2021 - Is inflation finally back in the conversation?

[tbone_ 14448]

Philosophically, it’s interesting to me that a society would only build housing when a private group can profit from doing so. If I really step back and look at it, this seems like an odd way to house a society.

Of course if that’s the case then logically you’d think that society would make it more profitable to build homes if there is a shortage. But we all know logic is irrelevant.

And this is coming from someone who has built housing for profit for the last nearly 30 years so wtf do I know. But I do chuckle at all the handwringing on the homeless issue when there really is only one solution - build free fucking housing - which of course no one ever says or does.

As a species, we really have somehow learned to dominate this planet in spite of ourselves.

[fattyflattie 4640]

11 minutes ago, tbone_ said:

But I do chuckle at all the handwringing on the homeless issue when there really is only one solution - build free fucking housing - which of course no one ever says or does.

I’ll throw the first bit in the plate if you build something in Norman specifically for the homeless of the west side of Houston. 

[Captainant 28539]

15 minutes ago, fattyflattie said:

I’ll throw the first bit in the plate if you build something in Norman specifically for the homeless of the west side of Houston. 

Houston is actually one of the better cities in the country when it comes to helping people out of homelessness, go figure

[We’reTexas 1477]

29 minutes ago, tbone_ said:

Of course if that’s the case then logically you’d think that society would make it more profitable to build homes if there is a shortage. But we all know logic is irrelevant.

 

Housing is such a trip. I mean NIMBYism is understandable but the mental gymnastics people perform to act as though their opposition to development is anything but pure selfishness are absurd. Yesterday I listened to a bunch of boomers at a bar go on at length about how there is no housing supply crisis in California -there’s plenty of housing, but prices are just too high! (They had just left a town hall about opposing housing in the neighborhood). 

[fattyflattie 4640]

14 minutes ago, Captainant said:

Houston is actually one of the better cities in the country when it comes to helping people out of homelessness, go figure

I have read that before. I don’t recall why (I assume partly shipping them to Atx and Dallas) but yeah, it’s a problem, but not like elsewhere.  I’ve got all of 2 panhandlers on this side of town I can think of.  But when you hit westchase, get ready. 

[52-80 19377]

17 hours ago, BabaYaga said:

Price controls are always the answer

almost 200 years under thriving modern economic systems alongside failed alternatives the morans still dont understand incentives work better than price controls

[BabaYaga 15625]

14 hours ago, tbone_ said:

build free fucking housing

 

14 hours ago, tbone_ said:

this is coming from someone who has built housing for profit for the last nearly 30 years

Go for it then

[Captainant 28539]

1 hour ago, 52-80 said:

almost 200 years under thriving modern economic systems alongside failed alternatives the morans still dont understand incentives work better than price controls

But we can't incentivize individuals and consumers - that would be communism. We must pour the incentive upon the shareholder companies and let the wealth trickle down, since it's so abundantly and empirically clear that's the best way to improve economic opportunities for wage earners. 

[bernorange 8385]

FWIW:

Quote

A Wall Street economist says the Federal Reserve is losing its power to influence the U.S. economy.

If he’s right, then it means the central bank will likely need to hike interest rates much higher than it otherwise would have, potentially sparking another selloff in stocks and bonds.

In a note shared with clients last week, Nomura Research Institute Chief Economist Richard Koo challenged the notion that the U.S. economy’s resilience in the face of the Fed’s most aggressive interest-rate hikes in four decades is partly the result of the lagged effects of monetary policy that Federal Reserve Chairman Jerome Powell cited once again during his speech from Jackson Hole on Friday.
...
While inflation has fallen since the summer of 2022, the U.S. economy has remained surprisingly resilient. According to Koo, this isn’t an accident, but a symptom of how the Fed’s pre-pandemic era policies have permanently changed the U.S. financial system.

He argued that an explosion of bank reserves built up during the era of easy money has helped to insulate the financial system from the effects of the Fed’s policies which have “lost some of [their] potency” as a result. Reserve balances have exploded since the collapse of Lehman Brothers in September 2008, according to weekly data from the Federal Reserve.

Here’s how Koo described this dynamic in his note.

“Central bank monetary policy ordinarily relies on two tools: interest rate control and the supply of liquidity. As I have noted previously in this report, then-Fed Chairman Paul Volcker’s effort to stamp out inflation starting in October 1979 succeeded because he restrained the supply of liquidity.”

“U.S. banks had almost no excess reserves at the time, and when the Volcker Fed reduced the supply of those reserves, they rushed en masse to secure reserves. This sent the federal funds rate soaring to 22%, weakening the economy and stabilizing inflation.”

