German Bond Auction Failure Today

[YouAreNotFree]

You have to admire the German stance on the ECB involvement in all of this. Merkels recent speach was especially encouraging. At least to this point they are proving themselves to be a cut above the rest.

Long may it continue.

 

[Martinghoul]

MG few questions if yo might, chaperoo.
Is it strictly true that the auctions are priced so that there is no economic benefit or non-arb potential on issuance?
Is actual yield dynamic depending on price of the bond or do rates always adjust accordingly?

Not sure what you mean.

Auctions are priced based on the supply/demand dynamics and the exact methodology varies by issuer.

Prices and yields are one and the same, really.

 

[scose-no-doubt]

I'll come back to you when I figure out how to put exactly what I'm thinking into words.

 

[Martinghoul]

I'll come back to you when I figure out how to put exactly what I'm thinking into words.

No probs...

 

[scose-no-doubt]

:arrowd: hungover...

 

[new_trader]

This is investors (quite rightly) saying to Governments that because of all this inflation you are creating we want higher interest rates for our loans to you. The Governments are saying f*ck you, we’ll just get our Central Banks to print up the money and buy our debt so we can continue to borrow and spend cheaply and recklessly, suck on that gold standard!

German 10-year bund yields are higher this morning as a result, rising to 1.99% at last check. In comparison, 10-year US Treasurys are yielding 1.94%, and UK gilts are yielding 2.16%.

You call that yield with 3% inflation?

Nov. 30 (Bloomberg) -- European inflation remained at a three-year high and unemployment increased to the highest in more than 13 years, undermining an economy already hit by a worsening fiscal crisis.

The inflation rate in the 17-nation euro area held at 3 percent in November,

Euro-Area Inflation Steady; Unemployment Hits 13-Year High - Businessweek


On top of all this, Central Banks are in a co-ordinated effort to create even more inflation!

 

[new_trader]

This is investors (quite rightly) saying to Governments that because of all this inflation you are creating we want higher interest rates for our loans to you. The Governments are saying f*ck you, we’ll just get our Central Banks to print up the money and buy our debt so we can continue to borrow and spend cheaply and recklessly, suck on that gold standard!

Only a modern economist can think there is no inflation

General Mills - Financial News Release

General Mills Reports Results for Fiscal 2012 Third Quarter
Company Reaffirms Full-year EPS Guidance

MINNEAPOLIS--(BUSINESS WIRE)--Mar. 21, 2012-- General Mills (NYSE: GIS) today reported results for the third quarter of fiscal 2012.

Fiscal 2012 Third Quarter Financial Summary

•Net sales grew 13 percent to $4.12 billion. The international Yoplait acquisition completed in July 2011 contributed 8 points of net sales growth.

•Segment operating profit rose 1 percent to $675 million, including significantly higher input costs year-over-year and increased advertising expense.

•Diluted earnings per share (EPS) totaled 58 cents.

•Adjusted diluted EPS, which excludes certain items affecting comparability of results, totaled 55 cents, one penny below the year-ago level.

Chairman and Chief Executive Officer Ken Powell said, “Our third-quarter results reflect strong worldwide sales growth for our business, but the 10-11 percent input cost inflation we’re experiencing this year pressured our margins. In the fourth quarter, we expect to generate continued good sales momentum and we anticipate that gross margin contraction will ease somewhat. This should result in renewed earnings growth as we wrap up 2012 and move into the new fiscal year.”


Outlook
General Mills reaffirmed its fiscal 2012 adjusted diluted EPS guidance of $2.53 - $2.55. This guidance excludes mark-to-market valuation effects, and integration costs for the Yoplait acquisition. “Fiscal 2012 has represented a challenging operating environment, with the highest level of commodity inflation that we’ve seen in 30 years,” Powell said. “But sales of our leading food brands remain strong in markets around the world, putting General Mills on pace to achieve record-level net sales and adjusted diluted earnings per share.”

 

[Martinghoul]

Huh? You're barking up the wrong tree here, n_t. This is input inflation... Didn't the very same Ken Powell say that prices for consumers are going to stablize and that gross margins are likely to contract further?

 

[new_trader]

Huh? Now you're being silly Martinghoul. What planet do you live on? I wonder how long you are will remain in denial. Like JR says, if you did your own shopping instead of having your butler do it you would know what is going on.

 

[new_trader]

Only a modern economist can think there is no inflation

General Mills - Financial News Release

General Mills Reports Results for Fiscal 2012 Third Quarter
Company Reaffirms Full-year EPS Guidance

MINNEAPOLIS--(BUSINESS WIRE)--Mar. 21, 2012-- General Mills (NYSE: GIS) today reported results for the third quarter of fiscal 2012.

Fiscal 2012 Third Quarter Financial Summary

•Net sales grew 13 percent to $4.12 billion. The international Yoplait acquisition completed in July 2011 contributed 8 points of net sales growth.

•Segment operating profit rose 1 percent to $675 million, including significantly higher input costs year-over-year and increased advertising expense.

•Diluted earnings per share (EPS) totaled 58 cents.

•Adjusted diluted EPS, which excludes certain items affecting comparability of results, totaled 55 cents, one penny below the year-ago level.

Chairman and Chief Executive Officer Ken Powell said, “Our third-quarter results reflect strong worldwide sales growth for our business, but the 10-11 percent input cost inflation we’re experiencing this year pressured our margins. In the fourth quarter, we expect to generate continued good sales momentum and we anticipate that gross margin contraction will ease somewhat. This should result in renewed earnings growth as we wrap up 2012 and move into the new fiscal year.”


