2021 - Is inflation finally back in the conversation?

[Shaggy3.0 1695]

5 hours ago, UTGrad98 said:

So someone tell me why having deflation in 2024 and 2025 to offset this shit is bad. My economic knowledge comes from 1 macro and micro econ course taken in the mid 90s at acc. 

Same.  We must know one another...or maybe even dated the same chick.

Edited July 13, 2022 by Shaggy3.0

[bernorange 8385]

8 hours ago, Wulaw Horn said:

I read (maybe heard) so lets juts go with "people are saying" that if we still measured inflation today like we did in the 70's ...

http://www.shadowstats.com/

[Wulaw Horn 19585]

49 minutes ago, bernorange said:

http://www.shadowstats.com/

17.3 on the “corrected” report huh? 
I feel like my grocery bill has gone from high 100’s to low 300’s. I know my gas spend has gone from 35 a tank to 60+ a tank, while my property tax bill and electric bill has more than doubled. So yeah- my life seems to cost at least 20% more this year than last. At least my income is only down 33%. 
Oh- the cool thing is I thank my lucky stars every day for how fortunate I am. I can’t believe people aren’t freaking out more. 

[Snake Diggity 4714]

Resident “experts”: how much of the 9.1% number released today would you attribute to  each of the potential causes?

Overstimulus impact on demand (Trump and others; “pre-Biden”)

Overstimulus impact on demand (Biden)

COVID supply chain impact on supply  (including China shutdowns)

Russia/Ukraine O&G impact on supply

Russia/Ukraine wheat impact on supply

Russia/Ukraine geopolitical stability impact on supply

Saudis, other non-Russian bad actors on oil prices

Other causes (describe)

Edited July 13, 2022 by Snake Diggity

[jimmyjazz 47134]

1 hour ago, Wulaw Horn said:

17.3 on the “corrected” report huh? 
I feel like my grocery bill has gone from high 100’s to low 300’s. I know my gas spend has gone from 35 a tank to 60+ a tank, while my property tax bill and electric bill has more than doubled. 

How has your property tax more than doubled?  Do you not claim a homestead exemption?

[Trey3216 15452]

2 hours ago, Snake Diggity said:

Resident “experts”: how much of the 9.1% number released today would you attribute to  each of the potential causes?

Overstimulus impact on demand (Trump and others; “pre-Biden”)

Overstimulus impact on demand (Biden)

COVID supply chain impact on supply  (including China shutdowns)

Russia/Ukraine O&G impact on supply

Russia/Ukraine wheat impact on supply

Russia/Ukraine geopolitical stability impact on supply

Saudis, other non-Russian bad actors on oil prices

Other causes (describe)

Why didn’t you include “idiotic Covid Zero policies” in some areas and overly restrictive Covid measures domestically to the supply/demand blame game?   Because those measures have as much or more effect, ore even cause, on much of the things you listed.   

Edited July 14, 2022 by Trey3216

[Humble Beast 258]

2 hours ago, Snake Diggity said:

Resident “experts”: how much of the 9.1% number released today would you attribute to  each of the potential causes?

Overstimulus impact on demand (Trump and others; “pre-Biden”)

Overstimulus impact on demand (Biden)

COVID supply chain impact on supply  (including China shutdowns)

Russia/Ukraine O&G impact on supply

Russia/Ukraine wheat impact on supply

Russia/Ukraine geopolitical stability impact on supply

Saudis, other non-Russian bad actors on oil prices

Other causes (describe)

I don’t know percentages, but you have to include ESG/energy transition on your list. A massive part of the supply side problems that people like to blame is underinvestment in fossil fuels. Look at the poster child for green movement, Germany. Shutting nuclear plants for environmental reasons while paying astronomically for natural gas. And it’s only going to get worse. 
 

Also, an another input is prolonged easy money policy. Way before all this shit happened we kept rates zero and continued QE for YEARS past when it was “necessary”. Just priming that pump. That’s demand side over time. 