“Today, however, the prolonged application of QE has left the US with excess reserves of some $3 trillion, or 1,600 times the amount that existed prior to Lehman Brothers’ failure.”

“This means the Fed no longer has the option of tightening by reducing the supply of liquidity. The only way to tighten policy is to raise interest rates.”

Data from the Federal Reserve Bank of St. Louis showed bank reserves parked at Fed branches stood at just under $3.2 trillion as of Aug. 23. New data are released weekly. By comparison, reserves amounted to $5.7 billion in December 2007.

According to Koo, the upshot of this is that if the Fed wants to materially slow the U.S. economy to drive inflation back to its 2% target, then interest rates will need to be raised high enough that borrowers balk.

“Under such circumstances, the monetary authorities cannot expect tightening to work unless they discourage borrowers by raising rates far higher than they normally would,” Koo said.

Koo, based in Tokyo, has studied balance-sheet recessions in the wake of the 2008 financial crisis and before joining Nomura, worked at the New York Federal Reserve earlier in his career.

https://www.marketwatch.com/story/the-feds-monetary-policy-has-lost-some-of-its-potency-and-interest-rates-may-need-to-rise-much-higher-as-a-result-economist-says-fe0d246a

[Cheeseweasel 26439]

17 hours ago, tbone_ said:

As a species, we really have somehow learned to dominate this planet in spite of ourselves.

Until the apes take over. Be kind to us Dr. Zaius. 

[BabaYaga 15625]

1 hour ago, bernorange said:

FWIW:

https://www.marketwatch.com/story/the-feds-monetary-policy-has-lost-some-of-its-potency-and-interest-rates-may-need-to-rise-much-higher-as-a-result-economist-says-fe0d246a

Soft landing....

17 minutes ago, Cheeseweasel said:

Until the apes take over. Be kind to us Dr. Zaius. 

[Storm the Field 5366]

Paywalled article in Bloomberg yesterday about how retailers are finally putting stuff on sale again. Clothes, shoes, appliances..etc.

https://www.bloomberg.com/news/articles/2023-08-27/discounts-make-a-comeback-as-shoppers-get-picky-about-spending?sref=QEebQnRf#xj4y7vzkg

Anecdotally, I have noticed a lot more "40% off sitewide" deals from apparel brands lately. 

[Royalfan5 2384]

8 minutes ago, Storm the Field said:

Paywalled article in Bloomberg yesterday about how retailers are finally putting stuff on sale again. Clothes, shoes, appliances..etc.

https://www.bloomberg.com/news/articles/2023-08-27/discounts-make-a-comeback-as-shoppers-get-picky-about-spending?sref=QEebQnRf#xj4y7vzkg

Anecdotally, I have noticed a lot more "40% off sitewide" deals from apparel brands lately. 

I noticed that too, and bought some corduroy pants to try and manifest fall.  

[Cheeseweasel 26439]

40 minutes ago, Royalfan5 said:

I noticed that too, and bought some corduroy pants to try and manifest fall.  

I thought I heard you coming down the hall

[Biff Tannen 46168]

8 hours ago, bernorange said:

Federal Reserve Chairman Jerome Powell cited once again during his speech from Jackson Hole on Friday.

Fucking really?  Is this The Onion? 

[bernorange 8385]

2 hours ago, Biff Tannen said:

Fucking really?  Is this The Onion? 

Not sure if serious, but just in case:

https://www.kansascityfed.org/research/jackson-hole-economic-symposium/

[tbone_ 14448]

Go for it then

[BabaYaga 15625]

Such a bunch of cunts.  Jackson Hole?  They need to have every meeting in as many inner cities and distressed areas as possible to see what they are doing to people.  

I actually met Bernanke once.  They are all arrogant and unaccountable.  He has especially so.  Two very dangerous traits for those leading our monetary policies.  

[Captainant 28539]

49 minutes ago, BabaYaga said:

I actually met Bernanke once.  They are all arrogant and unaccountable.  He has especially so.  Two very dangerous traits for those leading our monetary policies.  

I mean, you're describing the average corporate executive here. Bernanke is the outcome of decades of trickledown and short-sighted profiteering becoming gospel in """academic economics""" - you don't get your record profits at the cost of massive economic inequality without it either.

[bernorange 8385]

1 hour ago, BabaYaga said:

...

I actually met Bernanke once.  They are all arrogant and unaccountable.  He has especially so.  Two very dangerous traits for those leading our monetary policies.  

Ah memories...

Tradition!

