Inflation discussion

[Edward64]

Stuff that I've noticed ...

Reg gas ranges from $4 to $4.10, up from $3.20'ish. Not too price sensitive as I work from home and wife only has a short drive to school.

Seems the fast food joints' specials have gone up $1 to $2.

My favorite Vietnamese pho place is $14 up from $12. Sushi chirashi that was once about $18-$19 are about $22.

Toyota Corolla barebones is $1,000 above MSRP (when got daughter a Corolla 3 years ago, bought it for about $2,500 under MSRP).

Checked Zillow today and house price has increased again. It feels its increasing at a faster clip in past 3-4 months than last year. I know to take it with a grain of salt but it is indicative of upward swing.

Biggest impact to us is not so much the day-to-day but the angst its causing in the markets and impact to our portfolio.

*****

Increasing rates should theoretically tame inflation. But Powell was wrong before on "transitory" inflation so I'm not having a lot of confidence that he'll get the "pace" of rate increase right. We also have Ukraine war hurt oil prices. And of course, Covid which is adversely impacting the supply chain (especially the stuff from China).

Basically prices will continue upward in the short term (6 months). Below pundit says this will cause a recession. I think I'm okay with that. Better recession than the 80's inflation.

U.S. economy will fall into a recession this summer, as inflation eats into consumer spending, former Fed official warns - MarketWatch (https://www.marketwatch.com/story/u-s-economy-will-fall-into-a-recession-this-summer-as-inflation-eats-into-consumer-spending-former-fed-official-warns-11649101555?mod=home-page)
Higher inflation will force consumers to limit their spending by so much that the economy will slump into a recession by the July-September quarter, former Federal Reserve Governor Lawrence Lindsey said on Monday.

“I do think we’re going to have a recession, probably in the next quarter,” Lindsey said, in an interview on CNBC.

“Inflation is eating into consumer spending power, they’re going to have to cut back,” he said.

The former Fed governor also said the U.S. central bank was “nowhere close” on being able to control inflation.

[Edward64]

I do wonder if not passing the BBB was a good thing all things considered. The recent bipartisan additional $10B covid bill looks like the model to get things done. Not a big bang but split it out into smaller bills.

[GrantDawg]

That bipartisan bill is suddenly not so bipartisan. The GOP is not anything like that through till they get their pound of crazy in it.

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[Solecismic]

In 1996, a couple of years after moving out west and just having gotten married, I bought a small (1,580 sqft.) home in Redmond, Washington for $185k. A tri-level, no basement, laundry at the back of what was strangely a three-car garage. From the street, it looked like a gigantic garage defending a bungalow.

The neighborhood was only a few years old and had dozens of near-identical homes. I think there were two basic styles - a tri-level and a two-story square - and people could choose two- or three-car garages in front, one of a few basic trim colors that carried over to countertops and carpeting, and there was a skylight package.

The population was exploding around Microsoft and the other Seattle Eastside tech companies. I remember how hard it was to find anything and being a bit disappointed in the quality of the house, but it was nice to join what we call the rat race.

We sold the house in 2001 for a nice profit. From time to time, I look at estimates of what that house is worth.

But getting to the point of this item - inflation and other pressures on the economy are changing housing in many ways. Much of this is the realization that small single-family homes in growing areas are a wonderful opportunity at a corporate level.

All of a sudden that house (and everything else in the neighborhood) is valued at $1.1 million on Zillow - about a $500k increase in the last two years. There's no way it was possible given life, but it's a shame I couldn't have found a way to keep it.

[molson]

Just checked on my first house I bought in 2010 - 768 square feet near downtown Boise. $87,000. Zillow has it at $428k now. That's inflation, but also Boise becoming one of the hottest real estate markets in the country in the interim. I don't feel bad about selling it though. I bought a new house 5 years ago for under $200k that has had a similar increase on Zillow. My mortgage payment is still under $1,000, when that wouldn't get you a studio apartment here anymore.

I remember some housing v. renting debates, including here. At least in my town, I was lucky to be right. I know quite a few people who stuck with renting who have had to move. Rents are going up 2X and 3X overnight, or on lease renewal. I would have had to have figured out something myself. Timing and luck are everything.

Edit: There are many other consequences to this besides renters being screwed. It is really hard to hire new people for open professional positions. A place like Boise has always relied on hiring a lot of tech and white collar workers from out of state, who were drawn here by the lower cost of living. The salaries haven't increased much, but the cost of living has gone completely bonkers. People still assume that they can come to Boise and get a big house and a yard for cheap, and when they figure out that's no longer the case, there's much less reason to move here.

[Lathum]

In 1996, a couple of years after moving out west and just having gotten married, I bought a small (1,580 sqft.) home in Redmond, Washington for $185k. A tri-level, no basement, laundry at the back of what was strangely a three-car garage. From the street, it looked like a gigantic garage defending a bungalow.

The neighborhood was only a few years old and had dozens of near-identical homes. I think there were two basic styles - a tri-level and a two-story square - and people could choose two- or three-car garages in front, one of a few basic trim colors that carried over to countertops and carpeting, and there was a skylight package.

The population was exploding around Microsoft and the other Seattle Eastside tech companies. I remember how hard it was to find anything and being a bit disappointed in the quality of the house, but it was nice to join what we call the rat race.

We sold the house in 2001 for a nice profit. From time to time, I look at estimates of what that house is worth.

But getting to the point of this item - inflation and other pressures on the economy are changing housing in many ways. Much of this is the realization that small single-family homes in growing areas are a wonderful opportunity at a corporate level.

All of a sudden that house (and everything else in the neighborhood) is valued at $1.1 million on Zillow - about a $500k increase in the last two years. There's no way it was possible given life, but it's a shame I couldn't have found a way to keep it.

