OdontoBear66 said:

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Unit2Sucks said:

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The President's budget has become a joke over the decades. It's essentially gamesmanship. Biden is hoping that signalling a wealth tax will make him more popular with everyone who isn't loaded, even though you have millions of poor and middle class white people who for whatever reason think that taxing rich people is a mistake.

Biden and his team know very well that his budget isn't going to be the starting point and that his wealth tax doesn't have the support. He didn't genuinely believe that he was going to get it through. He wanted to be able to say "I tried to make the wealthiest in our country pay their fair share, but Republicans got in the way again." It probably won't work but what does he have to lose? Fox News was going to skewer him anyway. Congress controls the purse strings and they will have a lot of mouths to feed that can only be done by spending money.


No one power is ever going to want to balance the budget. That's reality. Just like no one runs for student body president on an austerity platform, no US president is ever going to say "I'm taxing you more and giving you less." No democrat, no republican, no one ever. The only way we balance the budget is by accident, like what's happened in California and it won't be for long.

Our deficit will go down, because it has to without the CARES act and other spending bills repeating, but it will still be historically high. The only hope is for interest rates to come back down because we're going to be royally screwed if we have to pay high interest rates on debt that is growing faster than GDP with no end in sight.

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Couldn't agree more Unit2.....Paragraph 3 is already in play..Terminology was used to show a big budget surplus while we have monstrously more indebtedness long term to pension promises.

Paragraph 4 is the killer. Any politician has to bring to her/his constituency to survive (aka, spend money). Spending goes up in times of low interest rates and everyone loves the side effects of the drug.

Interest rates rise, we can't pay indebted interest without reducing services. Who gets hurt? Yup, the middle class and the poor mostly.

And yes, balancing the budget is gone.

---

"And yes, balancing the budget is gone." It disappeared with reagan.

WTI Crude at $76.62

Heading down by $62 in January.

Housing Sales to Institutional Investors Dropped 30% in Third Quarter

Real estate retraction in 2023?

movielover said:

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Housing Sales to Institutional Investors Dropped 30% in Third Quarter

Real estate retraction in 2023?

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Institutions buying fewer homes is good for Americans regardless of other factors. My recent experience is that demand is much higher than supply. We need to build more housing.

dajo9 said:

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movielover said:

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Housing Sales to Institutional Investors Dropped 30% in Third Quarter

Real estate retraction in 2023?

---

Institutions buying fewer homes is good for Americans regardless of other factors. My recent experience is that demand is much higher than supply. We need to build more housing.

---

There are a lot of vacant properties out there but investors are sitting on them. That goes for commercial as well. One wonders why the investor would rather sit on the property than sell or lease it. Could it be to artificially limit supply?

dimitrig said:

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dajo9 said:

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movielover said:

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Housing Sales to Institutional Investors Dropped 30% in Third Quarter

Real estate retraction in 2023?

---

Institutions buying fewer homes is good for Americans regardless of other factors. My recent experience is that demand is much higher than supply. We need to build more housing.

---

There are a lot of vacant properties out there but investors are sitting on them. That goes for commercial as well. One wonders why the investor would rather sit on the property than sell or lease it. Could it be to artificially limit supply?

---

Yes, and, if you have a portfolio of properties and you squeeze prices higher you get to mark up all your properties at a higher valuation.

dajo9 said:

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dimitrig said:

---

dajo9 said:

---

movielover said:

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Housing Sales to Institutional Investors Dropped 30% in Third Quarter

Real estate retraction in 2023?

---

Institutions buying fewer homes is good for Americans regardless of other factors. My recent experience is that demand is much higher than supply. We need to build more housing.

---

There are a lot of vacant properties out there but investors are sitting on them. That goes for commercial as well. One wonders why the investor would rather sit on the property than sell or lease it. Could it be to artificially limit supply?

---

Yes, and, if you have a portfolio of properties and you squeeze prices higher you get to mark up all your properties at a higher valuation.

---

So it is not really about building more housing but more about allocating the housing we already have.

I was talking to a friend the other day who read about an Orange County housing developer who builds housing communities to lease to residents. They are never available to buy but only to lease through their management company. This is not a new concept but it exposes the harsh reality of the housing market, which is that there is big money out there working hard to make sure a lot of people will remain renters and never become owners.

