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Old 01-10-2021, 04:16 PM   #101
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One of the reasons I keep a relatively low equity position is so that I worry less about the ups and downs of the markets. Yes, that has cost me growth - but it was growth I don't need to make my plan work. What I worry about is big changes as we are seeing now, what with the uncertainty caused by COVID19 - and other stuff. As always, YMMV.
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So much bullish sentiment
Old 01-10-2021, 06:03 PM   #102
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So much bullish sentiment

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Originally Posted by G8tr View Post
Indeed it has. But that's in regard to the domestic economy. What we don't know is whether the incoming administration will bleed off some of the recently created wealth based on that anticipation.


Or create more wealth. Let’s not slip in politics, please. Too toxic.
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Old 01-10-2021, 06:12 PM   #103
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As I pointed out in a couple of other threads, the price of industrial metals, i.e. copper, tin, zinc, iron ore, has been rising. Same with rock phosphate and urea for fertilizer. These are still far from their all-time high, but are higher than 1 year ago, even pre-Covid.

The world economy is still recovering, so I don't think the rise of commodity prices is due to higher demand, but rather due to lack of supply. Will supply improve soon?

Just yesterday, I read of Toyota not being able to produce pickup trucks due to lack of some semiconductor chips.

When will higher commodity prices get reflected in the PPI? How high will the Fed let it go until it raises interest rates?

I don't know the answer to any of that, so can only keep an eye on new developments. No need to sell anything at this point.
Higher commodity prices are a good sign for stocks. "Inflation" does not denote higher prices here and there, it denotes widespread price growth overall. In particular wages.

I agree this does bear watching and it is the thing I am most concerned about.
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Old 01-10-2021, 08:02 PM   #104
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The chart below tells me inflation is not a current reality.

Capacity "lost" due to the events of early 2020 is easily replaced, because the only thing missing is labor. Hire the labor and the capacity returns. The fixed assets (property, plant and equipment) were in place on December 31, 2019, producing at all time high levels of output in many (most?) industries. I'm not concerned about supply in the medium term.

An argument can be made that there is more capacity available than ever before, for work that can be done from home. This removes from concern the intellectual part of the economy. It has never been easier to do certain tasks such as hold meetings, make decisions, analyze data and trade stocks.

Short term supply increase for goods producing companies needs workers to be re-employed, and if any price blips or supply outages occur, they will be short lived in my view. I see it as friction related to getting the economy fully back into gear.

Supply in the long term is a normal part of economic and capacity planning for any company as things ebb and flow.

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Old 01-11-2021, 06:34 AM   #105
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OFF TOPIC: Amazon has TT Delux for $40 now. Being a gun slinging trader I bought it.

https://smile.amazon.com/gp/product/...D3J0WMC8&psc=1
Right. The Dec 26 deal threw in a $10 gift card kick back. $40 still ain't bad.
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Old 01-11-2021, 09:32 AM   #106
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Except on Amazon only on Dec 26.
Wasn’t that $30 for Deluxe, not Premier?

Premier is usually quite a bit more expensive.
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Old 01-11-2021, 09:37 AM   #107
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Wasn’t that $30 for Deluxe, not Premier?

Premier is usually quite a bit more expensive.
See my link above to the Amazon $40 offer of Delux Fed + State with separate e-file fee for State. Last year it was $15 to e-file the State forms.
Premier is $54.90.
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Old 01-11-2021, 09:43 AM   #108
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Pelosi getting pregnant at her age of 80? That would be a true miracle.
Ah, more flashbacks to pointless teachings of law school: "The Fertile Octogenarian"
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Old 01-11-2021, 09:43 AM   #109
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See my link above to the Amazon $40 offer of Delux Fed + State with separate e-file fee for State. Last year it was $15 to e-file the State forms.
Premier is $54.90.
Joe Wras was making fun of ERs scrambling for “free” TurboTax which he valued at $30 on Dec 26. I simply pointed out that the “free” TurboTax being offered is actually TurboTax Premier (not Deluxe) which is more expensive – usually at least ~$55.

I see that TT Deluxe is still $30 for the no state versions both at Amazon and Costco, $40 with state.
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Old 01-11-2021, 09:48 AM   #110
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Oh, I thought the Fidelity free deal was Deluxe. I stand corrected and will step aside and not agitate anymore. Sincerely. My apologies.
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Old 01-11-2021, 09:58 AM   #111
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Oh, I thought the Fidelity free deal was Deluxe. I stand corrected and will step aside and not agitate anymore. Sincerely. My apologies.
I fear your reputation as a TurboTax pricing expert has been severely and permanently damaged. But we will accept your apology.
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Old 01-11-2021, 03:01 PM   #112
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The chart below tells me inflation is not a current reality.


