Economy

[Dr. Strangelove]

8 minutes ago, BigRedBuster said:

We sell products into the residential construction market.

 

The problem is, overall inflation could remain around 3% over the next year.   However, as seen in our industry, prices have dropped significantly over the past year and there's still more pressure to reduce prices due to lack of demand.  Did I mention demand is way down?  I'm also seeing that in lots of construction materials.  Lumber is way down too.  

There are obviously other areas of the economy that are propping up that inflation number.  My problem with that is, interest rates greatly affect housing and car sales the biggest when it comes to personal finance.  So, if other industries are propping up the inflation rate, keeping interest high is having not going to accomplish what they want.

 

I haven't been able to find good information on what segments are seeing high inflation vs low inflation.  Everything I can find is from early to mid summer.  That's too old of data for this conversation.

 

FYI US auto sales dropped significantly in October.

https://www.marklines.com/en/statistics/flash_sales/automotive-sales-in-usa-by-month

 

Housing starts and permits were down around 4% from a year ago.

https://www.census.gov/construction/nrc/current/index.html

I see, interesting!

 

Yeah, it's a tricky situation. I'm really unsure how the Federal Reserve will proceed. They may have to accept inflation in the low 3s and lower rates to ease pressure on the auto and residential housing industries.

 

My personal opinion is that the Federal Reserve may favor a mild recession instead of accepting inflation at 3%. I say that because the highest inflation contributer at this point is transportation services (8% annually), which can only be lowered through a substantial decrease in demand. All other inflation contributers are sitting at a low rate of 2-3% annual inflation. 

 

You can look at inflation contributers by month through the BLS publications.

[BigRedBuster]

3 minutes ago, Dr. Strangelove said:

I see, interesting!

 

Yeah, it's a tricky situation. I'm really unsure how the Federal Reserve will proceed. They may have to accept inflation in the low 3s and lower rates to ease pressure on the auto and residential housing industries.

 

My personal opinion is that the Federal Reserve may favor a mild recession instead of accepting inflation at 3%. I say that because the highest inflation contributer at this point is transportation services (8% annually), which can only be lowered through a substantial decrease in demand. All other inflation contributers are sitting at a low rate of 2-3% annual inflation. 

 

You can look at inflation contributers by month through the BLS publications.

Thanks for the link.

 

So, October is a ZERO percent.  That's where this discussion really needs to be focused.  If, over the next couple months it remains there, then there should be pressure to lower interest rates.  And, it indicates what the guy was talking about earlier.  He's talking about what's happening right now.  Not what was happening 3-6 months ago.

[Dr. Strangelove]

13 minutes ago, BigRedBuster said:

Thanks for the link.

 

So, October is a ZERO percent.  That's where this discussion really needs to be focused.  If, over the next couple months it remains there, then there should be pressure to lower interest rates.  And, it indicates what the guy was talking about earlier.  He's talking about what's happening right now.  Not what was happening 3-6 months ago.

Correct, it's 0%, but mostly because energy prices dropped. Going into spring of next year when people drive more and OPEC continues production cuts, inflationary pressures will probably return.

 

The question will be if the FED accepts those inflationary pressures and cuts interest rates to help out industries that rely on loans or if they keep rates higher for longer, risking a recession particularly in the auto and housing sectors. 

 

I certainly hope that they chose to accept the inflation at 3% but the Fed seems pretty willing to accept some economic pain to get inflation back to the 2% target. 

[Guy Chamberlin]

I'm Not a Politician, So I Can Just Say It: Most People Know Jack s#!t About Economics

Go ahead, don't vote for me

JEFF MAURER DEC 1   ∙   PAID

READ IN APP

Picture from mevans via Getty.

Americans don’t like Joe Biden’s handling of the economy. The Fox News crowd and the late capitalist hellscape crowd are angrier than most, but basically every demographic group is less-than-jazzed. Here are some polls that tell us this. The economy is probably Biden’s second-biggest liability, behind the fact that he’s so old, his prom theme was “walking upright” (this joke is on loan from the Museum of Classic Joke Construction).

 

Biden’s team is reportedly flummoxed by this. By most normal measures, the economy is doing well. Growth is up, unemployment is down, and inflation is easing. And people tell pollsters that they like Biden’s policies if you don’t call them “Biden’s policies”. It’s like people are at a diner requesting a bowl of lettuce, croutons, and Parmesan cheese tossed in a Dijon and garlic-based dressing, but when the waiter says “So a Caesar salad?” they yell “NO!” and storm out of the restaurant.

