It wasn’t 1.85 the whole time he was President. Also at the end of his presidency we were in the middle of all the pandemic shutdowns and many were not traveling as much. Let’s not be so obtuse.
Time to Buy Stocks
- Thread starter TheStateUofMS
- Start date
For the ones that the price stayed the same, I’m guessing the net weight dropped. I’d like to see the actual lunchables you are comparing. What was milk in January 2020? And chips are up a bunch…if you can find them on the shelf. Not an expert on fruit, but those prices fluctuate in the best of times. Y’all can look at a whatever metric you want, but I just know our grocery bill has gone up bunch. In the last year.
Same with ours. We buy roughly the same things give or take a few items and it’s clearly up over the last year.
Yeah it's really simple. The chart I posted above is from IRI, they have the best data in the world on grocery costs and demands. I have a good friend that works for them. They collect and aggregate every single point of sale scan from Costco, Kroger, Target you name it...
They use the data to help track demand by items and location. Manufacturers and cpg brokers use it to determine pricing, coupons, and fulfillment. Nobody has better information on grocery inflation and demand. It's up 8% year over year. Every category is up at least 6% except for beverage and alcohol.
How anyone can possibly argue that we have not seen significant grocery inflation is ridiculous.
Link to IRI website. They have a whole Covid 19 dashboard where you can see supply, demand, inflation, channel shift, e-commerce, and promotions. Quick recap for the stubborn and obtuse: supply is down, demand is up, promotions are down and the result is 8% grocery store inflation.
https://indices.iriworldwide.com/covid19/index.html?i=4
They use the data to help track demand by items and location. Manufacturers and cpg brokers use it to determine pricing, coupons, and fulfillment. Nobody has better information on grocery inflation and demand. It's up 8% year over year. Every category is up at least 6% except for beverage and alcohol.
How anyone can possibly argue that we have not seen significant grocery inflation is ridiculous.
Link to IRI website. They have a whole Covid 19 dashboard where you can see supply, demand, inflation, channel shift, e-commerce, and promotions. Quick recap for the stubborn and obtuse: supply is down, demand is up, promotions are down and the result is 8% grocery store inflation.
https://indices.iriworldwide.com/covid19/index.html?i=4
The cost of transporting and unloading a shipping container has increased tenfold from a year ago.
Where should you put your money?
I had no idea people understood economics as much some of you guys. But today if you are the guy sitting on cash where do you put it? Low p:e ratio blue chips, a condo at the beach, or hold and wait for a stock market bottom/crash?
I had no idea people understood economics as much some of you guys. But today if you are the guy sitting on cash where do you put it? Low p:e ratio blue chips, a condo at the beach, or hold and wait for a stock market bottom/crash?
Yep. That data tells you all you need to know about the source of this inflation, money printing vs supply chain issues.
I'm not stubborn, I just have a time tested explanation of the facts that fits the current data, and am not trying to fit the data to my preferred conclusion like you are.
You don't seem to grasp how price fluctuations typically happen in our economy. Every year there are price increases and price decreases on the order of what you are posting. It's just cherry picking. You have to look at the average data.
Another piece you are missing is that demand for services was massively curtailed by the pandemic. This money unspent created additional demand for goods, the supply of which was constrained. That this effect resulted in an increase in price is not a monetary phenomena effect. It is a basic supply and demand effect.
You make a good point about sale prices of groceries. How do you accurately measure the price of a good that is often sold on sale? I would think inflation measures take this into account, but I don't know for certain. My own hypothesis is that price increases have fallen most on those that don't shop for deals. A bifurcation if you will. Companies know that the price they can demand among good shoppers is constrained by the price of competing goods, so they target increases at customers that don't shop for price. If you know how grocery store product placement and such works, you'd have to conclude this is happening.
Soda cans have a supply problem. As does housing for rent, as you know. A 5% increase for hc premiums is actually historically low. Elec and gas is fuel, which is one of the 3, and one in which no one should point to short term fluctuations as proof of a monetary phenomenon. Service supplies are labor supply constrained right now.
