Everything is so expensive! (just a vent)

[JimMIA]

As not only the Fed Chair said....but also several other members.....they truly don't know where the economy will be two years from now. We're all a part of this grand global experiment of opening up the world after mostly shutting it down for some period of time. I can't help but think of that great quote from Samuel L. Jackson in Jurassic Park...."Hold onto your butts".... .

Agree. As you said above, we don't have a template for this, so nobody really knows how it's going to shake out.

 

[dclpluto]

Well, that trillion dollar in infrastructure that is currently being negotiated....and it started out as a two trillion dollar infrastructure deal. Even using reconciliation....this latest deal will be under one trillion. And all of this spending literally hinges on roughly two to six individuals....depending on which way the wind is blowing. And don't forget...the last congress added 8 trillion to the national debt, four of that before Covid, through reconciliation....and that was never getting paid for through an increase in GDP...and therefore revenue. GDP never got north of 2.9% pre-pandemic. That money went to massive corporate tax cuts....very little went to the average American. We had "historic" GDP growth in 2020....but that tends to happen when you shut everything down....and then open it back up .

But I won't argue over throwing money into an economy that has seriously supply issues and seemingly loads of cheap money sloshing around already. I've seen that movie before...didn't end well. From everything I'm reading, the Fed isn't quite convinced that we're good to go on the growth side of things, thus continuing their 120 Billion a month spending spree. I suspect that the rest of that 6 trillion in planned spending would be half of that if they were extremely lucky. And even then, it will hinge greatly on whether the inflation we're seeing now is transitory, or if it does really impact the average American's bottom line beyond say, six months to a year from now...which is just when the mid-terms will be heating up. As not only the Fed Chair said....but also several other members.....they truly don't know where the economy will be two years from now. We're all a part of this grand global experiment of opening up the world after mostly shutting it down for some period of time. I can't help but think of that great quote from Samuel L. Jackson in Jurassic Park...."Hold onto your butts".... .

right now it’s looking great. I’m on pace to make over $ this year. I won’t give the amount some people will think I’m bragging others will think it’s peanuts. I haven’t made this much money since 06 and 07 we all know what happened in 08. 08 I made about 25 percent less money than 07. Same company and all just way less overtime. I work in a factory.

 

[lpereira]

What makes me crazy are housing prices. I worry about affording a home of my own in the future.

Keep hanging on to your money and saving it. The bottom will fall out on these people eventually.

 

[dvcgirl67]

Agree. As you said above, we don't have a template for this, so nobody really knows how it's going to shake out.

Yesterday two Fed Governors made comments about the need for continued QE....that we're not seeing employment and growth at sufficient levels for them to begin tapering. The employment picture is super complicated right now and the Fed is trying to figure it out. There's a large number or retirements that have taken place. They're trying to understand if these people will come back or if these workers are gone for good. They've commented that "full employment" may look different post-covid compared to before covid.

There's been tons of talk about the extra $300 in UI benefits keeping all of the workers at home, but American Airlines had to cut back on flights because they don't have enough staff....from maintenance to flight crews (including pilots). Back at the very beginning of Covid, the first round of stimulus included huge grants to airlines so that could keep all star employed through October 1st of 2020....because if the economy really bounced back we'd need them in place. Well, that didn't happen and the airlines had to furlough loads of staff. Now, they're trying to get them back to meet demand, and that's not going as smoothly as they'd like. And while it seems like everyone is on the move...traveling everywhere, ticket sales for flights dipped down in June compared to May. So...did we just see a big burst of "revenge travel" out of the gate...only to have things slow down again a bit?

The WSJ podcast from yesterday asks the question..."why are so many employees quitting"? There were lots of different explanations, but one common answer seemed to be that many people had saved a lot of money during quarantine. Many kept their jobs and did nothing, went nowhere....and so they saved a lot of money. Some of them have left their jobs and are looking for more fulfilling work. So, just a lot of data that needs to be sifted through.

 

[MillauFr]

Keep hanging on to your money and saving it. The bottom will fall out on these people eventually.

I doubt the prices will fall as long as the federal reserve keeps running the printing press 24/7.

 

[TLSnell1981]

Oh dear God! I just priced tires for my SUV...SIX HUNDRED $$$ EACH!!! Absurd!!! Inflation? What inflation?