[Wulaw Horn 19585]

1 hour ago, jimmyjazz said:

How has your property tax more than doubled?  Do you not claim a homestead exemption?

From where I bought it in 2019 and the taxes I paid then. It jumped 150k when they figured that out and then maxed the 10% the next two years. 338k appraised value to 600k taxable this year. I guess it’s not quite doubled but close enough for message board purposes in short hand. 

[Wulaw Horn 19585]

I think the biggest driver (by a good bit) is supply chain destruction brought on by Covid. 
#2 is hostile energy policies (prior to Russia- we saw more of a run up pre- war than we have post war)

#3 is geopolitical instability in Russia

those account for the vast majority in my opinion.  
rest is government stimulus (Trump and Biden) both of which were stupid but Biden’s being slightly more stupid for coming after the lockdowns abated in many places and should have abated everywhere. 

[Gravy Train 975]

21 minutes ago, Wulaw Horn said:

I think the biggest driver (by a good bit) is supply chain destruction brought on by Covid. 
#2 is hostile energy policies (prior to Russia- we saw more of a run up pre- war than we have post war)

#3 is geopolitical instability in Russia

those account for the vast majority in my opinion.  
rest is government stimulus (Trump and Biden) both of which were stupid but Biden’s being slightly more stupid for coming after the lockdowns abated in many places and should have abated everywhere. 

Where are we on PPP "loans" grants? 

https://justthenews.com/nation/states/center-square/fed-report-finds-75-800-billion-paycheck-protection-program-didnt-reach

Quote

Taxpayers paid $4 for every $1 in wages and benefits received by workers in jobs saved by the federal government’s pandemic Paycheck Protection Program (PPP), according to a new study by the Federal Reserve Bank of St. Louis.

The Fed study also found PPP didn’t support jobs at risk of disappearing, and money flowed disproportionately to wealthier households.

“The PPP was a very large and very timely fiscal-policy intervention, saving about 3 million jobs at its peak in the second quarter of 2020 and distributing $800 billion well within two years of the onset of the COVID-19 crisis,” authors William Emmons and Drew Dahl concluded in their study, “Was the Paycheck Protection Program Effective?”

“But it was poorly targeted, as almost three-quarters of its benefits went to unintended recipients, including business owners, creditors and suppliers, rather than to workers. Due to differences in the typical incomes of those varied constituencies, it also ended up being quite regressive compared with other major COVID-19 relief programs, as it benefited high-income households much more.”

 

[drewlaws 130]

Supply chain issues, pent up consumer demand from COVID and increased wages are the co-related issues. IMO, wage inflation driven by labor shortages are an underreported driver of what we are seeing. My recollection is that was one of the early inflationary pressures put on the economy. It increases costs for businesses while increasing consumer demand since people are earning more, yet there was a choked supply chain limiting goods to market. 

[jimmyjazz 47134]

42 minutes ago, Wulaw Horn said:

From where I bought it in 2019 and the taxes I paid then. It jumped 150k when they figured that out and then maxed the 10% the next two years. 338k appraised value to 600k taxable this year. I guess it’s not quite doubled but close enough for message board purposes in short hand. 

Ouch.

[Cheeseweasel 26439]

9 hours ago, Gravy Train said:

Where are we on PPP "loans" grants?

Quote

But it was poorly targeted, as almost three-quarters of its benefits went to unintended recipients, including business owners, creditors and suppliers, rather than to workers.

Did the guys who wrote this report understand how PPP worked before they reached this genius conclusion? The money went DIRECTLY to the businesses who used it to continue to pay wages instead of furloughing / laying off employees.  Antidotally our business would have furloughed most of our employees during Covid. Instead, we kept everyone employed (and off of unemployment), worked on the few jobs we had, and sputtered along until business picked up.  Did this benefit creditors, suppliers, business owners? Sure. But the opposite would have been MASSIVE bankruptcy where NONE of the suppliers would get paid & MORE people would get laid off. 

