DiabloWags said:

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dajo9 said:

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What? Nobody wants to celebrate cooling inflation?

https://www.bloomberg.com/news/articles/2022-12-13/us-core-cpi-posts-smallest-monthly-increase-in-more-than-a-year?srnd=premium

The Fed needs to hit the pause button

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Core Services (wage driven) is 73% of CORE SERVICE CPI.

Services inflation accelerated to 6.8%

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I'm not sure exactly what you are referencing above ("Core Services is 73% of Core Service CPI")

But, shelter is about half of services CPI and it is not wage driven. Shelter is a lagging indicator as leases catch-up to spot rental rates. Spot rental rates are flat-to-negative.

I believe that the shelter component of CPI is roughly 33% of CPI

Measuring Price Change in the CPI: Rent and Rental Equivalence : U.S. Bureau of Labor Statistics (bls.gov)

I believe Fed Funds futures are indicating a "pause" come March.
But it's hard to envision previous "doves" like Mary Daly (SF) and Neel Kashkari (MN) who turned "hawks" relenting anytime soon.

Note: It's important to highlight that a significant share of the deceleration in core CPI came from relatively volatile items . . . such as new and used car prices, gasoline, and health insurance which accounted for a very large share of the decline in core CPI.




CPI: A Second Consecutive Downside Surprise, But Details Matter | Seeking Alpha

DiabloWags said:

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I believe that the shelter component of CPI is roughly 33% of CPI

Measuring Price Change in the CPI: Rent and Rental Equivalence : U.S. Bureau of Labor Statistics (bls.gov)

I believe Fed Funds futures are indicating a "pause" come March.
But it's hard to envision previous "doves" like Mary Daly (SF) and Neel Kashkari (MN) who turned "hawks" relenting anytime soon.

Note: It's important to highlight that a significant share of the deceleration in core CPI came from relatively volatile items . . . such as new and used car prices, gasoline, and health insurance which accounted for a very large share of the decline in core CPI.




CPI: A Second Consecutive Downside Surprise, But Details Matter | Seeking Alpha

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Shelter is about 1/3 of CPI and about 1/2 of Services CPI. Also, I don't think gasoline had any impact on Core CPI, since it is excluded from Core CPI.

Finally, healthcare will continue to be a drag on inflation for a year (starting in October, to be exact). I knew this two months ago. I also knew it artificially propped up inflation in the prior year. How did I know? From this Odd Lots podcast that was aired on October 3rd (go to the 31st minute). Very informative stuff.

https://www.bloomberg.com/news/articles/2022-10-03/odd-lots-podcast-omair-sharif-explains-rent-healthcare-and-cpi-data

I think the biggest single problem that the FED has is how "resilient" the labor market continues to be.

Over time, the core CPI (stripped of Covid sensitive components) tends to track the rate of wage growth.

With wage growth close to 5%, that tells you that we are quite a ways away from getting the unemployment rate to tick up and hence cause the CPI to decline in a material way.

By the way, this 2 page interview with Felix Zulauf in Barrons this past weekend was most interesting.

Mind you, he's more of a MACRO guy but I found his comments most provocative about the next big up leg in the commodity markets - - - driven by scarce supply, and not by robust demand.

He sees "inflation coming back from late 2023 onward, and will probably go even higher in '24, '25, than it has been in the current cycle." - - - He's talking double-digits and how oil could easily trade near $200 in 2024 - 2025.

"As we have seen in the 1970s, it's the second up wave in inflation that is really bad for the bond market. In the first up wave, the bond market follows timidly, but stays far below the inflation rate. In the second wave, the bond market will try to catch up. And that will be a devastating move in the bond market, a terrible bear market in bonds, in 2024-25."



A Global Upheaval Is Under Way, Says Market Veteran Felix Zulauf. Don't Get Caught Flat-Footed. | Barron's (barrons.com)

I hope he is very wrong. Most of these bold predictions prove to be.

Unit2Sucks said:

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I hope he is very wrong. Most of these bold predictions prove to be.

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Me too.
But I enjoy reading people's thoughts that are "outside" the traditional box.

In either scenario, I cant wait to buy FCX . . . especially if we do in fact get a recession next year.
The copper market will continue to see more and more demand while the supply side will actually be declining.

DiabloWags said:

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By the way, this 2 page interview with Felix Zulauf in Barrons this past weekend was most interesting.

Mind you, he's more of a MACRO guy but I found his comments most provocative about the next big up leg in the commodity markets - - - driven by scarce supply, and not by robust demand.

He sees "inflation coming back from late 2023 onward, and will probably go even higher in '24, '25, than it has been in the current cycle." - - - He's talking double-digits and how oil could easily trade near $200 in 2024 - 2025.