 

[TLSnell1981]

right now it’s looking great. I’m on pace to make over $ this year. I won’t give the amount some people will think I’m bragging others will think it’s peanuts. I haven’t made this much money since 06 and 07 we all know what happened in 08. 08 I made about 25 percent less money than 07. Same company and all just way less overtime. I work in a factory.

I’m afraid 2008 will soon become just a fond memory. My memories from that era on FB are beginning to cause concern... Deja vu all over again.

 

[daisy2013]

Yesterday two Fed Governors made comments about the need for continued QE....that we're not seeing employment and growth at sufficient levels for them to begin tapering. The employment picture is super complicated right now and the Fed is trying to figure it out. There's a large number or retirements that have taken place. They're trying to understand if these people will come back or if these workers are gone for good. They've commented that "full employment" may look different post-covid compared to before covid.

There's been tons of talk about the extra $300 in UI benefits keeping all of the workers at home, but American Airlines had to cut back on flights because they don't have enough staff....from maintenance to flight crews (including pilots). Back at the very beginning of Covid, the first round of stimulus included huge grants to airlines so that could keep all star employed through October 1st of 2020....because if the economy really bounced back we'd need them in place. Well, that didn't happen and the airlines had to furlough loads of staff. Now, they're trying to get them back to meet demand, and that's not going as smoothly as they'd like. And while it seems like everyone is on the move...traveling everywhere, ticket sales for flights dipped down in June compared to May. So...did we just see a big burst of "revenge travel" out of the gate...only to have things slow down again a bit?

The WSJ podcast from yesterday asks the question..."why are so many employees quitting"? There were lots of different explanations, but one common answer seemed to be that many people had saved a lot of money during quarantine. Many kept their jobs and did nothing, went nowhere....and so they saved a lot of money. Some of them have left their jobs and are looking for more fulfilling work. So, just a lot of data that needs to be sifted through.

I've seen some articles that particularly in the restaurant industry people are thinking it just not worth the money - the long uncertain hours, abuse of the customers (and management at times), the subpar wages, they are turning to other industries. I myself, though not a restaurant worker, changed job mid-covid to a higher paying but more stressful position, but decided it just wasn't worth it. Even though I primarily worked from home, I was in a constant state of work and stress and my family, health etc suffered. Thankfully, I left my old position in such a manner that I could get my job back because they didn't fill it. So although I make less, I am able to sleep at night, see my kids etc. I am not the only person to decide the money is not worth it. I know people who moved out of NYC and are now looking and taking jobs closer to their new homes because even if the salaries are higher in NYC the long commutes and stresses associated with the jobs are not worth the money.
It will be interesting to see how work/life balance changes in the post-covid world.

 

[JimMIA]

Yesterday two Fed Governors made comments about the need for continued QE....that we're not seeing employment and growth at sufficient levels for them to begin tapering. The employment picture is super complicated right now and the Fed is trying to figure it out. There's a large number or retirements that have taken place. They're trying to understand if these people will come back or if these workers are gone for good. They've commented that "full employment" may look different post-covid compared to before covid.

There's been tons of talk about the extra $300 in UI benefits keeping all of the workers at home, but American Airlines had to cut back on flights because they don't have enough staff....from maintenance to flight crews (including pilots). Back at the very beginning of Covid, the first round of stimulus included huge grants to airlines so that could keep all star employed through October 1st of 2020....because if the economy really bounced back we'd need them in place. Well, that didn't happen and the airlines had to furlough loads of staff. Now, they're trying to get them back to meet demand, and that's not going as smoothly as they'd like. And while it seems like everyone is on the move...traveling everywhere, ticket sales for flights dipped down in June compared to May. So...did we just see a big burst of "revenge travel" out of the gate...only to have things slow down again a bit?

The WSJ podcast from yesterday asks the question..."why are so many employees quitting"? There were lots of different explanations, but one common answer seemed to be that many people had saved a lot of money during quarantine. Many kept their jobs and did nothing, went nowhere....and so they saved a lot of money. Some of them have left their jobs and are looking for more fulfilling work. So, just a lot of data that needs to be sifted through.

I'm much more concerned about Fed action and what Congress might do.

