2021 - Is inflation finally back in the conversation?

[MonkeyDoughnut 10297]

This is where all the talk of a "good" economy needs as asterisk. Pretty direct line to where the "growth" is coming from.

[StassneyHorn 6612]

Economic envy of the world

The price of chips has had a hole shot through the bottom. Childhood obesity is back!

[babysdaddy 2725]

On 1/27/2024 at 7:09 AM, MonkeyDoughnut said:

This is where all the talk of a "good" economy needs as asterisk. Pretty direct line to where the "growth" is coming from.

Pretty difficult to argue with a robust real GDP number in the 4th quarter of 3.3% following the Q3 number of 4.9%.  Increased consumer spending in both goods and services, increases in state and local government spending and nonresidential fixed investment, and increased federal government spending led the way.  Gross nominal GDP for the trailing 4 quarters was just a shade under $28 Trillion.  Inflation rate increases have subsided that gave a boost to real disposable personal income increasing 2.5% for the quarter. Overall real GDP for 2023 was up 2.5% after an increase of 1.9% in 2022.  

Nominal was up 6.3% in 2023 after a 9.1% increase in 2022.  If we review consumer balance sheets, specifically the liabilities, 66% of debt outstanding are mortgages and 90+% of those are still at the historically low rates of previous years indicating consumers are not feeling the pinch of higher interest rates.  The robust nominal GDP numbers have actually caused the Debt to GDP percentage to decrease the last couple of years, even with massive annual deficits (meaning the US has more borrowing capacity).

Those concerning increased interest rates have actually provided additional income to investors in the form of higher return on cash balances.

[Parliament 14260]

8 minutes ago, babysdaddy said:

Pretty difficult to argue with a robust real GDP number in the 4th quarter of 3.3% following the Q3 number of 4.9%.  Increased consumer spending in both goods and services, increases in state and local government spending and nonresidential fixed investment, and increased federal government spending led the way.  Gross nominal GDP for the trailing 4 quarters was just a shade under $28 Trillion.  Inflation rate increases have subsided that gave a boost to real disposable personal income increasing 2.5% for the quarter. Overall real GDP for 2023 was up 2.5% after an increase of 1.9% in 2022.  

Nominal was up 6.3% in 2023 after a 9.1% increase in 2022.  If we review consumer balance sheets, specifically the liabilities, 66% of debt outstanding are mortgages and 90+% of those are still at the historically low rates of previous years indicating consumers are not feeling the pinch of higher interest rates.  The robust nominal GDP numbers have actually caused the Debt to GDP percentage to decrease the last couple of years, even with massive annual deficits (meaning the US has more borrowing capacity).

Those concerning increased interest rates have actually provided additional income to investors in the form of higher return on cash balances.

 

(I agree with you on much of that.)

[Storm the Field 5295]

On 1/19/2024 at 9:19 AM, Storm the Field said:

Best consumer sentiment reading since July 2021.

Current conditions, future conditions, inflation expectations all much better than expected.

Different survey, similar results, though this one shows much higher readings for "present situation" vs "future expectations"

 

 

[B00M 6416]

On 1/23/2024 at 12:15 PM, jimmyjazz said:

So, 1.0 -> 0.37 in 38 years (article is from 2021) implies an annual inflation rate of 2.58%.

This is news?  Run for the hills!

I just wanna say that data analysis jimmyjazz is best jimmyjazz 

[jimmyjazz 45972]

4 minutes ago, B00M said:

I just wanna say that data analysis jimmyjazz is best jimmyjazz 

I probably got it wrong.

[WBT 20606]

1 hour ago, jimmyjazz said:

I probably got it wrong.

Looks good to me

[Storm the Field 5295]

Reminder, there are posters on here who take Zerohedge seriously.

That's right, mass unemployment occurs every single January. The powers that be just don't tell you about it and hide it!

Getting real tired of these month-long Great Depressions occurring at the start of every year.

[Neonmoon 38129]

Barry Habib posts at ZeroHedge?

[wackawacka 179]

Inflation keeps falling. I bet partly that China is exporting deflation but expect this is to continue all of 2024.