Regarded people who've never run a business should shut the fuck up about things they don't understand. Stay in academia, fuckwits.

[Wulaw Horn 19585]

9 hours ago, jimmyjazz said:

Ouch.

I should also. It’s that I’m not talking about necessarily 12 month changes I’m more talking about what I’m paying since roughly the time Covid started. So, I’m comparing gas to 210 or so a gallon even though it got down to 139 or so (which was always weird). I’m comparing my property tax bill to what I paid in December of 2019. I’m comparing my grocery bill to a couple years ago, etc. we don’t conceptualize pricing as being compared to exactly 12 months ago, it’s more like- I remember when I paid 6.99 a pound for the good bacon and now that bacon is 10.99 a pound and I have to buy the shut bacon for 7.99 a pound or skip it all together. Was that June of 2021?  Probably not.  But it’s not like it was 1997 either. It was fairly recently. 

[phdhorn 6225]

Holy shit, PPE up 11.3%?  That's insane.

[Cheeseweasel 26439]

[Wulaw Horn 19585]

1 hour ago, phdhorn said:

Holy shit, PPE up 11.3%?  That's insane.

That's dated information dude. Why are you living in the past?

[Wally Fairway 5674]

14 hours ago, Snake Diggity said:

Other causes (describe)

Maybe part of China shutdown/COVID - hording by consumers (initially toilet paper, but now a little bit of everything)
New vehicle shortages (again related to chip shortage), which caused a bigger increase in used car pricing
Rebound increase in gas demand - people tired of not travelling (because gas prices should have caused a larger decrease in demand then we've seen)
And when in doubt blame Musk, Gates, Bezos, et al for being assholes and having too much money

[gsoda3 3362]

started off as a supply issue then it became a demand issue.  we're not getting out of this without significant destruction of consumer demand (recession, spike in unemployment).

[Snake Diggity 4714]

14 hours ago, Trey3216 said:

Why didn’t you include “idiotic Covid Zero policies” in some areas and overly restrictive Covid measures domestically to the supply/demand blame game?   Because those measures have as much or more effect, ore even cause, on much of the things you listed.   

I feel like I covered part of the impact of shutdowns with “COVID supply chain impact”.  I do think it’s warranted to add a separate “pent up demand from COVID lockdown” to cover the demand side.

If I were parsing out the 9.1% by cause off the cuff with only cursory research it would look like:

RUSSIA: 3% of the 9% can be traced back to Russia and the impact on oil prices (including the the impact of the Saudi reaction), food prices (Ukrainian wheat), and general supply pullback due to fear of geopolitical instability.

COVID: 4% of the 9% can be traced to COVID; from pent up demand and overstimulus hitting the demand side to China lockdowns and domestic shutdowns/slowdowns impacting the supply side.  This also includes the impact of labor shortages resulting from olds retiring early and women deciding to stay home; the olds part was going to happen eventually anyway but COVID expedited it.

The FED: 1% of the 9% can be traced back to pre-COVID fiscal policy resulting in overstimulation.

The remaining 1.1% could be left for other/misc. causes.

Not to CR it up, but I think the blame on Biden should limited to the difference between 7% and 9%.  We were going to have high inflation regardless of that last stimmy, it just made it slightly worse.

 

Edited July 14, 2022 by Snake Diggity

[Laxtonto 13277]

1 hour ago, Wally Fairway said:

Maybe part of China shutdown/COVID - hording by consumers (initially toilet paper, but now a little bit of everything)
New vehicle shortages (again related to chip shortage), which caused a bigger increase in used car pricing
Rebound increase in gas demand - people tired of not travelling (because gas prices should have caused a larger decrease in demand then we've seen)
And when in doubt blame Musk, Gates, Bezos, et al for being assholes and having too much money

In many ways, this entire spike in inflation and the soon to resulting depression (not a recession, unfortunately) is more tied to the abject failure of JIT when dealing with supply chain disruption and the cascading impact that has when tied to a global supply chain, if we are going to look at this from a purely academic non-monetary policy standpoint. We can all point to COVID, but in many ways, it's not COVID but the hubris that the system will always run perfectly globally is the real culprit. We built our systems to be so perfect that any sustained disruption was disastrous to the entire global marketplace.