 

[52-80 19377]

1 hour ago, BabaYaga said:

They need to have every meeting in as many inner cities and distressed areas as possible  

They do.  They regularly meet in Washington D.C.

[Cheeseweasel 26439]

24 minutes ago, Captainant said:

I mean, you're describing the average corporate executive here.

You think like a child.

[BabaYaga 15625]

51 minutes ago, Cheeseweasel said:

You think like a child.

A child with a pocket full of talking points

[Parliament 14598]

Yeah.  At the Waldorf Astoria.

[Trey3216 15452]

4 hours ago, BabaYaga said:

Such a bunch of cunts.  Jackson Hole?  They need to have every meeting in as many inner cities and distressed areas as possible to see what they are doing to people.  

I actually met Bernanke once.  They are all arrogant and unaccountable.  He has especially so.  Two very dangerous traits for those leading our monetary policies.  

They meet in Jackson Hole every year, and have for as long as I can remember.  

[BabaYaga 15625]

2 hours ago, Trey3216 said:

They meet in Jackson Hole every year, and have for as long as I can remember.  

Oh, I know - that's the point.  Give these sophomoric elites time in areas that actually reflect the impact of their failed policies

[LCHorn 2751]

Obviously it's not downtown Detroit, but Jackson is probably not a bad area on the whole to see some of the housing dysfunction at least partially abetted by Fed action.  Lots of second homes, lots of property that's unaffordable for most folks that make their wages locally. 

As far as the resort they attend, it's the resort at Grand Teton National Park so it's nice but not the kind of place a member of SCOTUS with friends in high places would ever stoop to visit.

[Trey3216 15452]

2 hours ago, LCHorn said:

Obviously it's not downtown Detroit, but Jackson is probably not a bad area on the whole to see some of the housing dysfunction at least partially abetted by Fed action.  Lots of second homes, lots of property that's unaffordable for most folks that make their wages locally. 

As far as the resort they attend, it's the resort at Grand Teton National Park so it's nice but not the kind of place a member of SCOTUS with friends in high places would ever stoop to visit.

Or a president who “couldn’t rub two nickels together” who now owns vacation homes in Martha’s Vineyard and Hawaii.   It’s nice to be a politician….elected or injected 

Edited August 30, 2023 by Trey3216

[52-80 19377]

12 hours ago, Trey3216 said:

Or a president who “couldn’t rub two nickels together” who now owns vacation homes in Martha’s Vineyard and Hawaii.   It’s nice to be a politician….elected or injected 

One of those houses had a small kitchen fire so it's practically destroyed

[Hefeweizen 5444]

[bernorange 8385]

I did not expect these numbers to be so high.

Quote

...
As of July, 61% of adults still said they are living paycheck to paycheck, according to a new LendingClub report, slightly more than last year's 59%.
...
Now, 78% of consumers earning less than $50,000 a year and 65% of those earning between $50,000 and $100,000 were living paycheck to paycheck in July, both up from a year ago, LendingClub found. Of those earning $100,000 or more, only 44% reported living paycheck to paycheck.

Some 70% of Americans admit to being stressed about finances, according to a separate CNBC Your Money Financial Confidence Survey conducted in March, largely due to inflation, rising interest rates and a lack of savings.

Only 45% of adults said they have an emergency fund. For those who do have emergency savings, about 26% polled said they have less than $5,000 saved.

That survey found that 58% of Americans are living paycheck to paycheck.

https://www.cnbc.com/2023/08/31/living-paycheck-to-paycheck-inflation-is-still-squeezing-budgets.html

[Bozo_Casanova 26851]

9 minutes ago, bernorange said:

I did not expect these numbers to be so high.

https://www.cnbc.com/2023/08/31/living-paycheck-to-paycheck-inflation-is-still-squeezing-budgets.html

I think those numbers seem optimistic, and the reality is a bit higher. Debt kills. 

Edited August 31, 2023 by Bozo_Casanova

[bernorange 8385]

16 minutes ago, Bozo_Casanova said:

... Debt kills. 

But but but...

Spoiler

debt is money

 

[Bozo_Casanova 26851]

13 minutes ago, bernorange said:

But but but...

  Hide contents

debt is money

 

Relevant:

 

[Cheeseweasel 26439]

25 minutes ago, Bozo_Casanova said:

I think those numbers seem optimistic, and the reality is a bit higher. Debt kills. 

This. If there was one thing I could instill in the yutes, it would be 'live within your means' while you are young. They'll be time for nice things later, but stay out of debt for as long as you can. Once you are behind the debt curve, life is infinitely harder.

