisor Perspectives noted on May 6, that economist David Rosenberg says the Consensus is Wrong about Stocks, Bonds and Inflation. The “fiscal juice” from stimulus checks and the re-opening of the economy are outstripping supply, creating temporary inflation. Supply will catch up when demand subsides as the effect from the stimulus wanes, according to Rosenberg. That will happen before the end of the year. We don’t and won’t have a trend of inflation, Rosenberg said. Fed Chairperson Jay

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Huge Jobs Disappointment 732,000 Under Consensus With Big Negative Revisions Too

May 7, 2021

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The Word of the Day is “Shortage”: Why Can’t Employers Find Workers?

May 6, 2021

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Dogecoin, Created as a Joke, is the Epitome of Greater Fool Mania

May 6, 2021

What is DogeCoin and Who Created It?Dogecoin is an altcoin (Bitcoin alternative). The correct pronunciation is “dohj coin.”It was created by Jackson Palmer and Billy Markus, software engineers at Adobe and IBM respectively. Palmer discusses the details in a fascinating 2014 interview."It was a joke on a whim. … I sat down with a beer and slapped doge’s face on a coin and put it live. The next day there was heaps of retweets. … We thought it would last maybe three days."No Longer a JokeThe Wall Street Journal explains Dogecoin is No Longer a Joke. The cryptocurrency that started out as a parody less than a decade ago had surged more than 10,000% in 2021 as of May 4. It is named after an internet meme centered around the image of a Shiba Inu dog with bad spelling habits—thus “doge”

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The Hockey Stick Rise in M1 is a Monetary Statistical Mirage

May 5, 2021

Huge Monetary RiskEarlier today I posed a Q&A what if on QE: What Would Happen to Inflation If the Fed Announced $40 Trillion a Month in QE?My conclusion was not even a further quadrillion in M1 via QE would matter.I just added a couple of paragraphs to the post that are themselves worthy of a monetary spotlight update.Please recall my August 18, 2020 post Bond Bull Lacy Hunt Warns of a Huge Monetary Risk (emphasis mine). LH: When the Fed initiated QE1, QE2 and QE3, folks said those policies were very inflationary. There is a liquidity effect of what the Fed is doing, and the liquidity effect can be very powerful over the short term. But ultimately the increase in the money supply did not follow through after the rounds of Fed purchases of government securities because the banks couldn’t

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Expect Evictions to Soar as a Court Threw Out the CDC’s Eviction Moratorium

May 5, 2021

Good News for Landlords Bad News for Tenants In what’s good news for landlords the National Eviction Moratorium Invalidated by Federal Judge. The CDC, citing public health grounds, had implemented the temporary halt on evictions, extending protections for millions of tenants who have fallen behind on their rent during the pandemic. But a series of conflicting lower court rulings has called into question the legality of the moratorium, creating uncertainty for landlords and tenants alike.Wednesday’s ruling from Judge Dabney Friedrich, from the U.S. District Court for the District of Columbia, is the first to set aside the moratorium on a nationwide basis. Judge Friedrich, a Trump appointee, said that while it was the role of the political branches of government to address the pandemic,

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What Would Happen to Inflation If the Fed Announced $40 Trillion a Month in QE?

May 5, 2021

QE Parameters$40 trillion a month in QE for 24 months, no matter what, announced upfront.3-month bills at 0% rolling everything over each month while adding a new $40 trillion each month.Zero percent interest paid to banks on excess reserves.What Would Happen?Hyperinflationists and inflationists would come out of the woodwork on the announcement screaming inflation or worse.In two years, M1 would rise by $960 trillion dollars, nearly a quadrillion dollars.Since M1 is currently about $18.7 trillion, M1 would thus rise by about 5,000 percent. What About Inflation?Q: What would a 5,000% increase in M1 over the course of two years under the parameters as outlined above do to inflation?A: Not a thingThere is a stimulus impact of holding down short term rates, but the Fed was already committed

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To Promote Equality, California Proposes a Ban on Advanced Math Classes

May 4, 2021

Dumbing Down of America Takes Another Leap ForwardA friend of mine emailed an article the likes of which always prompts me to say "really?"Please consider the Reason article In the Name of Equity, California Will Discourage Students Who Are Gifted at Math. Culturally Responsive FrameworkI like to verify things myself and you can do so as well by reading the California Department of Education Mathematics Framework. In its framework, the Department of Education seeks "Culturally responsive mathematics education."Introduction Highlights Active efforts in mathematics teaching are required in order to counter the cultural forces that have led to and continue to perpetuate current inequities. Mathematics pathways must open mathematics to all students, eliminating option-limiting tracking. [i.e.

