Inflation continues to fall

[+ augustus]

5 hours ago, EZEtoGRU said:

January inflation numbers have been released today.  They show continued improvement but came in a tad higher than expected. 

Well, if it came in higher than expected that's not "continued improvement".   Inflation is NOT coming down - the rate has slowed.  Basic necessities of life are 30-40% higher than 3 years you know.

Edited February 13 by Kevin Slater

[+ augustus]

Starbuck's venti hot chocolate and a brownie, Jan 2021 - $6.95.

Today, only three years later? $8.88.

Increase - $1.93, or 27.8%.

[+ augustus]

A Big Mac meal costs $18.00 in Connecticut.  It was on the news.   At this point, "containing" inflation is a little like "containing" the fire that has already burned down half your house.

[EZEtoGRU]

My issue with Mr. Dimon has nothing to do with politics.  I don't even know what his political leanings are.  It has everything to do with him predicting the US is imminently going to fall into a recession since November of 2020.  So he's been wrong for over three years with his prediction.   To me, he has zero credibility anymore.  How he manages to hold the top job at JP Morgan/Chase is beyond me.

[+ BOZO T CLOWN]

10 hours ago, EZEtoGRU said:

 Overall, the trend is still in the right direction. 

The right direction?  lol. Is that why the Dow closed down over 500 points, and NASDAQ closed down almost 2%! 
If the trend continues in this so-called "right direction", we are on the road to a depression.

American's credit card debt and 401K withdrawals are at rates not seen since the financial collapse. Also, home purchases are at the lowest since the financial collapse. Those are really bad economic metrics.
Credit is tightening too. People can't afford new homes, or new cars. The reason most people can't afford, even if they want them, all those nifty new EVs, is the credit isn't there for many, even with the subsidies.
Bozo knows a lot of disabled and elderly, and they're struggling. They can't feed themselves, and have to turn to food banks. These high rates of inflation hurt everyone, except the crooks and cheaters.
Shoplifters, looters, and people collecting food stamps never worry about inflation.

The PCE conveniently EXCLUDES Food and Energy price changes because they are too "volatile."

"Yes, we are fully AWARE of how volatile our grocery and fuel bills are...we PAY them.
Shelter rent leading the way. Up 6% on an annual basis.

Inflation up!
Food prices up!
Gas prices up!

BTC

 

 

 

 

[BSR]

3 hours ago, EZEtoGRU said:

My issue with Mr. Dimon has nothing to do with politics.  I don't even know what his political leanings are.  It has everything to do with him predicting the US is imminently going to fall into a recession since November of 2020.  So he's been wrong for over three years with his prediction.   To me, he has zero credibility anymore.  How he manages to hold the top job at JP Morgan/Chase is beyond me.

'imminently"?  I'd like to see the quotes of Dimon's predictions of an imminent recession. 

Warning signs abound that our economy is headed for a bad recession:  unprecedented government debt at a record-high percentage of GDP, a huge number of commercial real estate foreclosures, an alarming rate of personal bankruptcies, car repossessions, and mortgage delinquencies.  The bankruptcies, repos, and late mortgage payments in isolation wouldn't worry me that much.  But those factors in our current economic environment of record-high debt-to-GDP and the commercial lending collapse make me fear a perfect storm is brewing.

Those in the aughts who warned a bad recession loomed were the first to admit they had no idea when it would hit.  That's why I question the "imminently" aspect of Dimon's prediction(s).

[+ augustus]

On 2/13/2024 at 10:28 AM, EZEtoGRU said:

Overall, the trend is still in the right direction.  Annualized January inflation numbers are less than half of what they were one year ago.  

Not true.  Look at the latest inflation report.  Inflation is accelerating!  Prices are rising for everything.

MSN

WWW.MSN.COM

 

Edited March 1 by augustus

[+ augustus]

On 2/13/2024 at 10:28 AM, EZEtoGRU said:

Overall, the trend is still in the right direction.  Annualized January inflation numbers are less than half of what they were one year ago. 

It's not in the right direction anymore.  The CPI and today's PPI show inflation accelerating.   Prices keep going up and up.

[+ augustus]

@stevenkesslar did you see the latest CPI and PPI numbers??  It looks like we are heading into stagflation.  

[+ BOZO T CLOWN]

The cost of automobile insurance is skyrocketing.....