 

What to make of this? Well that — thank God — is not my job. Not anymore; my speechwriting days are done. It’s now up to some other caffeine-fueled cube stooge to analyze that data. But I think one variable is often missing from that analysis. I consider it an important variable, and perhaps even the prism that makes the picture snap into focus. And that is: Your average person knows diddily-dum-f#&%-all about economics.

 

I’d like to immediately add: It’s fine that people don’t understand economics! Knowing that stuff is not their job! My argument is not “people don’t know economics and that’s bad” — my argument is “people don’t know economics, which is fine and normal and should be factored into decision making.” Personally, I don’t understand most things. I know nothing about physics or dentistry or 98% of topics under the sun. How does my phone work? Goblins, probably — I don’t f#&%ing know. No-one can specialize in everything. But we often pretend that everyone has intrinsic knowledge of economics, which just isn’t true.

 

This is not something that any politician will ever say. Admitting this fact sounds like you’re calling people dumb, or at least ignorant. I just explained why I don’t think that’s the case, but it doesn’t matter — if a politician were to find himself at a town hall saying “No no no — I don’t think you’re a total dumbass,” he’s already lost. The Obama White House used to debate how much to push back against people’s negative perceptions of an improving economy. Which makes sense; when people report economic pain, responding with charts and graphs and data about housing starts and the federal funds rate can seem callous. And it sounds a bit like you’re saying “Shut up you dumb liar — this chart says you’re fine.”

 

Of course, there’s a difference between someone feeling that their personal economic situation is bad and feeling that the economy, as a whole, is bad. There’s also a difference between thinking that the economy is bad and thinking that it’s the president’s fault. Most people probably answer polls about economics based on their general vibes about how things are going, especially personally. Plus: Things could always be better, right? We’d all prefer more money! Economic polls will likely skew negative in any society short of a perfect utopia in which the very concept of human desire is but a distant memory.

 

Still, some observers act as though voter dissatisfaction proves that the president’s policies are bad. The GOP — obviously — is running with this concept far past the point of sanity. The far left is doing the same. But even observers without an obvious political ax to grind sometimes make too strong of a connection between voters’ perceptions and Biden’s policies. That’s what Dean Baker and Ben Winck do in wonky articles that I think were good-faith attempts to set the record straight, but that almost certainly bear no resemblance to the thought process most people go through when answering polls about the economy. The reality is that there are only two types of voters: Those who forgot about the CHIPS Act and those who never knew about it to begin with. Voters’ economic opinions may roughly track the general state of the economy (usually!), but basically nobody tracks a president’s performance the way they would track a quarterback on their fantasy football team.

 

What would “good” economic policies in the eyes of the voters even look like? Well, they want low taxes, high spending, and no deficits. They want robust growth and no inflation, but they also think that the technology that could make that possible “takes away jobs”. If the Fed raises interest rates to hold down inflation, people get mad about high mortgage rates. People want a high minimum wage and less offshore manufacturing, but they also want basic goods and services to be dirt cheap. They want government projects to be quick and inexpensive, but demand that those project use American goods and union labor and also satisfy a million other ancillary goals. At the moment, they want prices to go down, but don’t realize that that would be bad. The most deranged incel’s expectations for a girlfriend are more reasonable than the average American’s expectations for the economy.

So what?

 

Well, first: Personally, I’d stop trying to make sense of these polls. They’re not going to make sense. They are a puzzle created by a demon designed to drive political operatives insane. Democrats should seek better messaging on the economy because that’s always a good idea, and my expert analysis is that it will either work or it won’t.

 

Second: The best political strategy is probably to pursue good economic policies, not popular ones. A president will be judged by the overall state of the economy, and the popularity of their individual policy choices probably won’t matter much. Matthew Yglesias noted that the recent bout of inflation — which was global and mostly driven by events beyond anyone’s control — contributed to incumbents losing elections around the world. Voters didn’t decide that left-wing or right-wing policies were to blame — they just decided that they didn’t like the situation and threw the bums out. To the extent that policy makers control economic conditions, their optimal survival strategy is probably to pursue sound policy — popularity be damned — and hope for the best.

 

People who lead pro sports teams have an expression: “If you listen to the fans, pretty soon you’ll be one of them.” That’s probably true. Fans love to b!^@h and moan about every move their team makes, but what they really want is to win. A coach or general manager who wins will be popular, regardless of methods, and one who loses will be fired before they can say “but I did everything you wanted!” Presidencies are probably the same — it’s about results, not process. With that being true, presidents and other policy makers probably shouldn’t heed the preferences of people who, if we’re being perfectly honest, don’t really know what they’re talking about.

[DevoHusker]

Good link @Guy Chamberlin thanks.

