Greedflation

Is it a conspiracy theory?

Good morning, my fellow future billionaires. This is your Stock Market Rundown for July 11th, 2023. Thanks for reading. Let’s get things going:

TODAY’S TOP STORY: IS PROFIT A SIN? 🤑 

That said, with inflation at a 40-year high, some economists have been musing whether the price increases strangling consumers could be partially due to corporate greed. Say it ain’t so: could fat cats be exploiting consumers’ grudging acceptance of higher prices, to swell their own margins?

Well, maybe. Sometimes the cause of higher prices is more mundane. For example, egg prices spiked last year due to avian flu, but dropped as farmers got things under control. Happily for my raw-yolk intake, the price of a dozen eggs is down 7% year over year. Bulk szn saved.

When it comes to overall inflation in the economy, some analysts say corporations are exploiting a window of opportunity to lift prices—in layman’s terms, gouging. Picture a bunch of corporate bros in suits sitting around a boardroom table, high-fiving each other as they conspire to blame supply chain disruption to sneak price markups by consumers. Nefarious!

That said, even if greedflation actually was a dynamic, it’s now in decline: pretax margins widened in 2021 and 2022, but reverted to pre-panny levels by the beginning of 2023. Now we have a new problem: wages growing faster than prices. And wage-price spirals are what really give central bankers stress tummy-aches. Vicious cycle, anyone?

SO WHAT ELSE IS GOING ON?

That’s it for today, see you bright and early tomorrow. Yours in capitalism, The Axe