2021 - Is inflation finally back in the conversation?

[Cheeseweasel 26438]

16 hours ago, Bozo_Casanova said:

The important thing isn't that workers should necessarily make more. Let's imagine that CEO only made 10MM.  Is the CEO 8mm less productive? Or rather, what's the value of a 10mm CEO, plus the return on 8mm additional CapEx? 

Wouldn't the risk be losing that CEO to another company? Like we see in pro sports, value is what the market will pay. 

[Hefeweizen 5347]

Unfortunately CEO performance is correlated to metrics which may or may not be reflective of company performance.  Hence idiotic stock buybacks that make you scratch your head.  And on top of that, a CEO can actually be penalized for making long term decisions beneficial to the company.

 

But that goes to the core issue in a lot of companies.  Their boards are pathetic and don’t do their job, rubber stamping the compensation plans.

 

 Unfortunately none of that is relevant to this thread as it relates very lightly to inflation…

 

And the CR bullshit really needs to go away, it runs an otherwise really good thread.

[StassneyHorn 6673]

 

U.S. producer prices barely rose in June and the annual increase in producer inflation was the smallest in nearly three years, more evidence that the economy had entered a disinflation phase.

The producer price index for final demand nudged up 0.1% last month, the Labor Department said on Thursday. Data for May was revised to show the PPI falling 0.4% instead of the previously reported 0.3%. In the 12 months through June, the PPI gained 0.1%. That was the smallest year-on-year rise since August 2020 and followed a 0.9% rise in May.

https://www.reuters.com/markets/us/us-producer-prices-barely-rise-june-core-ppi-subsides-2023-07-13/

[washparkhorn 9939]

Central Banking 101:

1. disinflation—good
2. deflation—destroyer of worlds

Eurozone and China edge closer to an abyss.

 

[Gatorubet 30330]

16 hours ago, 52-80 said:

Wrong interpretation: i didn't say people aren't interested in their neighbors' financial conditions.  I said they shouldn't be.  Specifically in the context of the numerical outliers - the pay of the people who represent 0.003% of SP500 employees is not what determines my wage and livelihood or not.  It's a reductive, populist distraction.

SP500 employee count 35,000; Pay ratio 300:1; Employee earns 60k per year, CEO earns 18M.  If pay ratio goes back down to 50:1... each employee now earns... $60,400.  That's a 0.7% raise for anyone counting.  Can we now move beyond catchy headlines numbers designed to rile up cable TV audiences?

***

The relative measurements keep getting brought up and its flawed.  Example: your 1960 working-class grandpa provides sufficiently for his family.  But now everyone above him raises their standard of life tremendously .  The median has just gone up.  (1) did your grandpa just get closer, or farther away from the median?  (2) does everyone else living better suddenly make his life insufficient?

***

So from 1960 to 2020 what has happened to the real, median income in America?  it's gone UP- posted above.  What's happened to real disposable income per capita?  UP (FRED series A229RX0)

What's happened to home ownership rate? UP (FRED series RHORUSQ156N)

What's happened to poverty rate in America? DOWN (US Census 2021, using both traditional poverty measure and modern SPM)

Those are authoritative government sources, so people are welcomed to dispute them. 

***

Fact is in a gigantic country with natural distribution of talent and achievement, there will never be equal outcomes. The most important thing is the country provides opportunity for capable people to move up -- which it does in spades.  The second most important thing is a safety net against the bottom from falling out -- which it also does (I would know, my family were former recipients of all the programs).  In between there's a slot for everybody. 

This is some Ayn Randian asshole-ish shit.   People shouldn’t be interested in their neighbors financial conditions?   What a self-absorbed, anti-Christian, anti-decent human secular opinion.     

 

 

[52-80 19274]

3 minutes ago, Gatorubet said:

This is some Ayn Randian asshole-ish shit.   People shouldn’t be interested in their neighbors financial conditions?   What a self-absorbed, anti-Christian, anti-decent human secular opinion.    

I don't read Ayn Rand or the Bible.  Can you tell me their perspective on measuring oneself against other people with higher means?  Feel free to obsess about your CEO's pay.  Just realize his/her pay doesn't materially affect yours.  Sorry to douse you with that indecent splash of reality. 

 

[52-80 19274]

36 minutes ago, Cheeseweasel said:

Wouldn't the risk be losing that CEO to another company? Like we see in pro sports, value is what the market will pay. 

