Welcome to Fed’s New World of Inflation.
By Wolf Richter for WOLF STREET.
Retail sales rose by 0.6% in June from May, according to the Commerce Department today. But over the same period, prices for food bought at the store rose by 0.8%; prices at restaurants, delis, cafeterias, etc. rose by 0.7%; for gasoline by 2.5%, and for durable goods such as appliances, electronics, furniture, cars, etc., by 3.5% in just one month! These are the categories that make up retail sales.
And these whopping price increases in June outran the increase in retail sales in June, and they outran retail sales for the entire second quarter, indicating that consumers paid more to get less. Welcome to the Fed’s New World of inflation.
Retail sales in June rose to $621 billion (seasonally adjusted), but after the 1.7% drop in May, remain below March and April:
New & used auto dealers and parts stores: Sales fell 2.0% in June, to $132 billion (seasonally adjusted), the second month in a row of declines from the historic WTF spike in March and April. Sales fell despite colossal price increases:
These colossal price increases showed up in the CPI for used vehicles which spiked by a previously unimaginable 10.5% in June and by an equally unimaginable 45% year-over-year; and in the CPI for new vehicles that jumped by 1.8% in June, as people bought far fewer vehicles but paid out of their nose for them.
People who are trying to buy under these conditions are begging to get screwed. Just say no. Most people can delay by a year or more the purchase of a vehicle because they can just keep driving what they have, which is what they did during the Financial Crisis, when auto sales collapsed for a couple of years as people went on buyers’ strike. We can now see the first few qualms building up at buying cars and trucks at these crazy prices.
In terms of the number of vehicles, used vehicle retail sales fell by 2.7% in June from May (seasonally adjusted) and were down 7.8% year-over-year. And sales of new cars and trucks plunged by 14% in June from May (seasonally adjusted):
The retailer segments by magnitude.
Auto dealers and parts stores are by far the largest segment in dollar-sales terms, accounting for about 21% of total retail sales (black line). Nonstore retailers, which is mostly ecommerce, have jumped to second place during the pandemic (top red line). Grocery and beverage stores are in third place (green line), followed by bars, restaurants, and other “food services and drinking places” (purple line), followed by general merchandise stores (such as Walmart), and building material and garden supply stores (such as Home Depot), followed by the rest:
Ecommerce and other “non-store retailers”: Sales rose 1.2% in June from May, to $88 billion, seasonally adjusted. Compared to June 2019, sales jumped by 31%. This includes ecommerce sales by pure online retailers and by the online operations of brick-and-mortar retailers, sales by mail-order, at street stalls, vending machines, etc.
Food and Beverage Stores: Sales ticked up 0.6% in June to $75 billion, as the CPI for food bought at stores rose 0.8% – paying more to get less.
Working from home, not working at all, and starting small businesses out of the house have shifted some consumption from commercial buildings to households, and thereby to supermarkets.
Restaurants & Bars: Sales rose 2.3% in June to a new record of $71 billion, amid widespread price increases.
General merchandise stores: Sales ticked up 1.1% in June, to $56 billion, after two months of declines, and were up 17% from June 2019. This segment includes the brick-and-mortar stores of Walmart, Costco, and Target; but not their ecommerce sales, which are included in “nonstore retailers”:
Building materials, garden supply and equipment stores: Sales fell 1.6% in June, the third month in a row of declines, to $39 billion, but were still up 25% from June 2019:
Gas stations: Sales rose 2.5% in June, to $47 billion, as the average price of gasoline also rose 2.5% in June, indicating that consumers bought about the same quantity of gasoline, but paid more for it. Gasoline prices are now at levels not seen since October 2014, when the Oil Bust began, and sales at gasoline stations followed. Sales at gas stations include all the other stuff they sell, from sodas to motor oil:
Clothing and accessory stores: Sales rose 2.6% in June, to $26 billion, up 16% from April 2019:
Furniture and home furnishing stores: Sales fell 3.6% for the month, to $12 billion, but were up 19% from May 2019. The CPI for furniture and bedding jumped by 2.1% in April, another 1.9% in May, and another 0.7% in June for a combined three-month inflation of 4.7%. Over the same three-month period, sales dropped by 4.8%. In other words, consumers paid less to get a lot less:
Department stores: sales rose 5.9% for the month to $12 billion, and were up 7.1% from June 2019. This includes sales at brick-and-mortar stores of Macy’s, Kohl’s, J.C. Penney, etc., but not their ecommerce sales:
Sporting goods, hobby, book and music stores: Sales ticked down 1.7% for the month, to $9.4 billion, the third month in a row of declines, after the spike in March. Compared to June 2019, sales are up 38%:
Electronics and appliance stores: Sales rose 3.3% for the month, and were up 2.1% from June 2019. Most consumers buy electronics and appliances online, a booming business, and sales at these brick-and-mortar stores have been declining for years, to where they’re now below where they’d been in 2005:
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Back in 08, nearly all homes declined in price after a huge rally.
