OT: July CPI next week
- Thread starter PBDog
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Fed needs to get out ahead of new bill and say if it passes they will raise interest rates an additional amount before spending starts to account for it and keep expectations under control.
CPI
It will flat or lower due to fuel decreases. The new bill and funds won’t be spent for months, if not a year.
It will flat or lower due to fuel decreases. The new bill and funds won’t be spent for months, if not a year.
I think it might have peaked. Falling gas prices will push that possibility. I think we’re going to get a lower cpi, fed reverses rate hikes in sept, economy turns around for midterms, and then 2023 we roll over and even the White House can’t redefine recession. Just a retrace but it will have many fooled.
Consumer debt topped $16T for the first time ever last week. People are running out of money. There's going to be a lot of things going on the next year or so.
I'll go with an 8 handle for July, and a 7 or maybe even 6 for August. By 1Q 2023 it will be well under 5.
The consumer balance sheets are still relatively strong. The surprise has been household income of 50k or less. They have been resilient in comparison to historical economic downturns. Spending habits are changing. Inventories are building at retailers and durable good will come down. New housing and auto sales are dropping double digits; however, we continue to add jobs. So much info to consume.
That's close to my thinking. Fuel and RE are both falling fast, though it may take til next month to be in the data. Food will mostly follow fuel costs down, though with more lag. That covers more than 3/4, maybe 90%, of what's been driving high CPI. If the Fed continues to hike, we'll be in recession and under 2 by 2023. The Fed will gladly drive a hard recession if that's what it takes to ensure profits favor capital and not labor.
People no longer can afford things is why those things are building up. Not because times are good or better. If not being able to have the life you were living is a good thing, I think I'll pass.
Simple economics
The point is the economy is slowing but not as dramatic as most make it out to be and economic metrics can be deceiving. Wages still grew this past month albeit minimal and I expect inflation to decline, which create a positive vs slowing wages and higher inflation.
The point is the economy is slowing but not as dramatic as most make it out to be and economic metrics can be deceiving. Wages still grew this past month albeit minimal and I expect inflation to decline, which create a positive vs slowing wages and higher inflation.
The Fed dictates most of the economy. Presidents and Congress might change but the Fed is a constant since after its inception after the CRASH about a hundred years ago. I watch this guy, Jake Broe, about the Ukraine and economy: check out his content. He will diversify a lot of your perceptions. Jake did 6 years USAF as a ICBM launch officer. I believe that his war annalysis is second to none.
https://www.youtube.com/watch?v=WO2485yFor4
https://www.youtube.com/watch?v=WO2485yFor4
I'll say it until my eyes bleed, though they did have help with fiscal stimulus from Congress and 2 administrations. Ukraine war has put an extra log on the fire with gas and food shortages, but the fire was already roaring.
If we have no interest rate cuts to zero, no massive balance sheet additions by the Fed, no PPP, no 3 rounds of stimulus, no child tax rebates, no enhanced unemployment, no mortgage forbearance, and no student loan forgiveness in 2020... We would have had a severe and sharp recession starting in Q2 of 2020. Period. You do not get inflation when unemployment is high and people are broke. People don't buy houses, used cars, steak, or anything other than the basics.
Yes there are shortages all across the supply chain, but that's only because we have all been so flush with extra money (still don't think anyone is paying back student loans) we could afford to buy everything we wanted... And then some. Supply was down in many cases yet demand was high. If supply and demand don't track together, you get excessive inflation or deflation.
Beef is the perfect example. Data is now in. We produced more beef in the US during 2020 than any year in history, until we broke the record in 2021. We also imported 10% more beef in 2020 and exported 3% less than 2019 (no numbers on 2021 imports/exports yet.) Net-net, we had the greatest beef supply in American history in 2020 and then likely broke the record in 2021. Yet the price of ground beef is up 27.5% since 2019. That's nothing but demand/pull. You cannot cry supply chain when the supply actually increases substantially.
Broke people eat beans and rice and get drunk on MadDog. People with helicopter money buy Bitcoin, steak, brisket, and bourbon.
This is not an argument of whether or not fiscal and monetary policy was right or wrong given the Covid circumstances, but if we can't have the basic intelligence to acknowledge how much it contributed to the current inflation scenario, we can't have an intelligent conversation about how to fix it.
I am saying that most indicators for inflationary mess have been constant after watching the Jake Broe YouTube content. There were very little data point changes shown during Trumps last two years or Biden's first two years. This indicates that there is another power or circumstance driving the issue. The Fed is a major constant that can not be ignored. Sadly, we are in a perfect storm with Ukraine energy ramifications globally. Also global food insecurity is a reality. Covid hangover is still an issue also. I linked the video as a tool to promote cognitive diversity of thought on this subject. Consider subscribing to Jake Broe YouTube so both of us can get better at understanding this issue?
Nobody is, it expires right before the midterm election, so I strongly expect it to continue then or there to be a massive forgiveness as a vote buying scheme.
No doubt. I would imagine a large forgiveness will be announced sometime prior to mid term elections
You’d think, but DYX is still high. I guess because other economies are worse than ours. I think long term you’d see good returns though.
Post more, read less.
The selected text above needs to be repeated over and over to anyone that can't see past 'us vs them' when it comes to national politics.
The problem with this, as we've been over but you haven't answered (so much for intelligent conversation?), is that many goods have not gone up in price at all. Pork is one example. The price shot up in mid 2021 amid supply problems , but is now back to normal. What, people flush with money don't like bacon and ribs? They had ribs for $2.99 a lb in the grocery today.