At this point, I conclude you don't have a good grasp on how supply and demand works. If you put more money in people's hands, they can only bid up the price of supply constrained goods. If the supply of a good can respond to a change in demand, then the price won't change. That's how free markets work.
Topbulldawg's example still shows 4.5% of inflation on a pretty small sample size. 8% is the real inflation number looking across all grocery items nationwide with billions of data. But you are never going to let a researched fact get in the way of an anecdotal observation that supports your argument.
View attachment 23744
https://indices.iriworldwide.com/covid19/?i=4
View attachment 23744
https://indices.iriworldwide.com/covid19/?i=4
He only included units on some of those items. Don’t get too excited. $1.39 for a 10oz bag of chips is not the same as $1.39 for a 9oz bag of chips. Lunchables can be completely different. I’m guessing the pastaroni is a smaller size now as well.
You don't seem to grasp how price fluctuations typically happen in our economy. Every year there are price increases and price decreases on the order of what you are posting. It's just cherry picking. You have to look at the average data.
Not cherry picking, just trying to look up anything and everything with data. Here is a pie chart of the average American household's expenditures. More than 60% of which revolves around 3 areas.. Food, Transportation, and Housing. That's where the focus should be because when those items face inflationary pressures to the tune of double digits and high single digits, poor people get poorer. I am fully willing to admit that apparel, healthcare, and education have hung around 2%, but it doesn't matter, combined those items make up less than 15% of the average person's budget.
View attachment 23745
Another piece you are missing is that demand for services was massively curtailed by the pandemic. This money unspent created additional demand for goods, the supply of which was constrained. That this effect resulted in an increase in price is not a monetary phenomena effect. It is a basic supply and demand effect.
Savings absolutely increased during the pandemic. I would not not deny that. But the facts are income also increased even though productivity decreased. This is a major contributor to the imbalance in supply and demand. Let's talk about 2 products that are very near and dear to my heart. Lumber and beef.
I'm a commodity guy, I understand supply and demand very well. But the major price drivers in both of the products have been on the demand side. We don't have the final numbers on 2021 yet, but in 2020 4.3% more lumber was produced than in 2019 and it was the highest volume since 2006. Yet lumber prices spiked 400% from its 2019 averages. It was driven by unbelievable demand in both monetary and FISCAL policy. The monetary policy of the Fed has given us ultra low mortgage rates and the fiscal policy from politicians gave us plenty of extra cash for down payments. The want to buy a home was caused by demographics and the pandemic, the ability to keep paying astronomical prices was created by monetary and fiscal policy.
https://madisonsreport.com/2021/03/...ill-capacity-utilization-wwpa-full-year-2020/
Now to beef. Guess the years with the 2 largest volumes of beef production in the US. 2020 and 2021. Imports were near record levels as well. So supply was up and prices were up, that is demand. I have no illusions about what caused people to want to buy more beef, but again like lumber the prices went crazy because of everyone's ability to pay more for what they wanted. While monetary policy ultimately trickles down somewhat in beef, not many people are financing their beef purchases (unless its a brisket), so this probably leans more to fiscal policies (Stimulus, PPP, extended UE benefits.) Here's a great article citing Mississippi State on the past few years of beef production.
https://www.beefmagazine.com/beef/beef-production-totals-2021
You make a good point about sale prices of groceries. How do you accurately measure the price of a good that is often sold on sale? I would think inflation measures take this into account, but I don't know for certain. My own hypothesis is that price increases have fallen most on those that don't shop for deals. A bifurcation if you will. Companies know that the price they can demand among good shoppers is constrained by the price of competing goods, so they target increases at customers that don't shop for price. If you know how grocery store product placement and such works, you'd have to conclude this is happening.
