Falling ISM prices index shows slower growth, lack of pricing power and stealth deflation – stock market crash?
Peter Oberois
Nov. 1, 2006

Corporations are facing lack of pricing power. That is creating a massive underwater current that can finally create a crash in the stock market. The falling ISM price index when plotted against gold price shows a very dangerous sign. This has happened before especially in Japan. The market expects a 3-point drop of ISM price index to 58 from 61. The lower price index with long term bull trend in gold market is an early signal of trouble in the stock market.

The stock market can some how fight the stagflation with extremely high liquidity. But what it cannot tolerate is the fact the corporation lose their power to price in a stagflation driven economy.

Stagflation is always followed by deep deflation. That is exactly what happened in 1929-33. That is exactly what happened in Japan in late eighties. The catastrophic effects become more severe when the economy is heavily debt-burdened.

The lack of pricing power creates the ideal situation for a crash and total collapse in the stock market.

Falling ISM prices index shows slower growth, lack of pricing power and stealth deflation – stock market crash?
Peter Oberois
Corporations are facing lack of pricing power. That is creating a massive underwater current that can finally create a crash in the stock market.
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ISM Manufacturing data shows the economy is struggling to float above water plagued with underemployment
Arun Sinha
Market expects the ISM data to come around 53.0 a notch above last month’s 52.9. Anything-above 50 shows that the economy is still expanding.
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Home Resales Pending data shows slow but steady depletion of real estate values – result of debt, underemployment and stagflation
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The pending resale of home figure is a clear indication that real estate prices will decline slowly as people understand there is nothing much left in that sector other than owning their own residential properties...
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Lower construction spending is another sign of very weak real estate market and underemployed stagflation plagued economy
Sam Adelton
After providing all that incentives, the builders understand they cannot sustain the sales. The population growth is there but the underemployment in the economy will not allow selling homes and condos at that price levels.
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Market expected Conference Board Consumer Confidence at 109.5 but it came 4% short – another confirmation of recession
Sam Adelton
The stock market will be hurt the worst. While rates will remain comparatively high, the growth and earnings will collapse.
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Chicago Purchasing Managers index shows the economy is headed for a deep recession and most pundits and Fed are all wrong
Sam Adelton
The Chico PMI just says the recession has started within the umbrella of stagflation. It is expected now to turn into deflation driven deep recession if not depression.
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The jump in Conference Board Consumer Confidence shows temporary cheer in the mind of people on gas prices and stock market
Ratan Sen
The jump in Conference Board Consumer Confidence is interesting. People are relived at what they see in gas stations. They are happy to see the Dow going up steadily.
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