The Secret Side of Inflation: Size Reduction

When I was shopping the other day, I got this “coupon/receipt” notice:

 

I find it odd that a company would give advance notice of their intent to reduce the amount of product offered rather than trying to slip it past the radar. Perhaps they worry in this social media sensitive society that any attempts to make changes without notice would be uncovered and put the company in a bad light of looking like it was trying to cheat the public.

It’s a good guess that other main juice companies will likely be following suit in reducing their product size size. Tropicana stands to lose lots of market share if the other companies offer more product for the same price.

This is a good example of spotting clear signs of inflation. Most people assume inflation means seeing prices go up, but the other side is reducing the size of the product while selling at the same or nearly the same price.

Be on the lookout for “secret inflation” when shopping for competitive prices. I don’t plan on “rewarding” any companies trying to shortchange me and offering it as a “feature”. ūüíł

Update:

I did some research and found out that that Tropicana was involved in a “shrinking product” scandal in the UK last year:

http://www.dailymail.co.uk/femail/food/article-4218994/Tropicana-hit-shrinking-scandal.html

So my guess about them fearing social media/news outing of attempts to pass off reduced product at the same price was correct and they are playing it more carefully in the States after getting burned in the UK.

 

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Analysis of President Trump’s First Year in Office

I wanted to write this at the end of January, but never could find the intersection of having both the time and motivation to do it.

This first year has been mostly a non stop ride of Trump not conforming to what would be expected of the model of President that has been in place for several generations.

Some of the notable differences:

1) He uses Twitter to share his opinions and policies on everything. This includes personal insults levied at anyone that catches his attention, whether they are regular folks, movie stars, business people, or other politicians, which includes those who work for him in his Admin like Jeff Sessions. These attacks are seen by many as “unpresidential” in particular, and immature in general.

2) He remains in “campaign mode” and never made the transition of moving towards the center. It’s standard for elected Presidents that they try to move towards a middle ground consensus area rather than remain entrenched in their highly partisan campaign rhetoric. After all, they are President of the whole country, not just those who voted for them. Trump established his 2020 re-election¬† campaign group earlier than any modern President and his public speeches are often indistinguishable from his election campaign speeches as they still include attacks on Hillary Clinton and the Dems and recalling his surprise election victory.

3) His choice of hires for his Admin have been very controversial – placing people to be in charge of departments that they have no experience in and/or expressed disdain for in past comments. Examples:

Secretary of Education: Betsy Davos – Has a history of being an advocate of charter schools over public schools with no prior public school government experience. Couldn’t get a majority vote in the Senate for confirmation, required tiebreaker vote by Vice President Mike Pence. Recently had a disastrous 60 minutes interview showing her to be ill-prepared¬† in solving public school problems.

Secretary of Housing and Urban Development: Ben Carson РA  neurosurgeon with no background government experience in this area. His time in office has been controversial with scaling back Housing Enforcement  and recently involved in a controversy of spending $31,000 for an office dining set.

Secretary of Energy: Rick Perry – Former Governor of Texas – In the past has stated that if he were elected President, he would abolish the Department of Energy.

Secretary of the Interior: Ryan Zinke – Advocating shrinking the size of National Parks and Monument areas, opening them up to mining and oil exploration. Actions to date have elicited angry responses from many.

Acting Director for Consumer Financial Protection Bureau: Mick Mulvaney – The CPFB was created to protect the consumer in response to the financial crisis of 2008/2009¬† which led to the Great Recession.¬† The CPFB’s purpose is to protect the consumer from predatory financial practices. Mulvaney¬† has stated in the past he wanted to eliminate/do away with it.

Head of the Environmental Protection Agency: Scott Pruitt РAvid  climate change denier.

 

Campaign Promise Fulfillment Status

Trump’s major tenets he said he would fulfill if elected:

1) Increased restrictions on immigration and travel ban on several countries that coincidentally have a higher percentage of Muslim citizens.

Released an immediate controversial travel ban that caused chaos as some people who were in the middle of traveling  to the US were blocked from entering the country. The ban was declared unconstitutional by the US appeals court. He ended protections for undocumented children who were brought here by their parents (DACA) and have lived here most of their lives.

2) Health Plan that was superior to the ACA (Obamacare).

Revealed he had no plan, but left if up to the GOP House and Senate to make changes. This resulted in bills from the House and Senate that had a main purpose of defunding/gutting the ACA, making things worse, as opposed to improving America’s healthcare. The Bill failed in the Senate.

3) Building a southern border wall that Mexico would pay for, costing the USA nothing.

To date there is no concrete plan for Mexico to pay for the wall. Instead, Trump is demanding the US pay for it now, using DACA as a bargaining chip.

4) Tax relief for the middle class, lower corporate tax rates with more scrutiny to close Wall Street/corporate/ultra wealthy tax loop holes.

Trump touted his tax plans as having big breaks for the middle class, and said rich people like him were not going to like it at all. The actual results were quite different, with the middle class losing their permanent deductions/personal exemptions for themselves and their dependents as well as most of their State and local tax deductions. In return, they got a doubling of the standard deduction that will expire in 8 – 10 years. In reality the middle class received a delayed tax increase. Corporations and the wealthy, on the other hand, received a permanent tax reduction and the elimination of the estate tax, which only affected single individuals with inherited homes worth over 5 million or over $10 million for couples. There was also no closing of any corporate or Wall Street tax loop holes.

The tax bill is estimated to cost an additional $1.5 Trillion in national debt, which looks very bad for Republicans who had been campaigning on fiscal responsibility¬† during Obama’s time in office. The general public was not happy with this tax bill as polling showed the majority dissatisfied. Most believe they will not see much of the benefits and it’s a give away to the wealthy at the expense of the middle class.

