Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 12-17-2015, 01:23 PM   #61
Recycles dryer sheets
Theseus's Avatar
 
Join Date: Aug 2013
Posts: 484
Quote:
Originally Posted by ziggy29 View Post
Or health care?

Seriously, though, the crashing of oil prices has had a massive overall impact of inflation in macro terms. It has a ripple effect on a lot of things we buy, but it doesn't feel noticeable with things like food, and *certainly* not medical care.
Businesses with energy intensive processes are undoubtedly breathing a bit easier these days. Hopefully that shows up as improved earnings.
__________________

__________________
Theseus is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-17-2015, 02:09 PM   #62
Recycles dryer sheets
 
Join Date: May 2015
Location: Atlanta suburbs
Posts: 347
Quote:
Originally Posted by Hyper View Post
I have a hard time believing that many people (already retired) actually invest in the market when the rates are too low. With volatility, many may not be able to lose any money so I would think they adjust their life style to compensate for no returns instead of risking further loss.
Myself, I would invest considerably in the market if I were getting some kind of return on safe investments. Because I am barely getting any return I am not willing to invest in a volatile market. I'm comfortable so why donate more than I've already lost?
I don't believe the fed has the little guy's best interest in mind at all.
On the contrary, most people who have a 30-40 year outlook probably will invest a portion of their portfolio in the stock market for growth and to counter inflation. Low gains (or losses) this year doesn't mean this is the outlook for the next 30-40 years.

At least one member of a 65 year old couple will likely live till 95, and many of us retired folks are younger than that.
__________________

__________________
DEC-1982 is offline   Reply With Quote
Old 12-17-2015, 02:37 PM   #63
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,369
Quote:
Originally Posted by DEC-1982 View Post
On the contrary, most people who have a 30-40 year outlook probably will invest a portion of their portfolio in the stock market for growth and to counter inflation. Low gains (or losses) this year doesn't mean this is the outlook for the next 30-40 years.

At least one member of a 65 year old couple will likely live till 95, and many of us retired folks are younger than that.

Not disputing what you say, but that reminds me of a $500 hockey bet I had in Tahoe a few years ago. Devils were up 2 goals going in the 3rd and at start of period they flashed on screen Devils 31-0 when leading heading into the 3rd period. I am thinking, well this is money in the bank...Well 20 minutes later they were 31-1 and I am out $500! Sometimes history doesn't repeat itself.
Caveat...I have a good pension, so that skews my thinking considerably. But the only thing I can stomach mostly is high yields, above common in capital structure, monopoly, and guaranteed ROE.
Fortunately most people here are not investing wimps like me...


Sent from my iPad using Tapatalk
__________________
Mulligan is offline   Reply With Quote
Old 12-17-2015, 02:45 PM   #64
Thinks s/he gets paid by the post
mpeirce's Avatar
 
Join Date: Feb 2012
Location: Columbus area
Posts: 1,589
Quote:
Originally Posted by frank View Post
no sign of inflation, that one always gets me. where do these people buy their groceries?
It's not a secret. Have a look:

Consumer Price Index (CPI)
__________________
mpeirce is offline   Reply With Quote
Old 12-17-2015, 04:27 PM   #65
Recycles dryer sheets
 
Join Date: May 2015
Location: Atlanta suburbs
Posts: 347
Quote:
Originally Posted by Mulligan View Post
Not disputing what you say, but that reminds me of a $500 hockey bet I had in Tahoe a few years ago. Devils were up 2 goals going in the 3rd and at start of period they flashed on screen Devils 31-0 when leading heading into the 3rd period. I am thinking, well this is money in the bank...Well 20 minutes later they were 31-1 and I am out $500! Sometimes history doesn't repeat itself.
Caveat...I have a good pension, so that skews my thinking considerably. But the only thing I can stomach mostly is high yields, above common in capital structure, monopoly, and guaranteed ROE.
Fortunately most people here are not investing wimps like me...


Sent from my iPad using Tapatalk
Mulligan, you have given me cause for thought. Let me clarify my earlier post.

The populace is diverse. There are people with defined benefit pension plans, others with defined contribution pension plans and others with no pension. There are people with rentals, others with annuities, and there are other ways to produce a fixed income stream like laddered CDs, bond income and stock or preferred stock dividends.

In a similar way, there is diversity with some people with high risk tolerance and others with lower risk tolerance.

