Jump to content
View in the app

A better way to browse. Learn more.

Surly Horns

A full-screen app on your home screen with push notifications, badges and more.

To install this app on iOS and iPadOS
  1. Tap the Share icon in Safari
  2. Scroll the menu and tap Add to Home Screen.
  3. Tap Add in the top-right corner.
To install this app on Android
  1. Tap the 3-dot menu (⋮) in the top-right corner of the browser.
  2. Tap Add to Home screen or Install app.
  3. Confirm by tapping Install.

2021 - Is inflation finally back in the conversation?

Featured Replies

  • Replies 8.1k
  • Views 495.9k
  • Created
  • Last Reply

Top Posters In This Topic

Most Popular Posts

  • Bateshorn
    Bateshorn

    The only thing more predictable than the GOP running up huge deficits on tax cuts and military spending, is each one suddenly becoming horrified by deficit spending 5 mins after a Democrat is sworn in

  • PilotsError
    PilotsError

Posted Images

50 bp

And guidance for 50 bps hikes at the next two meetings. Fed trying to play catch up.


Sent from my iPhone using Tapatalk
35 minutes ago, TxTower said:

And guidance for 50 bps hikes at the next two meetings. Fed trying to play catch up.

Time to buy CD's again! 

Huge relief rally in equities as traders think the Fed just might have some balls after all.


Sent from my iPhone using Tapatalk

Quote

“The bottom line is the deficit went up every year under my predecessor before the pandemic and during the pandemic. It has gone down both years since I’ve been here,” Biden said. “Why is it important? Because bringing down the deficit is one way to ease inflationary pressures.”

Pepperidge farms remembers when people claimed govt spending had nothing to do with it. 

11 minutes ago, 52-80 said:

Pepperidge farms remembers when people claimed govt spending had nothing to do with it. 

lots of ins, lots of outs, lots of whathaveyous

12 hours ago, Incredulity said:

lots of ins, lots of outs, lots of whathaveyous

its very fluid

18 hours ago, TxTower said:

Huge relief rally in equities as traders think the Fed just might have some balls after all.


Sent from my iPhone using Tapatalk

it was the opposite.  we were going lower during his prepared remarks and in his Q&A until he said they weren't considering 75 basis point hikes.  immediately rates sold off and the market went up.  the longer dated rates aren't justifiable without a couple 75 bp increases. 

it was the opposite.  we were going lower during his prepared remarks and in his Q&A until he said they weren't considering 75 basis point hikes.  immediately rates sold off and the market went up.  the longer dated rates aren't justifiable without a couple 75 bp increases. 

We needed 75 bps hike to combat increasingly entrenched inflation. Markets coming to terms with that today. There will be blood.


Sent from my iPhone using Tapatalk
2 minutes ago, TxTower said:


We needed 75 bps hike to combat increasingly entrenched inflation. Markets coming to terms with that today. There will be blood.


Sent from my iPhone using Tapatalk

They should have done 2 straight full point hikes and ripped the bandaid off.  I think the market would have reacted better to that than this limey ass shit we're trying to pull now.  

2 minutes ago, Trey3216 said:

They should have done 2 straight full point hikes and ripped the bandaid off.  I think the market would have reacted better to that than this limey ass shit we're trying to pull now.  

Agree.  Everyone knows it’s going to take a lot  higher rate to slow things down and the fed is moving too slowly.  As usual.

 

 Quantitative easing has stopped, right?  Are those assets being sold too?

2 minutes ago, Hefeweizen said:

Quantitative easing has stopped, right?  Are those assets being sold too?

"Reviewing the balance sheet"

 

4 minutes ago, Hefeweizen said:

 Quantitative easing has stopped, right?  Are those assets being sold too?

not sold.  they "refresh" their purchases every period, they're decreasing those purchase amounts going forward. 

not sold.  they "refresh" their purchases every period, they're decreasing those purchase amounts going forward. 

Starting in June.

Fed is 6-8 months behind in stopping Open Market purchases and shrinking the balance sheet. Now they’re behind in raising rates.

Consumer spending is still strong and near full employment so they could’ve stopped OM purchases and started to shrink the balance sheet long ago. They pussy footed around too long and now they’re going to have to pull a Volker to contain inflation. But they can’t do that either without ballooning the deficit with carry costs. Rock and a hard place. Inflation may be here to stay for awhile.