This time, in my opinion, after the house rally fades, some homes will decline, but others will not because of crime. Families have become very crime sensitive and ask a lot of questions before buying a home. People are willing to pay up for a safe area.
When the housing market cools, we may see home prices fall substantially in areas with a crime issue, while areas deemed “family safe” may hold up very well.
My advice is, if you are buying now, make sure the crime stats look good or pass.
I don’t know that people care about crime any more now than they did in 2008.
That’s always been a main factor, along with schools, that anyone I know has asked about a suburban neighborhood prior to moving in.
RightNYer, a few realtors tell me that many are now hyper sensitive to crime rates, and they tell me that is new to them.
Maybe the NYPD will put out another WELCOME TO FEAR CITY pamphlet.
I would have to believe this especially after all the rioting and crime related activities in the news over the past year.
In our “safe haven” 55+ community of 437 SFH’s nestled away in the woods and out of sight from the general public, last week a lady returning from a shopping trip was robbed at gunpoint in broad daylight in her driveway. That’s the first time I have heard of such a thing happening in this community of older folks and I have been here 6 years.
Worse yet, the politicians here are trying to “mainstream” pedophiles into residential neighborhoods. I’ve gotten about a dozen alerts on my Lifelock serivice in the past year of convicted child molesters recently released from prison moving into my geographic area. Never had that happen before.
Hahahahahahahaha!!!!! Your house will never decline in value because you live in a good neighbor!!!! It’s a good time to buy!!! Hahahahahahahahahabahaba!!!!!!!!
What they don’t know yet is that crime has increased in suburbs and rural areas. It’s a different type of crime. More staked out home invasions than just random stuff on the street. I’m not sure there are any stats on it yet, but am definitely noticing it in small towns north of SF. Because of that I’d be very surprised if it’s not so in SoCal as well. Flashy people with nice cars tend to be victims.
Of course, if I am wrong, and crime falls across the board, then all houses will slip in value when the housing market stalls. I don’t think crime will fall for quite some time, but I could be wrong.
With cancel culture working hard to ‘defund the police’ and weaken criminal justice system in many localities across US, neighborhood and home security should be on everyone’s mind.
Crime statistics are useful, up to a point. Sometimes it is a crap shoot no matter the research.
Unfortunately these are unprecedented batsh*t crazy times in so many ways so strap in, review your checklist, and listen to your gut.
By me, the local LEO sit in their cars all day, respond late to calls, grump about having too few resources, fill our jails with broke minorities, make excuses, and mostly stand down unless they really have to respond. Proving how utterly useless these groups can be while taking taxpayer dollars. Gubmint at work!
But these days crime rates can be a moving target. A place can have low crime rates for 20 years, then in a year or so things can change. There is speculation among futurists that the West Coast cities becoming the next rust belt, with SF playing the part of Chicago, Seattle of Cleveland and Portland Toledo. Municipal budgets can rapidly collapse and police departments defunded. With the crazy flash parties hitting Manhattan Beach I , think soon we will see the streets of Newport Beach and Oceanside lined with burning cars and Antifa Vandels.
This is some Grade A mental masturbation.
I thought defunding the police made cities safer? You mean I was wrong about this?
Makes sense to me. Stable civilization requires a layered defense across all classes. Many places are actively attacking that reinforcing construct.
Without a stake in stability, it becomes every man for himself.
I do wonder if advertising and financial engineering can replace manufacturing as a primary economic foundation. If not, SF is in trouble.
“Stable civilization requires a LAYERED? defense across all classes”
Man, I’d would love to see that stupid sound byte expanded upon!
Anyway, here’s just ONE bad thing that happened when this country was BS’d by the wealthy into rejecting the pleading of us dirty filthy hippies, and EVEN President Carter, to slow and work towards STOPPING the totally MINDLESS accumulation and consumption, and wasting of resources, and the EVER increasing net wealth differences between classes….and handed things over to their puppet Reagan and his ilk…..who made things far far worse….de-reg, union busting, deficit spending, etc, etc.
The top 0.1% now have net wealth equal to the bottom 92% (up from 90% in 2015 when Bernie was saying it every chance he had during the Senate Budget Hearings.) And of course, that’s just the wealth that is public knowledge! Would YOU vote for that? DID YOU?…. ignorantly and unknowingly?
I suppose some public and private prison jobs were “created”, though, along with cops and lawyers and judges. So some “trickle down WAS delivered.
And it isn’t hard to guess the prison demographics this “layered defense” produced.
The County Sheriff used to publish crime statistics and a crime map showing where crimes were occurring. That was taken down during the pandemic. Crime is usually in the poorer neighborhoods, but there are other factors too. I visited a town in the Rocky Mtns. where a mine closed and many were out of work. The crime rate spiked.
If UE is high in an area, crime goes up.
I could never figure out why people robbed poor people. Why not go rob people with money or good stuff to sell?
You aren’t to bright, or maybe just never lived on the bottom.
However, I guarantee you that if you give the more angry or sociopathic (or starving) homeless people guns, Benzes, suits, and a bit of “starter cash” they WILL switch to robbing people/places with “the GOOD stuff”.
