2021 - Is inflation finally back in the conversation?

[936horn 910]

3 minutes ago, Immaculate Vibes said:

This is pretty incredible when you see it laid out. 
 

Unfortunately the most likely scenario is hiking rates to a hard landing for the economy. Then with inflation still elevated, having to print and ease again. 

Should have hiked a lot more a lot faster, but JPOW knows exactly what he's doing. Fucking pumping the markets as much as possible to squeeze as much out as he can. We are a year past the point of a soft landing being possible. And the poorest among us are going to get dunked on, yet again. I honestly have no idea how lower to lower middle class folks are even surviving right now...but meanwhile the Fed will raise 50 bp next week and call it good!

[Guest]

27 minutes ago, Wulaw Horn said:

Dude that looks like a cliff to me bro. Completely vertical descent pretty much from one day to the next of 30%. 

Sorry, I wasn't clear -- absolutely dropped off a COVID cliff. But then I was thinking that it was still at heavily depressed COVID levels based on the price action and people complaining about Biden policies. In fact, it's been rebounding.

[Parliament 14261]

Oil filters for my Porche are gonna get SO expensive. 

[Cheeseweasel 26438]

17 minutes ago, Parliament said:

Oil filters for my Porche are gonna get SO expensive. 

Wait until you find out the price of caviar. 

[phdhorn 6224]

Still good!  Ain't no thang.

 

 

Edited June 10, 2022 by phdhorn

[Cheeseweasel 26438]

We only consume Russian caviar, peasant. 

[52-80 19183]

4 hours ago, Immaculate Vibes said:

This is pretty incredible when you see it laid out. 
 

Unfortunately the most likely scenario is hiking rates to a hard landing for the economy. Then with inflation still elevated, having to print and ease again. 

Someone way upthread said US monetary wasn't one of the cause for inflation because inflation was seen globally lol.

Anyway, I dont know about the other CBs, but the advantage of US Fed governors not being elected officials is that they could do the right thing even if it's 'unpopular'.  Hike already.

[52-80 19183]

6 hours ago, Immaculate Vibes said:

When prices are up across the entire board but you blame 1 industry lol

 

And let's go with the claim that shipping is non-competitive.  If that was the case, the oligopolies starved themselves of their pricing power for years and decades because....they didnt know they could? lol

 

so far we've implicated grocers, oil companies , russians, and now the Maersks of the world...

are politicians just pointing fingers at 1 scapegoat at a time until they run out of candidates?

 

[Parliament 14261]

Delete (CR)

Edited June 10, 2022 by Parliament

[sidis 9832]

1 hour ago, 52-80 said:

And let's go with the claim that shipping is non-competitive.  If that was the case, the oligopolies starved themselves of their pricing power for years and decades because....they didnt know they could? lol

 

i think it's a fairly self-evident point that everyone wants to buy shit online and have it delivered at demand levels significantly greater than pre-2020 now.  they have substantially more leverage in the value chain than they did before.  simply market demand market dynamics in an industry with extremely high barriers to entry.

[52-80 19183]

9 minutes ago, sidis said:

i think it's a fairly self-evident point that everyone wants to buy shit online and have it delivered at demand levels significantly greater than pre-2020 now.  they have substantially more leverage in the value chain than they did before.  simply market demand market dynamics in an industry with extremely high barriers to entry.

so you're talking domestic transport? freight transportation index is pretty much flat (especially if you look at seasonally adjusted numbers), across the pandemic, except for the obvious dip when activities were regulated frozen. 

https://fred.stlouisfed.org/series/TSIFRGHTC

https://www.bts.gov/newsroom/april-2022-freight-transportation-services-index-tsi-first-decline-after-7-consecutive

 

the post-pandemic pricing power (=expenditure index) derived from demand does not reflect in the level of domestic activity (=freight index).  the cass chart goes back over a decade.

 

the steepest hike i see across the BTS data is in the import goods.  i think that reflects lots of raw material and inventory stocking by producers, reflective of cheap credit.  (of course consumer demand is baked in there also)

https://www.bts.gov/freight-indicators (towards bottom).

 

[phdhorn 6224]

2 hours ago, Cheeseweasel said:

We only consume Russian caviar, peasant. 

Those sturgeon were Russian Nationals but became US citizens because they wanted to see Montana. Yellowstone River holla!

[Immaculate Vibes 114]

 

[Shaggy3.0 1695]

23 hours ago, Cheeseweasel said:

We only consume Russian caviar, peasant. 

I disagree. I believe his taste palette is more aligned with plebes.  Common clay of the Earth, he is. Pass the Grey Puopon, please.

