Latest Inflation Numbers and Discussion

[NW-Bound]

I thought he said the same number of strokes will be administered, but the force of the blows will be reduced and they will be administered over a longer period of time.

Well, the market turns naughty already. The old spanking regime may have to be reinstituted.

I doubt those traders making millions a year for big institutions are buying and holding.

Right. I was asking how we can learn to be on their side, buy when they buy, and sell when they sell. You don't want to buy when they sell, and sell when they buy.

We just dont have the money they have to work with,,,,,,

Eh, if they make $100B, can you make $1M or even $100K using your lesser capital?

 

[Montecfo]

I thought he said the same number of strokes will be administered, but the force of the blows will be reduced and they will be administered over a longer period of time.

There was really nothing new. The market reacts to part of the statement, ignores the rest.

Will be interesting to see if there is follow through.

 

[explanade]

Only way to be "on their side" is to pay them hefty fees to trade your money.

They probably have access to market makers if they're not market makers themselves that gets them the most precise execution.

I don't know if HF trading is still a thing, with some institutions paying a lot for ultra fast access to real-time markets.

They can make a lot of money just by having a price advantage of a few cents a share.

 

[NW-Bound]

The "Flash Boys" as described in Michael Lewis book try to front-run other traders to pick up a few pennies per share. They have very high trade volumes, and these pennies make a difference.

On the other hand, on a day when a stock may go up/down several dollars, I am asking if one can tell beforehand to pick up these dollars, and not mind the few pennies.

People say that it is not possible to tell what the market will be doing from day to day. But do these big guys know?

 

[audreyh1]

Flash Boys was a great book. I listened to it as an audiobook.

 

[Popeye]

Blue Horseshoe loves Anacott Steel!

 

[ShokWaveRider]

Averaged $123 a month Electricity bills for 2022 compared to $113 for 2021 here in NE Fla. We are all Electric except water heater which is propane. 3,200 sqft home. Florida Power and light. Gas for 2022 averaged $23 per month, down from $30 in 2021. Not too bas methinks.

 

[Montecfo]

Payrolls and wages blow past expectations, flying in the face of Fed rate hikes

New jobs came in at 263K, down from last month, but beating expectations by 63K

Hourly earnings up more than expected.

Unemployment rate flat at 3.7%

Stock futures in freefall (happens every time).

https://www.cnbc.com/2022/12/02/jobs-report-november-2022.html

Nothing here to please the Fed. So maybe we get some better long rates for investment.

 

[bobandsherry]

Payrolls and wages blow past expectations, flying in the face of Fed rate hikes

New jobs came in at 263K, down from last month, but beating expectations by 63K

Hourly earnings up more than expected.

Unemployment rate flat at 3.7%

Stock futures in freefall (happens every time).


Nothing here to please the Fed. So maybe we get some better long rates for investment.

Unemployment is basically back to Nov 2019 levels, as are non-farm payroll numbers. And average salaries should already be expected to go up as government and society overall pushes for that magical $15/hr - which as expected also gets eaten up by inflation. SMH

https://www.bls.gov/news.release/pdf/empsit.pdf

Seasonal workers ramped up for the holidays, 1Q job cuts already announced by some companies. Strange market we have finds people gainfully working, especially around the holidays, to be a bad thing. We keep saying it often enough we'll definitely talk ourself into inflation period, or worse

 

[NW-Bound]

I think the current high inflation is caused by lack of supply more than excessive demand.

To bring supply and demand into balance, it is too difficult to increase supply, such as building new refineries for more diesel fuel and building more products domestically. We only know to squash demand.

I guess the US can learn to eat less and buy fewer things. There's really no need to get that latest iPhone, or get a new TV with 10" more screen, or a faster PC. Oh, lowering the thermostat in the winter and raising it in the summer helps too.

If the above thesis is true, then discretionary spending will be cut first. We already see people not going out to eat as much. Restaurants have to raise prices to survive, which further reduces their clientele. Bleak!

The happy days are over.

