2021 - Is inflation finally back in the conversation?

[UT_OB1 2,218]

We aren’t quite back to Spring 2021 prices, but fuck. Started keeping up with Home Depot prices on pieces I was going to need a lot of. It stated coming down, I stopped paying attention. Had to buy some 2x4s and plywood last weekend and was afraid I’d need an armed escort to on my way home as expensive as it was. 
 

[Cheeseweasel 26,438]

13 hours ago, washparkhorn said:

flattening yield curve spreads.

[Laxtonto 12,080]

Scariest stat I saw this week is that December’s YOY house rent price went up 12%. What makes this scary is that 1, it’s not apartments and 2, houses as an investment property are most likely not seeing significant churn on the market with there run at that time on home sales. This is also without seeing any rate increases in that year.

So who priced in a 12% increase and why? Is supply of homes for rent that scarce? Are secondary expenses for landlords jumping significantly or is it something else?

I attribute part of it to people wanting more space/backyard due to the cabin fever of being home due to COVID. But regardless, 12% for house rentals YOY is insane.

[Catpfish 618]

Can't speak to the larger market as a whole, but I would guess the vast majority (if not all) of the 12% increase is going towards real estate taxes in Texas.

[UT_OB1 2,218]

6 minutes ago, Catpfish said:

Can't speak to the larger market as a whole, but I would guess the vast majority (if not all) of the 12% increase is going towards real estate taxes in Texas.

Yep.  We got a 10% increase on one of ours that came up. That 10% doesn’t cover our increased taxes (home value more than doubled)

[tbone_ 14,116]

Apartment rents were up nationally, averaged across all classes, about 12% as well IIRC. In phoenix that number was 24%.

The answer to your question above is yes there is that big a shortage of rental housing. For a bunch of reasons.

Interesting point about taxes in high tax states like Texas. In AZ our taxes are only about 50bp on value. And the assessments don’t run near as fast as market values.

[LCHorn 2,617]

I don’t know why YOY house rent stats are scarier than any others.  
 

you want to know what I find scary?  Escargot at Justine’s is now $16 per plate.  $16!!!!

[Wulaw Horn 19,069]

Yeah- what TBone said on the shortage in housing. Also- keeping in mind what’s going on with appreciation it makes sense that rents follow said appreciation. Appreciation on SFR is running hotter than rent increase. 

[tbone_ 14,116]

Yeah- what TBone said on the shortage in housing. Also- keeping in mind what’s going on with appreciation it makes sense that rents follow said appreciation. Appreciation on SFR is running hotter than rent increase. 

Same in apartments because cap rates are also compressing

[52-80 19,150]

they always do these things when it's too late

 

 

[Cheeseweasel 26,438]

16 hours ago, LCHorn said:

Escargot at Justine’s is now $16 per plate.  $16!!!!

[troph 24,785]

On 2/15/2022 at 11:34 PM, UT_OB1 said:

We aren’t quite back to Spring 2021 prices, but fuck. Started keeping up with Home Depot prices on pieces I was going to need a lot of. It stated coming down, I stopped paying attention. Had to buy some 2x4s and plywood last weekend and was afraid I’d need an armed escort to on my way home as expensive as it was. 
 

we are done with one business project, and our house build is almost to finish out stage. at this point we are almost out of the fray, we have 3 large projects on the horizon, one could break ground in about 2 months. I'm so frazzled over supply chain shit, I have half a mind to sit this out for a year. just take a break and let the values rise.  i don't know if I have the ability to take the stress again.  these are 2 year projects too so I mean, ugh 2 years of FAFOing with supply chain and inflation sounds horrible.