Team transitory!

[Incredulity 11675]

28 minutes ago, wackawacka said:

China is exporting deflation but expect this is to continue all of 2024.

It’s looking like China is proper fucked.  Hopefully that stays in China 

[Trey3216 15347]

On 2/11/2024 at 10:00 PM, wackawacka said:

Inflation keeps falling. I bet partly that China is exporting deflation but expect this is to continue all of 2024.

Team transitory!

Welp....

[Skipper 6136]

This time last year I never would have thought we would go through the first quarter of 2024 without cutting rates. Now we may make it through the 2nd quarter.

[Trey3216 15347]

2 minutes ago, Skipper said:

This time last year I never would have thought we would go through the first quarter of 2024 without cutting rates. Now we may make it through the 2nd quarter.

I don't think we're cutting rates at all.  I think we'll hold here for the entirety of '24, and maybe halfway into '25.  

Edited February 13 by Trey3216

[StassneyHorn 6612]

Wall Street loading up on Baja Blast and Taco Bell before shitting themselves over a one-tenth of a percent difference is never not funny. Annual inflation drops from 3.4 to 3.1 and they want you to sell in the morning panic so they can buy it back later in the day and pump it the next morning.

[Bateshorn 9928]

Daddy Jpow for weeks: "I'm not cutting in March.  Maybe not even in June."

Wall Street after inflation comes in barely above predictions "HOLY SHIT, I DON"T THINK THERE"S GONNA BE A RATE CUT!!!!!!"

[MonkeyDoughnut 10297]

Everything has been fine as long as the jobs number stays strong. Recent layoff announcements across multiple industries making the market very skittish right now. Being an election year does not help. Very volatile market this year even though it should wash out in the end.

[bernorange 8362]

2 hours ago, Trey3216 said:

I don't think we're cutting rates at all.  I think we'll hold here for the entirety of '24, and maybe halfway into '25.  

That's what I've been thinking for a while now.  I forget who it was that recently said something to the effect of "some (small/regional) banks are going to die, and we're cool with it", but it was a strong signal that they are firm in their commitment to hold rates in place.

[TxTower 652]

That's what I've been thinking for a while now.  I forget who it was that recently said something to the effect of "some (small/regional) banks are going to die, and we're cool with it", but it was a strong signal that they are firm in their commitment to hold rates in place.

It was JPow

[Storm the Field 5295]

21 hours ago, Trey3216 said:

I don't think we're cutting rates at all.  I think we'll hold here for the entirety of '24, and maybe halfway into '25.  

I think this is a bit of a stretch based on a hot January CPI report. CPI spiked last January too. Several wonks pointed out that a lot of the overshoot came from an unexpected blip in OER, which doesn't seem to match up with other data concerning rents. 

Now, if February and March numbers don't get back on track, "no rate cuts in 2024" might be more reasonable, but let's take a breather for a second.

[tbone_ 14128]

The 10 year is fucking killing me

[Trey3216 15347]

11 minutes ago, Storm the Field said:

I think this is a bit of a stretch based on a hot January CPI report. CPI spiked last January too. Several wonks pointed out that a lot of the overshoot came from an unexpected blip in OER, which doesn't seem to match up with other data concerning rents. 

Now, if February and March numbers don't get back on track, "no rate cuts in 2024" might be more reasonable, but let's take a breather for a second.

I'm not basing it on a month's worth of CPI numbers.  I'm basing it on a feeling that's been building since last summer.  And speaking of rents, wait til the real effects of the craziness in the homeowners/dwelling insurance costs start showing up in the rental rates and OER numbers.  50% YoY increases in insurance cost is real $$, real inflation.  

[UTPhil2006 3807]

17 minutes ago, tbone_ said:

The 10 year is fucking killing me

[Fudge Nuggets 19204]

5 hours ago, Trey3216 said:

I'm basing it on a feeling that's been building since last summer.

Always a sound strategery.

[LCHorn 2620]

On 2/13/2024 at 12:34 PM, MonkeyDoughnut said:

Everything has been fine as long as the jobs number stays strong. Recent layoff announcements across multiple industries making the market very skittish right now. Being an election year does not help. Very volatile market this year even though it should wash out in the end.