You know it’s amazing how far we have come. Three years ago, we wouldn’t have talked about any of this. Yet starting about 2019 some time, the Nextdoor app where I live started seeing a lot more complaints about car break ins and porch piracy. Those really accelerated last year but seem to have peaked around March this year. Although I haven’t been on Nextdoor much lately.
A friend was away from home in Idaho and forgot about an Amazon package that was delivered while he was gone. The package sat on his front porch and no one had touched it for the two months he was gone. Much of America used to be like this.
In Idaho the kids dump their bikes and scooters at the bus stop and they are still there when the bus drops them off in the afternoon. I leave my door unlocked. My mom was visiting from chi-town and kept locking the doors at night. But we lack diversity.
Yes, if you leave your bike around in your drive way in the bay area, and leave it through a weekend, odds are it’ll disappear.
There might be still places like what you’re talking about in the US. But it’s sure as heck not around where I live.
Still other places like that:
Friend near Tahoe told me his neighbor across the street went on vacay for two weeks and left the garage door open…
”No issues” FKA problems,,, nothing stolen, etc.
Everyone in our very very mixed hood in the saintly part of tpa bay area watch out for neighbors, actually come and help when needed, etc.,
Unfortunately, what is generally on ”the news” is in fact just the bad news, typically about the small minority of bad actors who have, or seem to have, a permanent get out of jail card, and thus keep doing their bad acting over and over again, and that is what makes the headlines and 10 second news reports…
I don’t think it is just the news. You do see a rise in crime rates over the last couple of years. If I ignore all of the news and just look at where I live. Nextdoor is a good example of regional stuff, you can get a sense of the neighborhood just by looking at trends on the crime and safety part of Next door and see how the ebb and flow.
Yes. VRBOs and short term rentals have conveniently moved drug dealers and criminal activity of all sorts into unsuspecting neighborhoods all over America. Having several friends that are cops, they confirm these types of rentals are havens for all sorts of criminal activity. Word of advice, dont buy next to or near one of these rentals
Good point. This is a real problem in beach areas. If you buy in a or near a resort area, you need to make sure the city council has policies in place to limit short term rentals.
I don’t even need to watch Fox “news” to figure out what narratives Rupert Murdoch is pushing, I can get them here!!
Boogie boogie boogie…..crime and antifa are coming to get you! You forgot to mention ISIS. Don’t you keep a gun under your pillow in case of ISIS?
And don’t get vaccinated, even if Red Don and silver spoon “Tucker” did. It’s a all a conspiracy from Soros and Bill Gates to steal your children.
This is so much fun, I might go see the “Two Old Molester-Bigots Complain” tour. I love hearing old white men (like me) whine constantly about unfair the world is!!
I just peeked out the window and saw “Burning cars and Antifa Vandels” too.
This sort of BS reminds me of the time I was talking on my cell phone and set back my back-pack down on a bus bunch next to the Ringling Art Museum in N. Sarasota, FL.
Two old couples were walking by and one of the old men starts looking around suspiciously. I had walked about 20′ from my back back. The moron interrupts my call to ask “Is this your backpack?”.
I keep talking and nod “YES” at the moron. He then says “You never can be too careful.” Actually Mr. Moron, you can!!
This terrified Snowflake thought on a Sun afternoon, a terrorist left a backpack bomb next to an empty bus-stop in N. Sarasota, FL.
Maybe he was going to jump on it like a soldier on a grenade to save me? Imagine being so scared, everything looks like a threat.
The “I watch Fox ‘news’ all day long” fear, anxiety and lies are obvious to the rest of us in about 5 seconds.
Maybe you should stop parroting this garbage and learn how to think for yourself.
I agree with you. Wolf’s blog seems to attract right-wing nutters.
You need help.
Is Antifa and the Vandels a quartet or quintet? I so like soul music.
Sensitivity to crime doesn’t mean a prospective buyer can afford it.
A deteriorating economy will also contribute to declining neighborhoods in many locations, crime or not.
Don’t forget there has been record increase in provate and public sectors and record leverage with margin, more so since ’08!
Higher they go harder they fall!
In LA, we have a worthless Mayor and an incompetent DA. Crimes pretty much tripled.
No, they haven’t “pretty much tripled”. A quick Google shows that some crime was up in LA in 2020, although some is down.
“killings hitting a decade high after years of sustained reductions, and shootings increasing nearly 40%. Meanwhile, robberies declined by 17%, and reported rapes fell 25%…. domestic violence calls are up 45%-50%.”
So, the situation is not great, but it’s definitely not as bad as you, or others, are painting. Crime may be up but perception of crime is what’s REALLY way up.
“A quick Google” is not the way to measure or track anything.
It’s the way for lazy people to look for evidence to support the conclusion they have already reached.
What “a quick Google” reference shows is that there is lots of data available, and you don’t have to fabricate stuff like “triple,” when its in fact an increase of 30% or whatever.
I can tell you one thing, triple or one third, I am content not be living in one of the Dem controlled cities right now.
