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Right, in this case the Fed said, based on its forecasts, it wouldn't raise rates until 23' or 24'. So then the Fed becomes stuck in a trap of its own making where raising rates hurts credibility because it said it wouldn't while at the same time inflation forecasts and NGDP are already in excess of 5%.
Was it a significant amount of money globally? inflation is currently a global phenomena (with a few exceptions). So much of the us inflation “debate” seems to want to wish away the trans border origin and nature of it, focusing only on the twisted policy of domestic demand destruction aka pain for poor people.Quote:
Originally Posted by RoooR
Right. If you’re going to complain about the US situation, at least compare it to our peers:Quote:
Originally Posted by dunfree
Attachment 418961
https://home.treasury.gov/news/featu...tional-context
We have only slightly higher inflation, but we also have had more real economic growth. Seems like a good trade off as long as inflation doesn’t spiral, which it doesn’t appear to be doing.
FWIW, it's not necessarily an either or. The Feds efforts in response to the crisis were beneficial while at the same time more modest rate hikes earlier might have prevented the need for more & bigger rate hikes later.
^^^ My impression as well, but during a global pandemic and when you turn off an economy I guess they didn't want to chance a global depression so they went big.
And when things didn't go as far south as feared they were a bit too paltry on the inflationary response. It isn't easy reacting to something one has never experienced before.
I mean lots of countries did stimulus.Quote:
Originally Posted by dunfree
https://www.statista.com/statistics/...ges-share-gdp/
And many more than us. Japan did more and their inflation has been worse.
If we gave everybody $1M that would certainly be inflationary right? So it's really just an argument of degrees.
Exactly. In retrospect, they could have done better by raising rates a bit earlier. But given the uncertainty and market outlook they were working with, I’d say they did a pretty good job, and the results compared to other countries would support that.Quote:
Originally Posted by Bunion 2020
Given uncertain forecasts, I’d rather they unexpectedly miss high and have a bit more inflation temporarily than miss low and have higher unemployment and lower economic output.
Not sure by what you mean by Japan’s inflation being worse, but they’re finally getting up to their 2% target.Quote:
Originally Posted by RoooR
Regarding stimulus, there’s also this:
A team of researchers looked at 166 countries and ranked their fiscal responses to the pandemic as a percentage of GDP. International comparisons can be challenging because in 2020 and 2021 not all countries measured spending in the same way. As one example, their analysis actually has Japan leading among the fiscal responses to the pandemic, with an estimated 55 percent of its GDP directed towards stimulus. However, this estimate includes spending not directly related to the pandemic, such as government efforts to reduce carbon emissions and certain loan guarantees that do not affect current spending.When removing this spending from the total, Japan’s fiscal stimulus drops to 16 percent of GDP, and the country falls out of the top 10 largest fiscal responses to the pandemic. Singapore leads the pack of industrialized countries with 29 percent of its GDP dedicated towards fiscal stimulus, with the U.S. not far behind with 27 percent of its GDP for this purpose. Only eight other countries spent more than 20 percent of their GDP on fiscal stimulus.”
https://taxfoundation.org/us-covid19-fiscal-response/
And you could argue that Japan has been trying to ‘stimulate’ their economy for decades, even when things have been good globally, so I’m not sure how good a comparison it is to the US.
As said, japan has had minimal inflation 2.5% yoy last month (high for post crash Japan, sure, but not high), despite huge spending of a far more “socialist” nature. Crude measures of spending without noting what & how it was spent do a disservice.Quote:
Originally Posted by RoooR
I disagree....the current administration said it in their campaign and repeated in in recent days...."WE WILL GET RID OF FOSSIL FUELS" So expect more of the same.Quote:
Originally Posted by J. Barron DeJong
Not to get OT but, we must get off of Fossil Fuels.
By making the transition, the potential positives for our economy cannot be understated. Will there be some pain? Yes, no doubt, the billions in subsidies given to fossil fuel producers annually would ease a lot of it.
We'll get mostly off fossil fuels in about 30-40 years. Maybe it will help slow humanity's contribution to the warming climate, but it won't stop the climate from warming.Quote:
Originally Posted by Bunion 2020
And those subsidies are basically no different than subsidies to timber companies for logging. It benefits the country to have affordable energy and building supplies, so the government subsidizes those industries as needed, and it benefits all of us with lower prices (usually).
How come nobody ever mentions Trump's tariffs when talking about inflation? Didn't everybody warn him those tariffs would lead to inflation and higher costs for American consumers? Seems to me those tariffs came at exactly the wrong time, just before the pandemic fucked everything up.