[tbone_ 14448]

This. If there was one thing I could instill in the yutes, it would be 'live within your means' while you are young. They'll be time for nice things later, but stay out of debt for as long as you can. Once you are behind the debt curve, life is infinitely harder.

This.

Although in fairness, having zero money, I obtained a graduate degree while incurring only $13k of debt. I don’t think that’s possible today.

We have really put the youngins in a bind wrt housing and college/grad school imo.

[Cheeseweasel 26439]

21 minutes ago, tbone_ said:

I obtained a graduate degree while incurring only $13k of debt. I don’t think that’s possible today.

We have really put the youngins in a bind wrt housing and college/grad school imo.

I agree. The people who convinced kids that college was the answer are assholes. 

[Guest]

1 minute ago, Cheeseweasel said:

I agree. The people who convinced kids that college was the answer are assholes. 

Yes, why would they think that?

College has some dumb things about it. It's too expensive. There are degrees that aren't worth much. The loan system is wild. You could likely get the same education in a much shorter amount of time and for less if you carved out unneeded classes.

But it's also by far the best signal we have to an employer that you are a worthwhile job candidate. The numbers bear that out. It's not for everyone, but if you want to be comfortable, get a college degree.

[Cheeseweasel 26439]

Im gonna need a source for that chart. Does it take into account that if I took the 100k+ I needed to pay for State U and put it into an investment account what my return would be?

[BabaYaga 15625]

2 hours ago, Cheeseweasel said:

Im gonna need a source for that chart. Does it take into account that if I took the 100k+ I needed to pay for State U and put it into an investment account what my return would be?

Does that take into account having the $100k liquid to invest and not borrower funds as so many people do to pay for school?

[BabaYaga 15625]

2 hours ago, FirstTimeCaller said:

Yes, why would they think that?

College has some dumb things about it. It's too expensive. There are degrees that aren't worth much. The loan system is wild. You could likely get the same education in a much shorter amount of time and for less if you carved out unneeded classes.

But it's also by far the best signal we have to an employer that you are a worthwhile job candidate. The numbers bear that out. It's not for everyone, but if you want to be comfortable, get a college degree.

Yeah, it's a racket, but they have everyone by the short hairs.  At the end of the day it's a piece of paper that doesn't signal much other than you were willing and able to put in the time to get sed piece of paper.  Some pieces of paper come with tangible skills such as many of the STEM routes, but many do not and it's hard to validate and tease out "critical thinking skills" from a recent graduate with no track record or experience.  

 

[Guest]

2 hours ago, Cheeseweasel said:

Im gonna need a source for that chart. Does it take into account that if I took the 100k+ I needed to pay for State U and put it into an investment account what my return would be?

It literally has a source... on the chart.

[Cheeseweasel 26439]

24 minutes ago, FirstTimeCaller said:

It literally has a source... on the chart.

Super expensive University: "It's worth it. Trust me bro"

[Cheeseweasel 26439]

1 hour ago, BabaYaga said:

Does that take into account having the $100k liquid to invest and not borrower funds as so many people do to pay for school?

It's a legit question. But Georgetown did the study, so there's no bias there. 

Also noted: Wuhan lab says "It was the bat. Trust us".

[Guest]

5 minutes ago, Cheeseweasel said:

Super expensive University: "It's worth it. Trust me bro"

Yes, they are the only source that has ever produced this sort of data. 
 

[Cheeseweasel 26439]

1 minute ago, FirstTimeCaller said:

Yes, they are the only source that has ever produced this sort of data. 
 

"The data from 30 years ago is still legit", says university overcharging for it's services.

[Guest]

You can just say you want to believe college is a rip no matter what sort of hard facts are shown to you.

Might make it easier for all of us.

If you do have an interest in learning more, the data is out there for you to explore. There's a reason people go to college. It pays off, even with all the warts.

[Cheeseweasel 26439]

"Considering all of the evidence, we conclude that the conventional wisdom about college is not as true as it used to be."

https://www.stlouisfed.org/on-the-economy/2019/february/is-college-still-worth-it-complicated

 

[BabaYaga 15625]

Depends upon the school and the degree.  You send your kid to SMU to get a humanities degree, that's on you.  

[Cheeseweasel 26439]

8 minutes ago, BabaYaga said:

Depends upon the school and the degree.  You send your kid to SMU to get a humanities degree, that's on you.  

Yup. That was my point. Convincing kids that you need to go to school for the sake of a degree is dumb. STEM? Sure. But paying 6 figures for and underwater basket weaving degree, not so much.