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Money, Banking and the Economy
rfenst Offline
#301 Posted:
Joined: 06-23-2007
Posts: 35,301
HockeyDad wrote:
Supply chain problems are because demand is up because income is up because the president has successfully guided this economy out of the teeth of a terrifying recession.

Whose narrative is that?
HockeyDad Offline
#302 Posted:
Joined: 09-20-2000
Posts: 41,829
rfenst wrote:
Whose narrative is that?



Secretary Pete Buttigieg, U.S. Secretary of Transportation
HockeyDad Offline
#303 Posted:
Joined: 09-20-2000
Posts: 41,829
“The tragedy of the treadmill that’s delayed” ~ White House press secretary Jen Psaki

Abrignac Offline
#304 Posted:
Joined: 02-24-2012
Posts: 16,016
My guess is shortages have more to do with unprecedented numbers of container ships anchored waiting for undermanned docks to unload them. But, there is a segment of society that will buy in to boy wonder’s reasoning since it fits a certain narrative. Not bad for someone in charge of our infrastructure whose only qualification is managing a city with a staggering 118,000+ population.
rfenst Offline
#305 Posted:
Joined: 06-23-2007
Posts: 35,301
HockeyDad wrote:
Secretary Pete Buttigieg, U.S. Secretary of Transportation

That's out of the fire and into the frying pan of inflation.
RayR Offline
#306 Posted:
Joined: 07-20-2020
Posts: 3,912
Petey Buttigieg isn't thinking clearly, it must be from postpartum depression. The long paid maternity leave didn't help.
Then again he's a progtard, they never make any sense anyway, they live in a fantasy world, especially when it comes to economics.
rfenst Offline
#307 Posted:
Joined: 06-23-2007
Posts: 35,301
His agency itself, as of late, has been considered benign- until now.

At the same time, he is personally sitting politically pretty good right now (and much more so for his future once the infrastructure bill passes and there is money being spent in his post-Cabinet future).

So, when he is done after serving four years (or less) and the legal time limit expires, huge transportation and construction corporations will seek him to sit on their boards and lobby the federal government.

Pretty sweet to be Pete from the future personal enrichment perspective...
rfenst Offline
#308 Posted:
Joined: 06-23-2007
Posts: 35,301
6 in 10 say Biden policies responsible for increasing inflation: poll

The Hill

More than 6 in 10 respondents in a new poll say President Biden’s policies are responsible for increasing inflation in the U.S.

The Morning Consult/Politico poll found 40 percent of respondents say Biden’s policies are very responsible for rising inflation, which is at a 13-year high, while 22 percent say they are somewhat responsible.

Pollsters also found 18 percent of respondents say Biden’s policies are not too responsible for inflation, while 10 percent say the administration's policies aren’t responsible at all.


Only 38 percent say they believe the country is on the right track, while 62 percent believe it’s on the wrong track.

The results come as the uneven pace of the recovery, along with a stimulus-fueled return to pre-vaccination spending habits, keep up pressure on inflation and overloaded supply lines.

Republicans have gone after Biden for the increased inflation as the economy opens up after pandemic-related shutdowns, saying his policies are contributing to the problem.

Labor shortage, inflation pose political obstacles for Biden
Poll: Half of voters say American democracy under 'major threat'
“Rising prices for products like cars, gas, and even Christmas gifts are making it harder to make ends meet. Yet the President and Democrats are forging ahead with reckless spending and plans to raise taxes,” Sen. Roger Wicker (Miss.), the top Republican on the Senate Commerce Committee, previously said.

Biden is trying to push his Build Back Better plan through Congress but has been met with opposition from his own party, delaying the spending package.

The new poll was conducted from Oct. 16 to Oct. 18 among 1,998 registered voters. The margin of error is 2 percentage points.
rfenst Offline
#309 Posted:
Joined: 06-23-2007
Posts: 35,301
The Monetary Bathtub Is Overflowing
Many economists say inflation is transitory. It will be persistent.

WSJ

The consumer-price index has risen 5.4% over the past 12 months. President Biden says we are facing a temporary bout of price increases caused by supply-chain glitches and bottlenecks that are themselves temporary. But while supply-chain problems affect prices of specific commodities, they have little effect on the overall price level if monetary growth is stable. The problem is that monetary growth in the U.S. has been anything but stable.

“Inflation is always and everywhere a monetary phenomenon,” Milton Friedman said. Inflation isn’t caused by temporary supply-chain disruptions. Take Japan during the 1979-80 oil crisis: Oil prices surged, but consumer prices remained stable. In China today, raw-material prices are soaring, but consumer prices have hardly budged.

To explain what is happening in the U.S. economy, we present the bathtub theory of money and inflation. Money flows into the tub through the faucet. The bathtub has three drains.

One drains into economic growth—a k a growth in real gross domestic product. Another drains into money that the public wishes to hold relative to its income measured by the ratio M/Py, where M is the money supply, P is the price level, and y is real GDP. Nobel Prize-winning economist Lawrence R. Klein called this one of the five great ratios in economics. In noninflationary times, the inflow from the faucet roughly equals the outflow through these two drains. But if more money is flowing in than out, the level of money rises. It will eventually reach the overflow, which is the inflation drain. It usually takes about two years for any excess money to show up as inflation.

Let’s take a look at the U.S. bathtub. During the early months of the Covid-19 pandemic, the faucet was wide open. Between December 2019 and August 2021, the U.S. money supply, measured by M2, grew by $5.5 trillion, a stunning 35.7% increase in only a year and a half, driven primarily by the Fed’s purchases of Treasurys and mortgage-backed securities. In light of anticipated Federal Reserve tapering, we estimate that by the end of 2024 the money supply will grow another $5.1 trillion.

Out of the total $10.6 trillion in new money, real GDP growth will drain roughly $1.4 trillion. Another $1 trillion will flow down the money demand drain. Since the amount of money flowing into the bathtub far exceeds the two outflows, the excess money in the tub—around $8.2 trillion—will hit the inflation overflow drain.

The huge monetary expansion—$5.5 trillion already in the bathtub—is starting to reach the overflow. Persistent, not transitory, inflation will be with us for the next two to three years.
rfenst Offline
#310 Posted:
Joined: 06-23-2007
Posts: 35,301
Inflation Is the Mother of Big Political Change
Remember the 1970s. Neither Democrats nor Republicans could sit out the demand for reform.

