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2021 - Is inflation finally back in the conversation?

Reagan1k

By Reagan1k
in Business and Markets

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babysdaddy

babysdaddy 2731

Posted
Posted
3 hours ago, Captainant said:

You're just describing a government version of what private equity firms have been doing for ages with their own stocks and shares and bonds lol. This is why the money supply is out of control. Every dollar of asset is being used to underwrite loans, and then the asset is still used or sold, or simply loses value. But the money from the loan remains. 

Rinse and repeat. Zero percent interest is a hell of a drug if you've got a few million in things to get loans off of

I appreciate that you posted this twice but I'm still having trouble following.  How is the government buying it's own debt the same as what private equity has been doing? 

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Bateshorn
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The only thing more predictable than the GOP running up huge deficits on tax cuts and military spending, is each one suddenly becoming horrified by deficit spending 5 mins after a Democrat is sworn in

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workswithseed

workswithseed 2204

Posted
Posted
12 minutes ago, Incredulity said:

So what happens next?

Do new/current college students pile up debt hoping for another round?  I would guess so. 

High School class of 22 is going to be screaming, "it's not fair" in 26, right?

I haven't paid my college loan since COVID. It was under 10, I ain't paying till I have to.

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Cheeseweasel

Cheeseweasel 26439

Posted
Posted
16 minutes ago, Incredulity said:

So what happens next?

Do new/current college students pile up debt hoping for another round?  I would guess so. 

High School class of 22 is going to be screaming, "it's not fair" in 26, right?

You know it will. All those parents who've saved for their kid's college are going to take out 10K loans instead. 

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Humble Beast

Humble Beast 258

Posted
Posted
31 minutes ago, Incredulity said:

So what happens next?

Do new/current college students pile up debt hoping for another round?  I would guess so. 

High School class of 22 is going to be screaming, "it's not fair" in 26, right?

 
You can expect more generalized fuckery. We just passed an inflation reduction act that likely does the opposite. Then followed It up with declaration that will be inflationary. 

 

I think once the law is disregarded like this and the seal is broken, there’s really not a limit on how much they can do.
 

College costs will keep rising because they’re even more subsidized now, therefore debts will keep rising, then calls for new relief. Rinse, repeat. Or put another way, money printer go brrrrrrrrrrr. 

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Storm the Field

Storm the Field 5366

Posted
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RBOB wholesale gasoline futures down to $2.78 this morning (lowest since 2/25).

Implies a nationwide average of around $3.59 for regular unleaded later this Fall (currently $3.88). Probably $3.19 or so in Texas (currently $3.43). GasBuddy is already showing some stations on the outskirts of Houston at $3.00 or less.

https://www.gasbuddy.com/gasprices/texas/houston

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Posted
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3 hours ago, Storm the Field said:

RBOB wholesale gasoline futures down to $2.78 this morning (lowest since 2/25).

Implies a nationwide average of around $3.59 for regular unleaded later this Fall (currently $3.88). Probably $3.19 or so in Texas (currently $3.43). GasBuddy is already showing some stations on the outskirts of Houston at $3.00 or less.

https://www.gasbuddy.com/gasprices/texas/houston

Lol, this will not last. And it will rise quickly. 

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52-80

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Posted
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this loan forgiveness totaling $10B is just $10B less they have to hire more IRS agents to audit the rich.

image.png.386955ba35fb2dc28a2f043faf9ba2bd.png

apparently, beyond the loans, they're also giving out more free money:

>>The President championed the largest increase to Pell Grants in over a decade and one of the largest one-time influxes to colleges and universities.<<

if i was running a university, i'd definitely start charging more for tuition.    

but there were >>key steps to strengthen accountability [against price hikes]<<

OK... can someone show us where they are?  i've perused the Department of Education website and across WhiteHouse.gov but can't find reference to this thing they mentioned

https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/24/fact-sheet-president-biden-announces-student-loan-relief-for-borrowers-who-need-it-most/

https://www.ed.gov/news/press-releases

 

 

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Humble Beast

Humble Beast 258

Posted
Posted
14 minutes ago, Parliament said:

So again, I hope this isn't too CR.  Outside of whether they do/do not deserve it, won't cancelling debt and raising the Pell Grant just cause more tuition inflation?

Of course. It’s all so tiresome. No one here will try to justify it economically. 
 

I’m pretty sure that even the people in government don’t believe that prepared statement. It’s all bogus justification for something that was desired for many CR reasons. I shared it here because it’s clearly inflationary. 

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Humble Beast

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A fun experiment for tuition inflation would be to implement the time honored next step for central planners. Price controls. They invariably lead to shortages. But guess what, there’s too many colleges and useless degrees out there anyway. Could actually kill two birds with one stone. I’m only partially joking. 

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Posted
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1 hour ago, StassneyHorn said:

You guys are really gonna lose your shit when you find out parents that make under 125k and send kids to UT get tuition help and those making 65k or less get it all free.

Not really. Those people are poor. The student debt forgiveness is the most retarded thing ever. 

