2021 - Is inflation finally back in the conversation?

[TxTower 648]

I’m hearing “Entrenched Inflation” now.
Is that like Transitory?

[Incredulity 11141]

7 minutes ago, TxTower said:

I’m hearing “Entrenched Inflation” now.
Is that like Transitory?

Hopefully,  because obviously “transitory” was dead fucking wrong.

[Thetexashammer 1062]

 

 

[Bozo_Casanova 25500]

1 hour ago, Incredulity said:

Hopefully,  because obviously “transitory” was dead fucking wrong.

lighten up Francis

[Bozo_Casanova 25500]

3 hours ago, washparkhorn said:

 

[Dbeasy 14733]

CPI has lagging indicators, especially housing. It’s close to the 2% target once you look at where housing is headed and remove the volatility of energy. 

However, the economy has to be pushed clearly into a recession to generate significant unemployment, which would drop inflation firmly into the 2% range or possibly even lower, and also slow down coastal housing inflation  

But, with deficits and debt so high the government can’t afford a major recession or the debt and deficits will get so scary as to be potentially catastrophic. 

So they will be reluctant to push too hard. The coming wave of real estate defaults will probably cause a major impact. So they will not raise rates, wait for the real estate crash, and then adjust rates modestly.  Inflation will continue to run hot for the next 10 years (3-4%) and they will inflate away the debt.

[Newdoc 3421]

1 hour ago, Dbeasy said:

So they will be reluctant to push too hard. The coming wave of real estate defaults will probably cause a major impact. So they will not raise rates, wait for the real estate crash, and then adjust rates modestly.  Inflation will continue to run hot for the next 10 years (3-4%) and they will inflate away the debt.

[Dbeasy 14733]

I’m reading that services inflation came in hot. That is not good, but is not surprising given the ridiculous increases in insurance rates. 

And by the way, we need to get the lawyers under control. The lawsuits are getting out of control. People suck and will sue for anything and everything. 

Edited April 10 by Dbeasy

[Hefeweizen 5210]

3 hours ago, Dbeasy said:

I’m reading that services inflation came in hot. That is not good, but is not surprising given the ridiculous increases in insurance rates. 

And by the way, we need to get the lawyers under control. The lawsuits are getting out of control. People suck and will sue for anything and everything. 

This last is no lie.  I spend over half my time being an expert in either litigation or administrative law cases.  Everyone is suing and lawyering up, in every jurisdiction too.  Not just big cities.  Out in BFE too.

[Brisketexan 103143]

This last is no lie.  I spend over half my time being an expert in either litigation or administrative law cases.  Everyone is suing and lawyering up, in every jurisdiction too.  Not just big cities.  Out in BFE too.

Except that’s literally untrue. I work with a group that just pulled data on that exact point for a presentation to professionals. We actually had a hypothesis that the number of disputes going to court had increased. We were wrong. Over the past several years, the number of suits filed has declined. The number of cases going trial has declined. The percentage of cases that settle at mediation has held steady.

We had our crusade against “lawsuit abuse!” 20 years ago. It didn’t do shit except increase the profits of insurance companies, and fuck over people who had actually meritorious claims. Sure, let’s have another crusade against people’s right to hold other people accountable. Fuck it, we’ve pretty much decided to ditch the rule of law anyway, might as well finish the job. All disputes settled by violence now, let’s get it done.

[MirrOlure 14397]

I’m reading that services inflation came in hot. That is not good, but is not surprising given the ridiculous increases in insurance rates. 
And by the way, we need to get the lawyers under control. The lawsuits are getting out of control. People suck and will sue for anything and everything. 

Shakespearean….

[TwiceHorn 30715]

4 hours ago, Dbeasy said:

I’m reading that services inflation came in hot. That is not good, but is not surprising given the ridiculous increases in insurance rates. 

And by the way, we need to get the lawyers under control. The lawsuits are getting out of control. People suck and will sue for anything and everything. 

Suing is a civil liberty in the United States that is unmatched elsewhere in the world.  As brisket notes, efforts to "get the lawyers under control" always hurt those with meritorious claims more than anyone else.

