The Destroyer of Finance

 Rockin’.

The Labor Department reported that consumer prices jumped 1.1 percent last month, much worse than had been expected. Energy prices rocketed upward by 6.6 percent, reflecting big gains for gasoline, home heating oil and natural gas.

Bernanke’s comments underscored the bind the central bank is in, caught between a faltering economy that is struggling to overcome a prolonged housing slump and a severe credit squeeze, and the risk that inflation would move higher.

Many analysts believe that the central bank is likely to leave interest rates unchanged for the rest of the year out of concern that any tightening of credit policy could send the economy into an even worse tailspin.

Over the past 12 months, consumer inflation is up by 5 percent, the largest year-over-year gain since a similar 5 percent rise in May 1991.

 Yes, and 1991 was a grand time in the economy.

Core inflation, which excludes energy and food, showed rising pressures too with an increase of 0.3 percent in June, up from a 0.2 percent gain in May and the biggest one-month rise since January.

This increase reflected a 4.5 percent jump in airline ticket prices, the biggest one-month rise for airline fares since March 2000.

 Airline tickets?  Really?  Good lord, talk about discretionary spending.

 Some good points from this and other stuff.

 A) The media is focusing on the total inflation number now, trumpeting the 1.1% increase in June instead of giving center stage to the “core” inflation number.  While I’m still TOTALLY baffled why airline tickets would be included in anything “core”, I take comfort in knowing that the media is almost never ahead of the curve, or even on the curve.  If they are focusing on something terrible, the worst is already past.

 B) I saw on the news last night (while on the treadmill) a graphic that 81% of Americans have negative feelings about the economy now, up from 61% a few months ago.  This is a great sign because, sorry for the offense, the public is generally clueless when it comes to the economy and its opinion really only reflects what has happened in the last 3 to 6 months.  Now that it’s a general concensus that the economy is terrible and doomed, it’s probably a signal that the worst is over.

For informational purposes:

1 month rankings for discussed or relevant stocks:

DRYS
ISRG (still not crazy about this one, so suck it)
UNP
*SP 500 Index*
BNI
NATI
USG
BAC

Strummin,

Jesse Jane