2021 - Is inflation finally back in the conversation?

[Fudge Nuggets 19208]

I guess those deflationary headwinds are still causing problems?

[Fudge Nuggets 19208]

If inflation worries were the real cause for a down day in the stock market today then oil and gold would be racing.  They have barely budged so this is likely just Goldman’s trading bot throwing a fit.  J.p. morgan’s bot will save the day tomorrow.

Edited February 10, 2022 by Fudge Nuggets
God damn autocorrect

[Muny_Tex 293]

Has anyone explained yet why runaway inflation is best addressed “in the relatively near future” using the iron-fist of “less accommodative” monetary policy?

Bonus: I would also appreciate context for how an “extremely robust” economy can also simultaneously possess record high trade deficits and a nearly incalculable national debt?


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[Fudge Nuggets 19208]

11 minutes ago, Muny_Tex said:

Bonus: I would also appreciate context for how an “extremely robust” economy can also simultaneously possess record high trade deficits and a nearly incalculable national debt?

Because no one wants to pay taxes and we don’t manufacture shit.

[Muny_Tex 293]

Also fucking lol at the alleged 4.1% YoY increase in Shelter Costs. The CPI is so embarrassing.


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[tbone_ 14132]

Cardboard boxes maybe

[gsoda3 3265]

2 hours ago, Wulaw Horn said:

Look- if it would have come in at 7 which was the expectation people would still have been off to the races writing articles and tweeting and the like. 
the point I was making (and sorry if it wasn’t clear) was that this number was always going. To look awful, next months number will look awful and then after that it will start to seriously drop bc we will be comparing YOY pricing to a point in time last year after the elevator went up, as opposed to before it happened. Hope that makes sense. 

no. 7% was not the expectation.  full stop.  7.3% was the expectation.  there might have been a firm or two who pegged the number at 7%, but the street wide survey soundly said 7.3%.  i'm being pedantic b/c that's the number everyone trades off of.  a CPI print of 7% vs 7.3% would have been a huge catalyst.  

21 minutes ago, Muny_Tex said:

Also fucking lol at the alleged 4.1% YoY increase in Shelter Costs. The CPI is so embarrassing.


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Shelter is one of, if not the most, unreliable calculations in CPI.  Twice a year they send a survey (a panel, call it panel #1) out to a group of people (each location is a different segment, there are 67 segments per panel) asking 1.)  if they're renting what they're paying for rent (minus gvt subsidies) and 2.) if they're homeowners what they think they'd be able to charge in rent for their home.   

Problems:  When renters report their monthly rent, they're told not to include gvt subsidies.  So that doesn't get calculated.  Additionally, most homeowners don't know how much their place would rent for.  

After this info is collected, there's some other fancy maths I can't recall enough to explain but then CPI workers select FIVE HOUSES to represent each segment (think area, and there are 67 of these areas they use every month to generate #s), and those numbers are all averaged together to come up with that month's housing #.  

 

The next month another survey is sent out to 67 new segments, this is panel #2.  Rinse and repeat.  There are 6 panels per year.  Jan and Jun #s come from panel 1, Feb and July from panel 2, etc.  They go through owner supplied estimates, whittle those #s down to a sample size of FIVE and then come up with a number.  Then the next month they go to a whole new group of locations.  This is an example of overthinking the issue.  If only we had a system that kept comprehensive records of what rents are actually going for...  

[Muny_Tex 293]

^^^Great info, thanks for posting.

I knew “owner equivalent rent” was a dogshit metric, but had no idea it was that willfully inaccurate.

The housing/rental market has probably benefited from digitization as much as any major consumer industry over the past ~5 years; you could enlist a summer intern from Zillow to pull YoY rental comps (not to mention the ‘for sale’ list prices from MLS) within the top 50 MSAs and do 1000x better than the CPI.

Everything is a scam. It’s very exhausting.


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[Immaculate Vibes 114]

5 hours ago, Muny_Tex said:Has anyone explained yet why runaway inflation is best addressed “in the relatively near future” using the iron-fist of “less accommodative” monetary policy?