WSJ OPINION

Since excessive inflation is one characteristic outcome of a fiat money system, who is really surprised that such a moment might be on us again? The table would seem to have been set for a long time: Unruly government borrowing. Mounting regulatory burdens and disincentives to business and workers. A decline in labor force participation. The peculiar unwillingness of a large cohort of young men to pursue either work or schooling.

Then came the pandemic and the pandemic spending binge, which shifted public demand away from services (no longer available) to goods that the supply chain struggles to deliver.

Jerome Powell, the Fed chief, posits a happy ending: Production resumes, goods and services flow in abundance, inflation is transitory. But he knows it’s not that simple. An apparition of central bankers is the dread inflation psychology, but inflation expectations don’t become embedded in consumer heads because of childhood trauma, but because consumers detect a mindset of policy makers to accommodate inflation. And Mr. Powell, whose renomination is pending, must subordinate himself and his monetary decisions to a fast-rising new agenda in Washington: a whole-of-establishment effort to keep Donald Trump from returning to the White House.

Inflation is like Covid: If it gets loose, it will dominate our politics. It causes great unhappiness but also makes new things possible.

In the 1970s, the inflationary crisis imploded a large government establishment occupied with trying to fix the supply and price of air travel, truck transport, rail services and consumer energy supplies. It imploded a tax system that was found to be constantly promoting people into higher brackets even as their real income and living standards declined.

All in all, quite a revolution in government’s role in the economy began under Jimmy Carter and continued under Ronald Reagan, and was echoed all around the Western world.

Today’s inflation would be hitting an economy with rigidities of its own, mostly of a different kind. Zoning rules depress the supply of housing; licensing restrictions depress the supply of personal services. Wind and solar mandates tax the reliability of the grid. Means-tested entitlements make it less attractive at the margin for Americans to work.

We may discover other vulnerabilities but two gaping ones weren’t part of the story in the 1970s. In 1977 federal debt was 34% of GDP; today it’s 125%. And the share of Americans who’ve experienced direct government aid has quadrupled. It now comprises more than 50% of the population, and that’s before our vast pandemic spending and Joe Biden’s welfare ambitions.

Which means a lot could go kerblooey and fast. Rising interest rates could double or triple today’s $400 billion interest bill on the national debt. Overnight, this item could rival Social Security and Medicare as the biggest single budget outlay.

The available options would only compound the public’s unhappiness with inflation: large tax hikes and spending cuts, central bank finance of deficits (leading to more inflation) or heavy-handed measures to force private depositors to hold government debt, essentially expropriating private savings.

Though Social Security benefits nominally are indexed for inflation—a 5.9% increase has been announced for next year—Congress knows well how to claw back benefits by taxing them. For programs like Medicare and Medicaid that deliver in-kind benefits, the even simpler expedient is to cut reimbursements to providers, which users will experience as declining quality and longer wait times.

To the upwelling of voter aggravation, add Congress’s likely targeting of indirect benefits that effectively put almost 100% of Americans on the dole. These include the mortgage-interest deduction and tax-free employer-provided health care.

When voters are angry and at wit’s end as they are when inflation is unraveling their expectations and life plans, new things become possible, good and bad. Evolutionists talk about “punctuated equilibrium.” A bout of society-transforming inflation would certainly get us off an old and exhausted equilibrium and onto a new one that we can hope will prove sustainable in the long run.

Nobody planned our giant experiment in a welfare-****-administrative state. Its incoherence has long been showing. Many of its features aren’t even about fixing any problem but about satisfying constituencies who want power over their fellow citizens.

All things that live must change and adapt. That includes a fiscal state that so demonstrably has run out of gas that almost everybody, from the most woke to the most Trumpian, senses it in some fashion.
rfenst Offline
#311 Posted:
Joined: 06-23-2007
Posts: 35,301
Yellen expects inflation to linger, then ease later in 2022
The most recent Consumer Price Index showed prices have gone up 5.4 percent in the past 12 months.

POLITICO

Treasury Secretary Janet Yellen said on Sunday that she expects higher inflation to linger for months, then ease by "the middle to end of next year."

"The Covid shock to the economy has caused disruptions that we'll be working through over the next year. And, of course, Americans have not seen inflation like we have experienced recently in a long time," Yellen said on CNN's "State of the Union." "As we get back to normal, expect that to end."

The most recent Consumer Price Index showed prices have gone up 5.4 percent in the past 12 months. Yellen also cited supply chain issues and worker shortages as a result of Covid-19 that has hampered the economy.

She named health and child care concerns as two reasons why "many firms are experiencing a shortage of labor." And shutdowns related to Covid-19 in Asia have impacted the import of good, she said, including a shortage in semiconductors that has pushed up prices of used cars and a reduction in the production of new cars.

"This is temporary pains that result from a Covid economy," Yellen said.


Still, the Treasury secretary said she expects conditions to improve and the supply bottlenecks to subside. And she credited the American Rescue Plan passed in March for giving Americans "enough income and support to get through this while still being able to put food on their tables and keep roofs over their heads."

"As we get beyond the pandemic, I expect labor supply to increase," Yellen said. "It's good, I think, to see wages begin to rise, especially for those Americans who had the most insecure jobs and the lowest wages. To see some improvement there is something we should be pleased with."

The Treasury secretary also reiterated the need for Congress to raise the debt ceiling. The U.S. is projected to default on its debt on about Dec. 3 unless Congress acts.

Yellen reiterated that a default would be "utterly catastrophic" and threaten the viability of America's assets, which she said are regarded as "the safest on the planet."

Yellen said she would leave it to House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer on how to raise the debt limit, adding it was her personal view that Republicans and Democrats share the responsibility.

Yellen also noted that raising the debt limit is about ensuring the U.S. can pay for its past spending and borrowing decisions, not future ones.

Earlier on the CNN show, Pelosi again appeared open to Democrats alone raising the debt limit through reconciliation if Republicans remained unified in opposition.

"That's one path," Pelosi said. "But we're still hoping to have bipartisanship."

Enough Republicans in the Senate supported temporarily raising the debt limit earlier this month to avoid the reconciliation process and ensure a default wouldn't occur until December.