The stimulus already passed will work its way out. Employees will go back to work or replacements will be hired. Airlines and other industries will return to normal on their own. It will take some time -- maybe a year -- but "normal" will return. The new "normal" will undoubtedly involve some level of inflation, but the key is to keep it within reasonable boundaries.

But I am eager for the Fed to start tapering QE. They have even been buying junk bonds just to pump money in, and I don't see much further need for that. They can't just shut it off, but they should wind it down and raise their standards for purchases IMHO.

I also hope Congress doesn't pass any additional "stimulus" beyond the bipartisan infrastructure bill they are working on. Too much money pumped into the economy will not end well -- especially if there is no way to pay for it.

 

[spiders]

I just got back from a trip to Colorado. Somewhere towards in the middle of nowhere between the west side of Rocky Mountain National Park to the highway was a McDonald's. Now it was a ski town that we were going through but the banner for McDonald's said "Now hiring. Starting at $15 per hour plus $2 per hour signing bonus."

One restaurant we went to said they were a "no tipping" restaurant and all bills had a 20% gratuity added -- no additional tip line. That I can appreciate. Another restaurant we went to added a "Happy People" 22% fee and then asked for an additional tip. If you want to charge me 22% then go for it but to then ask for an extra tip is ridiculous. I ordered a pretty basic pasta dish -- it was like $24. So the restaurant owner wants to charge $24 for a dish that has about $4 worth of ingredients and they can't contribute towards "happy people"...

 

[NYCgrrl]

It’s definitely not 2008 in my mind at least but I get that some are worried.

 

[mrodgers]

Keep hanging on to your money and saving it. The bottom will fall out on these people eventually.

I can't wait. This will be the benefit of Covid I'm looking for. I'll probably be in the market when the bottom falls.

 

[mrodgers]

Oh dear God! I just priced tires for my SUV...SIX HUNDRED $$$ EACH!!! Absurd!!! Inflation? What inflation?

Ever buy tires for this particular car? Might be just what they are, tires aren't cheap for the big vehicles. $600 sounds pretty normal for big SUV and trucks to me.

Just looked at my car, which I've put 2 sets on already. Pretty much the same price I paid 3 years ago as well as Spring of 2020.

 

[TLSnell1981]

Ever buy tires for this particular car? Might be just what they are, tires aren't cheap for the big vehicles. $600 sounds pretty normal for big SUV and trucks to me.

Just looked at my car, which I've put 2 sets on already. Pretty much the same price I paid 3 years ago as well as Spring of 2020.

Yes. They have almost doubled in price

 

[LuvOrlando]

Ever buy tires for this particular car? Might be just what they are, tires aren't cheap for the big vehicles. $600 sounds pretty normal for big SUV and trucks to me.

Just looked at my car, which I've put 2 sets on already. Pretty much the same price I paid 3 years ago as well as Spring of 2020.

I got about 4 quotes for the same tires for my SUV last month that ranged from $400 to $1200, it was very strange, so there is a great deal of gouging happening. My suspicion is the rigging is coming from manufacturing reducing output to manipulate pricing like OPEC did with gas, but these days it's not gas triggering loss of wealth it's "stuff" and we need to start making our "stuff" here so we are not as vulnerable to market manipulation. Anyone who lived through the 70's gas "shortages" should remember the dance steps :/

 

[NotUrsula]

I got a cold call from a realtor the other day, not the first one who has called, as my neighborhood is being targeted for teardowns. This one really wanted to ask why I would not even think of selling. It was a simple enough question: this is a paid-for home that was purchased for $69K thirty years ago. It may be small, and it may have some issues, but lock, stock & barrel it is ours, and even if we both lose our jobs we'll still be able to afford to stay in it. I asked her to pitch me any scenario she has on buying another that would put us in a better condition, and as I knew would be the case, she could not do it. Sure, we could probably net $230K, but what the heck good would that be in a market where replacing the house would surely cost more than that?