* errata: 130%, not one third
I wouldn’t call ….
“killings hitting a decade high after years of sustained reductions, and shootings increasing nearly 40%.” as a situation that is not great, are you round the bend?
Plus if you have had lockdowns of any sort then, of course, you are going to get fewer robberies if there are fewer on the streets.
Stop making excuses for evil liberals.
“I can tell you one thing, triple or one third, I am content not be living in one of the Dem controlled cities right now.”
that’s because people tend to perceive more crime in other areas. since Gallup started asking in the 90’s, every year more people think “crime is up nationally” than “crime is up locally”. this is perception (national) vs reality (local, which you can actually experience). in fact, this year the local response was as low as it’s been in 20 years while the “crime is up nationally” response was the highest it’s ever been, at 78%. in other words, thanks to messaging by certain people, there is the perception we are in the wild, wild west while the reality is people don’t actually seem to be experiencing crime much differently. and that’s ignoring the massive drop in crime/violent crime we have seen over the last 25-30 years. last year is barely a blip in the overall trend.
Based on all of the reporting in the mainstream media and particularly on Fox News, you would think Chicago is some war torn hellhole thst ‘s much worse than Saigon during the height of the Vietnam war or like Kabul or Baghdad during the worst of the wars in Iraq and Afghanistan. In fact, people have been calling it Chi-raq lately. I lived in Chicago for many years, and while I certainly won’t deny there are violent parts of town where guns need to be taken off the street, most of the evil violent areas are confined to the poor areas of town that historically have had mass unemployment, gang activity, and lots of drug dealing. Most of the other homicides outside of those areas are usually due to domestic violence or some brazen robberies in an upper scale business or retail district. So if you live in Chicago yet don’t live in the ghetto, you’re more likely to be brutally attacked by your spouse, boyfriend/girlfriend, or family member than from some thug off the street.
“People are willing to pay up for a safe area”
If that’s true people will begin to migrate away from the US. I never bought into the society is dangerous narrative even so I will say since moving to Pontevedra I almost never lock my house and it has been months since I’ve seen a cop – we just don’t need them.
The US is a flaming monetary dumpster fire, if you decide to stay that’s on you.
Good for you. I wish I was an expat again. But the central bank, Davos and WEF cabal will not rest until the whole world is a dumpster fire. You may have to keep moving around. If I was able to leave, my plan was to keep on the move on 90 day visa periods. Covid border closures kind of trashed that plan.
Nacho Libre doesn’t care about reality, none of the GQP do.
All they care about is their ‘kkkulture wwwar”, aka animosity towards the horrible idea that us white men don’t have to be the center of the Universe 100% of the time.
Trump didn’t create this racial animosity, he simply took advantage of it….pour gasoline on the fire.
The USA is like it’s been for years: Lots of problems, lots of good stuff, and a nation unlike any on earth in 1 important respect: overflowing with guns. Hundreds of millions of guns.
Hmmm, I wonder if flooding a nation with hundreds of millions of guns will ever have negative consequences? As with everything, the future is unknown. It will be interesting to see what happens.
“Nacho Libre doesn’t care about reality”
Are you high on mushrooms fat man?
Why don’t you sleep it off and come back here when you have something coherent and constructive to say?
“I wonder if flooding a nation with hundreds of millions of guns will ever have negative consequences?”
No more so than flooding it with trillions of printed dollars to drive those people to use those guns.
The same can be said about cars, mobile phones, tvs with hundreds of choices to watch, junk food et al.
It is all about how and when people use devices. The dumbing down of The US has consequences.
Serious gun owners and serious drivers are offset by people who have no discipline on driving nor on when and
how to use guns, and the same for discipline on food or work habits, which is also why we have systemic unemployment.
We have to come to grips with reality on this all. We will not.
“I wonder if flooding a nation with hundreds of millions of guns will ever have negative consequences?”
It already has for the burglars and thieves who prefer to not work an area rather than get their heads blown off.
Crime occurs where people voluntarily give up their right to effective self defense, like Asians in Oakland or people in the blue suburbs who get homevaded.
I can see where this is a valid, and growing issue for sure. With wide open borders, supported groups rioting and destroying American cities and mom and pop stores looted, no one is going to save you, so yes better live in a safe community if possible. The current trend is NOT good.
We should all figure out how to barricade our homes from the civil war on our doorsteps. Have you barred your windows yet? Do you have a field of fire figured out for when the time comes?
Ya got enough paintballs there, soldier?
In cpi, housing, owners equivalent rent, went up 2.3%, and was weighted at 23%.
I have a feeling that with bidding wars going on in the desirable areas, and houses sitting there unsold in not so desirable areas, housing prices were also up 10%. Or more which would add considerably to index.
Also, with beef up for example, how many people were deemed to have switched to hamburger or pork to save money.
Its a cost of living index, not a true inflation index
Its disinformation. But does the msm ever discuss it.
