I expected rent and OER to moderate. They didn’t. The CPI rose 0.2 percent month-over-month but fell to 2.5 percent year-over-year.
The BLS reports the CPI Rose 0.2 Percent in August.
Had shelter cooperated, the gain would have been much lower, which is what I expected.
However, rent and owners’ equivalent rent (OER) rose 0.4 percent and 0.5 percent respectively. OER is the price of rent someone who owns a home would pay if instead they rented their own home.
Other than shelter, this was a very tame report. But shelter is over a third of the index.
CPI Month-Over-Month Details
- The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent on a seasonally adjusted basis.
- The index for shelter rose 0.5 percent in August and was the main factor in the all items increase.
- The food index increased 0.1 percent in August, after rising 0.2 percent in July. The index for food away from home rose 0.3 percent over the month, while the index for food at home was unchanged.
- The energy index fell 0.8 percent over the month, after being unchanged the preceding month.
- Medical care commodities fell 0.2 percent and medical care services fell 0.1 percent.
CPI Month-Over-Month Rent and OER
The price of rent and OER rose at least 0.4 percent every month for 33 consecutive months. In June both were up 0.3 percent breaking the streak.
However, July and August were back to the old pattern. This likely kills any chance of a half-point interest rate cut by the Fed this month.
CPI Year-Over-Year
Year-Over-Year Details
- CPI: 2.5 Percent, Down from 2.9 Percent
- OER: 5.4 Percent, Up from 5.3 Percent
- Rent: 5.0 Percent, Down from 5.1 Percent
- Core CPI (excluding food and energy): 3.2 Percent, Unchanged
- Food and Beverage: 2.0 Percent, Down from 2.2 Percent
Energy was down 4.0 percent from a year ago. I don’t chart energy because it is so volatile that it blows the scale on every chart.
The surprise for me was OER which rose year-over-year and also jumped 0.5 percent from a month ago.
After correctly warning against optimistic views for over two year, I am now expecting rent to be very cooperative.
I explained why on September 8, in Year-Over-Year Rent Inflation Is About to Fall Sharply
The Philadelphia Fed All Tenant Regressed Rent index [ATRR] suggests rapid deceleration in rent increases, perhaps even declining.
I think we start to see this in the next CPI report on September 11. If not, then October. This is one of the reasons I have been expecting the Fed to cut 50 basis points this month.
I will put some numbers on a CPI estimate on Monday. I expect to be on the low end of economic forecasts, perhaps the lowest.
As always, I can be easily wrong. The most likely way is to be early once again because this data is very compelling.
My forecast won’t change if ATRR is cooperative as I expect.
Despite a hot shelter component, the CPI year-over-year fell from 2.9 percent to 2.5 percent. That is the smallest rise since February 2021.
The Bloomberg year-over-year consensus was 2.6 percent and my guess was 2.4 percent. The middle was correct.
I told a friend yesterday that I could have easily undercut the consensus by 0.1 percentage points thus increasing the odds that I would beat the consensus estimate, but I really thought rent would be more cooperative.
ATRR leads OER by ~1 quarter. So, expecting results in August appears to be a tad early. Otherwise, this was a very tame CPI report.
Weakening Economy
On September 5, I noted Small Businesses Reducing Workers for the Last Four Months
ADP data shows small businesses with 1-49 workers have been reducing workers for four months. Those with 20-49 workers have shed workers for 7 straight months.
NFIB “Mood on Main Street Darkens” Small Business Optimism Dips
On September 10, I commented NFIB “Mood on Main Street Darkens” Small Business Optimism Dips
The July jump in small business optimism momentum lasted precisely one month.
The McKelvey Recession Indicator Triggered, But What Are the Odds?
In case you missed it, please see The McKelvey Recession Indicator Triggered, But What Are the Odds?
Mortgage News Daily has the 30YFRM down to 6.11% as of yesterday. It’s dropping like a rock and probably will push below 6% BEFORE the Fed cuts in about a week.
