Inflation continues to fall

[+ stevenkesslar]

 

 

Delinquencies:   Delinquency Rates for All Banks

That just reinforces what I posted above.   Regarding why a recession is supposedly imminent, I do keep reading general notions that go like this:   "The Fed always breaks something."   Or, "something is going to break."

Then when you get a little more specific, it gets down to ideas like this:   1)  consumers are maxxed out on credit, or 2) lots of commercial loans will go bad because offices are clearing out,  or  3)  malls and hotels will go bust.  Often these come with anecdotes about some mall or hotel in San Francisco.

It just does not appear to be true.  At least according to all the Fed charts on the page I hyperlinked.

Residential real estate loans have delinquencies near all time lows.

Commercial real estate loans have delinquencies near all time lows.

Commercial and industrial loan delinquencies are at an all time low.

Agricultural loan delinquencies are at an all time low.

Delinquency rates on all loans by all banks are at an all time low.

So maybe something will break.  Because delinquency rates actually can't get much lower.  None of this screams "broken" or "recession."  As I said above, credit card delinquencies have "skyrocketed," if we want to use a scary word.  But that is from a historic pandemic low to the same low they were at right before COVID hit.  Credit card delinquencies are still under half what they were at the height of The Great Recession.

Inflation and higher interest rates are causing a lot of people a lot of stress, for sure.  And helping to blow up the federal deficit.  But it makes sense to me that the bears are getting less bearish.  Because there is no clear evidence that anything is really broken.  At least not yet. 

There is also evidence that due to all that inflation lots of big corporations enjoyed record profits, as was reflected in the S & P 500 hitting a nice sugar high during the pandemic.  Last year it did look to the smart guys like Michael Burry like 2022 could be the first part of a 50 % drop in the S & P, like from 2000 to 2003.  It doesn't look that way anymore.

You can put red lipstick on a rising stock market.  But the color of money people like my nephew are making on tech stocks this year is still very green.

 

 

 

[+ stevenkesslar]

4 hours ago, BOZO T CLOWN said:

Current US Inflation Rates: 2000-2023

WWW.USINFLATIONCALCULATOR.COM

I'm so glad you mentioned that.

Here's what I have been trying to figure out.  You're a math whiz, so maybe you can help.

Even at the 2022 low of 3500, the S & P 500 was way higher than it was at its highest point in 2018.  Right now the S & P 500 is about 50 % higher than the 2018 high.   

Meanwhile, the FTSE, to name one European index, is about where it was in 2018.  The DAX is doing better, up about 20 % from its 2018 high.  But the US market is clearly kicking ass for math-oriented investors.  I don't feel so bad about inflation when I check my bank and stock account balances.

They did call it a "global" pandemic and a  "global" inflation spike and a "global" supply chain crisis for a reason.

Yet, for some strange reason, the US seems to be doing better than most.  Whether we are talking about getting inflation back down to normal, or getting supply chains moving again, or having a festive stock market that makes mucho money for math geniuses like you, Bozo.  (I suck at math, and am not ashamed to admit it.  But I still know my accounts are growing.)

One wonders why this could be.  I can't figure it out.

Edited September 16, 2023 by stevenkesslar

[Kevin Slater]

Stop the personal barbs and stick to the subject at hand.  Several posts edited. 

[Marc in Calif]

On 9/16/2023 at 1:19 AM, augustus said:

 I think real estate is going to take a big hit.

Maybe real estate in your location. My property won't! 😇

Edited September 17, 2023 by Marc in Calif

[EZEtoGRU]

Meanwhile, American consumers are feeling increasingly confident that inflation is being tamed despite higher gas prices.  

Despite rising gas prices, Americans feel more optimistic about inflation's future | CNN Business

WWW.CNN.COM

---

Rising gas prices haven’t taken their toll on the American consumer just yet, amid growing optimism that inflation is easing, according to the latest consumer sentiment survey...

 

[EZEtoGRU]

I just paid 3.09/gallon for regular gasoline yesterday at Costco in the Detroit area.  That’s about 50 cents a gallon less than a week ago. Huge drop!  Anyone else seeing much cheaper gas in their area?
 

im kind of surprised it’s gone down so much so quickly especially given the upheaval in the Middle East. 

Edited October 13, 2023 by EZEtoGRU

[+ Charlie]

The price of gas here in Riverside County fell by about 3 cents this week, but that was attributed mostly to the state of CA switching to winter blend gas, which is a bit cheaper to produce.

