2021 - Is inflation finally back in the conversation?

[52-80 19096]

so Newsom in California wants to hand out more cash, and DeSantis in Florida wants to suspend taxes on consumer products.

LMAO.

[statsman 5425]

Yeah, I’m ok with pain and recession from the Fed, to stop inflation. I’m not in favor of pain and recession from the Fed, with inflation stopping thwarted by government largesse. 
 
These guys all need to get on the same page. 

[Cheeseweasel 26437]

8 hours ago, Stunns38 said:

I’ve been seeing a lot of school-aged kids flying weekdays during “school hours” too.

Muffy and Biff's Instagram needs their little props for the most views.

[Humble Beast 258]

UK’s new government really going for it.  Tax cuts and energy bailouts. Its currency and bonds both dumping. 
 

 

[Humble Beast 258]

2 hours ago, statsman said:

Yeah, I’m ok with pain and recession from the Fed, to stop inflation. I’m not in favor of pain and recession from the Fed, with inflation stopping thwarted by government largesse. 
 
These guys all need to get on the same page. 

Seems like that’s going to be the trend. 
 

Unelected central bankers willing to wreck economies to stop inflation. 
 

Elected officials pursuing fiscal stimulus in part to protect their jobs. 

[Humble Beast 258]

Higher than the 1970s even. 

[Guest]

 

[Snake Diggity 4614]

I’m increasingly concerned that this round of inflation is largely the result of demographic shifts and thus raising rates will not address the real issue, which is a worker shortage across the entire first world.  Instead of reducing access to capital for everyone we should be reallocating capital from those who’ve been increasingly hoarding it for the last 30 years (in addition to using immigration to increase supply of young workers).

[Humble Beast 258]

More on the bond selloff

 

[Cheeseweasel 26437]

2 minutes ago, Snake Diggity said:

I’m increasingly concerned that this round of inflation is largely the result of demographic shifts and thus raising rates will not address the real issue, which is a worker shortage across the entire first world.

I honestly don't understand it. Did everyone just fuck off to a remote island? Hit big on Bitcoin and retire? UFO's? Where is everyone? 

[Brisketexan 104628]

19 minutes ago, Snake Diggity said:

I’m increasingly concerned that this round of inflation is largely the result of demographic shifts and thus raising rates will not address the real issue, which is a worker shortage across the entire first world.  Instead of reducing access to capital for everyone we should be reallocating capital from those who’ve been increasingly hoarding it for the last 30 years (in addition to using immigration to increase supply of young workers).

Excellent post.  We have some much bigger systemic issues across the board.

[gsoda3 3236]

26 minutes ago, Snake Diggity said:

I’m increasingly concerned that this round of inflation is largely the result of demographic shifts and thus raising rates will not address the real issue, which is a worker shortage across the entire first world.  Instead of reducing access to capital for everyone we should be reallocating capital from those who’ve been increasingly hoarding it for the last 30 years (in addition to using immigration to increase supply of young workers).

maybe you're speaking to specific circumstances but i 100% disagree on a macro level.  we've been spraying money into every corner of the system for well over a decade and frankly i'm surprised more bubbles haven't burst sooner.  there has to be a lot of wealth destroyed, not redeployed.  

[jimmyjazz 45560]

47 minutes ago, Snake Diggity said:

I’m increasingly concerned that this round of inflation is largely the result of demographic shifts and thus raising rates will not address the real issue, which is a worker shortage across the entire first world. 

How do you reconcile this with near-record low unemployment?  Is it because people are leaving the workforce (retiring) and thus don't count towards the unemployed?

I admit I don't pay a whole lot of of attention to the subtleties of workforce accounting.

[Incredulity 11555]

1 hour ago, Cheeseweasel said:

I honestly don't understand it. Did everyone just fuck off to a remote island? Hit big on Bitcoin and retire? UFO's? Where is everyone? 

