Conversation

Preliminary thinking, speculation, and hypotheses. Earnestly intended and honestly attempted, but almost always needing further consideration, clarification, correction, or not-yet-found confirmation. These are research notes and homework still underway. Conversation is derived from the Latin meaning to turn together.

  • Tariffs and TARA
    Below is a conversation from this morning’s Bloomberg Surveillance. Ryan Petersen with Flexport discusses tariffs. He offers most of the same predispositions, assessments, arguments, and preferences as most of my supply chain-focused clients and contacts. Most support “bringing back” manufacturing to the United States. Many are open to carefully crafted reciprocal tariffs (here and here […]
  • Characteristics of pre-tariff demand
    January consumption expenditures ticked-down just a tad (see first chart below). Given unusually cold weather and perhaps some post-holiday restraint, this is not unprecedented nor necessarily the start of a pattern. January 2024 expenditures ($15,812.6 billion 2017 dollars) were lower than December 2023, but by last month US personal consumption expenditures had grown to $16,283.6 […]
  • Tariffs (again)
    From Sunday night to Monday noon (US Eastern Time) my inbox overflowed with questions and venting — probably more venting than questions. By Monday dinner-time the drama had significantly abated (here and here and here). Back on December 2, I wrote in regard to Mr. Trump’s tariff strategies, “What is promised — threatened — often […]
  • Closing status of 2024 US Flows
    According to the Bureau of Economic Analysis, December demand — measured by Personal Consumption Expenditures — increased 0.7 percent compared to November. This was almost twice the rate of increased personal income (0.4 percent) continuing a steady — supply-chain-friendly– ascent in real (inflation-adjusted) consumption that started in mid-2021. See first chart below. In response to […]
  • Resilience realities
    Nicholas Morales at the Richmond Federal Reserve Bank has authored a helpful Economic Brief that concludes: The push for resilient supply chains reflects a trade-off between stability and cost. While resilience investments protect against future disruptions, they may raise input prices and inflation in the short term. Given the likelihood of increased climate events and […]
  • Neck strain and hourglass structures
    Tomorrow, Tuesday, January 7, face-to-face negotiations resume between the International Longshoremen’s Association (ILA) and the US Maritime Alliance (USMX). Dockworkers and port operators are facing a January 15 (extended) contract expiration deadline. According to Bloomberg, the crux of the stand-off involves “the use of semi-automated, rail-mounted gantry cranes at port terminals… Such equipment is permitted […]
  • Out of gas in Veľké Kapušany
    On January 1 pipeline flows of Russian natural gas across Ukraine to Veľké Kapušany, Slovakia (and elsewhere) came to an end (see map below, principal flows have moved between Sudzha, Russia (yellow NE) and Veľké Kapušany (yellow SW) ). In February it will be three years since the Russians invaded Ukraine. Despite the war, a […]
  • End of year look-ahead
    Forecasting earthquakes, volcanic eruptions, cyclones, flood, fire, famine, epidemics, cyberattacks, and war is easy. Shifting demand patterns and supply disruptions are de rigueur. Predicting when and where is the tough — typically impossible — task. Resilient choices are often neglected because we discount directly experiencing where and when. Answering why these threats — and our […]
  • 2024 Quick Review
    Amazonia has not recovered from two years of drought. The Sahara desert is expanding (here and here). Despite recent rain, parts of Pakistan are stubbornly dry. One third of the United States is currently experiencing drought. Over the last twelve months flooding in southern Brazil, Spain, Bangladesh, and the Western Carolinas was especially intense. Even […]
  • Feels-like price temperatures moderate
    According to the Bureau of Economic Analysis, “Personal income increased $71.1 billion (0.3 percent at a monthly rate) in November. Disposable personal income (DPI)—personal income less personal current taxes—increased $61.1 billion (0.3 percent). Personal outlays—the sum of personal consumption expenditures (PCE), personal interest payments, and personal current transfer payments—increased $78.2 billion (0.4 percent) and consumer […]
  • Food-At-Home seeks equilibria
    The November Consumer Price Index for Food-At-Home displays some of the volatility that encourages some economists to exclude food (and fuel) from measures of so-called “core inflation”. The Bureau of Labor Statistics reports, “The food at home index rose 0.5 percent over the month. Four of the six major grocery store food group indexes increased […]
  • 335 million take the steps