 

[phdhorn 6224]

The Big $5 wall has been breached (as if there was any mystery left in it:
https://www.cnn.com/2022/06/11/business/gas-prices-five-dollars-national-june/index.html

3 months ago they were talking "wow, gas might actually reach $5/gallon, remote as it seems" as if it was a slim but possible thing.

Now, they're saying the same thing about $6/gal. gas, almost unthinkable 3 months ago.  Now it's thinkable.

[Shaggy3.0 1695]

I think we hit $10/gallon by October. 

[Wulaw Horn 19116]

19 hours ago, Shaggy3.0 said:

I think we hit $10/gallon by October. 

That’s Euro prices man. Just brutal. 
cancelled my rv trip to padre that was supposed to be later in the summer, we are going to Sargent and Waller instead. Should save $250 in gas that way, more or less. Shit starts to add up. That’s 250 per leg of the trip- $500 total. 
when I bought the Rv gas was $1.49. I knew that was the Covid discount but figured $2.50 - $3.00 would be reasonable and felt like we could do more or less what we wanted with it at that price point. At $5.00 a gallon don’t really feel like taking it beyond 100 miles or so- which means gulf, lake or campground outside Waller. 
had fun on this trip to Garner and big bend and Kerrville but the price to fuel up and fill up at the grocery store is just really really depressing man. 
Was talking to the lady at Walmart yesterday while buying groceries. Jokingly asked her if I was going to need a heloc to pay. Came to $223 and it was not all that much and only one premium item (steaks) for $23.00 (we split two ribeyes when normally we’d get 3 for our family of 5). 
We got serious and she said it’s Bristol checking items there. People mad. People crying. People cussing the store. And most of all tons of people just sheepishly having to put items back and being embarrassed by it. 

Edited June 12, 2022 by Wulaw Horn

[Incredulity 11675]

5 minutes ago, Wulaw Horn said:

That’s Euro prices man. Just brutal. 
cancelled my rv trip to padre that was supposed to be later in the summer, we are going to Sargent and Waller instead. Should save $250 in gas that way, more or less. Shit starts to add up. 

Have you considered moving downtown and making your own lunch?

2 for 1 couponing is also a key.

[Dahobbs 17625]

1 hour ago, Wulaw Horn said:

That’s Euro prices man. Just brutal. 
cancelled my rv trip to padre that was supposed to be later in the summer, we are going to Sargent and Waller instead. Should save $250 in gas that way, more or less. Shit starts to add up. That’s 250 per leg of the trip- $500 total. 
when I bought the Rv gas was $1.49. I knew that was the Covid discount but figured $2.50 - $3.00 would be reasonable and felt like we could do more or less what we wanted with it at that price point. At $5.00 a gallon don’t really feel like taking it beyond 100 miles or so- which means gulf, lake or campground outside Waller. 
had fun on this trip to Garner and big bend and Kerrville but the price to fuel up and fill up at the grocery store is just really really depressing man. 
Was talking to the lady at Walmart yesterday while buying groceries. Jokingly asked her if I was going to need a heloc to pay. Came to $223 and it was not all that much and only one premium item (steaks) for $23.00 (we split two ribeyes when normally we’d get 3 for our family of 5). 
We got serious and she said it’s Bristol checking items there. People mad. People crying. People cussing the store. And most of all tons of people just sheepishly having to put items back and being embarrassed by it. 

At least you don't have to worry about any overpasses.

Edited June 12, 2022 by Dahobbs

[Armybrat 40851]

So, are we gonna see car dealerships with unsaleable full size SUVs choking their lots and a big increase for economy models…. And even compact cars?

[Wulaw Horn 19116]

5 minutes ago, Armybrat said:

So, are we gonna see car dealerships with unsaleable full size SUVs choking their lots and a big increase for economy models…. And even compact cars?

Every time we have a gas spike we do see that. Will be interesting to see if that can have a bigger effect than supply chain issues which are pulling opposite each other. 

[Immaculate Vibes 114]

33 minutes ago, Armybrat said:

So, are we gonna see car dealerships with unsaleable full size SUVs choking their lots and a big increase for economy models…. And even compact cars?

Winnebago seems like a good short. 

[Immaculate Vibes 114]

Cross posting from the market thread. He has some views on inflation.  He warns about interest rates up, dollar up, and oil up. Red flags. 
 

 

[UT_OB1 2224]

15 hours ago, Wulaw Horn said:

Every time we have a gas spike we do see that. Will be interesting to see if that can have a bigger effect than supply chain issues which are pulling opposite each other. 

Yeah they were practically giving trucks away last time. I think some of the supply chain stuff is already loosening. Maybe by end of summer I’ll be able to find a good deal on a used truck to haul stuff around 

[Immaculate Vibes 114]

 

[gsoda3 3263]

On 6/10/2022 at 1:37 PM, Parliament said:

Oil filters for my Porche are gonna get SO expensive. 

good thing my electric porsche doesn't need oil filters

[Immaculate Vibes 114]

Goldman thinks we’re going to see accelerated hikes starting at the meeting Wednesday. 
 

