0% Inflation!

[OrediggerPoke]

On 10/13/2022 at 12:11 PM, renoskier said:

and housing prices are dropping 

I told my wife earlier this year in February that our new house we were purchasing would likely lose $40,000 in value this year but that we could lock in a 30 year note at a 3.4% interest rate before rates went up for a long time. She thought I was full of shit and wouldn't have purchased and sold our other less expensive house if she believed the market would tumble . From a math perspective, we do save on monthly payments and don't plan to move anytime soon so I still think it was a good purchase. But I don't see its value reaching our purchase price for several years.

[renoskier]

On 10/13/2022 at 11:23 AM, OrediggerPoke said:

I told my wife earlier this year in February that our new house we were purchasing would likely lose $40,000 in value this year but that we could lock in a 30 year note at a 3.4% interest rate before rates went up for a long time. She thought I was full of shit and wouldn't have purchased and sold our other less expensive house if she believed the market would tumble . From a math perspective, we do save on monthly payments and don't plan to move anytime soon so I still think it was a good purchase. But I don't see its value reaching our purchase price for several years.

right, if you're not planning on selling anytime in the near future, the "value" doesn't really matter

the home still has the same utility as when you bought it

[thelawlorfaithful]

On 10/13/2022 at 11:10 AM, grandjean87 said:

Hey, used cars and trucks are down for the 4th month in a row.  Pork chops, hamburger, and ice cream also dipped since August. Yum. 

Let them eat ice cream.

[grandjean87]

On 10/13/2022 at 2:43 PM, thelawlorfaithful said:

Let them eat ice cream.

Biden's got that. 

[toonkee]

On 10/13/2022 at 11:05 AM, thelawlorfaithful said:

Is something stays shitty on a long enough timeline shitty just becomes the way it is. I’m starting to get this math thing.

It always becomes the way it is. When you were born the average new car was like $2,500. Nobody was kvetching in 2019 when they were $30,000 cuz it ain't like it used to be. 

 

[thelawlorfaithful]

On 10/13/2022 at 10:36 PM, toonkee said:

It always becomes the way it is. When you were born the average new car was like $2,500. Nobody was kvetching in 2019 when they were $30,000 cuz it ain't like it used to be. 

 

How old do you think I am? The last time the average car was $2,500 was in 1965 which comes out to $21,000 adjusted for inflation. Maybe there is a little bit of inflation between then and 2019, but the average car is thousands of dollars more valuable. Microchips, sensors, backup cameras, satellite radio, quality heating and air conditioning; the list goes on and on. Vegetables are not 9% better than they were a year ago.

https://blog.cheapism.com/average-car-price-by-year/amp/#close

[happycamper]

On 10/14/2022 at 2:05 AM, thelawlorfaithful said:

How old do you think I am? The last time the average car was $2,500 was in 1965 which comes out to $21,000 adjusted for inflation. Maybe there is a little bit of inflation between then and 2019, but the average car is thousands of dollars more valuable. Microchips, sensors, backup cameras, satellite radio, quality heating and air conditioning; the list goes on and on. Vegetables are not 9% better than they were a year ago.

https://blog.cheapism.com/average-car-price-by-year/amp/#close

Mandated safety features, antilock brakes, fuel injectors vs carburetors, catalytic converters...

hell just the fact that a new car can reasonably be expected to last for a quarter million miles instead of what, 90k? for a 1960s vehicle. 

IMO you get a lot more car adjusted for inflation than you used to. 

[Los_Aztecas]

On 10/13/2022 at 11:05 PM, thelawlorfaithful said:

How old do you think I am?

[toonkee]

On 10/13/2022 at 11:05 PM, thelawlorfaithful said:

How old do you think I am? The last time the average car was $2,500 was in 1965 which comes out to $21,000 adjusted for inflation. Maybe there is a little bit of inflation between then and 2019, but the average car is thousands of dollars more valuable. Microchips, sensors, backup cameras, satellite radio, quality heating and air conditioning; the list goes on and on. Vegetables are not 9% better than they were a year ago.

https://blog.cheapism.com/average-car-price-by-year/amp/#close

1965 or 1975 or 1985. Tomato tomatoes. But I concede thems fruits and not vegetables. Still plenty of inflation between then and 2020. 

Yes of course high inflation is no fun, but it does eventually become normal, as always. Hopefully, anyway.

Also cars are made of plastic and in automated factories now. Plenty of cost cuts to offset the upgrades. The cars are certainly better but it doesn't mean they have more value necessarily. The ability to pay, supply and demand, etc are just a big a parts of the price equation as anything. There is no baseline "value" that things should be to reference. Dumbsh*t 19 year olds with a crap job get a 20% interest rate to buy a new car, because they still live at home and they can. 