Bonus: I would also appreciate context for how an “extremely robust” economy can also simultaneously possess record high trade deficits and a nearly incalculable national debt?


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Interest rate hikes are the easiest, most blunt way to remove liquidity from the economy and therefore smother inflation. 
 

To your bonus, people that are proclaiming it as “extremely robust” likely are citing GDP growth and low unemployment. Trade deficits have little to do with it. The high national debt is worrisome from a big picture standpoint but running a high deficit also helps stimulate the economy in the short term. 
 

Imo it is omitting a big part of the picture to trumpet how robust the economy without mentioning we have been running at pretty much fully stimulative monetary policy until just recently. Now we get to see how much of a slowdown a few token rates hike can cause. That’s important because if it causes a recession then we don’t have much room to goose the economy. 

[Muny_Tex 293]

Interest rate hikes are the easiest, most blunt way to remove liquidity from the economy and therefore smother inflation. 

Understood, but rhetorical point is what is the Fed waiting for? Shouldn’t immediate rate hikes/cessation of QE/end of asset purchases been enacted the moment it became crystal clear the inflation was not at all transitory and in fact a borderline crisis?

And as for “less accommodative” Fed policy as an elixir, how does a 1-2 point rate nudge upward offset an inflation issue that is (generously) running at 7.5%? Supply chains will likely improve this year, but enough to resolve an ongoing labor shortage (e.g. psychological shift of many people being “done” with certain jobs/industries), high gas prices, and a tidal wave of pent up demand for travel/leisure?


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[Trey3216 15349]

2 hours ago, Immaculate Vibes said:

Interest rate hikes are the easiest, most blunt way to remove liquidity from the economy and therefore smother inflation. 
 

To your bonus, people that are proclaiming it as “extremely robust” likely are citing GDP growth and low unemployment. Trade deficits have little to do with it. The high national debt is worrisome from a big picture standpoint but running a high deficit also helps stimulate the economy in the short term. 
 

Imo it is omitting a big part of the picture to trumpet how robust the economy without mentioning we have been running at pretty much fully stimulative monetary policy until just recently. Now we get to see how much of a slowdown a few token rates hike can cause. That’s important because if it causes a recession then we don’t have much room to goose the economy. 

Lot of street rumors that the FED may pull an emergency hike tomorrow.   If they do, market is gonna get absolutely throttled.   

[Parliament 14265]

How often have they done something like that?  Seems rare, no?

[Trey3216 15349]

26 minutes ago, Parliament said:

How often have they done something like that?  Seems rare, no?

Pretty rare.  More so emergency cuts, not hikes.   

[Trey3216 15349]

Just saw that the meeting is Monday.  Closed door emergency meeting under expedited procedures.  

[Snake Diggity 4625]

10 hours ago, Muny_Tex said:

 

Understood, but rhetorical point is what is the Fed waiting for? Shouldn’t immediate rate hikes/cessation of QE/end of asset purchases been enacted the moment it became crystal clear the inflation was not at all transitory and in fact a borderline crisis?

And as for “less accommodative” Fed policy as an elixir, how does a 1-2 point rate nudge upward offset an inflation issue that is (generously) running at 7.5%? Supply chains will likely improve this year, but enough to resolve an ongoing labor shortage (e.g. psychological shift of many people being “done” with certain jobs/industries), high gas prices, and a tidal wave of pent up demand for travel/leisure?


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Removing liquidity is not the answer to addressing inflation caused by supply chain issues.  I believe that is why the Fed is hesitant to raise rates quickly/dramatically.  I still think that inflation will taper extremely quickly later this year, although I do think we’ll see sustained moderately high inflation in services sectors.

Edited February 11, 2022 by Snake Diggity

[Cheeseweasel 26438]

8 minutes ago, Snake Diggity said:

Removing liquidity is not the answer to addressing inflation caused by supply chain issues.  I believe that is why the Fed is hesitant to raise rates quickly/dramatically.  I still think that inflation will taper extremely quickly later this year, although I do think we’ll see sustained moderately high inflation in services sectors.