 

Labor force participation has been going down since turn of century.

https://fred.stlouisfed.org/series/CIVPART

 

I think the current significant contributors are:

1.) Boomers, who would still be working sans the pandemic said fuck this I'm out.

2.) Lack of child care availability/expense has a portion of working age population unable/unwilling to work.

3.) Meth/opioid addiction explosion.  Primarily working age males.

4.) So called work penalty for benefits.  Disincentive to work by loss of more than extra amount earned in benefits.  Most people respond to incentives rationally.

 

 

[Aqua Buddha 14522]

2 minutes ago, Incredulity said:

 

Labor force participation has been going down since turn of century.

https://fred.stlouisfed.org/series/CIVPART

 

I think the current significant contributors are:

1.) Boomers, who would still be working sans the pandemic said fuck this I'm out.

2.) Lack of child care availability/expense has a portion of working age population unable/unwilling to work.

3.) Meth/opioid addiction explosion.  Primarily working age males.

4.) So called work penalty for benefits.  Disincentive to work by loss of more than extra amount earned in benefits.  Most people respond to incentives rationally.

 

 

Most excellent post.  These are all factors instead of just screaming "welfare!!!!" or whatever.  Also, a sub point to #2 was covid.  A million people died and it's easy to forget that, I guess, but a lot of these were older people who provided free child care to one degree or another for a family member.  Even if it was just a few days a month, that matters.

The workers just aren't here and I'm not sure how raising interest rates fixes that.

[Snake Diggity 4614]

1 hour ago, Incredulity said:

 

Labor force participation has been going down since turn of century.

https://fred.stlouisfed.org/series/CIVPART

 

I think the current significant contributors are:

1.) Boomers, who would still be working sans the pandemic said fuck this I'm out.

2.) Lack of child care availability/expense has a portion of working age population unable/unwilling to work.

3.) Meth/opioid addiction explosion.  Primarily working age males.

4.) So called work penalty for benefits.  Disincentive to work by loss of more than extra amount earned in benefits.  Most people respond to incentives rationally.

 

 

I think #1 and #2 make up a LOT bigger % of the issue than 3 and 4.

[Snake Diggity 4614]

2 hours ago, Cheeseweasel said:

I honestly don't understand it. Did everyone just fuck off to a remote island? Hit big on Bitcoin and retire? UFO's? Where is everyone? 

Some got old, others got less productive.

2 hours ago, gsoda3 said:

maybe you're speaking to specific circumstances but i 100% disagree on a macro level.  we've been spraying money into every corner of the system for well over a decade and frankly i'm surprised more bubbles haven't burst sooner.  there has to be a lot of wealth destroyed, not redeployed.  

Why destroy wealth when you can redeploy it?

[Snake Diggity 4614]

2 hours ago, jimmyjazz said:

How do you reconcile this with near-record low unemployment?  Is it because people are leaving the workforce (retiring) and thus don't count towards the unemployed?

I admit I don't pay a whole lot of of attention to the subtleties of workforce accounting.

People retiring early is a big one but I also think a lot of prime working age people are working less (or are just less productive).

[Cheeseweasel 26437]

8 minutes ago, Snake Diggity said:

Some got old, others got less productive.

Well, they need to get their shit together.

[Incredulity 11555]

58 minutes ago, Snake Diggity said:

Some got old, others got less productive.

some spend hours scrolling the intertrons for thirst trap thot photos.

[Humble Beast 258]

Looking at things that could force Fed to unwillingly pivot. 
 

HYG, the high yield, corporate debt etf is tanking below recent lows. Not far from the same levels of the Covid crash when the Fed jumped in and started buying corporate debt. Something to watch.  
 

 

[Cheeseweasel 26437]

28 minutes ago, Incredulity said:

some spend hours scrolling the intertrons for thirst trap thot photos.

[Cheeseweasel 26437]

16 minutes ago, Humble Beast said:

Looking at things that could force Fed to unwillingly pivot. 