It’s probably going to be 5.80’ish or lower by the end of Sept.
I suspect housing sales will continue to show a slow recovery through the end of the year. While sales will, the big money is waiting for 5% or less mortgage rates by the end of Q1 next year.
If employment remains positive through next spring, people are going to come out of the woodwork, and housing sales & prices are going to move towards double digit YoY gains, ESPECIALLY if the Fed cuts another 25 BP between now and then.
Good Lord, JPowell, if this comes to pass, you’re an absolute IDIOT!
And with $7T+ in government debt maturing by the end of 2025, EVERYONE knows the Fed has to start cutting the FFR to keep interest on the debt from jumping from the current $1.1T annualized up towards $1.5T.
Here’s the transition over the past 18 months: The Fed has to bring down non-transitory inflation, to we have to be more concerned about the job market, to we have to be really concerned about high interest rates consuming a third of Uncle Sam’s revenue.
Good job again on Coast to Coast AM tonight, Mister Mish
I heard you say there is a 50% chance of an upcoming recession in next few months.
I agree with you, and hope the Fed only drops the Fed Funds rate from 5.5% to 5.25% since inflation has not cooled enough such as Owners Equivalent Rent (OER) and core inflation (at 3.2%).
the only thing is east end of Panama City Beach seems to be at 2021 rental rates like for 3 bedroom, +1 car garage townhomes ; they still building a lot of multifamily housing and just broke ground down the street with Hathaway “Luxury” Apartments (on St Joe Corporation land)
Need to more promote the trades from LPNs to HVAC techs to Auto Repair to Shipbuilding (pipefitters, welders, diesel mechanics, etc) Workers ; that will drop the service inflation rate
Key takeaways.
https://themacrobutler.substack.com/p/the-disinflationary-illusion-is-over
They are running out of bullets…. pushing on multiple strings….
Raising rates in a desperate attempt to stop inflation … will blow up the economy and collapse civilization…
Reducing rates… will do the same…..
8 billion fools have zero clue as to the danger … like cows in a pasture… ignoring the pack of wolves that is squeezing through the rent in the fence….
Hey Joe — what are you investing in? Moo…. nice patch of green grass over here…
Hahahahaha
They are trying to slowly let the air out of the balloon and maybe prevented it from popping
I hope they don’t re-inflate it “2008-2015” style with Zero Interest Rate Policy and endless Quantitative Easing
But the endgame is “inflate out of a debt crisis” which will put the most burden on the working stiffs or working-class and lower-middle-class will suffer the most with annual inflation at 2.5% and wage increase only 2%
Hopefully it is not a slow death like death by 1000 cuts for working class or a slow grinding down
Maybe the Federal Government cuts a deal with the expiration of Trumps tax cuts and put in some entitlement reforms like for Medicaid
I give credit to Governor DeSantis with reforming Medicaid spending and enrollments
“ Energy was down 4.0 percent from a year ago. I don’t chart energy because it is so volatile that it blows the scale on every chart.”
Yes. Very volatile. Which provides opportunity daily for traders. I keep buying dips and selling rips. Often several times per day.
Then there are the longer term trends. I am beginning to shift my focus towards natural gas producers. After enduring a drop from $9 in 2022 to $2 in 2024, the market is setting up for stronger nat gas prices over the next 2-3 years.
At $2, nat gas is equivalent to $12 oil. This is promoting substitution. More nat gas for electricity generation, heating, diesel truck conversions, hydrogen, etc. It’s a long slow process, but it is happening already and will gain steam as time passes. US and Canadian companies stand to benefit as LNG export facilities are scheduled to increase capacity significantly. Plaqeusmines in Louisiana is the most recent new LNG plant about to start up. The US will double it’s export capacity over the next 5 years.
And reasonable energy prices are a boon to US consumers who spend a much smaller percentage of their income on energy today than in the past.
WTIC in a trading range since Mar 2023. SSEC is testing 2024 and 2020 lows.
