Reconciling micro observations with macro trends? (is the economy really doing well?)

IMO, the need for diversification is as great today as it ever has been in my lifetime. I take nothing for granted other than my own ignorance of the future.
 
IMO, the need for diversification is as great today as it ever has been in my lifetime. I take nothing for granted other than my own ignorance of the future.


Words to live by! Diversification is one of the few strategies that have served me well. When I've tired to over think it or follow a trend, I've usually lost money. I no longer count on my own "brilliance" to succeed.:LOL:
 
I went to the Mall of America this weekend and it was PACKED! It was raining so I have to keep that in context. The road construction is going on everywhere as usual. Cars are seemingly at all time high volume's on our roads right now again. I don't hear too many people complaining anymore about prices, so maybe wages and inflation are normalizing. Clearly the markets are responding positive as earnings and data come in.
 
There is a new story every night on the news about something that is about to cost our state a ton of money (several stories lately on folks still living in hotels at state expense due to the wildfires on Maui. IIRC it's a billion/year so far)

HECO (our electric company - already the most expensive electricity in the nation) is trying to anticipate the fall out from the Maui fires AND trying to become green by 2045 and fixing crumbling electrical infrastructure. They want to add even more "special categories" to our rate bills. IOW, without ever turning on a light, your light bill is already over $20. So now they want to pass all their poor planing onto rate payers.

The Rail project is an abject failure and almost no one is using it. When it begins to break down due to lack of maintenance, it will get even more expensive.

There was a story last night that we don't have enough condos in the state. What a revelation! Well, it turns out that the COST of building condos here is (wait for it) 56% due to (wait for it) regulations! So more than half the cost of a condo is to be sure there are building permits, environmental assessments, burial ground assessments, traffic assessments, on and on, etc. I still recall our first Walmart being held up for something like 2 years because they found a couple of ancient bones on the site.

Property crime is through the roof. The big complaint that retailers mention: "They cost me $2000 in damage to steal $100 in petty cash or $200 worth of merchandise." The police only catch the thieves if they happen to catch them in the act. Hundreds of such break ins occur and maybe once or twice a year, there is a story of a "ring" being busted. They're all on camera (every business has cameras) but the police don't use the footage to track them down - even though vehicles are always involved and visible.) Guess who ultimately pays for all of this crime.

I could go on, but my point is, on a micro basis, the economy is under a lot of stress. And we are one micro-recession away from a tourism crash which will REALLY be devastating since we now exist on tourism and military - that's it. That's our economy.

Oh, and the Covid money (which has been sustaining our economy) is finally drying up. So there is a "feeling" of "doom" among people here. Things are humming along, but everyone knows that the next shoe to drop could be a state wide disaster. YMMV
I believe PGE here in NorCal is right on par with HECO, a few pennies higher, in fact.
What is the PG&E rate per kilowatt-hour?

PREVIOUS Residential Bundled Non-CARE Average Rate as of January 1, 2024: 46.6 cents per kilowatt-hour. NEW Residential Bundled Non-CARE Average Rate as of March 1, 2024: 46.8 cents per kilowatt-hour. Customers enrolled in the CARE program receive a discount of approximately 35% on their electric bill.
 
Just got back from Chicago. Had dinner at a great steak place on the river. Cheapest steak was $70, average was $90. On a Wednesday night, the place was mobbed!! Our dinner for four came to $825. Every other restaurant in the area was similarly packed!

Stayed at the Four Seasons (not cheap), again the hotel was packed.

I think it's a case of the rich getting richer and the rest struggling with groceries and gas.
 
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Just got back from Chicago. Had dinner at a great steak place on the river. Cheapest steak was $70, average was $90. On a Wednesday night, the place was mobbed!! Our dinner for four came to $825.

Stayed at the Four Seasons (not cheap), again the hotel was packed.

I think it's a case of the rich getting richer and the rest struggling with groceries and gas.
One thing I've noticed from 2020 forwards, is these types of places have seen zero drop off. Hotels like FS are hard to find under 1k in major/seasonal locations, and, yet, yes, packed.
 