Yes, thats 1 factor.  Further, the hypothetical productivity question between a 18M and a 10M CEO - the answer is embedded a priori in the final realized compensation.  You don't know whether a CEO will perform to 18M, but you structure the pay to be aligned with the positive net effect of that productivity.

Apple says if Tim Cook raises the companies market value quicker than their peers over a 3 year period, he gets paid more. 

 

26 minutes ago, Hefeweizen said:

And the CR bullshit really needs to go away, it runs an otherwise really good thread.

We've barely scratched anything that involves political parties or ideas.  Or is CR just a catchall label for when people lacking substantive arguments get really emotional and angry instead

[Cheeseweasel 26438]

37 minutes ago, Gatorubet said:

This is some Ayn Randian asshole-ish shit.   People shouldn’t be interested in their neighbors financial conditions?   What a self-absorbed, anti-Christian, anti-decent human secular opinion.     

WE SHOULD be interested in our neighbor's financial conditions, but I don't expect Walmart to do that. I expect them to follow the Government's guidelines for paying taxes, safety, etc.

[Bozo_Casanova 26613]

1 hour ago, Cheeseweasel said:

Wouldn't the risk be losing that CEO to another company? Like we see in pro sports, value is what the market will pay. 

Sure, but 
a) CEOs leaving for other companies purely over compensation doesn't seem to happen much and 
b) when companies pay their CEOs less than others in their industry there doesn't seem to be much negative impact

That was my point earlier - it just doesn't seem tightly correlated to performance so much as expectations - the same thing is true with P5 football coaches. 

Edited July 13, 2023 by Bozo_Casanova

[52-80 19274]

20 minutes ago, Bozo_Casanova said:

That was my point earlier - it just doesn't seem tightly correlated to performance so much as expectations - the same thing is true with P5 football coaches. 

And you could say the exactly same thing at the staff employee level.  Which is not at all to say there's anything unnatural with that.  You ascertain potential performance, you structure the incentives, and then you hope for the best. 

[Cheeseweasel 26438]

Just now, 52-80 said:

then you hope for the best. 

"Hope is not a plan" - Every shitty midlevel manager I ever worked for

[Upgrayedd 5822]

2 minutes ago, Cheeseweasel said:

"Hope is not a plan" - Every shitty midlevel manager I ever worked for

What about as a strategery?

[Captainant 27878]

1 hour ago, Cheeseweasel said:

I expect them to follow the Government's guidelines for paying taxes, safety, etc.

finish your thought now... The guidelines that their billionaire owners oligarchs have gotten passed through our government.

Edited July 13, 2023 by Captainant

[Cheeseweasel 26438]

26 minutes ago, Captainant said:

finish your thought now... The guidelines that their billionaire owners oligarchs have gotten passed through our government.

You're not wrong. Foxes are certainly guarding the hen house.

[Bozo_Casanova 26613]

1 hour ago, 52-80 said:

And you could say the exactly same thing at the staff employee level.  Which is not at all to say there's anything unnatural with that.  You ascertain potential performance, you structure the incentives, and then you hope for the best. 

Not really. I mean, they don't have any power over the makeup of their own management team, compensation structure, or employment contract. It's just not analogous at all- the labor market for board-appointed senior management just works on a completely different basis than it does for middle management and ICs, who work in banded comp structures and benchmarked. 

[Neonmoon 38130]

12 minutes ago, Bozo_Casanova said:

banded comp structures and benchmarked. 

"banded comp structure" are my trigger words

[Hefeweizen 5347]

2 hours ago, 52-80 said:

Yes, thats 1 factor.  Further, the hypothetical productivity question between a 18M and a 10M CEO - the answer is embedded a priori in the final realized compensation.  You don't know whether a CEO will perform to 18M, but you structure the pay to be aligned with the positive net effect of that productivity.

Apple says if Tim Cook raises the companies market value quicker than their peers over a 3 year period, he gets paid more. 

 

We've barely scratched anything that involves political parties or ideas.  Or is CR just a catchall label for when people lacking substantive arguments get really emotional and angry instead

Ironic that you found this aimed at you when it clearly wasn’t.  If the glove fits though…

[52-80 19274]

12 minutes ago, Bozo_Casanova said:

Not really. I mean, they don't have any power over the makeup of their own management team, compensation structure, or employment contract. It's just not analogous at all- the labor market for board-appointed senior management just works on a completely different basis than it does for middle management and ICs, who work in banded comp structures and benchmarked. 

Execs are benchmarked - their benchmarks are explicit in the proxy statement for all to read and scrutinize.  Their comp and hiring selection is more rigorous than any IC or staffer. You dont pay an executive recruiting firm to screen for a lead dev. 