Yes. And still a good range for oil producers, particularly Canadian oil sands companies who have breakeven points ranging from $28 to $40. And 30-75 years of reserves.
Conventional Oil Sources peaked in 2008 and the Shale binge has now spoiled US reserves, top investor warns Financial Times.
Preface. Conventional crude oil production may have already peaked in 2008 at 69.5million barrels per day (mb/d) according to Europe’s International Energy Agency (IEA 2018 p45). The U.S. Energy Information Agency shows global peak crude oil production at a later date in 2018 at 82.9mb/d (EIA 2020) because they included tight oil, oil sands, and deep-sea oil.
Though it will take several years of lower oil production to be sure the peak occurred. Regardless, world production has been on a plateau since 2005.
What’s saved the world from oil decline was unconventional tight “fracked” oil, which accounted for 63% of total U.S. crude oil production in 2019 and 83% of global oil growth from 2009 to 2019.
So it’s a big deal if we’ve reached the peak of fracked oil, because that is also the peak of both conventional and unconventional oil and the decline of all oil in the future.
Some key points from this Financial Times article: Read More
The Precarious State of the Shale Oil Industry:
Try to get your head around the idea that by 2027, US tight oil production might be 12 MM BOPD, not the 9 MM it is now, which is what cheerleaders say it will be, and that means we’ll actually have to find and extract 12 MM BOPD… before we can ever grow the new 3 MM.
Man, that is a slew of new wells! Thats gonna take like…four times the HZ wells we’ve already drilled in the US.
Where? Read More
Yep. I read this months ago. Again; what point are you attempting to make?
I see — so you think that the oil fields have been refilling since that article was dropped…. brilliant… logical thinking!!!
This article is more recent… and it demonstrates that NO… the fields are not refilling….
Try to get your head around the idea that by 2027, US tight oil production might be 12 MM BOPD, not the 9 MM it is now, which is what cheerleaders say it will be, and that means we’ll actually have to find and extract 12 MM BOPD… before we can ever grow the new 3 MM.
Man, that is a slew of new wells! Thats gonna take like…four times the HZ wells we’ve already drilled in the US.
Where? https://www.oilystuff.com/single-post/the-hamster-wheel
The author would appear to know what he is writing about:
Mike Shellman was literally born in the oilfields of S. Texas. He started tailing out sucker rods when he six years old, learned to throw a spinning chain by the time he was 12 and became a driller on 1500 HP rigs by 20.
He’s done just about everything there is to do in the oilfield, from ditch digging to deep well design and implementation. He has operated as many as 90 wells in the past and owned various non operated WI and royalty interests throughout Texas, including tight oil wells.
He still drills wells every year, based on his geology, with his own money. His operational company was one of the first in the industry to render produced water reusable and beneficial to the environment under Environmental Protection Agency and Texas Railroad Commission compliance standards he helped draft, and implement. He worked with many of the same employees and service providers he started operating with over 45 years ago. We’re all still family.
You also make a lot of incorrect assumptions about what I actually think.
This says everything I need to know about your ability to think…
‘Why do you keep referencing old, out-of-date articles like this one from 2021?’
That should go into the Mishtalk hall of fame of most ridiculous questions ever.
Now have a look at the state of the oil industry in:
link to fasteddynz.substack.com
Every single day… those fields deplete…
I was speaking to an engineer who worked the North Sea for the better part of a decade… he was telling me that the North Sea is into serious depletion and that Aberdeen – where he was born and lived… is dying…
He still owns and apartment there… and it has sunk in value by 40%… the market is doomed… cuz people understand the North Sea is dying … and that oil fields DO NOT REFILL.
Shall I introduce you to him — you could buy his property then when the North Sea refills… sell it at a tremendous profit hahaha
Blah, blah, blah.
You haven’t told me anything I don’t already know.
And I have told you before that I also follow oilystuff.
