Economy

[Cornflake]

I posted a response to majorminor on the daily thread and then realized it might seem somewhat political. SO I deleted it there and I'm adding it here.

"Work has been weird. This is usually busy season getting orders started for pre snow install and it's kind of slow. My vendors and customers are saying the same. Not dead but....weird. Erratic irrational stock market? Extended housing boom winding down? Heading in to a presidential election? Other than the fact banks are requiring you to have a job and a down payment and pass a credit check to buy a house these days it's reminding me of August 2008."

We may find that the Fed waited too long to cut interest rates. N Y Times: "The American job market significantly slowed in July, the Labor Department reported on Friday, adding 114,000 jobs on a seasonally adjusted basis. The unemployment rate rose to 4.3 percent, the highest level since October 2021. The S&P 500 was down 1.2 percent when it opened on Friday, as investors likely ponder whether the Fed has been too slow to lower interest rates. Fears among investors of slowing growth dragged the 10-year U.S. Treasury yield to 3.85 percent, down 12 basis points. The 2-year yield fell 20 basis points to 3.96 percent."

[brucemacneill]

Aug 2, 2024 9:34:36 GMT -5 Cornflake said:

I posted a response to majorminor on the daily thread and then realized it might seem somewhat political. SO I deleted it there and I'm adding it here.

"Work has been weird. This is usually busy season getting orders started for pre snow install and it's kind of slow. My vendors and customers are saying the same. Not dead but....weird. Erratic irrational stock market? Extended housing boom winding down? Heading in to a presidential election? Other than the fact banks are requiring you to have a job and a down payment and pass a credit check to buy a house these days it's reminding me of August 2008."

We may find that the Fed waited too long to cut interest rates. N Y Times: "The American job market significantly slowed in July, the Labor Department reported on Friday, adding 114,000 jobs on a seasonally adjusted basis. The unemployment rate rose to 4.3 percent, the highest level since October 2021. The S&P 500 was down 1.2 percent when it opened on Friday, as investors likely ponder whether the Fed has been too slow to lower interest rates. Fears among investors of slowing growth dragged the 10-year U.S. Treasury yield to 3.85 percent, down 12 basis points. The 2-year yield fell 20 basis points to 3.96 percent."

Well, the middle class is running out of money after 3 1/2 years of Bidenomics and they're scared it may continue under Kamalanomics so they're trying to cut expenses. It is a lot like 2008 Obamanomics, all basic Communist policies. Equality is at the bottom of the ladder, you know.

[John B]

Aug 2, 2024 9:44:27 GMT -5 brucemacneill said:

Aug 2, 2024 9:34:36 GMT -5 Cornflake said:

I posted a response to majorminor on the daily thread and then realized it might seem somewhat political. SO I deleted it there and I'm adding it here.

"Work has been weird. This is usually busy season getting orders started for pre snow install and it's kind of slow. My vendors and customers are saying the same. Not dead but....weird. Erratic irrational stock market? Extended housing boom winding down? Heading in to a presidential election? Other than the fact banks are requiring you to have a job and a down payment and pass a credit check to buy a house these days it's reminding me of August 2008."

We may find that the Fed waited too long to cut interest rates. N Y Times: "The American job market significantly slowed in July, the Labor Department reported on Friday, adding 114,000 jobs on a seasonally adjusted basis. The unemployment rate rose to 4.3 percent, the highest level since October 2021. The S&P 500 was down 1.2 percent when it opened on Friday, as investors likely ponder whether the Fed has been too slow to lower interest rates. Fears among investors of slowing growth dragged the 10-year U.S. Treasury yield to 3.85 percent, down 12 basis points. The 2-year yield fell 20 basis points to 3.96 percent."

Well, the middle class is running out of money after 3 1/2 years of Bidenomics and they're scared it may continue under Kamalanomics so they're trying to cut expenses. It is a lot like 2008 Obamanomics, all basic Communist policies. Equality is at the bottom of the ladder, you know.

Bush was in office in 2008. You might remember it as the period of time before massive economic expansion during Obama's administration.

[brucemacneill]

Aug 2, 2024 9:58:05 GMT -5 John B said:

Aug 2, 2024 9:44:27 GMT -5 brucemacneill said:

Well, the middle class is running out of money after 3 1/2 years of Bidenomics and they're scared it may continue under Kamalanomics so they're trying to cut expenses. It is a lot like 2008 Obamanomics, all basic Communist policies. Equality is at the bottom of the ladder, you know.

Bush was in office in 2008. You might remember it as the period of time before massive economic expansion during Obama's administration.