I opine that the Wall Streeters and the banksters are trying to inflate themselves out of a looming problem: a likely stock market crash due to the outrageous valuations given to over leveraged companies, many of which issued near-junk bonds to buy back shares, which will soon formally become junk bonds when rates rise. However, the economy is like a spider’s web and interest rates will begin to rise as inflation is acknowledged as rising. That will cause more corporate insolvencies that will prompt panic and a stock market crash.
If you believe the deniers, remember what happened in 2008. The banksters try to claim that one person was to blame, but most of the banks, credit rating agencies, and loan industry made gigantic profits for years before the 2008 crash. They knew that it was coming but pretended that it was not — just like they are today. See “How Goldman secretly bet on the U.S. housing crash” in mcclatchydc.
I would not buy today, because if they were to create enough inflation to make the stock market and real estate markets be reasonable in terms of valuations, that hyperinflation would go out of control. Crime rates are decreasing, so they are not as much of a factor anymore, except in some locations.
regarding: …..have shifted some consumption from commercial buildings to households, and thereby to supermarkets.
My sister in law is a front end manager for a large Canadian supermarket chain. When Covid hit their sales skyrocketed. As infections have waned here, 1-2 cases per day per 900K Island population, their sales continue to stay high and have even increased. This is in a wealthy area of retirees and many no longer work, but they all have bucks. It looks like habits have changed. More cooking at home and people not returning to dining out so much. Plus, people are not traveling beyond local vacations.
I’m wondering if an increased nesting instinct and home entertaining is now permanent as a result of the pandemic?
I think it’s too soon to make that judgment. Also note that Wolf’s data show that US restaurants are back to pre-COVID sales numbers AND US food-store sales are still up.
People probably aren’t actually eating more in total, so I’d love to see physical sales-volume data (pounds of beef, pounds of chicken…) rather than dollar-sales numbers.
That would be really informative about how many of the sales dollars are coming from price inflation vs. actual changes in habits.
“increased nesting instinct”
I think it is more of being forced to stay home than a voluntary nesting instinct.
I got fed up with being locked down and tried to schedule a trip. Borders are still closed in most places. Like I said not a voluntary choice.
My guess is it will get worse as they fret about the Peruvian Lambda and California triple mutation variants after milking the Delta. Then the cost of travel will become out of reach. Miles needed for award tickets increased almost 50%.
1) Back to school is hot. Gasoline sales are up, Ecommerce is still rising, but the total retail sales cluster together.
2) American consumers cannot stop spending. The Chinese consumers
3) Consumers bid up Chinese goods, cars, houses and stock prices,
4) Without ever growing PPP loans, gov stimulus and cont plunging interest rates, – when the positive bias of credit expansion feedback loop is unsustainable, due to the stalling republicans, JP will not be able to save the economy.
5) China clamp down on internet cos. US gov will mimic them.
6) EEM used to be commodities, but today it 36% China’s tech.
7) EEM top 10 : TSM, Tencent, Alibaba, Samsung, China Construction
8) Since Mar 2020 US investors gang with each other to invest in China.
9) A bubble was born, lifting EEM to a new all time high > Oct 2007 high.
10) Thanks to Xi, EEM decayed to 2008 LPSY on the way to July/Aug 2007 backbone.
11) IWF might be next.
Here in Michigan, most new vehicles are leased. When the lease is up, you need a vehicle in most cases. I have a neighbor who was two years into a 3 year lease and the dealer contacted him and bought him out significantly over the residual value. Then sold him a new pickup. He thinks he got a deal, and maybe so, but they weren’t giving the away pickup in my mind either.
I’ll bet the dealer had your neighbor’s car pre-sold at a higher price than the dealer gave him. Why else would he do the deal? The truck, no deals on new trucks, anywhere.
With all due respect to WR work history in the car biz, I always laugh when customers think they ‘got a deal’. No way is a consumer going to beat a professional in sales, in any market. The good ones let you walk away happy. The savants let you think you got the better of them.
I had to laugh at my neighbours transplanted from France. They were dealing on a truck years ago and switched to speaking french along the lines of, “We’ll just beat him down a bit more, walk away, and come back later, We’ve almost got him.”. The salesman answered back in french. :-) True story. They bought the truck.
Have a friend who thought they bested the salesman during a trade in for a new JEEP. Always saying they got exactly what they wanted and WON. Telling everybody they played the dealer
We just smile and agree
Maybe so, Maybe No Paulo:
Bought a new pickup for exactly half the MSRP/Sticker in ‘9, when we jumped up and started walking to the door, as previously arranged with the better half!
Sales mgr ran after us to agree to drop the ”extra” charges they were going to add on after the deal had been made on the phone…
From professional debt counsellor on Biz TV: ‘vehicles are the black hole of personal finance. I rarely see a debt problem without vehicles involved.’
From another counsellor: ‘never lease a car’
What does it tell you that the main ‘come on’ is the lower monthly payment to lease the same car? This is not aimed at the affluent, but the industry has managed to associate leasing with affluence.
In Canada, this used to be true for business owners who could deduct most it from taxes. That was the original sell, but here anyway they tightened up a LOT on the amount deductable.
What does it tell you that it’s now big business charging people thousands to get out of leases, (Lease Busters etc.)
