2021 - Is inflation finally back in the conversation?

[Cheeseweasel 26437]

2 hours ago, 52-80 said:

Methink the youngins doth spend too much money....

Damn kids and their flying skateboards!!!

[washparkhorn 9935]

Services PMI print ugly. Steep drop. 

Fed anti-inflation tools bringing the pain, as expected. Cure worse than the disease?

[Cheeseweasel 26437]

5 minutes ago, washparkhorn said:

Services PMI print ugly. Steep drop. 

Fed anti-inflation tools bringing the pain, as expected. Cure worse than the disease?

Short term, yeah. We probably needed the amputation. Long term, no problem. Our billionaires will be launching Penis Rockets into space soon!

[Skipper 6103]

6 hours ago, 52-80 said:

I get a very strong sense that everyone now is engaged in leisure travel (and associated spending) because of pent up covid lockdown.  Its true of everyone I know personally, everyone at work, and even the same sentiment is on surly. 

And yeah the surly folks are illiterate as hell

There are also just a lot of financially incompetent people in this country. Some of my wife's extended family provide a recent example that is case and point:  This person (i) recently asked their dad for money to help pay for unexpected vet expenses because her and husband don't have an emergency fund (ii) went on a long trip to fancy Caribbean destination (iii) bitched to my wife about trip costing over $10K and credit card balance running up, yet (iv) put down a reservation at resort (at rack rates I'm sure) for 8 day trip next year.  Oh did I mention this person is pregnant with first child and will have a 5 month old she expects someone to keep during said 8 day trip.   Again, zero savings heading into parenthood.   That's unfathomable to me.  But sadly I think this person is probably representative of at least 50% of the population.   

And I agree it's accelerated with revenge travel.  It's all fascinating to me how this going to play out on macro level (and waiting for investment opportunities to pounce on as it all blows up).  

[washparkhorn 9935]

The services PMI drop in perspective:

[troph 24562]

Plenty of signals inflation may be slowing. Fingers crossed.

https://www.latimes.com/business/story/2022-07-07/inflation-is-coming-down?_amp=true

https://www.fastcompany.com/90768212/some-costs-are-finally-coming-down-what-does-that-mean-for-inflation

[52-80 19093]

CPI directly excluding energy is 9%

Assuming energy is behind the other costs (in terms of cost of transport), maybe CPI excl energy would drop to 8%

Energy, in the short term, can go down rapidly. The other costs - food, medicine, services - seems to me a hell of a lot stickier. 

[DefinitelyNotHollywoodColt 12301]

On 7/22/2022 at 9:45 AM, Skipper said:

There are also just a lot of financially incompetent people in this country. Some of my wife's extended family provide a recent example that is case and point:  This person (i) recently asked their dad for money to help pay for unexpected vet expenses because her and husband don't have an emergency fund (ii) went on a long trip to fancy Caribbean destination (iii) bitched to my wife about trip costing over $10K and credit card balance running up, yet (iv) put down a reservation at resort (at rack rates I'm sure) for 8 day trip next year.  Oh did I mention this person is pregnant with first child and will have a 5 month old she expects someone to keep during said 8 day trip.   Again, zero savings heading into parenthood.   That's unfathomable to me.  But sadly I think this person is probably representative of at least 50% of the population.   

And I agree it's accelerated with revenge travel.  It's all fascinating to me how this going to play out on macro level (and waiting for investment opportunities to pounce on as it all blows up).  

Just reading that gives me a panic attack. I don't understand how someone could live like that.

[Humble Beast 258]

27 minutes ago, 52-80 said:

CPI directly excluding energy is 9%

Assuming energy is behind the other costs (in terms of cost of transport), maybe CPI excl energy would drop to 8%

Energy, in the short term, can go down rapidly. The other costs - food, medicine, services - seems to me a hell of a lot stickier. 

The supply side issues have put a pretty elevated floor in energy prices imo. I think that’s why we don’t get below 5-6% inflation for a while outside of a full panic/depression. 

