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.

  • Typhoon Mawar
    Last week a very high-end typhoon — similar to a CAT4 to 5 hurricane — impacted Guam, a US territory in the Western Pacific. Guam is roughly 30 miles long.  It is one mile to almost nine miles wide (roughly the same total area as Columbus, Ohio).  About 170,000 people reside on the island. Guam is […]
  • April food PCE (very) slightly higher
    According to the Bureau of Economic Analysis, “Personal income increased $80.1 billion (0.4 percent at a monthly rate) in April… Disposable personal income (DPI) increased $79.4 billion (0.4 percent) and personal consumption expenditures (PCE) increased $151.7 billion (0.8 percent).” Food expenditures increased, but at a slower rate. Please see chart below (more and more).
  • Oil, gasoline, diesel: down and up
    EIA and S&P report, “US crude inventories fell 12.5 million barrels the week ended May 19 as refiners continued to boost runs while export demand remained strong.” See first chart below (more). This includes the US recently increasing its flow of diesel to Europe. According to Bloomberg, “cargoes from the US are set to be […]
  • Maritime flows slow
    According to Loadstar, “US west coast ports saw a 22% decline in container imports in April, compared to the record volumes of the previous year, to 812,611 teu… the top US east coast ports saw a 20% dip in container imports to 887,950 teu, to take the total of import containers handled by the Top […]
  • G7: Six principles of Supply Chain Resilience
    Supply Chain Resilience is not prominent in the Group of Seven’s headline Joint Communique. But in the G7 Leaders Statement on Economic Resilience and Economic Security the language is stronger than that emerging from the Finance Minister’s meeting in Niigata. Here’s the principal paragraph: The COVID-19 pandemic and Russia‚Äôs war of aggression against Ukraine has […]
  • Probabilistically OK
    Yesterday NERC released its 2023 Summer Reliability Assessment (more). The risk map for this summer has lots of orange but no red. This suggests some improvement from the recent Winter Assessment’s prominent bands of scarlet. (Please see map below.) Fundamental to all of these assessments is careful consideration of generation capacity, transmission capacity, demand projections, […]
  • More or less…
    US retail sales increased slightly (0.4 percent) in April, according to the US Census Bureau… not adjusted for inflation. Reuters headlined “solid spending.” CNBC emphasized the increase was “less than expected.” Bloomberg called it “steady.” (Solid and steady appeared in several summaries.) The Associated Press headlined an explanation for the growth: “buoyed by solid job […]
  • RISE (and shine?)
    This week there will be a Group of Seven summit in Hiroshima, Japan (more and more). Last week the finance ministers and central bank governors of Canada, France, Germany, Italy, Japan, United Kingdom, and United States (and EU too) completed their related pre-meeting. In Saturday’s joint communique, the Niigata group teed-up attention to supply chain […]
  • Mid-May Vital Signs
    Since November this blog has looked at five vital signs (recently amended). North American Agricultural Production: USDA is reporting a strong start to the US planting season. By May 7 farmers had planted half of the nation’s corn crop, more than a quarter ahead of May 2021-22. Around 35 percent of the nation’s soybean acreage […]
  • US food prices
    The April Consumer Price Index shows another month of stable to lower food-at-home prices (see chart below). According to the Bureau of Labor Statistics: The food index was unchanged in April. The food at home index fell 0.2 percent over the month, following a 0.3-percent decrease in March. Four of the six major grocery store […]
  • Concatenated Concentrations
    In today’s Financial Times, Rana Foroohar outlines the supply chain challenges involved in “too much power in too few hands.” Unfortunately the FT has a fierce paywall, so here’s what I perceive to be the crucial paragraph: Chinese mercantilism, European and US corporate price gouging, American Big Tech and Too Big To Fail banks are […]
  • More as normal?
    The May 1 post on freight flows includes, “More has been normal — not always year-over-year, but consistently decade-over-decade.” Not for everyone, not everywhere, but by the early 18th Century the experience of more and more was widening and accelerating. Please see chart below. Since the mid 20th Century our planet’s economic output has recorded […]
  • Supply exceeds demand?