Inflation increases the cost of supplies and labor, which means insurers must pay out pricier claims.

“With inflation hitting an astounding (high), general cost increases have affected several components of car insurance from repairs to replacement costs, where insurance companies are paying out more to buy comparable cars when their customers’ cars are totaled,”

  ~  Loretta L. Worters,
Vice president of the Insurance Information Institute, or III, an insurance industry association."

Also,  outrageously expensive EV's that cost a fortune to repair even minor fender benders. This is causing insurance companies to raise all rates to cover them.

BTC

 

[Lotus-eater]

5 hours ago, BOZO T CLOWN said:

Also,  outrageously expensive EV's that cost a fortune to repair even minor fender benders. This is causing insurance companies to raise all rates to cover them.

BTC

People conflate the cost of living with inflation. EV's are more expensive to repair just like luxury cars are more expensive to repair, so higher insurance rates are a downstream effect of more people buying costlier cars rather than inflation per se. But it does increase the cost of living.

[+ stevenkesslar]

On 3/14/2024 at 9:23 PM, augustus said:

@stevenkesslar did you see the latest CPI and PPI numbers??  It looks like we are heading into stagflation.  

The S &P 500 is at all time highs.  I'm making money hand over fist.

Oh, and like everyone middle class, my net worth is way up.  

Here's what YCharts says:

Quote

US Inflation Rate is at 3.15%, compared to 3.09% last month and 6.04% last year. This is lower than the long term average of 3.28%.

Higher prices suck, for sure.  But wage growth has been exceeding inflation for about a year now.

 

So do I think it's gonna screw up the economy and investing that wages are growing faster than inflation?  No, I don't.  Sorry.  

If we are talking about personal investing, rather than the unchanging dirge about inflation, here's something odd.  I did think we were about to enter into a correction phase in the S & P.  It has certainly been on a roll.  One reason why, among several, is Glenn Neely, who I have mentioned before. It's all kind of voodoo Neowave theory.  But on big calls, Neely has been correct most of the time.  Like when the 2000 downturn started, and when the GFC started and the market plunged. In both times at the very beginning he said, "Get out!"

So in February he was saying, and I quote, "upside progress should be minimal to non-existent for the rest of this quarter."  He thought Feb. 12 was when the decline would start, since the S & P had the biggest one day drop since this rally started right after Halloween.  I actually closed out about half my shares in SOXL, at something like a 150 % profit.  Although the ones I bought last October and still have got up to about a 200 % profit.

Anyhoo, funny thing.  The market kept going up.  SOXL exploded.  Something about all this investment in chips and new factories that the US is leading the way on.  How did that happen, anyway?  So Neely was wrong, and he has now flipped.  He's now saying the market seems to want to keep going up.  Now he's saying "the S&P will not drop much (even if it wastes time) before beginning a new advancing phase."  Rally on!  I bought 1000 shares of SOXL back, hoping to enjoy the next ride up.

Point is, while this unwavering dirge about inflation has been going on, the stock market has been on fire.  And home prices are going up, too.  Again, average middle class net worth is higher than it has ever been.  Inflation, after it's huge jump from 3.09 % in January to 3.15 % in February, is still below the long term average.

If this is how it works when things suck, can we make it so things suck all the time?  😉

[EZEtoGRU]

One lousy inflation report does not make a crisis.   Let’s see how the trend goes in the coming months. 
 

Recoveries from inflation are almost never completely linear. There will be bumps in the road which are normal and expected. 

[+ augustus]

8 hours ago, EZEtoGRU said:

One lousy inflation report does not make a crisis.   Let’s see how the trend goes in the coming months. 
 

Recoveries from inflation are almost never completely linear. There will be bumps in the road which are normal and expected. 

So we've redefined "transitory" again?

[+ augustus]

22 hours ago, stevenkesslar said:

Point is, while this unwavering dirge about inflation has been going on, the stock market has been on fire.  And home prices are going up, too.

Those 2 asset classes will not be "on fire" for much longer.  The Fed is going have to slam on the brakes hard.  We are in an awful situation.  Money creation to support these massive deficits is the 800 pound gorilla in the room.  

[+ BOZO T CLOWN]

Bozo wouldn't be a bit surprised if we see another rate hike.
Should've been raised to 10% when we entered that "transitional" stage!!