Yes, building more housing increases competition but there are a handful of these corporations (or REITs) dominating the rental market, especially when it comes to urban housing developments. In Downtown LA a bunch of new construction flooded the market with new units. The vacancy rate hit 14% and yet rents fell only 1% as investors sat on the properties and likely even made money by setting rent at higher rates than would clear the market.

In fact, one solution LA considered for this problem was to tax owners whose properties sit vacant. The issue is that it is very hard to identity vacant units. What constitutes a vacant unit? I guess the city used to determine this by looking at water usage, but they can't do that anymore (not sure why) and that can be gamed anyway. I like that idea, though, as especially in LA is lots and lots of housing being used as 2nd, 3rd, 4th homes for the wealthy and investor-owned luxury property sitting vacant, being used as corporate office space, or for short-term rentals.

dimitrig said:

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dajo9 said:

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dimitrig said:

---

dajo9 said:

---

movielover said:

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Housing Sales to Institutional Investors Dropped 30% in Third Quarter

Real estate retraction in 2023?

---

Institutions buying fewer homes is good for Americans regardless of other factors. My recent experience is that demand is much higher than supply. We need to build more housing.

---

There are a lot of vacant properties out there but investors are sitting on them. That goes for commercial as well. One wonders why the investor would rather sit on the property than sell or lease it. Could it be to artificially limit supply?

---

Yes, and, if you have a portfolio of properties and you squeeze prices higher you get to mark up all your properties at a higher valuation.

---

So it is not really about building more housing but more about allocating the housing we already have.

I was talking to a friend the other day who read about an Orange County housing developer who builds housing communities to lease to residents. They are never available to buy but only to lease through their management company. This is not a new concept but it exposes the harsh reality of the housing market, which is that there is big money out there working hard to make sure a lot of people will remain renters and never become owners.

Yes, building more housing increases competition but there are a handful of these corporations (or REITs) dominating the rental market, especially when it comes to urban housing developments. In Downtown LA a bunch of new construction flooded the market with new units. The vacancy rate hit 14% and yet rents fell only 1% as investors sat on the properties and likely even made money by setting rent at higher rates than would clear the market.

In fact, one solution LA considered for this problem was to tax owners whose properties sit vacant. The issue is that it is very hard to identity vacant units. What constitutes a vacant unit? I guess the city used to determine this by looking at water usage, but they can't do that anymore (not sure why) and that can be gamed anyway. I like that idea, though, as especially in LA is lots and lots of housing being used as 2nd, 3rd, 4th homes for the wealthy and investor-owned luxury property sitting vacant, being used as corporate office space, or for short-term rentals.

---

Yes, and I'm sure it is regional also
In the suburbs where I just bought a house it is a matter of Supply and Demand. I'm sure other places have an issue of effective allocation.

dimitrig said:

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There are a lot of vacant properties out there but investors are sitting on them. That goes for commercial as well. One wonders why the investor would rather sit on the property than sell or lease it. Could it be to artificially limit supply?

---

I believe they receive a tax credit.

Unit2Sucks said:

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Great just need to cut the core rate to 3% and then back on the fed money cannon.

---

The 10 year Treasury is ignoring the Fed, which isnt uncommon at the end of tightening cycles.

The stock market actually moves when the bond market stops raising rates; not when the Fed stops raising rates.

But Bulls might be too optimistic about an early end to rate hikes.

M2 (still elevated) has collapsed to about 2% below the level a year ago. In contrast, bank credit growth is BOOMING at the fastest pace since 2008.

What does this mean?

It means that the Fed may have to focus more on aggregate spending than the money supply, ie) CREDIT.

If so, rate increases may have to go another full percentage point higher than the 5% that Fed Funds futures imply by mid-2023.

DiabloWags said:

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Unit2Sucks said:

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Great just need to cut the core rate to 3% and then back on the fed money cannon.

---

The 10 year Treasury is ignoring the Fed, which isnt uncommon at the end of tightening cycles.

The stock market actually moves when the bond market stops raising rates; not when the Fed stops raising rates.

But Bulls might be too optimistic about an early end to rate hikes.

M2 (still elevated) has collapsed to about 2% below the level a year ago. In contrast, bank credit growth is BOOMING at the fastest pace since 2008.

What does this mean?

It means that the Fed may have to focus more on aggregate spending than the money supply, ie) CREDIT.

If so, rate increases may have to go another full percentage point higher than the 5% that Fed Funds futures imply by mid-2023.

---

Sounds close to my Barron's reading this AM. Give cred where due.