Anyway, we’re splitting hairs from a fine strand. 

Has poverty rate gone down? Yes. Are there support systems for those at the bottom? Yes. (Im open to argument there can be more). Has  wealth measure of the group (by median or mean) gone up? Yes.

Theres robust data behind that, and its not disproven by single anecdotes. 

Posters here seem patently offended at the notion that across 350m people its somehow wrong that some (very few) have more than others, and that they should all match closer in outcomes…I cant figure if rooted more in jealousy or naivete. 

[troph 24916]

4 hours ago, washparkhorn said:

Central Banking 101:

1. disinflation—good
2. deflation—destroyer of worlds

Eurozone and China edge closer to an abyss.

 

I get the implications of the second chart. I don't get the first one.

[Cheeseweasel 26438]

7 minutes ago, troph said:

I get the implications of the second chart. I don't get the first one.

Cheap rubber dog turds are back!

Look to the Bank of China to lower interest rates to fight deflation. Basically the exact opposite of what we've been doing.

[troph 24916]

3 minutes ago, Cheeseweasel said:

Cheap rubber dog turds are back!

Look to the Bank of China to lower interest rates to fight deflation. Basically the exact opposite of what we've been doing.

I get the China issue, I don't get the EU issue, I don't see deflation close if I read the chart correctly.

[troph 24916]

oh and obligatory...

 

 

[Cheeseweasel 26438]

8 minutes ago, troph said:

I get the China issue, I don't get the EU issue, I don't see deflation close if I read the chart correctly.

I read your post wrong because I'm regarded.

I don't think it's an issue for the EU--it looks like "disinflation" which is fine (until you hit China levels of deflation)

[52-80 19274]

1 hour ago, Hefeweizen said:

Ironic that you found this aimed at you when it clearly wasn’t.  If the glove fits though…

I didnt absolve just myself from the CR charge. I spoke collectively: *we’ve* not CR’ed. 
So give me the glove and say who you’re accusing…

[Bozo_Casanova 26613]

2 hours ago, Neonmoon said:

"banded comp structure" are my trigger words

Real life conversation with HR a few years ago- 

ME: Employee A is awesome.  But you're telling me they are only eligible for 2% increase. Employee B already makes more and isn't as good as employee A is eligible for a 5% raise. Why is that and what can we do?

HR: Employee A is over the midpoint for band 3, they are already being compensated fairly for above average performance on that band so they get a smaller increase. Employee B is below the midpoint for band 5, as considering your evaluation at an accurate rating, we ought to bring them to the midpoint.

Me: But Employee A has a better rating than employee B, in the same job. And they make less, and are eligible for a smaller raise. Why?

HR: It's the same job but a different salary band.

Me: Great. I'd like to promote Employee A into band 5. Can we do that?

HR: No. It's not a promotion, those are different salary ranges inside the grade.

Me: So how do you change bands?

HR: Salary band is generally determined at the time of hire. Employee A is in band 3. So are 50% of the people in the job grade. And he's over the midpoint. 75% of the people in the band are below the midpoint.

Me, puzzled: then how is that the midpoint?

HR: Because it's in the middle. <Shows me a picture of the band and puts finger in middle> See?

Me: <rips clothes off, strips naked and rubs shit in hair while screaming>

@52-80 the above is the reality of ICs and middle management compensation structure in large corps and bears absolutely no relationship to how senior exec compensation is set and managed. 

Edited July 13, 2023 by Bozo_Casanova

[Cheeseweasel 26438]

Employee A has already fucked off to another gig by the time this conversation finished.

[52-80 19274]

2 hours ago, Bozo_Casanova said:

@52-80 the above is the reality of ICs and middle management compensation structure in large corps and bears absolutely no relationship to how senior exec compensation is set and managed. 

Frustrating story, and not a surprise that HR cant math. A’s pay being independent from B’s (despite your lobbying on their relative merit)…isnt that my argument so far?  and their pay not reflective their performance….isnt that coincidentally illustrative of your viewpoint on CEOs?  

[Bozo_Casanova 26613]

14 minutes ago, 52-80 said:

Frustrating story, and not a surprise that HR cant math. A’s pay being independent from B’s (despite your lobbying on their relative merit)…isnt that my argument so far?  and their pay not reflective their performance….isnt that coincidentally illustrative of your viewpoint on CEOs?  

Well, it's not my view on CEOs, but rather that in many cases the packages simply seem excessive, irrespective of performance. 