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Yellen Spooks Markets With Fed-Like Comments “Rates May Have to Rise Somewhat”

May 4, 2021

Unofficial Dual RoleContinuing her unofficial dual role as a Fed president as well as Biden’s Treasury Secretary, Janet Yellen commented in an Atlantic interview Rate May Have to Rise Somewhat to prevent overheating.“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy,” Ms. Yellen said when asked if the economy could handle the kind of robust spending that the Biden administration is proposing. “I think that our economy will grow faster because of them,” Ms. Yellen said of the proposed investments, such as research and development spending.Tools? Who Has the Tools?Biden wants to increase spending by $4 trillion with Progressives wanting even

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Epic Games Takes Apple On In Court: Who Will Win and Who Should Win?

May 4, 2021

Bench Trial UnderwayIn a US court bench trial, Epic Accuses Apple of Monopolistic Practices.“Fortnite” maker Epic Games Inc. deliberately violated Apple Inc.’s AAPL app-marketplace rules to show the power that Apple wields and how the tech giant takes an unfair share of money from software developers, the videogame company’s chief executive testified in a trial Monday. “Apple was making more profit from selling developer apps in the App Store than developers,” said Tim Sweeney, whose company’s global hit videogame “Fortnite” was removed from Apple’s app platform last August.The statements from Mr. Sweeney, a 50-year-old programmer who founded Epic in 1991, in an Oakland, Calif., courtroom came on the first day of a planned three-week bench trial, one that could help reshape the

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The Fed Can’t Trigger Hyperinflation, It’s Not Even a Monetary Event!

May 3, 2021

Raising Eyebrows The title of this post will raise eyebrows. I suspect some will skip reading this article simply because of the title.After all, every hyperinflation in history has been accompanied by massive monetary inflation.The key word is "accompanied". But accompany does not imply cause.Hyperinflation Q&AQ: What is hyperinflation?A: Hyperinflation is a sudden complete lack of faith in currency.  Professor Steve Hanke, the leading authority on hyperinflation says "hyperinflation occurs when a country’s inflation rate exceeds 50% per month."That may be a sufficient condition but it makes for a poor definition. For example, 40% inflation monthly for six months would result in a 95% decline in purchasing power and for nine months would result in a 99% loss in purchasing power but

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Yellen Discusses Inflation Tools As If She Was Still the Fed Chair

May 3, 2021

Janet Yellen On Meet the PressJanet Yellen was on Meet the Press Sunday morning in a fluffy interview touting Biden’s $4 trillion socialist proposal while downplaying any problems.  Chuck Todd let Yellen pump up Biden’s plan for well over three minutes before getting in a second question.When Todd finally got in a word, he defended Biden’s plan "You just made a case these are investments and they are worthy of deficit spending."Tag Team FormatYellen responded to Todd in tag team format that "Over the long haul deficits need to be contained".Over the the long haul deficits have not been contained for many decades but we keep pretending. "Right", "right", "right" said Todd at least a ten times while nodding approval in the interview.InflationNearly six minutes into the interview Todd asked

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Competing $2 Trillion Infrastructure Plans: Is Pelosi’s Target of July 4 Possible?

May 2, 2021

Meaning of "Infrastructure"One of the key stumbling blocks is a pronounced disagreement over what constitutes infrastructure. Republicans have a traditional view. Democrats include a wide array of goals including union expansion and child care.Who Pays and How?Even if the meaning of infrastructure is limited in some sort of compromise, the second key stumbling block is how much funding, for what, and who pays.Test in Congress Coming UpThe WSJ notes Biden’s $4 Trillion Plan Now Gets Test in Congress.With Republicans largely lining up against most of the roughly $4 trillion in proposed spending and related tax increases, Democrats face a series of political and logistical questions. Should party lawmakers seek a compromise on narrower infrastructure legislation with the GOP, or plunge ahead

