Tuesday, October 25, 2016

That Time the FT's Kaminska Beat the Telegraph's Evans-Pritchard To the Big Macro Story

Not that they are in direct competition but they do have similar ambits.

Last Friday we saw something increasingly rare at the perch of Alphaville's benevolent dictator, Paul Murphy; Izabella stopped by the Markets Live post:
PM So, what else
IK Hi there
PM Izzy was threatening to join us
PM Ah there you are Izzy!
IK Just wanted to come in to spare Paul from talking to himself
PM I thought you’d wondered off
PM What’s on your mind?
IK Inflation
IK It’s back
IK In case you haven’t noticed
PM Emoticon
PM I had noticed, from a personal perspective
PM But didnt think it was actually showing thru in official figures as yet
IK But I don’t think it’s just a British thing. Huge pick up in my inbox of thought pieces focused on the return of inflation in 2017 (potentially in a big way)
PM But go on
IK And it’s not just me who thinks it may be a thing
IK (not to go all zerohegde on this)
IK From my inbox today
PM (No, don’t go ZH on us)
The death of deflation?
Dear Izabella,
Please join Dario Perkins for a conference call at 15:00 (UK time) on Wednesday 26th October where he will answer questions on major macro drivers such as :
· Will inflation taken over from deflation in 2017?
· Could we see another taper tantrum in bond markets, or worse a repeat of 1994?
· Can central banks do anything to manage these risks (e.g. Japanese-style yield targeting)
· How vulnerable are asset prices to rising yields?
IK But i’m more interested in the anecdotal stuff.
PM hmm
PM Go on
IK (I’m not saying it’s a bad thing guys!)
IK I think the really interesting stuff is happening on the freemium model side of things
PM In what sense?
IK We heard marc andreessen calling for start-ups to start raising prices earlier this year. And then there’s all sorts of anecdotal stuff like Spotify looking to charge
IK Or rather to windup some of the freemium stuff
IK And just personally. All the stuff i used to be able to get for free on the internet (like picture editing websites), all suddenly behind paywalls
IK Is it just me? Maybe....

She followed up on her guest appearance with "Have we crossed the inflation Rubicon?"
(I know the timestamps say otherwise, I'm going by the order the posts hit the feedreaders)

On Saturday the estimable International Business Editor of the Telegraph, AEP, posted "Inflation: next year's ticking time bomb" which focused on the British angle, what with the declining price of the £ when purchased in other currencies.

This all ties into something we have observed that, while not inflation per se, points in that direction.
Take a look at some of the commodities tracked by FinViz (on blogroll at right).
It's certainly not, by any stretch, all of them but enough to signal something may be afoot:

Although strangely the precious metals seem to have given up the ghost (we are still thinking $875 gold, which would imply nasty stagflation).

That's some of the stuff we're looking at these last few days.