Prices, Inflation/Deflation, Interest Rates & The Fed

Home delivery and fast food service booming against the crisis in Venezuela

Although it may seem paradoxical, fast food establishments are the ones that have had the greatest boom in our country, the ones that have managed to face the hyperinflation crisis and have managed to turn around, as we say in Creole, the obstacles to work.

Many do not even do it from their usual establishments, but dispatch from their residences or other places, which are closer to their usual customers, to send the order in vehicles with less fuel consumption, such as motorcycles or vehicles that do not use fuel, such as bicycles..
 
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I've probably mentioned this but always notice these charts cut off just in time to ignore the higher prices post-2011.

There still isn't any sign of inflation, outside some supply shocks. Similar to real estate, you're not seeing inflation from any "biblical" money printing (just do the math between M increase and prices), instead you're seeing markets beginning to fail.
 

kel

Ostrich
I work for a consumer reporting agency, my department works on credit checks for the mortgage industry. Its unbelievable how many people who have bottom-tier credit are applying for mortgages. Every week I come across at least a dozen people with things like recent bankruptcies, unsatisfied tax liens, multiple accounts that are in collections or have been written off. Every month I see at least 3 or 4 applicants who have actually been sued by credit card companies for non-payment and have settled for less. There's also all the people who have $50k+ worth of student loans which are in forbearance due to the Cares Act. I had one lady a couple weeks ago who had $237k of student loan debt but was a public school teacher. I really think we're heading into a bad situation with all of this.
How can someone with decent credit and a good income take advantage of this situation? I've been thinking of buying, to finally settle, but it seems like mania like this - besides low rates - would not help someone like me.
 

kel

Ostrich
Farm land has gone absolutely wild in the last year. I was lucky enough to close a deal 1 year ago on a plot of land.

What is happening now is that farmland prices are skyrocketing. Small farms and country homestead lots are seeing the most massive gains. Everyone has this idea. My farm is 50 acres workable, I see farms with 20 acres workable going for similar prices just one year later. A 20 - 50 acre farm is kind of "retail". Lots of people build a nice house, and either rent out the land, or do it as a hobby. The pricing for these farms has gone from something a determined blue collar guy could buy, to something now someone with deep pockets would go for. But there is a euphoria.
I wonder how long it can go on. When ("when", right? not "if"... [nervous laughter]) normal-ish life returns, will people interested in moving out to a more rural place be able to take advantage of a glut in the market from wealthy people losing interest in their lockdown pads and accepting their permanent place in the city, or is this on a longer timescale?
 

C-Note

Ostrich
Gold Member
As you know from the penny stock thread, I've been spending a lot of time poring over small public companies (below $700M capitalization) and I'm seeing a general trend over the last couple of weeks of upward pressure on the prices of penny stocks. From what I understand, once the big market stocks start looking overpriced, investors start poring money into alternative investments, like penny stocks. The thing is, the incentive checks are just now starting to arrive. So, if true, it looks to me like the market is overheated and will be so for at least another month or two. I guess right now is a great time to be a day trader, but if you're looking long term, it might be an expensive time for buying-in. I hope a correction comes in a couple of months so we can get it over with, but these things are so hard to predict.
 

jonNorth

Sparrow
I wonder how long it can go on. When ("when", right? not "if"... [nervous laughter]) normal-ish life returns, will people interested in moving out to a more rural place be able to take advantage of a glut in the market from wealthy people losing interest in their lockdown pads and accepting their permanent place in the city, or is this on a longer timescale?

The cities were struggling under Trump, the cash syphon was cut off and they were forced to deal with their budget realities.

Now the cash syphon is turned back on, so who knows what they are capable of. That's why I'm partially skeptical of the whole leaving the cities hypothesis... They will decide where we leave and where we stay
 
The cities were struggling under Trump, the cash syphon was cut off and they were forced to deal with their budget realities.

Now the cash syphon is turned back on, so who knows what they are capable of. That's why I'm partially skeptical of the whole leaving the cities hypothesis... They will decide where we leave and where we stay

Major cities will be justified as being "too big to fail", so will be continually subsidised. Most people who will "bug out" of the major cities would migrate and cluster around the established liberal rural areas. They will not attempt to break the heavily conservative rural areas, as the folk in those areas are hard workers who don't take too kindly to users/grifters.
 