 

[JoeWras]

There are so many echos to post WWII, yet it is different. The general culture of work and family was different. You had gun ho GIs coming back, ready to work. Not so sure how many people want to work today -- and that includes me! People are demanding wage increases and getting them. Also after WWII, you had women having babies and not working. Today, there is no baby boom and women are in the workplace as a matter of course. The lack of an upcoming working generation will have huge impacts.

We're in something new, although the supply shocks are very similar. Not sure how this will all play out.

 

[NW-Bound]

Blue Horseshoe loves Anacott Steel!

Good one!

 

[bobandsherry]

We already see people not going out to eat as much. Restaurants have to raise prices to survive, which further reduces their clientele. Bleak!

I know what the newspaper and surveys say, but from my casual observation I'm seeing these are packed to the gills. From basic fast food, to casual dine-in to a steakhouse. I talked to a manager of one restaurant and she said business is still doing "real good".

But I agree with ya on this being a difference inflation. But in addition to it being a supply issue, it's also that the government pumped waaaaayyyy to much free money into the economy to keep it rolling during the initial covid breakout. People who didn't feel the impact (still working) given extra cash to blow. [MOD EDIT]

 

[theo2]

Do you think more people are just living off credit cards?

 

[Koolau]

Been going on for millennia this way. It is just how markets work. It will eventually find sea level.

Yep. "Buy on rumor, sell on fact." Who said that the markets are rational? Over time, it all w*rks out.

 

[Koolau]

I thought he said the same number of strokes will be administered, but the force of the blows will be reduced and they will be administered over a longer period of time.

This is beginning to sound mildly naughty - or is it just me?

 

[Koolau]

Eh, if they make $100B, can you make $1M or even $100K using your lesser capital?

Yes - just as you can in Vegas.

 

[USGrant1962]

I know what the newspaper and surveys say, but from my casual observation I'm seeing these are packed to the gills. From basic fast food, to casual dine-in to a steakhouse. I talked to a manager of one restaurant and she said business is still doing "real good".
...

Yea, I didn't get that comment. Restaurants around here are so crowded nobody goes there anymore. And FRED seems to agree, restaurant sales are up about 30% from pre-covid while CPI is up half that.

https://fred.stlouisfed.org/series/MRTSSM7225USN

 

[bobandsherry]

Yea, I didn't get that comment. Restaurants around here are so crowded nobody goes there anymore. And FRED seems to agree, restaurant sales are up about 30% from pre-covid while CPI is up half that.



https://fred.stlouisfed.org/series/MRTSSM7225USN

The news never let facts get in the way of selling their newspaper or clicks on their content. The Editors obviously have access to same details you do. Seems to be an active effort to talk ourselves into a recession.

 

[audreyh1]

The PPI number was released this morning and came in hotter than expected - 0.3% instead of the 0.1% expected.

While we wait for the Nov CPI report to be released on Dec 13, I thought I’d post some numbers based a recent conversation with Montecfo on the Treasuries thread.

The 12 month unadjusted inflation (Nov 2021 through October 2022) was 7.7%, a drop from much higher 12-month rates earlier in the year.

It’s interesting to see how inflation has trended over the past 6, 4, 3, and 2 months.

Using the cumulative inflation calculator on inflationdata.com

Last 6 months: 3.08% - 6.12% annualized (x2)
Last 4 months: 0.57% - 1.71% annualized (x3)
Last 3 months: 0.59% - 2.36% annualized (x4)
Last 2 months: 0.62% - 3.72% annualized (x6)

As many have said, inflation has clearly peaked, but we aren’t out of the woods yet. And higher inflation, once established, is difficult to get rid of and can take a long time.

2023 should be very interesting…..

 

[Koolau]

The PPI number was released this morning and came in hotter than expected - 0.3% instead of the 0.1% expected.

While we wait for the Nov CPI report to be released on Dec 13, I thought I’d post some numbers based a recent conversation with Montecfo on the Treasuries thread.

The 12 month unadjusted inflation (Nov 2021 through October 2022) was 7.7%, a drop from much higher 12-month rates earlier in the year.

It’s interesting to see how inflation has trended over the past 6, 4, 3, and 2 months.