How about you just explain to me what you think is going to happen over the next 3-5 years and how you are investing to take advantage of it. Maybe you will be able to actually impress me for the first time ever.
No response?
Lol!
1. Why do you keep referencing old, out-of-date articles like this one from 2021?
2. What point are you attempting to make?
I bet big money that you have taken every Covid shot on offer.
What the hell does that have to do with you all’s oil discussion.
Dude, stay on task and stop with the persona attacks because you might get the feeling you’re losing the argument.
Go PapaD!
What natgas co you like? Some of us want to board the nat gas money train too!
Again: this is a longer term trend over the next few years. Though I trade portions of these in my portfolio almost daily as well.
Canadian: Canadian Natural (which is both oil and gas), Tourmaline, Peyto, Arc Resources, NuVista
US: Diamondback
Note: Peyto is very well hedged at much higher nat gas prices; Tourmaline has many long term contracts at favorable prices (both LNG and California)
I’ll add CN, T, DB & P to my watch list. I definitely want to look into NG moving forward.
Thanks!
Thanks for the recommendations!
cve
Yes. Though Cenovus is a more integrated company than the others, with oil, nat gas, and refineries.
They have recently hit their debt reduction target and will now be returning 100% of free cash flow to shareholders through share buybacks and dividend payouts. The dividend rate is 3.3%.
They are currently buying back shares aggressively as the share price is low. This should continue until shares are more fairly valued and then I expect more dividend increases.
Francine hit the Gulf of Mexico and New Orleans.
Yes. But hurricanes only interrupt a small amount of production and refining for a short period of time. The bigger issue is the danger to people.
Yeah the party will be over for “lower or cheap gas prices” after this election just like it was in November 2022
The Harris Biden regime brilliantly released the strategic reserves starting early 2022 knowing that it would keep gas prices low going into early voting for the 2022 election cycle
Granted look at million of barrels of oil consumed daily in the USA and its at 2007 levels or below them due to car mileage efficiency (i.e., Honda CRV gets +31 mpg in city) and electric cars popularity
track active rig count for world and North America ; Dallas Federal Reserve energy website is helpful
Yes. Biden’s decision to release oil from the SPR turned out to be a good move in hindsight. He managed to bring oil prices back down from over $110/bbl to under $80. The release began in April 2022 and ended in Oct 2022.
He began refilling the SPR in August of 2023 and has added back over 30 mb at prices in the 70s. Another good move that is still in progress.
So yes, you can thank Biden’s SPR release in 2022 for bringing down gasoline prices as 2023 began. But gasoline prices are even lower today. And that’s without any further SPR releases. The reason is lower demand for gasoline, thanks to better fuel efficiency, and increasing numbers of EVs and PHEVs on the roads.
And that trend will continue. So gasoline prices will continue to face pressure to the downside going forward.
Yes. I follow rig counts as they change each week. The fact that rig counts keep dropping while production has increased speaks to the efficiencies that these companies have developed. Which helps lower their cost of production.
Do you still like CNQ ?
Yes. I mentioned it in the list of producers. Canadian Natural Resources. Still like it.
Low debt: debt to equity 0.24
Goes ex-dividend Sept 13
Dividend 4.8%
Buying back a lot of shares with their great free cash flow
Hold lots of it. But I also day trade it because of the volatility.
Thank You, very much for all that information. Keep on giving stock picks…..and analysis. So many of these type sites like Mish and Zerohedge devolved from investment forums to MAGA cult V anti maga cult. Idiocracy was a documentary.
You’re welcome. I prefer to avoid the political stuff, most of the time. I want to focus most of my time on things that can improve my life.
I agree. The nuclear renaissance is at least 10 years away and probably more like 20 in terms of bringing on significant new capacity. Between now and then, most US coal plants are going away, meaning natural gas will be a great long-term play. Can you imagine the profits if Harris implements even the smallest of restrictions on fracking? Holy Cow!
While solar will continue its market share grab needs a ton of battery storage to rally make a difference and drives up the overall cost to install. In addition, it will be a very long time before there’s enough solar + battery capacity to become a baseload energy system.