Sent from my iPhone using Tapatalk
24 minutes ago, Trey3216 said:

They should have done 2 straight full point hikes and ripped the bandaid off.  I think the market would have reacted better to that than this limey ass shit we're trying to pull now.  

They're trying to manage a "soft landing"....which of course will be an ass-over-teakettle disaster.  

Just now, BabaYaga said:

They're trying to manage a "soft landing"....which of course will be an ass-over-teakettle disaster.  

No doubt.  I can understand the thought process, but it usually never works.  Wish I had sold my house about 6 weeks ago and collected that equity.  Gonna be a lot of $$ to be made in the market riding these waves up and down the next few weeks/months.  

13 minutes ago, TxTower said:


Starting in June.

Fed is 6-8 months behind in stopping Open Market purchases and shrinking the balance sheet. Now they’re behind in raising rates.

Consumer spending is still strong and near full employment so they could’ve stopped OM purchases and started to shrink the balance sheet long ago. They pussy footed around too long and now they’re going to have to pull a Volker to contain inflation. But they can’t do that either without ballooning the deficit with carry costs. Rock and a hard place. Inflation may be here to stay for awhile.


Sent from my iPhone using Tapatalk

The high inflation and low rates is by design, they are inflating the debt away. It’s financial repression. 

16 minutes ago, TxTower said:


Starting in June.

Fed is 6-8 months behind in stopping Open Market purchases and shrinking the balance sheet. Now they’re behind in raising rates.

Consumer spending is still strong and near full employment so they could’ve stopped OM purchases and started to shrink the balance sheet long ago. They pussy footed around too long and now they’re going to have to pull a Volker to contain inflation.


Sent from my iPhone using Tapatalk

 

expanding til march was cowardly.  

I've read roughly 60,000 posts between here and shaggy that said our deficit doesn't matter. Oops. 

I've read roughly 60,000 posts between here and shaggy that said our deficit doesn't matter. Oops. 

It matters when you need to raise rates to combat runaway inflation.

Financial repression indeed. Savers still getting bent over to benefit Borrowers and the Govt. Consumers to pay with higher prices on everyday goods and services.


Sent from my iPhone using Tapatalk
1 hour ago, Cheeseweasel said:

"Reviewing the balance sheet"

 

The balance sheet has bounced between $8.9T and $9T since late January.

 

14 minutes ago, bernorange said:

The balance sheet has bounced between $8.9T and $9T since late January.

 

"After further review, the ruling on the field stands"

This is what it looks like when the markets lose confidence in the Fed.


Sent from my iPhone using Tapatalk

44 minutes ago, TxTower said:

This is what it looks like when the markets lose confidence in the Fed.


Sent from my iPhone using Tapatalk

Confidence that they know what they’re doing?

Or confidence that they’re in control of the situation? 
 

Imo 2 different things. The first can be corrected. 2nd obviously not. 

9 hours ago, StruggleBus said:

I've read roughly 60,000 posts between here and shaggy that said our deficit doesn't matter. Oops. 

@David Dennison

come own your barf.

 

 

<THUD!>

Next shoe... worker output down 7.5%.  Worst since... wait for it... 1947.   1947?  Hol-ee shit!

https://www.cnbc.com/2022/05/05/labor-productivity-fell-7point5percent-in-the-first-quarter-the-fastest-rate-since-1947.html

Labor costs way up, which sometimes can be a good thing, but in this case it's not higher wages... more likely the enormous benefit costs of the covid surge in Q1.  Since general salary/wage costs only rose about 1.4% in the last measurement out (Q4 2021) and we know inflation is bouncing along at least 6%, most of the labor costs, like LDH cholesterol, are probably due to "bad" factors (the Great Resignation, increases in insurance and benefits to keep up with the pantomimic, etc.).  We can assume that Q2 didn't see spectacular wage increases, either.  Eventually this will cause companies to produce less... and workers will be culled. The jobs numbers for last week were worse than expected, tough they're still holding out.

Anyway, taken with the decline in worker output, the spiral has started.  The question is will it stop?

Not a good report to give confidence against a recession.

