OT: CPI comes in hot - +3.5% year over year

[Boom Boom]

You literally said in the the post I quoted "competition is supposed to keep them from seeing record profits."

Ok. You agree or disagree?

Competition exists to give companies opportunities to maximize profit.

no.

Companies are competing with each other to win more customers.

Yes.

And it's not just prices that drive that competition.

yes.

If you build the perfect mousetrap, you reap the free market rewards until someone else comes along and builds a better and/or cheaper mousetrap. And the cycle continues.

yes. But please explain what "better mousetrap" explains $7 Captain Crunch.

There also are federal laws in place to encourage competition and prevent monopolies;

Yes, but they have not been enforced for decades (until very recently)! This is the point! Congrats, you finally found it!

For example, in bygones past a merger would be blocked if it resulted in a company having more than 5% market share. In past decades mergers resulting in 75% market share have been allowed.

Next, figure out WHY they've not been enforced.

there are also federal laws that protect against price fixing among competitors.

Lol.

#themoreyouknow

#youvegotalottolearn

 

[Boom Boom]

This is pretty funny considering how this topic played out on this board 3 years ago or so. Right, @PooPopsBaldHead ?

 

[PooPopsBaldHead]

My Kroger app will see your $8.29 and raise you.

View attachment 555527

Considering they have digitally recreated Tom Cruise from Tropic Thunder as their spokesman... I'd tell them:

First, take a big step back... and literally, 17 YOUR OWN FACE! I don't know what kind of breakfast cereal ******** power play you're trying to pull here, but CTC Jack is my territory. So whatever you're thinking, you'd better think again! Otherwise I'm gonna have to head down there and I will rain down an un-Godly 17ing firestorm upon you! You're gonna have to call the 17ing United Nations and get a 17ing binding resolution to keep me from 17ing destroying you. I'm talking scorched earth, mother17er! I will massacre you! I WILL 17 YOU UP!

 

[Mobile Bay]

Bird Flu is back better go buy your eggs. They will be 10.0 a dozen. Back to the subject at hand, my wife and I shop together and prices are starting to go up at groceries stores. Box of cereal is 7.29 a box and that's not the king size. Hamburger went up a dollar a pound since last week. You don't need some stinking government agency telling you things suck right now in this country. You see it and you feel it.

The tuna, the mahi, the snapper, and the deer in my freezer went up zero dollars in the last 20 years. Just saying. Yes I guess the cost of my fishing trips has gone up, but not like the cost a the grocery store has.

 

[pseudonym]

You just gotta love the absolute complete lack of critical thinking skills here. Hey guys, let's go back to the robber baron monopoly days, it's cool cause corps are always greedy! So dumb to complain that the lack of good policy led to market inefficiencies that allowed corps to jack up prices beyond normal market fundamentals, cause corps are always greedy yall! Derp de derp derp!!

Yes, I agree with Lyn that printing trillions of dollars in a short period of time could have something to do with higher prices.

Are you going to school us like you did in the bitcoin thread?

 

[Boom Boom]

Yes, I agree with Lyn that printing trillions of dollars in a short period of time could have something to do with higher prices.

Are you going to school us like you did in the bitcoin thread?

It very well may have. Doesn't change that the argument she made was embarrassingly bad.

 

[IBleedMaroonDawg]

 

[Leeshouldveflanked]

 

[bolddogge]

I also dont view Kroger or other grocers as 'big ol evil greedy'.

You said "corporations have always been greedy". Greed is one of the 7 deadly sins. So you basically said corporations are evil.
Some people that run some corporations may very well be evil. However, a business maximizing it's profit isn't greed. It's their purpose. Doing anything else would go against their fiduciary duty. I don't want any company I invest in taking anything else into consideration. (No ESG for me please.) If they raise price too far and it results in loss of market share due to people going somewhere else, they screwed up.

 

[Boom Boom]

You said "corporations have always been greedy". Greed is one of the 7 deadly sins. So you basically said corporations are evil.
Some people that run some corporations may very well be evil. However, a business maximizing it's profit isn't greed. It's their purpose. Doing anything else would go against their fiduciary duty. I don't want any company I invest in taking anything else into consideration. (No ESG for me please.) If they raise price too far and it results in loss of market share due to people going somewhere else, they screwed up.