How about we try getting the insurers under control?

[Hefeweizen 5210]

39 minutes ago, Brisketexan said:

Except that’s literally untrue. I work with a group that just pulled data on that exact point for a presentation to professionals. We actually had a hypothesis that the number of disputes going to court had increased. We were wrong. Over the past several years, the number of suits filed has declined. The number of cases going trial has declined. The percentage of cases that settle at mediation has held steady.

We had our crusade against “lawsuit abuse!” 20 years ago. It didn’t do shit except increase the profits of insurance companies, and fuck over people who had actually meritorious claims. Sure, let’s have another crusade against people’s right to hold other people accountable. Fuck it, we’ve pretty much decided to ditch the rule of law anyway, might as well finish the job. All disputes settled by violence now, let’s get it done.

I must have touched you where the bad man did.  I can tell you that in my field, permits from the state of Texas, there has been a sharp increase in contested case hearings, so much so that SOAH is backed up like a bad toilet.  
 

My point remains with my narrow focus.  I am personally doing more legal adjacent expert work than I ever have before.  And I only do it for clients I am already working for- I am not an expert for hire.

[Dbeasy 14733]

1 hour ago, Brisketexan said:

Except that’s literally untrue. I work with a group that just pulled data on that exact point for a presentation to professionals. We actually had a hypothesis that the number of disputes going to court had increased. We were wrong. Over the past several years, the number of suits filed has declined. The number of cases going trial has declined. The percentage of cases that settle at mediation has held steady.

We had our crusade against “lawsuit abuse!” 20 years ago. It didn’t do shit except increase the profits of insurance companies, and fuck over people who had actually meritorious claims. Sure, let’s have another crusade against people’s right to hold other people accountable. Fuck it, we’ve pretty much decided to ditch the rule of law anyway, might as well finish the job. All disputes settled by violence now, let’s get it done.

 

44 minutes ago, TwiceHorn said:

Suing is a civil liberty in the United States that is unmatched elsewhere in the world.  As brisket notes, efforts to "get the lawyers under control" always hurt those with meritorious claims more than anyone else.

How about we try getting the insurers under control?

Don’t know what data you are referencing but my best friend is a senior exec in the insurance industry and has been doing underwriting for 30 years and he said absolutely lawsuits and payments are up massively. I also see it all the time myself. 

And yes you need lawyers to keep companies in check, but there is a needed balance. 
 

 

 

[Brisketexan 103143]

I must have touched you where the bad man did.  I can tell you that in my field, permits from the state of Texas, there has been a sharp increase in contested case hearings, so much so that SOAH is backed up like a bad toilet.  
 
My point remains with my narrow focus.  I am personally doing more legal adjacent expert work than I ever have before.  And I only do it for clients I am already working for- I am not an expert for hire.

There are more contested permit cases because…there are many more permit applications…because our population and development has exploded. While the size and staffing of SOAH has remained about the same. On a per capita basis, there hasn’t been any material increase in those disputes.

[Hefeweizen 5210]

Speaking of inflation.  I need to increase my rates.  By a lot.  I saw what the attorneys are charging my clients. And I’m tired of giving my expertise away.  I’m thinking 500 an hour might be too much but 400 seems reasonable.

[Storm the Field 5239]

PPI today came in much more modest than CPI yesterday.

 

[StassneyHorn 6407]

When everything missed is HOT HOT HOT by 0.1%, everything looks like a (straight) jacket.

Did I do that right? Hammer nail thing 

[BabaYaga 15116]

13 hours ago, Brisketexan said:

Except that’s literally untrue. I work with a group that just pulled data on that exact point for a presentation to professionals. We actually had a hypothesis that the number of disputes going to court had increased. We were wrong. Over the past several years, the number of suits filed has declined. The number of cases going trial has declined. The percentage of cases that settle at mediation has held steady.

We had our crusade against “lawsuit abuse!” 20 years ago. It didn’t do shit except increase the profits of insurance companies, and fuck over people who had actually meritorious claims. Sure, let’s have another crusade against people’s right to hold other people accountable. Fuck it, we’ve pretty much decided to ditch the rule of law anyway, might as well finish the job. All disputes settled by violence now, let’s get it done.

