2021 - Is inflation finally back in the conversation?

[Captainant 27494]

Truncation of synthetic data that is excluding manufacturing, retail, and transportation costs is OBVIOUSLY the best mechanism to gain insight to inflationary trends, it's so obvious now!

Or yeah the chart showing that the food producers are increasing prices faster than the general consumer price index is very compelling too

[Fudge Nuggets 19152]

5 hours ago, Cheeseweasel said:

 

Little Mordecai growed up to become cheeseweasel.

[StassneyHorn 6540]

You’re supposed to look at graphs and charts and make your own explanation.

52-80 just posting graphics and getting haughty when people don’t know wtf his explanation or point is never gets old.

[52-80 19108]

12 hours ago, StassneyHorn said:

You’re supposed to look at graphs and charts and make your own explanation.

52-80 just posting graphics and getting haughty when people don’t know wtf his explanation or point is never gets old.

anybody with trouble deciphering a time series plotting "consumer price" & "producer price" definitely needs help... but not from me.

Edited June 21, 2023 by 52-80

[troph 24584]

On 6/19/2023 at 6:19 AM, 52-80 said:

change in firm-wide price markup vs change in price, with a particular highlight post vs pre pandemic.

this is from a working paper from NYU and Columbia https://chrisconlon.github.io/site/markups_pnp.pdf

***********

this one i set up from FRED website, because food is essential.. and lizzy warren.. and eggs..

 

I have no personal animosity toward you and I think I’m reasonably smart… I don’t know what conclusion you’re trying to draw.  It would be helpful if you stated some analysis and your conclusion or observation. 

[MirrOlure 14638]

So I read this morning that premarket stock prices for Winnebago, La-Z-Boy and Pelton are all down on weak earnings.

Proof that the worm has turned on pandemic free-for-all spending!

[Captainant 27494]

43 minutes ago, troph said:

I have no personal animosity toward you and I think I’m reasonably smart… I don’t know what conclusion you’re trying to draw.  It would be helpful if you stated some analysis and your conclusion or observation. 

Naw, it's way easier for him to just call me a stupid leftist and talk down to me. Maybe you'll get a different result though, good luck!

[52-80 19108]

7 minutes ago, troph said:

I have no personal animosity toward you and I think I’m reasonably smart… I don’t know what conclusion you’re trying to draw.  It would be helpful if you stated some analysis and your conclusion or observation. 

Not my conclusion.  In brief, the short working paper determines if rate of price changes exceed their cost, on a company by company basis across industries.  In aggregate, no.  I left the link there so reasonably smart people like yourself can look at and debate their methodology, pitfalls, and conclusions.  (The peanut gallery would complain no matter what).

Examining a single industry (food) across different companies, the BLS' survey for their price indices also show consumer price matching producer price trends over the long term, including Covidmania.   In fact, consumer price for food actually trail production costs over most of that period.  That is my conclusion from the graph that I pulled from the country's foremost economics databank.

I picked food because it's the most essential good.  You could have put off buying a car in the last few years, but you can't hold off feeding yourself.

***

It's also the lighting rod for political point scoring, like when grocery stores were criticized by prominent senators and parroted here.

So now that we've escaped the pandemic, I give you the annual gross margins of the 2 largest publicly traded grocery chains in America: they each increased a maximum of ONE PERCENT during those years.  So much for "price gouging"