What I remember back then was an economic disaster after the Democrats, mostly Chuck Schumer said the banks were bankrupt so there would be a recession so the Republicans would lose the 2008 election. I lost a lot of money and had just retired so it took years to get some of it back. I don't remember any economic expansion under Obama. My spreadsheet of net worth says I didn't get close until 2020 and I've lost about 40 grand since then. I check my net worth the first of every month so I looked it up yesterday.

[factorychef]

Should of bought GOLD.

[majorminor]

Sub Prime Mortgage would be a good band name.

[brucemacneill]

Aug 2, 2024 11:09:18 GMT -5 factorychef said:

Should of bought GOLD.

Had some funds invested in gold and miners but there was a slump at some point and Fidelity, that manages my IRA account now dropped them and I assume they are smarter than me on investments. I was an engineer and made bad investment decisions so I went with a managed account and they got more back with less ups and downs than I did when I was DIY. They never went back to gold so I don't own any.

[majorminor]

My only commentary on the economy is that here in Montana it's not near as good as my newsfeed is telling me it is. Limited housing, high rents, major inflation for groceries, and high gas prices.

Intel is off 30% today and cutting it's dividend in the 4th quarter. Anybody buying at 20?

[millring]

I live and work among the working class. It's been eye opening. I never made much money, but what I did for a living insulated me from the lives of the working class. My work appealed to the educated and well-off.

My route is rural as it gets in Indiana. It might be illuminating even to me to realize just how few farms are on my 76 mile route where I'm never more than 100 yards from another field. What I mean is that in 76 miles of almost continuous farms, there is the Zimmerman farm, the Eaton farm, the Creighton bros farm. That's probably it.

Some young guys work for the few owners. The rest have jobs in town. Houses are in disrepair even short years after the windfall that inspired their building.

I deliver jail mail to a number of the houses.

The other day I had an unpleasant coincidence: At two different houses that regularly order Amazon for me to deliver I had, in three years of doing this route, never seen the owners. But that day I saw both of them -- coincidentally both in their open garages, both sitting in chairs facing three quarters away from me. And all I could really see was the lower part of their leg. Big as tree trunks. The obese folk you see electric carting their way through the aisles of Walmart (yes, I realize you don't shop at Walmart) are the tip of the iceberg. EMTs sometimes have to cut doorframes out of doors and bring in lifts to get people to the hospital. Or the morgue. These two are among the similarly homebound.

Fast food is easy and deadly. And my coworkers live on a steady diet of it. What else are you going to do when everyone in the family works just to buy more fast food so that everyone can work so they can afford more fast food, etc.etc.etc.

They're living the reality of the elitist dream of fulfillment by employment. Be somebody. Let the schools raise the kids and teach the next generation the joy of the fulfilled life of employment.... because it would just be damn WEIRD to want a one income family and a home instead of a house to return to each day.

And, no, we're not keeping up with inflation. Every. Single. Bag. Of. Groceries. is $100. Good thing most folks don't need groceries then, huh? Thank the Universal Random Chance that caused the world to spontaneously happen.... thank IT for fast food.

A pickup truck costs over $50,000 dollars. It's a good thing meth is cheaper.

[Dub]

Aug 2, 2024 14:04:55 GMT -5 millring said:

I live and work among the working class. It's been eye opening.

I couldn’t bring myself to “thumbs up” your post even though it is well written and insightful. The reality you accurately describe should get no thumbs up.

[RickW]

Somewhere along the way, the ability to make a living as a rural citizen if you’re not a landowner went into the crapper. And I don’t know what anyone can do about it. Here in BC, you could log/work in the sawmill, fish or can fish, or farm. Well, fishing died when all the fish went away. All three lines of work have been heavily automated — they don’t need a bunch of warm bodies for any of them. No one is going to build a factory out in the country, because they want to be near places where they can ship goods out. And even if they did, new factories are incredibly automated as well.

On top of that, many of the small towns, here and in the US, have well off folks from big cities moving in, buying the houses, because they can sell their inflated real estate for a fortune, and buy something much cheaper, and live in a “nice little town.” But it’s driving the prices up so far the locals can’t afford them anymore.

And what’s any government going to do about that? Squat, because what can they do, without draconian legislation, or subsidies? Every single government, left and right, has pretty much been helpless. And now with the constant threat of forest fires, the little some of those folks do have is being destroyed.

[millring]

It probably wasn't economic policy that supercharged the gap between the haves and the have nots. Just as those who caused the crash in 2008 not only didn't pay for it -- they cashed in on it, the ones who demanded the COVID shutdown because they were at risk have multiplied their wealth while those whose livelihoods they devastated will never catch up.