Covid money (which has been sustaining our economy) is finally drying up.
Probably true, but DD has just applied for further relief money for the organization that employs her. Not guaranteed they'll get it but I'm amazed there is still government cash available for this.
 
Just got back from Chicago. Had dinner at a great steak place on the river. Cheapest steak was $70, average was $90. On a Wednesday night, the place was mobbed!! Our dinner for four came to $825. Every other restaurant in the area was similarly packed!

Stayed at the Four Seasons (not cheap), again the hotel was packed.

I think it's a case of the rich getting richer and the rest struggling with groceries and gas.
I marvel that there are enough people who can afford such "luxury" and marvel even more that there are enough people willing to PAY such prices for such luxury - whether they can afford it or not.

I'm sure I could pay those prices occasionally, but refuse to do so. (Heck, I'm on a "stay-out-of-fast-food-joints-because-the-value-is-no-longer-there" kick.) YMMV
 
I marvel that there are enough people who can afford such "luxury" and marvel even more that there are enough people willing to PAY such prices for such luxury - whether they can afford it or not.

I'm sure I could pay those prices occasionally, but refuse to do so. (Heck, I'm on a "stay-out-of-fast-food-joints-because-the-value-is-no-longer-there" kick.) YMMV
Well, I'm a big believer in "if you're not good to yourself, who else is going to be?" ( my late mom's philosophy)

Plus our age coupled to our ever growing portfolio and having no children leaves us with the dilemma of: "if we don't spend it our heirs will". With 15 or 20 years left, and maybe only 10 of them good ones, we're running out of time and we can't seem to lower the balance. .

Two and a half days in Chicago, including airfare cost us a little over $7k. Yeah, that's a lot of money but you know what? It was worth every penny. The service, the attention to detail, the comfort, being treated like a human being. We're going back in the fall after the convention.

More generally, my take is that there's a lot of money rolling around out there. The wealthy are getting wealthier and the have nots are scrambling to buy groceries. Sad, but that’s the facts of where we are at this point and maybe the way it's always been. John Edwards was right about one thing: there's two Americas.
 
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Well, I'm a big believer in "if you're not good to yourself, who else is going to be?" ( my late mom's philosophy)

Plus our age coupled to our ever growing portfolio and having no children leaves us with the dilemma of: "if we don't spend it our heirs will". With 15 or 20 years left, and maybe only 10 of them good ones, we're running out of time.

Two and a half days in Chicago, including airfare cost us a little over $7k. Yeah, that's a lot but you know what? It was worth every penny. The service, the attention to detail, the comfort, being treated like a human being. We're going back in the fall.
In other words, BTD
More generally, my take is that there's a lot of money out there. The wealthy are getting wealthier and the have nots are scrambling to buy groceries. Sad, but that’s the facts of where we are at this point.
Yup, cannot disagree with this.
 
I don’t worry about reconciling macro trends with personal micro observations. Things are very diverse in my personal experience and I tend to focus on my day to day micro and lots of unique happenings.

Yes, I’m experiencing lots of money competing for travel resources out there.

Haven’t changed my investing approach in over 20 years since retiring. It not news driven and I can ignore news as much as I want.
 
I don’t worry about reconciling macro trends with personal micro observations. Things are very diverse in my personal experience and I tend to focus on my day to day micro and lots of unique happenings.

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+1. William Gibson said " the future is here, it's just distributed unevenly ". I think the same is true for the recession/expansion of the economy.
 
I am a bit late to the party here. I believe that the "feel" of the economy lags behind the numbers. The numbers clearly show that inflation is down. However, those inflation rates compare to last year, not pre-Covid prices. And the numbers may not reflect any one individual's or location's increases. I don't think we will ever get back to pre-Covid prices. We may see some items lower such as mortgage interest. How can that happen get to 4% when the banks are paying 5%? The parties-that-be are trying to hold inflation to ~2%. If they are successful, we will still see next year's prices higher than this year's. We will still feel that inflation is high though.
 