All of this worked great when the "trains always ran on time", but as soon as we saw significant fluctuations on the back end, the global JIT supply chain dream collapsed. As we saw the low supplier levels of the chain snap it cascaded to the point we started to see massive outages of secondary and tertiary components to many products and more importantly the loss of entire secondary suppliers. I don't care what field you are in, if you can't get the pieces to make the product, you cant make the product. This then leads to panic purchasing of resources and even more escalations in costs and you still have major delivery variance.

Prices are skyrocketing for goods and so to help slow inflation the fed raises rates.  Now we have reached the stage where the low-cost debt that many firms used to help deal with those escalations in costs a short-term bandaid is now no longer low cost and now also needs to be priced more aggressively into the sell price of goods. Then combine that with disruption in the raw material sector seeing the loss of a variety of suppliers and limited ability to quickly replace those suppliers which means components parts may have a greater scarcity and higher lead times, which have to be priced in.

Worse the cash-to-cash cycle (time to pay for resources until the time you get paid) is now stretching out longer than planned during initial production and many firms' cash reserves cannot consistently handle that added shock and start to default or flat-out close. Depending on where this is in the supply chain, we are either seeing the loss of available options to the consumer or major holes in the downstream supply of components that are then directly passed on to the consumer through more price increases. So the consumer is looking at ever-increasing prices and greater variability of timelines and quality and a much higher cost of debt to finance purchases, which inevitably will further stamp down demand. 

 

Without going down the rabbit hole of the failure of US energy policy and regulations (this is going back decades when we get into the issues of the near impossibility to be able open a new refinery in the US) and how that is going to further drive up prices.

 

[Dahobbs 18306]

4 hours ago, Cheeseweasel said:

Did the guys who wrote this report understand how PPP worked before they reached this genius conclusion? The money went DIRECTLY to the businesses who used it to continue to pay wages instead of furloughing / laying off employees.  Antidotally our business would have furloughed most of our employees during Covid. Instead, we kept everyone employed (and off of unemployment), worked on the few jobs we had, and sputtered along until business picked up.  Did this benefit creditors, suppliers, business owners? Sure. But the opposite would have been MASSIVE bankruptcy where NONE of the suppliers would get paid & MORE people would get laid off. 

Regarded people who've never run a business should shut the fuck up about things they don't understand. Stay in academia, fuckwits.

That's how it was supposed to work. There was a lot of fraud in the process and a lot of businesses getting shit without actually retaining or even really having employees in the first place. There has been pretty extensive coverage on this. 

[Wulaw Horn 19585]

58 minutes ago, Snake Diggity said:

I feel like I covered part of the impact of shutdowns with “COVID supply chain impact”.  I do think it’s warranted to add a separate “pent up demand from COVID lockdown” to cover the demand side.

If I were parsing out the 9.1% by cause off the cuff with only cursory research it would look like:

RUSSIA: 3% of the 9% can be traced back to Russia and the impact on oil prices (including the the impact of the Saudi reaction), food prices (Ukrainian wheat), and general supply pullback due to fear of geopolitical instability.

COVID: 4% of the 9% can be traced to COVID; from pent up demand and overstimulus hitting the demand side to China lockdowns and domestic shutdowns/slowdowns impacting the supply side.  This also includes the impact of labor shortages resulting from olds retiring early and women deciding to stay home; the olds part was going to happen eventually anyway but COVID expedited it.

The FED: 1% of the 9% can be traced back to pre-COVID fiscal policy resulting in overstimulation.

The remaining 1.1% could be left for other/misc. causes.