Powell said that inflation was going to be transitory, but of course nobody believes him. Now the MSM is reporting that Kimberly-Clark and General Mills are going to be raising prices:

Kimberly Clark said Wednesday that it would hike prices on staples like Scott toilet paper and Huggies diapers, joining the growing list of consumer products companies that are raising prices.....If rival Procter & Gamble follows its lead, consumers could also see higher prices on Pampers diapers and Charmin toilet paper.....General Mills CFO Kofi Bruce said on the company’s March 24 earnings call that it is taking action now and in the coming months to raise prices.

https://www.cnbc.com/2021/03/31/higher-commodity-costs-lead-to-price-hikes-from-kimberly-clark.html
 

What do you guys think of this guys analysis - he thinks inflation is transitory and that home prices are overvalued and will see a 20% reduction eventually?

I'm skeptical because he's not pricing in inflation. Hard to trust because he's a mainstream economist but he did call the 2008 subprime crisis correctly well before it happened - so I'm a bit mixed here about his view
 

Blade Runner

Pelican
Most people who "got 2008 right" haven't predicted anything in 13 years very well = they just got lucky or it's a media narrative. This guy is decent, he's on realvision here and there, but I don't think he's made any real predictions that differ substantially from any generalized position. I'm calling a crisis in the next 2 years (this includes major UBI/changes to the Federal Reserve Act, or ignoring it) and I think it'll happen early 2022 if I had to guess. Maybe 2023 latest.
 
Most people who "got 2008 right" haven't predicted anything in 13 years very well = they just got lucky or it's a media narrative. This guy is decent, he's on realvision here and there, but I don't think he's made any real predictions that differ substantially from any generalized position. I'm calling a crisis in the next 2 years (this includes major UBI/changes to the Federal Reserve Act, or ignoring it) and I think it'll happen early 2022 if I had to guess. Maybe 2023 latest.

Fair enough, on the other hand you have guys like Michael Burry (portrayed in the movie the Big Short) who did predict 2008, saying that we may have Weimar style inflation, calls himself Cassandra like the greek myth lol. the fact that the SEC "talked to him" about his tweets makes it even more suspect that the establishment wants to keep the lid on the inflation genie as long as possible.
 

NoMoreTO

Ostrich
The Fed recently has said that is will no longer support M2 Money Supply. This is crazy to hear. They've been providing money supply data every Thursday at 4:30pm. Now they are not even reporting their numbers. How will they calculate inflation? They must know how much they are printing, why not tell the public? The answers seem obvious.

Good little breakdown.
 
How can someone with decent credit and a good income take advantage of this situation? I've been thinking of buying, to finally settle, but it seems like mania like this - besides low rates - would not help someone like me.

Honestly, I have no idea. I'm not an investment professional. These are just my personal observations. What I find most interesting about all of this is that people who have terrible credit and have made tons of relatively recent bad financial decisions feel confident enough to think that their finances are good enough to justify applying for a mortgage.
 
How many of those bad credit folk are approved?

Good question. I just work on the credit reporting side so I don't see the actual decisions, but if you have enough people with history this bad applying for mortgages then that must mean that a decent amount of these people are getting approved. If it were impossible, or at least very unlikely, for these people to get approved then you wouldn't have these huge numbers of these types of people applying.

One thing that our clients use our services for is to massage the numbers. So, lets say you have an applicant with a particular credit score but they have a bunch of outstanding balances--a couple hundred on a credit card here, a couple thousand on an unsecured installment loan there, a few tens of thousands on a HELOC elsewhere, etc--the lender will have that person make a couple extra payments on their balances or clear out smaller ones so that on paper, for the lender's internal calculations, their financial situation looks better. My company internally calls those "cosmetic changes" to the credit report. We don't actually improve the applicant's credit score because that is all handled by the bureaus, but in the short term it makes it easier for the lender to meet their own internal standards (at least on paper) and thus get the loan approved. In the end the loan will just get sold off to another servicer anyways so they don't really care. Our clients are major banks and lenders that everybody (at least in the US) knows about and many people on this forum probably have multiple accounts with.