[+ stevenkesslar]

2 hours ago, Charlie said:

The price of gas here in Riverside County fell by about 3 cents this week, but that was attributed mostly to the state of CA switching to winter blend gas, which is a bit cheaper to produce.

Posted Fri, Oct 13, 2023 

Find Cheap Gas In Venice Beach: Gas Prices Fall For 14th Straight Day

@Charlie please tell me that headlines like this ain't gonna cause a mass migration to California, for cheap gas.  I kind of like the out-migration of riff raff.  And having the additional space and what not.

Quote

In Venice, it pays to have a warehouse membership. The majority of Costco stations were selling at $4.99 per gallon of self-serve regular gasoline as of Friday morning, according to GasBuddy.com.

Oh. "Cheap" is $4.99 a gallon?

I recently spent a few weeks in Chicago.  Even in the city, where prices are higher, it was like $4 a gallon.  And @EZEtoGRU is saying more like $3 at Costco in Detroit.

I guess that explains why everybody is flocking to Detroit and Chicago, and nobody wants to live in California anymore.  😉

[+ stevenkesslar]

Me being me, I can't resist putting anecdotal information on gas prices into long term context.  Silly idea, I know.  😉

 

The 2008 shit show actually set up what has mostly held as a price range for gas ever since.  In Spring 2008, when the stock market was near all time highs and times were good, you could fill your tank for $4 a gallon.  Then by Fall 2008, when your retirement fund had partly vaporized, at least you had the consolation prize of $2 a gallon gas.  

If we're going to bitch about inflation we should apply inflation calculations to what things cost.  So $2 in 2008 is $2.86 today, and $4 in 2008 is $5.72 today, according to a handy inflation calculator.

So, basically, when national gas prices briefly peaked over $5 a gallon last Summer it was not quite as bad as the Spring 2008 peak.  But I have it on good word that most people thought $5 a gallon gas pretty much sucked, anyway.

Of course, we could have our $2 a gallon gas from Fall 2008 back.  All it would require is pushing the global economy off the cliff again and nuking your retirement accounts.  Everybody good with that? 

I thought not.  😉

Then again, a clever clown could point out that in the blissful days of Spring 2020, you could fill your tank for under $2 a gallon.  Because nobody wanted to drive or fly.  We could have that back.  All it would require is about 3000 dead Americans a day, mostly seniors.  Everybody good with that?

I thought not. ☠️

I think a better comparison is that in the years before COVID gas was normally as cheap as the $2 low in 2008, adjusted for inflation.  Again, that would be $2.86 today.  Don't hold your breath, except maybe at Costco in Detroit.  😉

From an investment perspective, what strikes me is the years from roughly 2011 to 2014.  Back then the world was climbing out of the hole caused by a global crisis.   Sound familiar?  Gas prices bobbed under a $4 ceiling for years. Which is a bit more than gas costs today, adjusted for inflation.  And yet, for some strange reason, the stock market did just fine.  And the global economy recovered nicely.

If I had to bet, I'd overweight Murderous Vlad and Xi Whiz and say if we're gonna be stuck with a certain mass murdering asshole and a war of attrition for a few years (that's just a fact, not politics), we might also be stuck with $4 a gallon gas.  We had a growing economy and stock market the last time that happened in the early 10's.  I don't see why it can't happen again now.

 

[+ augustus]

I'm not buying it.  The National Debt and yearly deficits are too high and is starting to destabilize the financial system.  The Fed could start printing money again.  

[+ stevenkesslar]

On 10/16/2023 at 3:30 AM, augustus said:

I'm not buying it.  The National Debt and yearly deficits are too high and is starting to destabilize the financial system. 

I'm a deficit hawk, and I agree with you.  I think most Americans are, based on the polls. 

Of course, it gets complicated when we start to talk about cutting the things YOU like that cause government debt.  But the 1990's was an affluent period when people could mostly put politics aside, and worship the bond market.  😉  I don't see what's wrong with making the bond market happy.

Net worth surged 37% in pandemic era for the typical family, Fed finds — the most on record

Regardless, that article came as a little bit of an upside surprise.  And probably helps explain why we just had a quarter with 5 % growth, rather than a recession.  Or, stated differently, if inflation leads to recessions like this, can we have more recessions?

It makes sense to me as a landlord who owns stocks that anyone who owns homes or stocks is probably better off.  As many here keep pointing out, wealth and income are not the same thing.  But it seems like all the wealth is helping keep the economy going.