[52-80 19274]

30 minutes ago, Bozo_Casanova said:

Well, it's not my view on CEOs, but rather that in many cases the packages simply seem excessive, irrespective of performance. 

Ive voted more Nos than ive voted Yes. Even voted no to my employers exec group comp. 

Its worked, too. Some major companies have revised their target pay downwards as a response to shareholders. Its not always a monotonically increasing thing

[Neonmoon 38130]

3 hours ago, Bozo_Casanova said:

Real life conversation with HR a few years ago- 

ME: Employee A is awesome.  But you're telling me they are only eligible for 2% increase. Employee B already makes more and isn't as good as employee A is eligible for a 5% raise. Why is that and what can we do?

HR: Employee A is over the midpoint for band 3, they are already being compensated fairly for above average performance on that band so they get a smaller increase. Employee B is below the midpoint for band 5, as considering your evaluation at an accurate rating, we ought to bring them to the midpoint.

Me: But Employee A has a better rating than employee B, in the same job. And they make less, and are eligible for a smaller raise. Why?

HR: It's the same job but a different salary band.

Me: Great. I'd like to promote Employee A into band 5. Can we do that?

HR: No. It's not a promotion, those are different salary ranges inside the grade.

Me: So how do you change bands?

HR: Salary band is generally determined at the time of hire. Employee A is in band 3. So are 50% of the people in the job grade. And he's over the midpoint. 75% of the people in the band are below the midpoint.

Me, puzzled: then how is that the midpoint?

HR: Because it's in the middle. <Shows me a picture of the band and puts finger in middle> See?

Me: <rips clothes off, strips naked and rubs shit in hair while screaming>

@52-80 the above is the reality of ICs and middle management compensation structure in large corps and bears absolutely no relationship to how senior exec compensation is set and managed. 

My old department was full of assholes, so when the nice HR lady came in to explain away this exact same scenario of bullshit. It didn’t go over well. She transferred after our meeting so she wouldn’t have to cover our department.

The band compensation system (which is used in many companies) is manufactured horse shit to pay employees less over time. 

[Cheeseweasel 26438]

HR: "Things seem to be running smooth here. Now we can't have that, can we?"

[Captainant 27878]

50 minutes ago, Cheeseweasel said:

HR: "Things seem to be running smooth here. Now we can't have that, can we?"

Well if they increase employee comp, that would increase costs, which may harm share price, which may harm their ability to offer competitive executive comp packages! HR has gotta protect the shareholders and leadership from those workers

[Cheeseweasel 26438]

HR are just power hungry Karens. Prove me wrong.

[Slacks 6899]

17 hours ago, Bozo_Casanova said:

Real life conversation with HR a few years ago- 

ME: Employee A is awesome.  But you're telling me they are only eligible for 2% increase. Employee B already makes more and isn't as good as employee A is eligible for a 5% raise. Why is that and what can we do?

HR: Employee A is over the midpoint for band 3, they are already being compensated fairly for above average performance on that band so they get a smaller increase. Employee B is below the midpoint for band 5, as considering your evaluation at an accurate rating, we ought to bring them to the midpoint.

Me: But Employee A has a better rating than employee B, in the same job. And they make less, and are eligible for a smaller raise. Why?

HR: It's the same job but a different salary band.

Me: Great. I'd like to promote Employee A into band 5. Can we do that?

HR: No. It's not a promotion, those are different salary ranges inside the grade.

Me: So how do you change bands?

HR: Salary band is generally determined at the time of hire. Employee A is in band 3. So are 50% of the people in the job grade. And he's over the midpoint. 75% of the people in the band are below the midpoint.

Me, puzzled: then how is that the midpoint?

HR: Because it's in the middle. <Shows me a picture of the band and puts finger in middle> See?

Me: <rips clothes off, strips naked and rubs shit in hair while screaming>

@52-80 the above is the reality of ICs and middle management compensation structure in large corps and bears absolutely no relationship to how senior exec compensation is set and managed. 

 

17 hours ago, Cheeseweasel said:

Employee A has already fucked off to another gig by the time this conversation finished.

Can confirm, having been employee A at the big International Businesses firm. Immediate 25% increase upon leaving as a top performer that was 20% below reference (median) pay in the band and limited to 9% max increase by 'policy' and couldn't get promoted, even with a title change and more responsibility. 

 

Not sure what this has to do with inflation, but I'm surly. 

[Storm the Field 5304]

Best consumer sentiment reading in almost 2 years. Significant improvements in both "current conditions" and "future expectations", though near-term inflation expectations increased a bit.