I have pointed this out in other threads. There is really good data available from IRI which is a BI superpower for CPG. One of my friends is fairly high up the food chain and to simplify what they do, the capture all of the actual price data from the checkout register, including discounts. They are in everywhere except Wal-Mart I think. One of the biggest problems with the Fed/BLS/USDA etc is they rely way to much on smoothed data that takes out the volatility and effectively becomes a lagging indicator. That's why the missed the boat on inflation and are now freaking out and will most likely overshoot, but I digress. Please look around on this dashboard from IRI, it will really give you a good look. Supply is currently on balance or awful close, its demand driven (from the pandemic of course) but demand and the ability/willingness to pay higher prices is a key component of inflation.
https://indices.iriworldwide.com/covid19/?i=4
Soda cans have a supply problem. As does housing for rent, as you know. A 5% increase for hc premiums is actually historically low. Elec and gas is fuel, which is one of the 3, and one in which no one should point to short term fluctuations as proof of a monetary phenomenon. Service supplies are labor supply constrained right now.
I agree with fuel, it's volatile and not a good inflationary gauge. HC premiums at 5% aren't low, they are normal for the last 10 years. The labor supply constraint has tons to do with monetary and fiscal policy. When you don't make people pay for their mortgage for 18 months, pay them $800 a week to stay home and send them thousands of dollars of stimulus payments, many leave the workforce. 2.4 million excess retirements and probably half as many 2nd earners who left the workforce to stay home with kids. Broke people go to work as soon as they are able to. If you give me a year's salary and allow me to not pay my mortgage for 18 months, I can set myself up financially to where maybe I never have to go back to work... and I get to keep buying my overpriced beef and autos... Hell, I sold a house in November of 2020 to a guy that was in mortgage forbearance at the time on his house even though he ended up making 25% more income in 2020 than 2019.
At this point, I conclude you don't have a good grasp on how supply and demand works. If you put more money in people's hands, they can only bid up the price of supply constrained goods. If the supply of a good can respond to a change in demand, then the price won't change. That's how free markets work.
One of us doesn't. If you put more money in people's hands they now have the willingness and ABILITY to buy more goods thus creating a constraint. If you do this during a time when you also force schools to shutter and businesses to close, thus artificially constraining supply you create an inflation bomb. Note, a bomb explodes once. It has already done that. I'm not saying this will become Zimbabwe style hyper inflation or even sustained high inflation, our economy has too many long term deflationary forces. But make no mistake, this was the a real world example of Milton Friedman's helicopter money analogy. As long as another helicopter doesn't fly by and drop more money, most prices will stabilize over the next year or two... But there is a real risk of sector specific inflation lingering in places where there are no deflationary pressures (like housing.) Labor markets are tight and will remain tight unless the Fed overcorrects and causes a recession.
Another forward prediction based on simple game theory... We have neglected our personal healthcare quite a bit over the last 2 years because of covid. There are massive labor shortages in the healthcare sector and will continue to be over the next few years at the same time some of those neglected healthcare issues come home to roost. There will be a secular growth and inflation within the healthcare sector for the next 3-5 years. Wage growth will be handsome in that sector.
Not cherry picking, just trying to look up anything and everything with data. Here is a pie chart of the average American household's expenditures. More than 60% of which revolves around 3 areas.. Food, Transportation, and Housing. That's where the focus should be because when those items face inflationary pressures to the tune of double digits and high single digits, poor people get poorer. I am fully willing to admit that apparel, healthcare, and education have hung around 2%, but it doesn't matter, combined those items make up less than 15% of the average person's budget.
View attachment 23745
Another piece you are missing is that demand for services was massively curtailed by the pandemic. This money unspent created additional demand for goods, the supply of which was constrained. That this effect resulted in an increase in price is not a monetary phenomena effect. It is a basic supply and demand effect.
Savings absolutely increased during the pandemic. I would not not deny that. But the facts are income also increased even though productivity decreased. This is a major contributor to the imbalance in supply and demand. Let's talk about 2 products that are very near and dear to my heart. Lumber and beef.