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Fake Heath Certificates Complicate the Already Messy “Vax Pass” Idea

May 2, 2021

Airlines Struggle to Police Fake Certificates In Europe, Fake Covid-19 Certificates Hit Airlines, Which Now Have to Police ThemAirlines are battling a scourge of passengers traveling with falsified Covid-19 health certificates.Deutsche Lufthansa AG has been fined up to 25,000 euros, or about $29,800, by Germany for allowing passengers with false or incorrect documents to board, according to people familiar with the penalties. Complications? You Bet!At London Heathrow Airport, the additional checks by border control have led to lines of more than six hours for arriving passengers. That is with just 541,000 passengers passing through the airport in March, down 91.7% from the comparable period in 2019. The EU wants airlines to enforce restrictions that it sets up, but that makes the airlines

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Democrat’s DC Statehood Idea Is Dead Already. What Else is Dead?

May 1, 2021

Manchin Opposes Democrats’ BillThe Wall Street Journal reports D.C. Statehood Effort Stalls as Manchin Opposes Democrats’ Bill.Stall is not the correct word. Dead is the correct word.“If Congress wants to make D.C. a state, it should propose a constitutional amendment,” [West Virginia] Senator Joe Manchin, a centrist Democrat, said in a radio interview with WV Metro News. “It should propose a constitutional amendment and let the people of America vote.” The development underscores the pivotal role Mr. Manchin plays in the Senate, where he has influenced the course of legislation this year, including the level of unemployment benefits in the most recent Covid-19 aid package. He has also expressed concern about the size of President Biden’s spending plans and his proposed tax

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Is the Covid-19 Recession Over? A Comparison to the Great Recession

April 30, 2021

GDP Will Hit a New High Next QuarterReal GDP is poised to hit a new high next quarter. Is that a sufficient?GDP Three WaysGDP Reporting ConfusionReporting adds to the GDP confusion. Economists like to present GDP at a Seasonally-Adjusted Annualized Rate (SAAR). In the first quarter of 2021 GDP was up a reported 6.4% annualized. Actually, quarter-over-quarter GDP was up 1.6%. From the above chart one would be hard pressed to know the numbers I presented in the lead chart.The 33.4% rise did not come close to wiping out the 31.4% decline.It takes a 45.8% rise to wipe out a 31.4% decline.GDP did not really fall 31.4% in the first place. It fell 9.0% but that was the biggest decline in the history of the data.Official Arbiter of RecessionsThe National Bureau of Economic Research NBER is the

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Personal Income Soars Over 21% on Third Round of Free Money

April 30, 2021

And the reason for the spike in personal income…is another spike…
…Results from a new cell study suggest that the SARS-CoV-2 spike protein can bring about long-term gene expression changes. The findings could help explain why some COVID-19 patients — referred to as COVID long-haulers — experience symptoms such as shortness of breath and dizziness long after clearing the infection.
SARS-CoV-2, the virus that causes COVID-19, is covered in tiny spike proteins. During infection, the spike proteins bind with receptors on cells in our body, starting a process that allows the virus to release its genetic material into the inside of the healthy cell.
"We found that exposure to the SARS-CoV-2 spike protein alone was enough to change baseline gene expression in airway cells," said Nicholas

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AOC Pleased With Biden’s Way “Better Than Expected” Progressive Push

April 29, 2021

Biden Is No ModeratePresident Joe Biden proved beyond a shadow of a doubt that he is not a moderate. His proposed $1.8 Trillion "American Family Plan" speaks for itself.The above link contains the know details ahead of his Wednesday address to Congress and the nation. Wednesday evening, Biden added climate change, a $15 minimum wage, right to organize, gun control, paycheck fairness, defense spending, charging stations, even a goal to cure cancer. Biden Has Exceeded Progressive Expectations Not that any more evidence of Biden’s Progressive slant is needed, but AOC’s praise of Biden is in and of itself all one would need to know that Biden is no moderate.Please note that Biden has "Exceeded Expectations" that the Progressives had and AOC is pleased with his push. “The Biden administration

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GDP Surges 6.4% Fueled by Free Money Spending