BTC

Edited March 18 by BOZO T CLOWN

[+ stevenkesslar]

On 3/17/2024 at 8:03 PM, augustus said:

Those 2 asset classes will not be "on fire" for much longer.  The Fed is going have to slam on the brakes hard.  We are in an awful situation.  Money creation to support these massive deficits is the 800 pound gorilla in the room.  

Agreed about the gorilla.  Although I would word it differently.  I'd just say massive government deficits are the 800 pound gorilla.

We have been here and done this before.  The phrase "bond vigilante" is being resurrected from the 1990's.  It's only a matter of time until some smart political operative cleverly updates Carville's line about how if he is reincarnated he wants to come back as the bond market.

One way to interpret Carville's line is that these problems tend to solve themselves, in several ways.  One, if we don't have inflation and we do have a booming stock market (spoiler alert:  the stock market is booming) that creates capital gains tax revenues that can be used to reduce deficits.  But that depends on something even more basic:  that people agree that this is a problem that needs to be solved.  The polls say most Americans agree that a soaring federal deficit is a problem that needs to be solved. 

We're polite gentleman here, so we don't talk about politics.  But that's the point.  Polite gentleman do polite and sensible things.  Somehow, in the 1990's, polite and sensible gentleman did that.  And ended up with a budget surplus even.  Surely polite and sensible gentlemen can figure out how to do it today, SO AS NOT TO HAVE MORE INFLATION AND FUCK UP THE  STOCK MARKET AND THINGS.  I mean, it's not like the polite and sensible gentleman who were alive way back in the 1990's were that much smarter than we are, right?  By the way, weren't at least a few us alive back in the 1990's?  🤔

As far as whether those two asset classes will not be "on fire" for much longer, do you know something I don't?  

I actually did think we'd have a correction by now, similar to the multi-month one that ended last October.  My go-to guy on this stuff is Glenn Neely, who practices a form of voodoo I don't understand  call Neowave Theory.  For whatever reason, he has correctly called every major bull and bear market going back to the 80's, when he got started, quite accurately.  He was saying until a few weeks ago that a correction would start in February.  February 13th, to be precise, when the S &P dropped by more than any day since this current rally stated last November.  Anyway, he has now recanted, and is saying the market clearly wants to drift higher.  And may be poised for another rally to 5700 or more.  It's all voodoo, so what do I know.  But he tends to right.  

My nerdy nephew thinks the 15 year bull market will end soon.  When I asked him why, he gave me three good answers:  1) Boomer retirements, 2) Job losses, 3)  Tax changes in things like corporate buybacks that draw money out of the stock market.  All three are great reasons that the stock market could flounder, in theory.  None of them seem imminent now.  If I had to choose, I'd go with Neely and S & P 5700.

My best argument for why a bull market could end soon is a commercial real estate crisis that could ultimately trigger a banking crisis, like in 2008. 

In fact, Morgan Stanley predicted that commercial real estate values could drop 40 %, triggering a crisis just as bad as the 2008 GFC.  That's the bad news.  The good news is this.  That prediction is now a year old.  The stock market is higher, inflation is lower, and the recession we are all desperately looking for is still to be found.  Jesus Fucking Christ!  We are all polite and sensible.  Can't we at least find this recession?  How difficult can that be?

If April 2023 - when Morgan Stanley said that - were like 2008, it would now be 2009.  We would all know that we are in deep doo.  Instead, we're in the money.  Middle class net worths are higher than ever, and rising.  This is not like 2008.  What am I missing?

Right or wrong, I've been buying stock in regional banks and REITS with high dividends.  If Steven Mnuchin and Pals and Tim Geithner And Friends and other hedge funds think it makes sense, they may have a point.  

My guess is what is happening is some vacant office space is being sold for cheap to hedge funds or investors that will turn it into badly needed housing, at a profit.  Is that a crisis, or an opportunity? 

A Record Number of Office Buildings Will Be Converted Into Apartments in 2024

 

Where's the crisis?

If we are going to be polite and sensible gentleman, as we should be, we should all conspire to make shitloads in the  stock market, pay our capital gains taxes, and force the assholes in Washington to spend it on deficit reduction, like in the 1990's.  Is that really too much to ask, guys?