PS: Even though this time around, the banks are being careful not to lend to people who don't have sufficient steady income to cover the mortgage, that doesn't mean that many of those buyers will not end up over their heads sooner rather than later. Think how many of them will be stretched right to the limit with no cash reserve at all. When they need to pay for college, or medical bills, or have their employer bought out and downsized, they will quickly realize that they have to get out from under that mortgage. (DH & I had that happen to BOTH of us, 18 months apart, right around the time our youngest child was born. As a newish employee my maternity leave was really short, and he fortuitously was laid off right when I needed to go back to my job (not that it was good that he was laid off, but if it had to happen, that was the best possible time frame for it.) It took me 8 months to find a new job when I lost mine, and DH was unemployed for 6 months, we were paying private school tuition at the time, in addition to facing daycare expenses. Not having a mortgage was what saved us then.

 

[dvcgirl67]

I’m afraid 2008 will soon become just a fond memory. My memories from the era on FB are beginning to cause concern... Deja vu all over again.

I can understand being fearful from the Great Recession years, but what's occurring now is nothing like that period. House prices are rising, but for a completely different reason....and a lot of those reasons are pandemic related. In 2006 we had an oversupply of houses being purchased, in many cases, by people who never intended to live in those homes. The housing demand was completely manufactured. Wall Street, (aka Monetary Dr. Frankenstein) created a system where they literally took the riskiest of mortgages, bundled them together and then hired rating agencies (who had huge levels of conflicts of interest with these banks)....to turn these mortgages, which were the equivalent of leaden financial paper....into solid gold. And even worse....these Wall Street firms were selling these bundles of garbage out of the front of their house to investors.....while shorting these same products in another department at the same time The scam got so big that its tentacles found their way into our greater economy. The minute that housing prices started to drop....the whole house of cards came crashing down.

The next year or so we are going to see higher prices as these pandemic-related supply chain and employment shortage issues iron themselves out. But I believe the scariest economic portion of this pandemic is well behind us. Are there challenges ahead? Sure, But I don't believe we're in for a 55% drop in the stock market and 10+% unemployment like we had as result of the housing/credit bubble bust. Like JimMIA....I do have concerns about the unwinding of the Federal Reserve's huge level of spending....it's a very difficult balancing act that they're trying to pull off. But I think that erring on the side of continued QE during the full economic reopening is better than tapering too soon, which could dampen growth and lead to a big dip in the markets...recession....almost a self-fulfilling prophecy. I think they're waiting to see how much inflation works itself out as the kinks in the supply chain and employment participation work themselves out.

 

[dvcgirl67]

I got about 4 quotes for the same tires for my SUV last month that ranged from $400 to $1200, it was very strange, so there is a great deal of gouging happening. My suspicion is the rigging is coming from manufacturing reducing output to manipulate pricing like OPEC did with gas, but these days it's not gas triggering loss of wealth it's "stuff" and we need to start making our "stuff" here so we are not as vulnerable to market manipulation. Anyone who lived through the 70's gas "shortages" should remember the dance steps :/

There is definitely a great deal of gauging happening right now. Whether it be tires, or yes, even lumber. I don't fault any industry for getting market value, while they can. And maybe it was justified for a bit in the lumber world as they were having manufacturing issues and labor constraints. But it turns out there was also some hoarding of finished product going on, and so then it just takes one group to blink....and prices will start to fall, which is what is happening now.

In the new housing market demand for lumber is beginning to hit a ceiling as well. In a market like new homes, where it takes quite awhile to complete the finished product, new builders are becoming skittish about beginning new products when they're not sure how much lumber and other commodities might fall during the build. Instead of triggering escalation clauses where they can ask (and get) more money per unit legally, they could also end up on the other end losing money on finished homes where material prices fall so much that they are left holding the bag.

And then there's the grey area where builders may not get inflated prices, but it doesn't stop them from trying. My sister just closed on an expensive vacation home in the mountains of North Carolina. The home took nearly a year to build, and so she lucked out...the materials were purchased before inflation kicked in. But now you have a builder who is completing this really beautiful home they know they can get more money for....in this case it was about 30%, or 300K more. And legally, the builder was allowed to keep the home listed on the market until the closing. But they they tried to convince my sister that they could sell the home to a higher bidder. However, she had this thing....called a contract. And, it turned out this was not true, and it simply took one phone call to an attorney to confirm this was not legal. So, in that case, it just turns out the builders were jerks. They certainly made money on the home....just not as much as he felt entitled to at this point.