The rate of inflation will begin to taper. The increase in costs is here to stay. 

[Parliament 14265]

1 hour ago, Snake Diggity said:

Removing liquidity is not the answer to addressing inflation caused by supply chain issues.  I believe that is why the Fed is hesitant to raise rates quickly/dramatically.  [B]I still think that inflation will taper extremely quickly[/b] later this year, although I do think we’ll see sustained moderately high inflation in services sectors.

Whatever drug you're on...I want some.

[Cheeseweasel 26438]

Yeah, that's why I made the comment about rates. Because we are going to be fed a bunch of bullshit about "inflation under control" when 7 drops to 6 and to 5, etc. 

That shit compounds. 

[Wulaw Horn 19127]

15 minutes ago, Cheeseweasel said:

Yeah, that's why I made the comment about rates. Because we are going to be fed a bunch of bullshit about "inflation under control" when 7 drops to 6 and to 5, etc. 

That shit compounds. 

Yep. That was my point yesterday. And that happens with the April report detailing March activity. 

[Snake Diggity 4625]

4 hours ago, Cheeseweasel said:

Yeah, that's why I made the comment about rates. Because we are going to be fed a bunch of bullshit about "inflation under control" when 7 drops to 6 and to 5, etc. 

That shit compounds. 

Not if the measure is YoY for a given month.  The 7.5% is an annual number, so we won’t know the real compounding impact of that number until next year.

[Snake Diggity 4625]

4 hours ago, Cheeseweasel said:

Yeah, that's why I made the comment about rates. Because we are going to be fed a bunch of bullshit about "inflation under control" when 7 drops to 6 and to 5, etc. 

That shit compounds. 

Not if the measure is YoY for a given month.  The 7.5% is an annual number, so we won’t know the real compounding impact of that number until next year.

[gsoda3 3265]

5 hours ago, Wulaw Horn said:

Yep. That was my point yesterday. And that happens with the April report detailing March activity. 

those aren't the monthly #s.  the monthly #s are .6, .4, etc.

[Wulaw Horn 19127]

1 hour ago, gsoda3 said:

those aren't the monthly #s.  the monthly #s are .6, .4, etc.

I’m aware. I feel like I’m expressing this clearly and you aren’t getting it, and you are being a pedantic nitpicker also at the same time. I could be doing a shitty job of expressing this myself though since this is now twice that you’ve come back on something I said as if it was in error and it’s merely confirming the point I’m making. 
again- next month (in March) we are going to get a really big number (for February). Then, in April, we will get a very small number for March inflation. Because, March of 2021 was when inflation started shooting up, meaning that we have 1 more month of bad numbers to get through. 

Edited February 11, 2022 by Wulaw Horn

[gsoda3 3265]

2 hours ago, Wulaw Horn said:

I’m aware. I feel like I’m expressing this clearly and you aren’t getting it, and you are being a pedantic nitpicker also at the same time. I could be doing a shitty job of expressing this myself though since this is now twice that you’ve come back on something I said as if it was in error and it’s merely confirming the point I’m making. 
again- next month (in March) we are going to get a really big number (for February). Then, in April, we will get a very small number for March inflation. Because, March of 2021 was when inflation started shooting up, meaning that we have 1 more month of bad numbers to get through. 

the first time i replied to you upthread was a completely different matter.  i was explaining why the street was expecting 7.3% and not 7.0% like you said.  i meant to include this screen shot yesterday but didn't bother.  

 

 

this last time i replied to you my point was, and i should have expanded more clearly above, the month on month numbers aren't as important as the year on year.  they're calculated using the same inputs and the same formula but their inherit bases of comparison are different (12 months ago vs 1 month ago).  naturally MoM is more volatile than YoY which is why the YoY numbers are in the minds of traders and economists more important.  