[troph 24584]

okay that is a very helpful explanation. I was trying to glean the conclusion from the charts but the explanation (i.e your conclusion/analysis) makes it clear.  I think there are plenty of anecdotal accounts of price gouging, that is surely the case.  prior to your post I tended to assume it was anecdotal as well.  first, price gouging is illegal and second, free markets (or whatever left of one we have) operate to prevent or at least discourage it as well.  I have my own anecdotal accounts of the opposite and having managed small supply chains in my non-legal business pursuits over three businesses and 15 years I can say I haven't seen it.  there is a vexing question of how to price when you buy lower knowing your next shipment will squeeze the hell out of you.  managing margins over a larger time frame when you have average margins, then you have a chance to raise prices before your run out to increase margins because you know your next shipment will squeeze the snot out of you is a real thing.  I have a company that sold PPE and it frankly helped keep the company afloat during COVID and we ran 40%-45% margins before shipping, packaging and transaction costs.  our total margin after those other costs settled in the high 30%'s which is right where we want to be on our fast moving products (we have plenty that are 20% higher value so we net out in the 33-37% range quarter over quarter for a 35% annual average.  we priced lower than some competitors for sure but not all.  so the outliers either can't manage or price gouged, but I can tell you the time on the phone with supply chain was 10x what it normally was.  sourcing was a bitch.  so all of that is anecdotal but lead me to believe again, it's truly supply chain and costs at the origin, mostly China.  And if you go back to their extreme lockdowns and zero COVID policy, it's kinda obvious we had a supply chain problem.

[Captainant 27494]

11 minutes ago, troph said:

And if you go back to their extreme lockdowns and zero COVID policy, it's kinda obvious we had a supply chain problem.

A supply chain problem that was created in search of fatter and fatter margins by using more and more lean just-in-time manufacturing techniques by firms large enough to shape the market. It's not like it's some "aw shucks!" eventuality - it was as predictable as gravity.

[troph 24584]

that's a broader issue, and I agree with you JIT and lean supply chains are fragile and a problem. I've never really subscribed to it for then and certainly now obvious reasons. also at the micro economy level (any business under $10M in revenue is gonna be micro) those opportunities don't exist. you have to make sure you have your inventory on your shelf to be able to sell, lean and JIT is a farce at that level (most of the time) unless you are also buying from big time suppliers but then you get hosed on margin there too.  anyway, you raise a good point but that's not what others say, I do not believe there was systemic price gouging at the retailer level. chain of commerce problems started at the origin and prices rise higher at every hand off.  many, many reforms are needed for sure.

[52-80 19108]

7 minutes ago, troph said:

okay that is a very helpful explanation. I was trying to glean the conclusion from the charts but the explanation (i.e your conclusion/analysis) makes it clear.  I think there are plenty of anecdotal accounts of price gouging, that is surely the case.  prior to your post I tended to assume it was anecdotal as well.  first, price gouging is illegal and second, free markets (or whatever left of one we have) operate to prevent or at least discourage it as well.  I have my own anecdotal accounts of the opposite and having managed small supply chains in my non-legal business pursuits over three businesses and 15 years I can say I haven't seen it.  there is a vexing question of how to price when you buy lower knowing your next shipment will squeeze the hell out of you.  managing margins over a larger time frame when you have average margins, then you have a chance to raise prices before your run out to increase margins because you know your next shipment will squeeze the snot out of you is a real thing.  I have a company that sold PPE and it frankly helped keep the company afloat during COVID and we ran 40%-45% margins before shipping, packaging and transaction costs.  our total margin after those other costs settled in the high 30%'s which is right where we want to be on our fast moving products (we have plenty that are 20% higher value so we net out in the 33-37% range quarter over quarter for a 35% annual average.  we priced lower than some competitors for sure but not all.  so the outliers either can't manage or price gouged, but I can tell you the time on the phone with supply chain was 10x what it normally was.  sourcing was a bitch.  so all of that is anecdotal but lead me to believe again, it's truly supply chain and costs at the origin, mostly China.  And if you go back to their extreme lockdowns and zero COVID policy, it's kinda obvious we had a supply chain problem.

exactly.  if you accept that krogers and albertsons werent the financial beneficiary due to their empirically static margins, you root costs back to all the upstream inputs like transport, plastics/packaging, fertilizer, feed, etc.  its all along the supply chain (and concentrated in china).  so its a pretty complex thing and deserves scrutinizing at the public and policy level, because no one party gets crowned king from this issue.  instead we get really obtuse discourse about greed its difficult to deign oneself to entertain those ridiculously juvenile arguments.