 

[TxTower 652]

http:// https://apple.news/AoTxFFFijQC6BzSolcS3_Yg


Sent from my iPhone using Tapatalk

[tbone_ 14129]

Well lumber is way down

[Upgrayedd 5815]

26 minutes ago, tbone_ said:

Well lumber is way down

Framers are lining up to give back material premiums.

[52-80 19183]

6 hours ago, tbone_ said:

Well lumber is way down

 

[tbone_ 14129]

Framers are lining up to give back material premiums.

We spent most of yesterday discussing this. We have about $40M worth of framing contracts to buy this year on 3 apt projects. We budgeted at 8-900. Yesterday it was 528. Trying to figure out how to actually realize that savings from the contractors and suppliers.

[Trey3216 15348]

37 minutes ago, tbone_ said:

We spent most of yesterday discussing this. We have about $40M worth of framing contracts to buy this year on 3 apt projects. We budgeted at 8-900. Yesterday it was 528. Trying to figure out how to actually realize that savings from the contractors and suppliers.

????

Profit 

[Cheeseweasel 26438]

48 minutes ago, tbone_ said:

We spent most of yesterday discussing this. We have about $40M worth of framing contracts to buy this year on 3 apt projects. We budgeted at 8-900. Yesterday it was 528. Trying to figure out how to actually realize that savings from the contractors and suppliers.

FORCE MAJEURE or PRIMA NOCTA. Either one works.

[washparkhorn 9939]

On 6/10/2022 at 3:28 PM, 52-80 said:

Someone way upthread said US monetary wasn't one of the cause for inflation

No one is that dumb.
 

As I have been warning for months, the end of this round of QE (6 trillion cumulatively in MBS and treasury debt) meant the inflated bubbles would become vulnerable.
 

These inflated bubbles had knock on effects (leverage) for riskier debt (e.g., see crypto).

Now the Fed is selling and raising interest rates to dry up liquidity in an effort to curb inflation (which was primarily caused by cost-push inflation (supply chain disruptions that increase the cost of goods)).

With unemployment relatively low, the Fed’s dual mandate is satisfied by merely combatting inflation via interest rate hikes and balance sheet reductions. These tools create deflationary  pressure on overpriced assets.

Given the continued supply chain disruptions, there is no justification to keep pouring starter fluid into an overheated economy not firing on all cylinders.

It’s a blunt set of tools with a good risk of recession and pain. But the Fed’s mandate to curb inflation is clear and unequivocal. The Fed protects International Capital to maintain the value of the USD as the world’s primary reserve currency.  The Fed’s independence allows it to make these painful decisions for those purposes.

tldr: the Fed giveth; the Fed taketh away. 

[Snake Diggity 4625]

14 hours ago, TxTower said:

http:// https://apple.news/AoTxFFFijQC6BzSolcS3_Yg


Sent from my iPhone using Tapatalk

This part is understated:

”There was also bad luck. New Covid variants, Russia’s invasion of Ukraine and China’s Covid-related lockdowns have made a bad situation worse. And high inflation isn’t solely the result of U.S. policy errors: It will end the year at 7.2% in Germany, 8.8% in Britain, 6.1% in Canada, and 6.8% in the U.S., J.P. Morgan projects.”

Without the Russia-Ukraine and China lockdown, I don’t think inflation would even be a headline.

Edited June 14, 2022 by Snake Diggity

[tbone_ 14129]

US monetary policy also affects foreign economies doesn’t it? Even if to a lesser extent…

[Shaggy3.0 1695]

37 minutes ago, washparkhorn said:

tldr: the Fed giveth; the Fed taketh away. 

So end the Fed?

[Immaculate Vibes 114]

13 minutes ago, tbone_ said:

US monetary policy also affects foreign economies doesn’t it? Even if to a lesser extent…

In a big way.

A rapidly strengthening dollar murders emerging market economies. Much of their debt is dollar denominated and it makes it that much harder to pay back. Same thing with oil which is priced in dollars. 
 

15 minutes ago, Snake Diggity said:

This part is understated:

”There was also bad luck. New Covid variants, Russia’s invasion of Ukraine and China’s Covid-related lockdowns have made a bad situation worse. And high inflation isn’t solely the result of U.S. policy errors: It will end the year at 7.2% in Germany, 8.8% in Britain, 6.1% in Canada, and 6.8% in the U.S., J.P. Morgan projects.”

Without the Russia-Ukraine and China lockdown, I don’t think inflation would even be a headline.

Pretty sure it was over 7% before Putin did anything and China locked down.  
 