[epaul]

First, I see a lot Bernie Sander's economic thoughts on this thread (from an unxpected quarter). Then I just heard Bernie himself on MPR. Synchronicity!

[aquaduct]

Aug 2, 2024 17:10:05 GMT -5 RickW said:

Somewhere along the way, the ability to make a living as a rural citizen if you’re not a landowner went into the crapper. And I don’t know what anyone can do about it. Here in BC, you could log/work in the sawmill, fish or can fish, or farm. Well, fishing died when all the fish went away. All three lines of work have been heavily automated — they don’t need a bunch of warm bodies for any of them. No one is going to build a factory out in the country, because they want to be near places where they can ship goods out. And even if they did, new factories are incredibly automated as well.

On top of that, many of the small towns, here and in the US, have well off folks from big cities moving in, buying the houses, because they can sell their inflated real estate for a fortune, and buy something much cheaper, and live in a “nice little town.” But it’s driving the prices up so far the locals can’t afford them anymore.

And what’s any government going to do about that? Squat, because what can they do, without draconian legislation, or subsidies? Every single government, left and right, has pretty much been helpless. And now with the constant threat of forest fires, the little some of those folks do have is being destroyed.

Or you can skip an outrageously expensive degree and learn a trade.

Then you can fix all that automation that tends to get all bollixed up on a regular basis.

Oh, and you can help drain those rich people's bank accounts by fixing their expensive houses and other accoutrements.

[majorminor]

“accoutrements”

I always read this word with a French accent inside my head.

[aquaduct]

Aug 2, 2024 20:54:23 GMT -5 majorminor said:

“accoutrements”

I always read this word with a French accent inside my head.

That's what that uppity business you're in will do to you.

[Cornflake]

Paul Krugman, three days ago:

There’s an old joke about a motorist who runs over a pedestrian, then says, “I’m sorry. Let me fix that” — so he backs up and runs over the pedestrian a second time.

Right now, the Federal Reserve is looking like that guy.

The Fed received a lot of criticism for being behind the curve in 2021 and ’22, when it was slow to raise interest rates in the face of rising inflation.

It’s not clear that this delay did significant harm. As Jared Bernstein, the chief White House economic adviser, pointed out in a recent speech, U.S. economic performance during the pandemic and its aftermath stands out among wealthy nations; we experienced similar inflation to our peers while achieving much stronger economic growth....

Still, the Fed’s credibility took a hit.

But it’s now increasingly clear that the Fed is once again behind the curve, in the opposite direction: It has waited too long to cut interest rates as inflation has subsided. Unemployment has been rising, and the latest jobs report, on Friday morning, shows that the rise has now triggered the Sahm Rule, a historically very accurate indicator that the economy has entered a recession.

I wrote about the Sahm Rule this week, warning that it might be triggered but giving reasons not to panic (a view shared by Claudia Sahm herself). And other indicators, like prime-age employment, are still holding up. Nonetheless, the Friday jobs numbers make it very clear that the Fed should have cut rates on Wednesday and probably should have begun cutting earlier this year.

The good news is that the interest rates that matter for the real economy, like 10-year bond rates and mortgage rates, are partly driven not by what the Fed has done but by expectations about what the Fed will do.

So even though the Fed has gotten behind the curve, it may still be able to head off a recession by signaling to markets that it knows that it has ground to make up; we should definitely be looking at a rate cut of half a percentage point (rather than the usual quarter-point move) at its next scheduled meeting, in September, and maybe a before-schedule cut this month if more bad news comes in.

[majorminor]

Edit - anyone buying Intel at now $19? Whoah.

A big economic dump right about now would be yet another dramatic development for the upcoming election.

[epaul]

When it hits $15, I'm sinking the farm in it.

[RickW]

If you invested in Nvidia, it might be time to walk away. Their stock price was driven by the AI “boom”, which is turning out to not be profitable. It can certainly be useful, but how much people are willing to pay to use it does not come anywhere near to covering the costs of running it. Nvidia stock price went crazy, because they make the chips that power the machines that do the work. Now it’s being pointed out that the major AI companies are bleeding cash at an astronomical rate.

Having spent my life in IT, watching all the major companies jump on the AI bandwagon and integrate it into their products, it’s a repeat of a process everyone in the biz has seen over and over. The industry is driven by buzzword technology, and this was the latest. Sometimes those buzzwords last, like relational databases and java. Most of the time they fly around corporate boardrooms for a while, then disappear as soon as the marketing appeal withers.