April 29, 2021

Eddie_T2 daysThe free money did what it was supposed to do. It kept the economy from crashing. It will have been worth it unless it leads to continual future free money for reasons that aren’t nearly as good, which is the fear I have.
I still don’t know exactly how bad I really did last year. I hope my taxes are done soon. I’m guessing it will end up being my lowest income year in more than 20 years. This year may not be super great either, although I’m busy as hell.
I didn’t default on anything, and I finally got my last furloughed employee back on the clock (other than a couple who didn’t want to come back. )
And I didn’t die of COVID and I didn’t get sick, and I didn’t make anybody else sick. I spent far less than I usually do, and I spent 100% of bailout funds on expenses that met the

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Biden’s Lofty Economic Plan Will Be Dead on Arrival in the Senate

April 29, 2021

Massive OverreachPresident Biden wants people to believe he is a moderate. The plan he presented to Congress and the nation Wednesday evening was more like a Progressive wish list.In case you missed it, here is the Transcript of Biden’s Speech. I discussed pre-disclosed details yesterday in Biden to Propose a $1.8 Trillion "Family Plan" in a Prime Time AddressWednesday evening Biden added climate change, a $15 minimum wage, right to organize, gun control, paycheck fairness, defense spending, charging stations, even a goal to cure cancer.He kicked things off with a catchy phrase “My fellow Americans, trickle-down economics has never worked. It’s time to grow the economy from the bottom and middle-out.”The Big LieBiden jumped from that catch phrase immediately to a big lie: "A broad

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Don’t Worry, the Fed Says the Recent Jump in Inflation is Transitory

April 28, 2021

Fed Will Remain AccommodativeThe Federal Reserve Open Market Committee (FOMC) met today and its interest rate policy unchanged.Key FOMC PointsFederal Reserve will use its full range of tools to support the U.S. economy.The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened. The sectors most adversely affected by the pandemic remain weak but have shown improvement. Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses. The Committee seeks

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Biden to Propose a $1.8 Trillion “Family Plan” in a Prime Time Address

April 28, 2021

TexasTim653 daysBiden is up to 7 trillion spent in under 100 days. Trump barely spent that in 4 years!
I have kids, many of you posting here have kids. But why are we spending money on child care. If you can’t afford kids, you shouldn’t be having kids. I don’t ask anyone to pay for my kids and you shouldn’t ask me to pay for yours. Paying teacher salaries for babysitting kids ages 3-4 is abominable. We already have (or can have) minimum wage baby sitting for kids that age and if you want more than babysitting for your kids you should be paying for it.
Note the death taxes are going to be insane unless there is a free minimum of about 10 million tax free. Pretty much any family farm or small family business like a restaurant or landscaping business etc will have to be sold outright

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Democrat Sponsored DC Statehood Power Grab is Constitutionally Dubious

April 27, 2021

Lie of the DayThe lie of the day is that D.C. statehood is over voter disenfranchisement. To understand the lie, one must first understand the disenfranchisement argument: Over 700,000 people who live in D.C do not have a voting member of Congress or representation in the Senate.The proposed remedy is to make D.C. a state. Another remedy would be to reduce the footprint of D.C. so that very few people voters were disenfranchised.Constitutional BackgroundArticle 1, Section 8, Clause 17 of the Constitution creates a "District (not exceeding ten Miles square)" as the "Seat of Government of the United States."The 23rd Amendment to the Constitution allows American citizens residing in the District of Columbia to vote for presidential electors, who in turn vote in the Electoral College for

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The Fed Says “Money Doesn’t Affect Inflation” Others Say “It’s the Money Stupid”

April 27, 2021

Herkie3 daysAnyone else see their cable/internet bill go up by 20% this last month? My spectrum bill did and they did not even bother to announce it, the bill was just higher.
I will have to cancel the TV, I only watch a few hours per week anyway, and that is just Saturday evening PBS. And news, but I can get that from the net.
I have a rule, whatever the government (Veterans disability and social security) gives as a COLA for my annual raise if we even get a raise at all, is the maximum I will pay in increased prices for the things I have to spend money on.
If it is something that I am compelled to purchase like auto insurance which by law I have to buy, and that goes up by 13% as mine did in February, then I still have to buy it, but I will look for a cheaper source, and if I cannot

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