More Economic News from the Companies Themselves

I wrote this (in jest) yesterday

Kellogg (K), Kraft (KFT) - more CEOs who are going to try to tell us they see (haha) inflation or something. Silly CEOs.. there is no inflation out there. It's all in your imagination. More Fed cuts by the way! NYC and the top 1% must be saved! Go cry about your inflation to the bottom 60%.

But again folks, nothing to worry about here. The Fed is cutting rates (again), the Federal Government is sending us all rebate checks and that will solve everything! Don't you notice the market telling us that? Inflation is benign and under control. So ignore (once again) everything the CEOs are telling us, and buy those home builder stocks!

Kelloggs

• Earnings for the December quarter dropped to $176 million, or 44 cents a share, from $182 million, or 45 cents a share, a year earlier. The food company backed its 2008 forecast, which falls below Wall Street's current projection.
• Kellogg's gross margin for the quarter slid 50 basis points to 42.8%, hit by double-digit increases in commodity, fuel and energy costs. (but ignore that, inflation is just in your imagination and not a factor - PPI increases are negligible)
• To partially offset the continued cost inflation, we have increased prices and pursued various productivity initiatives." (ignore that - CPI increases are negligible)

So with Kellogg's all you need to know is the CEO is not reading the government reports (again!), and does not realize that is rising commodity, fuel, and energy costs are not real. Further his price increases will not his American consumers, because government reports tell us CPI is rising 3%... what is all this double digit baloney? Obviously excuse making by the CEO.

Kraft

• Kraft Foods Inc., the nation's biggest food and beverage maker, said Wednesday its fourth-quarter profit fell 6 percent due to higher dairy prices and one-time costs. Net income fell to $585 million, or 38 cents per share, for the three months ending Dec. 31. That's down from $624 million, or 38 cents per share, during the same period last year.
• The company primarily blamed a nearly 40 percent boost in dairy prices during the quarter for the earnings decline. The high commodities costs dragged down operating earnings at the company's North American Cheese and Foodservice division by more than 53 percent. (ignore that, just imagination)
  
• Kraft's operating margin dropped to 11.4% from 14.2% the prior year amid what the company called an "unprecedented" input cost environment.

Again, another CEO who truly does not understand our government reports. 40% dairy costs? I find that nowhere in any CPI or PPI report. So again, just a figment of another CEO's imagination and please ignore it.

I wrote this about UPS yesterday

UPS (UPS) - always interested in the bellweather transport companies commentary - probably they will say "things have slowed down, it looks like it will be slow next quarter - what's that? News flash, Fed cuts rates! Never mind - BOOM TIMES by Memorial Day!"

UPS

• UPS (UPS) matched analysts' adjusted earnings estimates for the fourth quarter, but the package shipper predicted a "difficult" first three months of 2008.
• Executives said UPS was hampered by the large spike in fuel prices in a short period of time in the fourth quarter. Usually, the company is able to pass increases in fuel prices along to customers, but executives said that wasn't as easy to do in the fourth quarter because of how quickly fuel prices rose. (please ignore the large spikes in fuel prices, just imagination running wild again)
  

So the first part of my prediction came true, and when the Fed cuts this afternoon (which again, solves EVERYTHING) I am sure the CEO will come back on the wire, and say "forget everything we said this morning, unicorns and butterflies are here again!"

And as I said with the other 2 companies, please ignore the comment about large spikes in fuel prices, because I don't see any of that in government inflation reports. So again, a figment of imagination by another CEO. And also ignore how the transport companies have been passing along fuel surcharges to companies - because when one passes along higher surcharges to companies, that also does not cause inflation.

Again, I am seeing a lot of imagination by all these CEOs of late as we've discussed this week. They are all seeing some sort of imaginary inflation that our government reports do not show. So obviously one is wrong. Since I always trust the government, it is very obvious that all these CEO's are living in an imaginary world and just making excuses for their poor performance. Thankfully we have Fed cuts coming anyhow... and that solves EVERYTHING. Even imaginary inflation. World of Shortages anyone? Stagflation? Nah.

At least Kool Aid is not going up in price!

Long imaginary inflation and CEOs who read government reports to see the "truth"