    The Bureau of Labor Statistics reports, “The all items [consumer price] index rose 2.7 percent for the 12 months ending November, after rising 2.6 percent over the 12 months ending October. The all items less food and energy index rose 3.3 percent over the last 12 months. The energy index decreased 3.2 percent for the […]
  • (Not) Talking about tariffs (yet)
    Despite my less frequent posts I have heard from some surprisingly persistent readers. They have each asked for my take on the Trump tariff proposals (here and here and here and here among many more). Mr. Trump is not yet President. He is well-known for aggressive negotiation tactics. What is promised — threatened — often […]
  • Steady strong spending (and revenue)
    On the day before Thanksgiving, the Bureau of Economic Analysis, reported, “Personal income increased $147.4 billion (0.6 percent at a monthly rate) in October, according to estimates released today by the U.S. Bureau of Economic Analysis … Disposable personal income (DPI), personal income less personal current taxes, increased $144.1 billion (0.7 percent) and personal consumption […]
  • Push responds to pull
    The fourth quarter has opened with abundant US flows. According to Bloomberg, The Port of Long Beach moved nearly 1 million containers in October, beating a record set just two months ago. The surge was driven in part by importers diverting cargo to Southern California to avoid risk of delays from a labor dispute that […]
  • Pull-Push Pressures on Food
    In response to pandemic constraints (and concerns) food purchases in the United States surged in March 2020 and remained elevated for two years (see first chart below). Demand exceeded preexisting supply capacity for groceries (if not for all food). Despite the sudden increase in grocery pull, price increases lagged demand increases for several months. But […]
  • Hard hit on fat target
    The remnants of Hurricane Helene (September 27-28) were especially destructive for higher elevations northeast of Asheville, North Carolina. A Baxter Healthcare facility in North Cove, North Carolina along the North Fork Catawba River, about 1500 feet above sea level, was hit especially hard (NC flood map). According to the American Hospital Association, “The plant manufactures […]
  • Comparing Apples and Oranges?
    In late September the Asheville, North Carolina metro area and nearby was hit hard by the remnants of Hurricane Helene  (more). In late October Valencia, Spain and nearby experienced catastrophic rains caused by the high altitude collision of warm and cold air (more) sometimes called a gota fria (cold drop). Some comparisons: Asheville Three Day Precipitation […]
  • Demand pulling strong
    The Bureau of Economic Analysis report on September Personal Income and Outlays signaled healthy and growing demand. According to the BEA: The $105.8 billion increase in current-dollar PCE in September reflected an increase of $72.1 billion in spending for services and an increase of $33.7 billion in spending for goods (table 2). Within services, the […]
  • Downstream to Upstream
    There is, of course, great variation as scope is adjusted local to global. But in terms of US pull and push, the fourth quarter began in good shape — even very good shape. Downstream demand as measured by real Personal Consumption Expenditures continues to edge upward (see chart below). Inflation-adjusted wages are above their pre-pandemic […]
  • Reductionist Resilience
    On September 23 I posted on a prospective dock strike. Four weeks later I resume blogging following a brief dock strike, two major hurricanes (Helene and Milton), another grim permutation of the Gaza crisis, and plenty of evidence of persistently strong flows — almost everywhere except where most needed. It is a month-long story of […]
  • Possible Dock Strike Disruption
    In another seven days US Atlantic and Gulf coast ports may be hit by a dock strike. (Here and here and here and here and here and here.) This possibility has been recognized all year. It is likely that higher-than-usual summertime flows into these same ports reflect supply chain front-loading (more). Recent record volumes arriving […]
  • US food flows flatten
    Bloomberg reports, “US retail sales unexpectedly rose in August, supported by online purchases that masked more mixed results at other merchants. The value of retail purchases, unadjusted for inflation, increased 0.1% after a revised 1.1% gain in July, Commerce Department data showed Tuesday. Excluding autos and gasoline stations, sales advanced for fourth month.” Good demand is […]
  • Supply Chain Summit
    Tomorrow — Tuesday, September 10 — the US Department of Commerce and the Council on Foreign Relations will host a Supply Chain Summit. It is organized to explore proactive strategies to strengthen global supply chain resilience. At the link you can still register to participate virtually. Rana Foroohar, one of my favorite thinkers and writers, […]

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