 

I lol'd this: Biden’s second-biggest liability, behind the fact that he’s so old, his prom theme was “walking upright”

[Dr. Strangelove]

On 12/1/2023 at 11:25 AM, Guy Chamberlin said:

I'm Not a Politician, So I Can Just Say It: Most People Know Jack s#!t About Economics

Go ahead, don't vote for me

JEFF MAURER DEC 1   ∙   PAID

READ IN APP

Picture from mevans via Getty.

Americans don’t like Joe Biden’s handling of the economy. The Fox News crowd and the late capitalist hellscape crowd are angrier than most, but basically every demographic group is less-than-jazzed. Here are some polls that tell us this. The economy is probably Biden’s second-biggest liability, behind the fact that he’s so old, his prom theme was “walking upright” (this joke is on loan from the Museum of Classic Joke Construction).

 

Biden’s team is reportedly flummoxed by this. By most normal measures, the economy is doing well. Growth is up, unemployment is down, and inflation is easing. And people tell pollsters that they like Biden’s policies if you don’t call them “Biden’s policies”. It’s like people are at a diner requesting a bowl of lettuce, croutons, and Parmesan cheese tossed in a Dijon and garlic-based dressing, but when the waiter says “So a Caesar salad?” they yell “NO!” and storm out of the restaurant.

 

What to make of this? Well that — thank God — is not my job. Not anymore; my speechwriting days are done. It’s now up to some other caffeine-fueled cube stooge to analyze that data. But I think one variable is often missing from that analysis. I consider it an important variable, and perhaps even the prism that makes the picture snap into focus. And that is: Your average person knows diddily-dum-f#&%-all about economics.

 

I’d like to immediately add: It’s fine that people don’t understand economics! Knowing that stuff is not their job! My argument is not “people don’t know economics and that’s bad” — my argument is “people don’t know economics, which is fine and normal and should be factored into decision making.” Personally, I don’t understand most things. I know nothing about physics or dentistry or 98% of topics under the sun. How does my phone work? Goblins, probably — I don’t f#&%ing know. No-one can specialize in everything. But we often pretend that everyone has intrinsic knowledge of economics, which just isn’t true.

 

This is not something that any politician will ever say. Admitting this fact sounds like you’re calling people dumb, or at least ignorant. I just explained why I don’t think that’s the case, but it doesn’t matter — if a politician were to find himself at a town hall saying “No no no — I don’t think you’re a total dumbass,” he’s already lost. The Obama White House used to debate how much to push back against people’s negative perceptions of an improving economy. Which makes sense; when people report economic pain, responding with charts and graphs and data about housing starts and the federal funds rate can seem callous. And it sounds a bit like you’re saying “Shut up you dumb liar — this chart says you’re fine.”

 

Of course, there’s a difference between someone feeling that their personal economic situation is bad and feeling that the economy, as a whole, is bad. There’s also a difference between thinking that the economy is bad and thinking that it’s the president’s fault. Most people probably answer polls about economics based on their general vibes about how things are going, especially personally. Plus: Things could always be better, right? We’d all prefer more money! Economic polls will likely skew negative in any society short of a perfect utopia in which the very concept of human desire is but a distant memory.

 

Still, some observers act as though voter dissatisfaction proves that the president’s policies are bad. The GOP — obviously — is running with this concept far past the point of sanity. The far left is doing the same. But even observers without an obvious political ax to grind sometimes make too strong of a connection between voters’ perceptions and Biden’s policies. That’s what Dean Baker and Ben Winck do in wonky articles that I think were good-faith attempts to set the record straight, but that almost certainly bear no resemblance to the thought process most people go through when answering polls about the economy. The reality is that there are only two types of voters: Those who forgot about the CHIPS Act and those who never knew about it to begin with. Voters’ economic opinions may roughly track the general state of the economy (usually!), but basically nobody tracks a president’s performance the way they would track a quarterback on their fantasy football team.

 

What would “good” economic policies in the eyes of the voters even look like? Well, they want low taxes, high spending, and no deficits. They want robust growth and no inflation, but they also think that the technology that could make that possible “takes away jobs”. If the Fed raises interest rates to hold down inflation, people get mad about high mortgage rates. People want a high minimum wage and less offshore manufacturing, but they also want basic goods and services to be dirt cheap. They want government projects to be quick and inexpensive, but demand that those project use American goods and union labor and also satisfy a million other ancillary goals. At the moment, they want prices to go down, but don’t realize that that would be bad. The most deranged incel’s expectations for a girlfriend are more reasonable than the average American’s expectations for the economy.