For a sub-section of folks with no pension, no annuity, no rental, no defined income streams, the choice to invest their savings comes down to some combination of stocks, bonds, Treasuries, Savings Bonds, CDs, commodities etc to produce an income stream from that, possibly with sales along the way to add to that income. For many of this sub-section of people who need money for 30 or more years, they have to invest some portion in the stock market in order to outpace inflation and taxes.
__________________
DEC-1982 is offline   Reply With Quote
Thoughts on the Fed Rate increase?
Old 12-17-2015, 08:28 PM   #66
Full time employment: Posting here.
Al in Ohio's Avatar
 
Join Date: Jun 2013
Location: Columbus OH
Posts: 688
Thoughts on the Fed Rate increase?

Quote:
Originally Posted by explanade View Post
It's going against the tide of every other nation. Some like Japan have tried to tighten in recent years, only to be forced to go back.



Some "market strategists" are saying it's still premature, with no sign of inflation at all.

It's way overdue because they went way down to an unhealthy low rate to begin with.

As for " no inflation"?. Don't go by the CPI. That's been disputed as a poor indicator. It's the governments way of sugar coating the boogeyman so it seems less harmful to us. Now it's even less informative as its heavily skewed by bargain basement gas prices.


Eggs are more than 25% higher than last year, milk costs noticeably more, and have you gone out to eat at any restaurants lately? They are charging a lot more for meals. Prices have risen and all the other indicators for economic growth went up within the last two months whereas summer was kinda flat. It was definitely overdue.


Sent from my iPad using Early Retirement Forum
__________________
Ohio INTJ ENG ER Hopeful
Al in Ohio is offline   Reply With Quote
Old 12-17-2015, 08:38 PM   #67
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,405
But those are volatile commodities. Their prices go up and down.

Sustained inflation requires rising wages, which has not yet happened.
__________________
explanade is online now   Reply With Quote
Old 12-17-2015, 08:40 PM   #68
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,369
Quote:
Originally Posted by Al in Ohio View Post
It's way overdue because they went way down to an unhealthy low rate to begin with.

As for " no inflation"?. Don't go by the CPI. That's been disputed as a poor indicator. It's the governments way of sugar coating the boogeyman so it seems less harmful to us. Now it's even less informative as its heavily skewed by bargain basement gas prices.


Eggs are more than 25% higher than last year, milk costs noticeably more, and have you gone out to eat at any restaurants lately? They are charging a lot more for meals. Prices have risen and all the other indicators for economic growth went up within the last two months whereas summer was kinda flat. It was definitely overdue.


Sent from my iPad using Early Retirement Forum

Beef is heading down, and the chicken flocks should be getting stronger fairly soon....Lets see if we get some of that back in our pockets soon. I am not holding my breath. But, being single food isn't a big percentage of my budget, so I am not too bothered by it.


Sent from my iPad using Tapatalk
__________________
Mulligan is offline   Reply With Quote
Old 12-17-2015, 09:06 PM   #69
Full time employment: Posting here.
 
Join Date: Jan 2005
Location: northern Michigan
Posts: 731
Quote:
Originally Posted by Al in Ohio View Post


Eggs are more than 25% higher than last year, milk costs noticeably more, and have you gone out to eat at any restaurants lately? They are charging a lot more for meals. Prices have risen and all the other indicators for economic growth went up within the last two months whereas summer was kinda flat. It was definitely overdue.
Well, those things may be true, but the Fed's own data contradicts their case for a rate increase. Back in Sept., they forecast that inflation in 2016 would be 1.7%. Then just recently, they revised it to 1.6%. So, either they don't believe their own data, or they raised the rate for other reason(s).
The Fed's own data contradicts its case for raising interest rates - Vox
__________________
RAE is offline   Reply With Quote
Old 12-18-2015, 07:33 AM   #70
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 3,040
The main reason the Fed had to raise rates because they talked far too long about raising them. It was a face saving event. If they didn't do it, they are all talk, no action.

The second reason is because all of the Feds members, the national banks, needed a larger interest rate spread. This creates a LOT of money for banks. As bank stock prices go up, and bank executives make more money. HELOCs, ARMs, and other loans are adjusted based on the current fed funds rate. There are a lot of loans out there, and a .25% increase in the terms is a huge amount of money.

A third reason is the Fed now pays the member banks an extra .25% (now it's .5%) to leave the banks overnight surplus funds at the Fed. The Banks can deposit their extra money that they have not yet loaned out at the Fed, and get .5% on their money. Risk free. As much as they can put there. Try and get a 1-day rate of .5% for yourself. It's difficult.

It had noting to do with inflation, as we are in a deflationary spiral. Electronics get cheaper, oil gets cheaper, the USD get stronger which makes imported goods even more cheaper, etc.

There is a labor surplus in the USA, and the World, and it is getting worse. We are getting more and more efficient. We create less jobs than we have people to fill them. We import cheaper tech and manual labor. Companies have plenty of workers applying for the jobs they have available, there is no need to raise wages. If wages rise, more technology is produced to eliminate jobs, or more jobs get imported. Or jobs exported.