I’m more of a dip buyer, but I’ll definitely add a few companies to buy whenever the recession arrives.
Thanks!
Agree. I don’t expect nuclear to be a factor anytime soon.
We are already replacing coal with nat gas. That has helped reduce US emissions. And we will continue to do this. And I applaud this.
I don’t expect Harris to restrict drilling, if elected.
And I don’t expect oil companies to “drill baby drill” if Trump is elected. It isn’t in their best interests to flood markets and crash prices.
Better to maintain current production levels, while cutting costs and increasing cash flows and profits.
The Fed will cut rates to ease gov debt. Demand for highly skilled workers will rise. The gov will fill its coffer and cut debt. The cost of Land/house is prohibiting. Construction co will build 4/6 floors apt houses in the suburbs and the flyover areas to reduce the cost of Land/ apt.. 50K for down payments jubilee. Student loans forgiveness. 40Y construction loans at deflated rates. 30Y/40Y mortgages at negative rates. Construction activities will fuel the economy.
Horizontal drilling produced x8 times more than vertical drilling.
No 2Y/3Y teaser rates.
Inflation remains stubborn due to labor services which IMHO remains understated per the bean counters at the BLS and the moronic OER component in the rent calculation.
Until unemployment reaches approximately 5% rents won’t come down. Services remain sticky till unemployment reaches 6%.
It looks like inflation is here to stay. Those who can’t keep up will need whatever assistance the gov deigns to supply. These could or may not be generous. Social skills will have to be learned. A recessionless, focused depression is somewhat new territory. Shortages are the lurking enemy.
“This likely kills any chance of a half-point interest rate cut by the Fed this month.”
It may depend on whether the Fed limits itself to managing the economy or also wouldn’t mind managing the election.
The federal deficit now stands at about $2.5 trillion. If GDP is $25 trillion and it increases by 3%, the federal government just spent $2.5 trillion for $0.75 trillion in growth. I do not know where inflation is going to show up, but there is $2.5 trillion more money chasing $0.75 trillion additional goods and services. Seems to me from a macro perspective, we are going to get more inflation. In a slowing economy, the government is going to provide more safety net services with less tax revenues, exacerbating the situation. It doesn’t matter in the long run what the fed does with interest rates, nor does it matter what the government reports economically, the only way out of this mess is to shrink the federal government significantly, but there is no political will for this action.
And by 2030 social security will be costing ~$2 trillion PER YEAR. That’s just social security, throw in medicare/medicaid and all the other social goodies and you’re talking real insolvency numbers. It’ll be 80 million people asking for handouts and it’s only 6 years away.
It’s people that are asking to collect the money they paid in. You seem to forget that minor fact.
Many of us (most) of a certain age stand to collect far more in Social Security and Medicare benefits than we “paid in.” We’re important welfare state dependents, and both political parties know it.
And the Democrat solution? Hazard a guess….
IMHO means testing will soon be rolled out.
When you open a bank account, brokerage account, buy a car, a house, subscribe to a streaming service, buy an annuity or almost anything else, you are given a “contract” for that transaction that gives you “ownership” or “use” of that thing.
Show me your contract for social security where you “own” or are “entitled” to something and I won’t bring it up anymore. That’s a minor fact you keep forgetting.
I agree with you on the substance of this (see my comment above) but your parallels argument here is absurd. Our relationship with the state isn’t primarily shaped by contract. Most of the state’s obligations consist of promissory notes, which are unenforceable. That’s the case with the Social Security hustle, and it’s all it’s ever been. I happen to like this rare outcome, where I’m getting more in return than I should expect. But it might not go on. Remove cost of living adjustments and inflate like hell and the SS promissory note withers in value.
“Most of the state’s obligations consist of promissory notes, which are unenforceable”
That was the point of my comment. I keep hearing “I paid for it” over and over again here by many commenters. I keep asking what did you pay for? Where’s the receipt? Where’s the contract?