my anecdote from personal interest is around the bicycling industry.  going into covid retail prices went through the roof.  some companies ramped their orders/productions thinking it was a long term effect, and now they face a glut of surplus and many are liquidating and going out of business.  others were conservative, they were deprioritized by their suppliers and got squeezed on their costs too.  they substituted parts which resulted in sales loss at then-prices, and faced higher returns.  some folded, some survived.  when externalities causes shit to go wrong, lumps get passed along to everyone.  theres no singular villain and no singular victor in the story.  its a sort of microcosm of the business cycle and in the end the market flattens things back out again.

[Captainant 27494]

Not sure why you're trying to pin me and the discussion of the entire market dynamic down to one particular retailer type. You're right there's no singular villain - there's multitudes of them everywhere. The """business cycle""" of wanton boom and bust is not a sustainable way to do business, and has empirically led to even worse level of inequality in market power and individuals ability to improve their own economic situation.

 

And yet, despite how hard everything is and how negative things have been to the business climate as you've outlined - why is the GDP still growing, why are margins and profits UP, why are the stock markets at all-time highs?

It's like you're standing in the middle of Hurricane Harvey trying to convince me it's not raining.

[jimmyjazz 45599]

13 minutes ago, Captainant said:

It's like you're standing in the middle of Hurricane Harvey trying to convince me it's not raining.

Well, it probably isn't raining in the middle of the hurricane.  Take that, libtard.

[Wally Fairway 5527]

I am starting to think that since all JPow has is a hammer, that everything is starting to look like a nail.

I mean if he really wanted to fix the problem he created by printing money, then all he really should do is shred money (or t-bills). But since all he can really do is 
a) raise interest rates (aka the hammer - used to defeat inflation)
b) leave rates where they are (standing there looking stupid with his thumb up his butt)
c) lower rates (used to stimulate the economy - aka print money, brrrrrrt)                                    

[52-80 19108]

34 minutes ago, Captainant said:

Not sure why you're trying to pin me and the discussion of the entire market dynamic down to one particular retailer type. You're right there's no singular villain - there's multitudes of them everywhere. The """business cycle""" of wanton boom and bust is not a sustainable way to do business, and has empirically led to even worse level of inequality in market power and individuals ability to improve their own economic situation.

 

And yet, despite how hard everything is and how negative things have been to the business climate as you've outlined - why is the GDP still growing, why are margins and profits UP, why are the stock markets at all-time highs?

It's like you're standing in the middle of Hurricane Harvey trying to convince me it's not raining.

stock markets are factually not at all time high. (regardless,) stocks != economy != earnings.  the eps (~= net earnings) of the broad index is on a 2 year sequential decline.

you repeat the same tired anticapitalist trope with the substance of a coors light.  "business cycles" are a natural consequence of business (as a billion other cycles occurring in life). they shed bad actors and bad practices. 

the stability of business environment in western nations in modern times have been better than any other place at any other time in history.   gdp staying strong is testament to that robustness.  it helped by a widening economic base.  or is high gdp supposed to be a bad thing that "empirically" keeps individuals down?

you're standing in the middle of a short bus and i'm suggesting you should sit down and stay buckled in.

[Cheeseweasel 26437]

1 hour ago, troph said:

managing margins over a larger time frame when you have average margins, then you have a chance to raise prices before your run out to increase margins because you know your next shipment will squeeze the snot out of you is a real thing. 

Bingo. It's a very selective group (read monopoly) that can "price gouge".  The rest of are managing our inventory knowing that the pendulum will swing back hard when inventory needs to be replaced. Anyone who thinks differently is an internet warrior who's never had to deal with the reality.