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Humble Beast

Humble Beast 258

Posted
Posted
4 hours ago, Parliament said:

So again, I hope this isn't too CR.  Outside of whether they do/do not deserve it, won't cancelling debt and raising the Pell Grant just cause more tuition inflation?

This includes a good historical example of something similar. 
 

Also

It will pour “roughly half [a] trillion dollars of gasoline on the inflationary fire that is already burning,” says Jason Furman, formerly the top economic adviser to President Barack Obama.

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statsman

statsman 5693

Posted
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20 hours ago, Incredulity said:

So what happens next?

Do new/current college students pile up debt hoping for another round?  I would guess so. 

High School class of 22 is going to be screaming, "it's not fair" in 26, right?

I imagine that what happens next is that all student debt gets forgiven. 

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52-80

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Posted
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12 hours ago, StassneyHorn said:

You guys are really gonna lose your shit when you find out parents that make under 125k and send kids to UT get tuition help and those making 65k or less get it all free.

these grants (pell, tpeg, etc) already existed before.

the student loan forgiveness is new, and therefore accretive to the inflationary forces. 

 

they are also instituted in a bad time, when consumer demand is already high, and thus there is no need to stimulate spending within the economy. 

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gmr548

gmr548 16701

Posted
Posted
Because they have an anti-human mindset.
 
They believe there’s too many people and that any effect humans have on the environment is a negative, despite any positives it could provide. Cheap, plentiful energy is bad because it enables human flourishing. 

Lmao what in the texaggy fuck is this
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washparkhorn

washparkhorn 9973

Posted
Posted (edited)
13 hours ago, Humble Beast said:

It will pour “roughly half [a] trillion dollars of gasoline on the inflationary fire that is already burning,” says Jason Furman, formerly the top economic adviser to President Barack Obama.

If a person has Peterson Institute or PIIE in their bio, the person will reach the wrong conclusion most of the time. https://www.piie.com/experts/senior-research-staff/jason-furman
 

Edited by washparkhorn
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Humble Beast

Humble Beast 258

Posted
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44 minutes ago, washparkhorn said:

If a person has Peterson Institute or PIIE in their bio, the person will reach the wrong conclusion most of the time. https://www.piie.com/experts/senior-research-staff/jason-furman
 

Sounds like an economist. 
 

Still I think it’s some insight into how this is really viewed by people on the inside. They think it’s inflationary, but are still making it happen. 

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washparkhorn

washparkhorn 9973

Posted
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1 hour ago, Humble Beast said:

Sounds like an economist. 
 

Still I think it’s some insight into how this is really viewed by people on the inside. They think it’s inflationary, but are still making it happen. 

Those benefitting have not been paying for two years. Where is the “gasoline on the fire”/money they will suddenly be redirecting to stoke inflation?

 Further, those who have not been paying, but owe more than $10K, must begin paying down those loans after this “last” deferment ends.  That is deflationary. 
 

tldr: Furman gets paid for scaremongering about the debt and deficit. That’s his job now. Know your sources. 

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Aqua Buddha

Aqua Buddha 14806

Posted
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28 minutes ago, washparkhorn said:

Those benefitting have not been paying for two years. Where is the “gasoline on the fire”/money they will suddenly be redirecting to stoke inflation?

 Further, those who have not been paying, but owe more than $10K, must begin paying down those loans after this “last” deferment ends.  That is deflationary. 
 

tldr: Furman gets paid for scaremongering about the debt and deficit. That’s his job now. Know your sources. 

This.  Vast majority of these loans have been in deferment for the past 2+ years.  It won't change anything from a consumer spending standpoint.

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Hefeweizen

Hefeweizen 5444

Posted
Posted (edited)
19 minutes ago, statsman said:

Well, I have about $80k saved for my 7th grader’s education that might get repurposed to Euro vacations and new landscaping 

Let me know how that works out for you.  I’d like to see people do what they claim sometimes.  I’m paying cash for my daughter’s education because I guess I’m a sucker.

 

Edit: yeah this move is pandering bullshit and inflationary.  It’s also bullshit for any PPP recipients who had their loan forgiven to complain about it.  I didn’t benefit from either one.

Edited by Hefeweizen
Fuck you that’s why.
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Humble Beast

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Posted
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36 minutes ago, washparkhorn said:

Those benefitting have not been paying for two years. Where is the “gasoline on the fire”/money they will suddenly be redirecting to stoke inflation?

 

From the President yesterday. 
 

 “All of this means people can start finally to climb out from under that mountain of debt,” the president said. “To finally think about buying a home or starting a family or starting a business. And by the way, when this happens the whole economy is better off.”

Those things require credit (money) creation. 
 

38 minutes ago, washparkhorn said:

 

 Further, those who have not been paying, but owe more than $10K, must begin paying down those loans after this “last” deferment ends.  That is deflationary. 

You said it yourself. “last” 

I remain skeptical that this won’t continue. There’s a chance that they’ll let it lapse since it will be past midterm elections, but I’ll wait and see. 
 

10 minutes ago, Aqua Buddha said:

This.  Vast majority of these loans have been in deferment for the past 2+ years.  It won't change anything from a consumer spending standpoint.