There is none because what was paid was a TAX that entitles you to nothing other than the services or goods the government wants to hand out. That’s it, that’s the whole point. There is no contract between social security payers (or medicare) and you. The government can stop payments whenever they want or they go broke.
Far too many people here think there is a social security piggy bank somewhere in a giant government bank vault with their name on it and “their” money inside it. No it doesn’t work like that, it never has and likely never will. The ss tax that was paid back in 1980 or 90 or 2000 was taken and given to someone else, that’s where “their” money went. The money they receive now is coming out of my paycheck and I’m sick of it.
Then you need to move to a cash job so you can avoid taxes. One of my neighbors runs his own pool cleaning business. It’s virtually a cash business for him (100 a month cash or cash app type thing and 125 if it’s via credit card where he has to pay taxes on it). He told me well over half his monthly income is cash which he does not pay taxes on and I always see him carrying wads of cash that he uses to pay for things (dinner, groceries etc).
On another note, the government won’t ever stop paying out SS. It would cause riots and looting (those people on SS would simply take what they needed to live and even if some were arrested there are no facilities in place to hold millions or 10s of millions of such people so they’d be released and repeat their taking of what they needed).
That you know he is doing it, is enough to be caught. Now, he’s talking serious tax evasion.
Lesson 1: If you are going to cheat on your taxes, TELL NO ONE! Including your spouse.
Most people on SS aren’t getting enough money as it is now anyway and wait till inflation rockets back up again. I do expect cat food sales to sky rocket or maybe cats themselves will start disappearing. Do we really know who’s eating the cats in Ohio?
Alf is eating the cats 🙂
I think you’re 100% right. Thanks.
Correct, however by its actions over many decades, the government created an implied contract. You lose, Buckwheat.
Naw, he’s right enough. Implied contracts with government are worth a nickel on the dollar.
Your comment makes zero sense but for your line of reasoning that is par for the course. Most people won’t collect what they paid in do the math if you are Capable of it. Do you have contracts with your police department, public schools etc . Jez get a grip. I assume you are refusing all government help including ss?
IN theory, true. However, You’d need to die in about five to eight years to collect the money you paid in. Every year after is a loss leader.
Social Security and Medicare/Medicaid can be fixed by raising the ceiling on the employee tax. After the Boomer generation dies out the social safety net for those in their sixty’s or on personal disability or survivor benefits can be adjusted lower in taxes ceteris paribus.
Stealing more money from younger workers isn’t a “fix” to anything, it is larger and larger leeching from working people to unproductive members of society.
Perhaps everyone should just become a slave to boomers and be at their beck and call and cut out the middle man.
Young workers proportionately aren’t making more than $500K individually or $750K jointly for raising the ceiling on their wage income for Medicare nor are they making above $168K individually pertaining to the Social Security tax.
“Perhaps everyone should just become a slave to boomers and be at their beck and call and cut out the middle man.”
I’ve got a 27-year-old and I await the day.
TRUTH. as a boomer i plead guilty. however i was one of the 2 percent or less who actually protested against all the stupid wars and spending and imperial evil we did to our youth and the world…………so at least i tried. vast majority of boomers are just nihilists. not even worth living like that. hat tip ancient greeks, and chinese philosophers. my peers are the worst form of humanity on planet i have concluded. amerikan boomers
Inflation is a rate (or slope of the curve showing prices over time). One must integrate the CPI to get how much costs have increased. Even bring inflation to zero leaves prices too high. Price decreases are what’s needed. Inflation is a measure of reduction in the standard of living. More and more of the middle class are bing pushed into poverty. But slick talking politicians will consol them with empty promises as they recklessly spend money they dont have causing more inflation.
re: “Price decreases are what’s needed”
Right. Drain reserves while dropping the administered rates.
An example. Some people think Feb 27, 2007, started “across the ocean”.
