2021 - Is inflation finally back in the conversation?

[bernorange 8361]

1 hour ago, Neonmoon said:

Candy is high as fuck

Candy is made out of sugar.  Sugar is made of carbon.  Candy industry just preparing their anus for the carbon credit future.  /sarc

[B00M 6416]

2 hours ago, Skipper said:

Just had a similar conversation with my wife.  I always pay off card monthly but not sure I've ever had a higher current balance than when I logged in yesterday to make the payment.  Granted there are extenuating circumstances (Big 12 champ tix, Sugar Bowl trip flight and hotel prepaid, refundable flight/hotel to Houston for championship game) on top of all of the typical Christmas related charges, but still, it was a bit shocking and I did a double take.  It's just crazy how expensive everything is.  I've got reserves to absorb it but I don't know how people living paycheck to paycheck or "budgeting" based on prior spending are handling it.  The chart above is not surprising at all.  Feel like this all has to come crashing down at some point in '24 but I've been saying that this entire year so who knows.

Nice humble brag, well played sir. 

Also, Hook ‘Em! I couldn’t justify those ticket prices but I’m thankful for folks like yourself that did 

[Fudge Nuggets 19190]

2 hours ago, Skipper said:

Just had a similar conversation with my wife.  I always pay off card monthly but not sure I've ever had a higher current balance than when I logged in yesterday to make the payment.  Granted there are extenuating circumstances (Big 12 champ tix, Sugar Bowl trip flight and hotel prepaid, refundable flight/hotel to Houston for championship game) on top of all of the typical Christmas related charges, but still, it was a bit shocking and I did a double take.  It's just crazy how expensive everything is.  I've got reserves to absorb it but I don't know how people living paycheck to paycheck or "budgeting" based on prior spending are handling it.  The chart above is not surprising at all.  Feel like this all has to come crashing down at some point in '24 but I've been saying that this entire year so who knows.

Lucky me got hit with bills for an upcoming two-week international trip for three people, a domestic trip, a college tuition payment, car / house insurance payment, and a hefty Estimated Tax Payment this month.  Total outlay nearly $45K.  Yipppie.

[Guest]

3 minutes ago, Fudge Nuggets said:

Lucky me got hit with bills for an upcoming two-week international trip for three people, a domestic trip, a college tuition payment, car / house insurance payment, and a hefty Estimated Tax Payment this month.  Total outlay nearly $45K.  Yipppie.

You count your estimated payments as part of your spending? That's a way to an early grave. I had to explain to myself that if I had a regular paycheck that I'd never see money in the first place. So instead of counting it as spending, I count it as something that I was just holding for the time being. 

Otherwise, I would go insane.

[Hefeweizen 5321]

I will sheepishly raise my hand and say I have recently had the same experience as skipper.  I pay my card off monthly, and I kind of rocked back in my chair when I opened the Amex statement on my computer.  Shit is expensive, in general.  College tuition is still the most inflated but groceries are trying their hardest.  Airline travel is actually relatively cheap in my view.

[Parliament 14260]

My Lamborghini came off warranty last week and now it's making a funny noise.  The struggle is real.

[bernorange 8361]

I don't always bitch about the cost of gold plated super yachts on my CC statements, but when I do, it's always in the context of high inflation being annoying.

[Skipper 6135]

33 minutes ago, B00M said:

Also, Hook ‘Em! I couldn’t justify those ticket prices but I’m thankful for folks like yourself that did 

For Big 12 champ tix I had good seats but purchased around 9PM Friday night before game for about a 60 or 70% discount of what the same seats were selling for the Monday prior.  I'm hoping for a similar experience with the Sugar Bowl but not quite as confident we will see the same drop.

[Skipper 6135]

1 hour ago, FirstTimeCaller said:

"Let me complain about higher expenses while I'm buying tickets to major football games, multiple flights and hotels to go drop even more on football games, all during the Christmas holidays." 

I made those purchases and I knew what they cost.  My balance was about 25% higher than I expected because of how insane pricing for everything else is right now.  So in the context of a chart reflecting peak credit card balances, it just reminded me of the exact conversation I had last night (without seeing the chart) that I don't see how this doesn't all blow up in the first half of '24. 

My prediction is one last big consumer spending push this quarter and then a big slowdown into first half of next year with a noticeable bump on delinquencies on cards, car payments, etc.  