[52-80 19093]

29 minutes ago, Humble Beast said:

The supply side issues have put a pretty elevated floor in energy prices imo. I think that’s why we don’t get below 5-6% inflation for a while outside of a full panic/depression. 

i dont think so either.  spare capacity is still tight in short-medium term, and any capex in the sector wont have supply pay off until atleast in the medium-long term.  energy fundamentals looking to continue its ride for a decent while.

day to day price who knows.. all sorts of weird headlines like monkeypox and economy scare continue to stoke volatility

[Not a cat 5619]

8 hours ago, DefinitelyNotHollywoodColt said:

Just reading that gives me a panic attack. I don't understand how someone could live like that.

This.  My ex went through life figuring we could just call daddy if things got tough.  Took me years to finally get through to her that we're parents in our 30s, calling dad is not a viable option.  Well, it was an option for her but not one I was going to allow. Maybe that's why she's an ex, come to think of it.

[jimmyjazz 45558]

Had a little sticker shock the other day -- I haven't subscribed to the Statesman, or even purchased a copy, for probably a decade.  I needed to get a hard copy because we wanted a physical record of the obituary for a family member.

I remember daily was $0.50 and Sunday was $1.50, and not so long ago.  I picked up 2 Thursday editions and it was $5.  I'm sure this is less inflation than a dying media outlet trying to wrangle the last bit of profit out of an outdated distribution model, but I honestly thought a couple of newspapers might be $2.50 max.

Moral of the story:  read it online, or shoplift.

[Skipper 6103]

11 hours ago, DefinitelyNotHollywoodColt said:

Just reading that gives me a panic attack. I don't understand how someone could live like that.

Did I mention husband splits 4 decent Rangers season tix with 3 other people and plans to continue to do so?

[Skipper 6103]

1 hour ago, jimmyjazz said:

Had a little sticker shock the other day -- I haven't subscribed to the Statesman, or even purchased a copy, for probably a decade.  I needed to get a hard copy because we wanted a physical record of the obituary for a family member.

I remember daily was $0.50 and Sunday was $1.50, and not so long ago.  I picked up 2 Thursday editions and it was $5.  I'm sure this is less inflation than a dying media outlet trying to wrangle the last bit of profit out of an outdated distribution model, but I honestly thought a couple of newspapers might be $2.50 max.

Moral of the story:  read it online, or shoplift.

I actually miss the paper and priced getting a weekend delivery of the DMN a couple of years ago.  Don't remember what price was but sticker shock indeed.  Then it dawned on me papers don't exactly employ paper delivery boys anymore.

[Zepol87 9171]

On 7/22/2022 at 9:45 AM, Skipper said:

There are also just a lot of financially incompetent people in this country. Some of my wife's extended family provide a recent example that is case and point:  This person (i) recently asked their dad for money to help pay for unexpected vet expenses because her and husband don't have an emergency fund (ii) went on a long trip to fancy Caribbean destination (iii) bitched to my wife about trip costing over $10K and credit card balance running up, yet (iv) put down a reservation at resort (at rack rates I'm sure) for 8 day trip next year.  Oh did I mention this person is pregnant with first child and will have a 5 month old she expects someone to keep during said 8 day trip.   Again, zero savings heading into parenthood.   That's unfathomable to me.  But sadly I think this person is probably representative of at least 50% of the population.   

And I agree it's accelerated with revenge travel.  It's all fascinating to me how this going to play out on macro level (and waiting for investment opportunities to pounce on as it all blows up).  

Yea fuck those people. I have family the same way I just found out from vacation talk that my brother and sister in law truck payments and insurance hit around 2600 a month. 1500 for his truck and 1100 a month for her tahoe. My brother drives his truck for a living I kind of get it but sis in law goes to daycare and back and walmart in Rockwall, you dont need a bullshit new tahoe for that especially when it comes with 1100 a month expenses. Fucking insane. They also blame the economy and brandon for their issues. Fuck them ;

Edited July 25, 2022 by Zepol87

[StruggleBus 3922]

27 minutes ago, Zepol87 said:

Yea fuck those people. I have family the same way I just found out from vacation talk that my brother and sister in law truck payments and insurance hit around 2600 a month. 1500 for his truck and 1100 a month for her tahoe. My brother drives his truck for a living I kind of get it but sis in law goes to daycare and back and walmart in Rockwall, you dont need a bullshit new tahoe for that especially when it comes with 1100 a month expenses. Fucking insane. They also blame the economy and brandon for their issues. Fuck them ;

Are they poor? If not then who cares

[52-80 19093]

crisis averted

 

 

[Not a cat 5619]

49 minutes ago, 52-80 said:

crisis averted

 

 

But what about a family with 3 cars?  Can we safely say it's $105 saved or do we start approaching asymptote with larger families that presumably carpool some?  Someone should ask at the next press conference so I know exactly how much I'm saving.

