My Last Post on Baldor, I think...for awhile, & More on Recession.

Cramer and Baldor CEO John McFarland on Mad Money last Friday:

http://www.cnbc.com/id/15840232?video=780431599

Because I don't have any stupid sound effects developed yet.


So yesterday I spoke about this quote from a Fortune article:

"...the Fed remains skeptical that high commodity prices will ripple through the
economy, leading to broad price hikes and big wage increases. "The committee
expects inflation to moderate later this year and next year," the Federal Open
Market Committee said in holding the fed funds rate steady at 2%, though it did
note that "uncertainty" remains high and suggested inflation concerns could
rise."

I wanted to elaborate on the subject a little more. I work for a commodity-based product company and we are in fact completely increasing our pricing due to ripple effects in costs on all of our products and passing that cost onto our customers which will then pass that problem onto the public. We are doing that right now. Also, we are expecting large wage increases next year due to an recession with inflation environment. Additionally, if Buffett is suggesting this as well, I would damn near listen, not because Buffett is the man but because Buffett knows commodities.

Buffett typically purchases companies that are simple, balance sheets make sense, products are straight forward, and they are selling at a value at the time. Those types of companies are commodity based by default, well most of the time. When Buffett goes buying these stocks, he tends to buy enough to get someone on their board of directors, or at least get access to the companies financial situation. So it can be surmised that he is seeing this type of development in most of his investments across a large swath of products and businesses and is just speaking up. Meanwhile, our Fed is holding its breathe and hoping for the best.

Snap out of it people, we are already in the recession and high inflation is occurring and rippling through the pricing right now. If companies aren't doing this yet (i.e. airlines), then their survival may be limited. Open your eyes.