discussion comment
2 years ago
TLDR?
Deflation Is Here
But even aside from these larger questions, the latest CPI and PCE figures raise doubts about the basis of current Fed policy.
The Federal Reserve is still of the official view that inflation rages on. The year-over-year PCE is just over 5%. Even if that is 140 basis points lower than the CPI, it is still seen as a serious problem. “By any standard,” Chairman Powell said recently, “inflation remains much too high.”
But is it the case?
Since the summer – that is, over the last two quarters, which is long enough to establish a baseline – the PCE measure of inflation has essentially achieved the Fed’s 2% target, at a continuously compounded annual rate. (For November and December, it fell below 1%.)
The CPI is even lower for the last two quarters.
The fact is that inflation decelerated swiftly during the 2nd half of 2022. The PCE fell from a 7.74% annual rate in the 1st half of the year to a 2.09% rate in the 2nd half. Similarly, the CPI dropped from 10.57% to 1.88%.
Returning to the matter of the difference between the two measures, annualizing the monthly changes shows that the discrepancy exploded in the 1st half of 2022 – as inflation was accelerating. In the 2nd half of the year, as inflation disappeared , the gap also disappeared.
In other words, the bathroom scale is most inaccurate precisely when it is most needed!
A 283 basis point difference is extraordinary. Something is out of whack!
discussion comment
2 years ago
PCE vs CPI (Rickyboy’s argument flies in his face)
The PCE vs the CPI
The confusion begins with the two headline figures. The CPI and the PCE are designed to measure the same thing, so one should expect they will generally agree. Until Q2 2021 – when our inflation outbreak really got going – they did agree.
But since then, they have diverged significantly. The long term “gap” between the two metrics had been small (the CPI was less than 2/10ths of a percent higher). But as inflation has accelerated, the gap has widened by a factor of 8.
This is troubling. If two bathroom scales give different answers, but the difference is small and consistent, we accept it as an ordinary variation in the manufacture or calibration of the two mechanisms. But if one scale starts producing answers that differ by a large and growing amount from the other, the conclusion must be that there is something wrong with one or both of them.
Part of the problem is clear: the CPI is badly broken. This has been known for a long time. Congressional hearings and formal studies of the problem dating back to the 1990’s identified a systematic over-estimation of inflation by the CPI. Economists have estimated that the measurement error has contributed trillions to the federal deficit. The CPI is the benchmark for cost of living adjustments for social security payments, military pensions, and many other entitlements. (These problems are detailed in a previous column, here.)
The Federal Reserve itself recognized the problems with the CPI over twenty years ago, and replaced it with the PCE for purposes of setting monetary policy.
But the recent divergence is related to a more serious problem. It calls into question whether our conceptual understanding of inflation, and our techniques for measuring it, remain valid in a post-industrial, service-dominated and increasingly digital economy.
This intellectual reckoning is overdue. Inflation was “invented” as an economic concept when the economy was based on principally mass production of commoditized products. It “works” for assessing the cost of gasoline, say, or eggs. It works (to a point) for labor costs involving farm labor, hourly wages for “metal bending” jobs in a factory, or piece-work in the garment industry. But economists today struggle to apply it to services, to the compensation for knowledge work (e.g., doctors, chip designers, educators), to housing costs, and to products that embody high-tech features enabled by software, realtime data, and network connectivity.
discussion comment
2 years ago
And more text from the Forbes article (yes SkiDumb will think it’s an Apple News article)
Fed was late in detecting inflation, and it will be late to respond to the end of the cycle. This risks feeding a pro-cyclical impetus into the real economy’s slowdown and, potentially, bringing on the recession that many fear.
Let’s do the numbers.