[Hozz 1012]

$35 less per month for one peson

[Hozz 1012]

Also, forget about inflation!  At least we don't have to worry about a recession.

[Captainant 27459]

16 hours ago, Zepol87 said:

Yea fuck those people. I have family the same way I just found out from vacation talk that my brother and sister in law truck payments and insurance hit around 2600 a month. 1500 for his truck and 1100 a month for her tahoe. My brother drives his truck for a living I kind of get it but sis in law goes to daycare and back and walmart in Rockwall, you dont need a bullshit new tahoe for that especially when it comes with 1100 a month expenses. Fucking insane. They also blame the economy and brandon for their issues. Fuck them ;

goddamn that's more than my fucking mortgage + home insurance and utilities lol, all just to own a tinydick truck and tahoe in rockwall? No wonder there's so many angry people living in the dallas suburbs lmao

[Cheeseweasel 26437]

1 hour ago, 52-80 said:

crisis averted

This is fine!

[jimmyjazz 45558]

Netted $3.29/gal today ($3.44 less $0.15 per gallon via Gas Buddy).  I'm not sure why I should be complaining, comparing to $4.50 or whatever it was a couple of months ago.  If that direction was bad, this direction is good, and it helps elsewhere outside of pure price of energy (transport, etc.).

But sure, let's ignore it.

[Aqua Buddha 14515]

WMT just announced a huge cut in profit and markdowns to come.  Now the two largest retailers are pushing deep cuts and most every commodity is down significantly from its peak.  People bout to have whiplash on this.  
 

Oh, and on the $1,500 and $1,100 car tickets payments, I’d be stunned if they make half what we do and I drive a 7 year old 4 Runner.  They’ll be wiped out by something or broke at 65 and blame everyone but themselves.

[torre 1284]

Any economist nerds (said with respect) familar with Roubini ?    Bio link 2.     Note his explanation in the full article.

 

Economist Nouriel Roubini said the US is facing a deep recession as interest rates rise and the economy is burdened by high debt loads, calling those expecting a shallow downturn “delusional.”

“There are many reasons why we are going to have a severe recession and a severe debt and financial crisis,” the chairman and chief executive officer of Roubini Macro Associates said on Bloomberg TV Monday. “The idea that this is going to be short and shallow is totally delusional.” 

https://www.bloomberg.com/news/articles/2022-07-25/shallow-recession-calls-are-totally-delusional-roubini-warns

https://en.wikipedia.org/wiki/Nouriel_Roubini

 

 

[Captainant 27459]

You're telling me that doing the economic equivalent of rails of coke for the better part of a decade could have a less than fun comedown?? QE and tax cuts and BRRRRRT are a hell of a drug

[tbone_ 14022]

Isn’t Roubini always the doomsayer?

[52-80 19093]

43 minutes ago, torre said:

Economist Nouriel Roubini said the US is facing a deep recession as interest rates rise and the economy is burdened by high debt loads, calling those expecting a shallow downturn “delusional.”

Consumer debt has actually been extremely disciplined.  There's been more spending, but it's been paid out of higher wages and cash receipt.

The bugbear might once again be housing.  People been chasing rising property prices and if rising rates kick up adjustable mortgages and tips over the payability...that might be bad

 

https://www.philadelphiafed.org/surveys-and-data/large-bank-credit-card-and-mortgage-data

https://www.philadelphiafed.org/surveys-and-data/community-development-data/consumer-credit-explorer (1yr+ lag)

https://www.bls.gov/ncs/

[tbone_ 14022]

Did anyone do an arm with fixed rates below 3?

[Trey3216 15325]

2 hours ago, 52-80 said:

Consumer debt has actually been extremely disciplined.  There's been more spending, but it's been paid out of higher wages and cash receipt.

The bugbear might once again be housing.  People been chasing rising property prices and if rising rates kick up adjustable mortgages and tips over the payability...that might be bad

 

https://www.philadelphiafed.org/surveys-and-data/large-bank-credit-card-and-mortgage-data

https://www.philadelphiafed.org/surveys-and-data/community-development-data/consumer-credit-explorer (1yr+ lag)

https://www.bls.gov/ncs/

Consumer debt hit its highest level ever last November, and then the blowoff inflation top happened.   I don’t think there’s any way measurable that the consumer is healthy right now.   