Pelosi said failing to raise the debt limit could have "consequences that could last for decades," including millions of lost jobs. And she highlighted her grievance that most of this debt accrued under then-President Donald Trump and that Republicans raised the debt limit when he was president.
RayR Offline
#312 Posted:
Joined: 07-20-2020
Posts: 3,912
I wouldn't bet the farm on Yellen's inflation predictions.

And they should stop lying calling it a "debt limit" or a "debt ceiling" when we know they treat each increase as a debt floor. Bunch of dirty creeps.
rfenst Offline
#313 Posted:
Joined: 06-23-2007
Posts: 35,301
RayR wrote:
I wouldn't bet the farm on Yellen's inflation predictions.

And they should stop lying calling it a "debt limit" or a "debt ceiling" when we know they treat each increase as a debt floor. Bunch of dirty creeps.

I am betting the farm there will be protracted increased inflation.
RobertHively Offline
#314 Posted:
Joined: 01-14-2015
Posts: 1,390
I'm moving to the hunt camp soon to be farm, so I definitely wouldn't bet it. The price for venison and growing your own vegetables has remained steady.

Been working up there on and off for about a month. Already got our stuff packed down here. Quit our jobs. Cashed out.

Been working on the farmhouse that's on the property. I hadnt been up there since 2016. Needs a lot of TLC. Got the water turned on and a lineman is supposed to hook up the electric this week. Brother says he's never going to use the old house and it's perfect for the wife and I.

It's going to be a long process, but I'm truly looking forward to it. This is plan B. When they tell me I'm still a danger to ppl for living on the land out in the middle of nowhere, that's when I'll take a stand. Most of us just want to be left alone to live life on our own terms, and that's what we'll do.

I wanted to kinda do a DanM update thing on the 500 thread, but it comes as no surprise to me that there's no internet up there--my cell phone doesn't even work;

I kept a loaded 12 gauge shotgun with me the first few days, just knowing I'd see a rattlesnake but I didnt. No cool stories, just hard work thus far.

I will keep yall posted during the few times I'm in civilization and have internet service.

We are moving Saturday October, 30th.

And Frank, I watched that movie you rec'd. It was really funny. Made me think the short story "Luck" by Mark Twain.



frankj1 Offline
#315 Posted:
Joined: 02-08-2007
Posts: 39,696
RobertHively wrote:
I'm moving to the hunt camp soon to be farm, so I definitely wouldn't bet it. The price for venison and growing your own vegetables has remained steady.

Been working up there on and off for about a month. Already got our stuff packed down here. Quit our jobs. Cashed out.

Been working on the farmhouse that's on the property. I hadnt been up there since 2016. Needs a lot of TLC. Got the water turned on and a lineman is supposed to hook up the electric this week. Brother says he's never going to use the old house and it's perfect for the wife and I.

It's going to be a long process, but I'm truly looking forward to it. This is plan B. When they tell me I'm still a danger to ppl for living on the land out in the middle of nowhere, that's when I'll take a stand. Most of us just want to be left alone to live life on our own terms, and that's what we'll do.

I wanted to kinda do a DanM update thing on the 500 thread, but it comes as no surprise to me that there's no internet up there--my cell phone doesn't even work;

I kept a loaded 12 gauge shotgun with me the first few days, just knowing I'd see a rattlesnake but I didnt. No cool stories, just hard work thus far.

I will keep yall posted during the few times I'm in civilization and have internet service.

We are moving Saturday October, 30th.

And Frank, I watched that movie you rec'd. It was really funny. Made me think the short story "Luck" by Mark Twain.




You know I really like you and will certainly miss you. Have always appreciated that you are true to your inner nature and not a cranky preaching whiner so I'm really happy you are able to make this happen.

That movie was funny, probably has elements that will always feel current politically. For a minute we were even on recommendations as I took yours and read the Frederick Douglass autobio not all that long ago...but now I have to find Twain's short story. Don't believe I have heard of it but your opinion is Platinum with me...

Hey, maybe if Biden's stuff goes through you'll have internet soon. Fingers crossed...HA!
RobertHively Offline
#316 Posted:
Joined: 01-14-2015
Posts: 1,390
frankj1 wrote:
You know I really like you and will certainly miss you. Have always appreciated that you are true to your inner nature and not a cranky preaching whiner so I'm really happy you are able to make this happen.

That movie was funny, probably has elements that will always feel current politically. For a minute we were even on recommendations as I took yours and read the Frederick Douglass autobio not all that long ago...but now I have to find Twain's short story. Don't believe I have heard of it but your opinion is Platinum with me...

Hey, maybe if Biden's stuff goes through you'll have internet soon. Fingers crossed...HA!


Thanks Frank. I appreciate all that you've done for me on this forum. You will always be my vet.

I try to go out and live life more than complain about it. Lol The wife and I have traveled all over the southeast, mid-atlantic and mid-west for well over a decade. Now, at age 39, it's time to open a new chapter.

I've wanted to do this for quite sometime, but my wife is much more practical than me in a lot of ways. You shoulda seen her face when I told her that I was going to write Biden a thank you letter for giving me this opportunity. Lol!

I'm sure we'll figure out some way to get internet, but not for a while. At present I am tractor shopping. So many things we have got to do to the land and the house. It's going to be one hell of an adventure.

We'll work on the house this winter and plant in the spring. Mix in some hunting and fishing during the down time. I imagine we'll eventually try to find some freedom friendly jobs. WV isn't very strict with the mandates...

The CBID forum is a great place, and I like hearing what everybody has to say. To me it's the opposite of an "echo chamber". It's a place where we can say what we want, and talk a little sh*t at the same time.

Im going to keep the bands from all the cigars that I smoke. So expect a Zody level list one day--but no alphabetical order!

If I'm not around for xmas, make sure to top the "Cain Daytona" review for me.






frankj1 Offline
#317 Posted:
Joined: 02-08-2007
Posts: 39,696
don't recall doing anything for you, but one last reco...The Whore of Mensa.
Short story by Woody Allen, but you have to read it while "hearing" Phillip Marlowe as the narrator.
frankj1 Offline
#318 Posted:
Joined: 02-08-2007
Posts: 39,696
I think this is it...

https://www.newyorker.com/magazine/1974/12/16/the-whore-of-mensa
RobertHively Offline
#319 Posted:
Joined: 01-14-2015
Posts: 1,390
frankj1 wrote:
don't recall doing anything for you, but one last reco...The Whore of Mensa.
Short story by Woody Allen, but you have to read it while "hearing" Phillip Marlowe as the narrator.