 

[jimmyjazz 46351]

5 hours ago, Cheeseweasel said:

HR: "Things seem to be running smooth here. Now we can't have that, can we?"

Every time I hired a young engineer, especially new grads, I'd tell them "don't trust HR.  They aren't your friend.  They don't work on your behalf, they work on the board's behalf.  You're completely fungible in their eyes."

Combine that with their rigid "resume must contain these keywords" mentality, and my general view of them was basically

Edited July 14, 2023 by jimmyjazz

[Biff Tannen 45753]

23 hours ago, Bozo_Casanova said:

HR: Salary band is generally determined at the time of hire.

This is FUCKING INSANE.  

I quit my job in April and am now looking at going back (this was always the plan) and my manager even told me that there's a good chance I may get a pay increase when I get re-hired for the exact same position, purely because of this.  

[Longhornsnus 200]

The HR band conversations is a great reminder why the most important and best thing you can do for yourself when starting a new gig is a) know their comp plans (hopefully you have an insider who knows the lay of the land) and how they operate and what the benchmarking is and b) negotiate hard and be willing to walk. 

What you negotiate for yourself pays dividends (not just in raises but bonus, etc.) for the 2-5 years you are at the firm, unless you try to go MD/partner/shareholder route.

[gmr548 16617]

I think this normally politically divisive thread has found common ground in the belief that HR is just utterly useless.

[tbone_ 14211]

Useless to actual people who work. They do serve to minimize lawsuit exposure for the corp, which is the only possible benefit I can see.

[Incredulity 11684]

9 hours ago, tbone_ said:

They do serve to minimize lawsuit exposure for the corp

This.

HR is pure corporate CYA.

 

[StassneyHorn 6673]

HR is a tool for management only. Anyways…..

Americans are still better off, with more in the bank than before the pandemic

Bank account balances are 10 to 15 percent higher than they were in 2019, new data shows

https://www.washingtonpost.com/business/2023/07/17/bank-accounts-excess-cash-savings/

[UTGrad98 2288]

As a former director for a giant corporation I can not fucking stand HR. They literally made my life exponentially worse anytime I had to deal with them for one of my employees. There is no common sense. Only insanity. I try to not continue derails but HR and the music sub-forum here where everyone thinks they are so cool with their complicated shoes while shitting on perfectly good bands gets my blood boiling. CR, not so much. Anyway...what were we all talking about?

[jimmyjazz 46351]

2 hours ago, UTGrad98 said:

I try to not continue derails but HR and the music sub-forum here where everyone thinks they are so cool with their complicated shoes while shitting on perfectly good bands gets my blood boiling. 

Oh man, I need the deets.  (It's probably me, but my shoes are really basic Vans.)

[Gatorubet 30330]

21 hours ago, gmr548 said:

I think this normally politically divisive thread has found common ground in the belief that HR is just utterly useless.

 

[tbone_ 14211]

Oh man, I need the deets.  (It's probably me, but my shoes are really basic Vans.)

Typically been a Vans fan, especially the lace ups. But lately I’ve switched to Reefs. So comfy.

[Bozo_Casanova 26613]

I'm a checkered Vans slip on guy for 40 years, but lately I've been rolling with Sabahs

Edited July 18, 2023 by Bozo_Casanova

[babysdaddy 2730]

On 7/17/2023 at 2:10 PM, StassneyHorn said:

HR is a tool for management only. Anyways…..

Americans are still better off, with more in the bank than before the pandemic

Bank account balances are 10 to 15 percent higher than they were in 2019, new data shows

https://www.washingtonpost.com/business/2023/07/17/bank-accounts-excess-cash-savings/

 

I hope the you/the Post is right but lots of angst around what the consumer is going to look like later this year, early next.  Maybe the most telegraphed recession in history will finally show up but not yet

[StassneyHorn 6673]

go to page 53 and you can see people fighting over the "recession" last summer

Edited July 19, 2023 by StassneyHorn

[babysdaddy 2730]

18 hours ago, StassneyHorn said:

go to page 53 and you can see people fighting over the "recession" last summer

Yeah, that is when everyone found out that, technically, 2 quarters of negative real gdp in row is not how we define a recession even though we'd been using that shorthand for the past umpteen years.  It was odd that the everyone became pedantic about the definition right before midterms.  Anywho, no recession yet and not one in sight.  Earliest call would be sometime during q1 of 2024 and in an election year all incumbents running from house/senate/president will pull out the stops to avoid having one.