FedUpUSA

Here It Comes (Again): More Margin Collapse (Campbell's Soup)

 

Ben Bernanke’s QE2 is quite literally destroying some of America’s largest companies.  Yes, we do still make some things here, but if the Federal Reserve is not stopped, we won’t be for very long.

No, there’s no margin destruction…..

Campbell’s soup business has been under pressure in recent quarters along with the overall soup industry in the U.S. Industry executives have blamed a confluence of events. Soup became relatively pricey compared with some ready meals such as macaroni and cheese.

Right.

You have vegetables and meats in soup.  Both are… surprise…. commodities.

And what does this mean into stagnant wages?  You can’t pass along cost increases, which means your margins get destroyed.

And what does it do to your stock price?

Remember, we keep hearing that there is no inflation and that QE2 “will help corporations.”

Uh huh. 

What QE2 has already done is decimate margins, and what’s worse is that most of the margin pressures are baked into the cake but unrealized at this point because of the time it takes for cost pressures to go from the input side to the final product on the store shelf.

Wake Up America… and investors…. you’re both fixing to get trashed.

  

So that the banks, who, in the words of Alan Greenspan, committed frauds – CRIMES – can get away with and in fact profit from it.

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