When you are leasing you are renting your car. For the affluent who could buy the car for cash, but can’t be bothered with anything, it might make sense. Not financial sense, just ‘I don’t want to think about it’
The whole scene is a big part of the ‘debt slaves’ play.
We leased a car for business a while back. What a scam. It was treated like a rental purchase contract. The sale price went immediately onto my credit report and hurt my credit score. I’ll never do that again.
due to the stalling Republicans? you mean that you want to get rid of any brake on spending and just throw a bigger party?
the problem with Republicans is not that they are getting in the way of spending, but that they are inept at stopping spending.
this level of spending is simply unsustainable in the long run. we are stimulating the Chinese factories, because that is who we buy everything from.
so the Chinese unleashed COVID on the world and the stupid leaders of the western world just decided to reward them with huge upticks in spending on borrowed money.
brilliant, just brilliant.
“the stupid leaders of the western world just decided to reward them”
The stupid leaders of the western world, at least those in the US, allowed and even encouraged the export of their manufacturing base to China because, they CLAIM, they believed that higher standards of living in China would lead to true democracy. Actually, their absolutely clueless wishful thinking was seeded by vast sums of lobbyist MONEY.
Read the outstanding, but mistitled because they weren’t “sleeping,” 2019 book, “Stealth War: How China Took Over While America’s Elite Slept.” The vast majority of the required actions he lists in the last chapter which he estimated must be completed within three years are NOT being done nor did I expect them to be done.
After you read that book you will realize how completely and hopelessly compromised the US is simply because there are huge monetary incentives for that.
Have to keep saying this, but go to Walmart/ Dollar Stores and you’ll see 90+ % of Chinese imports. If you banned it all, it wouldn’t be replaced with much US stuff. SK would get China’s share of TV, micros etc. India, Pak, etc. would get most apparel.
You would get a short term bounce in higher tech apparel like boots, and budget housewares, etc. while Mexico and others took over but the US left these low profit areas long ago. In electronics, the US was out before China was in. Last US TV 1995. Taken out by Japan. And sure enough back then everything was blamed on Japan: ‘Rising Sun’ etc.
Sure try to keep an eye on tech ‘theft’ but it’s pretty hard to stop. BTW: The old USSR never paid a cent on patents it infringed. Being a Russ tech spy was a very easy job: there was so much info just laying around. I read a lot about espionage and it was incredible the stuff a strategic US co would send to a mail enquiry on fake letterhead.
Germany also has to deal with Chinese competition, but does so successfully.
The Chinese did not “ unleash “ COVID on the world. Virtually all viruses are “ unleashed “ on the world by virtue of contact wit animals. Racist fantasies, such as this one, are signs of mental instability.
Inflations? Watch credit collapse before your eyes instead.
What credit collapse?
Fed is always ready with Repo with any one bringing at least unused toilet paper and $ swaps to any one in the world. Nearly 20% of COs in S&P are walking zombies, thanks to Fed!
10y yield still remain under 1.3%!
MBS are good collateral. The o/n market starve for HQ collateral.
If JP taper it’s an inverse circuit breaker.
The republican stall because overtime is over.
I’ll keep our orders simple 2nite.
Couple of fish frys and bourbon old fashions. Will skip dessert for another round.
Time to. Celebrate. OSB dropped 20$
This week. Few more weeks….I’ll be ordering dessert and a extra round.
based on your order you are a badger – that was a staple friday order back when I lived in wisconsin
Yep. We can tolerate the fish being less than perfect as long as the bartender is a veteran.
The real housing bubble back in the day started after 9/11 when cocooning became a thing, our house doubled in value in about 3 years after 9/11 to give you an idea.
Covid has played a similar role in the cocoon game this go round.
Fed has one main tool, suppressing interest rates. Basically stealing from creditors and rewarding debtors because system is built on debt growth. Downside is it rewards Wall Street speculation and sucks novices in to over paying for real estate and financial assets.
An overactive Fed will do more harm than good.
I agree. The Fed is not the right institution to be managing an economy. Congress is the right place. Taxation and direct spending, the main fiscal tools, are far more efficient than manipulating interest rates. Also, the results are predictable. Healthy economies have a balance between bonds and equities, and commodities.
Debt is the main reason why America is too expensive for manufacturing any more. The debt is at all levels. Individual, village, municipal, state, and Federal.
It seems the child tax credit will be coming out just as some other fed benefits expire. The IRS estimates 39 million homes would receive benefits. I am not sure of number of children, but if 1.5 (wild guess) average and each gets $300? that might push total retail to a new high.
Ehh, I’ve heard this argument, but truthfully, I don’t think $300/kid is going to be enough to incentivize any huge splurges the way the $1,400 per person.
It’s $300 or so per kid per month tax free. Families earning up to $150,000 per year are eligible. According to President Biden, the goal is to end child poverty. I didn’t know that families earning $150,000 per year are living in poverty. Perhaps he was anticipating runaway inflation or just wants to boost future truck sales.
