2021 - Is inflation finally back in the conversation?

[Biff Tannen 45751]

9 minutes ago, Cheeseweasel said:

Your company is using the cost of goods from 2020 as a basis? Good luck with that...

For one, it's a SaaS internet company, so cost of goods may not be the biggest factor.  The people who decided to look at it this way are much smarter and higher paid than I, so I'm assuming they know what they are doing.  Perhaps that's a poor assumption.  It is on the cusp of being a Fortune 500 company, so I have to think they are doing something right.

Edited December 17, 2021 by Biff Tannen
just realized you said 2020. my point was they are using 2019 as the basis. Yo2Y.

[Cheeseweasel 26438]

Forecasting in inflationary environments is difficult. When I met with our board last month, I explained that our forecast accounted for price increases in Q1 of about 5/10% (depending on product) but that would taper off as the world settled down (Maybe Q2-Q3) but price increases are here to stay. The reality is, no one knows. 

Past performance is not indicative of future results yada yada yada.

[Biff Tannen 45751]

4 minutes ago, Cheeseweasel said:

Past performance is not indicative of future results yada yada yada.

You're really tired today?

[Cheeseweasel 26438]

6 minutes ago, Biff Tannen said:

You're really tired today?

Too much lobster bisque.

[workswithseed 2121]

10 hours ago, Biff Tannen said:

You're really tired today?

Can't you see that his avatar is sleeping?

[Trey3216 15379]

On 12/15/2021 at 10:44 PM, elfenix said:

our inflation market basket has gas prices as a big chunk of it.  so our inflation metric is going to show more inflation than, say, germany's, where people use less gas.  33% of observed inflation YoY is due to gas prices going up 58%.  that's 2 points just from one thing. 

used cars are another point by themselves. 

Which basket are you referring to?  Because core CPI does not include food or fuel.   Lol 

[washparkhorn 9939]

35 minutes ago, Trey3216 said:

Which basket are you referring to?  Because core CPI does not include food or fuel.   Lol 

Core inflation does not include food and energy. 
 

Full CPI numbers (headline numbers) do include food and energy. 
 

Baby financial reporters screw this up all the time, so you are not alone. 

[Trey3216 15379]

57 minutes ago, washparkhorn said:

Core inflation does not include food and energy. 
 

Full CPI numbers (headline numbers) do include food and energy. 
 

Baby financial reporters screw this up all the time, so you are not alone. 

What the fuck are you talking about?? Did you not read my question thoroughly?  

[elfenix 34343]

42 minutes ago, Trey3216 said:

What the fuck are you talking about?? Did you not read my question thoroughly?  

did you not read the post you responded to thoroughly?

On 12/15/2021 at 10:44 PM, elfenix said:

our inflation market basket has gas prices as a big chunk of it.  so our inflation metric is going to show more inflation than, say, germany's, where people use less gas.  33% of observed inflation YoY is due to gas prices going up 58%.  that's 2 points just from one thing. 

used cars are another point by themselves. 

further, fuel prices seep into core CPI indirectly.  the US economy is just more fossil fuel dependent than a lot of our industrial peers in terms of fuel consumed per dollar of GDP.  and so will be more sensitive to changes in fossil fuel prices. 

[Trey3216 15379]

48 minutes ago, elfenix said:

did you not read the post you responded to thoroughly?

further, fuel prices seep into core CPI indirectly.  the US economy is just more fossil fuel dependent than a lot of our industrial peers in terms of fuel consumed per dollar of GDP.  and so will be more sensitive to changes in fossil fuel prices. 

Again, I asked which basket you were referring to because core CPI does not include fuel and food.  Your original post said “our inflation market basket”, which there are several.   
 

you can argue all you want about fuel prices seeping into core CPI indirectly (they will in every inflation metric across the world due to the cost of plastics, rubber, pharma, and other shit) but they are not directly included in core CPI, which is also up.   Non-core inflation is up much more (clearly).  
 
your argument is akin to China wanting to be a key part of the creation of Green Regulations worldwide but not be beholden to the regulations until 20+ years from now.  That doesn’t put them on the forefront of shit, it shows they are a cause of it that wants to play like a big boy and be treated like a 3rd world country.   
 

min other words, every measure of inflation is up big, and it’s up for a lot of reasons.  PPI last month was damn near 10%, that’s wholesale prices.   And you’re picking nits over my asking you to clarify whether you using wool or cotton?     Lol 

[Muny_Tex 298]

Anecdotal data point on the leisure/hospitality side of the house:

-I stayed 3 nights in Florida Keys (Marathon) at a mid-tier result in April of 2012. Rate was $212/night before taxes as per my old email confirmation.