10y has dropped at least 20bp from its oeak two days ago. If oil and gas come off a bit maybe back to 3%
After covering RDBX bought some long. Now playing a strangle to take advantage of vol. Short puts, short calls.
May be interesting to see if can leg back into XOM after my position got taken out. Mulling selling puts on it.
REV is trading up despite bk rumours. Needs more price spike to take a swing at it on the short side (balance sheet looks awful) but not interested just yet
RE: Tariffs, cause ending them would be used as a political club to beat whoever ends them. You know, China lovers and all that shit.
As for the subsidies, I agree that they represent a 3rd rail to try and reform. As long as they remain in place then I don't ever want to hear about the mythical Free Markets again.
Oil prices are set on a global market for the most part. Also, Biden has promised a shit ton of stuff, but not much is going to get through congress.Quote:
Originally Posted by sirbumpsalot
Reduced refining capacity in the US seems to be an issue, but I believe that reduction happened before Biden (?).
ETA: Oil futures point to prices going down, not up
https://www.cmegroup.com/markets/ene...de.quotes.html
Gasoline too
Attachment 418984
https://www.cmegroup.com/markets/ene...ne.quotes.html
Fun fact. Competing energy options should LOWER not raise the price of gas at the pumps.Quote:
Originally Posted by sirbumpsalot
Right. Green energy keeps getting cheaper, which should keep a lid on oil prices.Quote:
Originally Posted by SumJongGuy
How has energy/oil demand risen 1-1.2%pa for the last…30? Years (Gfc and covid excluded) despite renewables? Emerging economies are growing and using just as much if not more fossil fuels than we are offloading via renewables. It’ll take generations to get off fossil fuels.
Otherwise I agree w JBDeJong on basically everything. In retrospect…ya fed should’ve moved earlier. But we were still in a tenuous spot w openings and workforce participation.
All that said…buy bonds people. 10y and out.
there are people who’ve mentioned tariffs - in particular softwood lumber tariffs. And that would make a small difference. Like with oil where one sides answer to gas prices is “because the industry has hurt feefees” theres not much interest in any fixing of the problem.Quote:
Originally Posted by yeahman
EIA has data for us refining capacity, you can see it peaked in April 2020 and dropped by 833 thousand barrels as of January 2021. Since then it’s dropped a further 199 thousand barrels a day as of March.
yeah, that sounds shrilly partisan, but that’s the reality of the us. Consumer sentiment is highly and shrilly partisan and retroactively so.
All the U.S. refineries are ancient and NIMBYism prevents new ones from being built. It's a big problem.
Also not sure increased renewables will lead to lower oil prices. There will be less exploration and less production, meaning supply could decrease as much as demand.
this right here folksQuote:
Originally Posted by RoooR
the ppp money was in theory to be used to help support businesses and their employees
but guess what?
outside of the service slash retail industry everyone kept on kept on makeing money
and in the service retail those employees were given unemployment on steroids
so where did that money go?
lets see houses boats cars toys vans and shit that money did nothing useful
then boomers with deep pockets kinda said fuck we might die so maybe we need to spend some of this cash we are sitting on
and here we are
whose surprised?
dude suncor has a refinery in north denver been there over a hundred years and now every fucking environmental nimby has loaded the poor people on their back screaming that they violate epa air quality standards weekly (the refinery does) and it needs to shut down immediately so all the new suburban houses built last year and all the poor people who live nearby can live in healthy envioromentQuote:
Originally Posted by yeahman
the idea that this refinery is shut down gives me chills
Glad others pointed out the issues with the Moody's chart.
Inflation is NOT entirely on the supply side.
PPP loans were a massive stimulus to the economy that caused inflation. The fed buying assets including MBS, corporate bonds and stocks was a massive stimulus to the economy that caused inflation.
I rest my case. It’s religion. The rich of TGR blame the other undeserving rich for inflation. Yup PPP caused global inflation. Not a single thing will change this view.
Apparently you are surprised that your stoned useless actor ass making bank on rich folk sucking on treasury tit didn’t do shit. Who you?Quote:
Originally Posted by fastfred
I get it though, amnesia of early 2020 is the lie you need to tell to make the sale
What’s the cure for high prices?
Sent from my iPhone using TGR Forums
Ppp was a drop in the bucket. 350b? Rounding error.