I feel like the FED is burning down the house to get rid of a few roaches. I look forward to them claiming "the bugs are gone!"

[Humble Beast 258]

Strong dollar also hurting EU banks?

Another one to watch here.

Credit Suisse down over 12%, new all time lows. 
 

I’d have to imagine CS failing would have some contagion. 

Edited September 23, 2022 by Humble Beast

[Trey3216 15325]

33 minutes ago, Humble Beast said:

Strong dollar also hurting EU banks?

Another one to watch here.

Credit Suisse down over 12%, new all time lows. 
 

I’d have to imagine CS failing would have some contagion. 

Incredible contagion.  

[Fudge Nuggets 19151]

If DB didn't fail back in 2018 (or whenever) then CS ain't failing now.

[washparkhorn 9935]

Supply disruptions are the new normal.  Covid eliminated years of neoliberal efficiency gains.  

Lean = fragile.  

Fragile = inefficient when it breaks.

Inefficient =  more resources, including labor.

J Powell promises pain. It appears he plans to deliver. But if true to form, the Fed will loosen afterwards so the big boys can swoop in with cheap money and gobble up distressed firms and assets for pennies on the dollar.  Same as it ever was. 

[Cheeseweasel 26437]

6 minutes ago, washparkhorn said:

Supply disruptions are the new normal.  Covid eliminated years of neoliberal efficiency gains.  

Lean = fragile.  

Fragile = inefficient when it breaks.

Inefficient =  more resources, including labor.

That's actually a really good synopsis of where we are. Instead of wasting their time on dick shaped rockets, our Billionaires need to invent some robot truck drivers / robot construction workers ASAP.

[Snake Diggity 4614]

16 minutes ago, Cheeseweasel said:

That's actually a really good synopsis of where we are. Instead of wasting their time on dick shaped rockets, our Billionaires need to invent some robot truck drivers / robot construction workers ASAP.

That is a good point that I didn’t mention.  Technology will certainly mitigate the labor supply issue, but that’s 5-10 years away at best.  And since we didn’t start pulling the immigration levers 5-10 years ago, we could be in for a decade of pain; not the kind where people are out of work, but the kind where shelves aren’t stocked, services aren’t available, and investments take a beatin.  Gonna stay weird.

Edited September 23, 2022 by Snake Diggity

[workswithseed 2037]

On 9/22/2022 at 12:33 PM, Captainant said:

and with the TCAJ tax cuts phasing out for wage earners through 2025, we're only gonna fuck em harder - MURICA!

I was told those didn't help at all.

[Humble Beast 258]

Strong dollar + energy shortages = tanking currencies

 

[Humble Beast 258]

Krugman weighing in on currency issues. I think this means UK is fucked. 
 

Guess what? They do have external liabilities in a foreign currency. Energy/USD. How is he so dense to miss that?

 

Same thing has the Yen under pressure. And the yen is a systemically more important currency. Japan will have to sell US treasuries to support their currency. Watch out. 

 

[Humble Beast 258]

Related 

 

[Bozo_Casanova 26285]

Related but personal- I need to pay my kid‘s tuition in the next few days. I’ve been putting it off because she goes to college in the UK and it’s payable in pounds.

On 9/25/21 the USD was worth .73GBP

today it’s .95

Edited September 26, 2022 by Bozo_Casanova

[jimmyjazz 45560]

Yeah, well do the conversion for my 2 kids in Austin and 1 kid in . . . well, he's in Tyler.

Still.

[Brisketexan 104628]

Related but personal- I need to pay my kid‘s tuition in the next few days. I’ve been putting it off because she goes to college in the UK and it’s payable in pounds.
On 9/25/21 the USD was worth .73GBP
today it’s .95

Yep. We had to pay a chunk of the tuition earlier, but still left some for later, and almost all of the housing invoice. Just the movement of the GBP in the last coupla months has saved me thousands.
We oughta buy each other drinks with the savings.