 

as for being pedantic...

 

[Wulaw Horn 19127]

21 minutes ago, gsoda3 said:

the first time i replied to you upthread was a completely different matter.  i was explaining why the street was expecting 7.3% and not 7.0% like you said.  i meant to include this screen shot yesterday but didn't bother.  

 

 

this last time i replied to you my point was, and i should have expanded more clearly above, the month on month numbers aren't as important as the year on year.  they're calculated using the same inputs and the same formula but their inherit bases of comparison are different (12 months ago vs 1 month ago).  naturally MoM is more volatile than YoY which is why the YoY numbers are in the minds of traders and economists more important.  

 

as for being pedantic...

 

That wasn’t even the main point I was making though- I was talking about the broad impact and the way the story would be written and talked about in the press and on talk radio and television and aggregation websites and that was always going to be inflation is running away and sucks. 
my guy that I pay to tell me stuff said 7.5 was his number and that lots of people were predicting 7.0 but I don’t really care as I’m not a ducking trader- and I was talking about macro trends and perception amongst the 330+ million Americans who are going to consume the story, not a microscopically small sub group of traders. In the world nobody gives a fuck about the difference between 7, 7.3 and 7.5. It doesn’t matter. It reads as the world is burning down and everything is going to shit. And we will have 1 more report like that. And then the number will start trending downward pretty sharply. But most people don’t know that, which was the entirety of my point, not to start a pissing contest about whose numbers were better or what the exact expectation was from the average house on the street down to a decimal point. 

Edited February 12, 2022 by Wulaw Horn

[gsoda3 3265]

56 minutes ago, Wulaw Horn said:

That wasn’t even the main point I was making though- I was talking about the broad impact and the way the story would be written and talked about in the press and on talk radio and television and aggregation websites and that was always going to be inflation is running away and sucks. 
my guy that I pay to tell me stuff said 7.5 was his number and that lots of people were predicting 7.0 but I don’t really care as I’m not a ducking trader- and I was talking about macro trends and perception amongst the 330+ million Americans who are going to consume the story, not a microscopically small sub group of traders. In the world nobody gives a fuck about the difference between 7, 7.3 and 7.5. It doesn’t matter. It reads as the world is burning down and everything is going to shit. And we will have 1 more report like that. And then the number will start trending downward pretty sharply. But most people don’t know that, which was the entirety of my point, not to start a pissing contest about whose numbers were better or what the exact expectation was from the average house on the street down to a decimal point. 

this is why this topic is important enough to me to address.  you say you care about macro trends but then dismiss the significance of a 7.0 vs a 7.3 or 7.5 print.  you don't appreciate the world of difference between those numbers.  you say it doesn't matter to anyone but a small sub group of traders.  in reality, those numbers are the reason the world markets moved as they did the past two days.  they're the reason the most watched sign of economic health to the common joe (rightly or wrongly), the stock market, made outsized moves the past two days.  i get this is surly/shaggy and everyone's smarter than the average bear but there's a whole lot of forest being missed for the trees.  

the CPI came in yesterday premkt at 7.5, worse than the 7.3 expected.  futures immediately dropped a percent and a half before clawing back to unchanged after trading started but wave after wave of selling clobbered the market and we closed down almost 2%.  today was more of the same.  as soon as the bell rang sellers flooded the books on the offer side although they were trying to be a little more cautious and not to spook the market.  that went out the window around noon with the reports that a russian attack was considered probable.  over the past 2 days the market's given up 3.5%.  fed members are considering an emergency half point rate hike.  

in a world where the CPI yesterday came in at 7.0 the market closes up 1 or 2%.  the prior CPI number came in at 7.0. another month of the exact same number when the street expectation was 7.3 is a huge difference.  remember, YoY is less volatile than MoM and a .3 difference to a market expecting worse numbers on the back of an almost 10% retracement off lows would have been a tremendously welcomed surprise and propelled the market higher.  there would be no emergency fed meeting this coming monday to discuss an emergency rate hike.  we'd be 5% higher than where we are now.  to compare, at the bottom of that huge selloff we had the first 3 weeks of the year we were down 12.5% off all-time highs.  that took a little over 3 weeks to happen.  this would have been a 5% difference in the matter of 2 trading days.

