Prices, Inflation/Deflation, Interest Rates & The Fed

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Look out below? They keep trying to buy these markets but hit resistance over and over.

By the way, what does deflation look like? Decreased prices? Utopia for the few that saved? Social upheaval due to massive job loss and an increasingly less productive economy? What's the actual death spiral?

The way I see it, the decreasing production seems to be a balance to lower supply, thus still maintaining prices, at least for anything meaningful ... (that which is actually required for life = food, energy, etc)
 
cosine said:
Looks like the covid-era savings boom is long gone:

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For a few years now, people are saying pain is coming, bankruptcies, people out of money.

But bankruptcies are historically low.

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I think it's systemic.

We live under socialism.

I hear many people say, oh I can't get a house. This is exemplary "get a house". Who will build it then?

I think we are in a low-risk society. Just do your thing, go to office, get money, eat.

And what is happening in the US is happening in Europe. No pain allowed.

You "loose" your job. (not fired) The state will pay you, so you can pay your mortgage or rent. Same for companies.

There is a price ofcourse, an ever increasing tax burden on those that produce goods and services.

I hear many say, why would you work you ass of if you can also sit on your ass and get all for free?

They are right.

Through automation the effects of societal lethargy have been managed. E.g. a farmer with 3 men produces more crop today than with 50 men 50 years ago. The same goes for factories.

Labour intensive work as building houses is getting increasingly expensive, anything high labour actually.

Actually less people need to work to bring the production. There is an increasing dependency on "capital".
Computer chips, software, machine, iron, aluminium. Any of the 30.000 components that go in a tractor.

It also shows the fragility. Who knows how it works?

High capital, high lazy. And with all the rules and minimum pay it becomes hard to do labour intensive projects as building individual houses.
Hence the housing shortage.

I think we are seeing the negative effects now of socialism that have been offset by technological advancement.

In Europe production is declining for 5 years now in material form. Houses built. Oil pumped. Crops harvested.

Socialism is though increasing, increasing socialism only works when production grows. What we see now it that that is shifting. And we come in the phase of confiscation. Confiscation of land from farmers. Nationalized businesses. It's becoming fragile.
 
paternos said:
I think we are in a low-risk society. Just do your thing, go to office, get money, eat.
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A decade of risky climbing gave me an interesting perspective on this. You see how incredibly durable humans can be, how people can spend a night out shivering in the cold in Alaska or in a crevasse somewhere, eating little food for days.

Then some obese person flips out about not having a seatbelt while you drive an air-conditioned car to the grocery store, where an incredible amount of food is prepared perfectly for very modest prices.

Humans worked so hard to make the world safer and easier, now our greatest sin is decadence.
 
paternos said:
I hear many people say, oh I can't get a house. This is exemplary "get a house". Who will build it then?

High capital, high lazy. And with all the rules and minimum pay it becomes hard to do labour intensive projects as building individual houses.
Hence the housing shortage.
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We also added a massive amount of building codes for building new homes. If you compare any new construction in the US today compared to 1965, today's house is much better in every way. Better insulated, better windows, better light, just better. But the entry price will be $1.2M or more.

I have a friend who wanted to build a "reasonable" home, 3 bed, 2 bath, 1500 sq ft. Normal place for normal people. Building requirements forced him to make it stronger, thicker, and so much more expensive that he was pretty much forced to make it huge (3700 sq ft) in order to make the economics pencil at all.
 


Ford Files For Patent That Can "Remotely Shut Down" Parts Of Your Car When Your Bill Isn't Paid​

Remember when getting in your car and flying down the highway with the top down used to be the perfect escape from the mire and muck of everyday life, like bills and e-mail? Now, thanks to the implementation of technology in the auto industry, that once-freeing joyride is literally becoming bills and e-mail.

That's because a new patent from Ford now allows the manufacturer to "remotely shut down your radio or air conditioning, lock you out of your vehicle, or prompt it to ceaselessly beep if you miss car payments", according to a new report from Bloomberg. While the official company line is that Ford has "no plans" to use the technology, we're certain that'll be proven to be incorrect over time.

“We submit patents on new inventions as a normal course of business, but they aren’t necessarily an indication of new business or product plans,” Ford said.

And the patent coincidentally comes along at a time when many car owners are experiencing difficulty keeping up with rising rates, resulting in "delinquencies [that] have been steadily ticking back up from their pandemic lull".