"As we have seen in the 1970s, it's the second up wave in inflation that is really bad for the bond market. In the first up wave, the bond market follows timidly, but stays far below the inflation rate. In the second wave, the bond market will try to catch up. And that will be a devastating move in the bond market, a terrible bear market in bonds, in 2024-25."



A Global Upheaval Is Under Way, Says Market Veteran Felix Zulauf. Don't Get Caught Flat-Footed. | Barron's (barrons.com)

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Generals are always fighting the last war

dajo9 said:

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Generals are always fighting the last war

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I dont really see it that way.
The war is a whole lot longer than just one cycle.
Moreover, the inflation of the 1970's was 100% demand driven.

That's not what Zulauf is saying.

If you were to read his interview, you'd understand WHY he is looking for scarcity of supply as opposed to increased demand driven inflation.

Scarcity of Supply of energy may be one key.

BTW, I saw an electric car company is logically moving to Mexico (which didn't buy into the Green New Deal reset), and now the Biden Administration and lackeys are now down on AMLO. They'll put tremendous pressure on him to reverse course.

movielover said:

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Scarcity of Supply of energy may be one key.

BTW, I saw an electric car company is logically moving to Mexico (which didn't buy into the Green New Deal reset), and now the Biden Administration and lackeys are now down on AMLO. They'll put tremendous pressure on him to reverse course.

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So you're saying that the government shouldn't be opposed to US companies moving their operations out of the country?

Depends how you define pressure.

Manufacturing exit a logical consequence of higher energy prices and possible interruptions in supply, both driven by WEF Green New Deal policies / "transition".

movielover said:

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Depends how you define pressure.

Manufacturing exit a logical consequence of higher energy prices and possible interruptions in supply, both driven by WEF Green New Deal policies / "transition".

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More driven by labor costs, trade restrictions in foreign jurisdictions (often products manufactured for local distribution), logistics, diversification of supply, and, in the case of China and India, talent, IP, and infrastructure. Remediation efforts in China are causing some companies to diversify at an accelerated basis outside of China to India, etc. But most are not coming back to the U.S. But I have to emphasize to those without actual operational experience how difficult it is to change manufacturing sites.

Sure, it would be nice if we could manufacture everything in the U.S. But the only way to do so would be for all of us to pay that much more. For those who are saying they are willing to pay, I would love for someone to do an audit and see if they are actually making a conscientious effort to purchase products made only in the U.S. I doubt it and I suspect most of the trade compliance origin tags on their products at home will state that it was manufactured outside the U.S. and most of this would be just virtue signaling from both the left and the far right. It is always the case that most people view this theoretically and not in actual action and that they love the idea of cheap TVs and cheap clothes. And when they talk about sacrifice, it is always someone else who should be sacrificing.

calbear93 said:

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movielover said:

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Depends how you define pressure.

Manufacturing exit a logical consequence of higher energy prices and possible interruptions in supply, both driven by WEF Green New Deal policies / "transition".

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More driven by labor costs, trade restrictions in foreign jurisdictions (often products manufactured for local distribution), logistics, diversification of supply, and, in the case of China and India, talent, IP, and infrastructure. Remediation efforts in China are causing some companies to diversify at an accelerated basis outside of China to India, etc. But most are not coming back to the U.S. But I have to emphasize to those without actual operational experience how difficult it is to change manufacturing sites.

Sure, it would be nice if we could manufacture everything in the U.S. But the only way to do so would be for all of us to pay that much more. For those who are saying they are willing to pay, I would love for someone to do an audit and see if they are actually making a conscientious effort to purchase products made only in the U.S. I doubt it and I suspect most of the trade compliance origin tags on their products at home will state that it was manufactured outside the U.S. and most of this would be just virtue signaling from both the left and the far right. It is always the case that most people view this theoretically and not in actual action and that they love the idea of cheap TVs and cheap clothes. And when they talk about sacrifice, it is always someone else who should be sacrificing.

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I tend to agree with you that lots of people talk about MIUSA preferences but they don't live it. The MAGA hats are made in China. People seem to ignore the impact on consumers from onshoring production and ignore that manufacturing companies which have successfully onshored recently have often done so through automation. The benefits of local manufacturing/distribution are real so if they can offset the increased labor costs through tax benefits and automation, the reduced shipping costs can make it a win.

On this topic, there are a number of US-made brands selling premium apparel and other products that I've tried to buy from historically but it's not something that I demand for all products I buy.

Two in particular that I frequent have recently moved their supply chain offshore. Interestingly, neither one reduced prices and both claimed that they moved their production for quality and other reasons and not to increase product margins. Meanwhile, there is a secondary market for their pre-owned goods where the MIUSA products sell for a premium. Interestingly enough, for at least one of the brands, the informed consensus seems to be that the Made in Vietnam products are actually better made than the USA products, but the premium on the pre-owned market still exists.

Unit2Sucks said:

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calbear93 said:

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movielover said:

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Depends how you define pressure.