When we moved to Seattle we bought a condo in Ballard. We eventually moved to Ohio and sold it so we could put 20% down on our house there. Not finding a way to make that work so we could keep the condo is the biggest financial regret of my life.

[QuikSand]

The effects of inflation are intensely personal, on a political level, and more emotional than practical. We respond to gas prices because by law they are advertised on gigantic signs. OMG it was 2.89 just a while ago, now it's 3.89 OM what are we to do? Cancel the trip to see grandmother!?!?!

Reality is: that 400m trip to grandmother in your avg car costs you 15 gallons of gas. You're going to cancel on grandma for $15? Really? ( I mean, I get there are people for whom $15 is a major matter, but it's not most of the people answering polls)


The major disconnect is that the economy is adding jobs (even if most Americans disagree with this unimpeachable fact), and that creates upward wage pressure overall..but if my wage has not increased, then I'm having more trouble paying for gas and whatnot than a year ago, so this sucks. Imperfect system.

[Solecismic]

The major disconnect is that the economy is adding jobs (even if most Americans disagree with this unimpeachable fact), and that creates upward wage pressure overall..but if my wage has not increased, then I'm having more trouble paying for gas and whatnot than a year ago, so this sucks. Imperfect system.

That feels very partisan to me.

The economy is absolutely adding jobs at an incredible pace, but... numbers are still below the February 2020 peak. Getting much closer, though. We'll see if this becomes a recovery or if inflation drops demand enough to send us toward recession. I don't think we know yet.

I don't know where this gas price is the only thing comes from. Your example, yes, of course it's silly to cancel a trip over $15 in gas. But the inflation comes from energy costs, from the grocery store (smaller portions, higher prices) and it's showing no sign of letting up. If you're closer to the poverty line, this is a huge issue.

The price of gas is only one part, but it is an important one not just because of your own gas tank, but the cost to transport everything and the costs associated with housing and selling. Ultimately, manufacturing as well, since almost all plastics are oil or natural gas based and steel and cement require massive amounts of energy to make.

[Mota]

I feel we're getting hammered from every direction though, it's not just gas. I was looking at buying a new amp for my music room. The amp that was selling for $1,499 last spring is now $1,999. Well then I go to the grocery store and everything is either much more expensive than it was last year, or in smaller packaging. I go to fill up the car after being told to start coming back to the office, and that's more too. And I'm supposed to feel grateful because I got a small raise at work, but it doesn't even match all the cost increases that I have to deal with.
And then forget about buying a house! I'm fine because I only have 5 years left on my mortgage, but what the hell are our kids going to do?

[Mota]

That feels very partisan to me.

The economy is absolutely adding jobs at an incredible pace, but... numbers are still below the February 2020 peak. Getting much closer, though. We'll see if this becomes a recovery or if inflation drops demand enough to send us toward recession. I don't think we know yet.

I don't know where this gas price is the only thing comes from. Your example, yes, of course it's silly to cancel a trip over $15 in gas. But the inflation comes from energy costs, from the grocery store (smaller portions, higher prices) and it's showing no sign of letting up. If you're closer to the poverty line, this is a huge issue.

The price of gas is only one part, but it is an important one not just because of your own gas tank, but the cost to transport everything and the costs associated with housing and selling. Ultimately, manufacturing as well, since almost all plastics are oil or natural gas based and steel and cement require massive amounts of energy to make.

I work in a manufacturing business, and our pricing for any raw materials is dramatically higher than a year ago. Transportation is also much higher. So yes, pricing to the end users is also going to increase.

[Edward64]

FWIW we went to Costco tonight. Also filled up with Costco Premium at $3.90 which is lower than what I saw unleaded at Shell for about $4 this past weekend. Unsure what the Shell premium was but assume about $4.50+. So this is a pretty big delta.

Kinda weird but not complaining, guess gas prices haven't quite found "equilibrium" yet. Unfortunately we go to Costco about once a month. If they were just closer it would be perfect.

[Vegas Vic]

Jimmy Carter's legacy of 14% inflation might not be within range, but Kiplinger thinks it might top out at about 10%.

https://i.imgur.com/LPVLMb7.jpg

[NobodyHere]

Gas has gone slightly down for me. I filled up yesterday and it was $3.99/gal. That's down from my previous fill up which was $4.10/gal.

[lungs]

My last fill was $1.82/gallon. I knew I was saving up seven years of Piggly Wiggly points for something.

[Ksyrup]

We've been at $3.99 for several weeks. A few places in the busiest parts of Lexington have been slightly over $4, but where I live, we haven't gone over $3.99. It dropped yesterday - to $3.98. Progress!

[QuikSand]

I isolate gas prices because they have a massively outsized effect on how people feel about prices/inflation. And the way people feel matters quite a lot in all things related to the current state of the economy. Individuals' decisions whether to buy something of consequence are substantially based on feel, and often businesses' decisions whether to expand/invest are as well.

I think the challenge that a job growth mostly just getting back toward former full employment is something less than an ordinary economic expansion is very fair. But the U6 measure suggests we're all but back to what the real "job" economy might bear at this point. Perhaps the recovery period of this whatever-letter-disruption is over, and from here it's back to fairer comparisons.

[Brian Swartz]

And then forget about buying a house! I'm fine because I only have 5 years left on my mortgage, but what the hell are our kids going to do?

Reach a new equilibrium eventually, most likely. We'll get past this period of relatively minor hardship as long as it doesn't drag on for decades of inflation.

I'm a lot more concerned about what happens when oil prices go nuts permanently. We're not there yet, it may be another half-generation or so away, but when it hits these will be the good-old days.