I'm a commodity guy, I understand supply and demand very well. But the major price drivers in both of the products have been on the demand side. We don't have the final numbers on 2021 yet, but in 2020 4.3% more lumber was produced than in 2019 and it was the highest volume since 2006. Yet lumber prices spiked 400% from its 2019 averages. It was driven by unbelievable demand in both monetary and FISCAL policy. The monetary policy of the Fed has given us ultra low mortgage rates and the fiscal policy from politicians gave us plenty of extra cash for down payments. The want to buy a home was caused by demographics and the pandemic, the ability to keep paying astronomical prices was created by monetary and fiscal policy.
https://madisonsreport.com/2021/03/...ill-capacity-utilization-wwpa-full-year-2020/
Now to beef. Guess the years with the 2 largest volumes of beef production in the US. 2020 and 2021. Imports were near record levels as well. So supply was up and prices were up, that is demand. I have no illusions about what caused people to want to buy more beef, but again like lumber the prices went crazy because of everyone's ability to pay more for what they wanted. While monetary policy ultimately trickles down somewhat in beef, not many people are financing their beef purchases (unless its a brisket), so this probably leans more to fiscal policies (Stimulus, PPP, extended UE benefits.) Here's a great article citing Mississippi State on the past few years of beef production.
https://www.beefmagazine.com/beef/beef-production-totals-2021
You make a good point about sale prices of groceries. How do you accurately measure the price of a good that is often sold on sale? I would think inflation measures take this into account, but I don't know for certain. My own hypothesis is that price increases have fallen most on those that don't shop for deals. A bifurcation if you will. Companies know that the price they can demand among good shoppers is constrained by the price of competing goods, so they target increases at customers that don't shop for price. If you know how grocery store product placement and such works, you'd have to conclude this is happening.
I have pointed this out in other threads. There is really good data available from IRI which is a BI superpower for CPG. One of my friends is fairly high up the food chain and to simplify what they do, the capture all of the actual price data from the checkout register, including discounts. They are in everywhere except Wal-Mart I think. One of the biggest problems with the Fed/BLS/USDA etc is they rely way to much on smoothed data that takes out the volatility and effectively becomes a lagging indicator. That's why the missed the boat on inflation and are now freaking out and will most likely overshoot, but I digress. Please look around on this dashboard from IRI, it will really give you a good look. Supply is currently on balance or awful close, its demand driven (from the pandemic of course) but demand and the ability/willingness to pay higher prices is a key component of inflation.
https://indices.iriworldwide.com/covid19/?i=4
Soda cans have a supply problem. As does housing for rent, as you know. A 5% increase for hc premiums is actually historically low. Elec and gas is fuel, which is one of the 3, and one in which no one should point to short term fluctuations as proof of a monetary phenomenon. Service supplies are labor supply constrained right now.
I agree with fuel, it's volatile and not a good inflationary gauge. HC premiums at 5% aren't low, they are normal for the last 10 years. The labor supply constraint has tons to do with monetary and fiscal policy. When you don't make people pay for their mortgage for 18 months, pay them $800 a week to stay home and send them thousands of dollars of stimulus payments, many leave the workforce. 2.4 million excess retirements and probably half as many 2nd earners who left the workforce to stay home with kids. Broke people go to work as soon as they are able to. If you give me a year's salary and allow me to not pay my mortgage for 18 months, I can set myself up financially to where maybe I never have to go back to work... and I get to keep buying my overpriced beef and autos... Hell, I sold a house in November of 2020 to a guy that was in mortgage forbearance at the time on his house even though he ended up making 25% more income in 2020 than 2019.
At this point, I conclude you don't have a good grasp on how supply and demand works. If you put more money in people's hands, they can only bid up the price of supply constrained goods. If the supply of a good can respond to a change in demand, then the price won't change. That's how free markets work.
One of us doesn't. If you put more money in people's hands they now have the willingness and ABILITY to buy more goods thus creating a constraint. If you do this during a time when you also force schools to shutter and businesses to close, thus artificially constraining supply you create an inflation bomb. Note, a bomb explodes once. It has already done that. I'm not saying this will become Zimbabwe style hyper inflation or even sustained high inflation, our economy has too many long term deflationary forces. But make no mistake, this was the a real world example of Milton Friedman's helicopter money analogy. As long as another helicopter doesn't fly by and drop more money, most prices will stabilize over the next year or two... But there is a real risk of sector specific inflation lingering in places where there are no deflationary pressures (like housing.) Labor markets are tight and will remain tight unless the Fed overcorrects and causes a recession.