[troph 24584]

I wish this thread could be more like the Ukraine war thread. I never came to the longhorn interwebs in 1995 to argue, I showed up to learn and share. But I think that’s part of the problem. Many are here to argue. That war thread is amazing, and I have almost nothing to offer. We have a lot of smart people here on this board and in this thread. I wish it could be better. Errybody wants to argue. 52-80 sometimes doesn’t synthesize the analysis that would help yes. But I see what he’s saying and I agree.  Cheeseweasel is like my supply chain sock or maybe I’m his no one will ever know, and Capitanant makes good points about the bottom line profit motive and how it does not protect consumers who are at the bottom of shithill.  Yet errybody wants to argue. This thread has so much potential… fuck it I’m going fishing…

 

Edited June 21, 2023 by troph

[Cheeseweasel 26437]

That's fair, @troph. Inflation is a complicated creature that impacts everyone. I appreciate everyone's input, but I do get tired of those who simplify it and point the finger of blame at one group (regardless of that group). There are too many levers that cause inflation to boil it down to one point. 

And when it comes to business management, pricing/costing, and inventory management I get hyperfocused. It's been my life and my area of expertise for 30+ years so I know a thing or two about it.  I don't suffer fools who think they know what they are talking about in the same way that you wouldn't if I tried to tell you how simple being a lawyer was. "Oh, just file a few papers, boss a few judges around, and WHAMMO, case dismissed. Easy peasy!"

The Ukraine thread is great because Surly has a few experts that know their shit when it comes to the battlefield. On this thread, we don't have that luxury. 

 

[jimmyjazz 45599]

For me, it seems that using an entire sector to "prove" there hasn't been any price gouging is a bit disengenuous.  Maybe not.  I'm certainly not a supply chain manager, I'm an engineer. But when I see "food manufacturing" writ large used to argue a point, it potentially hides nefarious business behavior within that sector.  Like (for instance) eggs, as we've argued ad nauseum.  In my case, it just didn't smell right when the price of eggs almost quadrupled after a 10% reduction in supply (or whatever the numbers were).  Perhaps I just don't get it.  Wouldn't be the first time.

Edited June 21, 2023 by jimmyjazz

[Captainant 27494]

1 minute ago, jimmyjazz said:

In my case, it just didn't smell right when the price of eggs almost quadrupled after a 10% reduction in supply (or whatever the numbers were).  Maybe I just don't get it.

Well you see, because of that 10% reduction in supply it caused them to feel  like and fear that there could be a supply shock so they HAD to quadruple prices otherwise they'd be negligent! And they're just catching up on "lost profits" anywho!

 

And repeat that excuse over and over and over, and that's how you get to our current situation where it's "nobody's fault" in the same way that pollution is "nobody's fault". I guess if you can argue that it's sufficiently complex, then you can do whatever you want under the guise of "well you see it's just so dang tricky and you're too dumb to get it"

[troph 24584]

There is always price gouging, but it’s not the driving cause. A few unscrupulous folks do it and at times it happens more often if conditions can allow it and that is as reliable as the sun rising and baking our asses in central Texas.  But the data is pretty convincing to me this was predominately a shock to supply chain from multiple sources leaving no aspect unaffected.  Demand shifts radically over night, supply chains cratering over night, logistics shut down, lean supply chains failing completely, and firing that all at once it’s obvious we would have problems. 
 

and @Cheeseweasel fair points. 

[Cheeseweasel 26437]

41 minutes ago, jimmyjazz said:

For me, it seems that using an entire sector to "prove" there hasn't been any price gouging is a bit disengenuous.  Maybe not.  I'm certainly not a supply chain manager, I'm an engineer. But when I see "food manufacturing" writ large used to argue a point, it potentially hides nefarious business behavior within that sector.  Like (for instance) eggs, as we've argued ad nauseum.  In my case, it just didn't smell right when the price of eggs almost quadrupled after a 10% reduction in supply (or whatever the numbers were).  Perhaps I just don't get it.  Wouldn't be the first time.