[Parliament 14260]

Yo chill.  Q4 stock dividends pay out shortly.  Hang in there and you'll be fine.

[StassneyHorn 6575]

10 hours ago, B00M said:

Given the events of the last few years, it seems short sighted to assume we don’t need the SPR.  I realize we only import like 3% of our oil from the Middle East but if China invades Taiwan and we lose a lot of our pacific fleet, it doesn’t seem crazy to assume Iran and Houthis could disrupt flow out of the ME precisely when our national consumption (and that of our allies) will surge.

why do you think it’s not a problem? If it’s cool that we physically can’t refill our SPR, what do we even have it for? 
 

My “why?” was less of an existential question and more of a why is the goal to have it at full capacity at all times.

[fattyflattie 4639]

6 hours ago, jimmyjazz said:

Well, people living paycheck to paycheck don't buy $1K game tickets, multiple flights or $1K hotel rooms (per night).  Your experience, while perhaps surprising to you, has nothing to do with the average middle income American.

Would probably be more accurate if you replaced “don’t” with “shouldn't”, unfortunately. SECx3 been in way too many big games to convince me otherwise. 

[elfenix 34240]

15 hours ago, HiggyBaby said:

SIAP, I don’t lurk over here often but this seems like the right thread. Was having a conversation with a mortgage lender buddy and brought up business. It’s obviously down but he says there’s a steady flow of customers cashing out at a higher interest rate just to get out from their credit card debt. I had to look up the stats and it’s crazy since the end of Covid.

https://www.lendingtree.com/credit-cards/credit-card-debt-statistics/

the credit card balance statistic isn't what most people seem to think it is.  it's the statement balance, rather than a carried balance.  they actually can't tell how much is carried balance.  i'm not sure how seasonally adjusted that data is when you can literally see the seasonality in the sawtooth of the graph. 

 

https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr479_faq.pdf

so it includes @Skipper's tickets unless he pays his card off before the statement. 

another chunk is subject of the thread.  this data isn't adjusted for inflation.

delinquency rates are more interesting.

not trending in the right direction but still below where we were prior to great recession:

as a percent of balance in serious delinquency the national average is about as low as its ever been

i thought this was kinda interesting.  debt collection by third parties has basically died

to some extent some of this is that we were at historic lows for delinquencies as so pretty much nowhere to go but up.

Edited December 13, 2023 by elfenix

[52-80 19157]

my monthly blue hairdye and anime streaming subscription prices are out of control

[Guest]

@elfenix Can you talk more about the juxtaposition of charts 1 and 2 in your post?

Delinquencies are up... but the balance that's delinquent is significantly smaller?

[elfenix 34240]

15 minutes ago, FirstTimeCaller said:

@elfenix Can you talk more about the juxtaposition of charts 1 and 2 in your post?

Delinquencies are up... but the balance that's delinquent is significantly smaller?

source pdf: https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2023Q3

it's % of the balance, not absolute terms.  and that's all debts, not just credit cards.  total debt is up (again, not inflation adjusted) (note that 18-29 year olds don't have that much debt, so despite having the highest delinquency rates in almost every category it doesn't add up to much):

 

mortgage debt is the biggest chunk of debt for every age group, with auto loans looking like they're second for those over 40, student loans second for those below.  people are relatively on time with their mortgage and student loan payments which is why the percent balance 90 days late is low.

% of balance in serious delinquency for mortgages is coming up off the floor but is still lower than it was in the before times.

student loan serious delinquencies are basically 0 right now due to the pause, but had been running ~10% of balance (it was the one loan type where 18-29 was actually the least delinquent)

auto loan delinquencies are not good for the under 40 crowd, about average for the over 40 crowd. 

 

foreclosures and bankruptcies are also running about half of what they were in the before times. 

 

mortgage delinquencies going above ~1.5%, maybe 1.75% is when i'd start being concerned.

[Neonmoon 38129]

PCE Deflator trending well

[Neonmoon 38129]

Here are some PCE forecasts

[Guest]

Just realized @Cheeseweasel hasn't posted for over two months. Used to be a staple on the inflation thread.

[Incredulity 11671]

Yikes,

Has he posted anywhere?  Hadn't occurred to me, but yeah he hasn't been around.  Hopefully that's just escaping this asylum for a while and not an issue.