Not to CR it up, but I think the blame on Biden should limited to the difference between 7% and 9%.  We were going to have high inflation regardless of that last stimmy, it just made it slightly worse.

 

I think you are high on the Russia effect. At least if you go back to the start of Covid. We were already well up in the summer of 2021 when we were debating transient vs more permanent. 

[Cheeseweasel 26439]

4 minutes ago, Dahobbs said:

That's how it was supposed to work. There was a lot of fraud in the process and a lot of businesses getting shit without actually retaining or even really having employees in the first place. There has been pretty extensive coverage on this. 

Exactly. If we are going to be critical of the program, be critical of the people who defrauded it or the lack of oversight. But also keep in mind that this was a massive triage operation that was quickly reacting to an incredibly rapidly changing situation. Fuck the arm chair QB's. 

[Cheeseweasel 26439]

33 minutes ago, Laxtonto said:

In many ways, this entire spike in inflation and the soon to resulting depression (not a recession, unfortunately) is more tied to the abject failure of JIT when dealing with supply chain disruption and the cascading impact that has when tied to a global supply chain, if we are going to look at this from a purely academic non-monetary policy standpoint. We can all point to COVID, but in many ways, it's not COVID but the hubris that the system will always run perfectly globally is the real culprit. We built our systems to be so perfect that any sustained disruption was disastrous to the entire global marketplace.

All of this worked great when the "trains always ran on time", but as soon as we saw significant fluctuations on the back end, the global JIT supply chain dream collapsed. As we saw the low supplier levels of the chain snap it cascaded to the point we started to see massive outages of secondary and tertiary components to many products and more importantly the loss of entire secondary suppliers. I don't care what field you are in, if you can't get the pieces to make the product, you cant make the product. This then leads to panic purchasing of resources and even more escalations in costs and you still have major delivery variance.

This is a decent criticism. We all benefited from JIT as it lowered overall costs. But, as you pointed out, when the train derails, it fucks everything up.

[Dahobbs 18306]

1 minute ago, Cheeseweasel said:

Exactly. If we are going to be critical of the program, be critical of the people who defrauded it or the lack of oversight. But also keep in mind that this was a massive triage operation that was quickly reacting to an incredibly rapidly changing situation. Fuck the arm chair QB's. 

I think I agree with this. But I'm not sure how one can be critical of the lack of oversight and also not be an arm chair QB. The concept was a good one. The execution was bad, and a lot of the problems appear to have been self-inflicted. 

[Laxtonto 13277]

1 minute ago, Cheeseweasel said:

Exactly. If we are going to be critical of the program, be critical of the people who defrauded it or the lack of oversight. But also keep in mind that this was a massive triage operation that was quickly reacting to an incredibly rapidly changing situation. Fuck the arm chair QB's. 

My complaints aren’t with the program at the time but the lack of initial oversight and more importantly how we are not seeing very aggressive actions to identify and prosecute the PPP fraud.

[Cheeseweasel 26439]

1 minute ago, Dahobbs said:

I think I agree with this. But I'm not sure how one can be critical of the lack of oversight and also not be an arm chair QB. The concept was a good one. The execution was bad, and a lot of the problems appear to have been self-inflicted. 

As it goes with Government. The execution was good but one hand didn't know what the other was doing. Congress passed the bills, but didn't give decent guidance on the implementation (especially forgiveness). 

[Laxtonto 13277]

2 minutes ago, Cheeseweasel said:

This is a decent criticism. We all benefited from JIT as it lowered overall costs. But, as you pointed out, when the train derails, it fucks everything up.

I have been working with some doc students about how to better model safety stock concepts with JIT and how we do a poor job of developing our supply chain around mission critical vs non critical assets and what inventory levels to hold.

 

It isn’t just the classic saw tooth inventory model any more because of globalization and larger lead times. Firms need to make a real effort of understanding what they can and cannot live without and build a more siloed supply chain structure on mission critical items (which may even necessitate reshoring or full direct acquisition), while trying to keep many of the tenets of JIT.