Considering the number of lawyers on this site arguing 24/7, this above seems accurate

[Storm the Field 5239]

13 hours ago, Dbeasy said:

 

Don’t know what data you are referencing but my best friend is a senior exec in the insurance industry and has been doing underwriting for 30 years and he said absolutely lawsuits and payments are up massively. I also see it all the time myself. 

An Insurance Exec complaining that there are too many lawsuits??!?!? Now I've seen everything. 

What's next, Doctors moaning about malpractice suits?

Surely we can go back to the old system where meritorious claims are paid out in full and only non-meritorious claims are denied.

Edited April 11 by Storm the Field

[CowboyFred 1130]

Lol at listening to an insurance exec bitch and moan. Ask him how he feels about the new tort reform in Florida that the insurance lobby helped pass. Insurance companies can get fucked. 

[washparkhorn 9894]

https://www.bloomberg.com/news/newsletters/2024-04-08/us-inflation-is-actually-being-driven-by-higher-interest-rates-jpmorgan-says

 

[UTPhil2006 3753]

7 minutes ago, washparkhorn said:

https://www.bloomberg.com/news/newsletters/2024-04-08/us-inflation-is-actually-being-driven-by-higher-interest-rates-jpmorgan-says

 

This guy gets it 

[jimmyjazz 45055]

58 minutes ago, UTPhil2006 said:

This guy gets it 

That has been my amateur opinion for a while now.  My perspective has been more "people need to readjust to current inflation rates, which are hardly exorbitant", but the point stands.  We need to slowly cut rates.

[ChickenSandwich 9749]

3 hours ago, jimmyjazz said:

That has been my amateur opinion for a while now.  My perspective has been more "people need to readjust to current inflation rates, which are hardly exorbitant", but the point stands.  We need to slowly cut rates.

If we can make Americans only compare this year vs last year and memory hole the prior three, then yes, inflation is not bad at all. 
 

It is a significant reduction of standard of living for the non-investor class. 
 

It’s Been 30 Years Since Food Ate Up This Much of Your Income

https://www.wsj.com/economy/consumers/its-been-30-years-since-food-ate-up-this-much-of-your-income-2e3dd3ed?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosam&stream=top

Edited April 11 by ChickenSandwich

[Gravy Train 969]

Lower rates aren't going to address house price appreciation of 44% from 2018.  That shit is entrenched from 12-month trailing comps and the next dipshit buyer bidding over list, leveraging their iBuyer service, or using it as a vehicle to park liquidity while AirBnB or rent-seeking for the next generation.

[jimmyjazz 45055]

Guess what, I'm over 30 years old.  I remember far worse.  People need perspective.

[StassneyHorn 6407]

2 hours ago, ChickenSandwich said:

If we can make Americans only compare this year vs last year and memory hole the prior three, then yes, inflation is not bad at all. 
 

It is a significant reduction of standard of living for the non-investor class. 
 

 

It’s Been 30 Years Since Food Ate Up This Much of Your Income

https://www.wsj.com/economy/consumers/its-been-30-years-since-food-ate-up-this-much-of-your-income-2e3dd3ed?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosam&stream=top

Point at this fat guy who eats fast food every meal

Edited April 12 by StassneyHorn

[StassneyHorn 6407]

Subway is forcing me to buy 12dollar footlongs! And tip! For counter service

[TwiceHorn 30715]

On 4/10/2024 at 8:58 PM, Hefeweizen said:

I must have touched you where the bad man did.  I can tell you that in my field, permits from the state of Texas, there has been a sharp increase in contested case hearings, so much so that SOAH is backed up like a bad toilet.  
 

My point remains with my narrow focus.  I am personally doing more legal adjacent expert work than I ever have before.  And I only do it for clients I am already working for- I am not an expert for hire.

So, are your clients "little guys" or moneyed interests of the type who in the past supported tort reform?

