dajo9 said:
calbear93 said:
dajo9 said:
calbear93 said:
dajo9 said:
calbear93 said:
dajo9 said:
calbear93 said:
dajo9 said:
calbear93 said:
cbbass1 said:
calbear93 said:
dajo9 said:
Aren't we trying to bring up the unemployment rate to slow down the service/wage inflation that remains sticky? We don't want a double dip inflation. As such, wouldn't the FED be less inclined to ease anytime soon as long as unemployment remains low with inflation still higher than target?
What "service/wage inflation"??
That's not what's driving Inflation & increases in the CPI. Over 50% of CPI increases are due to price gouging by producers with pricing power.
The inflation leads the wage increases, not the other way around.
I don't think you ever worked in a corporation where pricing decisions are made.
No, the low employment rate and job hopping for better pay created an unprecedented increase in compensation for employees, especially in the technology fields. If you have ever worked for a public company, you understand the importance of operating margin and earnings. The way to protect margins when there is a spike in compensation is to raise prices. You can say executives should not raise prices but instead allow earnings to deteriorate. Well, then the shareholders would sell, the stock would plummet, and directors will find other leaders. And if you are against all this, then stop investing in the markets and put money in a savings account because your investment in pensions funds (who invest in hedge funds) and in mutual funds are driving this behavior.
Corporations will charge what the market bears. They don't wait for costs to increase if they can raise prices, they'll raise prices. There is a lot of data supporting profits driven inflation, which is simply prices going up faster than input costs.
https://www.axios.com/2023/05/18/once-a-fringe-theory-greedflation-gets-its-due
Well, that is misleading. Market will not bear random price increases because there will be someone who can do it better and more efficiently if it is not a production cost driven price increase
We have competition, and as long as there is no collusion, someone who can do it better and can charge less at the same margin will do so and gain market share. But if everyone is suffering from increase in costs (e.g., supply chain shortages that drove most of the inflation since everyone was impacted), all prices will go up and market will have to bear it.
If you ever worked with sell-side analysts who advise hedge funds, you will know the importance of market leaders with value-add who have pricing power. Otherwise, for most things, companies cannot keep raising prices without losing market share if it is not a natural monopoly or universal cost driven dynamic.
The only thing misleading is you interjecting the phrase "random price increases" as if that has anything to do with anything I said. Then you wasted a couple paragraphs batting down your straw man.
That tells me you don't really understand how corporations and market works.
Just snide comment to detract from your lack of knowledge.
Unlike you, some of us have been in actual leadership roles at corporations, have participated in operational reviews, strategy reviews, and prepared earnings calls and Q&A with the CEO and CFO. What you wrote was so removed from how corporations do pricing or what the sell side and buy side analysts consider margins, market share and organic revenue growth that it could only come from someone who has no business experience despite claim of an MBA.
So, tell me, expert, how does market share come into play in a non-monopoly when one player just raises prices to increase profit? Do all others not care about gaining market share or do they collude to increase profit in lieu of gaining market share and despite criminal laws for individual executives for violation of antitrust laws?
You are all talk and no knowledge or experience. I have told you what my experience has been as partner of one of the top NY M&A shop, GC of public companies, and COO of a hedge fund before retirement. Where does your expertise on how companies exercise pricing power come from and the impact on market share?
Yes, what I wrote is pretty far removed from many of the topics you mentioned in that I didn't mention those topics at all. Once again, you are having a debate in your imagination only.
Retailers have spoken of "aggressively" raising their prices and the consumer paying those prices. Retailers have reported record profits. Obviously my comment about retailers charging "what the market will bear" is correct right now in most cases and your narrative of cost-push inflation is wrong in that it is not borne out by the data and comments from company CEO's.
But it doesn't take a CEO to know that there are forms of inflation other than cost-push inflation. Even the smallest businessman knows it. I have a rental unit for which I have increased rent by 25% since pre-covid (after doing appropriate market research - nothing random about it). That is almost all higher profit for me. I am charging what the market will bear in a highly competitive marketplace. Costs have nothing to do with my recent pricing decisions.
https://www.forbes.com/sites/laurendebter/2022/03/03/even-off-price-retailers-plan-to-aggressively-raise-prices-this-year/?sh=7a5bf9c06e98
Wait - your rental unit experience allows you to claim that the inflation and corporate pricing strategy is based on profit increases as opposed to increases in labor and supply costs? That your rental unit experience is similar to a highly competitive industry with multiple players who are often paying a lot to increase market share (e.g., why many high growth companies are also not profitable since they are focused on gaining market share as opposed to expanding margins to increase earnings)?
Well, I wrote 3 paragraphs and provided a link but somehow you only read 1 paragraph and ignored the link. No wonder it is so hard for you to pick up on recent events.
OK, you provided a link like you provided a link to show that inflation was transitory when I said inflation is sticky and will lead to aggressive interest rate hike
So, tell me, expert, why a company in a highly competitive industry can just raise prices to increase profit without a competitor leveraging that to steal market share that are easier to retain than to lose unless a competitor does something stupid like raise prices just for more profit and divorced from actual costs?
Was that your experience from your leadership roles within large companies? Because that is nothing like the way it actually happens from someone like me with actual experience.
Every time you lose an argument with me you start talking about something from years ago
Because you keep making the same mistake.
This is not a matter of me losing an argument. What you wrote is so divorced from actual experience I have had within a large corporation that it just makes me shake my head that you believe that and still claim to be an expert.
Even the article you posted goes against your argument:
"
Retailers have been grappling with a sharp rise in costs, primarily in transportation and wages, that have weighed on profit. Many have taken steps to raise prices in an effort to recover margins and boost profits. To their surprise, they have found that the American shopper is
accepting those price increases more readily than expected."
The price increases are being driven by costs of goods and labor, not some desire to just wily lily raise prices because they can despite being in a competitive industry.
So, my point is, you are often wrong about this. You have always been wrong because you think some headline in some newspaper makes you an expert or some random chart supplants history or actual practical knowledge of people who were actual decision makers and not some twitter hero. But you do not let your lack of actual experience deter from your acting like an expert based on having read some theory or headline. And that is why I keep bringing up all the times history has proven you wrong in our debates, from market trends, equity investments, inflation, interest rate. And this is not something I am predicting. This is something I know from having been an executive and from now serving on a board of a public company. What you write is nonsense and not what companies actually do. But instead of trying to be curious and maybe broadening your horizon from people who are actually doing the work, you think you know better than reality.
And that is what I am calling out.
Only those without actual knowledge or experience would think you are the expert. Anyone with actual experience can see that what you claim goes against reality.