 

[Cheeseweasel 26439]

5 minutes ago, Laxtonto said:

My complaints aren’t with the program at the time but the lack of initial oversight and more importantly how we are not seeing very aggressive actions to identify and prosecute the PPP fraud.

Valid. Congress should appropriate money to do just this. It would pay for itself and bankrupt some fools.

[Laxtonto 13277]

Just now, Cheeseweasel said:

Valid. Congress should appropriate money to do just this. It would pay for itself and bankrupt some fools.

Even just allocate 100M to the IRS for a 2 year program and it would probably pay for itself in 6 months…

[Cheeseweasel 26439]

1 minute ago, Laxtonto said:

I have been working with some doc students about how to better model safety stock concepts with JIT and how we do a poor job of developing our supply chain around mission critical vs non critical assets and what inventory levels to hold.

 

It isn’t just the classic saw tooth inventory model any more because of globalization and larger lead times. Firms need to make a real effort of understanding what they can and cannot live without and build a more siloed supply chain structure on mission critical items (which may even necessitate reshoring or full direct acquisition), while trying to keep many of the tenets of JIT.

 

Good stuff. My management philosophy has always been "Know what you are good at and get better at it" combined with "Don't try to be everything to all people". It's served us well in the last 2 years. It's so easy to chase business that doesn't fit your wheelhouse with JIT inventory and online storefronts these days. Being disciplined in B2B pays off in the long run, though.

[Wally Fairway 5674]

4 hours ago, Cheeseweasel said:

Did the guys who wrote this report understand how PPP worked before they reached this genius conclusion? The money went DIRECTLY to the businesses who used it to continue to pay wages instead of furloughing / laying off employees.  Antidotally our business would have furloughed most of our employees during Covid. Instead, we kept everyone employed (and off of unemployment), worked on the few jobs we had, and sputtered along until business picked up.  Did this benefit creditors, suppliers, business owners? Sure. But the opposite would have been MASSIVE bankruptcy where NONE of the suppliers would get paid & MORE people would get laid off. 

Regarded people who've never run a business should shut the fuck up about things they don't understand. Stay in academia, fuckwits.

 

19 minutes ago, Dahobbs said:

I think I agree with this. But I'm not sure how one can be critical of the lack of oversight and also not be an arm chair QB. The concept was a good one. The execution was bad, and a lot of the problems appear to have been self-inflicted. 

I can tell you from personal experience (2 business I worked at during the PPP period of the pandemic), is that both of them received PPP loans. They never laid anyone off, they learned to have many work remote, and how to work with more distancing. And all of the PPP money ended up in the owners pockets.
One was a construction company - over $4 mil in PPP, job sites went dark for about a couple of weeks, and progress was slowed but they have had record years in earnings. The owner now drives either his Tesla or his 2021 Vette (or an older truck if he is visiting a job site - can't let the peons or customers see the glitz)
The other was a law firm - about $1.3 mil, business slowed for a month or so, but then picked back up. They haven't spent the money yet, except for using it to fund a planned office expansion, and they are discussing how to use it to grow the business or fund retirement liabilities. 
What it really did, in both cases, was allow the owners to sleep quite well knowing there was a pretty big cash cushion in the bank

tldr - 100% of the business Wally can attest to had the PPP funds go to the owner

[jimmyjazz 47134]

31 minutes ago, Cheeseweasel said:

This is a decent criticism. We all benefited from JIT as it lowered overall costs. But, as you pointed out, when the train derails, it fucks everything up.

Agreed.  Inventory is a buffer -- a hedge, in a sense.  Hedges are insurance.  Insurance costs money.

[Cheeseweasel 26439]

19 minutes ago, Wally Fairway said:

What it really did, in both cases, was allow the owners to sleep quite well knowing there was a pretty big cash cushion in the bank

Too big to fail..