and that's just the equities markets.  look at what happened in the currency markets.  the dollar fell hard against the major currencies until mid-morning when the rumor started circulating of a possible emergency hike.  bonds reacted the same way in proportion to those interest rate expectations.  trillions of dollars in total across those markets moving, which is a staggering amount of money to be moving off one expected event.  

7.0 or 7.5, it DOES matter because the outcomes would have been different to the tune of trillions of dollars.  the story on main street if the number was 7.0 would have been "inflation is being tamed" vs today's panic to a probable emergency hike.  you can take this or you can leave it, it doesn't matter much to me what you personally think, i just want anyone else reading to have a better understanding of how this works.

 

 

 

 

[Wulaw Horn 19127]

I’m really not going to keep going because I understand what you are saying but you continue to post stuff that’s not relevant to what I’m saying as if it’s responsive. 
nobody would be calling inflation at 7% good news. Some in the admin might have spun it that way but the average guy/gal in the street would be freaked out and inflation at 7% would blare on every single news show and above the fold on every news paper and it would be the talk of the coffee shops and what not. The difference in national mood on Main Street would not be one bit different here at 7 v 7.5. That was the ONLY thing I was saying- that we were going to go through this news cycle regardless of what the number came in at YOY bc it was always going to be high and going up from last month. 
maybe you aren’t interested in that point. Maybe you don’t care. But I wasn’t making a point about the macro economy which you seem to believe I was, I was making a point about the perception of the markets and national mood of Main Street, politics, talk radio cycle etc. and 7.0 wouldn’t have  had any positive development for anything in those groups. The only thing that will be positive when the number stops going up from the previous month. And that will happen with the April report. And then we will start healing. 

[Wulaw Horn 19127]

10 hours ago, gsoda3 said:

this is why this topic is important enough to me to address.  you say you care about macro trends but then dismiss the significance of a 7.0 vs a 7.3 or 7.5 print.  you don't appreciate the world of difference between those numbers.  you say it doesn't matter to anyone but a small sub group of traders.  in reality, those numbers are the reason the world markets moved as they did the past two days.  they're the reason the most watched sign of economic health to the common joe (rightly or wrongly), the stock market, made outsized moves the past two days.  i get this is surly/shaggy and everyone's smarter than the average bear but there's a whole lot of forest being missed for the trees.  

the CPI came in yesterday premkt at 7.5, worse than the 7.3 expected.  futures immediately dropped a percent and a half before clawing back to unchanged after trading started but wave after wave of selling clobbered the market and we closed down almost 2%.  today was more of the same.  as soon as the bell rang sellers flooded the books on the offer side although they were trying to be a little more cautious and not to spook the market.  that went out the window around noon with the reports that a russian attack was considered probable.  over the past 2 days the market's given up 3.5%.  fed members are considering an emergency half point rate hike.  

in a world where the CPI yesterday came in at 7.0 the market closes up 1 or 2%.  the prior CPI number came in at 7.0. another month of the exact same number when the street expectation was 7.3 is a huge difference.  remember, YoY is less volatile than MoM and a .3 difference to a market expecting worse numbers on the back of an almost 10% retracement off lows would have been a tremendously welcomed surprise and propelled the market higher.  there would be no emergency fed meeting this coming monday to discuss an emergency rate hike.  we'd be 5% higher than where we are now.  to compare, at the bottom of that huge selloff we had the first 3 weeks of the year we were down 12.5% off all-time highs.  that took a little over 3 weeks to happen.  this would have been a 5% difference in the matter of 2 trading days.

and that's just the equities markets.  look at what happened in the currency markets.  the dollar fell hard against the major currencies until mid-morning when the rumor started circulating of a possible emergency hike.  bonds reacted the same way in proportion to those interest rate expectations.  trillions of dollars in total across those markets moving, which is a staggering amount of money to be moving off one expected event.  