[miami_fan]

I feel we're getting hammered from every direction though, it's not just gas. I was looking at buying a new amp for my music room. The amp that was selling for $1,499 last spring is now $1,999. Well then I go to the grocery store and everything is either much more expensive than it was last year, or in smaller packaging. I go to fill up the car after being told to start coming back to the office, and that's more too. And I'm supposed to feel grateful because I got a small raise at work, but it doesn't even match all the cost increases that I have to deal with.
And then forget about buying a house! I'm fine because I only have 5 years left on my mortgage, but what the hell are our kids going to do?

Are kids in their 20's looking to buy houses these days? My oldest son has zero interests in owning a house and everything that comes with it at this point.

[GrantDawg]

Are kids in their 20's looking to buy houses these days? My oldest son has zero interests in owning a house and everything that comes with it at this point.
My daughter very much is, and is heart-broken that a house she could have afforded 2 years ago now is way out of her price range. And I am getting heartbroken because it is looking more and more like she and her soon to be husband will be moving in HERE in November after the wedding. I do not want.

[stevew]

It is what it is mostly, but I do feel like I got substantial sticker shock when I was looking to buy a tow trailer. The garbage quality ones are now over 1000$ and it seems like anything approaching decent quality is 1600 or more. I don't need something that expensive and I suppose I'll try to find a used one. But it would be a nice something to have when I want to go pick up mulch or wood. Wood is also bordering on outrageous again.

[BYU 14]

Are kids in their 20's looking to buy houses these days? My oldest son has zero interests in owning a house and everything that comes with it at this point.

Only one of my 5 kids own right now, though another did own and sold and is renting my ex wife's place and holding the profit as he waits for the market to slide a bit. A third is in the Navy, so he stays in base housing or rents and the other two are still growing their careers and have no interest in buying now.

Edit - All my kids save one, are now in their 30's

[cuervo72]

I mean, we bought our second house when I was 27. Townhouse was at 25. But we weren't competing against large real estate/rental companies and there was a building boom at the time.

[NobodyHere]

I was just listening to my coworker complain about house shopping.

I bought my condo 2 1/2 years ago. During the shopping process I placed 3 initial offers, all about $5k less than the asking price. One got narrowly outbid. One was accepted but I pulled out after the housing inspection. The last one was accepted. Overall I thought it was a fairly painless process.

But now my coworker is saying that she is placing offers at multiple places well above the asking price and still getting outbid/denied. I don't think Toledo Ohio has seen any rapid growth in the last couple years. So why is the housing market all crazy?

[Solecismic]

I was just listening to my coworker complain about house shopping.

I bought my condo 2 1/2 years ago. During the shopping process I placed 3 initial offers, all about $5k less than the asking price. One got narrowly outbid. One was accepted but I pulled out after the housing inspection. The last one was accepted. Overall I thought it was a fairly painless process.

But now my coworker is saying that she is placing offers at multiple places well above the asking price and still getting outbid/denied. I don't think Toledo Ohio has seen any rapid growth in the last couple years. So why is the housing market all crazy?

The long answer:

Housing Supply - Realtor.com Economic Research (https://www.realtor.com/research/topics/housing-supply/)

The short answer:

Demand is higher than supply, combined with the realization that interest rates will not be historically low much longer.

[sterlingice]

And a ton of corporate buyers trying to get in on the "investment" and few laws restricting it

SI

[BYU 14]

And a ton of corporate buyers trying to get in on the "investment" and few laws restricting it

SI

This is the big driver, there is a corporate entity in Arizona that owns 8500 houses they have flipped to rental properties and finally the state Government is looking to address it.

[RainMaker]

And a ton of corporate buyers trying to get in on the "investment" and few laws restricting it


That's the biggest issue. And now that we know that the government will never allow banks or financial institutions to fail from those investments, it's as safe as they come. Plus it's one of the best ways for foreigners to launder money.

If the government truly cared about housing costs, they would tax rental and unused properties at significantly higher rates than they currently do. And actually treat money laundering as a crime.

[BYU 14]

From my post below here is a snapshot of the greater Phoenix area.

Zipcodes with the highest concentrations of investor-owned homes include:

Mesa – 85209 with 3,251 investor properties
El Mirage – 85335 with 2,155 properties
Scottsdale – 85260 with 1,596 properties
Mesa – 85202 with 1,438 properties
Buckeye – 85326 with 1,223 properties
Phoenix – 85015 with 1,194 properties
The largest single owner of investor properties is a company called Invitation Homes, which began buying houses in the Phoenix market in 2012. As of this quarter, the company owns 8,744 homes here.

And more
AZ Family Investigates examined data from the Maricopa County Assessor’s Office, which contained information on every residential property in the county. We found hundreds of investors have bought tens of thousands of properties. The 700 largest investors own more than 71,000 residential properties.

[bob]

Plus it's one of the best ways for foreigners to launder money.

Please explain

[GrantDawg]

Have some money to launder, Bob? There is a guy I'm the Ozarks that specializes in it.

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[bob]

I’m just saying I don’t understand

[GrantDawg]

A quick Google will give you the answers. Real Estate is one of the most common ways to launder money.

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[RainMaker]

Please explain

There's very little oversight in real estate and you don't have to go through the traditional financial channels. You can hide ownership through foreign companies and trusts. And most importantly, you can pay in cash.

Since real estate has become a safe investment (in the long run) and is a high ticket item, it's a perfect place to stash your money. Bank accounts and the stock market have oversight and draws attention. Owning millions million in real estate in different states through a number of shell companies and trusts is hard to detect.