This is totally fair, but missing the point a bit. The point is that these corps were not "passing on their costs". If that was true, then wouldn't be seeing record profits. They saw an opportunity to raise prices far beyond their increased costs (for profit), because they don't have competition. They don't have competition because we stopped regulating it. The giant irony? The theory that enabled this end to that regulation: that it would be better for consumer prices! You can thank Reagan and conservatives for this inflation, but of course those are the peeps complaining the loudest. Par for the course in modern American politics.

 

[Son_of_34]

Raisin Bran is damn near that at the local Krogers.

Then maybe you should try something else for breakfast since it's hurting your pockets so much

 

[Son_of_34]

With regard to an increase in food costs, please read the red statistics below and answer the subsequent question.


How Profit Inflation Made Your Groceries So Damn Expensive
Meanwhile, the average CEO to worker pay ratio was 324 to 1, up 23% from 2019, or nearly twice the rate of inflation. CEO earnings grew 18%, 4 times the rate of wage growth. S&P 500 profits rose by 17.6% in 2021. Profit margins crested at 15.5% in 2022, the most profitable year since 1950, while corporations issued more than $300 billion in stock buybacks to institutional shareholders like Kapito’s BlackRock. The timing with price inflation is uncanny....Companies have 3 choices when they receive cost increases. They can absorb and take a hit on their margins. They can pass through and share the pain with customers. Or they can put an additional mark-up above and beyond the rate of cost increase, padding their margins at the expense of customers. Up and down the value chain, this profit-driven model is responsible for over 50% of consumer price inflation.


https://www.vox.com/money/23641875/food-grocery-inflation-prices-billionaires
Chances are, you’ve bought a product that the food giant Cargill has had a hand in sourcing or processing, whether it’s wheat, soy, cocoa, feed for livestock, or the meat that ends up in grocery stores and restaurants. In fiscal year 2022, its revenue reached a record $165 billion. A record $6.68 billion of that was profit, double what its profits were in 2020. Its shareholders received $1.21 billion of those profits in dividends — yet another record.
...
Tyson Foods, the largest meat company in the US, also more than doubled its profits between the first quarter of 2021 and the first quarter of 2022.
Packaged foods manufacturer General Mills...has raised prices five times since 2021 and indicated another price hike could be coming soon. At the end of last year, its profits were up 97 percent compared to the previous quarter, and up 16 percent annually.
Conagra...noted a 22 percent profit increase in its last quarterly earnings report.
Grocery giant Walmart — the largest US corporation, bar none — has seen its profits grow for the past several years, with a 7 percent jump between 2020 and 2021.



Direct question- do you think corporate profit increases these last few years play a role in the higher prices consumers pay at grocery stores?


Covid relief funds, which were created under both Trump and Biden, and many conservatives happily used for personal and business costs, definitely impacted inflation. But its absurd to try and claim that as the only reason why costs are so high 4 years after covid hit our shores.
I accept the reality that for-profit companies work to maximize shareholder value, and when they have power to adjust pricing up, they will. I dont view these companies as evil or whatever else- they are playing by the rules we set up as a nation and economy. I would be foolish to ignore these record profits when considering factors that have led to higher prices in the grocery store.

 

[8dog]

View attachment 555768

This chart is so dumb my head hurts.

 

[PooPopsBaldHead]

View attachment 555768

Let's be very clear here for the short people in the back of the audience... The $4 trillion dollars in handouts, plus mortgage forbearance, plus student loan forbearance, plus enhanced unemployment, plus the cut to 0% interest rates under Trump in 2020 had nothing to do with inflation. It was the $2 trillion in handouts from Biden in 2021 that caused it.***

These two geriatric goobers are tied at the hip on inflation pal. Some of us were screaming about what was coming in August of 2020. Say what you will about Biden's role, he certainly threw napalm on a forest fire... But Trump and Powell started the fire and let it burn uncontrollably.

One of the more disappointing things about that "R" next to Trump on the ballot is the fiscal responsibility or lack thereof that comes with it. I remember Trump fighting Congress to increase his second stimulus payments in December of 2020 from $600 to $2000 person...