I think this is a legit criticism of PPP. For every small business it saved, some fat cats were able to purchase new cars/boats, etc. I think Big Auto was behind the whole thing.

Curiously, did they keep people employed? You were only supposed to count FTE in your calculation.

[Trey3216 15452]

25 minutes ago, Wally Fairway said:

 

I can tell you from personal experience (2 business I worked at during the PPP period of the pandemic), is that both of them received PPP loans. They never laid anyone off, they learned to have many work remote, and how to work with more distancing. And all of the PPP money ended up in the owners pockets.
One was a construction company - over $4 mil in PPP, job sites went dark for about a couple of weeks, and progress was slowed but they have had record years in earnings. The owner now drives either his Tesla or his 2021 Vette (or an older truck if he is visiting a job site - can't let the peons or customers see the glitz)
The other was a law firm - about $1.3 mil, business slowed for a month or so, but then picked back up. They haven't spent the money yet, except for using it to fund a planned office expansion, and they are discussing how to use it to grow the business or fund retirement liabilities. 
What it really did, in both cases, was allow the owners to sleep quite well knowing there was a pretty big cash cushion in the bank

tldr - 100% of the business Wally can attest to had the PPP funds go to the owner

Do those employees incur any of the business losses from “slowing down” if they are still employees and receiving paycheck?    Do they have to continue funding liabilities for projects underway while they are not being worked on?   I mean, I can understand how it can get twisted and abused, every government program ever invented has incurred mountains of abuse, but when some businesses were forced to shudder their doors by government decree, you can’t not fucking compensate them for that.   That goes against everything this country was founded upon.  

[Wally Fairway 5674]

7 minutes ago, Cheeseweasel said:

Too big to fail..

I think this is a legit criticism of PPP. For every small business it saved, some fat cats were able to purchase new cars/boats, etc. I think Big Auto was behind the whole thing.

Curiously, did they keep people employed? You were only supposed to count FTE in your calculation.

My only real issue with PPP is the blanket forgiveness of debt; there should have been some sort of means test to "earn" forgiveness. Restaurants, theaters, others that were devastated it could be argued earned the forgiveness. But businesses that ended up being only nominally affected should have, at least, had to pay taxes on the debt forgiveness; if not have to make a repayment of the "loans". That could have been spread over a number of quarters or years, to allow the funds to stay long enough to be confident that the pandemic is no going to put them belly up.

[Cheeseweasel 26439]

5 minutes ago, Wally Fairway said:

My only real issue with PPP is the blanket forgiveness of debt; there should have been some sort of means test to "earn" forgiveness

Ironically, the Government followed up PPP with the Employee Retention Credit which was means tested. 

[washparkhorn 9973]

4 hours ago, Laxtonto said:

We can all point to COVID, but in many ways, it's not COVID but the hubris that the system will always run perfectly globally is the real culprit. We built our systems to be so perfect that any sustained disruption was disastrous to the entire global marketplace.

Well said. 

[washparkhorn 9973]

4 hours ago, Laxtonto said:

It isn’t just the classic saw tooth inventory model any more because of globalization and larger lead times. Firms need to make a real effort of understanding what they can and cannot live without and build a more siloed supply chain structure on mission critical items (which may even necessitate reshoring or full direct acquisition), while trying to keep many of the tenets of JIT.

HBR: monofocus and/or hyperfocus on efficiency weakens resiliency. 
 

Eliminating waste sounds like a reasonable goal. Why would we not want managers to strive for an ever-more-efficient use of resources? Yet as I will argue, an excessive focus on efficiency can produce startlingly negative effects, to the extent that superefficient businesses create the potential for social disorder.
 

This happens because the rewards arising from efficiency get more and more unequal as that efficiency improves, creating a high degree of specialization and conferring an ever-growing market power on the most-efficient competitors.

The resulting business environment is extremely risky, with high returns going to an increasingly limited number of companies and people—an outcome that is clearly unsustainable.