Washing the money is the other side of it. So lets say you buy a $5 million building in cash. You can then use other dirty cash to put another $5 million in upgrades. The general contractor and electrician doesn't care where that money came from and no one is looking into it. Sell that building for $10 million in a few years and you've just cleaned $10 million.

Then you have renting as a tool. Take a 50 unit building and rent it out. Every dime coming through from tenants is clean. And if you have a few empty units in the building, who cares? Just say they are being rented and the tenant pays cash.

It's so popular that it's probably the reason we'll never go after the Russian oligarchs no matter what they do in Ukraine. It would crash the Manhattan (and other wealthy areas) real estate market overnight. Heck, our last President made his fortune as a laundromat for money launderers. Cleaning dirty foreign money is an American pastime.

[RainMaker]

If anyone is interested in the topic, I highly recommend Red Notice by Bill Browder. I believe it was a best seller and chronicles his business dealings in Russia. He has another book coming out next week that goes even deeper into the money laundering.

The Magnitsky Act was named after his attorney who was murdered in prison.

[Vegas Vic]

Please explain

This educational video might help:

<iframe width="1280" height="720" src="https://www.youtube.com/embed/3iti_gWbz1U" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>

[miami_fan]

Price of Paradise: Reasons for high housing vacancies in Florida (https://www.abcactionnews.com/news/local-news/price-of-paradise-reasons-for-high-housing-vacancies-in-florida)

[cuervo72]

Canada bans foreign homebuyers for two years in effort to cool market | Canada | The Guardian (https://www.theguardian.com/world/2022/apr/08/canada-bans-foreign-investors-buying-homes-housing-market)

[BYU 14]

Canada bans foreign homebuyers for two years in effort to cool market | Canada | The Guardian (https://www.theguardian.com/world/2022/apr/08/canada-bans-foreign-investors-buying-homes-housing-market)

This is needed here, not only for foreign investors, but the mega-million investment corps buying houses for rental property.

[Ksyrup]

I just got a letter in the mail this afternoon from a realtor who has a buyer wanting a house in our neighborhood. I assume we all got one. I suppose they are looking for someone about to put their house on the market trying to get a jump on the competition.

If I had a place to go, I'd consider doing that, but basically looking to extract a premium for giving them what is essentially a right of first offer.

[flere-imsaho]

Canada bans foreign homebuyers for two years in effort to cool market | Canada | The Guardian (https://www.theguardian.com/world/2022/apr/08/canada-bans-foreign-investors-buying-homes-housing-market)

This is needed here, not only for foreign investors, but the mega-million investment corps buying houses for rental property.

As I think Rainmaker pointed out earlier (in this thread or another), given the ease with which real estate investment can be used to launder money, it's an area that really need scrutiny in multiple countries, even before you want to argue about the social pluses or minuses.

I'd support legislation limiting the number of residential units a single entity (person, corporation) can own, with some sort of loophole for clearly-defined hardship cases (like you have to buy your folks' house so they can afford health care). Markets have gotten way, way, way out of hand.

I just got a letter in the mail this afternoon from a realtor who has a buyer wanting a house in our neighborhood. I assume we all got one. I suppose they are looking for someone about to put their house on the market trying to get a jump on the competition.

In our neighborhood I'd say about 90% of the homes are sold pre-market. I happen to know three local realtors really well and it's clear that if you want to buy here, you have to have a local realtor who can get wind of "private sales" as early as possible, otherwise you have no chance.

[RainMaker]

Worth mentioning that the Federal Reserve had been purchasing up to $40 billion A MONTH in mortgages last year. Haven't checked the numbers lately to see how much they have been the last couple of months. But that's one way to inflate housing prices.

They say it was to keep interest rates stable, which may be true, but it also has side effects.

[BYU 14]

As I think Rainmaker pointed out earlier (in this thread or another), given the ease with which real estate investment can be used to launder money, it's an area that really need scrutiny in multiple countries, even before you want to argue about the social pluses or minuses.

I'd support legislation limiting the number of residential units a single entity (person, corporation) can own, with some sort of loophole for clearly-defined hardship cases (like you have to buy your folks' house so they can afford health care). Markets have gotten way, way, way out of hand.


.

100% agree

[miami_fan]

Insurance agents: Why rates for Florida homeowners are soaring in 2022 | Jax Daily Record | Jacksonville Daily Record - Jacksonville, Florida (https://www.jaxdailyrecord.com/article/insurance-agents-why-rates-for-florida-homeowners-are-soaring-in-2022)

The insurance premiums on our rental properties in Florida went up about $400 in total this year. The one for our homestead actually went down about $50.

A while back I mentioned my shock at the cost of having a roof replaced. During the pandemic it felt like every week another house in our subdivision was getting their roof replaced. It has kept going to where I am sure myself and about four of my neighbors have the only houses that have not had a roof replacement in the last two years. Most people said they only paid the deductible. I am not saying everyone was committing fraud but it looks like the insurance companies are getting their money back with interest.

The point the article makes about the roofing companies being storm chasers is very true. I have had at least 15 offers of free roof inspections by various roofing companies in the last year alone.

[Flasch186]

And sometimes when they get in the roof they cause damage themselves in order to get the deal

When the insurance company says no you&rsquo;re stuck with a now damaged roof

If you were dumb enough to sign an AOB then your really screwed


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[sterlingice]

Was thinking about this thread and meat prices a couple of days ago.

Beef prices seem much higher (50%ish) but pork still seems pretty normal to me and chicken might be a little higher but, again, mostly within norms. Shrimp is lower than normal by a decent bit (like frequently on sale and 20%+ lower than normal) - I don't understand that at all. Crab legs have been insanely high for months, like twice as much as normal (which is a shame as I love them and I haven't had any of late).