5) No cuts to Social Security, Medicare, or Medicaid

Contrary to his promise of no cuts, Trump’s budget plan for 2018 is making cuts to all three: Medicaid being cut by $1.1 trillion, Social Security being cut by $72 billion, and Medicare being cut by $266 billion.

6) Renegotiate global country trade policies.

Trump stopped movement on the US joining the TPP as promised. In recent weeks Trump has started making unilateral decisions about charging tariffs on our global trading partners like China and Canada that threaten to trigger an all out trade war. As the US now imports most of it’s goods and services, a full scale trade war would have negative consequences for the economy.

7) Reveal Tax Returns after Audit

Trump promised to reveal his tax forms after his audit. An audit has never stopped anyone from showing their taxes before. He was the only president in modern history to not reveal at least his prior two years of tax return forms. After the election, he has decided not to reveal them ever.

8) Better Economy – Stopping Corporate Layoffs from Outsourcing

Trump campaigned on going after corporations that were outsourcing their labor and closing down plants in the US. After the tax bill passed, companies like Carrier and Amazon announced no layoffs and/or bonuses would be paid as a result of the lower tax rates. However, Carrier and Amazon announced new rounds of layoffs afterwards.

The stock market raced to all new highs for the year, which Trump proudly took credit for with multiple tweets with every new high made. Prior presidents did not go all in of market gains made, since that would mean they would also have to own it if the market started going down. Trumps talk of imposing tariffs have sparked trade war fears which has increased market volatility and declines.

 

Not Normal is the New Normal

From the start of the immediate execution of the travel ban the Trump Admin has been embroiled in what are literally one major controversial move or incident after the next. Some of the biggest examples:

1) Trumps adamant resistance to attack or stand up to the accusations of Russian election meddling or Russian overseas aggression.

Despite the US top intelligence agencies (CIA,FBI, NSA) reporting on their certainty of Russian election meddling, it took months before Trump stopped saying Russian interference was just a possibility rather than a certainty. He has still not directed our security agencies to ramp up their defenses against future Russian attempts to interfere with our elections. No matter how aggressive or belligerent Russia acts, he is loathe to publicly condemn or even complain about it.

2) Firing of FBI Director James Comey that was investigating possible Russian collusion with US citizens to affect election results.

In a very unexpected move, Trump fired the FBI director while the director was conducting an investigation into potential collusion between the Russians and Trump election campaign members. It’s never a good idea to attempt to try and fire the person who could be investigating them, as it looks like at attempt to be above the law and the issue with Nixon and Watergate come to mind. This resulted in a Special Counsel being created to investigate potential collusion and a spotlight many times brighter than when Comey was on the job.

3) Attack on US institutions and News Media

It’s been almost surreal the way Trump and several GOP politicians have begun attacking the FBI and DOJ since it was revealed Trump and his Admin are under investigation. He has expressed great disdain towards his appointed AG Jeff Sessions for recusing himself from the investigation, via a steady stream of insulting and belittling tweets. Jeff Sessions was the 1st GOP Senator to support Trumps election plans. Fox News pundits have assisted by talking about a “deep state” of law enforcement officials having sinister intent.

Trump has also directly attacked news outlets for generating “fake news”, which doesn’t turn out to actually be fake, just real news that is unfavorable towards Trump. No prior president has placed such an emphasis on attacking the media. Trump often says inaccurate things which prompts media correction.

These attacks serve to weaken both confidence in the government and the free press, not good for a democracy.

4) Potential Emolument Scandals

Trump and his family including son in law Jared Kushner never fully divested from their business interests upon taking up office positions, and now they are under a cloud of potential emolument violations of using their government positions to enrich their private business.

6)  Revolving door Administration with record number of departures for a president at the 1 year mark

The list of Trump Administration departures due to scandals, potential scandals, falling out of favor with Trump, ethics violations, potential criminal acts, have exceeded past records and shows no sign of abating.

List of departures to date- changing weekly, if not daily:

7) Misc Scandals/Controversies Du Jour

While campaigning in 2016, Trump often joked that a Clinton victory would result in her Administration getting bogged down in constant scandals. How ironic that joke turned out to be seeing how his Admin is faring with non stop controversies/scandals. Some examples:

1) Trump saying that there were “good people on both sides” at a Neo Nazi White Nationalist protest where fights broke out and a counter protestor died. Many questioned how there can be “good people” on the side of the White Nationalist group shouting anti semitic, Nazi, and anti non-white slogans.

2) Trump’s disdain and NSFW comments about immigrants from non European, non white countries.

3) Trump’s multiple sex scandals are currently front and center in the news.

 

Popularity Rating

Trumps approval rating ranges from the mid 30’s to the low 40’s, the lowest of any president at this point in their term.

He has about 30% – 32% of devoted fans, with ~12% that vary in approval over time. His disapproval has ranged the mid 40’s to high 50’s. His first year has been one of the most polarizing in history.

 

 

Financial Fine Cuisine – True “Smart Money” Talk and Wisdom

Economics and the state of the economy can be boring topics to many, but I found this discussion to be exceptionally interesting and educational.

Dylan Ratigan is the former host of CNBC’s “Fast Money”, and later moved to MSNBC to discuss news and politics of the financial world. He is one of the few financially super literate folks who dares to speak truth to power when it comes to the realities of our current economic policies and system/status quo.

Tom Sosnoff is the owner of the Tasty Trade network for traders and the two engage in some straight talk about the economy and investing – and why the masses are not more engaged in getting financially literate. Tom is hosting the show “Truth or Skepticism” where the discussion takes place.