Another forward prediction based on simple game theory... We have neglected our personal healthcare quite a bit over the last 2 years because of covid. There are massive labor shortages in the healthcare sector and will continue to be over the next few years at the same time some of those neglected healthcare issues come home to roost. There will be a secular growth and inflation within the healthcare sector for the next 3-5 years. Wage growth will be handsome in that sector.
Ok, part of the problem here is we're either talking about different things, or you're jumping around inappropriately. I thought we were talking about the general state of the economy, the cause of any underlying inflation, and how to respond. I didn't think we were discussing the plight of the poor. If it's the latter.....give them money. But that's another discussion.
If it's about whether a money drop that's now gone caused it, or a supply shortage that is now gone (or almost) caused it......OK. I don't see how either of us could prove or disprove it either way, nor how it would matter if both are gone anyway. We should easily be able to agree to ignore the transitory effects and move forward as normal.
The CPI is configured to take into account the factors you are claiming aren't taken into account. No, it's not configured to act as a measure for how the poor are doing. It's to guage inflation in the overall economy so as to understand how to respond with monetary policy. When 3 components comprise 70% of its increase, you have to account for that. And no, giving poor people money and pandemic effects on business did not affect the number of operating oil wells, how many cheap computer chips are available for autos, self-inflicted supply chain weakness, or monopolistic consolidation in the meat industry. There's just no logical way to get there. And when everything else is running at the historical average, it just shoots down you hypothesis. Sorry, but it does. Come to grips with that however you need to.
As to grocery prices, you are not taking into account how people like me have responded. When a good is cheap, I stock up. Take beef. I have about a dozen pounds I bought at 1.99 - 2.99. I just don't buy any when its above that. It's above that most of the time now, but if I'm patient I'll eventually find it in that range. Just spouting the current price doesn't take that into account.
Here's a good article on the current state of inflation in the economy:
https://www.ft.com/content/1e59e952-c5cf-4c8e-983a-560170c87cda
We are definitely arguing semantics. What you are considering supply chain issues, I am calling inflation. We both agree it will not sustain for more than a few years, but I reserve the right to be wrong as labor issues can linger forcing higher wage growth longer.
I would argue if it's just supply/demand imbalances, then in a year or two, prices will not only slow down, but they will drop back to the previous trajectory. And we can just fundamentally disagree on the original reasons for the pop. If the Fed and Congress don't backstop the average worker with the money drop, auto, housing, and yes, steak demand would be much lower. More workers who left the labor force would have had to participate thus shortening any supply chain disruptions.
And you give much more faith to CPI than I would. There are tons of biases and flaws in the data. In both directions at times. But the smoothing of the data creates a nasty lag and the secretness of the data creates misuse. It's why they screwed the pooch so bad and had to quit saying "transitory". Spending habits changed completely and there is no way that is being accounted for accurately in CPI.
It's a very simple equation when money supply increases and productivity decreases or even stays the same you will get 2 things. Saving or inflation. Savings skyrocketed at first, but then the spending frenzy went nuts. Without all that extra money, austerity wins the day.
I would argue if it's just supply/demand imbalances, then in a year or two, prices will not only slow down, but they will drop back to the previous trajectory. And we can just fundamentally disagree on the original reasons for the pop. If the Fed and Congress don't backstop the average worker with the money drop, auto, housing, and yes, steak demand would be much lower. More workers who left the labor force would have had to participate thus shortening any supply chain disruptions.
And you give much more faith to CPI than I would. There are tons of biases and flaws in the data. In both directions at times. But the smoothing of the data creates a nasty lag and the secretness of the data creates misuse. It's why they screwed the pooch so bad and had to quit saying "transitory". Spending habits changed completely and there is no way that is being accounted for accurately in CPI.