How did ppp cause inflation in GB? In Germany? Asia? Which are all just as bad if not worse than the Us. How did ppp jack up the price of lumber and semiconductors and used cars.
easy brahQuote:
Originally Posted by dunfree
I usually don't engange your engaging attitude but I'm in a slappy mood tonight after getting 60k in payments this week and it's only wed billed out 140k at the start of the month gonna be good this year
but I was in the ICU for the start of 2020 my life got turned upside down quickly and I suffered mentally it sucked
covid was a joke to me compared to what I had to deal with and where I am today health wise so suck my cock bro
I can guarantee you that not one cent of my ppp money went to anything worthwhile other than shit to make me feel good and my payroll is massive bruh we didn't shut down for any covid stuff just amped up to another level in ski town usa
and I know exactly where my customers money is coming from was just shooting the shit with some fortune 500 ceo on the phone today and I'm very cool with it hope you can understand how a capitalist society works someday my life is unreal so far from that essay I wrote in 9th grade about where I'd be when I'm older....................
and yeah "ay bitch pass me my ripple"
^^^
This. Inflation is a very complex discussion but the market is freaking out because the fed has decided to turn off the money spigot that traders have been drinking out of for the last decade. The amount of subsidies the rich have been given from the government since 2008 is beyond mind boggling. Low rates and quantitative easing make ppp look like a penny on the sidewalk. Inflation wouldn’t be as bad if corporations took a little haircut on profits for 2 years. Seems fair as the tax payer has made them huge profits for the last decade of which they haven’t paid taxes for.
Imagine if all that money wasn't pumped in while 40%+ of the global workforce was practically idle for close to a fucking year. These supply shortages are trivial compared to the shitshow depression we'd have hit without free money. A war in Urup doesn't help.. and big oil is using that as a smokscreen to fuck us all. RECORD profits and no product outages.. I'm calling bullshit on oil or gas shortages requiring price increases..
My business wouldn’t be solvent without the PPP money we received. None of my employees went on unemployment. Our sales were cut by more than half, nobody was driving. We stayed afloat by the skin of our teeth.
Maybe in your whole foods milf watching world people were living it up, but in my world it sure didn’t look the way you play it out.
P3 was a minor investment and probably paid for itself.
And fuck those poor people wanting to breathe healthy air. Ya know there is a lot of room east of Denver, whats stopping Suncor from building a new refinery 100 miles east of the Denver? NIMBYism?Quote:
suncor has a refinery in north denver been there over a hundred years and now every fucking environmental nimby has loaded the poor people on their back screaming that they violate epa air quality standards weekly (the refinery does) and it needs to shut down immediately
Plenty of stories of good small business’ that stayed afloat via ppp. Of course rich asshats scammed the system. Really glad it worked for you. Next time I need a wrench in SLC I need to check out your shop.Quote:
Originally Posted by BobMc
I can assure you that Moody’s economic modeling does in fact take into account both supply AND demand. Rather innovative of them to think of that, actually.Quote:
Originally Posted by Kevo
I don't know, man, 2 variables? Why do you hate America?Quote:
Originally Posted by J. Barron DeJong
Stop buying or start producing? Damnit. Too many options.Quote:
Originally Posted by skiballs
I'm not positing that supply constraints didn't cause inflation. Inflation is a product of variable on both the supply and demand side.Quote:
Originally Posted by Brock Landers
FWIW PPP was $953 billion.
People used PPP money to buy cars and houses while supply was constrained.
Trillions in asset purchases by the fed caused inflation. Low interest rates for too long and money printing caused inflation. People making more on unemployment than they had ever made in their lives caused inflation. Direct payments and extended child tax credits caused inflation. All were forms of stimulus that caused inflation from the demand side.
As far as the global economy, there were trillions in demand side stimulus from central banks and governments around the globe all while supply was constrained.
EM got screwed as commodities spiked. Isn't that tradition?
The SBA commenced the PPP on April 3, 2020, and closed the program on April 16, 2020, on the exhaustion of the $349 billion appropriated by Congress (Round One). Congress later provided an additional $320 billion for the PPP in H.R.JQuote:
Originally Posted by Kevo
950 or 670, basically the same, this discussion is now diverging away from the stock market and into the US economy.
Does anyone remember what it was like in April of 2020? No cars on the road, full lock down.
We deferred the pain. The bill has come due.
I’ve been all over the place with my $97 put on XOM, shoulda re-bought when I was up $100 on it early yesterday. It promptly went underwater and I bought it back today for minimal gain. Today the underlying dipped below my break even point, I decided to take any gain and will attempt another tomorrow.Quote:
Originally Posted by LeeLau
Picked up 20 more shares of MMP when it dipped below $50 today, Goldman Sachs upgraded it to a buy last week with a $59 price target. I’m already filling out a K-1 for it and the 8.1% yield makes it a no brainer.
Unless all of the demand stimulus falls under "other" on that chart then only 10 basis points out of 860 represented on that chart point to anything other than supply issues. Little suspicious, no?Quote:
Originally Posted by J. Barron DeJong
Moody's is a rating agency with no credibility. I have little confidence in anything they have to say.