-Checked rates today for same property during same date range this coming April (Tue-Thu), and listed price is $549/night.

So call it a ~160% increase over a decade, and that’s for an off-peak travel period. Curious to see how low got in April 2020, as it’s likely now close ~3x that trough price.


Sent from my iPhone using Tapatalk

[washparkhorn 9939]

3 hours ago, Trey3216 said:

What the fuck are you talking about?? Did you not read my question thoroughly?  

Why use the core inflation rate (CPI less food and energy) when energy and food inflation continue to impact markets and the economy? Seems inefficient when discussing the current environment.
 

The Fed (FRED) publishes a chart that plots CPI v. CPI less food and energy data (core) if that is what you seek,

CPI (Headline inflation rate and data) is the relevant data to capture a comprehensive look at the pervasiveness of inflation in this setting.  And I think you are expressing your concern with the widespread nature of inflation. CPI (full) demonstrates your point rather well. 
 

Core is helpful (to me) when we have a sempiternal energy crisis while the rest of the economy is humming along nicely. That’s not now. 
 

but by all means, you do what works for you. We all process information differently. There is no one approach to data (that is until AI eliminates all inefficiencies). Good day. 

[Muny_Tex 298]

I also want to add that “Owner Equivalent Rent” (~24% of the basket IIRC) is an extremely shitty, wildly inaccurate way to incorporate housing/shelter costs into CPI.

I assume this was done by design for maximum obfuscation/dilution of inflation, but still irritating to see (media) people say we are “not even close” to crisis level cost increases.


Sent from my iPhone using Tapatalk

[Trey3216 15379]

53 minutes ago, washparkhorn said:

Why use the core inflation rate (CPI less food and energy) when energy and food inflation continue to impact markets and the economy? Seems inefficient when discussing the current environment.
 

The Fed (FRED) publishes a chart that plots CPI v. CPI less food and energy data (core) if that is what you seek,

CPI (Headline inflation rate and data) is the relevant data to capture a comprehensive look at the pervasiveness of inflation in this setting.  And I think you are expressing your concern with the widespread nature of inflation. CPI (full) demonstrates your point rather well. 
 

Core is helpful (to me) when we have a sempiternal energy crisis while the rest of the economy is humming along nicely. That’s not now. 
 

but by all means, you do what works for you. We all process information differently. There is no one approach to data (that is until AI eliminates all inefficiencies). Good day. 

I prefer headline as well.    I asked him very clearly which basket he was referring to because it’s still relevant to the conversation (especially if jimmyjames gets involved) 

Edited December 27, 2021 by Trey3216

[elfenix 34343]

4 hours ago, Trey3216 said:

Again, I asked which basket you were referring to because core CPI does not include fuel and food.  Your original post said “our inflation market basket”, which there are several.   
 

you can argue all you want about fuel prices seeping into core CPI indirectly (they will in every inflation metric across the world due to the cost of plastics, rubber, pharma, and other shit) but they are not directly included in core CPI, which is also up.   Non-core inflation is up much more (clearly).  
 
your argument is akin to China wanting to be a key part of the creation of Green Regulations worldwide but not be beholden to the regulations until 20+ years from now.  That doesn’t put them on the forefront of shit, it shows they are a cause of it that wants to play like a big boy and be treated like a 3rd world country.   
 

min other words, every measure of inflation is up big, and it’s up for a lot of reasons.  PPI last month was damn near 10%, that’s wholesale prices.   And you’re picking nits over my asking you to clarify whether you using wool or cotton?     Lol 

you should go back to post #837 in this thread.

[Trey3216 15379]

4 minutes ago, elfenix said:

you should go back to post #837 in this thread.