Too Many Metrics
The first problem is — there are too many numbers to choose from. To start with, every month the federal government publishes two “headline” inflation numbers. The Bureau of Labor Statistics (a branch of the Depart of Labor) releases the Consumer Price Index (CPI) typically around the 12th of the month, and the Bureau of Economic Analysis (part of the Department of Commerce) publishes the Personal Consumption Expenditure Index (PCE) about two weeks later.
discussion comment
2 years ago
Instead of run and coke, crazy joes choice is runny shits!
discussion comment
2 years ago
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rickduganVerified and Certifiable Super-Reviewer
Lol! I haven’t ventured over to their website in many moons and gandered over there to see what has been posted out of curiosity. I thought some of you may enjoy this thread, especially their comments regarding RickDugan. I think jaded is the overall theme. Looks like only a few more days until it becomes deactivated.
https://www.stripperweb.com/forum/showthread.php?235401-Who-owns-and-runs-stripperweb
discussion comment
2 years ago
Eye drops are how people roofie drinks or slip somebody a Mickey, by replacing the solution with the drug.
discussion comment
2 years ago
25 finally got on the right path with Icee. As Shadowcat says, don’t engage in the trolls!
discussion comment
2 years ago
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CJKent_bandThe truth hurts, but if you accept it, it will set you free
OK OP, I will play along with the title of this topic. Ever heard of the saying be careful what you wish for?
discussion comment
2 years ago
I’ll go along with the OP and respond to your question. No. I’ve never been smothered so much by a dancer that I couldnt get away, mostly because I only pick girls half my size so it is easier for me to escape if they attempted it😘.
discussion comment
2 years ago
Lol! Didn’t read the article, but at least the topic delivers a good laugh. It’s why social media can be so petty and useless for info. Anyway, back in my single days about 15 years ago I met a girl someone set me up with on a blind date. During our meeting for coffee, she suggests visiting Babes down the street. We go there during the afternoon and it wasn’t too busy. This is one of the worst clubs for mongers to attend, but safe enough to bring a “date”. Regardless, I think she had a mental breakdown because she went off into the bathroom and I didn’t hear from her for over an hour. I texted and called her with no replies. I simply left for there was nothing left to do. She texts a couple hours later and asks me “where did you go? I’m sitting at the bar!” Needless to say I stopped communicating with her as soon as I left Babes, and have never returned since.
Used to take an ex girlfriend to Christie’s Tempe. She got extremely jealous of the dancers but didn’t let it show until we got home. Lesson learned.
discussion comment
2 years ago
Anything west of 7th avenue I neglect to venture into on the most part. Probably a local spot, maybe for the lgbtq crowd?
discussion comment
2 years ago
It’s quite possible ubiquitously apparent that Zelensky’s job has a lot of risk to it, and how he is compensated is likely part of the territory. Akin to
Policemen and Firefighters whom should be compensated for the extra risks they take on. Not excusing any corruption going on because it should be minimized, however politics is the breeding ground for corruption so why is this any different than Biden or Trump or any other local corruption that has taken place?
discussion comment
2 years ago
https://apple.news/A0lR4-avMRvaGYVnl17AD0Q
This article by Barron’s provides further support why my call last summer is correct, in turn leading to the most almighty “I told you so” in tuscl history! Money supply is actually starting to decrease.
discussion comment
2 years ago
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rickduganVerified and Certifiable Super-Reviewer
Dugan I’ve definitely seen an uptick of dancers letting it be known they’re open to set up meetings outside the club on a regular basis. They say things like “ we’d go together well”, and other hints suggesting fun.
discussion comment
2 years ago
That’s a fucking bad ass so mg DeclinetoState! I would have never thought of it until you brought up the Cult. They have several songs from that album that I’d love to play, Fire Woman to add.
discussion comment
2 years ago
Just this week, one of my good buddies is a high school teacher. A student tipped him off that a fellow student had a gun and ammunition in his backpack after class. My buddy found the student wondering the halls and escorted him to the principal’s office. Since the student is 18, he’s sitting in jail right now awaiting his first hearing on Monday. I’m sure he will retire as soon as he is eligible, which may be after this school year.
