161–170 of 300 posts
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The fed said interest rates will keep being raised until unemployment rises.
This seems like an easily accessible conspiracy theory but I think all the fed wants to do is bring down inflation.
This is the weirdest "recession" I can remember. Business leaders are constantly talking about how challenging the economic environment is and the need for layoffs etc. Meanwhile most of the underlying indicators are actually positive. Growth is strong, employment is strong. Anecdotally we're still having trouble finding good candidates. It's almost like there is a class of business leaders who are just trying to wis…
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The issue is that the definition of a recession is vague, subjective, and as a term has become so politically important. If the definition was objective, verifiable, etc, then there wouldn't be room for the idea of political manipulation. I wish that society would not place such high value on terms that are so murky. It encourages discourse where the truth is not important.
The whole “actually the terms we’ve used throughout your life aren’t correct and we’re going to pretend there’s nothing unusual about this sudden reversal” is wildly damaging to institutional credibility. I hold a BS in Econ and even I was shocked by how it was presented to the public. I figured there was a very good chance GDP would rebound for at least a quarter - and the political spin would be “Biden saves Americ…
If your bar for solving a political problem is 'We must first make sure everyone speaks about it the way I want them to speak', you're never going to get there. In a union of ignorance and malice, it's very easy for thought leaders to deliberately misframe speech, as they are the ones who determine both what we are allowed to talk about, and how we are allowed to talk about it.
"The U.S. economy grew at a 2.6% annual rate from July through September," Annual rate. That means the AP headline is deceptive, because it actually grew .6 percent. Capital is getting more expensive. Of course a recession is inevitable. I really hate the partisan capture of once neutral newsrooms. The headline is deceptively optimistic.
>Housing investment, though, plunged at a 26% annual pace, hammered by surging mortgage rates as the Federal Reserve aggressively raises borrowing costs to combat chronic inflation. It was the sixth straight quarterly drop in residential investment. Thank christ. Please bring on a housing crash ASAP.
We took a hard look at the economy before buying our house. Ultimately, we bought when interest rates were high, but prices had not yet come down. There's no crystal ball, but it sure looks like our investment will go down in value in the next few years, perhaps precipitously. I think of it this way: We bought the house we want for the price we can afford, and will happily enjoy it for two decades without price infla…
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Perhaps the housing market is obese from low interest rates, and will be healthier after a bit of dieting. Society would be healthier if the housing market wasn't managed to be a retirement fund. Would likely end homelessness.
I keep reading this house as a retirement fund comment online, and I have no idea what it means. Are reverse mortgages a common part of people’s retirement? https://www.urban.org/urban-wire/reverse-mortgage-use-differ... > At a time when seniors are sitting on a mountain of housing wealth and have anxiety about their finances, this should be a well-used program. Instead, despite rising senior population, participatio…
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Supposedly the car market is about to crash as well. There was supposedly 2008 like shenanigans in the auto lending segment and the crows are coming home to root. Speculation is that people were buying cars they couldn't afford using the stimulus checks as the downpayment and then immediately asking for a halt on payments due to COVID. With both factors no longer in play people can't afford their cars and are default…
Stimulus checks were what $2000 total. That's less than 10% on a new car and most competent banks look at your monthly payment and DTI to determine how much to loan. > A recession is bad for the party in power and a lot of the economic catastrophe drumbeat started around the time early polls opened up. They've moved from economy to gas and the polls are now on crime. Really anything to stir up FUD.
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>Federal Reserve aggressively raises borrowing costs to combat chronic inflation. [emphasis added] Not sure why you used that word. I don't think it applies in this circumstance. Not trying to be pedantic/snarky, I just wonder why you characterize only 18 months or so of higher than has been seen in quite some time inflation as "chronic." Chronic (adj.):[0] 1a : continuing or occurring again and again for a long time…
There is (was, really) an argument in the public sphere as to whether the inflation we're experiencing is merely "transitory," and this plays into the larger debate about how it ought to be dealt with by the Fed and the US government. Use of the word "chronic" is merely someone noting their position on the question of whether our inflation is "transitory." edit: looking at it in context, it's someone noting the Fed's…
Although I'd posit that there are a bunch of terms that (at least IMHO) would be more appropriate than "chronic":
Ongoing
Sustained over the past 18 months
Recent and continuing
In fact, when I realized that I was commenting on a quote from TFA, I almost deleted my comment altogether but decided against it.
The Yield curve, Mortgage Rates, Bonds and Asset Prices are all in bad shape. Combined with rapidly falling income (due to 15%+ real inflation) it's a disaster in the making. Homes will likely fall 30-35% in adjusted value in the next 12 months. A lot of people's net worth is in their homes. This will be the largest post WWII drop in home prices. Don't forget the strong dollar is crushing economies around the world,…
The Fed has two choices. They either need to engineer a quick and sharp recession, or give up the inflation fight and drop short term rates. With option one the US can fund debt liabilities on the long end. With option two, the short end. Otherwise the US government will become insolvent within a few years. To me it’s clear they’re choosing option one.
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The Fed has two choices. They either need to engineer a quick and sharp recession, or give up the inflation fight and drop short term rates. With option one the US can fund debt liabilities on the long end. With option two, the short end. Otherwise the US government will become insolvent within a few years. To me it’s clear they’re choosing option one.
Right, I just don't know how it's 'quick'. So much of inflation is supply side and not controlled by the Fed. They have to crush it hard and it may last a decade.
Letting inflation run wild for a decade is probably the less painful path all else equal, but for legacy reasons Powell won’t choose that route. He would be remembered as a failure, just as Arthur Burns is.
I would add that goods inflation is actually coming down, it’s much more about services inflation now which is labor supply driven, primarily.
Services make up a majority of the CPI and aren’t impacted by logistics for the most part.