Trump Say More Stimmy Please

Conclusion, they should both wear the L on this one and be disqualified from office and we hire someone under the age of 9 hundrety and 4 to run the country.

 

[MSUDAWGFAN]

Would you rather we have done austerity like in 2008? That took almost a decade to recover from?

I would love austerity. And most regular citizens would too. Look at what happened in Argentina, when they tried it there.

This Country Cut Spending to the Bone, and You Won't Believe What Happened Next

pjmedia.com

 

[tbaydog]

When is BidenEconomics kicking in, Tired of working 4 jobs..........

 

[bolddogge]

This is totally fair, but missing the point a bit. The point is that these corps were not "passing on their costs". If that was true, then wouldn't be seeing record profits. They saw an opportunity to raise prices far beyond their increased costs (for profit), because they don't have competition. They don't have competition because we stopped regulating it. The giant irony? The theory that enabled this end to that regulation: that it would be better for consumer prices! You can thank Reagan and conservatives for this inflation, but of course those are the peeps complaining the loudest. Par for the course in modern American politics.

Record profits is good. This means they are doing their job. If you can find someone that doesn't have competition it would be worth your while to either start up a business to compete with them or call Saul. Regan left office a long time ago. It's odd that this just kicked into high gear 3 years ago...

 

[dorndawg]

I would love austerity. And most regular citizens would too. Look at what happened in Argentina, when they tried it there.

This Country Cut Spending to the Bone, and You Won't Believe What Happened Next

pjmedia.com

LOL

 

[johnson86-1]

Let's be very clear here for the short people in the back of the audience... The $4 trillion dollars in handouts, plus mortgage forbearance, plus student loan forbearance, plus enhanced unemployment, plus the cut to 0% interest rates under Trump in 2020 had nothing to do with inflation. It was the $2 trillion in handouts from Biden in 2021 that caused it.***

These two geriatric goobers are tied at the hip on inflation pal. Some of us were screaming about what was coming in August of 2020. Say what you will about Biden's role, he certainly threw napalm on a forest fire... But Trump and Powell started the fire and let it burn uncontrollably.

One of the more disappointing things about that "R" next to Trump on the ballot is the fiscal responsibility or lack thereof that comes with it. I remember Trump fighting Congress to increase his second stimulus payments in December of 2020 from $600 to $2000 person...

Trump Say More Stimmy Please

Conclusion, they should both where the L on this one and be disqualified from office and we hire someone under the age of 9 hundrety and 4 to run the country.

It's not just Trump and Biden. The entire covid response was moronic. And mostly not in ways that are forgiveable based on imperfect information.

The only obviously dumber thing I can think of in recent memory was the clunkers for cash program, but even though that was more obviously idiotic and more destructive for each dollar spent, it was relatively small potatoes.

What's so bad is basically no politician or bureaucrat even felt the need to apologize for being so wrong and in such a stupid way. It's crazy that our politics have so little accountability, but here we are.

 

[peewee.sixpack]

When is BidenEconomics kicking in, Tired of working 4 jobs..........

Only 3 for me but who's counting at this point.

 

[GloryDawg]

Only 3 for me but who's counting at this point.

I still only have one, but we have dipped into the savings a little for emergencies. Used to not have to do that.

 

[johnson86-1]

PPI came in at "only" 2.1%, but that's the highest annual number since April 2023. And Core PPI was 2.4%.

Nothing that indicates inflation is about to spike again but also doesn't indicate that inflation is moving towards the Fed's target anytime soon.

 

[ckDOG]

Is wage growth still outpacing inflation? It has for the last year or so but haven't seen recent data.

No I'm not suggesting everything is sunshine and butterflies but that always seems to be left out in these threads or shouted down by anecdotes and vibes.

 

[GloryDawg]

Is wage growth still outpacing inflation? It has for the last year or so but haven't seen recent data.

No I'm not suggesting everything is sunshine and butterflies but that always seems to be left out in these threads or shouted down by anecdotes and vibes.

It has but the fly in the butter milk it is still behind since Biden took office. His first two years got it behind. It never comes up because both sides of the argument can make a point.