I know it’s not showing up yet in the CPI, but in the circles we run in there have been a LOT of recent layoffs.  It’s made logging into LinkedIn a depressing experience.  

[Storm the Field 5295]

1 hour ago, LCHorn said:

I know it’s not showing up yet in the CPI, but in the circles we run in there have been a LOT of recent layoffs.  It’s made logging into LinkedIn a depressing experience.  

[Trey3216 15347]

18 hours ago, Fudge Nuggets said:

Always a sound strategery.

Fair enough.  But I read and listen/watch enough commentary from the folks that are laying it out there to see if you want to look for it and run that commentary against what the data and the market are telling us and make that 'feeling' a bit more of a hypothesis.  

[LCHorn 2620]

18 hours ago, LCHorn said:

I know it’s not showing up yet in the CPI, but in the circles we run in there have been a LOT of recent layoffs.  It’s made logging into LinkedIn a depressing experience.  

As I was, I meant unemployment rate, not CPI,  

[gmr548 16580]

On 2/14/2024 at 8:52 AM, Storm the Field said:

I think this is a bit of a stretch based on a hot January CPI report. CPI spiked last January too. Several wonks pointed out that a lot of the overshoot came from an unexpected blip in OER, which doesn't seem to match up with other data concerning rents. 

Now, if February and March numbers don't get back on track, "no rate cuts in 2024" might be more reasonable, but let's take a breather for a second.

OER is the most ridiculously stupid "statistic" I have ever seen and the fact that it is included in any official surveys or inflation calculations is mind bogglingly dumb. It's literally a made up number.

CPI rent data isn't great either - it's likely propping up headline inflation now just as it likely sold it short at the peak - but at least it is rooted in real numbers.

I don't know what Zillow's observed rent index is but keep in mind they are so good at projecting rent growth and valuations that they lost their ass as an iBuyer.

Edited February 15 by gmr548

[bernorange 8362]

This paper is from last year (but I just now found it):

Quote

Abstract

As a matter of arithmetic, the trends of US government debt and deficits will eventually result in an outrageously high government debt-to-GDP ratio. But when exactly will the United States hit the constraint of infeasibility and how exactly will policy adjust to it? This article considers fiscal dominance, which is the possibility that accumulating government debt and deficits can produce increases in inflation that "dominate" central bank intentions to keep inflation low. Is it a serious possibility for the United States in the near future? And how might various policies change (especially those related to the banking system) if fiscal dominance became a reality?
...
As the money supply is forced to grow by fiscal dominance, inflation rises, which creates a new means of funding government expenditures via "inflation taxation." ...
...
... because many people are unfamiliar with the concept of the inflation tax (especially in a society that has not lived under high inflation), they are not aware that they are actually paying it, which makes it very popular among politicians. ...

https://research.stlouisfed.org/publications/review/2023/06/02/fiscal-dominance-and-the-return-of-zero-interest-bank-reserve-requirements

 

[bernorange 8362]

 

[gmr548 16580]

On 2/15/2024 at 3:15 PM, bernorange said:

 

The fuck ever happened to 140 characters? 

[Neonmoon 38129]

On 2/15/2024 at 4:15 PM, bernorange said:

 

Judy Shelton is batshit crazy. 

[Guest]

Just anecdotal -- my six month auto insurance and annual homeowners renew around the same time.

My auto-renew rates were $579 for auto (six months) and $2,210 for homeowners (full year). That's an increase over last year. Don't know the exact increase, but I'd estimate about 10-15%.

I then priced checked a few quotes online, including a new quote with my current insurer, Progressive. They had the lowest rate, which they quoted me at $459 for auto and $1,636 for homeowners with the same limits.

Instead of paying $2,789 in total, I paid $2,095 with the same company for the same coverage because... well... because... um... reasons, I guess?

[UTPhil2006 3807]

19 minutes ago, FirstTimeCaller said:

Just anecdotal -- my six month auto insurance and annual homeowners renew around the same time.