Here's a different way to think about it. Let's say you manufacture baseballs. You set up your business to produce 1 million baseballs per year by employing enough people to produce that number. You stock enough raw material inventory to produce 3 months worth of balls and continually replenish it. Today you go to work and the global cork supply has been hit by a disease that will cause them to lose a 3 months worth of growth. For the next 3 months, you can continue to produce balls, but in the next three months, you will likely produce minimal amounts (or nothing). If you are smart, you raise your price to cover the lost overhead during that 3 month "down" so you can continue to pay your employees, rent, light bill, etc. knowing that supply/demand will allow you to do it. You can call that "price gouging" if you'd like, but you've also likely saved jobs and kept your business afloat. 

[Incredulity 11564]

Again, eggs and most food commodities are traded daily.

There is no egg business that can just, "quadruple prices".

Edited June 21, 2023 by Incredulity
add egg to "business"

[Cheeseweasel 26437]

54 minutes ago, Captainant said:

Well you see, because of that 10% reduction in supply it caused them to feel  like and fear that there could be a supply shock so they HAD to quadruple prices otherwise they'd be negligent! And they're just catching up on "lost profits" anywho!

You are a beating, man. Curious, what do you do for a living?

[Incredulity 11564]

community organizer is going off at 3-1

[jimmyjazz 45599]

26 minutes ago, Incredulity said:

Again, eggs and most food commodities are traded daily.

There is no egg business that can just, "quadruple prices".

I didn't say it happened overnight, and it's certainly possible for a few of the largest suppliers to collude, thus driving the market.

I appreciate @Cheeseweasel's baseball analogy, but continuing the egg discussion, if supply drops 10% and demand stays flat, it would seem suppliers would need to increase price by the amount needed to cover lost profits in order to remain flat.  Are you arguing that leads to a 4X price increase?  Really?

[Cheeseweasel 26437]

I'd assume that if you are producing less, much of your variable costs (chicken feed, power, etc.) would be reduced so you don't need to make up all of the lost costs.

[jimmyjazz 45599]

9 minutes ago, Cheeseweasel said:

I'd assume that if you are producing less, much of your variable costs (chicken feed, power, etc.) would be reduced so you don't need to make up all of the lost costs.

I didn't even want to fold that in, but yes.  So it furthers the argument.  Why a 300% price hike for 10% lost supply?

[Cheeseweasel 26437]

4 minutes ago, jimmyjazz said:

I didn't even want to fold that in, but yes.  So it furthers the argument.  Why a 300% price hike for 10% lost supply?

I don't know how the egg market works, but uncertainty is a bitch. It might have been 10% in the end, but they may have been getting indicators that it was going to be more or longer lasting.

[Incredulity 11564]

All other things equal

You have the same 100% of buyers bidding for 90% of the supply.

Feedback loops/panic buying/speculation/....all combine to cause a non-linear price response.

[troph 24584]

I don’t think chain of commerce impacts pricing in a linear manner.  
 

here’s an article - first hit on google - for egg prices.
 

https://www.cnbc.com/2022/12/29/why-egg-prices-have-been-rising.html

 Looks like a multitude of factors that this thread has likely already discussed. I also would expect the daily commodity trading platforms make price gouging harder because of how liquid the market is for commodities. I’m not the expert but nothing here jumps out at me as problematic. Inflation first (from other supply chain problems), unprecedented bird flu outbreak second, demand shifts third and boom, classic supply chain inflation. 

Edited June 21, 2023 by troph

[jimmyjazz 45599]

It doesn't have to be linear.

It shouldn't be nonlinear as hell, unless of course you're ERCOT allowing pricing to go insane when the grid fails.

[Cheeseweasel 26437]

99% of the time, you are correct @jimmyjazz and supply/demand smashes any massive fluctuations in the market but Covid was truly a black swan event. It disrupted the supply chain (and thinking) in unmeasurable ways.  Think about the first time you flew after 9/11. It was fucking weird. Covid had the same effect on purchasing. It's fucking weird right now. 