It's a very simple equation when money supply increases and productivity decreases or even stays the same you will get 2 things. Saving or inflation. Savings skyrocketed at first, but then the spending frenzy went nuts. Without all that extra money, austerity wins the day.
Yea that’s complete ignorance
Trump unleashed the oil industry to supply abundant cheap energy and jobs. Pandemic or not, these demonuts want $5+/gal to stop people from driving and push toward carbon free. Problem is these idiots don’t understand that the tech or the energy is not there.
Trump unleashed the oil industry to supply abundant cheap energy and jobs. Pandemic or not, these demonuts want $5+/gal to stop people from driving and push toward carbon free. Problem is these idiots don’t understand that the tech or the energy is not there.
Is the US Equity Bullrun Over?
Is the US Equity Bullrun Over?
Interesting conversation with macroeconomist and investment strategist, Lyn Alden.
Is the US Equity Bullrun Over?
Interesting conversation with macroeconomist and investment strategist, Lyn Alden.
I assumed when I posted it all the other weights were the same but went back and validated. I am not advocating either way, just looking at my own purchases. Granted I don't usually purchase meat and I definitely see increases in eating out. Gas is so up and down I don't think that is a good measure.
Lays Stax - 5.5 Oz today vs. 5.5 oz 1 year ago
Pizza - 11.2 oz today vs. 11.2 oz 1 year ago
Pastaroni - 5.1 oz today vs 5.1 oz 1 year ago
Lunchable 4.2 oz today vs 4.2 oz 1 year ago
Strawberry - 1 lb today vs. 1 lb 1 year ago
Banana - 1 Banana each time.
For those mentioning the lunchable price, here is what I am buying:
https://www.target.com/p/oscar-maye...45vnqc0dZbHdnfSpndEaAi2-EALw_wcB&gclsrc=aw.ds
I get Lyn's newsletter. She covered her fears about equities a few weeks ago. The one thing she didn't talk about is the Fed put. The biggest reason equity valuations have stayed so elevated since the financial crisis is we now know for sure, no matter what, the equity markets will be supported by monetary policy and now even fiscal policy if it starts to falter. It has been proven 3 times in a dozen years and none more so than in 2020. The risk has changed with equities, the multiple should reflect that.
There will probably be some multiple compression this year as rates rise and there is some kind of yield, but profits are forecast to rise another 9-10% this year. Where will they meet, hard to say. Forward PE is currently at 25 which is high "historically" but not so much since the early 90's. We will never again see interest rates at 5+% on the 10 year, our civilization has too many deflationary pressures long term.
Without historical equity risk and historical interest rates, the equity markets will continue to live at elevated multiples. But can you see 10-20% further downside, sure... But rest assured as soon as companies start talking layoffs, the QE and rate drops will come and the boom will continue.
There will probably be some multiple compression this year as rates rise and there is some kind of yield, but profits are forecast to rise another 9-10% this year. Where will they meet, hard to say. Forward PE is currently at 25 which is high "historically" but not so much since the early 90's. We will never again see interest rates at 5+% on the 10 year, our civilization has too many deflationary pressures long term.
Without historical equity risk and historical interest rates, the equity markets will continue to live at elevated multiples. But can you see 10-20% further downside, sure... But rest assured as soon as companies start talking layoffs, the QE and rate drops will come and the boom will continue.
The only thing that has slowed US oil production is the Texas Freeze last winter wrecking their infrastructure. It’s expected to increase to record levels by 2023. OPEC is also expected to increase production. Supply and demand, it’s really that simple.
https://oilprice.com/Energy/Energy-General/US-Oil-Production-To-Hit-New-Record-In-2023.html
https://oilprice.com/Energy/Energy-General/US-Oil-Production-To-Hit-New-Record-In-2023.html
Another trick they're using: keep the price the same and reduce the amount of product in the package.
I love it when they do that. ***********
Just 17'ing raise the cost, so I don't have to cook 2 packages of broccoli for dinner and end up with leftovers.
17'ing ********.
Latest posts
-
Has Kirby been fined yet?- Latest: greenbean.sixpack
-
Get unlimited access today.