Our boilerplate introduction:
The author, Joe Carson
is the former Chief Economist & Director of Global Economic
Research at Alliance Bernstein. Prior to that he was Chief Economist at
Chemical Bank and at Dean Witter, firms he left in such rough shape they
were forced to merge with JPM and MS respectively. (Just Kidding Mr.
C.)
From his personal website, The Carson Report, December 1:
"It ain't over until it's over," quoting Yogi Berra, but this has been a "painless" tightening cycle for companies. According to the profit data for nonfinancial companies, profit margins (adjusted for inflation) for the first three quarters of 2022 have averaged 15.6%, essentially matching last year's figure, which was the highest in 60 years.
In previous Fed tightening cycles aimed at slowing and reversing cyclical inflation forces, real profit margins declined, and by a lot. Declines of 200 to 500 basis points in real profit margins occurred during the tightening cycles of 1980, the 1990s, and the 2000s....
....MUCH MORE
Also at The Carson Report, November 14:
Uh-Oh! Credit Boom Accelerates---How Does The Fed Stop An Inflation Cycle With Easy Credit?
Uh-Oh!. The credit boom gets stronger; bank lending for commercial, industrial, real estate, and consumer loans increased by 11.7% in the last twelve months ending in October. That's 50 basis points faster than the previous reading. C&I and real estate lending accounted for the acceleration. In the past year, C&L loans are running at +15.2%, consumer loans (including credit cards) at +12.6%, and real estate at 9.6%. How does the Fed stop an inflation cycle with easy credit? It doesn't....