[troph 24584]

then add unprecedented bird flu outbreak on top of all of that.

[troph 24584]

I wonder if some egg producers were able to ride the price wave up but were otherwise unaffected. The thing about supply chain problems is they impact companies all along the chain of commerce differently, even if there is a common theme. I recall importing car parts (gears for racing transmissions) from the UK during the financial crisis but I was smart enough to hedge my forex risk and was able to keep a 40% margin for about a year as the sterling pound started hammering the dollar.  my buying power was unaffected for a while.  I did follow prices up from competitors but was always a shy under them to be more competitive. my margins were 40% on those parts, my competitors were probably 15-20%, was that price gouging? I don't think so in that situation.  That was only one line of SKUs out of thousands. 

It's clear some egg producers had skyrocking profit margins (I can't tell if net or gross profits).  price gouging is illegal though, so we will see if anything comes of it. but if the broader market is up like that due to systemic issues and those with healthy supply chains and in this case healthy bird stock were unaffected of course their profits would rise while others go out of business.  I see profits surging by 600% but a 600% gain on a gross margin of 10% is not 600% profits. it's a very attractive 60% margin, which I would assume would retract later as prices correct. of course if margins were already healthy, then yes their gross margin ran away from them. it seems like a windfall but they followed the broader market and happened to be a healthy business (no pun intended). I suspect with the bird flu outbreak, there were clear winners and clear losers in the egg market.  that's just a guess though.

[Captainant 27494]

It's really well done to cordon the entire inflation discussion behind fucking egg prices as the be all end all lol. Jesus Christ. 

[Incredulity 11564]

Wholesale egg prices have quite literally cratered.  From $5 a dozen to less than $1 a dozen.  Fortunes that were previously made are being lost.

 

[Incredulity 11564]

2 minutes ago, Captainant said:

It's really well done to cordon the entire inflation discussion behind fucking egg prices as the be all end all lol. Jesus Christ. 

Someone gets pouty when the, "DeVil CoPRoSAtioNs!!111!!" rhetoric gets refuted.

[Cheeseweasel 26437]

13 minutes ago, troph said:

I see profits surging by 600% but a 600% gain on a gross margin of 10% is not 600% profits. it's a very attractive 60% margin, which I would assume would retract later as prices correct. of course if margins were already healthy, then yes their gross margin ran away from them. it seems like a windfall but they followed the broader market and happened to be a healthy business (no pun intended).

Truth. Windfalls happen during surging prices depending on who is holding the right inventory at the right time. But I can also point to you the dumpster full of inventory done on speculation that didn't sell. You take the good with the bad. 

[troph 24584]

the max profits you can have gross or net is 100%. you can't have 120% profit, you can't have 600% gross margins.  profits (gross or net) will never be 100%. so if you had an increase of 6x you had to be at 16-17% or less.  so the idea that gross or net margins went from 10% to 60% for a short period of time is not as shocking as saying surged by 600%.

if you just took the middle number 8% (between 0% and 16%) then 600% increase in profits takes it to 48%... no doubt great, but that's not a shockingly high number if prices go up 40% and you're business is not as impacted by the avian flu as others. congrats on the luck or on running a cleaner business.

that's my take.

Edited June 21, 2023 by troph

[Incredulity 11564]

so your saying......

 

Figures lie and liars figure?

 

 

 

 

just making a funnsie, not accusing anyone of lying

[52-80 19108]

4 hours ago, jimmyjazz said:

In my case, it just didn't smell right when the price of eggs almost quadrupled after a 10% reduction in supply (or whatever the numbers were). 

Did it smell right when they crashed back down? What about oil now at -20% below Ukraine invasion. Or natural gas getting cut in half, now 75% below its peak.  Ad infinitum.

I echo everything cheese said particularly about not suffering fools who endlessly seek singular bogeyman and a narrative for every occurence that is the result of a complex interactions.  (And that same framework gets repeated for every topic outside of economics). 