One other piece of good news.  The people who don't own homes or stocks seem to be not only seeing the light at the end of the tunnel, but out of the tunnel completely.  This is one good explanation for why the economy grew as fast as it did last quarter:

Quote

Wages and salaries in the April-June quarter, the latest period for which data is available, rose 1.7% after adjusting for inflation, according to the Labor Department. That was the fastest quarterly increase in three years.

 

Edited October 31, 2023 by stevenkesslar

[ICTJOCK]

When the topic comes up with clients,  I characterize inflation as a "reduction",  but not eliminated.   I think the Fed continues to adopt a "hawkish stance"  with regard to the raising of interest rates even 25 basis points.   The economy is buzzing,  although I missed the core report on Friday for October.    We'll see what happens.

[EZEtoGRU]

Jobs numbers this week were below expectations.  Payrolls generally seen to be under control.  As ICTJOCK says, the economy is still buzzing.  Inflation is much lower than one year ago so the trend line is good.  I would say things are pretty darn good economically.  

[+ augustus]

4 hours ago, EZEtoGRU said:

I would say things are pretty darn good economically.  

Are you serious?  Things are NOT "darn good economically"!   People are drowning in debt trying to maintain their standard of living from this inflation that you seem to think doesn't even exist. 

Edited November 4, 2023 by augustus

[+ augustus]

4 hours ago, EZEtoGRU said:

Payrolls generally seen to be under control. 

What does that even mean??  There should be higher unemployment?  That's a good thing?

[Jarrod_Uncut]

On 11/4/2023 at 6:10 PM, augustus said:

Are you serious?  Things are NOT "darn good economically"!   People are drowning in debt trying to maintain their standard of living from this inflation that you seem to think doesn't even exist. 

Not disagreeing with EZE, but I agree with this. Especially when you come to states and small towns outside the cities. A lot of people look like they’re doing okay but not always the case.

And I know the escort industry has been hit first, in the worst: but you don’t hear about it in the news. I’m finding Adam4Adam has not been too great for biz, and there’s cities I have gone over the summer and only gotten one or 2 bookings. 
 

The friends I know who aren’t being crushed right now: are either working 2 and 3 jobs or getting a decent 100k salary to afford it. It’s all facade. I’m on different forums for sex work, and many have said that even escorting is hardly something you can do alone and survive off anymore. I’m feeling that. And like @stevenkesslar said, the 2011-2014 days were some of the better times for me. I was completely independent, didn’t have to often need to ask for deposits, and it wasn’t 100 guys all advertising at the same time.
 

Now: it’s just a whole other game. That’s why I’m moving towards trying to get paid for the initial steps of booking clients because: I can’t rely on only meeting someone to get paid. I could  get 10 booking ”inquiries“ over a course of a week, and not make anything. That’s why I need to be getting something, just for my effort to engage on the phone.

Edited November 6, 2023 by Jarrod_Uncut

[Pd1_jap]

On 7/25/2023 at 11:43 AM, stevenkesslar said:

I love your logic, Auggie.  Let's run with it.  You are 1000 % correct.  In no way did Switzerland have an inflationary surge like the US.  And in no way did the US have an inflationary surge like Argentina.  Everything is relative.  Problem solved.  Unless you live in Argentina, inflation ain't a problem at all.  Pan comido.

People in Switzerland are basically confused in thinking that they had the highest inflation in 30 years.  Equally, people in Japan are very confused in thinking they had the highest inflation in 40 years.  30 % increase in energy costs?  That's not inflation.  I think we finally have a plausible theory about why the Swiss and Japanese suck at finance and investment.  They just kind of suck at math.  😉

Just to clear up any confusion, I did not argue that 3.5 % = 9 %.  I argued that a 5 % surge in inflation in Switzerland and Japan was similar to an 8 % surge in inflation in the US.  And that in all three cases it was caused by COVID, with the invisible hand of Vlad pushing it along.

But I get your point.  Calling a 5 % surge in prices that tops out at 3.5 % "inflation" is just silly.  

So you just solved America's inflation problem, too.   First, by definition, 3 % inflation is not really inflation.  So we don't have an inflation problem today in the US.  Woo hoo! 

Nor did we last year, as I've come to learn.   Inflation peaked in the US in 1947 at 20 %.  In 2022 it peaked at 9 %.  Everything is relative.  The difference between peak inflation of 20 % versus 9 % is way bigger than the difference between peak inflation of 9 % and Switzerland's measly 3.5 %.  So not only are the Japanese and Swiss bad at math.  Turns out the Yanks are, too.  Compared to 20 % inflation in 1947, in no way did the US have an "inflationary surge" in 2022 like the US in 1947.  Why did we even worry?