I saw it   

[elfenix 34343]

38 minutes ago, Trey3216 said:

I saw it   

then i don't know why you're confused.

[pronghorn 44]

Corporate Profits Drive 60% of Inflation Increases

https://mattstoller.substack.com/

[Parliament 14351]

52 minutes ago, pronghorn said:

Corporate Profits Drive 60% of Inflation Increases

https://mattstoller.substack.com/

Wooo!!!  Brrrrrr!!!

[Cheeseweasel 26438]

On 12/30/2021 at 9:52 AM, pronghorn said:

Corporate Profits Drive 60% of Inflation Increases

https://mattstoller.substack.com/

Matt Stoller is a hack and this entire article is conjecture/click bait. Do better, noob. 

[pronghorn 44]

 

[Incredulity 11684]

Compounded by delivery delays, worker shortages  and a fuckton of money from PPP and EIDL to companies at every point on that graph.

 

We are through the looking glass.  It will get worse before it gets better.

[Immaculate Vibes 114]

Big takeaway is they want to attempt accelerated balance sheet normalization. Bold strategy Cotton

 

The minutes also indicated that once the process begins, “the appropriate pace of balance sheet runoff would likely be faster than it was during the previous normalization episode” in October 2017.

 

 
 

 

[torre 1286]

https://www.bloomberg.com/news/articles/2022-01-09/fed-unites-left-and-right-in-warning-it-s-behind-inflation-curve

 

Above is an article from the meeting of the American Economic Association with comments from prominent academics and politicos.

Economics is not my field.    Who do you gurus think has the best analysis,  if anyone ?   (excerpts)

 

Nobel Prize laureate Joseph Stiglitz, who was chief White House economist for Democratic President Bill Clinton, called for caution by the central bank. He argued that higher interest rates wouldn’t solve the supply snafus and global shortages that have helped push up inflation. In addition, labor-force participation remains well short of what it could be.

Summers, a Harvard University professor and paid contributor to Bloomberg, also foresees Treasury yields rising further. 

“As the reality of the need for balancing supply and demand becomes clear, interest rates will rise substantially over the next year and a half,” he said. 

Summers got into a spirited back-and-forth with Stiglitz at the conference, arguing that the Columbia University professor was placing too much emphasis on supply-chain kinks for the run-up in prices. 

 

[washparkhorn 9939]

Powell testimony today (renomination hearing Senate):

 

[Incredulity 11684]

https://www.wsj.com/articles/us-inflation-consumer-price-index-december-2021-11641940760

 

The Labor Department said the consumer-price index—which measures what consumers pay for goods and services—rose 7% in December from the same month a year ago, up from 6.8% in November. That was the fastest pace since 1982 and marked the third straight month in which inflation exceeded 6%.

 

[Hozz 1020]

Thread title needs to be changed IMO.

[Trey3216 15379]

16 minutes ago, Hozz said:

Thread title needs to be changed IMO.

2021- Inflation is back. Back in the New Year Groove  

[Incredulity 11684]

Inflation 2022- Prepare Thy Anus

[washparkhorn 9939]

On 1/11/2022 at 10:23 AM, washparkhorn said:

Powell testimony today (renomination hearing Senate):

 

53:20 to 58:45 is all you need to watch. Questions from Sen. Shelby leads to a good overview of the economic problems.
 

tldr: Global supply chain remains fucked. 

[jimmyjazz 46293]

Thanks, that was a good primer in a short amount of time.

I assume the main problem at the ports, at least in the US, is labor shortage?  Is there any consensus that the degree to which the labor pool has just not stepped back into the workforce was a surprise?

It's been a surprise to me.  I don't understand how people who largely live paycheck to paycheck remain on the sidelines.  Yes, stimulus checks and unemployment insurance help mitigate that to some degree, but (a) I don't think they make up for total lost wages on balance and (b) I don't think the average blue collar American has enough savings to keep riding this out.  I could be wrong on one or both, for sure.

[pearlandhorn 3274]

https://www.wsj.com/articles/the-democrats-inflation-blame-game-budget-carter-1970s-voters-denial-biden-powell-2022-midterms-11642008348?mod=hp_opin_pos_2#cxrecs_s

Opinion piece from WSJ.