[bernorange 8361]

1 hour ago, Incredulity said:

Has he posted anywhere?  Hadn't occurred to me, but yeah he hasn't been around.  Hopefully that's just escaping this asylum for a while and not an issue.

Looks like he was quite active in the Israel-Hamas thread on October 9 and then just disappeared.

[StassneyHorn 6575]

Atlanta Fed increased GDP now prediction from 1.2% to 2.6% this week.

https://www.atlantafed.org/cqer/research/gdpnow

[B00M 6416]

18 hours ago, bernorange said:

Looks like he was quite active in the Israel-Hamas thread on October 9 and then just disappeared.

Hopefully it wasn’t like this Turkish MP

https://www.reddit.com/r/worldnewsvideo/comments/18go712/turkish_mp_says_that_israel_will_suffer_the_wrath/

[Hal Finney 174]

In the words of the great Winston Wolf, let’s no go sucking each other’s dicks just yet. 
 

Powell changes signaling, market now pricing in rate cuts in 2024.

 

 

 

[Ghost of LL 15531]

On 12/12/2023 at 12:27 PM, Incredulity said:

Yeah, I mean no one has ever needed to fall back on reserve inventory of any production material in the history of making stuff.

But we have the reserve inventory.  It's in the ground.  It's not going anywhere.  

Your point makes sense for Oklahoma as it continues to weigh the benefits of creating a Strategic Meth Reserve.  Unlike petroleum, meth has to be manufactured.  And it has to be manufactured from chemicals that themselves have to be manufactured.  So there is the potential for a shortage if there is any interruption in the manufacturing process.

But petroleum isn't manufactured.  It's already there.  All we're doing with the SPR is transferring petroleum from one hole in the ground to another hole in the ground.  And yeah, it's more accessible when it's in the second hole.  But it's not like we're ever going to have a real shortage of production equipment sufficient to justify the costs of the SPR.

 

[Neonmoon 38129]

On 12/15/2023 at 6:37 PM, Hal Finney said:

In the words of the great Winston Wolf, let’s no go sucking each other’s dicks just yet. 
 

Powell changes signaling, market now pricing in rate cuts in 2024.

The difference being Nixon engineered the rate cuts by instructing his buddy Burns to lower them in 1972 for political reasons (get elected) and had nothing to do with inflation. (there are recorded tapes of it). I doubt Biden called Powell up and asked for rate cuts before the election but I’m sure it will seem that way to certain people. 

Inflation shot back up after Carter stupidly passed 2 stimulus bills (Economic Stimulus Appropriations Act 1977 and Revenue Act 1978) for the stalled economy when it didn’t need it and then an oil shock happened again which supercharged the problem. 

[jimmyjazz 45948]

Not an O&G guy . . . honest question:  is there a difference between SPR and in-field resources in terms of response time to add supply?  I definitely recall a pretty bad lag in drilling once thousands of rigs have been mothballed after price has cratered.

[Ghost of LL 15531]

12 hours ago, BeardIP said:

I read today that, and in no small part due to the U.S. production, OPEC control of worldwide/total petroleum is down to ~50%. That is good as it the lower that number goes, the duller their influence when they act as a cartel.

The amazing thing is that together, the United States and Canada now produce more petroleum than do Saudi Arabia and Russia combined.  

We're kind of caught in this very Boomer mindset that the Arabs control the global petroleum market.  Today, that couldn't be further from the truth.  Combined, the Gulf Arab producers (i.e., Saudi Arabia, Iraq, Kuwait, the UAE, and Qatar) produce less annually than the United States and Canada.

2 hours ago, jimmyjazz said:

Not an O&G guy . . . honest question:  is there a difference between SPR and in-field resources in terms of response time to add supply?  I definitely recall a pretty bad lag in drilling once thousands of rigs have been mothballed after price has cratered.

Yes--the SPR is stored in salt domes in Texas and Louisiana.  So there is a lag not only in production, but in transportation.

But whether that lag is meaningful is another question.  When it comes to addressing economic considerations, which is the only purpose to which the SPR has ever been put, the lag has not been material.

[Wally Fairway 5549]

22 hours ago, BeardIP said:

I read today that, and in no small part due to the U.S. production, OPEC control of worldwide/total petroleum is down to ~50%. That is good as it the lower that number goes, the duller their influence when they act as a cartel.