 

[horshack.sixpack]

You literally said in the the post I quoted "competition is supposed to keep them from seeing record profits."

Competition exists to give companies opportunities to maximize profit. Companies are competing with each other to win more customers. And it's not just prices that drive that competition. If you build the perfect mousetrap, you reap the free market rewards until someone else comes along and builds a better and/or cheaper mousetrap. And the cycle continues.

There also are federal laws in place to encourage competition and prevent monopolies; there are also federal laws that protect against price fixing among competitors.

#themoreyouknow

I think that markets aren't perfectly elastic and the idea of better mousetrap was a lot easier/more possible to execute when the scale was smaller. The idea of being able to start a grocery store chain from scratch, establish the supplier partnerships with comparable discounts to say, Walmart or Kroger, and the result be lower prices to consumers seems like an impossibility at this point.

So while we don't have old school price fixing and monopolies, the barriers to market entry into these spaces are very high. I wonder if the 4% margin cited in prior posts is true profit or accounting manipulated "profit"? I wonder if pre-COVID these guys were at 2% (picking a number) and post-COVID the record profits are indicative of them increasing margin by not passing along any reductions in costs to the consumer.

I know for certain I would not start any business with an eye toward 4% profit and if that is really what it is, I wouldn't feel particularly obligated to hand any back.

 

[horshack.sixpack]

Gotta love the added reader context

View attachment 555533

Yeah, the number of people willing to believe anything on Twitter is astonishing. Something as simple as CPI, which has been calculated the same way for a long time, people don't even bother to vet. Just re-tweet my political thing. We truly are a dumbed down society, unwilling to put in any work to see what might actually be true and then work from reality towards improvements via policy compromises.

 

[horshack.sixpack]

View attachment 555768

I suspect that the president has less impact on inflation than other economic factors. That being said, here are the numbers by president going back to JFK. Looks like you should pushing to help Trump suspend the constitution and then pull a fast one on him and stump for Obama.***

 

[Drebin]

Then maybe you should try something else for breakfast since it's hurting your pockets so much

I am. Nailing your mom every morning is getting old and tired.

 

[DesotoCountyDawg]

I suspect that the president has less impact on inflation than other economic factors. That being said, here are the numbers by president going back to JFK. Looks like you should pushing to help Trump suspend the constitution and then pull a fast one on him and stump for Obama.***

View attachment 555911

One of my Econ professors when I was at State always said that a president takes too much credit for the economy when it’s good and too much criticism when it’s not good. There’s a lot more factors there than simply a presidents economic policy at work.

 

[dorndawg]

I suspect that the president has less impact on inflation than other economic factors. That being said, here are the numbers by president going back to JFK. Looks like you should pushing to help Trump suspend the constitution and then pull a fast one on him and stump for Obama.***

View attachment 555911

The 1990s were truly amazing, economically

 

[Boom Boom]

Let's be very clear here for the short people in the back of the audience... The $4 trillion dollars in handouts, plus mortgage forbearance, plus student loan forbearance, plus enhanced unemployment, plus the cut to 0% interest rates under Trump in 2020 had nothing to do with inflation. It was the $2 trillion in handouts from Biden in 2021 that caused it.***

These two geriatric goobers are tied at the hip on inflation pal. Some of us were screaming about what was coming in August of 2020. Say what you will about Biden's role, he certainly threw napalm on a forest fire... But Trump and Powell started the fire and let it burn uncontrollably.

One of the more disappointing things about that "R" next to Trump on the ballot is the fiscal responsibility or lack thereof that comes with it. I remember Trump fighting Congress to increase his second stimulus payments in December of 2020 from $600 to $2000 person...

Trump Say More Stimmy Please

Conclusion, they should both wear the L on this one and be disqualified from office and we hire someone under the age of 9 hundrety and 4 to run the country.

This is mostly true, but missing the forest for the trees. As agreed previously, without the weird supply effects on housing, cars, meat, etc, that all would have happened regardless of stimulus, then inflation would have topped at 4 or 5%. Without stimulus, inflation still would have gone up, probably to 6%, with a strong recession with it.