[troph 24,785]

on the personal side, restaurants are about to get bent over again.  COVID shut them down first and longest, well, inflation is going to do the same. my financial woes are always solved with more revenue, I don't like cutting back, I like to find more opportunities.  well, I spent $50 per person for neighborhood sushi on a Wednesday night.  growing boys, etc. yeah but still that's insane.  had we been a tad more reasonable it would have still been $175 total.  Two years ago, that was $125-150 which was still alot.  Heck, $200 used to be anniversary dinner level spend, now it's Wednesday night. good lord.  I told everyone, I'm done.  eating out 2x a month with the kids, 2x a month with us adults, that's once a week, watching pennies and dollars now on food, I can't stomach the spend for a dinner out. I just don't see how the easy discretionary spending isn't about to get whacked by consumer frustration and then by rate hikes that take that discretionary spending away from them with higher borrowing costs.  not sure how long it will be but I could see this ride getting really bumpy.

Edited February 17, 2022 by troph

[babysdaddy 2,721]

20 hours ago, LCHorn said:

I don’t know why YOY house rent stats are scarier than any others.  
 

you want to know what I find scary?  Escargot at Justine’s is now $16 per plate.  $16!!!!

[Skipper 6,135]

8 minutes ago, troph said:

on the personal side, restaurants are about to get bent over again.  COVID shut them down first and longest, well, inflation is going to do the same. my financial woes are always solved with more revenue, I don't like cutting back, I like to find more opportunities.  well, I spent $50 per person for neighborhood sushi on a Wednesday night.  growing boys, etc. yeah but still that's insane.  had we been a tad more reasonable it would have still been $175 total.  Two years ago, that was $125-150 which was still alot.  Heck, $200 used to be anniversary dinner level spend, now it's Wednesday night. good lord.  I told everyone, I'm done.  eating out 2x a month with the kids, 2x a month with us adults, that's once a week, watching pennies and dollars now on food, I can't stomach the spend for a dinner out. I just don't see how the easy discretionary spending isn't about to get whacked by consumer frustration and then by rate hikes that take that discretionary spending away from them with higher borrowing costs.  not sure how long it will be but I could see this ride getting really bumpy.

Agreed with this.  Hell, I literally made this decision this week.  We have a date night Friday and had reservations at a nice steak house since it's been a while.  But with prices the way they are, apps + good steak + sides + decent wine + tip in Dallas is going to run at or over $400.  And the real issue is we've been paying more for literally everything (evidenced by current CC balance which is pretty much already what I consider a 'normal' month with no big purchases and still a week left in the cycle).   

So I said f it, cancelled reservations and ordered a shipment of steaks from 44 Farms instead to do steak night at home with already purchased wine.  And for date night just going to be local (cheaper) Mexico joint.  But that decision led me back to this thread and you made my point exactly.  Even for people that can afford it, eventually excess spending takes its toll and impacts behavior.

[troph 24,785]

exactly.  the perceived value isn't keeping up with the rate of price increases.  this could be very dangerous.

[Cheeseweasel 26,438]

6 minutes ago, troph said:

exactly.  the perceived value isn't keeping up with the rate of price increases.  this could be very dangerous.

Already is. Cancelling projects/purchases is going to dump cold water on an already tumultuous market.  Fuck the money printers.

[UT_OB1 2,218]

51 minutes ago, troph said:

on the personal side, restaurants are about to get bent over again.  COVID shut them down first and longest, well, inflation is going to do the same. my financial woes are always solved with more revenue, I don't like cutting back, I like to find more opportunities.  well, I spent $50 per person for neighborhood sushi on a Wednesday night.  growing boys, etc. yeah but still that's insane.  had we been a tad more reasonable it would have still been $175 total.  Two years ago, that was $125-150 which was still alot.  Heck, $200 used to be anniversary dinner level spend, now it's Wednesday night. good lord.  I told everyone, I'm done.  eating out 2x a month with the kids, 2x a month with us adults, that's once a week, watching pennies and dollars now on food, I can't stomach the spend for a dinner out. I just don't see how the easy discretionary spending isn't about to get whacked by consumer frustration and then by rate hikes that take that discretionary spending away from them with higher borrowing costs.  not sure how long it will be but I could see this ride getting really bumpy.

We have a 7 and 9 year old. They love pizza. We’ve moved from eating out once every 2 weeks at ~$80-100 to ordering pizza for a home movie night for ~$35-40 every week (or other). And we have left overs for a few lunches during the week. Just too expensive going out. 

