Kids must have their Toys, and be allowed to play, but one wonders at the rationality of the activity. Turkish military activity, even if it was directed at Wall Street, could not affect the supply of Oil in January. New Englanders are in trouble, if there is not already sufficient Heating Oil available in the area to protect against a blizzard. Children enjoy manipulation of such Toys as arbitrage, but continuous flow market theory will rightfully suggest such influence could not affect Prices past a basic 6-Week Period; Supply alterations will alter allocations within this Period, rendering no post-traumatic impact past that point–this means essentially that arbitrage can only affect about 8% of the total Supply, and do so only for about a month. The Run-up of Oil prices for next year, based on minimal threats of short duration, simply expresses Children are trying to get their Toys to work in the real World.
Retailers may have to accept the fact that Shoppers are coming, but are not buying. I wish the Big-Box stores would release Check-Out Counter data for the Season. It appears likely that the Sales/Customer are down drastically, and if this is the Case, Retailers will have to accept the Season will come in poor in the Dollars exchange. Customer volume appears relatively high, and they have been turning away from high Prices. It does no good to hide adverse economic data, which could present evaluative data for Retailers; who still do not understand that Customers have allocated about the same total volume of Funds for Christmas shopping as they did last year. Customers will not pick up on Sale prices, which are 3% higher in Price than was Full price last year.
Mish has a Post on California and its budget woes, which just shows that the discussion could be about the entire nation. The entire Situation shows the fallacy of economic policy which exclaims that Public Debt is a good and necessary thing. The prime justification of this policy resides in the claim that Business operates with this level of Debt continually. The difference between Government operation and Private Business contains the element of failure; Business will eventually start making a Profit on invested Capital, else the business format will fail. Government operation, though, will never make a Profit; if it does make a Profit, Funding to the operation is rapidly cut. Government borrowing only provides an added Expense which must be both paid, and pay Interest on what debt there is; what is an Operating Cost which is never Profitable–Government in full, in Part, and in Essence. lgl
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