The stock market may be stagnant for a long time, be ready.

Quote:
Originally Posted by Al in Ohio View Post
They should have started with a full 100 basis points. This is wimpy start to a long overdue rate tightening. It will be nice when we get over 5 percent again.
Congress can just mandate that Banks pay a minimum of 5% on all deposits. That would make everything all better.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is online now   Reply With Quote
It's all about future news
Old 12-18-2015, 08:17 AM   #71
Thinks s/he gets paid by the post
DrRoy's Avatar
 
Join Date: Dec 2015
Location: Michigan
Posts: 1,713
It's all about future news

To your official question, the Fed pretty much said what they were going to do, they did what they said, so the market had mostly priced in what was done but rallied initially just from having the uncertainty removed. From here it is going to be reaction to future news on the economy, earnings, oil, etc.

I think your opening comment on your investments not doing much this year raises a different but valid issue, which is how we react to market movements (or the lack thereof) and to our investments. I agree that this year's flat market has been annoying, but some years are just like that. We need to accept that some market years are flat, which is better than a decline, and that over time markets have eventually gained due to rising population, productivity, and economic activity. It says nothing about next year however, which could be up, down, or flat again.
__________________
DrRoy is offline   Reply With Quote
Old 12-18-2015, 08:50 AM   #72
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
Quote:
Originally Posted by HFWR View Post
Market is reacting positively, so far...
Guess the market lost changed its mind...

As for CPI, it is what it is. The BLS site lists other inflation indices as well. It's just that those other indices don't have as much visibility to the media/public.

None, however, are designed to exactly model someone's personal rate of inflation.
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 12-18-2015, 09:16 AM   #73
Full time employment: Posting here.
 
Join Date: Jan 2005
Location: northern Michigan
Posts: 731
Quote:
Originally Posted by Senator View Post
The main reason the Fed had to raise rates because they talked far too long about raising them. It was a face saving event. If they didn't do it, they are all talk, no action.

The second reason is because all of the Feds members, the national banks, needed a larger interest rate spread. This creates a LOT of money for banks. As bank stock prices go up, and bank executives make more money. HELOCs, ARMs, and other loans are adjusted based on the current fed funds rate. There are a lot of loans out there, and a .25% increase in the terms is a huge amount of money.

A third reason is the Fed now pays the member banks an extra .25% (now it's .5%) to leave the banks overnight surplus funds at the Fed. The Banks can deposit their extra money that they have not yet loaned out at the Fed, and get .5% on their money. Risk free. As much as they can put there. Try and get a 1-day rate of .5% for yourself. It's difficult.

It had noting to do with inflation, as we are in a deflationary spiral. Electronics get cheaper, oil gets cheaper, the USD get stronger which makes imported goods even more cheaper, etc.

There is a labor surplus in the USA, and the World, and it is getting worse. We are getting more and more efficient. We create less jobs than we have people to fill them. We import cheaper tech and manual labor. Companies have plenty of workers applying for the jobs they have available, there is no need to raise wages. If wages rise, more technology is produced to eliminate jobs, or more jobs get imported. Or jobs exported.

The stock market may be stagnant for a long time, be ready.
Senator - agreed. And this then leads to the next question, which is - how long do you think it will be before the Fed is basically forced to go back to ZIRP? My guess is, not all that long - I think it will happen sometime in 2016. Japan and the European Central Bank both tried to raise interest rates prematurely in recent years, with very bad outcomes. The problem is that Bernanke got everyone hooked on basically free money, and once you do that, there is no easy way to get out of the trap. This is a grand experiment, as they've never had to try to get out of this kind of situation before, and get back to normalcy. And to make things worse, if the Fed does have to admit that they screwed up, and go back to ZIRP, they are basically then admitting that the economy sucks, and that we are in a deflationary spiral, and they have no idea how to get out of this mess. The markets will not react well to that.........
__________________
RAE is offline   Reply With Quote
Old 12-18-2015, 10:41 AM   #74
Thinks s/he gets paid by the post
 
Join Date: Aug 2006
Posts: 1,356
Quote:
Originally Posted by Al in Ohio View Post
It's way overdue because they went way down to an unhealthy low rate to begin with.

As for " no inflation"?. Don't go by the CPI. That's been disputed as a poor indicator. It's the governments way of sugar coating the boogeyman so it seems less harmful to us. Now it's even less informative as its heavily skewed by bargain basement gas prices.


Eggs are more than 25% higher than last year, milk costs noticeably more, and have you gone out to eat at any restaurants lately? They are charging a lot more for meals. Prices have risen and all the other indicators for economic growth went up within the last two months whereas summer was kinda flat. It was definitely overdue.