[elfenix 34,234]

"boomflation"

https://www.marketplace.org/2022/02/16/forget-stagflation-retail-sales-point-to-a-boomflation-economy/

 

53 minutes ago, UT_OB1 said:

We have a 7 and 9 year old. They love pizza. We’ve moved from eating out once every 2 weeks at ~$80-100 to ordering pizza for a home movie night for ~$35-40 every week (or other). And we have left overs for a few lunches during the week. Just too expensive going out. 

i think some of this has gone into rising grocery prices - if you eat out less you can spend more money on the actual food (as opposed to labor/rent/overhead at a restaurant) and part of that is being captured by meat packers. 

[Cheeseweasel 26,438]

28 minutes ago, elfenix said:

captured by meat packers

Great band name.

[troph 24,785]

2 hours ago, UT_OB1 said:

We have a 7 and 9 year old. They love pizza. We’ve moved from eating out once every 2 weeks at ~$80-100 to ordering pizza for a home movie night for ~$35-40 every week (or other). And we have left overs for a few lunches during the week. Just too expensive going out. 

we've had the pizza conversation multiple times. done with that too.

[jimmyjazz 45,903]

Regardless of inflation, spending multiple hundreds of dollars on a dinner for two is almost always grotesque.  I mean, I'm surly 10%, maybe 5%, and would never fucking do that outside of a once a year dinner for our anniversary, and that MIGHT kiss $200.  My wife wouldn't stand for it either.  I'd rather donate the difference to Mobile Loaves and Fishes.  This city and a good deal of our wage earners have a hopelessly distorted view of reality.

[Neonmoon 38,129]

5 hours ago, troph said:

we've had the pizza conversation multiple times. done with that too.

I would like to know more about the pizza conversation. Is this eating more or less pizza?

[txduck87 985]

I would like to know more about the pizza conversation. Is this eating more or less pizza?

5$ HEB pizzas at our house is the norm . 3 teenage boys .


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[troph 24,785]

26 minutes ago, txduck87 said:

5$ HEB pizzas at our house is the norm . 3 teenage boys .


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We buy cheap frozen or fresh H‑E‑B pizzas for sure, but splurge for yahgi’s or giant jersey’s on fridays. Nice greasy yummy foldable NY style pizza. It’s $100 now for take out / delivery for 5. F that noise. H‑E‑B and homemade all the way. 

[elfenix 34,234]

at what point does the big ooni become "saving money on pizza"?

[Muny_Tex 293]

I thought all the geniuses who presided over the unemployment bonanza told us a de facto $15 minimum wage wouldn’t have any impact on menu prices or food costs going forward.


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[Muny_Tex 293]

FWIW, my latest “I’m done” moment came at Thundercloud yesterday when a large tuna + drink (no chips) ran me $13…toss in a couple extra bucks for the kid behind the counter and that’s just a tremendous waste of money to spend with any regularity.

They (Lake Austin location) also have cut hours to close at 5pm most days since they don’t have enough workers.

In any event, it seems we’ve got another fresh set of anecdotes making the case for stagflation (scarcity + gouging + inability to staff due to wage push) along with a potential liquidity trap if Surly 1% decides to opt out of “new normal” consumption and burrow into their mansions armed with a war chest of $5 pizzas.

My vibe is most people will generally be willing to eat the dick for crazy costs one time (e.g. Disney trip promised to kids for 2 years, trip to Napa with SO for 6x postponed vacation, etc) and then the recession will get rolling with full force once everyone is fully “tapped out” either by choice or maxed out credit cards with no more monopoly money in sight.


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[Bozo_Casanova 26,447]

Weird. It’s almost like you guys don’t like the free market or understand consequences.  The same thing that drove your asset bubble is pricing into labor and food and materials now. There are no free lunches or “de facto” anything, and I spent the last two decades on these boards telling you.
Reap the whirlwind. 

