211–220 of 327 posts
Earlier quoted context omitted.
Prices drop and people spend less? That's silly.
It's more people see prices dropping hence their money increase in relative value so they save up more instead of spending it.
Earlier quoted context omitted.
Then don’t buy a new car? Buy used.
> Then don’t buy a new car? Buy used. In 1998 I bought a used 1989 Chevy Corsica for $1,800 all-in out the door. I'll admit I don't remember how many miles it had but it never had any major problems in all the years I drove it. There was a near unlimited sea of options for ~10 year old cars for around $2,000. In 2023, if you want a similar size 10 year old car (2013) a quick Googling suggests you'll be paying about $…
Earlier quoted context omitted.
> GDP isn't a good metric to compare household debt to It's a fantastic metric to compare aggregate debt to. It isn't the end of the story, which is why I also cited debt payments to disposable income. American households are not, in aggregate, in a painful or even deteriorating position with respect to their debt. That doesn't mean many households, or even entire regions, e.g. West [1], aren't in pain. [1] https://u…
Disposable income as an aggregate doesn't show a income-level class (my point). Unfortunately having up to date information on economic status given the income level is hard to get.
Earlier quoted context omitted.
I definitely never kept my RSUs after they vested. I always diversified them over the six months. I wouldn’t have used 25-30% of my cash income to invest in my company stock. Why would I keep my RSUs instead of selling them? While I could live off of my base income working remotely in the burbs of Atlanta, there is no way that my friend who had to relocate to Seattle and had two kids and a wife could have managed on…
I always sell my RSUs as soon as I can, but the proceeds never touch my checking or savings account. I directly purchase ETFs. When my base salary was $150k in SF, I worked a side contracting job to cover lifestyle costs so I could max out ESPP and 401k. Certainly if you have a family, you may not have the time to do that.
The reason I’m not at Amazon is for the same reason. I don’t work more than 40 hours a week on a normal basis and that’s what my new manager wanted me to do to show “improvement”.
Don’t cry for me. I saw it coming two months ago and I already had a few feelers out and I am 99% sure that one will come through within the next two weeks ago.
What I don't understand is this 2% price target. Prices could go up 10% one year, and well call it a success if next year we "tame inflation" by only having our prices go up 2%. Why can't we target to get prices back down? For those on a fixed income, this is money we lost forever. We expect (and see) some prices go down every year (mainly electronics) and it works fine. But god forbid the price of milk goes down a b…
Deflation means a dollar tomorrow is always worth more than a dollar today meaning a rational person should strive to spend as little money today as possible. This eventually locks the entire economy up into a death spiral.
The US economy had zero net inflation from 1800 to 1914. No death spiral.
The whole "2% is good for the economy" is propaganda to hide the fact that deficit spending causes inflation and is a tax on the economy.
Earlier quoted context omitted.
>> What I don't understand is this 2% price target. It is statistical trickery and a headline number used to make people think things are OK. It is also a convenient number for COLA increase targets which make people think their incomes/pensions are going up (when effectively they are not on a real basis.) Also, as you note, we re-baseline each year and dont talk about the cumulative compounded inflation e.g., over t…
Restaurant workers are probably the biggest winners over the past three years. Their wages are a large component driving inflation.
Then, the pesky Law of Supply and Demand devalues the extra money, which we call "inflation".
Earlier quoted context omitted.
Then don’t buy a new car? Buy used.
> Then don’t buy a new car? Buy used. In 1998 I bought a used 1989 Chevy Corsica for $1,800 all-in out the door. I'll admit I don't remember how many miles it had but it never had any major problems in all the years I drove it. There was a near unlimited sea of options for ~10 year old cars for around $2,000. In 2023, if you want a similar size 10 year old car (2013) a quick Googling suggests you'll be paying about $…
The only car we had problems with was 10 year old Jeep for my son that we had to keep taking back for various things for the first couple of months.
The manager proactively reached out to me and offered to reimburse one month payment. After those two months, we never had a problem with it.
What I don't understand is this 2% price target. Prices could go up 10% one year, and well call it a success if next year we "tame inflation" by only having our prices go up 2%. Why can't we target to get prices back down? For those on a fixed income, this is money we lost forever. We expect (and see) some prices go down every year (mainly electronics) and it works fine. But god forbid the price of milk goes down a b…
Some inflation is seen as good by economists because it pushes money that would sit on the sidelines into "productive" uses. It creates an incentive and a need for risk taking or stored wealth will be eaten away. That this doesn't align with most individual's goal is of no concern to those most interested in productivity and GDP growth.
The ever-popular Scrooge McDuck cash vault theory. Nobody has a cash vault. Any "cash" is stored in banks, which loan it out into the economy. People who borrow money save/spend it.
Earlier quoted context omitted.
This is accurate. Once the unit price is calculated with the temporarily higher input price, they are not going to reduce the unit price for as long as possible, even if input prices go down. And what's worse? The FED does not want negative CPI. They want slowly rising CPI. A negative CPI is deflation, something they want to absolutely avoid. They don't want prices to go down. They only want them to rise up slower. W…
It’s a pretty easy problem to solve, just have wages increase automatically on an annual basis in line with changes to the CPI. That would be in addition to any raises due to good job performance or a promotion. Or even on a monthly basis during periods of high inflation. Obviously, companies avoid this simple solution because they make money on the delay between raising the price of the product they sell and when th…
However, if instead of diffusing the cash through the government, it was directly granted to citizens by the government/FR one might would presume similar results as the current modality, just more beneficial to the individual. However this takes on some degree of complication: there are manifold ways to disburse it, for instance we could make a straight cut for every individual, weigh it based on income, weigh it based on wealth, and one could justify weighing in either direction - presumably the wealthy are better arbiters of economy than are the needy... But also the needy are needy and it may help alleviate some degree of disparity.
Also, inflation is difficult to measure. The CPI is not a great mark. Expanding the monetary base by 2% on paper may not result in a 2% increase in CPI. CPI is, I reckon, used as a check on the dollar's relative value, which can change dynamically as a result of cultural, economic, and political shifts on top of monetary policy. So resultsay vary, but considering market behavior over the pandemic, I think it points to a rapid dissemination of whatever money is given. I think that would probably, actually be a really efficient means to deal with inflation, however a lot of that money is actually doled out in subsidies, grants, et cetera. So a new system of public goods funding would necessarily have to be set up.
Earlier quoted context omitted.
I don't know how most people are doing it. For me it's because the asset bubble has inflated my stock income. I suspect a lot of folks who owned homes, stocks and other assets are feeling the wealth effect. For the rest of society, I don't know why they're not in the streets with pitchforks.
> my stock income My investment portfolio profits (or RSU vests or bonuses) never make their way to my checking account. Are people really dipping into their investment accounts to cover living costs? Maybe for home or car purchases?
That's your choice[1]. Some people sell upon vesting, and others liquidate periodically or to make down payments on property or health emergencies instead of going into debt. I suppose if one had a rainy day fund and the value of their RSUs doubled over one year, they may be tempted to spend the emergency fund since their net worth has gone up.
That said, I suspect you holding onto RSUs means you end up not saving as much for an emergency from your checking account, so you get an extra bit of liquidity.
1. I held onto RSUs too until I realized its indistinguishable from being paid extra cash and choosing to buy shares in my employer. I prefer rebalancing my portfolio with my preferred diversification mix.