Quote

Despite Wednesday’s inflation report indicating that consumer prices have risen by 7% over the past 12 months and accelerated to 9.1% over the past three months, the president and Democrats other than Sen. Joe Manchin remain firmly entrenched in a state of denial. In their telling, this inflation has nothing to do with their spending policy. This is the same argument we heard in the mid-1970s.

When we both began our careers in public service, the U.S. was suffering from the high inflation of the late 1970s. The federal government had squandered a decade in denying that its policies had anything to do with inflation. Politicians made convenient scapegoats out of big oil, big banks, big communications and even big grocers. Government made the problem worse with price controls, investigations into price fixing and antitrust actions. It embarrassed itself with WIN (Whip Inflation Now) buttons and Inflation Gardens. Mounting voter outrage finally ended the charade.

 

President Carter responded by leading the deregulation of airlines, railroads and trucking and appointing Paul Volcker chairman of the Federal Reserve. Congressional Democrats created the budget-reconciliation process to cut spending, but in the end they lacked the resolve to make significant cuts.

Voters lost patience in 1978, adding three Republicans to the Senate and 15 to the House. They were joined by a dozen newly elected conservative Democrats. In 1980 President Reagan was swept into office with a Republican Senate majority and a bipartisan House majority of conservative Democrats and Republicans. Voters’ voices ultimately drowned out the inflation deniers, as the Reagan program ended the inflationary spiral, brought interest rates down to earth, ignited economic growth, and won the Cold War. Democrats and Republicans offered competing tax cuts to undo the inflation-driven bracket-creep tax increases of the 1970s, which the Senate passed by a voice vote.

For 40 years, the pain of inflation was only a fading nightmare. Then last year, piled on top of Donald Trump’s ill-advised postelection spending surge, the Biden administration, the Democratic majority in Congress, the Federal Reserve, and a chorus of intellectual supporters assured the nation that with accommodating monetary easing by the Fed, they could increase federal spending by 54% without causing inflation. When—shockingly—prices started to rise, those same voices harmonized in assuring the nation that any inflation would be minor and temporary. To this day, they blame the inflation on supply-chain problems and the usual suspects: big business, insufficient antitrust enforcement and greedy profiteers. They never blame government.

Obviously the pandemic disrupted the economy and contributed to inflationary pressures, but U.S. production is higher today, and U.S. ports are moving 27% more goods than before the pandemic. Inflation, driven by excess demand, always faces supply-chain problems as production struggles to keep up. But supply-chain problems increasingly are the result of inflation rather than its cause.

 

What was billed as minor and temporary inflation has risen at rates unseen for four decades. So rapidly have prices risen that despite increases in nominal wages, real median weekly wages are $11.58 lower today than when President Biden took office. That decline in real wages is 19% larger than the decline that occurred during the entire subprime financial crisis.

But as American workers suffer declining real wages, Democrats and outside experts assure us that spending another $4.9 trillion to fully fund the Build Back Better plan is the key to ending inflation. This claim, which Minority Leader Mitch McConnell describes as Democrats’ “inflating their way out of inflation,” reminds us of the old George Orwell observation: “One has to belong to the intelligentsia to believe things like that: no ordinary man could be such a fool.”

As in the late 1970s, inflation is punishing workers, consumers and savers. But the government is largely protected. More than half of the federal budget is composed of entitlements, most of which are automatically adjusted for inflation (with a one-year lag). The remainder of the budget is set at a “current services baseline” that assumes all government programs will be increased by at least the inflation rate.

But if government and its beneficiaries are protected from inflation, who bears its brunt? The people who do the work, pay the taxes, and pull the wagon in America—especially blue-collar workers who have no automatic inflation adjustments in their employment contracts and who put their savings in certificates of deposit—will find no shelter in this storm. Those who were paid extra to come back to work and those who got big government checks will take a smaller hit, but the biggest losers will be the Americans who soldiered through the pandemic, stayed at their jobs, cared for the sick, kept food on our tables, and kept the country secure. No Democrat in Washington is standing up for their interests—except Mr. Manchin.