I think, if one is FIREd, the "micro" view has little or no impact to your life. By the very nature of FIRE one's retirement plan is based on "macro" trends, which tend to smooth out in a positive manner over time, and from which FIREd folks benefit.

Perhaps the danger, however, is assuming that everyone is immediately benefiting from the "macro trend" - and ignoring what the "micro tend" is doing to folks. My wife and I have more than a few friends being impacted by job loss (several out of work for 6+ months) job hours reduction, inflation, etc. They are not choosing to limit their budget, they have to limit their budget.

A recent example: a group of us, 6 couples, were getting together for bike riding and dinner afterwards. The organizer - friends who are FIREd like we are - was pushing for dinner at a place were the entrees were on the higher end that most other places in the area. Several of the couples said they would ride but pass on dinner. I called our FIREd friend and said something along the lines of "I think you and I would not be impacted by dining at that place, but that might be why some of the others are hesitant". Our friend said he had not though of that, and then recommended going to a spot where there were several relatively inexpensive takeout options and a park picnic area and just have dinner there, with folks buying (or bringing) what they wanted. The rest of the couples all agreed this was a good idea, so that is what we did.
 
Just got back from Chicago. Had dinner at a great steak place on the river. Cheapest steak was $70, average was $90. On a Wednesday night, the place was mobbed!! Our dinner for four came to $825. Every other restaurant in the area was similarly packed!

Stayed at the Four Seasons (not cheap), again the hotel was packed.

I think it's a case of the rich getting richer and the rest struggling with groceries and gas.

Last night we each got a take-out ribeye steak dinner at a nearby restaurant. OK, nothing ultra-fancy but about 10-12 oz of perfectly cooked and seasoned steak with almost a cup of tatertots on the side. Total cost: $13 each including tip. You have to know which night of the week they are serving the steak special, though. We think it's a great treat.
 
To me this is much like 2008 situation, IF you kept your job and didn't do something insane like pull your money out of the market, you did pretty great after that. However plenty of people lost their job, drained their savings, and then lost their house and were starting over at 30/40...they did not do ok for a very long time.

COVID is similar, many were able to lock in at low interest rates, were able to use the stimulus checks as extra money to pay off debt, put a down payment on a house, create an emergency fund plus job hop or get a decent pay bump and they are doing well. Then you have everyone else, especially the renters, the people who may have made some poor choices when it comes to their vehicles, in sectors where they didnt' get much of a pay increase, they aren't the best at trading out things when prices jumped and they are seriously hurting.

Yes inflation is up and so is pay but inflation impacts people very differently so to me its easy to see that some people are doing really well and some people are racking up debt. The problem is its hard to tell what the %s are because thats really the make/break for the economy.

So far I haven't seen the types of defaults, bankruptcies, etc that make me concerned so I have to conclude overall the economy is doing ok.

I see all the threads on reddit about $18 big macs while I can go on the app and get 2 for $5 here so its hard to tell how much of this is real or its an election year and people are stirring the pot.
 
To me this is much like 2008 situation, IF you kept your job and didn't do something insane like pull your money out of the market, you did pretty great after that. However plenty of people lost their job, drained their savings, and then lost their house and were starting over at 30/40...they did not do ok for a very long time.

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Pretty much the same story in 1929.....
 
I am a bit late to the party here. I believe that the "feel" of the economy lags behind the numbers. The numbers clearly show that inflation is down. However, those inflation rates compare to last year, not pre-Covid prices. And the numbers may not reflect any one individual's or location's increases. I don't think we will ever get back to pre-Covid prices. We may see some items lower such as mortgage interest. How can that happen get to 4% when the banks are paying 5%? The parties-that-be are trying to hold inflation to ~2%. If they are successful, we will still see next year's prices higher than this year's. We will still feel that inflation is high though.
I wonder how much of the "feel" is made worse by our splintered media. I don't recall the late 70s much, but inflation was much higher then and I don't think there was this much angst about it, especially our current unemployment rates, higher wages, higher stock market.
 
I wonder how much of the "feel" is made worse by our splintered media. I don't recall the late 70s much, but inflation was much higher then and I don't think there was this much angst about it, especially our current unemployment rates, higher wages, higher stock market.
Most walking around "out there" will tune in to Reddit, FB or some other social media channel and hear what they want to hear, then rail against the other reality.