The remedy, I believe, is for business, government, and education to focus more strongly on a less immediate source of competitive advantage: resilience.

This may reduce the short-term gains from efficiency but will produce a more stable and equitable business environment in the long run. I conclude by describing what a resilience agenda might involve.

https://hbr.org/2019/01/the-high-price-of-efficiency

[Wulaw Horn 19585]

So, my old boss (owned a mortgage company where everyone was straight commission) got 600k. There was never a snowballs chance in hell he was laying off employees but bc we were all W2 he got paid big time. 

[Wulaw Horn 19585]

My title company had been open for 3 or 4 months. We were ramping up. We got 50k. That was about one months worth of operating expenses as it worked out. It was a very good thing for us. The first month of lockdowns and the like the real estate market ground to a halt, we weren’t sure if the county clerks would be open to record which would have stopped all transactions etc. PPP made it so we didn’t explore or think about layoffs. They (or furloughs) would have otherwise been very much on the table for us. 

[Ag with kids 581]

On 7/13/2022 at 10:53 AM, Bozo_Casanova said:

The inflation was coming from inside the house

High liquidity + not enough stuff to do with it = stagflation 

Many of you have been around long enough to remember when I was still trying to explain basic economic reality. At that time, I repeatedly talked about the risks of tax cutting (or not letting tax cuts expire) during expansions and prolonged periods of low interest rates "loading the gun" for the next recession. Welcome to the utterly predictable future. The crop has failed and the seed corn has been eaten.  
Or, fellas, is it still too soon to tell how these things play out? Will it always be?
@TahoeHorn @Ag with kids @Wulaw Horn @washparkhorn

What's your point?

Yes...the long periods of low interest rates was bad.  They were too low for too long.  The Fed fucked up.

But...

What about the trillions of dollars dumped into the economy over the past 2 years?  Do you think that adding that kind of economic stimulus could have had any kind of effect?  You know, too much money chasing too few goods and all that shit?  Or as Milton Friedman said, “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”

And why would taxes affect anything in the aggregate?  It's either money available to the economy via the taxpayers if they get to keep the tax cuts or it's money available to the economy via the government when they spend those tax dollars...

[Ag with kids 581]

On 7/13/2022 at 8:18 PM, jimmyjazz said:

How has your property tax more than doubled?  Do you not claim a homestead exemption?

I own my house and 4 rental properties.  Only my house is homesteaded.  The others don't get that lovely exemption.

Perhaps that's his issue.

[Bozo_Casanova 26845]

1 hour ago, Ag with kids said:

What about the trillions of dollars dumped into the economy over the past 2 years? 

You mean, during a fiscal crisis? And  I’m not even defending that, I’m agnostic but let me get this straight: you supported tax cuts that were 100% financed by debt , ie, stimulative deficit spending during periods of already expanding GDP but  you’ve got a problem with stimulus when the economy is contracting? And you’re complaining about inflation? 
you, sir, are truly an ag with kids.

Edited July 15, 2022 by Bozo_Casanova

[Bozo_Casanova 26845]

1 hour ago, Ag with kids said:

And why would taxes affect anything in the aggregate?  It's either money available to the economy via the taxpayers if they get to keep the tax cuts or it's money available to the economy via the government when they spend those tax dollars...

Oh you sweet summer child, You were so close. There is no “either.” Do you really not understand that the money got spent regardless? No. I suppose you didn’t. That was the point of the cuts- to juice spending.
 

Son, let me tell you about this thing called the national debt.

Edited July 15, 2022 by Bozo_Casanova

[52-80 19377]

[PilotsError 2336]

We're just gonna ignore antidotally?

[bschoolprof 6341]

1 minute ago, PilotsError said:

We're just gonna ignore antidotally?

It's mute, for all intensive purposes.  

[Cheeseweasel 26439]

44 minutes ago, PilotsError said:

We're just gonna ignore antidotally?

Totally.