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Author Topic: So much for inflation being "transitory"  (Read 3755 times)

Golden Avalanche

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Re: So much for inflation being "transitory"
« Reply #25 on: September 13, 2022, 04:36:42 PM »
Inflation has moderated. Inflation has stabilized. It just didn't lower enough relative to unrealistic expectations.

Yet again we find ourselves in a self-propelled mouth breather spiral. It's hysterical this crap still happens after decades of walking the same path littered with dullards.

Goose

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Re: So much for inflation being "transitory"
« Reply #26 on: September 13, 2022, 05:22:58 PM »
Warrior69

Goldman and Apple do not let grass under their feet. Smart people always set the trends and I think there are going to be a lot of high paying jobs being lost in the coming months.

jesmu84

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Re: So much for inflation being "transitory"
« Reply #27 on: September 13, 2022, 05:31:18 PM »
I thought inflation was because of the government money printer injecting too much in combination with people receiving $2000 checks?

If Congress would both work on fixing supply chains and prevent price gouging, many day-to-day aspects of inflation would be fixed. But that entity (congress) is broken.

Can't do much about impacts of a foreign war.

Wall Street and housing have been inflated for such a long time that I'm not sure anything will be able to correct that.

The Fed pushing us into a recession is not the answer. Of course, them going to 0% shouldn't have happened either.

Goose

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Re: So much for inflation being "transitory"
« Reply #28 on: September 13, 2022, 05:42:45 PM »
I think the stimulus added to inflation but I firmly believe that bloated stock prices and home prices was a big factor. As long as housing prices are at crazy levels I think lowering inflation will be tough. Folks getting a sizable home equity loan due to price increase in their home caused a spending frenzy, IMO.

In the past few weeks I was at a home that I would not buy for $400k and they just completed a $100k makeover and did not think twice about it. I do not believe the couple is heavy earners, but I could be wrong, and I was floored at how little they thought about spending the money. Again, I think there has been a great deal of reckless decisions based off folks believing they are wealthier than they really are.
« Last Edit: September 13, 2022, 05:52:00 PM by Goose »

tower912

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Re: So much for inflation being "transitory"
« Reply #29 on: September 13, 2022, 05:45:38 PM »
There are words missing there, but I think I get your drift.   
Luke 6:45   ...A good man produces goodness from the good in his heart; an evil man produces evil out of his store of evil.   Each man speaks from his heart's abundance...

It is better to be fearless and cheerful than cheerless and fearful.

Goose

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Re: So much for inflation being "transitory"
« Reply #30 on: September 13, 2022, 05:50:37 PM »
tower

On my phone and tried to make the corrections, sorry about that.

tower912

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Re: So much for inflation being "transitory"
« Reply #31 on: September 13, 2022, 05:57:21 PM »
All good.   And good for a chuckle as you are generally very good at posting complete thoughts.   
Luke 6:45   ...A good man produces goodness from the good in his heart; an evil man produces evil out of his store of evil.   Each man speaks from his heart's abundance...

It is better to be fearless and cheerful than cheerless and fearful.

JWags85

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Re: So much for inflation being "transitory"
« Reply #32 on: September 13, 2022, 05:58:32 PM »
I think the stimulus added to inflation but I am firmly believe that bloated stock prices and home prices was a big factor. As long as housing prices are at crazy levels I think lowering inflation will be tough. Folks getting a sizable home equity loan due to price increase in their home caused a spending frenzy, IMO.

In the past few weeks I was at a home that I would not buy for $400k and they just completed a $100k makeover and did not think twice about it. I do not believe the couple is heavy earners, but I could be wrong, and I was floored at how little they thought about spending the money. Again, I think there has been a great deal of reckless decisions based off folks believing they are wealthier than they really are.

There is a very pervasive belief in "real estate ALWAYS goes up".  And while that is true to a certain extent in the long run, it leads to absurd short term behavior.  Like the renos you talk about.  Like people buying 15-20% over, and not $30K on a $250K house, and just assuming that will be made up in short time.

Ive mentioned, my parents bought in St Pete, fairly nice new development, in a 2 floor townhouse type unit.  They've seen nearly 40% appreciation in a year.  There are full floor condos in a 4-5 story building nearer to the water that are selling for $4MM when the same units sold for $1.7 2 years ago.

My friends bought a rental/investment property in Hilton Head a bit over a year ago.  Nice area, but older development, unit needs some updating, they paid around $300K.  Comparable units, also needing updating and TLC, are selling for $550-$575K and not sticking around long.  They may sell cause its just insane.

And while those are warm weather "vacation" type places, Ive heard the same stories from people in Colorado, Ohio, and Virginia.  My sister and BIL bought in Richmond and had people come $40-50K over the top on $400K houses that in a vacuum were probably barely worth $300K and needing work.