66 million employed back in the day, 62M+ now. Too many 55 year olds retiring early after Covid. So speak to the reality of employment/unemployment numbers.

edit: 66% employment, vs. 62%.

2022 is expected to have record employment of 158 million jobs, up from the prior record of 157 million in 2019.

Wage inequality fell over the last two and half years. And compared to early 2020, real wages are still higher for the bottom 40% of the workforce (accounting for demographic composition), in spite of high inflation rate over the past year and half. pic.twitter.com/PzHfSc2oyN

— Arindrajit Dube (@arindube) November 24, 2022

DiabloWags said:

---

Unit2Sucks said:

---

Great just need to cut the core rate to 3% and then back on the fed money cannon.

---

The 10 year Treasury is ignoring the Fed, which isnt uncommon at the end of tightening cycles.

The stock market actually moves when the bond market stops raising rates; not when the Fed stops raising rates.

But Bulls might be too optimistic about an early end to rate hikes.

M2 (still elevated) has collapsed to about 2% below the level a year ago. In contrast, bank credit growth is BOOMING at the fastest pace since 2008.

What does this mean?

It means that the Fed may have to focus more on aggregate spending than the money supply, ie) CREDIT.

If so, rate increases may have to go another full percentage point higher than the 5% that Fed Funds futures imply by mid-2023.

---

The higher the Fed pushes the Fed Funds rate, the lower the 10 year rate will go

OdontoBear66 said:

---

DiabloWags said:

---

Unit2Sucks said:

---

Great just need to cut the core rate to 3% and then back on the fed money cannon.

---

The 10 year Treasury is ignoring the Fed, which isnt uncommon at the end of tightening cycles.

The stock market actually moves when the bond market stops raising rates; not when the Fed stops raising rates.

But Bulls might be too optimistic about an early end to rate hikes.

M2 (still elevated) has collapsed to about 2% below the level a year ago. In contrast, bank credit growth is BOOMING at the fastest pace since 2008.

What does this mean?

It means that the Fed may have to focus more on aggregate spending than the money supply, ie) CREDIT.

If so, rate increases may have to go another full percentage point higher than the 5% that Fed Funds futures imply by mid-2023.

---

Sounds close to my Barron's reading this AM. Give cred where due.

---

Nancy Lazar was in my friends office 2 weeks ago.
That's where this came from.

She sees current nominal GDP at 9% dropping to 4% next year and Fed Funds having to trade at 2 percentage points above that to weaken margins and force companies to lay people off. This, will sop up $1 Trillion in savings that was accumulated over the past two years.

Its a brutal scenario. They should simply allow more immigrants into the workforce to push labor prices down.. Im sure Unit2 would agree with me on this.

DiabloWags said:

---

OdontoBear66 said:

---

DiabloWags said:

---

Unit2Sucks said:

---

Great just need to cut the core rate to 3% and then back on the fed money cannon.

---

The 10 year Treasury is ignoring the Fed, which isnt uncommon at the end of tightening cycles.

The stock market actually moves when the bond market stops raising rates; not when the Fed stops raising rates.

But Bulls might be too optimistic about an early end to rate hikes.

M2 (still elevated) has collapsed to about 2% below the level a year ago. In contrast, bank credit growth is BOOMING at the fastest pace since 2008.

What does this mean?

It means that the Fed may have to focus more on aggregate spending than the money supply, ie) CREDIT.

If so, rate increases may have to go another full percentage point higher than the 5% that Fed Funds futures imply by mid-2023.

---

Sounds close to my Barron's reading this AM. Give cred where due.

---

Its a brutal scenario. They should simply allow more immigrants into the workforce to push labor prices down.. Im sure Unit2 would agree with me on this.

---

Correct. Trump limiting immigration and making our country unattractive to immigrants damaged our labor force and hurt companies looking to grow.

Whether that ultimately contributed more to wage growth than inflation is beyond my knowledge at this point but I wouldn't be surprised if it were both. I definitely believe it reduced GDP growth because growth oriented companies were starved for talent. They still are!

We should have massively expanded legal immigration for tech workers because there simply isn't enough domestic talent to fulfill demand and it's not about wages as tech jobs are far more attractive to candidates than just about every other industry.

Unit2Sucks said:

---

DiabloWags said:

---

OdontoBear66 said:

---

DiabloWags said:

---

Unit2Sucks said:

---

Great just need to cut the core rate to 3% and then back on the fed money cannon.