“On Feb. 28, Bernanke told the House Budget Committee he could see no single factor that caused the market’s pullback a day earlier”.
In fact, it was home grown. It was the seventh biggest one-day point drop ever for the Dow. On a percentage basis, the Dow lost about 3.3 percent – its biggest one-day percentage loss since March 2003. It was the result of a drop in base money.
That will raise the real rate of interest for saver-holders.
30 year mortgage rates are 6.22% today and if the fed cuts 50 basis they will go sub-six, will that help or hurt housing inflation?
Nick Gerli said Florida housing market is crashing but they have lots of issues there with insurance, hoax climate change hurricanes, and mandated HOA repairs for condos.
https://www.youtube.com/watch?v=WS_swglrS8s
@TexasTim – your thought on Florida housing?
The mortgage rates already dropped 150 basis points from the peak before any actual rate cuts. Cutting in September will not necessarily lower mortgage rates as potential rate cuts may already be priced in.
Check back in with me next month.
Mortgage rates more closely correlate to the 10 year Treasury, which has dropped from 4.24 on July 24 to 3.66% now. Any Fed cut – even 50 bps – is already mostly baked in.
Welcome back from your sailing vacation. Hope you enjoyed your time off.
Doesn’t seem like anything much has happened in my region in the last few months. There might be a slightly uptick in the number of homes for sale in the neighborhoods I tend to look at but it also could be an illusion because I’m expecting more places for sale if there is a top in real estate.
Wolfs monthly housing bubble continues to show the Miami area (I’m 60 minutes north) making new highs month after month. Tampa after a brief top is also back to making new highs in his charts. So if it’s not a case of fewer sales pushing up the average (which it could be) it would say the market here is strong.
Personally I think its strong in the upper band of prices (700+K homes) simply because Florida continues to get an influx of people. Mostly retirees of course since as you know, Boomers are exiting the workforce enmass. Many are moving here to escape NY/NJ/Mass/Illinois taxes and can easily sell their home there and buy for cash here.
I shudder to think what younger people are going to do here for homes since there aren’t a lot of jobs in the 40-70K range since Florida is basically a service economy where you making cash tips or are already rich and retired.
Thanks for the insight.
Interest is the price of credit. The price of money is the reciprocal of the price level. The Keynesian economists have achieved their objective, that there is no difference between money and liquid assets.
It is much more desirable to promote prosperity by inducing a smooth and continuous flow of monetary savings into real investment, than to rely, as we have done c. 1965 (with the advent of interest rate manipulation as the FED’s monetary transmission mechanism), on a vast expansion of bank credit with accompanying inflation to stimulate production.
As expected. Core services, 0.312% MoM, 3.695% YoY. Have I ever been wrong in my comments? No.
PS A cut is September is a *huge* mistake. The Fed shouldn’t have cut until November, but now they have locked themselves in. That early cut will lead to a resurgence of inflation within eight months to one year.
The CPI-W barely budged this month going from 308.501 to 308.640. If the 2025 Social Security COLA were calculated today, it would be 2.5%.
Next month’s CPI-W reading will finalize the COLA. With falling energy prices, it’s altogether possible the CPI-W could fall, as it has 4 times in the last year. If it falls, then next year’s COLA will be 2.4%.
Meanwhile, Medicare premiums are forecast to increase 6%.
Kamala better hope as many seniors as possible mail their ballots in before they find out how much they’re going to get screwed next year.
ha ha. great analysis. so glad i took SS early………it’s a pleasure bankrupting the empire while i spend the small pittance on worldly pleasures like massages and flaneuring around town……….
I had to look that word up.
“The art of Flaneuring is to wander intentionally in an aimless way.”
Stopping to smell the roses is clearly allowed.
it’s been a past time of mine for decades. i committed 30 years ago to only worklike activities, 3 days per week, for 2 hours per day.
Right, yeah — a cheap excuse to use a twat-y word which you no doubt do not embody in anyway but still hope might confer upon you some elan or wit of which you are totally bereft.