But I feel like you can go "inflation" to say it's higher across the board, but you could also tell me there are individual actions accounting for it like did some beef processing plants close but pork and chicken didn't, meanwhile shrimp are having a bumper crop but crab have been overfished of late?

SI

[RainMaker]

It's just demand. People are making more money, have more in savings, and can now purchase higher-priced meat.

Inflation is a nice catch-all but sometimes a market just goes up because the demand is higher than the supply at the moment.

[Edward64]

Regular unleaded is back down to about $3.80 from $4 around here.

In other news, zillow says my house has appreciated thousands of dollars in the past month. We are just about to hit our 2nd "we'll sell the house and live in an apartment" target in the past year.

[Ksyrup]

I keep checking our house on Zillow every month or more when someone posts about it here, and every time it's gone up. This time 3.2% in the past 30 days. I call BS.

[Kodos]

Ours went up 4.9% in the last month. (And it probably doesn't know that we just renovated the original 1960s-era kitchen and added on an office for my wife.)

[Ksyrup]

Yeah, mine shows our house as 3 bedroom 2.5 bath and 2700 sq. ft. but it's actually 4/3.5 with a fully finished basement that adds about 1500 sq. ft. of living space, plus a covered deck that we added to the house a year ago.

[Edward64]

You can update the # bedrooms, baths, square ft etc. yourself. That's what I did when we finished the basement.

[miami_fan]

Citizens insurance rates will soon climb for thousands of Floridians (https://www.wptv.com/money/real-estate-news/citizens-property-insurance-rates-will-soon-climb-for-thousands-of-florida-residents)

Yet another reason why your parents who came down here to retire are packing up and heading back up north.

[Edward64]

I've not been able to get any legit deals on 2-liter Cokes/Zeros for the past couple weeks. Kroger, Walmart and CVS are selling them for like $2.50+ "sale" price. I'm running low and will probably give in. Not willing to go for the generic Cokes.

Gas was < $3 a few weeks back. It's crept up to $3.20 or so.

On other news, my zillow house value is continuing to decrease. Down about 7.2% from high. Still ahead from when the pandemic started though.

[Edward64]

Ketchup going to be costing more.

There are some generic/store brands that are just as good for some items, but will say I prefer Heinz by a little bit.

I was telling wife the other day that Kroger grape jelly is just as good as Smuckers, I can't really tell the difference.

Kraft Heinz CEO: Inflation and supply shortages are here to stay for a while | CNN Business (https://www.cnn.com/2022/10/24/economy/kraft-heinz-ceo-inflation-supply-shortage/index.html)
Kraft Heinz CEO Miguel Patricio says higher inflation and supply issues are coursing through the food industry, forcing companies to adopt new strategies for everything from production to promotion to packaging.

And he doesn’t see an end to either issue anytime soon.

“We’ve already increased the prices that we were expecting this year, but I’m predicting that next year, inflation will continue, and as a consequence [we] will have other rounds of price increases,” Patricio said in an interview with CNN Business.

For its second quarter ended June 25, Kraft Heinz raised its prices overall by 12.4 percentage points compared to the year-earlier period. The company is scheduled to report third-quarter earnings on Wednesday.
Those supply issues are broader than the Covid era, however. A crushing three-year drought has led to a shortage of tomatoes, for example.

[GrantDawg]

Why did Biden cause a three year drought? These Demorats. *shakes head*

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[sterlingice]

How Profit Inflation Made Your Groceries So Damn Expensive (https://www.forbes.com/sites/errolschweizer/2022/09/12/how-profit-inflation-made-your-groceries-so-damn-expensive/)

And, of course, across the board, industries are just taking advantage of the inflation narrative and their increasing oligopolies to pad their profits

SI

[miami_fan]

Citizens insurance rates will soon climb for thousands of Floridians (https://www.wptv.com/money/real-estate-news/citizens-property-insurance-rates-will-soon-climb-for-thousands-of-florida-residents)

Yet another reason why your parents who came down here to retire are packing up and heading back up north.

Just got my home insurance bill for 2023-2024. It went from $2,880.84 last year to $4,632.44. That is an increase of $1751.60. And that is with a 72% discount for hurricane mitigation.

Social Security is supposed to go up 8.7% next year. That means the average retired worker is going from $1,681 to $1,827 per month with the max going from from $3,345 to $3,627. The average couple is going from $2,734 to $2,972.

[Ksyrup]

My brother's in-laws live around Ft. Pierce, somewhat inland. Their HO insurance is $10K a year.

[Atocep]

How Profit Inflation Made Your Groceries So Damn Expensive (https://www.forbes.com/sites/errolschweizer/2022/09/12/how-profit-inflation-made-your-groceries-so-damn-expensive/)

And, of course, across the board, industries are just taking advantage of the inflation narrative and their increasing oligopolies to pad their profits

SI

Yep, 53% of inflation costs right now are going directly to corperate profits while the historical average is closer to 13%

I'm sure the GOP is going to fix it.

[sterlingice]

Yep, 53% of inflation costs right now are going directly to corperate profits while the historical average is closer to 13%

I'm sure the GOP is going to fix it.

You know what will fix that? Tax cuts for the top 1% and companies and austerity for everyone else

SI

[Edward64]

Haven't found a good deal on 2-liter Cokes past couple weeks. They are about $2.50 when you buy 3 or more.

So I've been buying the 12-cans for 3x12 for about $13.

I know there's been "Diet Coke, No Caffeine". They are now selling cans of "Coke Zero, No Caffeine". It doesn't taste half bad.

[Edward64]

Been checking out truecar.com on a new Toyota Corolla. There was like a 8% premium earlier this year. Now it's < 1%.