---

The 10 year Treasury is ignoring the Fed, which isnt uncommon at the end of tightening cycles.

The stock market actually moves when the bond market stops raising rates; not when the Fed stops raising rates.

But Bulls might be too optimistic about an early end to rate hikes.

M2 (still elevated) has collapsed to about 2% below the level a year ago. In contrast, bank credit growth is BOOMING at the fastest pace since 2008.

What does this mean?

It means that the Fed may have to focus more on aggregate spending than the money supply, ie) CREDIT.

If so, rate increases may have to go another full percentage point higher than the 5% that Fed Funds futures imply by mid-2023.

---

Sounds close to my Barron's reading this AM. Give cred where due.

---

Its a brutal scenario. They should simply allow more immigrants into the workforce to push labor prices down.. Im sure Unit2 would agree with me on this.

---

Correct. Trump limiting immigration and making our country unattractive to immigrants damaged our labor force and hurt companies looking to grow.

Whether that ultimately contributed more to wage growth than inflation is beyond my knowledge at this point but I wouldn't be surprised if it were both. I definitely believe it reduced GDP growth because growth oriented companies were starved for talent. They still are!

We should have massively expanded legal immigration for tech workers because there simply isn't enough domestic talent to fulfill demand and it's not about wages as tech jobs are far more attractive to candidates than just about every other industry.

---

I support more immigration for tech workers. In general though, right now wages are growing much less than inflation and there is no need to inflict massive damage on the labor market

I think that instead of importing cheap tech workers we should do more to create more of our own.

That means more access to education and job training programs.

dimitrig said:

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I think that instead of importing cheap tech workers we should do more to create more of our own.

That means more access to education and job training programs.

---

I'm for that too

For once, we all agree.

DiabloWags said:

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For once, we all agree.

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Time to shut down Off Topic

> Time to shut down Off Topic

bye bye

dajo9 said:

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dimitrig said:

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I think that instead of importing cheap tech workers we should do more to create more of our own.

That means more access to education and job training programs.

---

I'm for that too

---

We all are but you can't create experienced US worker engineers on a short time horizon. Immigrants help smooth out demand. It's really hard right now trying yo find a good software developer with 10+ years of experience and *checks math* it will take more than a few months of training to get us there.

Also, in case you haven't noticed, the GOP is anti higher education and still pushing for "manufacturing" jobs aka low skilled labor. Rather than helping make college more affordable, which would increase the domestic supply of knowledge workers, the GOP wants to destroy higher education because it's not "conservative," whatever that means these days.

Unit2Sucks said:

---

DiabloWags said:

---

OdontoBear66 said:

---

DiabloWags said:

---

Unit2Sucks said:

---

Great just need to cut the core rate to 3% and then back on the fed money cannon.

---

The 10 year Treasury is ignoring the Fed, which isnt uncommon at the end of tightening cycles.

The stock market actually moves when the bond market stops raising rates; not when the Fed stops raising rates.

But Bulls might be too optimistic about an early end to rate hikes.

M2 (still elevated) has collapsed to about 2% below the level a year ago. In contrast, bank credit growth is BOOMING at the fastest pace since 2008.

What does this mean?

It means that the Fed may have to focus more on aggregate spending than the money supply, ie) CREDIT.

If so, rate increases may have to go another full percentage point higher than the 5% that Fed Funds futures imply by mid-2023.

---

Sounds close to my Barron's reading this AM. Give cred where due.

---

Its a brutal scenario. They should simply allow more immigrants into the workforce to push labor prices down.. Im sure Unit2 would agree with me on this.

---

Correct. Trump limiting immigration and making our country unattractive to immigrants damaged our labor force and hurt companies looking to grow.

Whether that ultimately contributed more to wage growth than inflation is beyond my knowledge at this point but I wouldn't be surprised if it were both. I definitely believe it reduced GDP growth because growth oriented companies were starved for talent. They still are!

We should have massively expanded legal immigration for tech workers because there simply isn't enough domestic talent to fulfill demand and it's not about wages as tech jobs are far more attractive to candidates than just about every other industry.

---

For the first time in decades, Real Wages grew under President Trump, and grew the most for lower end workers. But I see the 'elites' don't like that. We had no inflation before the Plandemic.

Tech workers? Tech could stop relying on indentured servants (H1B Visa holders) and hire American techies. But they want cheaper labor, labor that can't move jobs, and younger techies (lower wages and health care costs). They'll also hang out and code at 10 PM while married older workers have wives, children, and grandchildren. H1B Visas are defacto age
discrimination.