Here and there you'll come across something in print that is more balanced in presentation that helps in understanding the different experience(s) of U.S. households.

People with the top 1% of net worth in the U.S. in 2025 will have $11.6 million in net worth
The top 2% will have a net worth of $2.7 million
The top 5% will have $1.17 million
The top 10% will have $970,900
The top 50% will have $585,000

Lately I've been reading more social media to try and understand what others experience. It has been pointed out many times that your internet experience becomes tuned to what you want to see. So we really are in echo chambers to a large extent.
 
Lately I've been reading more social media to try and understand what others experience. It has been pointed out many times that your internet experience becomes tuned to what you want to see. So we really are in echo chambers to a large extent.

Very much this, my FB account I am down some rabbit hole on reels and I'm not sure I sure how to get out of it. I'm being fed some pretty dark conspiracy theory stuff at this point and the algorithm clearly now thinks I'm deep in the weeds. I need a reset button that says oops, please reset I was just looking to why my mom would say certain things, now I don't want to know anymore.
 
My personal microcosm is mostly all retired people who are doing well, especially with the current stock market. I have been trying to adjust my AA to be more conservative (due to my age and being retired, not because of the macro economy).

There are only a few young people whose finances I'm familiar with. One is a bit of a hopeless financial mess (no job, two small kids, addicted/absent kid's father) but should get by okay due to her Boomer parents' resources. Maybe by the time the kids are in school she'll be mature enough to buckle down to some career. I would guess the current macro economy has limited effect on her given her financially dependent situation.

The other is my own kid. Increases in the cost of car insurance has caused her financial stress, and if she opts out of her current shared rent situation into having to pay rent entirely by herself I expect she will be very stressed. And although she is still naive in the job market, the low wages and non-existent benefits she gets from her job cause ME a lot of indignant feelings. On the other hand, she's been working now for a couple years in what I view as "fluff economy" (ridiculous pointless collectibles), and somehow people are spending enough money on useless fluff that she gets paid to go on trips to collector events. I console myself with the thought that at least she's getting marketing and sales experience so maybe she'll get a better paying job in the future.
 
I see all the threads on reddit about $18 big macs while I can go on the app and get 2 for $5 here so its hard to tell how much of this is real or its an election year and people are stirring the pot.
I don't know about $18 Big Macs but I would doubt you can get 2 for $5. That must be another sammich. Of course, I could be wrong. I was once so YMMV.
 
We seem to have inflation under control, but some people seem to want to see actual deflation, where prices drop across the board, perhaps to pre-Covid levels, and that's just not going to happen. So what people are bothered by is not that prices are increasing but that they are higher than what they had become accustomed to for a very long time. They don't take into account that they are earning more or that their house or investments are worth more. All they know is what they feel, and it feels like the price of a dozen eggs (probably a poor example) hardly budged from the mid-'90s through 2020 but is now noticeably higher. It will just take time before it soaks into people's minds that the economy has more or less stabilized now.
 
I don't know about $18 Big Macs but I would doubt you can get 2 for $5. That must be another sammich. Of course, I could be wrong. I was once so YMMV.
Deal last week to satisfy my wife's craving was buy 1 get one for $1, so $5.82 with tax for two.
 
Deal last week to satisfy my wife's craving was buy 1 get one for $1, so $5.82 with tax for two.
Got a Taco Bell cravings box yesterday for $6. 20% increase from the $5. It tasted good and I felt full.

We are foodies, so we are always search out new restaurants. I'm noticing alot of new restaurants that try to sell things that are a bit better then decent for a higher price now. For example, we just went to a new Dave's Hot Chicken. Portions were fine, taste was pretty good, but it was $14 for 1 tender, 1 slider, fries and a drink, so about $20 / person if you include the obligatory tip for fast food. We are willing to (over)pay one time, but my wife can certainly make a better fried chicken for less than half (quarter) of the price. Another one that I have to cross the list.
 
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