So what?

 

Well, first: Personally, I’d stop trying to make sense of these polls. They’re not going to make sense. They are a puzzle created by a demon designed to drive political operatives insane. Democrats should seek better messaging on the economy because that’s always a good idea, and my expert analysis is that it will either work or it won’t.

 

Second: The best political strategy is probably to pursue good economic policies, not popular ones. A president will be judged by the overall state of the economy, and the popularity of their individual policy choices probably won’t matter much. Matthew Yglesias noted that the recent bout of inflation — which was global and mostly driven by events beyond anyone’s control — contributed to incumbents losing elections around the world. Voters didn’t decide that left-wing or right-wing policies were to blame — they just decided that they didn’t like the situation and threw the bums out. To the extent that policy makers control economic conditions, their optimal survival strategy is probably to pursue sound policy — popularity be damned — and hope for the best.

 

People who lead pro sports teams have an expression: “If you listen to the fans, pretty soon you’ll be one of them.” That’s probably true. Fans love to b!^@h and moan about every move their team makes, but what they really want is to win. A coach or general manager who wins will be popular, regardless of methods, and one who loses will be fired before they can say “but I did everything you wanted!” Presidencies are probably the same — it’s about results, not process. With that being true, presidents and other policy makers probably shouldn’t heed the preferences of people who, if we’re being perfectly honest, don’t really know what they’re talking about.

The primary problem with this is that Trump voters currently employed, making 6 figures, who locked in 3% mortgage rates and who's incomes are rising at the fastest pace in decades will never vote differently. Their political opinions are divorced from reality.

 

It's why, no matter what Biden does, he's not going to be favored to win next year. It's a 45/55 split favoring Trump and that's probably his best case scenario. If gas goes up $.10 a gallon next October, he's probably toast. 

[Moiraine]

I can’t explain how the economy is bad, but I’m going to vote for a Trump-for-life presidency and the end of our government over it. 

[DevoHusker]

 

 

[nic]

This is an interesting statement from Disney in their 10-K. 

 

The 10-K stated, "We face risks relating to misalignment with public and consumer tastes and preferences for entertainment, travel and consumer products, which impact demand for our entertainment offerings and products and the profitability of any of our businesses." 

"Further, consumers’ perceptions of our position on matters of public interest, including our efforts to achieve certain of our environmental and social goals, often differ widely and present risks to our reputation and brands," Disney wrote. 

Disney honchos added that "the success of our businesses depends on our ability to consistently create compelling content" and "our revenues and profitability are adversely impacted when our entertainment offerings and products, as well as our methods to make our offerings and products available to consumers, do not achieve sufficient consumer acceptance."

[BigRedBuster]

I found this map interesting.  I didn't necessarily agree with the comment in the tweet it's from, so I'm not going to post that.  

[Archy1221]

15 minutes ago, BigRedBuster said:

I found this map interesting.  I didn't necessarily agree with the comment in the tweet it's from, so I'm not going to post that.  

What’s it telling you? I have my thoughts which I will reply with but wanted to get your view

[BigRedBuster]

6 minutes ago, Archy1221 said:

What’s it telling you? I have my thoughts which I will reply with but wanted to get your view

That what political party dominates a state isn't a big determining factor right now on what state is doing well or suffering.  You see some red states doing very well and some red states suffering the most.  Same with blue states.

 

I'm guessing it has more to do with what the major industries are in each state.

 

I'm very surprised at where Nebraska is.  I would be interested in knowing what industries are driving that.

[commando]

16 minutes ago, BigRedBuster said:

That what political party dominates a state isn't a big determining factor right now on what state is doing well or suffering.  You see some red states doing very well and some red states suffering the most.  Same with blue states.

 

I'm guessing it has more to do with what the major industries are in each state.

 

I'm very surprised at where Nebraska is.  I would be interested in knowing what industries are driving that.

it kind of looks like being in the grain belt has some advantages.

[Archy1221]

30 minutes ago, BigRedBuster said:

That what political party dominates a state isn't a big determining factor right now on what state is doing well or suffering.  You see some red states doing very well and some red states suffering the most.  Same with blue states.

 

I'm guessing it has more to do with what the major industries are in each state.

 

I'm very surprised at where Nebraska is.  I would be interested in knowing what industries are driving that.

All I was gonna say about it was energy prices took a jump from beginning of Q1-end of Q3.   USO was up like 25% or something in that timeframe.  A lot of oil/energy producing states at the top in that graph. 

[BigRedBuster]

15 minutes ago, commando said:

it kind of looks like being in the grain belt has some advantages.

Even moreso, the plains states.