The Best of Kass
Among his posts this week, Kass discussed the implications of the latest inflation data, revealed a change in his strategy on bank stocks and wrote that the bull market in gold is over, at least for a while.
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If You Don't Eat or Drive, Inflation Is Low
Originally published on Friday, March 16 at 9:30 a.m. EDT.
The core CPI came in slightly below expectations this morning at +0.1% (month over month) vs. expectations of +0.2%.
By contrast, the headline CPI was +0.4%, matching consensus. With the core CPI rising at a slower rate than core PPI, a headwind to corporate profit margins lies ahead this year.
And, with unit labor costs rising by +3.0% in the fourth quarter 2011, up from +2.0% in third quarter 2011 and only +0.1% in second quarter 2011, the consensus view that margins could be flat to slightly better (incorporated in most strategists' 2012 S&P profit forecast) is in jeopardy.
Originally published on Friday, March 16 at 12:43 p.m. EDT.
Gun to my head, the banks need to rest now -- too much too fast.
At the time of publication, Kass was short JPMorgan.