[thelawlorfaithful]

On 10/14/2022 at 6:03 AM, Los_Aztecas said:

 

[SharkTanked]

 

[grandjean87]

On 10/19/2022 at 2:26 PM, SharkTanked said:

 

Katie is pretty good at the visuals.  I math checked her bags and grains of rice thing awhile back. She does her homework.

That said, she's also good here using the Y-axis (vertical) bias.  The horizontal axis is 2/3rds of a century, but the Y-axis is in smaller increments (assume %s beginning above 0) which visually amplify that recent  spike.

It isn't surprising that in a time where PCE (personal consumption expenditures) have risen sharply, wages and salaries are up due to labor markets (albeit lower than general inflation), and expectations of future markets conditions and prices have changed that markups are higher. 

I will keep my eye out for any analysis on the topic.  

[grandjean87]

Getting there:

 

[AztecSU]

On 10/19/2022 at 1:26 PM, SharkTanked said:

 

In previous threads I said that businesses would do this, take advantage of the situation, and generate the bulk of inflation outside of energy/food. And I was mocked for it. When there's an opportunity to raise prices without having to provide a thorough and proper explanation you take it. Being able to point to a macro trend that may or may not effect you is a great way to do that. I'm not even necessarily criticizing the behavior, more so observing that inflation isn't just market forces at play, outside of everyone's control. Not unlike the stock market, it can be heavily impacted by emotion. 

[grandjean87]

On 11/15/2022 at 9:52 AM, AztecSU said:

In previous threads I said that businesses would do this, take advantage of the situation, and generate the bulk of inflation outside of energy/food. And I was mocked for it. When there's an opportunity to raise prices without having to provide a thorough and proper explanation you take it. Being able to point to a macro trend that may or may not effect you is a great way to do that. I'm not even necessarily criticizing the behavior, more so observing that inflation isn't just market forces at play, outside of everyone's control. Not unlike the stock market, it can be heavily impacted by emotion. 

I think I posted somewhere before, but Katie's graph has a major Y-axis effect. The horizontal axis is over 6 decades while the vertical axis is in small increments (can't read exactly).  It exaggerates the visual.  

I like Katie, but I didn't see her arguing for higher markups (which are not equal to net income/profits) when many firms were losing money in buckets a couple years back.  Of course, firms raised prices where they could during a stimulus juiced economy. 

Edit: I don't follow Walmart, Target, or even Kroger (although if the Albertson's deal goes through I may).  Their latest quarterly's on a quick shows net profit margins of 3.4%, 0.7% (a new figure is higher?), and 2.1% respectively for those three large retailers.  Of course, margins in many other sectors have been quite substantial and set some macro records.  

[AztecSU]

On 11/15/2022 at 9:11 AM, grandjean87 said:

I think I posted somewhere before, but Katie's graph has a major Y-axis effect. The horizontal axis is over 6 decades while the vertical axis is in small increments (can't read exactly).  It exaggerates the visual.  

I like Katie, but I didn't see her arguing for higher markups (which are not equal to net income/profits) when many firms were losing money in buckets a couple years back.  Of course, firms raised prices where they could during a stimulus juiced economy. 

Its super small so I cant quite see the values on the Y axis, I'm guessing they're tiny increments to make the jumps feel exaggerated. Also, increases in margin/markups arent the worst thing ever without the additional context of net profits. 

[bsu_alum9]

On 11/15/2022 at 9:23 AM, AztecSU said:

Its super small so I cant quite see the values on the Y axis, I'm guessing they're tiny increments to make the jumps feel exaggerated. Also, increases in margin/markups arent the worst thing ever without the additional context of net profits. 

Looked it up on C-Span in HD.

1955 - the markup was 1.2%.  

2021 - the markup was 1.7%.

Each line on the y-axis represents 0.1%.

[grandjean87]

On 11/15/2022 at 10:43 AM, bsu_alum9 said:

Looked it up on C-Span in HD.

1955 - the markup was 1.2%.  

2021 - the markup was 1.7%.

Each line on the y-axis represents 0.1%.

That Katie, lol.  

[Maji]

On 10/13/2022 at 9:27 AM, thelawlorfaithful said:

Don’t think we’re hitting 6% by the end of the year, Goldman. 

might end up closer than expected if the December report next month is good

 

[grandjean87]

On 12/13/2022 at 7:05 AM, Maji said:

might end up closer than expected if the December report next month is good

 

It looks like unless Jay tosses a truckload of snow on the bonfire, Santa Claus Rally likely.