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2021 - Is inflation finally back in the conversation?

Reagan1k

By Reagan1k
in Business and Markets

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Bateshorn
Bateshorn

The only thing more predictable than the GOP running up huge deficits on tax cuts and military spending, is each one suddenly becoming horrified by deficit spending 5 mins after a Democrat is sworn in

PilotsError
PilotsError

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Trey3216

Trey3216 15,347

Posted
Posted
1 hour ago, Shaggy3.0 said:

We're in dangerous territory. No way that stripper is paying those ARM mortgages for her 5 homes and condo.

 

Damn.  The stories about the ‘08 bomb with strippers having 3 and 4 “rent” houses on 1 year ARMs was absolutely insane.    

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Hefeweizen

Hefeweizen 5,328

Posted
Posted
10 minutes ago, Parliament said:

#transitive 

This has a slightly different meaning than transitory but you are a buckeye.

 

My data point today:  86 bucks filling up my car at pickys pantry on Bee Cave road.  Ouch.

 

Of course it was 93 octane because I can’t use peasant gasoline.

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Hefeweizen

Hefeweizen 5,328

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Here’s another serious inflationary data point:  developers are switching a lot of product from single family for sale, or conventional builders, to single family for rent.  That is due to lower income families and individuals who want to move into a house not qualifying due to higher interest rates, higher taxes, and higher home prices.  
 

The housing affordability crisis is about to get turbo fucked.  Because rent is a sure way to take away a method for building wealth for a lot of families.

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phdhorn

phdhorn 6,224

Posted
Posted

Ouch.  1st Quarter GDP -1.5% (after 2021 4Q was + 6.9%).  Not totes unexpected but worse than predicted and not great to see that much of a swan dive.  And jobless claims are ticking up, again to be expected with economic contraction:

https://www.msn.com/en-us/money/markets/first-quarter-gdp-declined-15-25-worse-than-thought-jobless-claims-climb/ar-AAXKVmD

Recession is a bit closer today than yesterday... but time will tell (June's report is gonna be very bad... or just a little bad.....)

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Shaggy3.0

Shaggy3.0 1,695

Posted
Posted

Treat me like I'm dumb.  But I have a few questions. 

Does it really matter if we're actually *near* or *close* to recession?  I mean, don't enough businesses simply need to *believe* recession is here?  Do we really need Beeks'  crop report with the bad news to make decisions going forward?

In IT, company layoffs have signaled recession. 


✨Notable 2022 U.S. tech layoffs ✨
PayPal
Klarna
Skillz Inc.
Outside
Colossus
Netflix
Picsart
Zulily
Vroom
Latch
Subspace
Section4
Zwift
DataRobot
Carvana
REEF
MURAL
On Deck
Cameo
Ideoclick, Inc.
Vise
Thrasio
Noom Inc.
Robinhood
Clyde
Blend
Better
Rad Power Bikes
Automox
Food52
Workrise
Fast
Gopuff
ClickUp
Bolt

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phdhorn

phdhorn 6,224

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Well, "officially" a recession has been 2 proven quarters of contraction in a row (measured by various means).  Lots of people still use this, although the NBER defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months..."

But I agree with you that the impression or dread of recession can alter company/consumer behavior, and sometimes bring them on faster.  However, there have been a number of times where the country followed a negative month by a positive one.  

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Immaculate Vibes

Immaculate Vibes 114

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22 minutes ago, phdhorn said:

Well, "officially" a recession has been 2 proven quarters of contraction in a row (measured by various means).  Lots of people still use this, although the NBER defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months..."

But I agree with you that the impression or dread of recession can alter company/consumer behavior, and sometimes bring them on faster.  However, there have been a number of times where the country followed a negative month by a positive one.  

Latest gdp now estimate for Q2 is 1.8. Was 2.4 last week. 

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Wulaw Horn

Wulaw Horn 19,088

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On 5/25/2022 at 9:59 AM, Storm the Field said:

Inflation may be sticking around, but expectations of future inflation are cooling off.

 

It’s not great if we keep stacking inflation at numbers between where they are now and 5 years from now still being over 2. We need some roll backs in prices not this as a new normal. Breathtaking how expensive it was going to the store and buying gas and basically any time I take out my credit card. 
I can’t imagine how scary this must be for the average person. 

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TxTower

TxTower 652

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Honest question: when have prices ever fallen?