Manufacturing exit a logical consequence of higher energy prices and possible interruptions in supply, both driven by WEF Green New Deal policies / "transition".

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More driven by labor costs, trade restrictions in foreign jurisdictions (often products manufactured for local distribution), logistics, diversification of supply, and, in the case of China and India, talent, IP, and infrastructure. Remediation efforts in China are causing some companies to diversify at an accelerated basis outside of China to India, etc. But most are not coming back to the U.S. But I have to emphasize to those without actual operational experience how difficult it is to change manufacturing sites.

Sure, it would be nice if we could manufacture everything in the U.S. But the only way to do so would be for all of us to pay that much more. For those who are saying they are willing to pay, I would love for someone to do an audit and see if they are actually making a conscientious effort to purchase products made only in the U.S. I doubt it and I suspect most of the trade compliance origin tags on their products at home will state that it was manufactured outside the U.S. and most of this would be just virtue signaling from both the left and the far right. It is always the case that most people view this theoretically and not in actual action and that they love the idea of cheap TVs and cheap clothes. And when they talk about sacrifice, it is always someone else who should be sacrificing.

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I tend to agree with you that lots of people talk about MIUSA preferences but they don't live it. The MAGA hats are made in China. People seem to ignore the impact on consumers from onshoring production and ignore that manufacturing companies which have successfully onshored recently have often done so through automation. The benefits of local manufacturing/distribution are real so if they can offset the increased labor costs through tax benefits and automation, the reduced shipping costs can make it a win.

On this topic, there are a number of US-made brands selling premium apparel and other products that I've tried to buy from historically but it's not something that I demand for all products I buy.

Two in particular that I frequent have recently moved their supply chain offshore. Interestingly, neither one reduced prices and both claimed that they moved their production for quality and other reasons and not to increase product margins. Meanwhile, there is a secondary market for their pre-owned goods where the MIUSA products sell for a premium. Interestingly enough, for at least one of the brands, the informed consensus seems to be that the Made in Vietnam products are actually better made than the USA products, but the premium on the pre-owned market still exists.

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Excellent points.

On automation and artificial intelligence and machine learning - those are some of the biggest threats to blue collar workers, even if manufacturing is brought back to the U.S.

I think it would be almost impossible for Apples of the world to manufacture in the U.S. the quantity and quality of iPhone required. Foxconn has almost an insurmountable advantage, whether from infrastructure, talent and workforce, quality, and IP that Apple would not be able to maintain its quality standards if it were brought back here. The hope is maybe we incentivize Foxconn to move more of the manufacturing here, but we will screw that up with politics and regulation.

I think the future for U.S. is in service and innovation and not on manual labor.

calbear93 said:

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I think the future for U.S. is in service and innovation and not on manual labor.

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Agreed.

We are the Global Leader in Services for good reason.
We are the most creative, diverse, and dynamic economy in the world.

Wall Street Globalists approve of this message.

movielover said:

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Wall Street Globalists approve of this message.

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Sounds like you are anti-technology.
Anti-robot.

Are you still stuck in the 60's and 70's?
Like Archie Bunker?

movielover said:

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Our economy expanded magnificently before the Plandemic, while China was hobbled.

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Oh wait.

Youre the guy that said that the economy under Trump displayed magnificent expansion

2017 = +2.3%

2018 = +3.0%

2019 = +2.2%

Hahahahahahahaaaaaa!!!

DiabloWags said:

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movielover said:

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Our economy expanded magnificently before the Plandemic, while China was hobbled.

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Oh wait.

Youre the guy that said that the economy under Trump displayed magnificent expansion

2017 = +2.3%

2018 = +3.0%

2019 = +2.2%

Hahahahahahahaaaaaa!!!

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Everyone knows it takes 3 years to implement economic policy. How did his guy do in year 4?

According to who?

movielover said:

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According to who?

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To whom, I would ask?

Unit2Sucks said:

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DiabloWags said:

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movielover said:

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Our economy expanded magnificently before the Plandemic, while China was hobbled.

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Oh wait.

Youre the guy that said that the economy under Trump displayed magnificent expansion

2017 = +2.3%

2018 = +3.0%

2019 = +2.2%

Hahahahahahahaaaaaa!!!

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Everyone knows it takes 3 years to implement economic policy. How did his guy do in year 4?

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2020 = - 3.7%

Trump was Magnificent!

Jonathan Graifer Sepf 16, 2020, WSJ:

The Higher Wages of Growth
Before the pandemic, income growth soared and poverty fell to the lowest rate since 1959.

"In case you missed it, and most of the media did, the Census Bureau reported Tuesday that the median household income in 2019 grew a whopping 6.8%the largest annual increase on record. While this year's government-ordered lockdowns will erase these gains in the short term at least, it's still worth highlighting how lower-income workers and minorities benefited from faster growth and a tighter labor market before the pandemic."