You always took up for me when I was the RayRay of the forum. You know, like 3 of the first 4 yrs that I was here. Lol
RobertHively Offline
#320 Posted:
Joined: 01-14-2015
Posts: 1,390
frankj1 wrote:
I think this is it...

https://www.newyorker.com/magazine/1974/12/16/the-whore-of-mensa


I will check it out.
frankj1 Offline
#321 Posted:
Joined: 02-08-2007
Posts: 39,696
RobertHively wrote:
You always took up for me when I was the RayRay of the forum. You know, like 3 of the first 4 yrs that I was here. Lol

just trying to be true to my inner nature, buddy.
RobertHively Offline
#322 Posted:
Joined: 01-14-2015
Posts: 1,390
frankj1 wrote:
just trying to be true to my inner nature, buddy.


Well you do a good job at it. I try to do the same.
rfenst Offline
#323 Posted:
Joined: 06-23-2007
Posts: 35,301
RobertHively wrote:
You always took up for me when I was the RayRay of the forum. You know, like 3 of the first 4 yrs that I was here. Lol

Don't denigrate yourself by unworthy comparison.
Be well on your journey to a new lifestyle!
rfenst Offline
#324 Posted:
Joined: 06-23-2007
Posts: 35,301
Banks’ Debt Sales Are Driving the Corporate Bond Market
Financial institutions account for more than one-third of all the investment-grade debt issued this year

WSJ

U.S. banks are overrun with cash. So they are loading up on debt.

The six largest U.S. lenders have issued some $314 billion of bonds so far this year, already the most for any year since 2008, according to Dealogic.

Since banks reported their third-quarter financial results earlier this month, Goldman Sachs Group Inc., GS 0.10% Morgan Stanley MS 0.11% and Bank of America Corp. BAC -0.13% have all come out with multibillion-dollar bond sales. In April, Bank of America and JPMorgan Chase & Co. completed the largest-ever bank debt sales.

What do the earnings reports from the big banks reveal to you about the recovery from the pandemic? Join the conversation below.

Banks are playing a greater role in propelling the corporate bond market, which has otherwise slowed from last year’s pandemic-induced debt bonanza. Financial institutions are the issuers behind more than a third of U.S. investment-grade debt so far this year, according to Dealogic, the highest share for any year going back to the dawn of the modern megabank.

The record debt sales might seem unnecessary because banks are already up to their eyeballs in cash. The biggest consumer and commercial banks have collected trillions of dollars of deposits since the pandemic started.

But deposits are only one part of the liability equation for the biggest banks. They are also required to keep a certain share of their liabilities in long-term debt. Because of that, the ratio of debt to other liabilities can get out of whack when deposits grow as much as they have. So banks are issuing more bonds to navigate the regulatory hurdles.

Requirements that long-term debt make up a minimum share of banks’ liabilities is a consequence of regulations after the financial crisis of 2008-09. The idea is that a layer of long-term debt makes banks less susceptible to panic in short-term funding markets, which was a key reason for the demise of Lehman Brothers.

It doesn’t hurt, too, that banks selling debt today are able to lock in low, long-term borrowing costs. That could help bolster profits down the road should short-term rates rise in the future and lending picks up steam.

At the moment, though, loan demand has been weak. During the pandemic, consumers cut back on spending and received federal stimulus payments, which gave them money to pay down loan balances. That has made it tough for banks to make use of the cash sitting on their balance sheets. Bank of America, for example, has more than twice as much money in deposits than it has lent out.

A pre-markets primer packed with news, trends and ideas. Plus, up-to-the-minute market data.

Goldman Sachs and Morgan Stanley don’t have large deposit bases but have been selling bonds to support growth. Goldman said in third-quarter results that it has been growing its equity and fixed-income financing businesses. Bank of America is also issuing debt partly to support capital markets activity.

Investors, meanwhile, sense opportunity in bank debt. Tom Murphy, head of investment grade credit at Columbia Thread needle Investments, said he currently likes banks and has participated in some of their debt sales this year.

Bank bonds trade at a higher yield relative to industrial company bonds with similar ratings, which means Mr. Murphy can pick up as much as an extra 0.3 percentage point in yield over industrials for no more credit risk.

At the same time, banks should benefit if higher inflation keeps pushing up interest rates. “The macro backdrop should be good for these institutions,” Mr. Murphy said.

Bank stocks also have been popular this year. The KBW Nasdaq Bank Index, which measures shares of the largest banks, has risen 45% this year, more than double the S&P 500’s gain. The rally has continued this month after banks reported profit growth across the board for the third quarter.
RayR Offline
#325 Posted:
Joined: 07-20-2020
Posts: 3,912
That's right Robert, you don't want to be compared to me...I'm an EXTREMIST!Laugh

This was really good, too short but good.

Peter Schiff Debates Two Socialists on Debt Ceiling

https://youtu.be/ZsDsJBtLb1g
Dg west deptford Offline
#326 Posted:
Joined: 05-25-2019
Posts: 2,060
It won't be only Lehman next time
rfenst Offline
#327 Posted:
Joined: 06-23-2007
Posts: 35,301
Global Chip Shortage ‘Is Far From Over’ as Wait Times Get Longer

Nearly a year into the crisis, some customers are finding it is taking months more than expected to get needed parts

WSJ

Almost a year into a global chip shortage, the problems are increasing for many customers as delays get even longer and sales are lost.

Manuel Shoenfeld placed an order in May for transmission chips for the utility-monitoring devices made by his New York-based firm PowerX. He was told the chips would arrive by summer, then fall, then winter and now doesn’t expect to get them until May 2022.

“This is far from over,” Mr. Shoenfeld said.

The global semiconductor shortage is worsening, with wait times lengthening, buyers hoarding products and the potential end looking less likely to materialize by next year. Demand didn’t moderate as expected. Supply routes got clogged. Unpredictable production hiccups slammed factories already running at full capacity.