That is why the Saudi's are now trying to develop influential positions in global soccer and golf; clearly that is a power play for economic influence

 

[Storm the Field 5294]

Oh the vibes they are a changin'...

Best economic sentiment readings in 6 months. 

[EastHorn 281]

On 12/12/2023 at 4:19 PM, bernorange said:

I don't always bitch about the cost of gold plated super yachts on my CC statements, but when I do, it's always in the context of high inflation being annoying.

Nobody wants to work, ya know.

[Hal Finney 174]

On 12/18/2023 at 6:40 PM, Ghost of LL said:

justify the costs of the SPR.

 

what are the costs? 

 

On 12/20/2023 at 9:22 AM, Storm the Field said:

Oh the vibes they are a changin'...

Best economic sentiment readings in 6 months. 

 

On 12/18/2023 at 7:25 PM, Neonmoon said:

The difference being Nixon engineered the rate cuts by instructing his buddy Burns to lower them in 1972 for political reasons (get elected) and had nothing to do with inflation. (there are recorded tapes of it). I doubt Biden called Powell up and asked for rate cuts before the election but I’m sure it will seem that way to certain people. 

Raging economy, but rate cuts already being priced in for 2024 off of Powell's change in tone. Hard not to see a political angle.

[Ghost of LL 15531]

2 hours ago, Hal Finney said:

what are the costs? 

I don't know the actual cost.  But there's a cost of maintaining the physical plant of the reserve.  And then there's the cost of acquiring the petroleum.

[gmr548 16580]

On 12/12/2023 at 12:28 PM, Skipper said:

Just had a similar conversation with my wife.  I always pay off card monthly but not sure I've ever had a higher current balance than when I logged in yesterday to make the payment.  Granted there are extenuating circumstances (Big 12 champ tix, Sugar Bowl trip flight and hotel prepaid, refundable flight/hotel to Houston for championship game) on top of all of the typical Christmas related charges, but still, it was a bit shocking and I did a double take.  It's just crazy how expensive everything is.  I've got reserves to absorb it but I don't know how people living paycheck to paycheck or "budgeting" based on prior spending are handling it.  The chart above is not surprising at all.  Feel like this all has to come crashing down at some point in '24 but I've been saying that this entire year so who knows.

Uh, maybe not spending thousands on traveling to football games?

[bernorange 8361]

Quote

Overall corporate pre-tax profits (excluding the Federal Reserve Banks), jumped by 3.4% in Q3 from Q2, and by 5.5% year-over-year, to a record seasonally adjusted annual rate of $3.45 trillion, fueled by profit spikes in a number of industries whose figures the Bureau of Economic Analysis released today ...
...
During the surge of inflation in 2021 and 2022, price increases were outstripping cost increases by extraordinary margins, hence the spike in profits. Then there was a lull in Q1 and Q2 this year, and now it’s starting all over again:

Surging profitability during a period of big inflation is a sign that companies have leveraged inflation to their advantage, hiking prices much faster than their costs went up, and thereby doing their part in fueling inflationary momentum. And they’re able to do it because their customers are willing to pay those whatever-prices.
...

More:

https://wolfstreet.com/2023/12/21/the-inflationary-aspects-of-corporate-profits-by-major-industry-with-charts-its-starting-all-over-again-good-lordy/

 

[Captainant 27667]

7 minutes ago, bernorange said:

More:

https://wolfstreet.com/2023/12/21/the-inflationary-aspects-of-corporate-profits-by-major-industry-with-charts-its-starting-all-over-again-good-lordy/

Careful, you could upset folks on this board posting data like that

[Storm the Field 5294]

November PCE comes in lower than expected.

On a 6-month basis, core PCE, at 1.87%, is already lower than the 2% target.

 

 

[Armybrat 40844]

Financial crisis in my household….

Oil royalty checks are down over last year, and Mrs. Brat just broke our budget with this massive purchase….

 

[Fudge Nuggets 19190]

13 hours ago, Armybrat said:

Financial crisis in my household….

Oil royalty checks are down over last year, and Mrs. Brat just broke our budget with this massive purchase….

 

You need to control your woman.

[Parliament 14260]

Inflation is high, my stock portfolio is higher.  Should I be whining?

[bernorange 8361]

Quote

...  the share of credit card debt falling behind for the first time climbed to 8% in the third quarter. That’s up from 6.5% in the first quarter of 2023.