Only one data point, but hope this means supply is getting much better.

[Edward64]

And we're complaining about our 8% inflation. But looks like most of their inflation is energy (oil? natural gas?).

Record inflation: Which countries in Europe are being worst hit as energy and food prices soar? | Euronews (https://www.euronews.com/next/2022/11/16/record-inflation-which-country-in-europe-has-been-worst-hit-and-how-do-they-compare)
In the eurozone, annual inflation is expected to have hit a new record high of 10.7 per cent in October, up from 9.9 per cent in September, according to the latest estimate of the bloc's statistics body Eurostat.
:
More than half of the eurozone countries recorded double-digit inflation rates in October, including Germany (11.6 per cent), Belgium (13.1 per cent) and the Netherlands (16.8 per cent). France showed the lowest rate, at 7.1 per cent.

Italy saw the biggest monthly increase in prices, with inflation jumping from 9.4 per cent in September to 12.8 per cent in October.

Energy prices were again the main drivers of eurozone inflation, with a 41.9 per cent year-on-year rise, compared with 40.7 per cent in September and 38.6 per cent in August.

[sterlingice]

iT's aLL bIdEN's fAULt!

SI

[Edward64]

On other news, my zillow house value is continuing to decrease. Down about 7.2% from high. Still ahead from when the pandemic started though.

Zillow house price is now -8.8% from high. Still happy with the price but know it'll continue decreasing until we hit some sort of new equilibrium. Hoping it'll slow down some.

But then I did find 2-liter Coke Zeros for $1.50 so that makes up for it.

[Edward64]

Link has a chart of where CPI inflation is. Some samplings ...

Eggs are highest at +49%. I buy the Kroger brand and didn't notice the jump (if any). Airfare is next at +36% and followed closely by Butter at 34.2%.

Interestingly, Televisions & Smartphones are at -17% and -23%. I guess BF sales were better this year for those items. Beef at -5.2%.

https://www.cnbc.com/2022/12/13/heres-the-inflation-breakdown-for-november-2022-in-one-chart.html
Core CPI rose 0.2% in November, after a 0.3% reading in October — down significantly from 0.6% in September and August.

“One month doesn’t make a trend, or even two months, but the October and November readings are clearly a big step in the right direction,” Hunter said.

[henry296]

Link has a chart of where CPI inflation is. Some samplings ...

Eggs are highest at +49%. I buy the Kroger brand and didn't notice the jump (if any). Airfare is next at +36% and followed closely by Butter at 34.2%.

Interestingly, Televisions & Smartphones are at -17% and -23%. I guess BF sales were better this year for those items. Beef at -5.2%.

https://www.cnbc.com/2022/12/13/heres-the-inflation-breakdown-for-november-2022-in-one-chart.html

My wife commented over the weekend how much eggs cost. I think she said the 18 count was 6.09 for the normal store brand.

[Lathum]

I was at the store today and noticed a pint of Ben and Jerrys was ON SALE for $6.39

[Edward64]

My wife commented over the weekend how much eggs cost. I think she said the 18 count was 6.09 for the normal store brand.

My wife corrected me. Kroger eggs were about $2.50'ish for a dozen earlier this year. It's now around $3.50'ish now, so still a pretty big jump.

[Brian Swartz]

Used cars and similar vehicle-related issues are where I notice it the most. There have been 6 tire price increases this year. 30-40% increase roughly in price there. A lot of people hanging on to their vehicles longer because they can't afford to replace them, so for people looking for a low-end beater, what you could get for $3k two years ago, now costs $5-6k, if you can find it which you often can't.

[Edward64]

Must be nice to get a 55% pay hike.

Hmmmm, have to check the exchange rate. I do want to visit the historic sites in Turkiye (and wonder how come CNBC hasn't started using Turkiye vs Turkey).

https://www.cnbc.com/2022/12/22/turkey-hikes-minimum-wage-by-55percent-as-inflation-and-living-cost-crisis-bite.html
Turkey announced a hike of its minimum wage by 55% Thursday, amid a cost of living crisis that has plunged millions into financial hardship, hammered small businesses and rendered many unable to afford basic goods.

The move is aimed at easing the impact of surging living costs, but economists worry it will further increase inflation. The country’s official rate of inflation is currently at a 24-year high of 84.4%.

Turkish President Recep Tayyip Erdogan, in a televised speech from Ankara Thursday, said that the monthly minimum salary would be brought to 8,500 lira ($455) starting in 2023. More than 30% of Turkey’s workforce is on the minimum wage, according to Turkish officials.

There is also a political angle, country analysts say: Turkey’s general election is due to be held in June 2023.

[Edward64]

Unfortunate but it is true that it costs money to do all the shots and recommended vet visits.

Dog food is about $50-$60 a month. We have some arthritis pills that is $50-$60 a month. We had annual vet visit for shots, blood sample etc. that was about $300. Still worth it for us.

People are giving up pets. Blame inflation. (https://www.msn.com/en-us/news/us/people-are-giving-up-pets-blame-inflation/ar-AA15HG5r)
Thirty-five percent of pet owners in September said they were concerned about the expense of having a pet in the current economy, according to data from the American Pet Products Association trade group. Of those, half said they may have to give up their pet.

Veterinary and shelter officials say it is a troubling sign about the future of American pet ownership. Middle- and upper-class households are spoiling their companions with new toys, top-shelf foods and luxurious day care and boarding accommodations. Meanwhile, pet adoption for lower-income households is slipping out of reach.

The overwhelming majority of pet owners who have fewer animals now than three months ago say it’s because one of their pets died, APPA reported. But 14 percent said they could not afford to keep their pet, while 12 percent said their pet was re-homed and 9 percent said they could no longer take care of their pet for a variety of reasons.