7.0 or 7.5, it DOES matter because the outcomes would have been different to the tune of trillions of dollars.  the story on main street if the number was 7.0 would have been "inflation is being tamed" vs today's panic to a probable emergency hike.  you can take this or you can leave it, it doesn't matter much to me what you personally think, i just want anyone else reading to have a better understanding of how this works.

 

 

 

 

Btw - I appreciate the analysis. It’s helpful for many people reading I’m sure and it’s interesting. Thanks for that. I just wish you wouldn’t write it as if you are responding to me or feeling the need to correct something I’m saying when it’s not responsive to me or what I’m saying. 

[Immaculate Vibes 114]

US debt monetization in one simple chart. But but but it’s all the supply chain.  
 

I’m sure it’s gonna be fine. 
 

 

[troph 24879]

rate hikes and shit's just fucking expensive are the best mods to buyer behavior, won't solve supply chain fed inflation directly.  we are going to hunker down on discretionary spending and will pull it in tight in about 3-4 months when our house is done.  I'm sick of this shit. we eat out a lot, dinner used to be $60 with tip now it's $80-90 for the same stuff.  I can't deal with that shit anymore. made a pot of beans a coupe of weeks ago because it was cold and cheap. I loved being cheap.  make america cheap again gottdammit.

[Trey3216 15349]

Wholesale Inflation came in at 9.7% YoY, is that good?  

[Cheeseweasel 26438]

18 minutes ago, troph said:

make america cheap again

START PRINTING THE RED HATS AND PROFIT!!!!

 

 

[Cheeseweasel 26438]

3 minutes ago, Trey3216 said:

Wholesale Inflation came in at 9.7% YoY, is that good?  

 

[phdhorn 6224]

PPI up 1% Jan., Core PPI .9%. Jan.
Ouch.
https://www.cnbc.com/2022/02/15/producer-price-index-january-2022-.html

Edited February 15, 2022 by phdhorn

[troph 24879]

furk. thank got getting fucked hard feels good.

[gsoda3 3265]

30 minutes ago, troph said:

rate hikes and shit's just fucking expensive are the best mods to buyer behavior, won't solve supply chain fed inflation directly.  we are going to hunker down on discretionary spending and will pull it in tight in about 3-4 months when our house is done.  I'm sick of this shit. we eat out a lot, dinner used to be $60 with tip now it's $80-90 for the same stuff.  I can't deal with that shit anymore. made a pot of beans a coupe of weeks ago because it was cold and cheap. I loved being cheap.  make america cheap again gottdammit.

same.  i hope frugality as a trait worthy to be desired is something we can pass on to our kids.  going out to "normal" dinner like pho or burgers and ringing up almost triple digit bills twice a week isn't going to work though.  

[Cheeseweasel 26438]

9 minutes ago, gsoda3 said:

same.  i hope frugality as a trait worthy to be desired is something we can pass on to our kids.  going out to "normal" dinner like pho or burgers and ringing up almost triple digit bills twice a week isn't going to work though.  

This is the "second hit" the economy will get as a result of inflation. People stop spending. We are headed to a major shitstorm.

[Snake Diggity 4625]

26 minutes ago, Cheeseweasel said:

This is the "second hit" the economy will get as a result of inflation. People stop spending. We are headed to a major shitstorm.

Nah.  There will be some pullback over the next 3-4 months but at the first sign of prices stabilizing shit will take off again.  This is all the result of the pandemic impact on supply chain and worker shortage.  That shit’ll buff out.

[Incredulity 11678]

59 minutes ago, Trey3216 said:

Wholesale Inflation came in at 9.7% YoY, is that good?  