[jimmyjazz 45,903]

27 minutes ago, Muny_Tex said:

FWIW, my latest “I’m done” moment came at Thundercloud yesterday when a large tuna + drink (no chips) ran me $13…toss in a couple extra bucks for the kid behind the counter and that’s just a tremendous waste of money to spend with any regularity.

They (Lake Austin location) also have cut hours to close at 5pm most days since they don’t have enough workers.

Interesting.  My son works at that location.  I asked him if a large tuna plus drink could be $13 and he said "no way".  So, we looked it up.  $7.99 + $2.29 (large drink) = $10.28, plus $0.85 tax = $11.13

He thanks you for the tip but would prefer you not lie to overstate their prices by 17%.

[Muny_Tex 293]

Interesting.  My son works at that location.  I asked him if a large tuna plus drink could be $13 and he said "no way".  So, we looked it up.  $7.99 + $2.29 (large drink) = $10.28, plus $0.85 tax = $11.13
He thanks you for the tip but would prefer you not lie to overstate their prices by 17%.

That’s some excellent detective work there Lou, but I guess all “drinks” aren’t created equal? I bot a can of sparkle water from the fridge so maybe that stuff is like $4? I didn’t receive an itemized receipt but maybe your kid can pull the surveillance tape in case I was overcharged?


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[elfenix 34,234]

bought fancy overpriced water made by unicorns at 1500% markup, blames the stoner behind the counter.

[52-80 19,150]

5 hours ago, Bozo_Casanova said:

Weird. It’s almost like you guys don’t like the free market or understand consequences.  The same thing that drove your asset bubble is pricing into labor and food and materials now. There are no free lunches or “de facto” anything, and I spent the last two decades on these boards telling you.
Reap the whirlwind. 

[Immaculate Vibes 114]

3 hours ago, 52-80 said:

But it’s mostly supply chain issues and corporate greed!

Global numbers. The great monetary expansion happened everywhere. We’re just near the end of a long debt cycle. 

Edited February 18, 2022 by Immaculate Vibes

[Dbeasy 15,047]

There was an interesting comment by Charlie Munger about inflation, and yes he’s an old fart who is disconnected somewhat from the modern world. However, Buffet and Munger still understand the big picture economically pretty well. 

Anyway, when asked about the seriousness of the inflation issue, he said his working assumption is that over one hundred years the value of the dollar will be zero. He pointed out that most democracies in history died when the people started using the currency excessively to pay themselves, pointing out examples in Latin America and Europe, including the rise of Hitler. So ya, inflation is a big deal. 

[52-80 19,150]

23 minutes ago, Immaculate Vibes said:

But it’s mostly supply chain issues and corporate greed!

Global numbers. The great monetary expansion happened everywhere. We’re just near the end of a long debt cycle. 

Hayek and Mises are smiling from their grave

[jimmyjazz 45,903]

7 hours ago, Muny_Tex said:

That’s some excellent detective work there Lou, but I guess all “drinks” aren’t created equal? I bot a can of sparkle water from the fridge so maybe that stuff is like $4? I didn’t receive an itemized receipt but maybe your kid can pull the surveillance tape in case I was overcharged?

Ah, the refrigerated sparkle water is $9 a can.  You got off easy.

[Cheeseweasel 26,438]

9 hours ago, Bozo_Casanova said:

Weird. It’s almost like you guys don’t like the free market or understand consequences.

The Fed printing money, the Government shutting down the economy and handing out money is hardly "Free Market". 

[Immaculate Vibes 114]

10 hours ago, Bozo_Casanova said:

Weird. It’s almost like you guys don’t like the free market or understand consequences.  The same thing that drove your asset bubble is pricing into labor and food and materials now. There are no free lunches or “de facto” anything, and I spent the last two decades on these boards telling you.
Reap the whirlwind. 

The Fed and the Us Govt 

 

[Snake Diggity 4,622]

2 hours ago, Dbeasy said:

There was an interesting comment by Charlie Munger about inflation, and yes he’s an old fart who is disconnected somewhat from the modern world. However, Buffet and Munger still understand the big picture economically pretty well. 