My auto-renew rates were $579 for auto (six months) and $2,210 for homeowners (full year). That's an increase over last year. Don't know the exact increase, but I'd estimate about 10-15%.

I then priced checked a few quotes online, including a new quote with my current insurer, Progressive. They had the lowest rate, which they quoted me at $459 for auto and $1,636 for homeowners with the same limits.

Instead of paying $2,789 in total, I paid $2,095 with the same company for the same coverage because... well... because... um... reasons, I guess?

That’s a @C-Man question.. curious as to the why 

[C-Man 27230]

47 minutes ago, FirstTimeCaller said:

Just anecdotal -- my six month auto insurance and annual homeowners renew around the same time.

My auto-renew rates were $579 for auto (six months) and $2,210 for homeowners (full year). That's an increase over last year. Don't know the exact increase, but I'd estimate about 10-15%.

I then priced checked a few quotes online, including a new quote with my current insurer, Progressive. They had the lowest rate, which they quoted me at $459 for auto and $1,636 for homeowners with the same limits.

Instead of paying $2,789 in total, I paid $2,095 with the same company for the same coverage because... well... because... um... reasons, I guess?

 

28 minutes ago, UTPhil2006 said:

That’s a @C-Man question.. curious as to the why 

Beats me. There's two ways to get to Progressive -- either thru an independent broker like us or directly to them. I think pricing is slightly better if you go direct because then they don't have to pay the commission. Could be something changed slightly -- deductible options, coverages might've been tweaked slightly from your previous policies and it's possible you're getting a "new business" credit because the system didn't/doesn't recognize you as a current client. You might not have selected a few add-in coverages this time or they might no longer be offered. Could also be that you've got a better insurance score than the first go-round and the system could be spitting out renewal offers without updating that info. Really hard to tell exactly.

[Guest]

8 minutes ago, C-Man said:

 

Beats me. There's two ways to get to Progressive -- either thru an independent broker like us or directly to them. I think pricing is slightly better if you go direct because then they don't have to pay the commission. Could be something changed slightly -- deductible options, coverages might've been tweaked slightly from your previous policies and it's possible you're getting a "new business" credit because the system didn't/doesn't recognize you as a current client. You might not have selected a few add-in coverages this time or they might no longer be offered. Could also be that you've got a better insurance score than the first go-round and the system could be spitting out renewal offers without updating that info. Really hard to tell exactly.

There are small tweaks here and there, but nothing major. I went direct, online, as I did when I first bought. There were signs it saw me as a new customer and then also signs that it recognized me in their system.

[StassneyHorn 6612]

PCE yearly index at 2.4. Our benevolent Fed’s favorite metric.

https://www.reuters.com/markets/us/futures-ease-caution-prevails-ahead-inflation-data-2024-02-29/

[Cum Rocket 136]

Oh

 

[Cum Rocket 136]

Has he spoken with Powell?

 

[bernorange 8362]

If that is accurate. so much for central bank independence.

[StassneyHorn 6612]

Jesus Christ y’all are housewives too?

[Cum Rocket 136]

1 hour ago, bernorange said:

If that is accurate. so much for central bank independence.

 

[Parliament 14260]

At the risk of going CR, our President has a habit of talking out of his butt.  Just because he says rates are coming down, doesn't mean rates are coming down.

[UTPhil2006 3807]

30 minutes ago, Parliament said:

At the risk of going CR, our President has a habit of talking out of his butt.  Just because he says rates are coming down, doesn't mean rates are coming down.

Bingo. 

[Neonmoon 38129]

4 hours ago, bernorange said:

If that is accurate. so much for central bank independence.

This comment is laughable 

 

[StassneyHorn 6612]

The man is literally saying out loud what most people think will happen before the election. He didn’t even put a number on it, just said down.

I bet he’s got some Cherry Luden cough drops in his pocket.

I bet he’s gonna find a quarter behind some young kids ear.

I bet he might have an ice cream cone sometime this summer.

Edited March 9 by StassneyHorn

[Cum Rocket 136]

He’s just an Average Joe giving his opinion on interest rates!

[StassneyHorn 6612]

Pull up the last president’s remarks on the Fed and Powell so we can review. You won’t