49 minutes ago, phdhorn said:

<THUD!>

Next shoe... worker output down 7.5%.  Worst since... wait for it... 1947.   1947?  Hol-ee shit!

https://www.cnbc.com/2022/05/05/labor-productivity-fell-7point5percent-in-the-first-quarter-the-fastest-rate-since-1947.html

Labor costs way up, which sometimes can be a good thing, but in this case it's not higher wages... more likely the enormous benefit costs of the covid surge in Q1.  Since general salary/wage costs only rose about 1.4% in the last measurement out (Q4 2021) and we know inflation is bouncing along at least 6%, most of the labor costs, like LDH cholesterol, are probably due to "bad" factors (the Great Resignation, increases in insurance and benefits to keep up with the pantomimic, etc.).  We can assume that Q2 didn't see spectacular wage increases, either.  Eventually this will cause companies to produce less... and workers will be culled. The jobs numbers for last week were worse than expected, tough they're still holding out.

Anyway, taken with the decline in worker output, the spiral has started.  The question is will it stop?

Not a good report to give confidence against a recession.

Wait.  How does a one-off benefit cost in Q1 become a spiral?  Or am I missing something.

1 hour ago, DefinitelyNotHollywoodColt said:

Holy shit the fiscal conservatives have returned lmao

Here’s another one of them. 

3 hours ago, DefinitelyNotHollywoodColt said:

Holy shit the fiscal conservatives have returned lmao

You rang?  I've been in hiding since 2001.

7 hours ago, Upgrayedd said:

Wait.  How does a one-off benefit cost in Q1 become a spiral?  Or am I missing something.

It hasn't "become" one as you say.  The processes are aligning for it to happen... they've started (IMHO) but not to the point of no return.  This is exactly what Powell said the other day (I had to make a .jpg of this because it's behind a paywall):

image.png.cf8d1b19dc9ece46bba2e62db4bb1f14.png

https://www.marketplace.org/2022/05/04/is-a-wage-price-spiral-driving-inflation/

This is more circular than linear (i.e. the last thing here links back up to the first), but in a nutshell:

Labor costs go up in tight labor market→wages go up but not as much as inflation→worker output declines→prices have to go up as oversupply occurs→labor costs go up again→output diminishes→prices go up again... (yada yada yada).  Eventually economic growth shrinks (like Q1).

The bad output figure might be a factor in creating a recession driven by the spira; - if it continues.   So far consumer spending is holding it up, driven largely by travel and stuff people couldn't do for 2 years, but that might eventually go away if prices get to the point where people do what they always do - stuff like put off house improvements, decide not to take that vacation after all, etc.

1 hour ago, DefinitelyNotHollywoodColt said:

here you'll find a list of posts made by @StruggleBus @workswithseed @Incredulity @Immaculate Vibes @Cheeseweasel @BabaYaga  decrying the explosion in our national debt from 2016-2020:

 

 

 

 

 

 

Cmon man. 
 

13 minutes ago, StruggleBus said:

Embrace the fact that you were dead fucking wrong. 

I was told this time would be different. 
 

8 hours ago, phdhorn said:

<THUD!>

Next shoe... worker output down 7.5%.  Worst since... wait for it... 1947.   1947?  Hol-ee shit!

https://www.cnbc.com/2022/05/05/labor-productivity-fell-7point5percent-in-the-first-quarter-the-fastest-rate-since-1947.html

Labor costs way up, which sometimes can be a good thing, but in this case it's not higher wages... more likely the enormous benefit costs of the covid surge in Q1.  Since general salary/wage costs only rose about 1.4% in the last measurement out (Q4 2021) and we know inflation is bouncing along at least 6%, most of the labor costs, like LDH cholesterol, are probably due to "bad" factors (the Great Resignation, increases in insurance and benefits to keep up with the pantomimic, etc.).  We can assume that Q2 didn't see spectacular wage increases, either.  Eventually this will cause companies to produce less... and workers will be culled. The jobs numbers for last week were worse than expected, tough they're still holding out.

Anyway, taken with the decline in worker output, the spiral has started.  The question is will it stop?

Not a good report to give confidence against a recession.

Hiking right into a recession.  
 

So then the question becomes when do we actually start new QE? I’ll say Q1 2023. Likely with still elevated inflation, maybe not 8%. Brrrr

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

Configure browser push notifications

Chrome (Android)
  1. Tap the lock icon next to the address bar.
  2. Tap Permissions → Notifications.
  3. Adjust your preference.
Chrome (Desktop)
  1. Click the padlock icon in the address bar.
  2. Select Site settings.
  3. Find Notifications and adjust your preference.