Glad your retirement is going well.
i will never retire. my 6 hour work week suites me great for past 30 years, and most likely another 30 like my recent 2 generations of ancestors worked well into their 90s………
there is a great difference between a pussy, a twat and a cunt. like a hobo, tramp and bum. i’m a pussy and a hobo. you smell like a cunt and a bum.
Meh. Rent up. Who cares, the socialist revolution is on its way! All the crappy apartments you can squeeze into. Three cheers for Komrade Kamala.
Gawd, you’re dumb.
“Rent up. Who cares.”
Everyone even remotely competent. At anything whatsoever.
Who is now stuck with an even less competitive cost structure, vis-a-vis competitors in freer countries like China.
And all that, just to keep the dumbest, most useless and most worthless of all available Americans comfortable in their child brained delusion that they are “making money off my hooooome and inveeeechtmennnnt!!” And that either “Private Equity” and “Fund Management” has anything at all of value to contribute to any even semi functional economy.
Hence; duh!!!; as a result: China is now the land of the free, the brave, the competent, the useful and the future. It’s where everyone with anything to contribute both want to; and need; to be. If you’re in America, you may as well be in the Congo, as far as being positioned for the future is concerned.
While America, who ones held the position of top destination, is now just a useless, decaying swamp. By and for utterly pointless and imbecile Fed Welfare Queens. All who live off of nothing whatsoever; aside from mindlessly, cluelessly and illiterately cheering on a totalitarian idiot regime to rob their fellow Americans even more, just to keep the idiots’ delusion that they are some form of worth vile lifeform alive for yet another; always value destroying and always as genuinely unintelligent as anything can possibly be; day.
Waller, Williams, and Logan seem to agree. They “believe the Fed can keep unloading bonds even when officials cut interest rates at some future date.”
Can confirm. Speaking as a renter in Maryland – The price of rent when we moved in last year to a 1 BR, 1 Shower apartment was $1,200. The same unit further down is now listed for $1,425 and was already moved into.
I honestly don’t know how people will survive another round of inflation if the FED cuts rates too fast and Bidenomics continues. I’ve nearly given up hope ever affording a home, we made an offer for a small 2BR 2 Bath starter home which was listed for $249K, at 6k above the asking price and the realtor said we were outbid and it closed with a cash deal Labor Day. The house was on the market only 4 days! Price of groceries continues to be up nearly 100% YoY and it sucks trying to get ahead when you know there’s no chance of a raise and the job market is in the tank.
Anyone have an idea who all these cash purchase buyers are?
Because they say the same thing in my NY area, a lot of cash buyers.
Is that Blackrock or other Hedge funds? Pooled investors whom them look to AirB&B it? It certainly isnt people young folks doing all cash deals, no disrespect to John
Could very well be people downsizing, especially older empty nesters if you are talking about smaller starter type homes (2/1 1700 sq ft type places).
Could also be people fleeing expensive regions like Cali and Illinois for places where housing costs are cheaper and being able to pay cash after selling their current home that’s worth 2-3x as much.
Immigrants often do cash deals too because the are living 10-12 to a house and pool money together.
If you’re not bound by employment to the Maryland-D.C. area, it might cheer you up to browse listings in other states. Some in the Midwest, Iowa for example, have vastly lower prices and more favorable tax policies. And these areas are no more bumpkin land than Maryland, where I’ve lived for a couple decades too many.
i read calculated risk this am. rents are decreasing in many places……….including my little corner of pax dumbfuckistan. i’ve been a landlord for decades and a tenant for decades in many regions of usa. my old properties i let go recently….past 2 years in bay area and phoenix are pulling back……..in rents and value of properties……..with r/e taxes and cost to mantain, going up in both locales……..
Right now we are underwriting flat rents for at least a year.
Thanks
Cats are friends, not food.
Another cultures friends are another cultures food
Peruvians eat cuy (guinea pig). Hard pass for me. Not enough meat.
If that were all they ate . . .