I know we've had this discussion before, but I tend not to trust the numbers. I've seen way too many items I usually purchase going up in price over the past 5 years. It may be true that many are offset by lower prices of things I don't buy. Still, for me, inflation is real. It's manageable, but real.

I guess my fear is that at some point, all the liquidity dumped into the system (now absorbed by paper markets) will suddenly start chasing rarer and even more rare goods. I obviously have no special expertise nor insight into inflation. But low inflation at this point of QE and stimulus, etc., etc., seems to fly in the face of the rule of supply and demand. I guess we'll see since YMMV.
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Old 01-11-2021, 04:26 PM   #113
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It’s pretty interesting that we had record low employment numbers, yet wage inflation – which often results in standard inflation, did not increase. We have much lower demand now, both domestic and globally. It’s going to take a while again, for demand to build and unemployment to drop. I just just don’t see inflationary pressures for at least 2 years.
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Old 01-11-2021, 06:52 PM   #114
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It’s pretty interesting that we had record low employment numbers, yet wage inflation – which often results in standard inflation, did not increase. We have much lower demand now, both domestic and globally. It’s going to take a while again, for demand to build and unemployment to drop. I just just don’t see inflationary pressures for at least 2 years.
You make an excellent point. Globalism has kept price inflation at bay, I expect this will continue.

Re-shoring of supply chains figures to cause some upward pressure on pricing and that is a new input. It'll be interesting to see if that becomes a measurable impact.
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Old 01-11-2021, 08:21 PM   #115
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I hope the Western world, meaning the US and Europe, will recover soon from Covid in order to resume normal economic production. China has long been back to normal, and they are cranking.

Saw somewhere earlier that China will overtake the US to become the world's largest economy by 2028, five years earlier than previously forecast, as estimated by the UK-based Centre for Economics and Business Research (CEBR). All this is the effect of Covid.

If somebody else is doing the heavy lifting in manufacturing, while we are busy distributing Covid-aid money to help idle workers, how it it going to help keep prices down?
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Old 01-11-2021, 08:45 PM   #116
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It’s pretty interesting that we had record low employment numbers, yet wage inflation – which often results in standard inflation, did not increase. We have much lower demand now, both domestic and globally. It’s going to take a while again, for demand to build and unemployment to drop. I just just don’t see inflationary pressures for at least 2 years.
Real wages have been trending up since 2013-2014, and took off starting in 2017. That is >12% "real" - above inflation.

https://fred.stlouisfed.org/series/LES1252881600Q
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Old 01-12-2021, 05:41 AM   #117
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What I meant to type was “did not increase standard inflation”. So somehow there are other pressures keeping CPI down, or wage increases have simply not yet had much of an impact. And given the higher unemployment now, probably won’t for a while.

The last part of that graph is a bit weird - indicates the full time lower wage people lost their jobs and mostly higher wage (work at home) folks kept theirs?
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Old 01-12-2021, 08:02 AM   #118
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What I meant to type was “did not increase standard inflation”. So somehow there are other pressures keeping CPI down, or wage increases have simply not yet had much of an impact. And given the higher unemployment now, probably won’t for a while.

The last part of that graph is a bit weird - indicates the full time lower wage people lost their jobs and mostly higher wage (work at home) folks kept theirs?
I think that is right - retail and restaurant layoffs. Though for a good chunk of last year many were collecting more in unemployment compensation than working wages. I don't believe that chart includes unemployment - only full time wages/salaries.

Economic data on FRED is going to have a ton of distortions for 2020/2021.
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Old 01-12-2021, 08:51 AM   #119
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The last part of that graph is a bit weird - indicates the full time lower wage people lost their jobs and mostly higher wage (work at home) folks kept theirs?
This is called the composition effect and is responsible for the appearance of an increase in real wages. From the San Francisco Fed a few months ago https://www.frbsf.org/economic-resea...f-wage-growth/


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Despite a sharp spike in unemployment since March 2020, aggregate wage growth has accelerated. This acceleration has been almost entirely attributable to job losses among low-wage workers. Wage growth for those who remain employed has been flat. This pattern is not unique to COVID-19 but is more profound now than in previous recessions. This means that, in the wake of the virus, evaluations of the labor market must rely on a dashboard of indicators, rather than any single measure, to paint a complete picture of the losses and the recovery.
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Old 01-12-2021, 10:00 AM   #120
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Real wages have been trending up since 2013-2014, and took off starting in 2017. That is >12% "real" - above inflation.

https://fred.stlouisfed.org/series/LES1252881600Q
Alas, CV did a real job on wages, especially at the lower levels.
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