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Minyan Mailbag - Annecdotal Minyans


But the BLS said there is no inflation!?!


Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.


Here are a few notes from recent observations I have made from a company I own.

1. Sanford Pen Company, a division of Newell Rubbermaid, ran a year end special. They are raising prices 5% Jan. 1 and the special goes like this: Buy before Dec 10th for immediate shipment and get an additional 5% off this year's price. Save 10% on January 2005 prices. NOW HEAR THIS: The 5% discount is payable as a credit in January of 2005. That's right, you are billed at regular prices but get a credit in January!

2. Price of odorless mineral spirits December 2003: .41 cents per pound Price of odorless mineral spirits December 2004: .56 cents per pound. All raw chemicals have seen similar price increases.

3. Just received a 24% increase on spray paint.

4. Balloons I buy from Canada: The last order reflected a 20% increase. I called, told them I knew latex was probably a by-product of crude oil, but isn't 20% a little steep for one jump? They said it wasn't latex, it was the U.S. dollar. I asked if I could pay in Canadian dollars. They said no.

5. Car dealers aren't selling any cars and their lots are loaded to the gills.

6. Price increases abound and are running 7+%. The usual 4-5% increases are few and far between.

Happy Holidays,
Minyan James

Minyan James,

It sure seems as if corporate America is trying to pass through raw material costs via price increases. One of three things will eventually happen. 1) Input prices will mitigate (hard to see with China/India demand) 2) corporate margins will crunch (pricing power?) or 3) the consumer will hit a saturation point (as a function of debt and disposable income).

There is a certain elasticity involved and I don't sense that it'll "break" as much as bend. The problem is, with so many people standing on the same foundation, a bend may be all we need to see serious slippage on both sides of the ride.

Happy holidays right back atcha.



No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at

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