A Beige-Book Fireball

That was the worst

Beige Book summary I have ever read.

Every month this snapshot of the U.S. economy comes and every month I look at it and notice how strong the economy is and how well it is doing. It is usually a footnote.

Wednesday's Beige Book was no footnote. It was a fireball racing through the nation, taking up prices wherever it went.

One of the first things I do with the Beige Book is look at the Third District, which includes Eastern Pennsylvania. For as long as I have been alive, this part of the economy has been in the dog house. Nothing ever seems to be strong or good or robust. Now take a look at this, from the summary in the

USA Today

Money section (which is the one I always use) :

Reports of rising prices increased at both the producer and retail levels, with manufacturers noting price increases spreading beyond energy, and stores beginning to raise prices selectively. Labor shortages persisted for both skilled and unskilled workers.

Believe me, when it is smoking in Philadelphia, it is Fahrenheit 451 --the heat level at which paper burns -- in the rest of the country. If that region is strong, other regions must be soaring.

I know that consumer spending has slowed a tad in April. I know that because the

same store sales for a lot of my companies that I follow are disappointing. (Hence the big

Goldman

downgrade.)

But the embedded strength in this economy is the Achilles heel of this market right now and I can understand why people would fear that the

Fed

would take short rates to 7.5% to cool this one off.

Random musings:

Congratulations and best wishes to

Faye Landes

who just landed at

Sanford Bernstein

. Her invaluable buy and sell calls in footwear and e-commerce have made our firm a fortune. Good luck, Faye!

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.