If history is any guide to the future, and of course it is the only guide, the voters will render judgment in 2022. At this point in the inflation cycle of the late 1970s, conservative Democrats were winning primaries and being elected to Congress and the Carter administration was changing policy. The real question is not why Mr. Manchin is standing up against inflationary spending but why the senator from West Virginia stands alone. Is compassion now something Democrats can feel only for people riding in the wagon? Is the Biden administration so dominated by leftist zealots that, unlike the Carter administration, it is more committed to its transformational agenda of expanding the dominance of government than it is to stopping the inflation?

Based on the history we have lived through, our guess is that other Democrats who will face voters in 2022 will wish they had joined Mr. Manchin, or at least offered an “amen” to his efforts. We’ve seen this all before. The intelligentsia and their politicians may be confused, but the working people of America are not.

To reitterate what someone said, it'll get worse before it gets better.

[tbone_ 14200]

Thanks, that was a good primer in a short amount of time.
I assume the main problem at the ports, at least in the US, is labor shortage?  Is there any consensus that the degree to which the labor pool has just not stepped back into the workforce was a surprise?
It's been a surprise to me.  I don't understand how people who largely live paycheck to paycheck remain on the sidelines.  Yes, stimulus checks and unemployment insurance help mitigate that to some degree, but (a) I don't think they make up for total lost wages on balance and (b) I don't think the average blue collar American has enough savings to keep riding this out.  I could be wrong on one or both, for sure.

I think at least some of them are finding better alternative outside traditional earning.

Couple of Examples:

My BIL is a fire captain in Houston. Had a side hustle installing window coverings which he shut down because people are a pita to deal with. Now he trades crypto. Bought a beach house in Galveston with the Cardano he sold at $3.00 that he bought at $.08.

Buddy of mine has several short term rentals here in scottsdale. Some are pretty nice. Just leased one for $14k/mo for 12 months to a 30 yo dude who showed him bank statements showing $150k/mo income from his couple million followers on his Instagram workout videos.

And lots of girls on onlyfans.com these days.

None of those alternatives existed before recently. I think it’s having an impact on the labor pool.

[jimmyjazz 46293]

2 minutes ago, tbone_ said:

My BIL is a fire captain in Houston. Had a side hustle installing window coverings which he shut down because people are a pita to deal with. Now he trades crypto. Bought a beach house in Galveston with the Cardano he sold at $3.00 that he bought at $.08.

Buddy of mine has several short term rentals here in scottsdale. Some are pretty nice. Just leased one for $14k/mo for 12 months to a 30 yo dude who showed him bank statements showing $150k/mo income from his couple million followers on his Instagram workout videos.

I can only assume your BIL's crypto earnings came at the expense of 10 losers.  Beyond that, who in the hell would pay $14K per month for rent?  I mean, I own a large, nearly new house in near-to-central Austin (13 minutes drive to the hike-n-bike trail) and I couldn't rent it for $6K.  Is Scottsdale that insane?

[LCHorn 2633]

59 minutes ago, jimmyjazz said:

I can only assume your BIL's crypto earnings came at the expense of 10 losers.  Beyond that, who in the hell would pay $14K per month for rent?  I mean, I own a large, nearly new house in near-to-central Austin (13 minutes drive to the hike-n-bike trail) and I couldn't rent it for $6K.  Is Scottsdale that insane?

Based on what I recall from your previous posts about housing, I don’t think $6k for your current home would be a wild exaggeration.  The Austin rental market had a big adjustment in 2021 (finally).

Edited January 12, 2022 by LCHorn

[jimmyjazz 46293]

5 minutes ago, LCHorn said:

Based on what I recall from your previous posts about housing, I don’t think $6k for your current home would be a wild exaggeration.  The Austin rental market had a big adjustment in 2021 (finally).

I didn't say it was a wild exaggeration.  It's surely a ceiling.  $14K?  Just buy the damn house.

[Parliament 14351]

3 hours ago, tbone_ said:

Now he trades crypto. Bought a beach house in Galveston with the Cardano he sold at $3.00 that he bought at $.08.