Re beef, you are being misleading. The supply may be an all time high, but it's like 1% higher than normal, and the supply has been flat for years, decades maybe. The demand has far outgrown the supply for a long time now. Why hasnt the supply been pacing the demand? And you can't just note imports vs exports and write off the effect of overseas demand on prices.
So what's the difference between pork and beef? Market consolidation probably.
Beef production has been flat for a decade, yet it increased a few percentage points in the last 2 years. But the price went up 27.5%? That's demand. Commodity prices don't just arbitrarily go up. Demand increased, supply didn't decrease.
And 17 you on bacon prices. Up 33% since February of 2020. 33%. Because bacon is awesome. And people are bidding it the 17 up. I personally don't buy much pork other than bacon, cause I 17ing love steak, bacon, and crab legs and use my extra money from not making a student loan payment to buy Wagyu Tri Tip to grind into breakfast sausage. Because I'm dope like that.
"Broke people eat beans and rice and get drunk on MadDog."
Plenty of them also have $900 cellphones, 70 inch flatscreens, maxed out credit cards, designer clothes/jewelry and $90k cars in the driveway so not sure the textbook supply and demand/product substitution works in an absolute vacuum like your generalization. Especially with our consumer spend driven economy.
Plenty of them also have $900 cellphones, 70 inch flatscreens, maxed out credit cards, designer clothes/jewelry and $90k cars in the driveway so not sure the textbook supply and demand/product substitution works in an absolute vacuum like your generalization. Especially with our consumer spend driven economy.
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Different conversation. In a recession, the vast majority of people practice some form of austerity is my point. And the idiots you described, if nothing else, have it forced upon them as lenders are much less generous in giving out the debt that many rely on to live beyond their means.
The pork industry and the beef industry are two different animals (pardon the pun). The beef market is controlled by just a few massive beef packers who control the price and pretty much screw the ranchers because they can. There’s actually some bipartisan legislation that’s about to be brought up in the senate in a bill that’s going to try and help address this problem.
Rational people practice austerity when the Money dries up....whether that money is derived from market driven economics or government spending. Right now the money hasn't dried up from all sources but it's coming if we continue on this current path regardless of what name anybody wants to call it. Rates need to continue upward and the government needs to stop spending period.
I still don't understand this argument. If we didn't have the massive expansion of the monetary base, those goods going up in price would almost necessitate other goods going down or being flat, subject to drawing down savings or taking on more debt (which is in itself an expansion of the secondary money supply?). Instead, basically everything is up, some inline with what you would see from "normal" inflation, others many multiples of that.
In the 70's, I'm assuming you had some goods inflate much more than others. Maybe not to this extent because there are supply chain issues, but just having different rates of inflation for different goods seems to be pretty standard, and can't be used to explain away the fact that monetary policy (or arguably not following the announced policy) is the main driver of inflation right now. I mean, obviously fiscal policy has been bad also, but if you assume the FED is responsible for monetary policy and reacting to fiscal policy (which I think is more or less agreed upon?), then it's still ultimately a FED failure to not adjust monetary policy to reflect all the fiscal stimulus.
You losers enjoy your austerity. I'm going to enjoy my new F-250. Only cost me 15% over MSRP and I'm going to own it outright after just 83 more monthly payments.
Are the heated seats and cruise control included or do they require a separate subscription?
I don't know. People are ok with the idea in theory, but if it gets close to happening and republicans start beating the drum about having lower income people pay to forgive the student loan debt of higher income people, I don't think Democrats will be able to stomach it. And I think that would resonate enough that MSM boycotting it and social media companies trying to censor talk of it wouldn't be enough.
Even if Democrats decide that midterms are going to be a bloodbath and forgiveness would solidify their hold on the lower upper class professionals, a significant number of them paid off their debts and they may not like seeing their friends and colleagues come out ahead just by not paying the debts they could easily afford to pay. Even if it's limited to $50k, that's still significant to most of those people.
I know people that could pay off significant student loan debt right now with cash but they were smart enough to realize this might be on the table, so they have been paying it as slowly as possible, and are paying nothing right now. I'm obviously not a demographic that democrats are worried about attracting, but certainly my desire to get involved and help against democrats will go up if they do loan forgiveness (unless it's limited to say people below the poverty line that did nto complete a degree from a for profit institution or something like that).
I don't think real estate has even been captured in the data yet since it's survey data on owner's equivalent rent and that supposedly lags by as much as two years.
Real Estate is a market to market situation. Florida is still doing well. Out west is not. Home prices are still up in New York, Philly, a number of FL markets too. SF is dropping like a rock. So is LA. Most southeastern markets are just flat to minimal drops. Large Joe Lee mansions are being hit much harder than a little 2500 sq ft Cooterpoot SFR.
I don't claim to know much about anything in this thread, but I watched a John Stossel video on this recently.
ETA: Videos aren't embedding correctly as of late. https://www.youtube.com/watch?v=ptxVvbRw4eE
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Funny! A car dealer friend of mine told me that the large manufacturers may continue to minimize supply to dealers even after supply chain issues are over. He's selling cars before he can get them on the lot and way over sticker. It will probably be relatively short term until they go back to the volume based model but sucks to be in the market for a vehicle right now.
83 payments? What are you, a sucker? You can spread it out over 120 months now, AND get the King Ranch trim package! Get down to the dillership toDAY!
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