review comment
2 years ago
Good review Dick Head!
discussion comment
2 years ago
https://www.google.com/search?q=mickey+your+so+fine&client=safari&channel=iphone_bm&ei=anXMY7WGCJzGkPIPiKWG8A0&gs_ssp=eJzj4tVP1zc0TDMyM7ewzEsxYPQSzs1Mzk6tVKjMLy1SKM5XSMvMSwUAvlwLSg&oq=mi+key+yiur&gs_lcp=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-T9oA3AAeACAAZ4BiAG7CJIBAzYuNZgBAKABAbABFcgBEcABAQ&sclient=mobile-gws-wiz-serp#fpstate=ive&vld=cid:5930e582,vid:WFrmapGCuhs
I forgot to post SkiDumbs choice what he’d play for his atf. He lives dudes exploring his wife’s hole, so this is perfect for him. Lol!
discussion comment
2 years ago
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founderslip a dollar in her g-string for me
I say go for it, and change it if you want to. My guess is you’re tired of being asked to take stuff down from members and this would eliminate the need to honor those requests.
discussion comment
2 years ago
^^ rong! It has already been well established per this Reuters article that unions had it built in their contracts that wages adjusted for inflation during the 70’s and 80’s, and now that unions have basically weakened in #s, we aren’t seeing wages keep up with inflation. It’s not me saying this, it’s history and it’s a fact, which is why today is way different than then.
https://www.reuters.com/article/sponsored/inflation-flashback-how-does-today-compare-with-the-70s?utm_medium=paid+social&utm_source=fb&utm_campaign=MFS&utm_content=6327979584688&fbclid=IwAR3BydWsQUcSWSBkf8vi1v4hSWMjvICxDt4qj7TH-zOa8YpcHXgZwGZKfLQ_aem_AdRE7g-oMbQheCO3fO4-u2zVj3bkD40fTWb_MiUdbNhGiIRTKRb7Fto_aYd3YMfS0zpaPgSc9Ek0r9fFFxtWkxIuSOuvtrX-ZpVLYoL-sXGRIjJDz11g5b4P1x5WPFGa9tA
Oh, I forgot to say “I told you so!”
discussion comment
2 years ago
https://m.youtube.com/watch?v=XcATvu5f9vE
Here’s another one I would request. Robert Palmer’s “Addicted to Love”.
discussion comment
2 years ago
https://m.youtube.com/watch?v=UtvmTu4zAMg
Listen and tell me I’m crazy for requesting this!
discussion comment
2 years ago
I’d agree with yiu if wage growth kept pace with inflation, like it did in the 70’s and 80’s when unions had greater strength in enforcing wages keeping up with inflation. That’s just not the case today. Real Wages are declining as the increases we are seeing are only up 5% yoy, much lower than the inflation rate yoy. If we were to see the 5 and 10 year bond rate at 5%, we would have longer term inflation to worry about, but as noted they are at 3.5%. Markets are better predictors than tuscl members.
discussion comment
2 years ago
Ah, yes the labor markets are taking a hit. They just need to report the complete story……
https://apple.news/ATSo06GhhRDSgEr0OutEQPw
The Labor Market
The evidence that a Recession has begun is evident except in the traditional measures of the labor market. We suspect that the unemployment rate has been sticky due to labor hoarding after a couple of years of insufficient labor supply. Instead of shedding employees, firms are adjusting to the Recessionary climate by aggressively slashing the workweek and overtime (see charts).
In addition, the headlining Payroll Survey doesn’t distinguish between full- and part-time jobs. That data is found in the Household Survey, and December’s report confirmed a 670K+ move to part-time work.
An almost daily occurrence, of late, is a headline about layoffs especially in the tech world (i.e., America’s growth industry). Some examples:
AmazonAMZN: -18,000
Alphabet (Google): -12,000
Meta (Facebook): -11,000
MicrosoftMSFT: -10,000
Salesforce: -7,000
The list goes on.