What’s left is widespread confusion for manufacturers and buyers alike. Some buyers trying to place new orders are getting delivery dates in 2024, said Ian Walker, operations director at electronic-components distributor Princeps Electronics Ltd., which helps companies find chips.

“It really feels as if we are running out,” Mr. Walker said.

The $464 billion semiconductor industry has been unable to keep pace, leading to lost revenue across the board. The pain is spreading beyond the initially affected—like car makers and home appliance manufacturers—to producers of other products, including medical devices and tobacco. The smartphone industry will grow by just 6% year-over-year, or half the initial forecast from earlier this year, because of chip woes, according to Counterpoint Research, which tracks handset shipments.

Chip makers say the lack of supplies have caused them to lose sales. “Trust me, we would be shipping a lot more if we weren’t constrained by the supply chain of these other components in the industry,” Intel Corp. Chief Executive Pat Gelsinger said last week on the company’s earnings call. Mr. Gelsinger has said he expects shortages to last until 2023.

Wait times for chip deliveries have continued to climb above a healthy threshold of 9-12 weeks. Over the summer, the wait stretched to 19 weeks on average, according to Susquehanna Financial Group. But as of October, it has ballooned to 22 weeks. It is longer for the scarcest parts: 25 weeks for power-management components and 38 weeks for the microcontrollers that the auto industry needs, the firm said.

Scott Wren, senior global equity strategist at Wells Fargo Investment Institute, said he would have thought six months ago that chip shortages would start easing by this time. But now he said they will likely last until 2023. Wells Fargo Investment Institute recently revised down its U.S. GDP forecast to 6.3% from 7% as the chip shortage limited the supply of consumer goods.

“This is playing out considerably longer than we initially thought,” Mr. Wren said.

A supply bounceback this year relied on rosy assumptions that already maxed-out production wouldn’t face further setbacks. But the chip-making process is under duress from beginning to end.

Basic building-block materials such as substrates are in short supply. Mishaps from bad weather and fires have interrupted wafer production. The final stage of manufacturing has been undercut by virus outbreaks and subsequent factory closures in Malaysia, which specializes in product packaging.

Global shipping constraints have added to disruptions and delays. Chip assembly can require that parts travel up to 25,000 miles before becoming finished products, according to a report by Accenture and the Global Semiconductor Alliance.

Sourcing chips has turned almost into a lottery, leading to over ordering that creates more supply strain, industry experts say. “People are buying a lot of parts to have just in case, and that’s exacerbating the shortage,” said Willy Shih, a professor of management at Harvard Business School, who specializes in semiconductors and supply chains.
rfenst Offline
#328 Posted:
Joined: 06-23-2007
Posts: 35,301
The U.S. recovery slowed in the third quarter as the Delta variant surged.

The gross domestic product grew 0.5 percent (a 2 percent annualized rate) as supply-chain bottlenecks and the resurgent pandemic hampered the economy.

NYT

Economic growth slowed sharply over the summer as supply-chain bottlenecks and the resurgent pandemic restrained activity at stores, factories and restaurants.

Gross domestic product, adjusted for inflation, grew 0.5 percent in the third quarter, the Commerce Department said Thursday. That was down from 1.6 percent in the second quarter, dashing earlier hopes that the recovery would accelerate as the year went on.

Growth in consumer spending, which has helped drive the recovery, slowed to 0.4 percent, from 2.9 percent in the second quarter, and spending on goods fell sharply. Business investment also slowed.

On an annualized basis, G.D.P. rose 2 percent in the third quarter, down from 6.7 percent in the second quarter.

The slowdown was partly a result of the spread of the Delta variant of the coronavirus, which led many Americans to pull back on travel, restaurant meals and other in-person activities. More recent data suggests that people have returned to those activities as virus cases have fallen, and most economists expect significantly faster growth in the final three months of the year.

But another major restriction on growth may be slower to recede. The pandemic has snarled supply chains around the world, even as demand for many products has surged. The resulting backups have made it hard for U.S. stores and factories to get the products and parts they need. Economists initially expected the disruptions to be short, but many now expect the issues to linger into next year.

Many businesses are also struggling to find enough workers to make, sell and deliver products — another supply shortage that is holding back growth longer than economists expected.

“The economy doesn’t have a demand problem,” said Ben Herzon, executive director of IHS Markit, a forecasting firm. “It has a supply problem.”

In some cases, those supply issues are resulting in delayed deliveries, reduced selection and empty shelves. In other cases, they are resulting in higher prices: Inflation soared last spring and has remained elevated. Consumer prices rose 1.3 percent in the third quarter, slightly slower than in the prior quarter, but still well above the prepandemic rate. Prices were up 4.3 percent from a year earlier.

In government statistics, faster price increases result in slower inflation-adjusted growth: Consumers are spending just as much, but getting less in return.

The combination of faster inflation and slower growth is causing headaches for the Federal Reserve, which has indicated it expects to being pulling back support for the economy as early as next month. It is also a political problem for President Biden as he tries to push his longer-term economic agenda through Congress.

Still, the economy is in much better shape than forecasters expected for most of last year. Gross domestic product returned to its prepandemic level in the second quarter, although it has not caught up to where it would be if the pandemic had never occurred. Government aid, along with reduced spending during the pandemic, has left Americans flush with cash, which should support spending for the rest of the year.

“Supply chain disruptions together with Delta conspired to hold back growth,” said Constance L. Hunter, chief economist for KPMG, the accounting firm. “It’s a speed bump not a slowdown.”
rfenst Offline
#329 Posted:
Joined: 06-23-2007
Posts: 35,301
A decline in car buying, for lack of cars, was the quarter’s biggest economic hitch.

WSJ

To understand how supply-chain woes are holding back the economic recovery, look no further than auto sales.

Spending on motor vehicles and parts, adjusted for inflation, fell 17.6 percent in the third quarter, according to the government data released Thursday. The problem wasn’t that Americans didn’t want cars — it was that dealers didn’t have enough to sell them. A global shortage of computer chips led to a slump in auto production, which in turn led to a slump in sales.

When consumers can find cars to buy, they are paying more for them. Total spending on motor vehicles, not adjusted for inflation, fell 13.5 percent — still a big drop, but not quite as big as the inflation-adjusted figure. In other words, consumers were getting less for their money.