Sent from my iPad using Early Retirement Forum
I'm not sure where you're shopping, but this year every time I go to the grocery store milk is cheaper than it was the last time I was there.

Plunge In Milk Prices Stresses Dairy Farmers - Dairy - News | Agweb.com

Pretty much everyone I hear disputing CPI is noticing the stuff that is going up and ignoring the stuff that is going down. I've never seen anyone keep track of actual data get too far from CPI without having a basket of goods that is pretty different than what most people buy.

Inflation is the lowest it has been in my lifetime. Gas is cheaper than it has been in 10 years, except for a brief little bit at the height of the financial crisis.
__________________
Hamlet is offline   Reply With Quote
Old 12-18-2015, 11:32 AM   #75
Full time employment: Posting here.
 
Join Date: Oct 2009
Posts: 940
I guess my insurance agent, Chubb, didn't get the message on inflation as my home owners insurance (as another anecdotal point) is up 7.3% year over year...


Sent from my iPad using Early Retirement Forum
__________________
LARS is online now   Reply With Quote
Old 12-18-2015, 11:46 AM   #76
Thinks s/he gets paid by the post
 
Join Date: Sep 2006
Posts: 1,685
The Federal Reserve is trying to attempt something that has never been successfully implementing - to get off zero interest rates. So the likelihood of this working is also not too probable. The very business that is created as a result of super low interest rates become imperiled with the rise in rates causing contraction and leading to need for more stimulus. We shall see but it seems to me the economy worldwide is much weaker than it was a year ago and this is not going to help improve economics, only banks that might have upcoming stress.
__________________
Running_Man is offline   Reply With Quote
Old 12-18-2015, 11:58 AM   #77
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,369
Quote:
Originally Posted by Running_Man View Post
The Federal Reserve is trying to attempt something that has never been successfully implementing - to get off zero interest rates. So the likelihood of this working is also not too probable. The very business that is created as a result of super low interest rates become imperiled with the rise in rates causing contraction and leading to need for more stimulus. We shall see but it seems to me the economy worldwide is much weaker than it was a year ago and this is not going to help improve economics, only banks that might have upcoming stress.

Plus, they have never attempted to raise rates so late in a "recovery cycle" along with official inflation at a very low rate. Thank you very much Feds... You are insuring my "long preferreds" stay safe for quite a while.


Sent from my iPad using Tapatalk
__________________
Mulligan is offline   Reply With Quote
Old 12-18-2015, 12:34 PM   #78
Recycles dryer sheets
 
Join Date: Aug 2015
Posts: 340
Quote:
Originally Posted by Al in Ohio View Post
It's way overdue because they went way down to an unhealthy low rate to begin with.

As for " no inflation"?. Don't go by the CPI. That's been disputed as a poor indicator. It's the governments way of sugar coating the boogeyman so it seems less harmful to us. Now it's even less informative as its heavily skewed by bargain basement gas prices.


Eggs are more than 25% higher than last year, milk costs noticeably more, and have you gone out to eat at any restaurants lately? They are charging a lot more for meals. Prices have risen and all the other indicators for economic growth went up within the last two months whereas summer was kinda flat. It was definitely overdue.


Sent from my iPad using Early Retirement Forum
+1. Rent and housing prices went through the roof in some regions while Gas prices are down.
__________________
VFK57 is offline   Reply With Quote
Old 12-18-2015, 01:08 PM   #79
Thinks s/he gets paid by the post
 
Join Date: Feb 2014
Posts: 1,044
They say a 2% inflation rate is stable prices. Sorry but 0% is stable in my book.
__________________
jim584672 is offline   Reply With Quote
Old 12-18-2015, 01:30 PM   #80
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,446
Quote:
Originally Posted by jim584672 View Post
They say a 2% inflation rate is stable prices. Sorry but 0% is stable in my book.
Modern history indicates that economies don't work well at 0% inflation. 2% inflation seems to be the minimum for a healthy growing economy.
__________________

__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Fed member worried about "Violent reaction in the market to rate increase" Lakewood90712 FIRE and Money 15 03-25-2015 02:33 PM
Fed up Fed LuVul Hi, I am... 14 10-16-2014 09:24 AM
Fed Official Jeffrey Lacker says Fed Bond Buying Must End Quickly haha FIRE and Money 3 07-28-2013 05:08 AM
Organic, Grass-fed, Pasture-fed... tmm99 Other topics 24 06-24-2010 11:06 AM
Just Got My Rate Increase Notice. A Bit of Rant MJ Health and Early Retirement 19 09-15-2007 11:09 AM

 

 
All times are GMT -6. The time now is 09:49 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.