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Notes to myself, possibly of interest to others.
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Thursday, December 8, 2011

Rosenberg Daily - Deflation...

We still get pushback from some readers over our deflation theme but we suspect those who challenge us on it don’t often dine at the Red Lobster or Olive Garden. Look at the facts on the ground in the retail space — competition for the constrained consumer dollar is so intense that 63% of web-based sales so far this shopping season have been facilitated with free shipping charges, which is up from 51% in this same juncture in 2010 and 44% in 2009. See the Heard on the Street column in today’s WSJ for more. 

But this is what the bond bears have consistently missed — disinflation or deflationary pressure in wide swaths of the consumer discretionary space. The reality that there is no sustainable bear market in bonds until the Fed starts to take the carry away in a tightening cycle (which is not in the cards for at least two more years).

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