They just give that tax credit monthly instead of it being a lump sum deductible. Could be great for some, others may end up with a bigger due tax bill at the end awaiting payment. And all that money is spent on rising costs.
With two kids, that’s enough to lease a nice car. Or a few new things on long installment plans. They plan this credit distribution to last until 2025 I recall.
Its 250 per older kid. And its just fronting what I would get anyway next year when I file taxes. Its hardly UBI. I will use it to pay mortgage debt ahead. Starve the beast.
My kids nurse and I T cybersecutity don’t need money think this is ridiculous but hey it buys votes 2020
Bad info there Guest – it’s designed as a one-off advance of 1/2 of the benefit, with the other 1/2 to be realized on 2021 tax return.
Yes, the main difference, besides being $2,000 versus $3,600 per kid, is that you don’t need to have any income taxes to be offset.
But regardless, I don’t think they’ll be large enough to encourage any splurging the way the “stimulus” were.
A couple of neighbors have 5 kids. They will be brining in $1300 a month
It is simply pork barrel welfare by another name, although children of some families in poverty would benefit (that is, if their poor parents don’t blow it by using windfall to buy new pickups, backyard pools, or vacations).
Bonus– you can of course be unemployed and still get the child tax credit. If you are an under the table or gig worker this is great.
The $3,000/child annual benefit is for children ages 6 to 17 and benefit is $3,600 per child under 6 years. Couples making up to $150,000/yr can qualify for the full benefit amounts.
By the way, the law as passed is only good for year 2021. But we well know the weasels in Congress have slam dunk ways of making temporary laws permanent.
Congress critters had voters in mind when they generously allowed higher income families to play this game.
It is anybody’s guess about the degree of fraud this program will produce but it won’t be insignificant since it is federal.
Great article Wolf, answers the question I had thoroughly. The inflation is making the numbers to look more positive than they really are.
Inflation is an insidious tax on the dollar. The Federal Government loves it, because it uses it to pay back Government debt in cheaper dollars. The local governments love it, because inflation becomes a tax on earnings, sales and, of course, on real property. Inflation is the perfect non-legislated tax on wealth, on a majority of Americans who are far from wealthy.
Inflation is indeed a tax, and it is a tax laid upon the holders of dollars by the Federal Reserve, intentional and fully admitted.
Would a 2,3,4,5% tax on the holders of dollars pass a Congressional vote? At least Congress must face the voters every so often.
But the Fed apparently answers to no one….and they have put a tax upon us…
Thus we have “taxation without representation”….ring a bell?
Did I mention “intentional theft”?
Never have we had a 5% differential between Fed Funds and inflation.
Never have we had a Fed willfully buying MBSs so far under inflation. Who else would lend so far under inflation and for so long a maturity?
The entirety is skewed, and we are screwed. IMO.
“At least Congress must face the voters every so often.”
But they “face” an easily propagandized, attention deficit idiocracy which has apparently never acquired the learned skill of critical thought and analysis and which is heavily influenced by the perfect uniformed opinion creation device – the “smart” phone.
A survey a few years ago showed that 6 out of 10 Americans read just a headline and pass it along to friends as truth without reading the content below the headline. Those of us who do read below the headline often find that the clickbait or POLTICALLY MOTIVATED headline isn’t substantiated within the article content and sometimes is even CONTRADICTED by the article content.
America Goes On A Buyer’s Strike: Explosive Inflation Leads To Record Collapse In Home, Car Purchase Plans
Does Fed printing more money will take care of this, right?
And don’t forget Covid!
COVID-19 cases now rising in all 50 states, as global tally tops 189 million
This is now a pandemic of the unvaccinated in the US.
There must be over 10,000 vaccination sites across the country, all free, to anyone who walks in the door. In and out in 15 minutes.
I can’t begin to guess how the economy will be impacted by this new covid spike. In my state, all restrictions are lifted and for the most part, people with underlying health problems wear masks while most others have stopped.
NO ITS NOT A GENE THERAPY. It does not alter your genes. You’ve 100% destroyed your credibility right there. The rest is gravy.
We like to pick on the unvaccinated because:
We like to pick on people whose only argument is “I don’t trust the government’s numbers” without giving an explanation. Why didn’t you call VAERS a scandal in the past? It’s been around a long time.
We like to pick on the statistically impaired.
We like to pick on fools whose behavior is going to set us all back again. People like you and Stecklan will be the first to scream about your rights when Delta kills enough people and we’re back to masks and distancing. If you survive.
Vaccinated people no longer give a damn about the unvaccinated. This has now become a one-way street. In California they’re now asking the vaccinated to wear face masks again to protect the unvaccinated. And the vaccinated don’t feel like doing that, understandably.
The “Trump vaccine” enables your immune system to fight the virus, and you don’t get sick and you don’t have symptoms and you don’t even know you carry the virus, but you may still infect the unvaccinated. And that unvaccinated person then can get seriously sick and end up in the hospital and die.
You can get vaccinated practically anywhere in the US these days, and its free. If you choose not to, fine, you’re gambling with your health and life. This is why the vaccinated no longer care about the unvaccinated.