[Neonmoon 38127]

1 hour ago, Trey3216 said:

Consumer debt hit its highest level ever last November, and then the blowoff inflation top happened.   I don’t think there’s any way measurable that the consumer is healthy right now.   

https://www.marketwatch.com/picks/serious-mortgage-delinquencies-are-up-55-over-pre-pandemic-levels-but-what-this-means-for-the-housing-market-isnt-what-you-might-think-01654348102
 

Ignore the scary headline of this article. Mortgage delinquencies are at record lows 

Quote

Though serious delinquencies are up from a few years back, they were very low anyway before the pandemic, data shows. And Black Knight reports they have fallen between 6-12% in each of the past 14 months. When you get into the nitty gritty of this data, you can see that the serious delinquency rate for FHA loans was nearly five times higher than the serious delinquency rate for conventional loans, according to CoreLogic data. “Homeowners with FHA loans are more likely to be low-to-moderate income workers, and the pandemic had a greater impact on those homeowners as compared to those with conventional loans.”

What’s more, the national delinquency rate — which factors in even someone who is delinquent by a single month — fell in April to 2.80%, marking a new record low for the second consecutive month, Black Knight reveals. As CoreLogic concluded in February: “The nation’s overall mortgage delinquency rates have improved significantly over the last year … Declines in local unemployment rates, a rapid rise in home prices and demand for housing have helped reduce the overall delinquency rate.”

And though the number of borrowers with a single payment past due increased 7.9% in April, that was offset by the fact that the number of borrowers who are three or more payments past due fell 8%. What’s more, foreclosure starts — the process of beginning a foreclosure after 120 days of delinquent payments — fell 12% from March.

“The overall mortgage delinquency rate fell to a new record low and not only that, [foreclosure starts] actually fell 12% from February to March, the largest month-over-month decline in 20 years,” says Channel. And foreclosure starts are below pre-pandemic levels, which means that even if a relatively large amount of people are seriously delinquent, many aren’t actively being foreclosed on. 

What does this all mean for the housing market?

At the end of the day, despite a few hiccups here and there, most data indicate that the housing market is doing pretty well, pros say. The majority of people seem capable of keeping up with their mortgage payments, and this is what economists and real estate pros told MarketWatch Picks about the housing market now. “While high rates and prices may push some people out of the market and eventually start putting more noticeable downward pressure on demand, there isn’t much evidence to suggest that we’re going to see a lot of homebuyers suddenly start falling behind or defaulting on their loans in the near future,” says Channel. 

Higher rates does mean housing prices will go down, but at what pace?

And lenders might start offering more ARMs to attract more buyers, but the word Adjustable has a stink on it, so it’s not an easy sell. 
 

[Not a cat 5619]

4 hours ago, tbone_ said:

Did anyone do an arm with fixed rates below 3?

Raises hand sheepishly.

In my defense, I'm selling in summer 2023 when the youngest graduates.  So last year I took out a HELOC at prime -.75 (was 2.99 at the time).  I figured I had a large chunk of change as an emergency fund getting nothing so used that along with the heloc to pay off my 3.625 fixed rate and used HELOC as emergency fund.  Now I'm at 3.75 and will be at 4.5 by the end of the week.  

I tried to get too cute and got burnt.  Oh well, that's life.  It's maybe a few grand in the big scheme of things.

[Not a cat 5619]

7 hours ago, Hozz said:

$35 less per month for one peson

Holy shit, I missed that.  Is that actually a WH release? No CR, but that's amateur hour

[52-80 19093]

4 hours ago, Not a cat said:

Holy shit, I missed that.  Is that actually a WH release?

yes, directly from the white houx

[Incredulity 11555]

3 hours ago, 52-80 said:

yes, directly from the white houx

Stassneyhorn took a position at WH comms department

[Humble Beast 258]

56 minutes ago, Incredulity said:

Stassneyhorn took a position at WH comms department

Working for the big guy. Living his dream. 
 