John Van Alst, a senior attorney with the National Consumer Law Center, commented: “It really seems like you’re opening up a can of worms that, as a manufacturer, you don’t really need to be doing.”

“You’ve now created this device which is like the doomsday device in Dr. Strangelove,” he continued.

The technology is called a "repossession-linked technology" in the patent and can also disable cruise control and automated windows. “Disabling such components may cause an additional level of discomfort to a driver and occupants of the vehicle,” the patent reads.

Recall, back in September 2021, we wrote about how in-car cameras were already keeping a close eye on everything drivers were doing. Researchers at the Fraunhofer Institute have now developed a smart-car camera system that can "figure out exactly what a driver is doing," according to a Gizmodo report from around the time.

We noted that the "appeal" of these points is what prompted the Fraunhofer Institute of Optronics, System Technologies and Image Exploitation to come up with a camera that uses AI powered image recognition to construct a digital sketch of the driver - which then, in turn, provides enough details for the system to guess what the driver is doing. The system can determine things like when a driver is sipping a cup of coffee or looking at their phone.

The vehicle can then make a determination if the driver is paying attention, prompting a semi-autonomous system to determine how distracted they could be.

Pretty soon the car will be taking you out for a joyride when it's stressed...
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Ford Files For Patent That Can "Remotely Shut Down" Parts Of Your Car When Your Bill Isn't Paid | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com www.zerohedge.com

news.yahoo.com

Miss a Car Payment and Ford’s Patent Could Shut Off Your A/C

(Bloomberg) -- What’s that aggravating beeping in your car? You might have missed a payment.Most Read from BloombergIsrael’s Window to Strike Iran Narrows as Putin Enters EquationTycoon Deripaska Warns Russia May Run Out of Money in 2024Americans Need to Be Richer Than Ever to Buy Their First...
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Say what you will but many are surviving on debt and society shifted to adapting to lower interest rates. Some say rates used to be higher historically so don’t complain.

I say that ignores the historic income to expense ratio and income to mortgage ratio. Interest was higher before but so was income against COL.

Sad reality is there is no way I could afford to buy the house I’m living in right now which I bought in 2018. If I were to try to buy it with all number being equal, my monthly would be about $1,700 higher than now in this same damn house. For the same exact mortgage amount. Factoring appreciation to actually buy without accordingly putting an additional 75-100k down the monthly would be about $2,400 higher. I just ran the numbers and my monthly would be 57% higher than it is currently if at 6.7% instead. Some places are already beyond that at 7.3%!

This is insane. Across the board people now couldn’t afford to buy the same homes they live in and many have also received raises/bonuses since originally signing the mortgage papers.

Entirely different than when boomers were my age, with higher rates. They would sell and upgrade in the same locality.

In effect this has turned middle class families into borderline lower class families and lower class families are completely priced out.
 
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That’s also why this is entirely different than 08 with predatory lending.

No pressure for owners to sell as they can’t afford to turn around and buy. They would downgrade. Unless moving to rural Montana which btw isn’t as cheap as pre Covid.

This will effectively suppress supply which won’t allow prices to drop much.

So it’s a standoff.

So either interest rates come down to add volume of transactions, the standoff continues or, home owners get laid off and default. Which would increase supply.

If the latter happens society has taken yet a deeper plunge downhill. It would mean waves of formerly middle class home owners are unemployed and defaulting.

Then what?
 
rainy said:
That’s also why this is entirely different than 08 with predatory lending.

No pressure for owners to sell as they can’t afford to turn around and buy. They would downgrade. Unless moving to rural Montana which btw isn’t as cheap as pre Covid.

This will effectively suppress supply which won’t allow prices to drop much.

So it’s a standoff.

So either interest rates come down to add volume of transactions, the standoff continues or, home owners get laid off and default. Which would increase supply.

If the latter happens society has taken yet a deeper plunge downhill. It would mean waves of formerly middle class home owners are unemployed and defaulting.

Then what?
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Couldn't it be that there is over-leverage and repo? Also, the big businesses wanted to buy a ton (and did) and turn a profit ... but they can't sell to anyone?
 
Blade Runner said:
Couldn't it be that there is over-leverage and repo? Also, the big businesses wanted to buy a ton (and did) and turn a profit ... but they can't sell to anyone?
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They don't want to sell. They will rent your home back to you. You will own nothing and be happy. Just like Tennessee Ernie Ford sang in sixteen tons - you'll owe your soul to the company store.

 
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