Its wholly inflated and unsustainable.  People says it will continue and its a great time to buy and will continue that way until things implode and suddenly 50% is shaved off in a year.  Among many things, Im very happy I'm not in a buying position for another few years cause it all makes me very uneasy.

Goose

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Re: So much for inflation being "transitory"
« Reply #33 on: September 13, 2022, 06:08:17 PM »
Wags

Good buddy of mine from college bought a house for $400k in Naples in 2018, sold it for $780k in 2021 and it was listed earlier this year at $1.3m. I get people relocating to warmer climates, but sooner or later you are going to run out of buyers.

In hot real estate spots, I believe foreign buyers and crypto guys drove the crazy high market it unreal levels. Great way to launder money or hide profits and that is a different level of buyer. That likely will not change.

I will add, sadly, that the recent run up in pricing in Florida has delayed my dream of moving there in the next 5-7 years, but such is life.
« Last Edit: September 13, 2022, 06:26:13 PM by Goose »

Lennys Tap

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Re: So much for inflation being "transitory"
« Reply #34 on: September 13, 2022, 06:19:23 PM »
Inflation has moderated. Inflation has stabilized. It just didn't lower enough relative to unrealistic expectations.

Yet again we find ourselves in a self-propelled mouth breather spiral. It's hysterical this crap still happens after decades of walking the same path littered with dullards.

This is simply not true. It didn’t “lower” at all - it rose. And it (CPI) rose in spite of a major drop in gas prices. That’s disturbing. Dow futures were up 200+ when the number came out. The Dow closed down more than 1200 points. Traders and economists were caught totally off guard by the bad news. And make no mistake, it was very bad news. But, sure, they’re all mouth breathing dullards - you’re the only smart guy. How many Nasdaq and S+P puts were you long coming into today? LOL.

Goose

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Re: So much for inflation being "transitory"
« Reply #35 on: September 13, 2022, 06:32:17 PM »
Lenny

There were a lot of smart guys on the right side of the number today. The number of shorts in the market is at a crazy level, not just the usual suspects. Anyone that thinks the number was good day, is not very informed. Knock on wood, we released over 8 million barrels of reserves last week to help on gas prices.


MuggsyB

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Re: So much for inflation being "transitory"
« Reply #36 on: September 13, 2022, 06:32:58 PM »
It is transitory but yes it will be rough for a while. Economy fades and economy surges, just like it always has.

Empires also crumble from within.  I think "Economy fade and economy surges", whatever you mean by that, isn't a particularly strong analysis. 

Lennys Tap

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Re: So much for inflation being "transitory"
« Reply #37 on: September 13, 2022, 06:56:50 PM »
Lenny

There were a lot of smart guys on the right side of the number today. The number of shorts in the market is at a crazy level, not just the usual suspects. Anyone that thinks the number was good day, is not very informed. Knock on wood, we released over 8 million barrels of reserves last week to help on gas prices.

Goose

No doubt there were a lot of shorts - that’s why volatility has remained high recently - making “put” buying expensive. But as you know, for every short position there’s a corresponding long one. So, as is always the case, some won, some lost. Fortunes made, but lots of blood on the tracks.

TAMU, the Wizard of MU Basketball

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Re: So much for inflation being "transitory"
« Reply #38 on: September 13, 2022, 07:43:08 PM »
Empires also crumble from within.  I think "Economy fade and economy surges", whatever you mean by that, isn't a particularly strong analysis.

Are you implying that this is going to be the thing that kills the USA? Because I'll take you up on that bet
God, grant me the serenity to accept the things I cannot change,
The courage to change the things I can,
And the wisdom to know the difference.

~Prayer of the Scooper

MuggsyB

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Re: So much for inflation being "transitory"
« Reply #39 on: September 13, 2022, 07:49:51 PM »
Are you implying that this is going to be the thing that kills the USA? Because I'll take you up on that bet

No, 'm not saying that.  I'm just an alarmist and not happy about a lot of bad decisions.

Sultan Sultanberger

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Re: So much for inflation being "transitory"
« Reply #40 on: September 13, 2022, 07:56:15 PM »
No, 'm not saying that.  I'm just an alarmist and not happy about a lot of bad decisions.


I think a lot of people on both sides of the aisle did a pretty good job with imperfect information during a global pandemic.  And a lot of this has nothing to do with decisions made here.
“True patriotism hates injustice in its own land more than anywhere else.” - Clarence Darrow

Goose

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Re: So much for inflation being "transitory"
« Reply #41 on: September 13, 2022, 08:01:09 PM »
TAMU

I do not think this economic downturn is going to structurally going to change America, but I think a lot people that thought they were stock market and real estate experts are going to feel a lot of pain. One thing I learned 50 years ago from my Dad, you lose money twice as fast you make it in crazy times. As Lenny stated, there was blood on the tracks today and I think there are a lot of traders out there that think they will outsmart the market.