Let's not conflate 8% inflation with stimulus. The data does not support it.

By my analysis of the data, we avoided stagflation and it cost us a couple points of inflation for a couple years. I take that deal every day and twice on Sundays.

 

[johnson86-1]

I think that markets aren't perfectly elastic and the idea of better mousetrap was a lot easier/more possible to execute when the scale was smaller. The idea of being able to start a grocery store chain from scratch, establish the supplier partnerships with comparable discounts to say, Walmart or Kroger, and the result be lower prices to consumers seems like an impossibility at this point.

So while we don't have old school price fixing and monopolies, the barriers to market entry into these spaces are very high. I wonder if the 4% margin cited in prior posts is true profit or accounting manipulated "profit"? I wonder if pre-COVID these guys were at 2% (picking a number) and post-COVID the record profits are indicative of them increasing margin by not passing along any reductions in costs to the consumer.

I know for certain I would not start any business with an eye toward 4% profit and if that is really what it is, I wouldn't feel particularly obligated to hand any back.

Grocery stores are pretty competitive most places. Krogers net margins are tiny on average. https://www.macrotrends.net/stocks/charts/KR/kroger/net-profit-margin

The major food producers have pretty good margins usually. They have pricing power because of brand loyalty and maybe lack of generic competition, not sure. Grocery stores usually don’t.

 

[dorndawg]

I am. Nailing your mom every morning is getting old and tired.

Hode up - so Drebin and Coach34 are Eskimo brothers??

 

[Boom Boom]

Record profits is good.

for them. Not necessarily for the rest of us. Its generally been agreed for a long time that monopolies are a bad thing, despite all those profits they bring, but i know the far right is so lost these days that that too may have been forgotten.

This means they are doing their job. If you can find someone that doesn't have competition it would be worth your while to either start up a business to compete with them or call Saul.

That's not how things work. The whole point of cornering a market is that barriers to entry virtually guarantee you a lack of competition for the foreseeable future. That's why corps are so eager to corner a market, it's like printing money.

Regan left office a long time ago. It's odd that this just kicked into high gear 3 years ago...

Market consolidation did not kick into high hear 3 years ago. That's just when the bill came due.

 

[mstateglfr]

You said "corporations have always been greedy". Greed is one of the 7 deadly sins. So you basically said corporations are evil.
Some people that run some corporations may very well be evil. However, a business maximizing it's profit isn't greed. It's their purpose. Doing anything else would go against their fiduciary duty. I don't want any company I invest in taking anything else into consideration. (No ESG for me please.) If they raise price too far and it results in loss of market share due to people going somewhere else, they screwed up.

Oh my gosh.
As with so many conversations about economics/politics on here, many people seem to struggle with nuance.

I will try to break this down for you.
- First off, I did not initially call corporations greedy, @pseudonym referenced an X post that used the term. I responded to his post using the term he brought up in that X post.
- I can view a corporation as greedy without viewing the corporation as evil.
- I reject your application of Deadly Sins here because this isnt religion, its a discussion about markets and economics. Dont force religious definitions or religious beliefs into a conversation where it does not belong.
- I agree that maximizing profit is the purpose of most corporations. You seem to be really hung up on how 'greed' is used here. I am using it in a conversational manner where it means the same general thing as 'trying to get more and more'...because that is a way to use the term.
- I am not passing ethical or moral judgement when I say corporations have always been greedy. Its just the reality of the system we have in place- it rewards a corporation trying to get more and more, whether it is more revenue, more profit, more marketshare, etc.
- I did not basically say corporations are evil. You created that claim by applying religious values to my comment and then interpreting my comment using those religious values. Thats lame. I do not view corporations as evil and if you actually read my posts in this thread without an agenda, you will see comments that show I am fine with corporations making profits and do not view them as evil.



As for you not investing in companies/funds that focus on ESG, cool- dont invest in those. Nobody is forcing you to. I dont care if you do or dont.
I will say that 'fiduciary duty' is a very nebulous term when applied to corporate initiatives and a lot of spending/ideas/initiatives/purchases(outside of ESG) that corporations make could easily be questioned. That doesnt seem like ground I would want to stand on and bring attention to, but you do you.