[Edward64]

I think we are hitting some sort of inflection point on new cars.

I remember pre-Covid, you can get a Corolla below MSRP per TrueCar. For the past 2 years or so, its been significantly above MSRP but has been coming down recently.

I just checked and TrueCar is reporting that Corolla "average price" are available at below MSRP.

That's my typical strategy. Just tell the dealers -- no fuss, just the TrueCar average price, financing is yours if you can beat my pre-approved by .25, and definitely no stupid options.

[sovereignstar v2]

That TruCoat, you don't get it and you get oxidization problems.

Sent from my CPH2451 using Tapatalk

[PilotMan]

That TruCoat, you don't get it and you get oxidization problems.




They install it at the factory!

[Edward64]

I think we are hitting some sort of inflection point on new cars.



Saw this blurb today. Be nice if the price war really does happen.

The U.S. car market has shifted into lower gear in only a matter of months. After average car prices hit record highs as recently as last summer, some analysts now predict that an oversupply of vehicles will lead to a price war that sends prices plummeting.

A recent report from UBS estimates that global car production will exceed sales by 6% this year, leaving an excess of 5 million vehicles that will require price cuts to get sold off of lots, Yahoo Finance reported. Although those price cuts might not happen until the latter half of 2023, automakers are preparing for a price war, and some electric vehicle makers are already slashing prices.

[Edward64]

UK apparently doesn't have 15 or 30-year fixed mortgages like in the US. Their fixed mortgages are for 2-5 years and then adjusted ... so more like adjustable rate ARMS.

Must really suck to worry about what your mortgage rate will be every 2-5 years.

https://www.cnbc.com/2023/06/26/uk-mortgage-crisis-millions-pushed-toward-the-brink-of-insolvency.html
The Bank of England last week hiked interest rates by 50 basis points to 5%, a bigger increase than many had expected. The BOE’s 13th consecutive rate rise takes the base rate to the highest level since 2008.

The surprise move — which is designed to lower inflation — will affect millions of homeowners as the interest rates on many mortgages in the U.K. are directly linked to the central bank’s base rate. Renters, too, are likely to see their payments increase as buy-to-let landlords pass on higher mortgage repayments.

“The rise in interest rates to 5% will push millions of households with mortgages towards the brink of insolvency,” said Max Mosley, an economist at NIESR. “No lender would expect a household to withstand a shock of this magnitude, so the government shouldn’t either.”

[Edward64]

Inflation is done

Dozen eggs at Walmart for $1.16

[Brian Swartz]

lol

[Edward64]

Spoke too soon. Have to go to Costco and buy a couple of their multi-packs.

https://www.cnbc.com/2023/08/23/pork-belly-prices-rose-over-100percent-ytd-bacon-is-about-to-get-pricier.html
Bacon is about to get even more expensive as wholesale pork belly prices approach record highs.

Pork belly prices rose over 100% year-to-date from 131.59 cents per pound to 270.89 cents at the end of July.

https://image.cnbcfm.com/api/v1/image/107179773-1673988344313-gettyimages-607830493-78176399.jpeg?v=1692755542&w=740&h=416&ffmt=webp&vtcrop=y

Oh, this inflation is self-inflicted ...

Analysts who spoke to CNBC attributed the surge in pork prices partly to a recently imposed animal welfare regulation in California, which came into effect July 1.

California’s Proposition 12 bans the sale of pork from farms that confine pregnant sows in tiny enclosures, and spaces that are less than 24-square-feet.

[Ghost Econ]

Weird how analysts and industry sources never say prices went up because, "we fucking felt like it."

[miami_fan]

Just got my home insurance bill for 2023-2024. It went from $2,880.84 last year to $4,632.44. That is an increase of $1751.60. And that is with a 72% discount for hurricane mitigation.

Social Security is supposed to go up 8.7% next year. That means the average retired worker is going from $1,681 to $1,827 per month with the max going from from $3,345 to $3,627. The average couple is going from $2,734 to $2,972.

Cheery reading for a likely future FL resident.

(I was aware already, it's just depressing a.f.)

Jon, I just wanted to give you a real world example.

We got our first bill for home insurance of one of our rental properties. Not in a flood zone, never filed a claim for this property. The bill went from $2,516.00 in 2021, to $4,233.98 last year which was an increase of 68.2822%. It has now gone from $4,233.98 to $6795 this year for a 60.4873% increase. That is a 170.072% increase in two years.

[Edward64]

New phrase to add to our lexicon.

'Immaculate disinflation' is the new economic buzzword. But what does it mean? | CNN Business (https://www.cnn.com/2023/09/06/economy/immaculate-disinflation-meaning/index.html)
Economists added yet another term to their lexicon in recent months: immaculate disinflation.

While there’s no official definition of immaculate disinflation, the phrase is being used to describe a scenario where inflation cools without causing a spike in unemployment.
The supporting stats ...

In the United States, inflation cooled from a peak of 9.1% in June 2022 to 3.2% in July of this year, according to the latest Consumer Price Index. Yet the nation’s unemployment rate actually fell from 3.6% in June 2022 to 3.5% in July 2023. The current rate is 3.8%.

That’s leading some economists to believe that immaculate disinflation may be possible.
But not everyone is convinced.

Even President Joe Biden’s top economic adviser, Jared Bernstein, expressed skepticism about the term.

“I wouldn’t call this disinflation immaculate,” he said in a CNBC interview at last month’s Jackson Hole Fed conference. “There’s a good question as to what’s around the corner at the last mile,” he added.
“So we shouldn’t be that surprised that perhaps some of these typical relationships are not necessarily being borne at this time,” Mester said in a CNBC interview at Jackson Hole last month.