    Last year Adam Shapiro at the Federal Reserve Bank of San Francisco deployed a method for measuring the comparative contributions of demand or supply to the PCE inflation rate. You can read how he does this with an Economic Letter published in June 2022. Monthly results since March 2018 are available at a FRBSF research […]
  • Falling freight flows
    Last week UPS “announced first-quarter 2023 consolidated revenues of $22.9 billion, a 6.0% decrease from the first quarter of 2022. Consolidated operating profit was $2.5 billion, down 21.8% compared to the first quarter of 2022, and down 22.8% on an adjusted basis. Diluted earnings per share were $2.19 for the quarter; adjusted diluted earnings per […]
  • US consumption slows
    March Personal Consumption Expenditures suggest an essentially flat first quarter for pull. Please see first chart below. For the first time since April 2022 nominal food consumption was slightly softer (real expenditures as well, red line in second chart). Reduced SNAP benefits almost certainly played a part. Even services seem to have been slightly less […]
  • Christmas eve surprise reprised
    In November 2022 the North America Electric Reliability Corporation (NERC) released its Winter Reliability Assessment. This report warned, “A large portion of the North American BPS [Bulk Power System] is at risk of insufficient electricity supplies during peak winter conditions.” NERC also highlighted the challenges associated with transmission system limitations during “large power transfers during […]
  • Ukraine spring planting update
    Before the war Ukraine was one of the world’s top five grain exporters. According to Deutsche Weld, in 2021 Ukraine accounted for 10 percent of the world wheat market, 13 percent of the barley market, 15 percent of the corn market, and more than half of global trade in sunflower oil. Since the February 2022 […]
  • Natural Gas: Been to the mountain and back?
    Below is a two year view of a benchmark futures contract for natural gas in Europe. This nicely scopes and scales nervous demand for replacing Russian flows with alternate flows for the winter now behind us. It went much better than I was expecting last May-June. In August 2022 more than 300 Euros were required […]
  • More (concentrated) capacity
    The expansion of ExxonMobil’s Beaumont Refinery is significant (more and more). After three years of declining US refining capacity, adding a quarter-million barrels per day is helpful. US domestic demand for refined products is experiencing long-term decline. But ready production capacity needs to be larger than realistic demand capacity — and this ratio has been […]
  • Revised Vital Signs
    Since November we have monitored five indicators of Supply Chain Resilience. These have been intended to supplement more comprehensive measures such as the Global Supply Chain Pressure Index (GSCPI) and the CSCMP Logistics Manager’s Index. These and similar indices remain important. (Here are the vital sign updates for December, January, February, and March.) It is […]
  • Real consumption of food
    February expenditures on Food-At-Home — adjusted for inflation — have once again increased. An updated January real PCE for food has also been adjusted upward (see chart below). In February 2019 real Personal Consumption Expenditure (PCE) for food was $964.1 billion. In February 2020, just as the pandemic began to emerge, inflation adjusted expenditure on […]
  • Updating March Vitals
    Long time no see. I apologize, but the next two weeks won’t be much better (I’m very sorry to say). Still, here’s a quick try at updating some flow indicators to which I have given regular attention for the last six months or so. Southern Hemisphere Agricultural Production: Brazil’s soybean harvest is close to complete and […]
  • Global wheat flows
    Given wartime constraints on Ukraine’s ports, processing, and internal transportation; serious US, European, Argentine, and other drought; and price-pinching by a strong US dollar, a few months ago there were credible wide-spread concerns regarding sufficient upstream supplies of wheat reaching downstream demand. There have been deep deficiencies in some places. But overall global flows have […]
  • US food consumption slows (again)
    US Personal Consumption Expenditures for food, adjusted for inflation, once again showed modest reductions in January (see chart below). In January $1021.9 billion chained 2012 dollars were spent compared to December’s $1022.5 billion (red line). This compares to $1084 billion in January 2022 and $985.9 billion in January 2020. Slowly, slowly we turn. But we […]

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