Wrong. Economically this is about setting people up so they can gorge on the next debt trough. 
 

20 minutes ago, statsman said:

 

21 minutes ago, statsman said:

Well, I have about $80k saved for my 7th grader’s education that might get repurposed to Euro vacations and new landscaping 

Don’t worry at the current rate of tuition Inflation your kid will need student loans anyway. 

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Cheeseweasel

Cheeseweasel 26439

Posted
Posted
39 minutes ago, Hefeweizen said:

 It’s also bullshit for any PPP recipients who had their loan forgiven to complain about it.

Slight difference. The Government forced businesses to comply with mandates. No one forced people to take out student loans.

FWIW, I think we should be looking at debt forgiveness for student loans, but not until we fix the cost side. It's like bailing a boat without fixing the leak.

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https://finance.yahoo.com/news/us-corporate-profits-soar-taking-154202598.html

US Corporate Profits Soar With Margins at Widest Since 1950

(Bloomberg) -- A measure of US profit margins has reached its widest since 1950, suggesting that the prices charged by businesses are outpacing their increased costs for production and labor.

After-tax profits as a share of gross value added for non-financial corporations, a measure of aggregate profit margins, improved in the second quarter to 15.5% -- the most since 1950 -- from 14% in the first quarter, according to Commerce Department figures published Thursday.

994cee0084e6ebb6738f832380deff8b

 

Lotta people on this thread:

Suspicious Monkey GIF by MOODMAN

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Storm the Field

Storm the Field 5366

Posted
Posted
24 minutes ago, Cheeseweasel said:

FWIW, I think we should be looking at debt forgiveness for student loans, but not until we fix the cost side. It's like bailing a boat without fixing the leak.

I think a more "fair" idea is capping the interest rate on student loan balances. I can't really say I've seen a good reason that federally-backed student loans need to be upwards of 7.5%. There are people are paying $500+ every month and not making a dent in their principal.

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Incredulity

Incredulity 11876

Posted
Posted (edited)
13 minutes ago, Storm the Field said:

I can't really say I've seen a good reason that federally-backed student loans need to be upwards of 7.5%.

Because it was a fair market rate when they took out the loan?  It's not like SOFI hasn't been begging people to refi their student debt.

7.5% on an unsecured loan is pretty damn good, even today.

There is an economic reality here.  

Edited by Incredulity
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Cheeseweasel

Cheeseweasel 26439

Posted
Posted
17 minutes ago, Storm the Field said:

I think a more "fair" idea is capping the interest rate on student loan balances. I can't really say I've seen a good reason that federally-backed student loans need to be upwards of 7.5%. There are people are paying $500+ every month and not making a dent in their principal.

I agree that part of the solution is low interest loans for students. It's in our best interest to have an educated society. However, until we push back on the Universities, we'll never solve the problem. 

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washparkhorn

washparkhorn 9973

Posted
Posted (edited)

All eyes on Jackson Hole tomorrow. Newly minted hawk, J. Powell, will signal:

a. “damn the recession, full pain ahead”


b. “Incoming pivot” 

c. “Let’s pause“ - and/or - 

d. “I feel lovey-dovey again.”

I think he will try to convince his audience that he is a alpha-hawk - and his audience will sense he is a beta-cuck as soon as big capital wants easy money and bail outs again. 

Edited by washparkhorn
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52-80

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3 hours ago, FirstTimeCaller said:

(Bloomberg) -- A measure of US profit margins has reached its widest since 1950, suggesting that the prices charged by businesses are outpacing their increased costs for production and labor.

After-tax profits as a share of gross value added for non-financial corporations, a measure of aggregate profit margins, improved in the second quarter to 15.5% -- the most since 1950 -- from 14% in the first quarter, according to Commerce Department figures published Thursday.

Big context that's missing from this - intentional or not - is that composition of the economy has become overweight in Tech, and tech have massive margins by the nature of their business, which doesn't strictly incur on consumers.

Like Microsoft's margins don't come from their shitty smartphones, but from Azure.  Amazon's margins don't come from selling toilet paper, but from AWS on the b2b side.

Eventually those costs 'trickle' through somehow, but if someone wants to make a point about b2c profits, make it excl tech so it's more like Healthcare and Consumer Discretionary and Utilities rather than Salesforce and Broadcom

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washparkhorn

washparkhorn 9973

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Posted

Further disinflationary trend in single family homes:
 

“Blackstone Single-Family Landlord to Halt Home Purchases in 38 Cities. Home Partners of America to press pause beginning Sept. 1.  Company cites home price growth, market demand, regulations.  

Home Partners of America, the single-family landlord owned by Blackstone Inc., will stop buying homes in 38 US cities, becoming the latest institutional investor to back away from an overheated housing market.

The company, acquired by Blackstone in June 2021 for $6 billion, told customers that as of Sept. 1, it is pausing applications and property submissions in Boise, Idaho; Fresno, California; Memphis, Tennessee, and 25 other areas. It will go on hiatus in 10 additional cities on Oct. 1. “

https://www.bloomberg.com/news/articles/2022-08-25/blackstone-single-family-landlord-to-halt-purchases-in-38-cities

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