Outlook
General Mills reaffirmed its fiscal 2012 adjusted diluted EPS guidance of $2.53 - $2.55. This guidance excludes mark-to-market valuation effects, and integration costs for the Yoplait acquisition. “Fiscal 2012 has represented a challenging operating environment, with the highest level of commodity inflation that we’ve seen in 30 years,” Powell said. “But sales of our leading food brands remain strong in markets around the world, putting General Mills on pace to achieve record-level net sales and adjusted diluted earnings per share.”

Real inflation Vs Government inflation.

General Mills confirms the reality while some continue to live in denial.

 

[Martinghoul]

I have talked about ShadowStats before... At best, there's no reason to believe that they're any more credible than the official figures. At worst, it's a scam.

Why should I believe ShadowStats, whose methodology is completely unpublished and opaque, vs, for example, the MIT BPP data below?

And, for the record, I don't have a butler and I don't know who JR is. But again, kudos for the humor.

 

[The Leopard]

I have talked about ShadowStats before... At best, there's no reason to believe that they're any more credible than the official figures. At worst, it's a scam.

I am not aware of shadowstats, so I can't comment on them. But I do know that all politically-sensitive statistics are manipulated, quite shamelessly and openly in many cases. I suppose crime figures are the most obvious and notorious.

Whatever the true inflation figure is, it is certainly higher than the government is claiming.

 

[new_trader]

Shadow stats still calculates inflation exactly the way the BLS used to calculate it before they introduced the concept of hedonics and substitution, that is why shadow stats is credible. That is why the figures line up in the early 80's. That is why their figures match those reported by General Mills.

I read that the price of a 1st class stamp is going up 30% next month. Great news, buy 1st class stamps now, that's a guaranteed return!

Stamp prices soar to record highs - UK News - MSN News UK

 

[Martinghoul]

I am not aware of shadowstats, so I can't comment on them. But I do know that all politically-sensitive statistics are manipulated, quite shamelessly and openly in many cases. I suppose crime figures are the most obvious and notorious.

Whatever the true inflation figure is, it is certainly higher than the government is claiming.

Well, I have no problem with this as a hypothesis... However, based on the evidence available to me so far, I have not seen any actual tangible proof of this for inflation calculations. And, as if on cue, here's a post on the subject:
Argentina CPI Vs. Price Stats

 

[new_trader]

Substitution, Weighting And Hedonics? | VIEWPOINTS OF A COMMODITY TRADER

 

[The Leopard]

Well, I have no problem with this as a hypothesis... However, based on the evidence available to me so far, I have not seen any actual tangible proof of this for inflation calculations. And, as if on cue, here's a post on the subject:
Argentina CPI Vs. Price Stats

If only our own Government was as honest as that of Argentina(Falklands aside, although our position on that has nothing to do with the character of our Government). In fact, I long for the day when the probity of our public life once again approaches that of any tinpot third-rate banana republic run by kleptocrat generals. Then we would have something to be proud of in the UK.

 

[Martinghoul]

Shadow stats still calculates inflation exactly the way the BLS used to calculate it before they introduced the concept of hedonics and substitution, that is why shadow stats is credible. That is why the figures line up in the early 80's. That is why their figures match those reported by General Mills.

I read that the price of a 1st class stamp is going up 30% next month. Great news, buy 1st class stamps now, that's a guaranteed return!

Stamp prices soar to record highs - UK News - MSN News UK

No, this is a myth that has been thoroughly discredited by quite a bit of research... Moreover, comparing ShadowStats CPI with the PPI figures that the General Mills release refers to is incorrect.

Finally, John Williams, the economist behind ShadowStats, has been invited numerous times to make his exact methodology public and to debate it with other economists. He has refused every single one of these invitations and has refused to submit his "research" for peer review of any sort. Moreover, one has to be aware of the fact that ShadowStats is a business venture, which depends on publicity for revenue. All of the above suggests to me that ShadowStats is just not very credible, where actual economic data is concerned.

Finally, on the subject of UK stamps, what does that have to do with the subject of US inflation, which is what I thought we were discussing?

 

[Martinghoul]

If only our own Government was as honest as that of Argentina(Falklands aside, although our position on that has nothing to do with the character of our Government). In fact, I long for the day when the probity of our public life once again approaches that of any tinpot third-rate banana republic run by kleptocrat generals. Then we would have something to be proud of in the UK.

Well, my access to BPP isn't working at the moment, for some reason. However, if I am not mistaken, they have data for the UK, which should allow us to get an idea of how manipulated the UK data is.

 

[The Leopard]

Well, my access to BPP isn't working at the moment, for some reason. However, if I am not mistaken, they have data for the UK, which should allow us to get an idea of how manipulated the UK data is.

There is no need. I can assure you that tractor production in the UK is up for the 84th year in a row, and the potato harvest this year breaks all records.

If I had to guess, when the Government was claiming RPI at 5%, I would have thought that equated to about 6.5% / 7% in reality. Obviously it is a little tricky as it depends on how one measures inflation. Different people experience it differently, of course.

That reminds me, exam results as an example. They improve every year without fail, and nobody suggests that those results weren't achieved. I also know of nobody that genuinely believes that those results represent an improvement in educational achievement.

 

[Martinghoul]

There is no need. I can assure you that tractor production in the UK is up for the 84th year in a row, and the potato harvest this year breaks all records.

If I had to guess, when the Government was claiming RPI at 5%, I would have thought that equated to about 6.5% / 7% in reality. Obviously it is a little tricky as it depends on how one measures inflation. Different people experience it differently, of course.

That reminds me, exam results as an example. They improve every year without fail, and nobody suggests that those results weren't achieved. I also know of nobody that genuinely believes that those results represent an improvement in educational achievement.

Yes, Comrade... I can't disagree with any of that.