Like Powell, she is not banking on immaculate disinflation, saying it’s not yet clear how the full effects of the Fed’s cumulative rate hikes will play out.

[Brian Swartz]

I can't decide if I love or hate the term.

[Edward64]

Yeah, it's got 8 syllables so doesn't roll off the tongue.

[Ghost Econ]

Is that a new grid game where I have to match economists with their theories, policies and Economic stats?

[miami_fan]

So as not to derail the kids leaving home thread more than I did.

US is not prepared to house a growing number of older Americans (https://www.abcactionnews.com/us-is-not-prepared-to-house-a-growing-number-of-older-americans)

[Mota]

So as not to derail the kids leaving home thread more than I did.

US is not prepared to house a growing number of older Americans (https://www.abcactionnews.com/us-is-not-prepared-to-house-a-growing-number-of-older-americans)

Canada is trying to prepare for this same demographic trend by growing their population through immigration by 3% in one year. Which is the highest growth rate of any developed country. It's also causing culture issues, and apartment rentals are increasing at record rates. It is one of the biggest housing bubbles in the world, with an insane cost of living crisis happening. Maybe trying to fix the demographic issue is causing bigger issues in the short term. Basically the Canadian social system has become a giant ponzi scheme.

[miami_fan]

Canada is trying to prepare for this same demographic trend by growing their population through immigration by 3% in one year. Which is the highest growth rate of any developed country. It's also causing culture issues, and apartment rentals are increasing at record rates. It is one of the biggest housing bubbles in the world, with an insane cost of living crisis happening. Maybe trying to fix the demographic issue is causing bigger issues in the short term. Basically the Canadian social system has become a giant ponzi scheme.

Is the goal of the increased immigration to increase production? Increase the tax base? Change the culture?

[Mota]

I think the goal is to have 4-5 working people for every retired person. Right now with the demographic getting older (as it is in every developed country), the ratio is quickly changing with more older people.
It is also adding more consumers to the economy. So the GDP number increases, even though our per capita GDP has been shrinking and is in the negatives. So it seems like we are throwing millions of consumers for our real estate investors and landlords, and fast food and grocery companies to grow.

[Edward64]

Canada is trying to prepare for this same demographic trend by growing their population through immigration by 3% in one year. Which is the highest growth rate of any developed country. It's also causing culture issues, and apartment rentals are increasing at record rates. It is one of the biggest housing bubbles in the world, with an insane cost of living crisis happening. Maybe trying to fix the demographic issue is causing bigger issues in the short term. Basically the Canadian social system has become a giant ponzi scheme.

I know that Canada is more skills-based immigration vs family-based. A long time ago, I did the on-line questions (education level, profession etc.) and was "desirable". So, Canada is getting talent for the future.

(One thing I remember was age worked against an applicant. Older you were, the less desirable you were).

I know the housing prices were because of rich Chinese investing in Vancouver property (and assume the bigger cities also) but thought Canada cracked down on that.

I think overall Canada is easier to immigrate to for younger, more skilled workers. Which is a good thing. I'm a little surprised about the culture issues, I'd think the younger and more educated immigrants would assimilate pretty quickly.

[miami_fan]

I think the goal is to have 4-5 working people for every retired person. Right now with the demographic getting older (as it is in every developed country), the ratio is quickly changing with more older people.
It is also adding more consumers to the economy. So the GDP number increases, even though our per capita GDP has been shrinking and is in the negatives. So it seems like we are throwing millions of consumers for our real estate investors and landlords, and fast food and grocery companies to grow.

Apologies for the crude description. I find the disconnect between a nation's government and its society in general knowing that it needs its citizenry to replenish its workforce (preferably with people born and raised in said country) and the government's/society's willingness to make doing so a worthwhile proposition for the citizenry interesting. The country can't afford for the citizens not to have replenish the workforce. In theory it should want its citizenry especially if they want to maintain its "culture". At the same time. the country also demands that the citizens only have children they can afford and in many cases actively puts obstacles in place that make that almost impossible.

[Edward64]

Wife and I wouldn't mind having some hens in our fenced in backyard. HOA won't allow it. Rooting for Trump to declare a national emergency and allow anyone to have (temporarily) chickens on their property.

Love the creativity (but I'd still have the HOA to deal with)

https://www.cbsnews.com/boston/news/rent-a-chicken-egg-prices-new-hampshire/
The concept behind Rent The Chicken is simple. The Templetons provide customers with two or four hens, all the feed they need, instructional materials, tutorials, and even phone support. For about $600 for a six-month rental, customers can expect around a dozen eggs per week from two hens.

The process, the Templetons assure, is easy.

"You just let them out and walk around and they go in at night on their own, they want to roost up," Brian Templeton said. "Real low maintenance and people really enjoy it."

But then, the $600 rental for 2 seems like price gouging

Baby chicks can cost between $3 and $5, and egg laying hens can cost between $20 and $50 depending on age.

[albionmoonlight]

Over $20 for a cheeseburger in the airport.

At some point, people are going to stop believing the “inflation is fine now, actually” talking point no matter how often the media repeats it.

[JonInMiddleGA]

Over $20 for a cheeseburger in the airport.

At some point, people are going to stop believing the “inflation is fine now, actually” talking point no matter how often the media repeats it.

Umm, unless you're talking about a fast food counter, that's been about the cost of a burger in the airport for the past several years.

Eating in an airport is right up there with eating at a toll plaza for getting your wallet pillaged, but somebody has to pay the rent for the space.

[albionmoonlight]

I remember it being bad, but not this bad