Really, when you get down to it, the only nation that has an inflation problem is Argentina.  Oh, and maybe Turkey.

 

Not to take away from your impressive contributions in Mathematics and Moving Goalposts,  Auggie.  But I'm still gonna go with the idea that COVID did cause huge inflation surges all over the world.  And that brought inflation to 30 to 40 years highs, from Japan to Switzerland to South Dakota.  

Gas prices hitting new records daily in South Dakota

There is some good news, though.  If we could just agree to measure and move goal posts like you do, people in South Dakota were also very confused about this whole pain at the pump thing, too.  They were ornery about inflation when gas prices supposedly "surged" to $4.59 a gallon last July.  Meanwhile, in places that were not impacted by inflation, like Switzerland, gas prices in US gallons rose mildly, from $5.67 in 2020 to $9.12 a gallon at the peak in July 2022.  So you were right about that, too.  To paraphrase, in no way did Switzerland have an inflationary surge like South Dakota, or other places.  And in no way did COVID have anything to do with it.  It was those darn South Dakotans, and all their excessive money printing.  😉

So we agree on that.  Plus the fact that excessive debt could slow down the US economy, and fuck up a record long bull stock market.  I'm lovin it!

The Swiss Franc is pegged to the U.S. Dollar. If the value of the dollar falls then so does the Fanc. So... Yes, technically Switzerland had inflation because so did the dollar. However, their economy is much better suited to ride out economic hardships and things in Switzerland are much more expensive than in the U.S. and have been for a very long time. 

[+ Vegas_Millennial]

3 hours ago, Pd1_jap said:

The Swiss Franc is pegged to the U.S. Dollar. If the value of the dollar falls then so does the Fanc. So... Yes, technically Switzerland had inflation because so did the dollar.

The Swiss Franc is NOT pegged to the U.S. Dollar.  If it was, the exchange rate between Swiss Francs and U.S. Dollars would not fluctuate.

 

[Pd1_jap]

4 hours ago, Vegas_Millennial said:

The Swiss Franc is NOT pegged to the U.S. Dollar.  If it was, the exchange rate between Swiss Francs and U.S. Dollars would not fluctuate.

 

Pardon my misnomer. It's "manipulated" to maintain parity. 

Swiss franc could be opening salvo in new currency war - Marketplace

WWW.MARKETPLACE.ORG

---

The Swiss franc is now worth so much that it threatens Swiss jobs. The Swiss government wants to do something...

Switzerland will never allow their currency to outpace the dollar. Otherwise no one would be able to afford their exports or travel to their beautiful country. 

Although, just last year the U.S. government removed them from the list of currency manipulators. So it might change but I don't see corporations in Switzerland allowing such a thing to happen. 

Swiss respond to removal from US currency manipulation list | Reuters

WWW.REUTERS.COM

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The Swiss National Bank responded on Wednesday to the U.S. Treasury removing Switzerland from its monitoring list of...

Thanks for keeping me on my toes.  😘

[+ Vegas_Millennial]

2 hours ago, Pd1_jap said:

Pardon my misnomer. It's "manipulated" to maintain parity. 

Swiss franc could be opening salvo in new currency war - Marketplace

WWW.MARKETPLACE.ORG

---

The Swiss franc is now worth so much that it threatens Swiss jobs. The Swiss government wants to do something...

Switzerland will never allow their currency to outpace the dollar. Otherwise no one would be able to afford their exports or travel to their beautiful country. 

Although, just last year the U.S. government removed them from the list of currency manipulators. So it might change but I don't see corporations in Switzerland allowing such a thing to happen. 

Swiss respond to removal from US currency manipulation list | Reuters

WWW.REUTERS.COM

---

The Swiss National Bank responded on Wednesday to the U.S. Treasury removing Switzerland from its monitoring list of...

Thanks for keeping me on my toes.  😘

Thanks for sharing.  I thought China was the only one doing currency manipulation

[marylander1940]

10 hours ago, Vegas_Millennial said:

Thanks for sharing.  I thought China was the only one doing currency manipulation

 

12 hours ago, Pd1_jap said:

Pardon my misnomer. It's "manipulated" to maintain parity. 

Swiss franc could be opening salvo in new currency war - Marketplace

WWW.MARKETPLACE.ORG

---

The Swiss franc is now worth so much that it threatens Swiss jobs. The Swiss government wants to do something...

Switzerland will never allow their currency to outpace the dollar. Otherwise no one would be able to afford their exports or travel to their beautiful country. 