[Cheeseweasel 26438]

13 minutes ago, Snake Diggity said:

Nah.  There will be some pullback over the next 3-4 months but at the first sign of prices stabilizing shit will take off again.  This is all the result of the pandemic impact on supply chain and worker shortage.  That shit’ll buff out.

[Wulaw Horn 19127]

32 minutes ago, Snake Diggity said:

Nah.  There will be some pullback over the next 3-4 months but at the first sign of prices stabilizing shit will take off again.  This is all the result of the pandemic impact on supply chain and worker shortage.  That shit’ll buff out.

It’s not all supply chain and worker shortage I don’t think. Some of it is likely accommodative policy making by fed and hugely increased government spending and stimulus brought on by the pandemic. I think it’s more what you said but it’s not all what you said I’d wager. 
 

[Wulaw Horn 19127]

1 hour ago, Cheeseweasel said:

This is the "second hit" the economy will get as a result of inflation. People stop spending. We are headed to a major shitstorm.

Yeah, but that should stabilize shit, maybe lead to some layoffs in some areas and sectors and maybe get job openings and job seekers in alignment. I mean, it won’t be pretty or anything but we are going to bring on a recession and get to whipping inflation now. 

[Cheeseweasel 26438]

11 minutes ago, Wulaw Horn said:

Yeah, but that should stabilize shit, maybe lead to some layoffs in some areas and sectors and maybe get job openings and job seekers in alignment. I mean, it won’t be pretty or anything but we are going to bring on a recession and get to whipping inflation now. 

True. It's great, unless it's you that gets laid off. But being the Surly 1% has its perks. 

[Wulaw Horn 19127]

8 minutes ago, Cheeseweasel said:

True. It's great, unless it's you that gets laid off. But being the Surly 1% has its perks. 

It should be what- the bottom 2% of the workforce more or less?  I’m skeptical of the argument that unemployment is a good thing as a general proposition (which I was surprised to see get some traction in the last couple weeks but nihilists I suppose) but it ought to be a good thing  for fighting inflation as the market normalizes. 

[Snake Diggity 4625]

15 minutes ago, Cheeseweasel said:

True. It's great, unless it's you that gets laid off. But being the Surly 1% has its perks. 

I would be very surprised if unemployment got above 8% anytime in the next 20 months. Getting laid off when unemployment is low is far less devastating than when it’s high.

[Trey3216 15349]

2 hours ago, Wulaw Horn said:

It should be what- the bottom 2% of the workforce more or less?  I’m skeptical of the argument that unemployment is a good thing as a general proposition (which I was surprised to see get some traction in the last couple weeks but nihilists I suppose) but it ought to be a good thing  for fighting inflation as the market normalizes. 

We're still 3 million or so workers lower than the end of 2019.   2% of the workforce getting chopped at this juncture would be an absolutely horrific scenario.  

[Fudge Nuggets 19208]

7 hours ago, Wulaw Horn said:

It’s not all supply chain and worker shortage I don’t think. Some of it is likely accommodative policy making by fed and hugely increased government spending and stimulus brought on by the pandemic. I think it’s more what you said but it’s not all what you said I’d wager. 
 

Mix in some good old fashioned price gouging while we’re at it. 

[washparkhorn 9939]

I am watching flattening yield curve spreads. Look at the yield curve to scale. Personally, hope that is transitory. 

[Wulaw Horn 19127]

1 hour ago, Fudge Nuggets said:

Mix in some good old fashioned price gouging while we’re at it. 

I’m not saying it’s not happening but that’s not the sense I get. Where do you think specifically price gouging is going on? 

[Fudge Nuggets 19208]

20 minutes ago, Wulaw Horn said:

I’m not saying it’s not happening but that’s not the sense I get. Where do you think specifically price gouging is going on? 

Any place where my typical bill has gone up by 30% or more from pre-COVID levels.  Fruits, vegetables, meats, general produce, consumer electronics, vehicles.  Pretty much everything has some gouging built in.  It's not "Let's jack the price of unleaded up from $3 / gal to $20 / gal because of a hurricane" kind of gouging but it exists.