 

[mstateglfr]

I would love austerity. And most regular citizens would too. Look at what happened in Argentina, when they tried it there.

This Country Cut Spending to the Bone, and You Won't Believe What Happened Next

pjmedia.com

Its been 3 months- I personally think it isnt smart to declare most drastic federal economic changes as successful or failed in only 3 months.

 

[mstateglfr]

When is BidenEconomics kicking in, Tired of working 4 jobs..........

Only 3 for me but who's counting at this point.

Are you both working 3 to 4 full time jobs? Are you working 0 full time jobs and all part time? Are you working a full time job and 2 or 3 seasonal part time jobs?

I have a full time job.
I coach a sport at a high school that is 13hr/week for 3.5mo and 1 hr/week all other months.
I coach a sport at the club level that is 7hr/week for 3.5mo.

Do I really have 3 jobs? I sure dont view it as 3 jobs, but I guess the IRS would.

 

[mstateglfr]

One of my Econ professors when I was at State always said that a president takes too much credit for the economy when it’s good and too much criticism when it’s not good. There’s a lot more factors there than simply a presidents economic policy at work.

True. Its like most of the gas price threads that have been started on here in the last 3 years. Gas under R = good. Gas under D = bad.
Meanwhile, gas was higher when Trump left than when Obama was leaving, gas consistently increased under W, gas lowered under Obama, and gas is cheaper now in current dollars than it was 17 years ago under W.
Presidents get way too much credit and blame for gas prices.


Reality is that global factors impact prices and the economy in the US and much of it cant be controlled by whoever happens to sit in the Oval Office, despite what they may claim they have the power to do.

 

[bolddogge]

Oh my gosh.
As with so many conversations about economics/politics on here, many people seem to struggle with nuance.

I will try to break this down for you.
- First off, I did not initially call corporations greedy, @pseudonym referenced an X post that used the term. I responded to his post using the term he brought up in that X post.
- I can view a corporation as greedy without viewing the corporation as evil.
- I reject your application of Deadly Sins here because this isnt religion, its a discussion about markets and economics. Dont force religious definitions or religious beliefs into a conversation where it does not belong.
- I agree that maximizing profit is the purpose of most corporations. You seem to be really hung up on how 'greed' is used here. I am using it in a conversational manner where it means the same general thing as 'trying to get more and more'...because that is a way to use the term.
- I am not passing ethical or moral judgement when I say corporations have always been greedy. Its just the reality of the system we have in place- it rewards a corporation trying to get more and more, whether it is more revenue, more profit, more marketshare, etc.
- I did not basically say corporations are evil. You created that claim by applying religious values to my comment and then interpreting my comment using those religious values. Thats lame. I do not view corporations as evil and if you actually read my posts in this thread without an agenda, you will see comments that show I am fine with corporations making profits and do not view them as evil.



As for you not investing in companies/funds that focus on ESG, cool- dont invest in those. Nobody is forcing you to. I dont care if you do or dont.
I will say that 'fiduciary duty' is a very nebulous term when applied to corporate initiatives and a lot of spending/ideas/initiatives/purchases(outside of ESG) that corporations make could easily be questioned. That doesnt seem like ground I would want to stand on and bring attention to, but you do you.

I didn't mean to touch a nerve there glfr. But I'm not forcing anything. Words have meaning. you said them. I happen to live with a biblical world view. Guilty as charged. If you view that as lame, I'll toss you on my prayer list.
Regarding ESG: I make it a point to not invest in any company directly that incorporates ESG in any of their business decisions. I've also instructed my broker to do the same. I contribute to the charities and causes that I support directly. I don't need a company to do that with my funds. My investments are there to grow, not push anyone else's agenda that may or may not agree with my values.

 

[MSUDAWGFAN]

Its been 3 months- I personally think it isnt smart to declare most drastic federal economic changes as successful or failed in only 3 months.

While that's true, can you name when similar steps have been taken and it has failed spectacularly? What we should note is that despite all of the gloom and doom end of the world scenarios out there about cutting spending, what we are seeing with at least this example is that all that talk is nothing but a scare tactic.

I think we can say that so far, this has been quite successful.