The drop in car production was big enough to drag down overall economic growth for the quarter. Gross domestic product would have risen 0.9 percent in the third quarter had it not been for the slump in auto output.

Supply-chain issues have been particularly acute in the auto sector, but they are much broader than that. Spending on other long-lasting goods also fell.

“It’s not just in autos,” said Robert Rosener, senior U.S. economist at Morgan Stanley. “There are other consumer goods that are also in short supply.”

The snarled supply chain is partly a result of the surge in spending on goods during the pandemic, as Americans bought cars instead of plane tickets, workout equipment instead of gym memberships and cooking equipment instead of restaurant meals. Those patterns have begun to reverse as the pandemic has ebbed, but not all the way. Spending on goods remains far above its prepandemic level, while services spending, adjusted for inflation, had yet to return to its prior level in the third quarter.

The spread of the Delta variant has slowed the service-sector rebound. Spending at hotels and restaurants rose just 3 percent in the third quarter, down from nearly 14 percent in the second quarter, adjusted for inflation.
RayR Offline
#330 Posted:
Joined: 07-20-2020
Posts: 3,912
This is a really good article on what transitory inflation can mean. The usual suspects at the FED, Treasury Secretary Yellen, and their political parrots would have you believe that transitory inflation just means "don't worry about it peasants, it's just temporary, everything will be fine".

What Does ‘Transitory Inflation’ Really Mean?

William J. Luther
October 29, 2021

Quote:
No one denies that inflation has been higher than usual in recent months. The personal consumption expenditures price index (PCEPI), which is the Federal Reserve’s preferred measure, grew 4.4 percent from September 2020 to September 2021 and has averaged roughly 2.98 percent growth per year since January 2020. The disagreement today is whether this inflation is permanent or transitory. However, there is some confusion over what the term “transitory” actually means in this context.

In what follows, I identify two potential uses of the term transitory to describe inflation. In the first sense, inflation is described as transitory so long as the rate does not remain high permanently. In the second sense, inflation is described as transitory only if the temporarily high inflation is followed by temporarily low inflation, which restores the old price level trajectory.

More...

https://www.aier.org/article/what-does-transitory-inflation-really-mean/
rfenst Offline
#331 Posted:
Joined: 06-23-2007
Posts: 35,301
When Will the Supply-Chain Strains Finally Ease?

Many companies are resetting strategies to plan for long-term stresses

Opinion: WSJ

Companies that have been scrambling to get goods into stores and distribution centers by the end-of-year holidays are now starting to take a longer view on when the gridlock that has tied up their supply chains might finally end.

It is a crucial question for retailers and manufacturers planning out capital spending, purchasing and production strategies for next year. Comments from corporate executives on recent quarterly earnings calls and interviews with logistics experts suggest expectations for relief increasingly are being pushed deep into 2022 and even beyond.

Large numbers of companies pointed to supply-chain constraints as a drag on earnings. There are growing signs that issues like port congestion, the difficulty in getting truck drivers, slowing supplier deliveries and rising costs for raw materials and components such as semiconductors are affecting the broader economy.

Companies including Clorox Co. , Majestic Steel USA, water heater manufacturer A.O. Smith Corp. and apparel retailer Under Armour Inc. are undertaking changes in operations and sourcing that will last past the current bottlenecks, signaling that stopgap measures responding to raw materials shortfalls and transportation logjams are being embedded into ongoing operations.

“We feel that the supply chain constraints will continue to be in the market all the way to the second half of calendar year 2022 before we see them abating,” Tarek A. Robbiati, finance chief at information technology company Hewlett Packard Enterprise Co., said at an Oct. 28 analyst meeting.

Under Armour says it has narrowed its spring and summer 2022 order book. “We are taking precautions to navigate some of the volatility and anticipated business disruptions in the first half of 2022,” David Bergman, chief financial officer of Under Armour, said during an earnings call Tuesday.

Consumer-goods suppliers have trimmed product lines to simplify manufacturing and keep goods moving and are expanding their sources of raw materials. Larger industrial manufacturers are resetting assembly lines to make them more resistant to the sort of outages that have hit the automotive sector, where several companies say they now expect the semiconductor shortage to affect their production into 2022.

Ford Motor Co. is “designing for much more interchangeability, fungibility,” and ensuring it has multiple sources for components, said Hau Thai-Tang, its chief product platform and operations officer, during a Monday investor meeting.

Logistics experts say the interconnected nature of supply chains means there is no quick fix to resume the steady flow of goods through the global economy.

“We’ve been looking at no relief coming until the end of the 2022 calendar year,” said Sarah Banks, global lead for freight and logistics at consulting firm Accenture PLC. “But the continuing issues in supply chains raise the question of whether that is still possible. There are some positive signs, but it’s still a guess how long we will be in this situation.”

She said unwinding the supply-chain snarls will depend at least in part on addressing the impact of Covid-19 on the economy and on operations from factories to port docks.

“There are bigger economic questions that dictate supply and demand,” Ms. Banks said. “Only until it becomes clear how we live our lives with Covid will we know what it looks like for supply chains,” she said.

Lisa Ellram, a professor of supply chain management at the Miami University Farmer School of Business in Oxford, Ohio, said supply chain operations could be closer to normal by the fall of next year. But because of the continuing potential for shutdowns and other pandemic impacts, she said, “I do think Covid is the big wild card.”

Operators in supply chains say the congestion will remain until there are enough workers for trucking, port and warehouse operations.

“I won’t try to prognosticate when and how this ends, but I do believe that it’s going to extend for quite some time,” Bob Biesterfeld, chief executive officer of C.H. Robinson Worldwide Inc., the largest U.S. freight broker, said on the company’s third-quarter earnings call last week.
RayR Offline
#332 Posted:
Joined: 07-20-2020
Posts: 3,912
October inflation numbers for October are in.
Wholesale price inflation jumped to 8.6% according to the Labor Department
This must be part of the Build Back Better Inflation Plan.

"Prices jumped 8.6% year over year, matching last month’s reading for the largest annual increase on record. Annual price increases have printed at a record pace for seven straight months."

https://www.foxbusiness.com/economy/producer-price-index-october-2021


UK central bankster makes rare admission

We're "Very Sorry" - Bank Of England Governor Apologizes To Brits For Crushing Their Standard Of Living

"In an odd moment of truthful admission - that absolutely will not be heard in the US - The Bank of England governor has said he is "very sorry" that UK inflation is rising amid forecasts the cost of living could increase as much as 5%.