Its mostly cosmetic because a lot of people with bad credit will repeatedly make bad financial decisions. Its all short term just enough to get that mortgage approved.

Don't get me wrong, we get people who have great credit or have had one or two negative events in otherwise good histories so its not a complete disaster, but the amount of those people with lower-tier credit is extremely concerning and kind of scary. I don't see the bigger picture, i.e. the local economy tanked and their business suffered, that kind of thing. But when you have someone with multiple civil judgments and charge-offs spanning multiple years plus years of repeated 90+ day late payments on credit cards then you know something is going on.

On a side note there's a grocery warehouse for a major retailer near me that pays really well--actually better than what I'm making now. I might just apply there since they're always hiring and I don't know how long this subprime bonanza can last. If its a choice between walking away from a mortgage and buying food, you know full well which one people will choose and which company will have more work.
 

Blade Runner

Pelican
Fair enough, on the other hand you have guys like Michael Burry (portrayed in the movie the Big Short) who did predict 2008, saying that we may have Weimar style inflation, calls himself Cassandra like the greek myth lol. the fact that the SEC "talked to him" about his tweets makes it even more suspect that the establishment wants to keep the lid on the inflation genie as long as possible.
The Cassandra thing is curious and he seems to be a bit scattered here and there, but he is definitely red pill and NO BS. He called the covid response hoax from the beginning. I think he's likely one of the more legit "analysts" of all, so I agree with you.
 
if you have enough people with history this bad applying for mortgages then that must mean that a decent amount of these people are getting approved

Banking data suggests otherwise. Lenders report extreme tightening of loans since March of 2020.

The Fed recently has said that is will no longer support M2 Money Supply.

No one, not even the government, has taken M2 seriously since before the 1980s. It's a dumb metric without a purpose.
 

aynrus

Kingfisher
Honestly, I have no idea. I'm not an investment professional. These are just my personal observations. What I find most interesting about all of this is that people who have terrible credit and have made tons of relatively recent bad financial decisions feel confident enough to think that their finances are good enough to justify applying for a mortgage.

The truth is that the life (slavery) in this country is so bad right now that all kinds of people end up with credit problems. They're not some bad people who need to sleep on the street.
It's not some strange onslaught of bad credit score people trying to get housing ...what's you're seeing is societal change and decline.
Plus, the government unlawfully shut down the economy using fake Hoax, which ruined the credit of more people.
People need to live somewhere.
Landlords, just like mortgage lenders, also (most of them) check credit scores and want good credit (and employment/consistent income).
So these people have to go somewhere and get housing, bad or good credit, rental or mortgage.
Saving for buying a house in cash was made impossible for most people in this country, due to predatory, artificial inflation of housing prices (worthless rotting chicken coops costing $$$$) and the country was sold to the highest bidder, foreigners and vulture "investors" owning many properties.
And people want to own their housing, not just rent it, it's a basic human need not to be forever slaves - having a good credit, just because you agreed to jump through fake unnecessary hoops which are erected barriers to housing, realistically can't, shouldn't and won't be a prerequisite no for not sleeping on the street on a long term (laws will have to change to accommodate bad credit people) - unless you want to see a nation of the homeless, favelas, and barbwire everywhere like in South America.
(anyone seen huge homeless camps in California? I did, just terrible stuff. Camps of 130K people).
Construction in many states was made extremely hard and artificially expensive due to many draconian prohibitive regulations - "building codes", minimum square footages, permits, and "licensed contractor" work requirements + insurance needs because of all the frivolous lawsuits and "mechanics liens" - and homelessness is also illegal (I guess they want people to commit suicides, if they didn't fit into their social credit system?)

I have good credit, but back when I wanted to get mortgage they asked for 2 current credit lines - ridiculous and unnecessary requirement.
I don't have 2 credit lines and don't see the reason to need them, I don't borrow money, this just means bowing to usury, to get into more usury.
I got one credit line (I got it just because back when I thought of getting a mortgage they wanted me to have some credit card, ridiculous), and I don't really use it, I kept my credit good only because I learned to avoid the army of scammers and frauds that operate without impunity in this country, ready to ruin your credit at any chance if you engage with them. I live very low-engagement with society/reclusive lifestyle, this is the only reason my credit is good, so what I said above isn't because I'm one of those "bad credit people"
 
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