9 replies to this topic

[Chilidawgz]

Life outside the corporate Matrix

 

Edited by Chilidawgz, 06 October 2022 - 12:10 PM.

[Chilidawgz]

amazing

 

[slupert]

amazing

 

Its been a slow moving train wreck all year. The Fed has played their hand up in to next year. People just refuse to accept reality. One thing they should not ignore is what Mohammed El Erian said", be careful what you ask for", once the US economyis in shambles they might blink Do people really think that is going to be enjoyable? That won't happen to sub 3400. (JMHO)

[pdx5]

FED needs to jack up FED funds rate to 7% to bring inflation down. 70% of Americans are living paycheck to paycheck with pay raises lagging inflation by 4%.

[Douglas]

pdx5, this is the kinder and gentler Fed of Arther Frank Burns, not the jackboot on your neck Fed of Paul Adolf Volker, but unlike the Aurther Burns Fed which tried and failed to tame inflation, this Fed actually likes inflation.  It wants 2% inflation using the new fudge-factor BLS values which is more like 4 or 5% using the calculation methods of Arthur Burns's day.  QT combined with the somewhat higher 4 - 4.5% Fed funds rate should gradually cause inflation to cool down to their target range if Putin and Saudi MBS cooperate just a little. 

 

The nasty little undiscussed rub with this Fed's approach is that as soon as they reach their 2% panacea and then try to lower the Fed funds rate and restart QE to fund all the government spending, inflation will probably reaccelerate putting them back in the hot soup yet again.  I believe it will be at this point that more serious efforts will be made to put the inflation genie back in the bottle.

 

Regards,

Douglas 

[pdx5]

Ya thinks eventually "they" will do something serious to curb inflation?

Nah the PTBs in DC are doing just fine with inflation. DC pols can give themselves any raise their little heart desires.

Did you all know DC pols get full pension benefits at age 62 after serving just 5 years in Congress! I will bet my last dollar you don't get anything like that in your job.

[K Wave]

FED needs to jack up FED funds rate to 7% to bring inflation down. 70% of Americans are living paycheck to paycheck with pay raises lagging inflation by 4%.

I do not see this inflation you keep speaking of...since Spring of 22...

 

I see nothing but massive deflation, except for Beef, which is still about same area, but probably not for much longer.

 

Lumber, Copper, Iron, Steel, Grains, Energy, Used Cars, Houses...yada yada yada

 

Y-O-Y numbers will be reflecting this soon enough, within a few short months from now.

When I look at long term charts, looks like spring of 22 may have been a Great Last Hurrah for inflation in just about every category.

 

Plenty happy the YOY are still bad though as we approach Nov 8.

And this last ramp up into resistance on Crude/Gasoline with a couple weeks to go not all bad either.

Edited by K Wave, 08 October 2022 - 10:08 AM.

[pdx5]

The categories in your list depict wholesale prices. I do all shopping at my house and I am a retail shopper. I have not seen a single item in grocery stores, home Depot type stores, eye glasses, prescription drugs, oil changes, gasoline purchases, electric utility bills, etc which has not increased by 10% over prices in September 2021.

[K Wave]

The categories in your list depict wholesale prices. I do all shopping at my house and I am a retail shopper. I have not seen a single item in grocery stores, home Depot type stores, eye glasses, prescription drugs, oil changes, gasoline purchases, electric utility bills, etc which has not increased by 10% over prices in September 2021.

Best not to drive looking in the rear view mirror.

 

Bet they wont be up another 10% a year from now...more likely they will be struggling to sell them at all, and mark downs will be the norm, even if they do not budge on the MSRP.

 

Serious wave of pain about to hit shore, likely unlike anything seen in either of our lifetimes....the shock wave from the rates/punch bowl pull earthquake combo is just staring to spread out...

RE market has essentially seized up at this point, even here in formerly as red hot as they come Austin (to the complete disbelief of everyone in RE/loan industry around here, who looked at me like I was insane when I kept warning them this was coming when short term rates were still near Zero).

 

Right now, it is just the post injury shock phase, but the pain wave has not even begun yet...that is still many months into the future.

 

Told my Realtor wife that we would go from $100-250K over ask sales in Austin in May 2021, to foreclosures by 2023 -2024. She is starting to believe....

[pdx5]

Do not under-estimate ability of Biden admin to mess things up.I noticed gasoline has jumped 10% over 3 days back.

 

My opinion is, reason retail inflation will remain at 8%+ until mid-2023 is because of shortages in deliveries. Not so much from wholesale price side.

Edited by pdx5, 08 October 2022 - 07:24 PM.