4 hours ago, troph said:

I wish this thread could be more like the Ukraine war thread. I never came to the longhorn interwebs in 1995 to argue, I showed up to learn and share. But I think that’s part of the problem. Many are here to argue. That war thread is amazing, and I have almost nothing to offer. We have a lot of smart people here on this board and in this thread. I wish it could be better. Errybody wants to argue. 52-80 sometimes doesn’t synthesize the analysis that would help yes. But I see what he’s saying and I agree.  Cheeseweasel is like my supply chain sock or maybe I’m his no one will ever know, and Capitanant makes good points about the bottom line profit motive and how it does not protect consumers who are at the bottom of shithill.  Yet errybody wants to argue. This thread has so much potential… fuck it I’m going fishing…

 

Like...profit motive is not ipso facto bad.  Literally everyone of us, who are all participants in this ecosystem, share the same motive. We all want the nicest house for the lowest cost with the best mortgage rate. That's what makes a market. Are we evil parties too? Arguments are fine but can we just scrape something else besides the bottom of the barrel please

[jimmyjazz 45599]

16 minutes ago, 52-80 said:

Did it smell right when they crashed back down?

Are you serious?  In your world, does a greedy jump in prices mean the reversal is equally indefensible?  Maybe (just maybe) it's an indication that the costs of doing business didn't actually justify the price hike, and competition caught up.

I mean, my graduate work was in Cockrell, not McCombs, but I'm not that ignorant.

[Incredulity 11564]

All the commodities he listed aren’t priced based on, “price hikes” or “competition caught up”.  They are open traded daily.  The market sets the price.  It doesn’t give a shit what your/mine or anyone’s costs are, it trades on what participants are willing to pay.  Markets can’t gouge or profiteer, every trade has a winner and a loser.

[Bozo_Casanova 26330]

2 hours ago, troph said:

the max profits you can have gross or net is 100%. you can't have 120% profit, you can't have 600% gross margins. 

you can, but you need negative COGS (usually resulting from credits or subsidies) combined with massive distribution or other advantage in a space with low price elasticity. It's good to be the only game in town, and better when they pay you to operate. Those situation are rare, but they exist .

Edited June 21, 2023 by Bozo_Casanova

[Bozo_Casanova 26330]

Also commodities are the worst possible choice for a discussion of inflation or pricing strategy, supply-chain mediated or otherwise. Pricing is complicated. A better choice would be office supplies.

[troph 24584]

14 minutes ago, Bozo_Casanova said:

you can, but you need negative COGS (usually resulting from credits or subsidies) combined with massive distribution or other advantage in a space with low price elasticity. It's good to be the only game in town, and better when they pay you to operate. Those situation are rare, but they exist .

Fair enough but that’s an outlier situation and counter productive for attempts to simplify the discussion.

Edited June 21, 2023 by troph

[troph 24584]

14 minutes ago, Bozo_Casanova said:

Also commodities are the worst possible choice for a discussion of inflation or pricing strategy, supply-chain mediated or otherwise. Pricing is complicated. A better choice would be office supplies.

it was the boogeyman that won't go away.

1 hour ago, 52-80 said:

Did it smell right when they crashed back down? What about oil now at -20% below Ukraine invasion. Or natural gas getting cut in half, now 75% below its peak.  Ad infinitum.

I echo everything cheese said particularly about not suffering fools who endlessly seek singular bogeyman and a narrative for every occurence that is the result of a complex interactions.  (And that same framework gets repeated for every topic outside of economics). 

Like...profit motive is not ipso facto bad.  Literally everyone of us, who are all participants in this ecosystem, share the same motive. We all want the nicest house for the lowest cost with the best mortgage rate. That's what makes a market. Are we evil parties too? Arguments are fine but can we just scrape something else besides the bottom of the barrel please

I love profit.

[Incredulity 11564]

9 minutes ago, troph said:

I love profit