The Biden Administration has driven our economy to the worst economic results in decades.

Gas Prices COLLAPSING in the Diablo Valley.

Safeway in Pleasant Hill.
From the Tesoro Golden Eagle Refinery in Avon.

Q3 GDP upgraded to 2.9%. Media barely mentions it.
https://www.google.com/amp/s/www.marketwatch.com/amp/story/u-s-grew-2-9-in-third-quarter-gdp-shows-and-theres-little-sign-of-recession-for-now-11669815688

I can't wait until Fox News starts blaming Biden for falling gas prices and claims that it hurts small businesses, like they did this summer. Will be interesting to see if they get to that or blaming Biden for the overheating economy.

Here's our writeup of Fox News anchor Sandra Smith noting that the recent drop in fuel costs is “historically faster“ than usual and poses a risk to “mom-and-pop gas stations.”

"It’s a struggle for all of them!" Smith added.https://t.co/rqXpIZinVr

— Justin Baragona (@justinbaragona) July 11, 2022

Fox News Complains About Lower Gas Prices: Right wing tax nut Grover Norquist told Fox News' Sandra Smith that gas prices dropping across the country is bad because in his estimation people are driving less. Huh? Just a few months.. via crooksandliars https://t.co/BCn9zlFy2B

— Jeffrey Levin 🇺🇦 (@jilevin) August 11, 2022

Yowza. It will be quite interesting to see how meaningful long COVID is. I won't be surprised if it's a lot of people on fake disability like we commonly see with FD/PD.

"Some of the participation gap reflects workers who are still out of the labor force because they are sick with COVID-19 or continue to suffer lingering symptoms from previous COVID infections ("long COVID")" https://t.co/okxnuChVJI pic.twitter.com/dXaPm7ma1j

— Sam Ro 📈 (@SamRo) November 30, 2022

WSJ: Food Commodities Are Getting Cheaper Unlike Grocery Bills

Prices have pulled back, but higher energy costs and production worries are keeping costs for consumers high

Dec 2, 2022

(WSJ) "Global prices for commodities such as wheat and sugar have fallen back to where they were a year ago, but consumers are still likely to feel the pinch at the checkout.


[…]" Higher energy and power costs are also fueling food-price inflation. "That product on the shelf has a lot of the oil price built in," said Kathy Kriskey, a commodity strategist at Invesco.

"Costlier energy means it costs more to transport and package food, while supermarkets are paying more to power their stores. Higher gas prices also lead to increased fertilizer costs, while wage bills are also rising rapidly.

"Supermarkets have more incentive to freeze than to lower prices, Ms. Kriskey added, since that gives them more flexibility if other input costs such as energy rise further in the coming months. (read more)

Higher energy costs = Biden / WEF Green energy policies

263,000 NFP jobs added in November.

Unemploment rate remained at 3.7%

Avg. Hourly Earnings were up 0.6% in November.

This was the 8th straight month that the payroll data topped analysts estimates.

The economy is far more resilient than most have expected.

Avg. Hourly Earnings grew +5.1% from a year earlier.

This will continue to make the Fed's job tougher.

DiabloWags said:

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263,000 NFP jobs added in November.

Unemploment rate remained at 3.7%

Avg. Hourly Earnings were up 0.6% in November.

This was the 8th straight month that the payroll data topped analysts estimates.

The economy is far more resilient than most have expected.

Avg. Hourly Earnings grew +5.1% from a year earlier.

This will continue to make the Fed's job tougher.

---

"Fed's job tougher" and maybe longer.

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

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

---

Some people are predicting that we kicked inflation but that's not exactly the prevailing view yet. Going to be an interesting few months!

dajo9 said:

---

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

---

Perhaps.
But they'll raise Fed Funds another 50 basis points this week to 4.38% and probably another 25 in Feb.

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

Services inflation accelerated to 6.8%

They're not even close to seeing the real rate go to zero or +one-half point.
Even if they pause, rates will remain high until they see a positive real rate.

I shorted the opening.
Market participants are in fantasy land if they think equities can rally from a 17.5x forward multiple.
Margins are going to be contracting throughout 2023.

dajo9 said:

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What? Nobody wants to celebrate cooling inflation?

---

The futures market celebrated earlier this morning when the Dow Futures were +1,000