[TwiceHorn 30715]

18 hours ago, Storm the Field said:

What's next, Doctors moaning about malpractice suits?

 

The residential construction industry groaning about being sued for building shitty houses.

Wait, that already happened.  https://www.dentonlaw.com/news-and-articles/residential-construction-defects/

[Hefeweizen 5210]

1 hour ago, TwiceHorn said:

So, are your clients "little guys" or moneyed interests of the type who in the past supported tort reform?

Yes?  Generally I would say the latter, although that’s a function of my work, which is obtaining new permits rather than working to prevent them from being issued.  But usually, the little people are bystanders while cities and counties are the main opposition to my clients. 

[Fudge Nuggets 18825]

On 4/7/2024 at 5:19 PM, 52-80 said:

Your command of English must be as good as it is of Economics. 

The verb agreement choice depends on context and/or region. Here’s UT Law faculty Wayne Schiess who “teaches legal writing, legal drafting, and plain English“:

English is my 2nd language (out of 4).  What’s your excuse?

You just proved his point, dumbass.

[52-80 18962]

35 minutes ago, Fudge Nuggets said:

You just proved his point, dumbass.

One of the dummies to which I was referring, with the correct plural case, just showed up. 

[Bozo_Casanova 25500]

On 4/11/2024 at 1:32 PM, washparkhorn said:

https://www.bloomberg.com/news/newsletters/2024-04-08/us-inflation-is-actually-being-driven-by-higher-interest-rates-jpmorgan-says

 

Yeah, no. People are thinking twice about selling because they wont make as much as they would have before? Oh no! Where was all the bleating about the unattainable explosion of asset prices when leverage was free?

Easy credit got us into this, it won’t get us out, and if sectors of this economy don’t work with very normal 5% interest rates it’s the sector that needs change only tighter credit can provide.

Big picture: we need much more and much smaller housing that doesn’t need free debt to make sense. Near term, if people want their house to sell faster they can drop prices. Until then unemployment is low, businesses are hiring, wages are rising and things are pretty good.
Normalizing rates is like the veer offense or novacaine. It always works. Just give it time. 

Edited April 13 by Bozo_Casanova

[Fudge Nuggets 18825]

4 hours ago, 52-80 said:

One of the dummies to which I was referring, with the correct plural case, just showed up. 

Keep on deflecting, boy. 

[gmr548 16252]

On 4/11/2024 at 1:32 PM, washparkhorn said:

https://www.bloomberg.com/news/newsletters/2024-04-08/us-inflation-is-actually-being-driven-by-higher-interest-rates-jpmorgan-says

 

This is ignoring the amount of people (and money) on the sidelines in the housing market because they don't like the interest rate environment. A decrease in interest rates without an economic slowdown is going to lead to an increase in home prices - and a significant one at that - because we are still structurally undersupplied.

[Make em eat Taco Bell 1548]

Tide 92oz bottle downsized to 84oz at same $12.99 at Target, a 9.5% increase mofos!  Luckily i grabbed a couple of the few remaining 92oz phew! 

[Bozo_Casanova 25500]

4 hours ago, Bozo_Casanova said:

Easy credit got us into this, it won’t get us out, and if sectors of this economy don’t work with very normal 5% interest rates it’s the sector that needs change only tighter credit can provide.

BTW @UTPhil2006 and others in the real estate biz: I’m aware this is not a fun time for y’all and it has probably impacted your lifestyle. Sorry if my post seemed flip.

[52-80 18962]

2 hours ago, Fudge Nuggets said:

Keep on deflecting, boy. 

Are you going to cry to immamac too?

[jimmyjazz 45055]

Sick burn.

[UTPhil2006 3753]

1 hour ago, Bozo_Casanova said:

BTW @UTPhil2006 and others in the real estate biz: I’m aware this is not a fun time for y’all and it has probably impacted your lifestyle. Sorry if my post seemed flip.

I ain’t mad at all. I appreciate your commentary. 

[Fudge Nuggets 18825]

9 minutes ago, UTPhil2006 said:

I ain’t mad at all. I appreciate your commentary. 

Cool.