Housing cycles
Volatile gas prices
Tech, because of Moore’s law etc

Seems like everything else is going to really sticky.

Higher prices are the new normal. There will be no reversion to last years prices. Some cooling in from the insanity in the housing market but overall higher prices are here to stay. Inflation is imbedded in consumer goods, food, housing and energy which is the vast majority of the economy. The Fed fucked around and is finding out.

The only way prices fall is if we fall into serious recession and while I think that could happen, I see a mild recession as more likely.


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Wulaw Horn

Wulaw Horn 19,088

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22 minutes ago, tbone_ said:

Honest question: when have prices ever fallen?

Housing cycles
Volatile gas prices
Tech, because of Moore’s law etc

Seems like everything else is going to really sticky.

So all three things you said are certainly things that can fall. When there are temporary dislocations in the supply and demand curve that should cause prices to fall once they have risen because of said dislocations- I would think.  I’m thinking food this happens with all the time with something like mad cow, bird flu, or shitty harvests. 
I’ve never done drugs but don’t street prices rise and fall based upon interdiction efforts by the government, differences in harvest yields and/or war for turf that effects supply available? 
Seems like some things should go back down (I hope) and some remain stickier. 

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Incredulity

Incredulity 11,675

Posted
Posted
26 minutes ago, tbone_ said:

Honest question: when have prices ever fallen?

Housing cycles
Volatile gas prices
Tech, because of Moore’s law etc

Seems like everything else is going to really sticky.

Televisions have been deflating for 20 years.  Other consumer electronics as well.

Food is volatile as well.  Specifically, commodities like beef, eggs, milk....

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phdhorn

phdhorn 6,224

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Some good numbers just released.  Inflation definitely cooler in April than before (but still pretty bad):
- CPI had first decline in 17 months:  6.3% YOY (vs. around the 8%'s the past few months)
- Core PCE (w/o energy/gas) down to 4.9% - 3rd straight month of down.
- YOY CPI "down" to 8.3% from previous 12-month rolling 8.5ish.
- Consumer spending (to me) surprisingly has continued to be positive, if barely, 0.9% last month (March revised slightly upward).

The good side is that these indicators clearly show a cooling off, however brief.
The bad side is that May has been a brutal month for energy/gas/housing, far worse than recent, and May's figures (released late June) are expected to not be April's.

So will this be a rest stop on the steep stairway to more inflation/recession, or a true top of the coaster track?  I think it'll be the beginning of a s-l-o-w cooling off, expected to last well into the fall, but slower is better than nothing.  However, a return to the "glory days" of <2% inflation is probably way off right now.

So the mantra is, "still kinda sucks, but the suckage was less last month. We'll see how the suckage fares after a very bad May, next month."

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TxTower

TxTower 652

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I think the answer to my question is basically never. At least not outside a depression scenario.

Correct. The globalization of economies and accommodative monetary policies that drove down prices of goods and capital over the last 30 yrs is yesterdays news. It’s a new world.


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Wulaw Horn

Wulaw Horn 19,088

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58 minutes ago, phdhorn said:

Some good numbers just released.  Inflation definitely cooler in April than before (but still pretty bad):
- CPI had first decline in 17 months:  6.3% YOY (vs. around the 8%'s the past few months)
- Core PCE (w/o energy/gas) down to 4.9% - 3rd straight month of down.
- YOY CPI "down" to 8.3% from previous 12-month rolling 8.5ish.
- Consumer spending (to me) surprisingly has continued to be positive, if barely, 0.9% last month (March revised slightly upward).

The good side is that these indicators clearly show a cooling off, however brief.
The bad side is that May has been a brutal month for energy/gas/housing, far worse than recent, and May's figures (released late June) are expected to not be April's.

So will this be a rest stop on the steep stairway to more inflation/recession, or a true top of the coaster track?  I think it'll be the beginning of a s-l-o-w cooling off, expected to last well into the fall, but slower is better than nothing.  However, a return to the "glory days" of <2% inflation is probably way off right now.

So the mantra is, "still kinda sucks, but the suckage was less last month. We'll see how the suckage fares after a very bad May, next month."

Look for higher numbers YoY from the summer time because of what we are comparing to from the previous time last year. 
because that’s know and baked in the numbers to watch for are the month to month to see what direction we are going. If it’s truly going to be getting better we need to start seeing negative - 0.2 or less on the monthly. 

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