It’s been more than a decade since the share of 30-day credit card delinquency was that high, according to household debt statistics from the Federal Reserve Bank of New York.

At a time when markets wonder about the ongoing strength of consumers and their mood, new Goldman Sachs estimates say credit card delinquencies will keep rising in the new year.

The rate of new credit card delinquencies will climb to 9.5% by the first half of 2024 before it eases to around 9% by the end of the year, researchers said in a Thursday note. Low-income card holders will be strained the most, they added.
...
Data is showing more people missing mortgage payments. The default rates on past-due Federal Housing Administration loans reached a nine-year high in November.

Though overall mortgage delinquency rates are still below pre-pandemic levels, it’s a trend “worth watching” one observer said.

https://www.marketwatch.com/story/more-people-fell-behind-on-credit-card-bills-this-year-heres-how-rough-it-could-get-in-2024-7697ab50

 

[Neonmoon 38129]

1 hour ago, Parliament said:

Inflation is high, my stock portfolio is higher.  Should I be whining?

Inflation is not high 

[Neonmoon 38129]

47 minutes ago, bernorange said:

https://www.marketwatch.com/story/more-people-fell-behind-on-credit-card-bills-this-year-heres-how-rough-it-could-get-in-2024-7697ab50

 

Here is more from the article you posted 

Quote

Reassuringly, the recent rise in the delinquency rate does not appear to have been caused by distress in the labor market or unsustainable spending,” they wrote, going on to say that credit card data suggests people have “have pulled back their spending from elevated peaks in 2021 to be more in line with their incomes.”

Almost half of people (44%) said they wanted to save money, reduce spending and pay off debts in the new year, according to a YouGov poll on resolutions for 2024. The personal finance resolution was the third-ranked goal, behind eating healthier and losing weight.

But the delinquency drumbeat is getting picked up elsewhere.

Data is showing more people missing mortgage payments. The default rates on past-due Federal Housing Administration loans reached a nine-year high in November. 

Though overall mortgage delinquency rates are still below pre-pandemic levels, it’s a trend “worth watching” one observer said.

I know you want the market to crash but the numbers don’t back it up 

[ChickenSandwich 9836]

2 hours ago, Parliament said:

Inflation is high, my stock portfolio is higher.  Should I be whining?

No-

 The top 10% owns 89% of the stocks in this country, meaning the bottom 90% owns just 11% of the stocks.

 

Inflation is not high 2023 vs 2022, it was the 24 consecutive months prior of record high inflation that did the damage. 
 

https://awealthofcommonsense.com/2021/10/ownership-inequality-in-the-stock-market/#:~:text=The top 1% now owns,just 11% of the stocks.

Edited December 23, 2023 by ChickenSandwich

[Captainant 27667]

2 minutes ago, ChickenSandwich said:

No-

 The top 10% owns 89% of the stocks in this country, meaning the bottom 90% owns just 11% of the stocks.

 

Inflation is not high 2023 vs 2022, it was the 24 consecutive months prior of record high inflation that did the damage. 

And one step of further division, the top 1% owns 53% of stocks in the country. The gains and growth of the stock market aren't being realized uniformly. Wage earners have been getting fuckin spitroasted

[Fudge Nuggets 19190]

2 hours ago, ChickenSandwich said:

it was the 24 consecutive months prior of record high inflation that did the damage. 

Tell me you’re a millennial without telling me you’re a millennial.

FFS I wish you stupid fucks would look at something that goes back more than 15 minutes.

[StassneyHorn 6575]

Well he looked back 24 months, not 15 minutes

[Hal Finney 174]

On 12/21/2023 at 3:20 PM, Ghost of LL said:

I don't know the actual cost.  But there's a cost of maintaining the physical plant of the reserve.  And then there's the cost of acquiring the petroleum.

Without going CR, let’s just say we spend plenty of money on a lot more frivolous or suspect shit than storage of the world’s most important commodity.  

[Trey3216 15346]

5 hours ago, Captainant said:

And one step of further division, the top 1% owns 53% of stocks in the country. The gains and growth of the stock market aren't being realized uniformly. Wage earners have been getting fuckin spitroasted

And when the market melts down, they’ll own and realize most of the losses.   When 90% of your wealth is tied up in stocks, that shit tends to happen.  

[Neonmoon 38129]

Additional inflation perspective. Core PCE over past 6 months is at 1.9%, right at Fed’s target