[phdhorn 6224]

This ain't good:
https://www.cnbc.com/2022/07/26/nearly-half-of-americans-fall-deeper-in-debt-as-inflation-boosts-costs.html

This week of course all the big #'s coming in... key # of course is today's CCI numbers, and Thursday's GDP Q2 released.  The icing on the cake is Friday's PCEPI data (which charts costs of goods bought by consumers... that'll tell whether Thursday's GDP report looks shaky (whatever side of 0 it's on), or pretty valid. Good chance it's negative and therefore recession.  Maybe it'll skate by with a atom-sized positive #, but I doubt it.  Nevertheless the longer numbers portend a more likely recession (now or into the latter half of 22).   But I suppose throwing out Opposite Day memos is what you do when your team expects shitty numbers:
https://news.yahoo.com/white-house-getting-ahead-expected-195337271.html

And, oh yeah, 2 consecutive neg GDP quarters IS a recession. Doesn't mean a big or long one, but yeah, it's a recession.  It's never been "official" but it's always the one that we've gone by for oh about 8 decades at least.  So yeah, it's a recession if the number says so.

So far Wall St. earnings are about 50/50 which is actually better than expected.  But Wal-Mart's big bomb definitely is a major downsider for this economy.   The numbers this week are probably the most critical since this whole shitty mess began in early 2020.  Not only because we'll know where we've been, but as most things that get more data and fill in the gaps, we'll know where we're likely going, and at least an idea for how long.

[troph 24562]

We are in a recession already numbers get revised down later so usually the last minuscule positive number ends up being the first negative number 3-4 months later on final revision.

I think housing, china’s no covid policy, and the war in Russia are the three biggest drivers.I think the whiplash consumer spending and revenge travel is subsiding. 
 

as for mortgages we are going to take a 10 year ARM at 4.25% on our new mortgage. I could be upset but we are usually on both sides winning and losing when the market shifts. We have some wins too so no complaints even if I’d rather have the 30 year 2.875% rate. 

[Neonmoon 38127]

The US is in recession. Hell, even if the number doesn't go below 0 on Thursday, most people feel like it's in one. But I think the number will be below 0

[troph 24562]

We are in a recession now. It’s also not the end of the world. We’ve been through shit storms of recessions, they hurt and are painful, heck 2010 I was interviewing bankruptcy lawyers (thankfully didn’t go through with it). Hang on, ride it out, don’t catch the pox, and it’ll be over soon enough and the last ones in will be cleared out and opportunity will be there for the taking. 

Edited July 26, 2022 by troph

[Humble Beast 258]

McDonalds weighing in

 

[52-80 19093]

New York Fed:

https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2022Q1

 

 

this particular piece below is behind some Qs

 

[Cheeseweasel 26437]

41 minutes ago, troph said:

Hang on, ride it out, don’t catch the pox, and it’ll be over soon enough and the last ones in will be cleared out and opportunity will be there for the taking. 

Lord loves a workin' man; don't trust whitey; see a doctor and get rid of it.

[Incredulity 11555]

7 minutes ago, Cheeseweasel said:

Lord loves a workin' man; don't trust whitey; see a doctor and get rid of it.

never get less than twelve hours sleep; never play cards with a guy who has the same first name as a city; and never get involved with a woman with a tattoo of a dagger on her body. 

[StruggleBus 3922]

38 minutes ago, 52-80 said:

New York Fed:

https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2022Q1

 

 

this particular piece below is behind some Qs

 

[Not a cat 5619]

27 minutes ago, Cheeseweasel said:

Lord loves a workin' man; don't trust whitey; see a doctor and get rid of it.

I think next week I'll be able to send some more money as I may have extra work.

[Fudge Nuggets 19151]

1 hour ago, Neonmoon said:

The US is in recession. Hell, even if the number doesn't go below 0 on Thursday, most people feel like it's in one. But I think the number will be below 0

And a lot of times we are actually out of the recession about the time it is officially announced we are in one.  That's the fun of stats that lag by a quarter.

[Cheeseweasel 26437]

10 minutes ago, Not a cat said:

I think next week I'll be able to send some more money as I may have extra work.

[DaysOff 7852]

$35 less per month for one peson

Starting to think this administration is as stupid as the last.

[Cheeseweasel 26437]

2 minutes ago, DaysOff said:

Starting to think this administration is as stupid as the last.

We are on a straight line to President Camacho.