TAMU, the Wizard of MU Basketball

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Re: So much for inflation being "transitory"
« Reply #42 on: September 13, 2022, 08:13:03 PM »
I don't disagree with any of that Goose. I have the advantage of youth and not needing my investments in the short term. I don't try to outsmart the market. I'm confident the market will rise again long before I need my investments. I recognize that not everyone has my situation and I hope those hit hardest can recover.
God, grant me the serenity to accept the things I cannot change,
The courage to change the things I can,
And the wisdom to know the difference.

~Prayer of the Scooper

Goose

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Re: So much for inflation being "transitory"
« Reply #43 on: September 13, 2022, 08:15:36 PM »
Muggs

I think the S&P hit around 2300 in March of 2020 and then one of the greatest rebounds in history occurred, all while businesses were shuttered, travel came to a halt and countless other once in a lifetime events unfolded before our eyes. The easiest of easy money was made, not on fundamentals but based of two decades of financial irresponsibility by our leaders.

IMO the Fed and government did whatever they could to keep things afloat, first 9/11, then housing crisis and then pandemic. Each event was bigger than the previous one and somehow a magic wand not only kept things in the rails, but created a market that you would have tried to lose money.

I think the Fed and government saved the day in the housing crisis and used unnecessary measures during the pandemic. I have no idea how low the S&P goes, but I think it can go real low.

Sultan Sultanberger

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Re: So much for inflation being "transitory"
« Reply #44 on: September 13, 2022, 08:15:40 PM »
TAMU

I do not think this economic downturn is going to structurally going to change America, but I think a lot people that thought they were stock market and real estate experts are going to feel a lot of pain. One thing I learned 50 years ago from my Dad, you lose money twice as fast you make it in crazy times. As Lenny stated, there was blood on the tracks today and I think there are a lot of traders out there that think they will outsmart the market.

This is why I buy houses mostly to live in and just invest in mutual funds targeted to my likely retirement date. I feel way out of my depth in both fields.
“True patriotism hates injustice in its own land more than anywhere else.” - Clarence Darrow

MuggsyB

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Re: So much for inflation being "transitory"
« Reply #45 on: September 13, 2022, 08:15:47 PM »

I think a lot of people on both sides of the aisle did a pretty good job with imperfect information during a global pandemic.  And a lot of this has nothing to do with decisions made here.

I'm not sure what your point has to do with inflation today. 

Sultan Sultanberger

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Re: So much for inflation being "transitory"
« Reply #46 on: September 13, 2022, 08:22:04 PM »
I'm not sure what your point has to do with inflation today. 

Well what bad decisions did people make that you are referring to?
“True patriotism hates injustice in its own land more than anywhere else.” - Clarence Darrow

Goose

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Re: So much for inflation being "transitory"
« Reply #47 on: September 13, 2022, 08:30:46 PM »
TAMU

As I told my 29 year old son, be thankful you were in a position to lose as much as money as he has since November. He has age on his side, like you, and better days ahead and no doubt you will see more crazy times over upcoming decades.

Another lesson learned from my Dad, every April he said he feels sorry for guys that do not owe taxes and he was a gray area guy and did whatever he could to minimize his tax bill. Similar to that, be thankful you have money to lose and time on your side.

MuggsyB

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Re: So much for inflation being "transitory"
« Reply #48 on: September 13, 2022, 08:32:53 PM »
Well what bad decisions did people make that you are referring to?

The Fed didn't act quickly enough.  There's no need for a political discussion but the most recent spending bills have not helped the overall economy. 

4everwarriors

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Re: So much for inflation being "transitory"
« Reply #49 on: September 13, 2022, 08:35:25 PM »
Inflation always takes awhile to be brought to heel. Before this becomes a political discussion, I'll offer this ...

Maybe the best investment out there is the Series I Savings Bond. "I Bonds" are indexed to inflation, and right now their annual rate is 9.62%. It's incredible to get almost 10% interest on anything, let alone something that is 100% safe.

https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm

Fine print:

++ Each individual can only buy $10K worth per year. A couple can buy $20K. They also can buy $10K worth for each kid, although the money technically would belong to the kid.

++ Each I Bond must be held for at least a year. If cashed in after 1 year but before 5 years, the penalty is the last 3 months' interest -- but even cashed in after a year it currently would produce an effective rate of 7%+. From 5 years on, there is no penalty.

++ Rates can and usually do change every 6 months, in May and November. We don't know what the next rate will be yet ... but if it's lower it won't be by much.

So it's not a place where one can park hundreds of thousands of dollars, but anybody with $10K ($20K for couples) sitting around in checking accounts and who doesn't need the $$$ for at least a year ... it's a complete no-brainer to max out the annual I Bond account.




Nads, this is the most intelligent piece you've ever written on this site, hey?
"Give 'Em Hell, Al"

 

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