[troph 24563]

Good read on inflation numbers (up until his picks).

https://seekingalpha.com/article/4542305-why-inflation-has-likely-peaked

 

[Incredulity 11555]

 

[Humble Beast 258]

 

[bernorange 8348]

If the poor and middle and upper middle classes want to lessen the pain the Fed can bring to bear, they should stop spending money on non-essentials.  Tighten belts you fools.

[Hefeweizen 5307]

1 minute ago, workswithseed said:

They will be, America will be going on a diet. We didn't know it, but this was the true liberal plan all along. 

Fuck out of here with that bullshit.

[Schulz2.0 28771]

12 hours ago, Bozo_Casanova said:

Related but personal- I need to pay my kid‘s tuition in the next few days. I’ve been putting it off because she goes to college in the UK and it’s payable in pounds.

On 9/25/21 the USD was worth .73GBP

today it’s .95

[jimmyjazz 45560]

14 minutes ago, workswithseed said:

They will be, America will be going on a diet. We didn't know it, but this was the true liberal plan all along. 

So much for no politics?

[Wally Fairway 5524]

we are going to need a very concerted effort along multiple fronts to bring inflation under control
maybe something like the advertising campaign launched in 1974

 

It was so successful that the administration was able to bring it under 2.5% by mid-1983, only took 9 years for that little button to have a big impact

Footnote: I would like to thank that high inflation rate for ruining the Michigan economy, which led me to move to the great state of Texas and I spent the 80's and most of the 90's in the Houston area

[gurt 736]

3 minutes ago, Wally Fairway said:

we are going to need a very concerted effort along multiple fronts to bring inflation under control
maybe something like the advertising campaign launched in 1974

 

It was so successful that the administration was able to bring it under 2.5% by mid-1983, only took 9 years for that little button to have a big impact

Footnote: I would like to thank that high inflation rate for ruining the Michigan economy, which led me to move to the great state of Texas and I spent the 80's and most of the 90's in the Houston area

my condolences 

[washparkhorn 9935]

Wharton Business School professor Jeremy Siegel (Siegel’s paradox) calls his shot:

“. . .One source of inflation that worries some economists and policymakers now is the threat from rising wages, which can create a so-called wage-price spiral, where higher prices push up wages, which then reinforce still higher prices.

However, Siegel said he doesn't think wages are really driving inflation this time, saying that recent worker raises appear to be "catch-up" rather than impetus.

"It seems to me wrong for Powell to say we're going to crush wage increases, we're going to crush the worker, when that is not the cause of the inflation. The cause of the inflation was excessive monetary accommodation for the last two years," Siegel said.”

https://apple.news/AkTa4wEPHQj2Gsm_esHoDew

 

[Bozo_Casanova 26285]

1 hour ago, workswithseed said:

They will be, America will be going on a diet. We didn't know it, but this was the true liberal plan all along. 

Maybe stop voting for giant spending sprees during expansions.

Edited September 26, 2022 by Bozo_Casanova

[Wally Fairway 5524]

1 hour ago, workswithseed said:

They will be, America will be going on a diet. We didn't know it, but this was the true liberal plan all along. 

everybody has been promoting deficit spending - some on welfare, some on warfare, some on tax cuts, some on healthcare, oh yeah and the "non-political" FED was printing money like they were going to run out of paper or ink; both sides of the aisle are guilty of putting us trillions into debt.

[Cheeseweasel 26437]

31 minutes ago, washparkhorn said:

However, Siegel said he doesn't think wages are really driving inflation this time, saying that recent worker raises appear to be "catch-up" rather than impetus.

Yes and no. "Wages increases" is not just about raises. It's about having to hire more people to get the same amount done / hiring more people to fill gaps created by supply chain issues.

[workswithseed 2037]

1 hour ago, jimmyjazz said:

So much for no politics?

So sensitive of a joke. Unless you think it is a true conspiracies, but I doubt it.