Sounds simplistic, but you make your own luck. If we hadn’t primed the pump with vast monetary expansion prior then those shocks don’t have the same impact. 

[52-80 19183]

32 minutes ago, tbone_ said:

US monetary policy also affects foreign economies doesn’t it? Even if to a lesser extent…

he who controls the reserve currency controls the universe

 

-baron vladimir harkonnen

[Cheeseweasel 26438]

38 minutes ago, Snake Diggity said:

Without the Russia-Ukraine and China lockdown, I don’t think inflation would even be a headline.

Keep drinking the Kool-aide. 

[Make em eat Taco Bell 1549]

On 6/13/2022 at 12:38 PM, Immaculate Vibes said:

 

this 25.7% year over year increase is MUCH closer to the truth than the 8.6% quoted by the government.  My everyday items are 20-50% higher than last year, milk by itself about 60% for a gallon from $2.59 to $4.09.   Beef, chicken, eggs, butter, some vegies up 10-40%.  Electric rates up huge. 

Edited June 14, 2022 by Make em eat Taco Bell

[Snake Diggity 4625]

56 minutes ago, Cheeseweasel said:

Keep drinking the Kool-aide. 

What part of that is “Kool-aide”?  The Fed saw inflation on the horizon, as they had broadcasted their intention to raise rates.  They obviously under forecasted, and so the question is, what changed?  Seems pretty clear the 2 things I highlighted were 2 extremely high impact surprises.  We were definitely going to see inflation but not this high.

Edited June 14, 2022 by Snake Diggity

[PilotsError 2296]

45 minutes ago, Snake Diggity said:

What part of that is “Kool-aide”?  The Fed saw inflation on the horizon, as they had broadcasted their intention to raise rates.  They obviously under forecasted, and so the question is, what changed?  Seems pretty clear the 2 things I highlighted were 2 extremely high impact surprises.  We were definitely going to see inflation but not this high.

 

You can't be serious.  Forty percent of all dollars ever printed was printed in the last two years.  The inflation was coming catastrophically whether the war (or whatever theater we're watching) happened or not.  

[Cheeseweasel 26438]

48 minutes ago, Snake Diggity said:

 They obviously under forecasted, and so the question is, what changed?

They are dipshits?

Everyone saw inflation coming. They just didn't want to admit it because it wasn't politically expedient. Janet Yellen seems like a smart person. I'm guessing she's been waving her hands for months about inflation but has been told "tell them it's transitory" and other bullshit lines. The Fed serves at the will of the Executive Branch.

[StruggleBus 3922]

On 6/11/2022 at 6:17 PM, Shaggy3.0 said:

I think we hit $10/gallon by October. 

[Snake Diggity 4625]

12 minutes ago, PilotsError said:

 

You can't be serious.  Forty percent of all dollars ever printed was printed in the last two years.  The inflation was coming catastrophically whether the war (or whatever theater we're watching) happened or not.  

“Theater”. LOL

[StruggleBus 3922]

On 6/12/2022 at 1:40 PM, Wulaw Horn said:

That’s Euro prices man. Just brutal. 
cancelled my rv trip to padre that was supposed to be later in the summer, we are going to Sargent and Waller instead. Should save $250 in gas that way, more or less. Shit starts to add up. That’s 250 per leg of the trip- $500 total. 
when I bought the Rv gas was $1.49. I knew that was the Covid discount but figured $2.50 - $3.00 would be reasonable and felt like we could do more or less what we wanted with it at that price point. At $5.00 a gallon don’t really feel like taking it beyond 100 miles or so- which means gulf, lake or campground outside Waller. 
had fun on this trip to Garner and big bend and Kerrville but the price to fuel up and fill up at the grocery store is just really really depressing man. 
Was talking to the lady at Walmart yesterday while buying groceries. Jokingly asked her if I was going to need a heloc to pay. Came to $223 and it was not all that much and only one premium item (steaks) for $23.00 (we split two ribeyes when normally we’d get 3 for our family of 5). 
We got serious and she said it’s Bristol checking items there. People mad. People crying. People cussing the store. And most of all tons of people just sheepishly having to put items back and being embarrassed by it. 

I'm pulling my travel trailer to Colorado this weekend. I get around 8mpg pulling it with my F250. So yeah, looking at around $1250 in gas for the trip

[Trey3216 15348]

4 minutes ago, StruggleBus said:

I'm pulling my travel trailer to Colorado this weekend. I get around 8mpg pulling it with my F250. So yeah, looking at around $1250 in gas for the trip

Just getting to Port A and back in my F150 was about $260 10 days ago.  Would have rather spent half of that at Venetian Hot Plate.   

[Cheeseweasel 26438]

6 minutes ago, Trey3216 said:

Venetian Hot Plate.

Is that what the kids are calling it these days?