Using the cumulative inflation calculator on inflationdata.com

Last 6 months: 3.08% - 6.12% annualized (x2)
Last 4 months: 0.57% - 1.71% annualized (x3)
Last 3 months: 0.59% - 2.36% annualized (x4)
Last 2 months: 0.62% - 3.72% annualized (x6)

As many have said, inflation has clearly peaked, but we aren’t out of the woods yet. And higher inflation, once established, is difficult to get rid of and can take a long time.

2023 should be very interesting…..

I know it's anecdotal and personal, but if anything, I would say inflation is increasing where I live (and including what I buy.) The one single thing that has gone down is gasoline. I buy so little of it that it almost doesn't matter. Everything else seems to be accelerating - either that or those that held the line have finally given in (given up?) and raised prices - a lot. Services, food, restaurant meals, insurance, HOA dues, electricity, car repair, prepared foods, etc. YMMV

 

[Car-Guy]

I know it's anecdotal and personal, but if anything, I would say inflation is increasing where I live (and including what I buy.) The one single thing that has gone down is gasoline. I buy so little of it that it almost doesn't matter. Everything else seems to be accelerating - either that or those that held the line have finally given in (given up?) and raised prices - a lot. Services, food, restaurant meals, insurance, HOA dues, electricity, car repair, prepared foods, etc. YMMV

We have noticed the price of eating out (particularly at fast food joints) has taken some pretty big (noticeable) leaps in recent weeks.. It was already high from previous months but now it seems to change almost weekly now.

 

[MichaelB]

The PPI number was released this morning and came in hotter than expected - 0.3% instead of the 0.1% expected.

While we wait for the Nov CPI report to be released on Dec 13, I thought I’d post some numbers based a recent conversation with Montecfo on the Treasuries thread.

The 12 month unadjusted inflation (Nov 2021 through October 2022) was 7.7%, a drop from much higher 12-month rates earlier in the year.

It’s interesting to see how inflation has trended over the past 6, 4, 3, and 2 months.

Using the cumulative inflation calculator on inflationdata.com

Last 6 months: 3.08% - 6.12% annualized (x2)
Last 4 months: 0.57% - 1.71% annualized (x3)
Last 3 months: 0.59% - 2.36% annualized (x4)
Last 2 months: 0.62% - 3.72% annualized (x6)

As many have said, inflation has clearly peaked, but we aren’t out of the woods yet. And higher inflation, once established, is difficult to get rid of and can take a long time.

2023 should be very interesting…..

I think there’s a good chance inflation will stay high (over 5%) for a while longer. The Atlanta Fed wage tracker shows wages are still above 6% (here), and the BLS shows the “food away from home” rate of increase was still 0.9% for October. (here) Both of these point to strong discretionary spending, which feeds inflation.

 

[audreyh1]

I think there’s a good chance inflation will stay high (over 5%) for a while longer. The Atlanta Fed wage tracker shows wages are still above 6% (here), and the BLS shows the “food away from home” rate of increase was still 0.9% for October. (here) Both of these point to strong discretionary spending, which feeds inflation.

Thanks!

 

[Chuckanut]

Gasoline is going down, which is great. But, as we know it can vary quite a bit due to world wide issues regarding oil.

OTOH, my biggest increase next year will probably be taxes. Property tax is going up double digits, car tabs may go down but not as much as they usually do year to year. A new carbon tax will hit us in 2023. There is also a move to increase the sales tax to pay for a new local aquatic center in my area. Various fees charged by government agencies are going up. Insurance on the home and vehicles is going up, I just don't know by how much yet. But friends are seeing double digit percentage increases.

I reduced eating out months ago when the senior plates went up over 25% and/or were just plain eliminated. Happy Hour is now at least $40 for two. Well, I guess it still is far cheaper than dinner for two. My COLA-lite pension will fall behind the COL increase for the 2nd year in a row.

FWIW, despite the rise in interest rates my savings are still falling behind in real terms after inflation and taxes. I will continue to take steps to protect my assets and and increase earnings without taking high risks. Losing one's money on questionable inflation hedges is not a good way to fight inflation.