Although, just last year the U.S. government removed them from the list of currency manipulators. So it might change but I don't see corporations in Switzerland allowing such a thing to happen. 

Swiss respond to removal from US currency manipulation list | Reuters

WWW.REUTERS.COM

---

The Swiss National Bank responded on Wednesday to the U.S. Treasury removing Switzerland from its monitoring list of...

Thanks for keeping me on my toes.  😘

I don't want to drag this out of subject but the Swiss manipulate absolutely everything they want. 

Unfortunately high prices are here to stay and that's the legacy of printing ourselves out of travel like we did in 2020.... There's a new reality! 

The problem isn’t inflation. It’s prices.

WWW.VOX.COM

---

What goes up may not come down. Like, ever.

 

[Pd1_jap]

5 hours ago, marylander1940 said:

 

I don't want to drag this out of subject but the Swiss manipulate absolutely everything they want. 

Unfortunately high prices are here to stay and that's the legacy of printing ourselves out of travel like we did in 2020.... There's a new reality! 

The problem isn’t inflation. It’s prices.

WWW.VOX.COM

---

What goes up may not come down. Like, ever.

 

I find it particularly grating that the Fed, the IMF, and most economists in the news blame the recent spike on wage inflation. Essentially, they are blaming the common worker for inflation because everybody wants a raise and simultaneously completely ignoring the $140 billion a month the Fed pumped into the economy for several years. 

Chart Book: Tracking the Post-Great Recession Economy | Center on Budget and Policy Priorities

WWW.CBPP.ORG

---

When President Trump took office in January 2017, he inherited an economy in its 91st month of economic expansion...

 

 

[marylander1940]

3 minutes ago, Pd1_jap said:

I find it particularly grating that the Fed, the IMF, and most economists in the news blame the recent spike on wage inflation. Essentially, they are blaming the common worker for inflation because everybody wants a raise and simultaneously completely ignoring the $140 billion a month the Fed pumped into the economy for several years. 

Chart Book: Tracking the Post-Great Recession Economy | Center on Budget and Policy Priorities

WWW.CBPP.ORG

---

When President Trump took office in January 2017, he inherited an economy in its 91st month of economic expansion...

 

 

and most folks are sucking it up and paying more for airfare, hotels, food, etc. 

[Pd1_jap]

[+ stevenkesslar]

4 hours ago, Pd1_jap said:

The good news is that in 2023, wages are outpacing inflation.

The black line is inflation and the blue line is wages.  Here's the website if you want to see the details.

It really is a bit of a mystery why almost half of Americans think we are in a recession.  Did I mention the Nasdaq went up 2 % today, because the market thinks things are better than the Fed, apparently?

There are people who deserve to bitch and moan.  If you are someone who hires escorts, you are almost certainly not one of them.  Average net worth went up 37 % during COVID.  If you own a) a home or b) stocks, you are like the majority of Americans.  And your net worth probably went up a lot.  Granted, inflation-adjusted gas prices in the US are only a little LOWER than they were in 2008.  Making it seem impossible that the US can survive, let alone prosper.  And, yet, we seem to be prospering.  And I get that you can't use big increases in home equity to fill your tank with gas.  But you are still better off.

The people who are not better off, or maybe a little worse off, are people who don't own homes and stocks, don't have STEM jobs, live in big cities with high rent, and did not change jobs recently.  They are a minority of Americans, who actually do tend to be minorities as well.  

The other thing we know is that thanks to things like all the COVID relief, consumer debt levels actually went to about as low as they get.  So when the media goes off about how consumer debt is soaring, they basically mean it is coming off lows and going back to the normal place it has been, on average, for like half a century.  Much like inflation is coming off highs and going back to normal. 

In fact, if the past is a guide, there are three times consumer debt levels hit a low of about 5 %:  during the early 90's recession, during the Great Recession, and during COVID.  All three times involved things being tight.  All three times, tight times were followed by years of expansion.  So if we follow the past trend, it's as likely as not that we'll have more consumer-debt fueled expansion, not less.  

The combined effect of it all of this is that most people are better off economically since COVID started, as an objective fact. Even if they don't feel that way when they buy bread or fill their gas tank.  If the economy is growing at a 5 % annual rate, average net worth is up 37 %, and even people who don't own assets are now making more in wage gains than inflation, that is all good news for consumers. 

Could that possibly be why the stock market is flirting with all time highs, not lows?

 

Edited November 11, 2023 by stevenkesslar