Andrew Bailey told the BBC that households were already feeling the impact of rising prices."

More...

https://www.zerohedge.com/personal-finance/were-very-sorry-bank-england-governor-apologizes-brits-crushing-their-standard


HockeyDad Offline
#333 Posted:
Joined: 09-20-2000
Posts: 41,829
#winning!
deadeyedick Offline
#334 Posted:
Joined: 03-13-2003
Posts: 13,530
BBB = Built on the backs of the middle class.
RayR Offline
#335 Posted:
Joined: 07-20-2020
Posts: 3,912
More BUILD BACK BETTER WINNING!

US Consumer Prices Are Spiking At Their Fastest Rate In 40 Years

BY TYLER DURDEN
WEDNESDAY, NOV 10, 2021


Quote:
Following yesterday's US PPI print at record highs, overnight we saw Chinese producer prices rising at their fastest pace in 26 years, and this morning's US consumer price data was expected to show yet another non-transitory surge in inflation... but the actual surge was far bigger than expected.

US Consumer prices soared 6.2% YoY in October, far higher than the +5.9% YoY expected and accelerating from September's 5.4% YoY; that was the highest print since June 1982...

More...

https://www.zerohedge.com/personal-finance/us-consumer-prices-are-spiking-their-fastest-40-years
Dg west deptford Offline
#336 Posted:
Joined: 05-25-2019
Posts: 2,060
Bidenflation is here to stay. He's going to have to try to blame Trump before the proles wake up to reality

Biden is making Carter look like a genius economist

The econocide this administration is committing is astonishing

Only New Jerseys king Phillip could give Brandon a run for most disastrous politician for the economy
RayR Offline
#337 Posted:
Joined: 07-20-2020
Posts: 3,912
The Biden administration is a terrorist organization.

"It is the Left that is cruelly regimenting, corralling and impoverishing the populace; it is the Left which brooks no appeal to humanity or common decency. It is the Left which seeks power, as an end in itself – no matter the human debris left in its awful wake."

Shut Down Joe

By eric -November 10, 2021

Quote:
It appears that the Biden Thing is determined to do more than Jab the entire country. He also appears determined to freeze it.

And bankrupt it.

Word is out that – contrary to initial denials – the Biden Thing will issue another ukase (that is, a decree) shutting down the Line 5 pipeline that currently sends more than a half-million barrels’ worth of oil per day to the United States from Canada.

Of course, it’s phrased otherwise. The regime is merely “studying” it. You know, like it “studied” issuing a ukase that every American worker be threatened with loss of job and livelihood as the “incentive” to make them roll up their sleeves.

Shutting down Line 5 will have catastrophic practical and economic effects on the supply of oil – in the United States – because there is nothing on tap, so to speak, to make up for the impending loss. The Biden regime seems determined to close off the tap; which is to say the Biden regime is consciously trying to squeeze (and quite literally) freeze the people of the United States.

This will happen because of two things, one of them obvious. Less oil means less fuel. For cars as well as homes heat with oil. The effect will be especially harsh in the Midwest, where the freeze comes sooner, is harder – and lasts longer.

But everyone is going to pay more for gas – and oil – and everything else connected with oil and gas.

Which is essentially everything – including food and not only because it will cost more to truck the food from where it grows and where it’s raised to where it’s bought. Oil fuels agriculture – via fertilizer – without which the amount of food currently grown cannot be sustained. Cows and chickens and pigs eat the produce of agriculture before we eat them. When they have less to eat, there are less of them for us to eat. When it costs more to feed them, it costs us more to eat.

That is just one of the cascading effects to expect as a result of the Biden ukase.

More...

https://www.ericpetersautos.com/2021/11/10/shut-down-joe/
DrMaddVibe Offline
#338 Posted:
Joined: 10-21-2000
Posts: 51,120
KEVIN HASSETT: "I’m trying to think of the right word for what [President] Biden is doing…Biden-enomics is not negative enough. He’s really doing econo-cide. You know, he’s got a demand stimulus that’s as big as we’ve ever seen and then he’s whacking the heck out of supply. You know, he’s regulating firms, promising big tax hikes—you, know, we have the highest marginal tax rate in the whole developed world if they pass those tax hikes, and all of that is basically creating all this cash chasing supply but supply is going down so you see inflation. You know, people sort of say it’s looking like the 1970s but I actually think it could be worse than the 1970s, if you look at all these forces. These are policy errors that are unlike anything that economists have ever seen. And finally, the last thought is: where are all the economists? I mean Larry Summers, you were right to cite him, but the academy is just silent about this. They need to step up."
rfenst Offline
#339 Posted:
Joined: 06-23-2007
Posts: 35,301
Who’s to blame for inflation?
NYT

The rising prices of food, gas and other things we buy — in other words, inflation — were already a central economic issue of 2021. Those prices are up 6.2 percent over the last year, and shortages and other inconveniences are side effects of the problem.

Now inflation is also a central political issue. It is dragging down President Biden’s approval ratings and fueling discontent among Americans. It’s clear in surveys. It will surely be the talk at the table of Thanksgiving family gatherings next week (even if, as an economics writer, I might prefer to skip one day of talking about supply chain mechanics).

How did we get here? Who is to blame? To help you understand, today I’ll walk you through the most obvious candidates — and where the evidence looks strongest.

President Biden
Presidents have less control over the economy than headlines might suggest, but the current situation is an exception to the rule. You can draw a direct line from a specific policy decision that Biden and congressional Democrats made this past winter to some of the inflation happening now.

In designing the stimulus that Congress passed in March, Biden’s administration went big, with $1.9 trillion in pandemic relief — on top of a separate $900 billion package that passed three months earlier. Put the two together, and $2.8 trillion in federal money has been coursing through the economy this year while economic activity has trended only a few hundred billion dollars a year short of what mainstream analysts would consider full health.

If you think of inflation as a result of too much money chasing too few goods, then this extra spending is most likely a culprit.

But for all the trillions spent, Americans’ purchases through the end of September were only about $52 billion higher — or 0.4 percent — than would have been expected in a world where the pandemic never happened. I take that as evidence that most of the spending served to replace lost incomes (from people not working, voluntarily or otherwise) or was plowed into savings, and the inflation story is more complicated than just too much money floating around.