Anyway, when asked about the seriousness of the inflation issue, he said his working assumption is that over one hundred years the value of the dollar will be zero. He pointed out that most democracies in history died when the people started using the currency excessively to pay themselves, pointing out examples in Latin America and Europe, including the rise of Hitler. So ya, inflation is a big deal. 

Meh, fuck Charlie Munger.

[Bozo_Casanova 26,447]

8 hours ago, Cheeseweasel said:

The Fed printing money, the Government shutting down the economy and handing out money is hardly "Free Market". 

“The market should only react to inputs I agree with.”

-Cheeseweasel

[Shaggy3.0 1,695]

I'm done.  When Surly 1%-5% calls it quits, what chance do I have?  I'll stick to precious metals, stocked ammo cans, Mossbergs, and survival food that will taste good in 20 years.

I am running low on toilet paper.

 

[Bozo_Casanova 26,447]

36 minutes ago, Shaggy3.0 said:

I'm done.  When Surly 1%-5% calls it quits, what chance do I have?  I'll stick to precious metals, stocked ammo cans, Mossbergs, and survival food that will taste good in 20 years.

I am running low on toilet paper.

 

Not a fan of precious metals, but I’ve been investing in green tips since the 2017 tax code overhaul. 

[workswithseed 2,103]

2 hours ago, Bozo_Casanova said:

Not a fan of precious metals, but I’ve been investing in green tips since the 2017 tax code overhaul. 

 

Por que no?

[UTGrad98 2,271]

Fast food /restaurant prices coupled with "tipping" almost anywhere that isn't a drive through has created enough sustainable rage for me to have eaten at home for lunch 2 straight weeks. Our family hasnt eaten out in a month. I'm saving 200 a week personally and my wife said the grocery bills aren't too much higher since we are eating more at home including leftovers. I've lost weight. I have a ton more energy and have even started working out at lunch. So many positive changes from this and all it took was "sandwich artists" and 40 year high inflation. 

[troph 24,785]

46 minutes ago, UTGrad98 said:

Fast food /restaurant prices coupled with "tipping" almost anywhere that isn't a drive through has created enough sustainable rage for me to have eaten at home for lunch 2 straight weeks. Our family hasnt eaten out in a month. I'm saving 200 a week personally and my wife said the grocery bills aren't too much higher since we are eating more at home including leftovers. I've lost weight. I have a ton more energy and have even started working out at lunch. So many positive changes from this and all it took was "sandwich artists" and 40 year high inflation. 

Beans and cornbread and soups are my favorite cheap meals. Grew up on beans they are a kind of comfort food for me.  
 

Yesterday we took a quick trip to the coast. Didn’t care about the cost of my fishing flies or diesel fuel to drive to the coast. Noticed it but then thought well we are camping for nearly free and cooking all weekend, so we still said FAFO to the inflation boogeyman.

[Bozo_Casanova 26,447]

8 hours ago, workswithseed said:

 

Por que no?

The characteristics of money are durability, portability, divisibility, uniformity, limited supply, and acceptability.
 

Gold and silver were pretty good for those things during periods of relative stability in pre-industrial times and tend to hold value through time but I’m not super convinced about their acceptability during periods of chaos, and they are less portable, less divisible, and less uniform (or at least less verifiably uniform than other modern alternatives as a store of value. 

[Parliament 14,257]

12 hours ago, Bozo_Casanova said:

Not a fan of precious metals, but I’ve been investing in green tips since the 2017 tax code overhaul. 

 

10 hours ago, workswithseed said:

 

Por que no?

I think he's referring to AR15 ammo.

[washparkhorn 9,939]

On 2/18/2022 at 6:08 AM, 52-80 said:

Hayek and Mises are smiling from their grave

Hayek and Moses are ashamed of the Frankenstein creature known as neoliberalism  - which is credited to their ideas. It should have designed with guardrails (and an exit ramp). 
 

 

[washparkhorn 9,939]

On 2/18/2022 at 7:22 PM, Bozo_Casanova said:

I’ve been investing in green tips

Any recommendations for a reading list?