 

 

Edited March 20 by stevenkesslar

[+ stevenkesslar]

On 3/17/2024 at 11:03 PM, augustus said:

Those 2 asset classes will not be "on fire" for much longer.  The Fed is going have to slam on the brakes hard.  We are in an awful situation. 

 

Stock market today: US stocks rise as Fed holds rates steady, projects 3 cuts this year

Inflation is now lower than its long term average, as I posted above.  Interest rates appear to be headed in that direction.

At least today, the stock market is on fire.  Had a larger one day gain than any day since this rally started last October.  If I had to bet, as I said above.  I'd bet an Glenn Neely and S & P 5700 on the horizon.

Where's the crisis?

 

 

[+ augustus]

On 3/20/2024 at 3:33 PM, stevenkesslar said:

Where's the crisis?

The impact of the massive federal debt is unknowable but in any scenario is not good. Devaluation, hyperinflation and economic devastation are all possible. What is not possible is for nothing to happen.  When you're borrowing money just to pay the interest on the money you borrowed earlier, its game over.  

[BSR]

2 hours ago, augustus said:

The impact of the massive federal debt is unknowable but in any scenario is not good. Devaluation, hyperinflation and economic devastation are all possible. What is not possible is for nothing to happen.  When you're borrowing money just to pay the interest on the money you borrowed earlier, its game over.  

We are adding $1 trillion in debt to the federal deficit every 100 days.  Not if, but when the gigatons of caca hit the fan, it's gonna be ugly.

[MikePDNA51]

government borrowing money is not like me or you borrowing money.  Remember the USA government has the primary reserve currency. When countries to foreign exchanges they use USA dollars.  Taxes, due at the end of the week, will obviously pay for a lot. 

[BSR]

6 minutes ago, MikePDNA51 said:

government borrowing money is not like me or you borrowing money.  Remember the USA government has the primary reserve currency. When countries to foreign exchanges they use USA dollars.  Taxes, due at the end of the week, will obviously pay for a lot. 

So no big whoop?  I strongly disagree.  Somw context, from the Peterson Foundation:

What is more, spending on interest will surpass federal outlays on major budget categories over the next few years:

• In fiscal year 2024, the federal government will spend more on interest than on defense.
• In fiscal years 2024 through 2026, interest payments will exceed the amount that the federal government spends on Medicare (net of offsetting receipts). Net Medicare spending will overtake interest payments in the following years, except for 2029.
• In fiscal year 2025, the federal government will spend more on interest than on non-defense discretionary, which includes funding for transportation, veterans, education, health, international affairs, natural resources and environment, general science and technology, general government, and more.

[+ augustus]

4 hours ago, MikePDNA51 said:

government borrowing money is not like me or you borrowing money.  Remember the USA government has the primary reserve currency. When countries to foreign exchanges they use USA dollars.  Taxes, due at the end of the week, will obviously pay for a lot. 

What you are thinking is that the US government can never default because the Fed will print dollars to pay off the debt.  That is technically true BUT it will be highly inflationary at the very least.  Like the double digit inflation after WW2.  People who have savings will be devastated.  And the US dollar may not remain the world's reserve currency with rapid inflation.  People hold on to US dollars to preserve their wealth, not to have it devalued by inflation or default. 

Edited April 9 by Kevin Slater

[Boaxxx]

There can be all kinds of indexes, studies, charts, graphs, etc. but the real data is the day to day costs for the average American. I live in California and everything is going up.

- Bridge tools

- Express lane tolls

- Pacific Gas and Electric rates

- Gasoline (approaching record high levels again)

- Water

- Insurance

- Groceries

- Eating out - from burritos at the local taqueria to McDonalds to takeout pizza to coffee to soft serve ice.

Prices are out of control and companies are engaged in shrink-flation (charging the same price but decreasing the amount of product).  I now buy almost exclusively from Walmart and other discount retailers while I stock money away for retirement in a few years.

I'm not trying to be an almost, just a realist.

[+ FrankR]

9 hours ago, Boaxxx said:

 

I'm not trying to be an almost, just a realist.

Not sure what you meant to say here… ⬆️

We are going into Q1 earnings season where large corporations announce earnings and profits for the 1st quarter of the year. Dont be surprised by record profits - they are using “inflation” as an excuse to raise prices to deliver larger profits. Take that into account - I like to believe I am a realist too, and as realists, we aim to see the entire picture.