The Fed
The nation’s central bank has kept ultra-easy monetary policy in place for far longer than in past economic cycles. Its chair, Jerome Powell, has focused on returning the job market to full health and has projected that the inflation surge is temporary.

His response in large part took from the lessons of the last economic expansion, when the Fed started raising interest rates at the end of 2015 and, with hindsight, might have excessively crimped a recovery that was only starting to show big benefits to workers.

But Powell and other policymakers might be fighting the last war. At a minimum, the Fed has not played its traditional role of pre-empting an inflation surge by deliberately slowing the economy.

That said, monetary policy takes a long time to affect consumer prices, so it’s not a given that the inflation situation would be terribly different now if the Fed had started raising rates already.
Corporate America

When the pandemic shut down the world in 2020, operations managers at companies concluded: We need to do whatever we can to survive.

Automakers saw it as a severe recession and cut back production and orders for new supplies, while car rental companies sold their fleets. Airlines canceled orders for new jets. Energy companies canceled drilling projects. Companies in a range of industries laid off workers.

We’re still dealing with the effects of those decisions. This turned out to be a much shorter economic downturn, with a much speedier recovery, than many people were forecasting in the spring of 2020. So now, automakers are wishing they hadn’t canceled orders for semiconductors, car rental companies are struggling to add vehicles, shipping prices are through the roof, fuel prices are spiking, and companies are wrestling with labor shortages.

What seemed like prudent, sensible decisions turned out to be wrong for the actual economy we ended up with.

Despite all that, however, supplies of many goods actually are higher than they were before the pandemic. The problem is that demand is up even more.

Though everybody experienced the pandemic differently, in the aggregate a couple things are true.

We shifted our spending toward stuff, rather than services. Americans purchased 18 percent more physical goods — cars, washing machines, furniture — in September than they did in February 2020, while their consumption of services fell a bit. Because demand for such goods is off-the-charts high while supplies are limited, they are more expensive.

And many of us elected to stop working, or work less. (The number of people working remains smaller than it was prepandemic.) The shortage of workers has led employers to offer higher wages to attract employees. That fuels price increases even in services experiencing underwhelming demand, like restaurant meals.

The takeaway
The great shift in Americans’ purchasing and employment patterns prompted by the pandemic look like the primary culprit in this bout of inflation. Decisions by Biden and the Fed likely contributed, and earlier decisions in the corporate world made it harder for supply to adjust to match surging demand.

In assessing blame for the wave of inflation, the biggest question is whether policymakers should have foreseen the problems around reopening — and perhaps been more restrained in trying to stimulate the economy.

That means the future of inflation depends not just on what happens in Washington, but on what happens with the pandemic — and how quickly Americans return to more typical spending patterns and more people go back to work.
HockeyDad Offline
#340 Posted:
Joined: 09-20-2000
Posts: 41,829
I heard it’s mostly peaceful inflation.
rfenst Offline
#341 Posted:
Joined: 06-23-2007
Posts: 35,301
HockeyDad wrote:
I heard it’s mostly peaceful inflation.

**Hoping** for a quick truce.
rfenst Offline
#342 Posted:
Joined: 06-23-2007
Posts: 35,301
Attend to these financial matters before 2021 ends

As we approach year-end, countless articles will mull over the events that defined 2021.
But when it comes to financial matters, this time of year is not for looking back but rather for assessing where you stand — and where you want to go in 2022. The next few weeks are a time to take specific steps to make sure you’re on track. Here are a few items to consider.

Your required minimum distribution: If you’re 70 or older, you must take a prescribed amount out of your tax-sheltered retirement accounts — IRAs, 401(k)s, 403(b)s and other specialty retirement plans. Do that now — before year-end. It might be easy to forget because in 2020, there was no RMD. But now you must take an RMD for 2021.

You can take the money from one or several of your accounts, but the total required is based on the value of ALL your retirement accounts as of last year-end (2020). The amount of your RMD can be easily calculated by any one of your plan custodians, if you give them the total value of ALL your accounts.

Year-end profits: If you own stocks or other assets outside of your retirement accounts, you might want to sell and take profits. It’s still uncertain whether Congress will increase capital gains tax rates in the next legislative session. Current tax rates are near modern historic lows. Long-term capital gains rates apply to investments held longer than one year. Gains on stocks held less than a year before sale are taxed as ordinary income.

Now is the time to decide if you want to take some gains — and to minimize the taxes by selling any losers you might have. You can offset capital gains and losses, both short term and long term, to save on taxes. But you can only deduct $3,000 of capital losses against ordinary income.

If your investments are held inside a retirement account, you can ignore this topic. All of your retirement withdrawals will be taxed as ordinary income down the road when you withdraw, except for Roth IRAs and Roth 401(k)s, which are withdrawn tax-free.

Don’t think you can take a loss for tax purposes and then buy the stock back right away, or even a few days later in the new year. You’ll be caught in the “wash sale” rule if you repurchase that stock within 31 days. And your loss will be disallowed.

Organize year-end statements: If you are scrambling for year-end balances from last year in order to calculate your RMD for this year, now is the time to set up a paper filing system to collect the year-end statements that will arrive in January. And if you’ve gone paperless, just make a list of year-end online balances in all your retirement accounts to make it easier next year at this time.

Reconsider your debt: According to CreditCards.com, the average interest rate on credit cards is 16.4%. And many people are paying 21% or higher — especially if they are trapped with big balances. Can you stop yourself from charging more now and then pay double the minimum every month? That would considerably shorten the 30-plus-year time period it will take to pay off the balance using only the minimum — and save a fortune in interest.

Contributions: Consider making a charitable contribution right now. The higher standard deduction of $12,550 in 2021, along with limited deductions for state and local taxes, means most people aren’t searching for tax deductions. But charities still need your help. Check out good causes at CharityNavigator.com, and help those who worry more about food and shelter than tax deduction and retirement distributions.

It’s the best way to show gratitude for your good fortune. And that’s The Savage Truth.




Terry Savage is a registered investment adviser and the author of four best-selling books, including “The Savage Truth on Money.” Terry responds to questions on her blog at TerrySavage.com.
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