..dude who showed him bank statements showing $150k/mo income from his couple million followers on his Instagram workout videos.

And lots of girls on onlyfans.com these days.
 

Seems to me those are examples of what happens when the Government fills the World up with free money.  People spend it on dumb things.  

[staboner 4988]

3 hours ago, jimmyjazz said:

I didn't say it was a wild exaggeration.  It's surely a ceiling.  $14K?  Just buy the damn house.

yeah agree here. somethng way wrong with that 14k math

[tbone_ 14200]

Seems to me those are examples of what happens when the Government fills the World up with free money.  People spend it on dumb things.  

Maybe so but the question was about the labor force. None of those people are slinging burgers or sheetrocking your house.

[tbone_ 14200]

Is Scottsdale that insane?

Yes. To clarify, it’s a big house, plus it’s a seasonal rental. He gets $20k/mo in season and $10k in the summer. $14k is the average. The renter paid his yearly seasonal rate because he wanted the house, could afford it, and didn’t care.

[tbone_ 14200]

Should add fully remodeled to the nines and decorated to the tits.

[tbone_ 14200]

Seems to me those are examples of what happens when the Government fills the World up with free money.  People spend it on dumb things.  

Also how is trading intangible crypto assets at moon valuations for a hard asset like a rental beach house that will throw actual US dollar denominated cash forever a dumb thing?

[jimmyjazz 46293]

1 hour ago, tbone_ said:

Yes. To clarify, it’s a big house, plus it’s a seasonal rental. He gets $20k/mo in season and $10k in the summer. $14k is the average. The renter paid his yearly seasonal rate because he wanted the house, could afford it, and didn’t care.

 

Got damn.  What would that house sell for?  I may need to start buying property in Scottsdale.

[Immaculate Vibes 114]

 

[UT_OB1 2225]

36 minutes ago, Immaculate Vibes said:

 

Prices are up, but I think he’s cherry picking dates dates for clicks. 1/12 last year lumber was 800, and then it dipped for a very brief time. He’s probably using the bottom of that dip for his “omg1 91% increase”.  It’s 1200 today. It was also 1800 mid May but he’s not writing about how we’re 33% lower than mid last year.  
 

Yes prices are up, but he needs to be slapped. 

Edited January 13, 2022 by UT_OB1

[Laxtonto 12140]

CPI and PPI prints were brutal. 
 

Even if the supply chain problems got fixed today we are looking at 6 months of rising consumer prices because of production and service cost increases.

 

We’re this gets really interesting is we should be coming up on the point in which COL adjustments for inflation are going to become a real sticking point internally.

If we are looking at a 10% bump in overall costs at an individual level, the only way an individual makes that up is either the business provides them a COL adjustment or they find a new job. With how short most industries are of real talent, most companies don’t have much of a choice because if they lose that talent it is that much more difficult to replace them…. 

So provide a COL and see an even greater increase in costs, which have all sorts of down stream impacts, or don’t and see your talent leave and be at the whims of the market to try and find a replacement..

[Incredulity 11684]

Yup,

We have summoned the inflation dragon and that motherfucker is hungry.

Oh, by the way several states have indexed min. wages to inflation.  That's going to be a severe kick in the balls Jan 1, 2023.

[Guest]

11 hours ago, UT_OB1 said:

Prices are up, but I think he’s cherry picking dates dates for clicks. 1/12 last year lumber was 800, and then it dipped for a very brief time. He’s probably using the bottom of that dip for his “omg1 91% increase”.  It’s 1200 today. It was also 1800 mid May but he’s not writing about how we’re 33% lower than mid last year.  
 

Yes prices are up, but he needs to be slapped. 

Except that he's done this weekly for a long time and his entire feed is a steady stream of market data. 
 

https://twitter.com/charliebilello/status/1471494727253983248

Edited January 13, 2022 by FirstTimeCaller

[Rip76 4971]

Last year a 330 gallon tote of DEF cost me about $375.

Now, $775.

[UT_OB1 2225]

8 minutes ago, Rip76 said:

Last year a 330 gallon tote of DEF cost me about $375.

Now, $775.

Time to put in a tank and buy by the truck load.