A quick definition of terms amid the ongoing impact of horrific White House Policy . . .
“The bullwhip effect is a distribution channel phenomenon in which demand forecasts yield supply chain inefficiencies. It refers to increasing swings in inventory in response to shifts in consumer demand as one moves further up the supply chain.”
A practical example . . .
“Research indicates a fluctuation in demand of 5% will get interpreted by supply chain participants as a 40% change in demand. Much like cracking a whip, a small flick of the wrist, change in demand. can cause a large motion at the end of the whip – manufacturers’ responses.”
And all of THAT might earn consumers a few discounts and then cost MILLIONS their jobs at the outset of our current recession.
Now, here's the word from one of the smartest people working in Kansas City . . .
"The speed at which interest rates should rise...is an open question," she said in remarks made as several of her colleagues have already endorsed a second consecutive three-quarter point increase at the upcoming July Fed meeting. Kansas City Fed president Esther George dissented against an increase of that size in June, preferring the half-point increase the public was expecting until the weekend before the meeting.
"The pace at which this path unfolds will need to be carefully balanced against the state of the economy and financial markets," George said in what amounts to the bluntest warning yet from a policymaker that the central bank may be at risk of overdoing it.
Read more via www.TonysKansasCity.com links . . .
Weekly Comic: The Clown Departs, but the Circus Continues By Investing.com By Geoffrey Smith Investing.com -- Sad trombones, please. Boris Johnson's rule is over, and not a moment too soon. He leaves the U.K. poorer, more divided, less stable and...
Quantitative tightening (QT)-the reduction in the Federal Reserve's balance sheet-will transfer a significant amount of Treasury and agency mortgage-backed securities to investors. This transfer will be larger than the first endeavor with QT in 2017 and will occur at a time when financial markets are strained, suggesting this round of QT has the potential to be more disruptive compared with the benign start to the 2017 runoff.
"Big Short" investor Michael Burry suggested Monday that the Federal Reserve could unexpectedly reverse course on its planned series of sharp interest rate hikes due to an economic phenomenon known as the "bullwhip effect."
Subtext: Supply chains are experiencing a massive bullwhip from the COVID economy and have built up massive inventory levels. A slowdown in consumer spending caused by inflation and a potential recession will have a massive impact on freight demand and prolong an inventory drawdown.
Scion Asset Management CEO Michael Burry took to Twitter Inc TWTR on Tuesday to warn his 915,000 followers of long-term inflation and owes it to four critical factors. What happened: In the now-deleted tweet, Burry said, "Seems China moves on Taiwan in 2023, as the war in Ukraine spreads into the EU, maybe via Lithuania.
Developing . . .