[Thetexashammer 1062]

I think they are going to have to cut rates massively to avoid out of control deficits. To be fair, this is what I am hoping for anyway.

When this happens, I want to get massively long on some personal real estate. It will be the last time we see low cost mortgages, and just like the inflation from the 1980's, if you held on to your home the mortgage cost inflated away and the home value (driven by nominal wages) just kept going up. 

[TheFlyingBoat 906]

On 4/11/2024 at 11:32 AM, washparkhorn said:

https://www.bloomberg.com/news/newsletters/2024-04-08/us-inflation-is-actually-being-driven-by-higher-interest-rates-jpmorgan-says

 

This is dumb as fuck. If you want to curb housing price growth rates, build units at the rate the population grows. Cutting interests rates would massively inflate home prices as dry powder sitting on the sidelines rushes in to buy at low interest rates.

[CHIEF 5035]

6 hours ago, TheFlyingBoat said:

This is dumb as fuck. If you want to curb housing price growth rates, build units at the rate the population grows. Cutting interests rates would massively inflate home prices as dry powder sitting on the sidelines rushes in to buy at low interest rates.

The problem is there is not a lot of fat between construction costs and retail pricing right now. Small time custom home builders (like myself), are pretty much sitting on the sidelines, or building for clients at cost plus a percentage. The cost of building, right now in our area, is from $190-195sqft. 1450sqft. starter homes with single car garages, sitting on $10k lots in mixed housing (stick built homes and mobile homes) are $250k. We are closing on one today. It's a young couple with a combined income of a little over $100k, and it was still tough to get them qualified.

I paid $117/yard for concrete in 2020. It is hovering around $200/yard currently. Until material costs come down, building will lag behind, and the units that are being built are still unobtainable to most young families at current interest rates. Doubling interest rates basically halved what potential home buyers are able to qualify for. 

CHIEF

[tbone_ 13968]

I ain’t mad at all. I appreciate your commentary. 

I’m annoyed af at the rates, and the long cycle projects I have that were conceived at lower rates. I happy to build in any rate environment as long as costs and rents/prices are adjusted to reflect reality (which they aren’t right now).

Just because I’m annoyed doesn’t mean Bozo was wrong though.

[tbone_ 13968]

I think they are going to have to cut rates massively to avoid out of control deficits. To be fair, this is what I am hoping for anyway.
When this happens, I want to get massively long on some personal real estate. It will be the last time we see low cost mortgages, and just like the inflation from the 1980's, if you held on to your home the mortgage cost inflated away and the home value (driven by nominal wages) just kept going up. 

This is really the only true actual solution.

[Bozo_Casanova 25500]

9 hours ago, CHIEF said:

The problem is there is not a lot of fat between construction costs and retail pricing right now. Small time custom home builders (like myself), are pretty much sitting on the sidelines, or building for clients at cost plus a percentage. The cost of building, right now in our area, is from $190-195sqft. 1450sqft. starter homes with single car garages, sitting on $10k lots in mixed housing (stick built homes and mobile homes) are $250k. We are closing on one today. It's a young couple with a combined income of a little over $100k, and it was still tough to get them qualified.

 

See this is a symptom of the structural problem: we used low rates to paper over:
1) Regulatory restraints on the market, especially at the local level
2) Increased materials scarcity
3) Labor supply issues 
4) Poor product-demand match at the population level

and other stuff

Like any dysfunctional complex, it became entrenched because we enabled it, because dealing with the problems underneath was too hard. Now not dealing with it is too hard. It's not fun for anybody. 

Edited April 15 by Bozo_Casanova

[TheFlyingBoat 906]

16 minutes ago, Bozo_Casanova said:

See this is a symptom of the structural problem: we used low rates to paper over:
1) Regulatory restraints on the market, especially at the local level
2) Increased materials scarcity
3) Labor supply issues 
4) Poor product-demand match at the population level

and other stuff

Like any dysfunctional complex, it became entrenched because we enabled it, because dealing with the problems underneath was too hard. Now not dealing with it is too hard. It's not fun for anybody. 

Nailed it