"Real median U.S. household income last year rose by $4,379 to $68,709. In dollar amounts, this is nearly 50% more than during the eight years of Barack Obama's Presidency...."

"But lower and middle-income folks were also finally sharing more in the country's growing wealth. Notably, median household incomes increased more among Hispanics (7.1%), blacks (7.9%), Asians (10.6%) and foreign-born workers (8.5%) versus whites (5.7%) and native-born Americans (6.2%). One reason is more Americans with lower education levels were working...."

Median U.S. household income has already increased 18.7% under Biden from when Trump "left" office on Jan. 6th.

October's estimated median household income was $78,813.

When the Traitor left office it was $66,370.


Median household income U.S. 2021 | Statista

saupload_median-household-income-in-21st-century-200001-202210.png (910661) (seekingalpha.com)

Subtract record inflation.

movielover said:

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Subtract record inflation.

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I've noticed that you keep moving the goal posts.
You sound depressed.

Wanna make a friendly wager on Trump "winning" the Presidency in 2024?

I've got $5,000 that says he doesnt.

Wanna play my friend?

I'm pretty sure it will be a long time before we get back to honest elections with same-day, in-person voting. Obama really pulled a number, and Eric Holder turned the DOJ into a partisan organization. Now we have a superceding 4th Branch of government - the all-powerful Intelligence Community.

Let's be clear. McTurtle and Ronna McDaniel are happy to knife President Trump and the MAGA movement. The UniParty hates an outsider, be it Perot, the Tea Party, or DJT.

We're a Banana Republic now. Biden didn't leave his basement, neither did the crooked Arizona Democrat in charge of elections. Jimmy Carter previously has said mail-in ballots are most prone to corruption, and Germany outlawed computers due to the high risk of Rigging. Day of voting, paper ballots, and picture IDs. They get it done in one night.

I was talking with a Latino colleague, a new immigrant, about our whacky, rigged elections. Blocked observers, illegal drop-off votes, counting for days, mysteriously found ballots that seem to always favor one side, dead voters.

He just smiled and said, "Yes, this is how we do it in my country."

I'll take that as a "No" in answer to my $5,000 bet.

Losers gonna play the "blame" game.
That's what Losers do.

movielover said:

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I'm pretty sure it will be a long time before we get back to honest elections with same-day, in-person voting.

We're a Banana Republic now.

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Trump backed Bo Hines who was running for a House of Reps seat in North Dakota.

Trump backs the most idiotic moronic losers that you could ever find.

Lololololololo!

DiabloWags said:

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I'll take that as a "No" in answer to my $5,000 bet.

Losers gonna play the "blame" game.
That's what Losers do.

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You're about as emotionally mature as your backordered Porsche. Or is it just politics and / or TDS that sets you off?

Politics is complicated. But even Joe Biden and Kamala Harris are worse. What kind of father - and Mother - sends their compromised son out to be their alleged bag man for Millions of dollars?

movielover said:

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I'm pretty sure it will be a long time before we get back to honest elections with same-day, in-person voting. Obama really pulled a number, and Eric Holder turned the DOJ into a partisan organization. Now we have a superceding 4th Branch of government - the all-powerful Intelligence Community.

Let's be clear. McTurtle and Ronna McDaniel are happy to knife President Trump and the MAGA movement. The UniParty hates an outsider, be it Perot, the Tea Party, or DJT.

We're a Banana Republic now. Biden didn't leave his basement, neither did the crooked Arizona Democrat in charge of elections. Jimmy Carter previously has said mail-in ballots are most prone to corruption, and Germany outlawed computers due to the high risk of Rigging. Day of voting, paper ballots, and picture IDs. They get it done in one night.

I was talking with a Latino colleague, a new immigrant, about our whacky, rigged elections. Blocked observers, illegal drop-off votes, counting for days, mysteriously found ballots that seem to always favor one side, dead voters.

He just smiled and said, "Yes, this is how we do it in my country."

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Trump cannot fail, he can only be failed.

movielover said:

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DiabloWags said:

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I'll take that as a "No" in answer to my $5,000 bet.

Losers gonna play the "blame" game.
That's what Losers do.

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You're about as emotionally mature as your backordered Porsche. Or is it just politics and / or TDS that sets you off?

Politics is complicated. But even Joe Biden and Kamala Harris are worse. What kind of father - and Mother - sends their compromised son out to be their alleged bag man for Millions of dollars?

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Youre the guy that disappears whenever they are asked WHY Trump's son in law (Jared Kushner), a U.S. Government official received $2 Billion from the Saudis for his PE fund.

You've got as much credibility here as Baghdad Bob.

Have you gotten your Trump Trading Cards yet?

They say there's a sucker born every minute but it feels like most of those minutes occurred 50-75 years ago judging by Trump's fan base.