But for the unvaccinated, this has become a really bad deal because they’re now getting infected from all sides – because the vaccinated don’t even know they carry the virus because it doesn’t make them sick, and they’re just going about their lives and infecting people who refused to get vaccinated, who then can get very sick and end up at the hospital and some die, but so be it. People now have a choice. It’s up to them.
Worth remembering that the unvaccinated include all children under 12, who still seem to experience milder COVID, but a small percentage do get severe cases, and it’s still unknown what the burden of long COVID will be for this group.
To be fair, I still wear a mask because a lot kids aren’t able to get the vaccines yet. Their parents might be stupid but they have no choice, such is life. Do what I can to help avoid getting them sick even if it may not do much.
I’m just annoyed that the government is is catering to the unvaccinated adults. I say have anyone eligible who refuses sign a waiver saying they will cover all medical costs related to COVID out of pocket or through private insurance. No public money will spare them from medical bankruptcy. Have at it, take a free vaccine or leverage your whole life on chance. Everyone else do whatever, mask or no mask, whatever.
Keep it optional, if your satisfied with your 2 vaccination shots and follow booster, etc..etc..etc… enjoy the ride. Forcing it upon everyone is unjust and un-American.
Absolutely! Totally agree.
Are you condoning callously offing the unvaccinated with the virus? The city of LA does not appear to share your view. Masks for everyone. If you don’t follow the directive, obviously you either don’t follow the science or worse, you follow the science but don’t care about your fellow man/woman/child or whatever. How inconsiderate of you. ?
If I suppose if the shoe is on the other foot, how inconsiderate of those who are unvaccinated to burden others with their… well I am sure someone will think of the appropriate word for whatever they have.
This would be oddly entertaining to sit on the sidelines and watch all this misery if it wasn’t so sad.
Some good news,,,,,,Here in the UK we have had the Delta variant for some time and it is very contagious but hardly anyone is dying from it. Yes, some take ill and go to hospital yet the deaths are below the deaths from flu. That is the way viruses are supposed to work….they tend to get more contagious but less deadly, as the virus also wants to live.
Most people I know (in BC) still wear masks in public spaces, even though they are fully vaccinated. The reason is that we had a late vaccination start due to restricted supplies. Regardless, inoculations are surging here to where we have surpassed every other country, and growing. So why wear masks? For people like my 67 year old friend who gets his second shot tomorrow. He has been stuck in Mexico pre covid and while it got underway. He also wears a mask, obviously. My 56 year old sister in law, just got her 2nd dose a week ago works in grocery retail…wears a mask, but everyone can still be a carrier. My brothers wife has to delay her 2nd shot due to an immune system concern…a retired nurse. How about for the kids who have yet to receive a vaccine? Our attitude is we are all in this together until we hit an 85-90% vaccination rate of 12 and above. I also think there is a different attitude within a public health system. People listen and follow suggestions here more readily as it’s about health and not politics.
And then we will even open the border to vaccinated tourists. :-)
As for those who refuse and remain anti vaxxer, you can pre arrange to get someone to apply on your behalf for a Darwin Award, posthumously. Can’t fix stupid.
Anthony re the Delta variant: “Yes, some take ill and go to hospital yet the deaths are below the deaths from flu.”
Not quite. According to the latest UK data, the Case Fatality Rate is 0.2% (seasonal flu is about 0.1%) which is POSSIBLY more of an artifact of the very high vaccination rate in the UK among the elderly than of the variant itself. That is versus 1.2 to 1.4% for pervious variants. The Delta variant is estimated to be 20 to 60% more contagious.
On the vaccine breakthrough topic, the Delta variant as of 11 July 2021, the latest UK data I can look at, has reached a huge spike of 31,352 new cases daily with a 7-day average of 31,116. So, the vaccines are apparently not effective against infection by new variants as they are hyped to be.
This wonderful little gift from China, 99.5% optimized for humans from day one with an R0 far higher than the seasonal flu, is going to be a long term problem and, most likely, one with seasonal (winter) spikes for intuitively obvious reasons: more indoor residence, child vectors back in school, lower vitamin D levels, MUCH longer virus survival on surfaces due to lower temperatures, etc. A very recent study of the virus indicates that that will be likely.
five-times-more-children-committed-suicide than of died-covid-19-during-lockdown-uk-study
Yeah, braindead clickbait headline. It’s braindead because very few children die of Covid; and because children committing suicide has been a huge issue forever. When I was 14, a friend of mine killed himself. He was big into judo, was always fun and upbeat, and one day, he just did it. This is a horribly common situation.
In the US, overall suicides FELL in 2020, to 47,511, from 48,344 in 2019. From these huge numbers of suicides, you can tell that suicide has been a huge problem in the US forever. In 2019, a friend of mine (61 years old) committed suicide. Earlier this year, another friend of mine (60 years old) committed suicide. In between those two men and the childhood friend, there were four other people I knew who committed suicide. Each suicide is a terrible tragedy.
Nothing wrong with Gain of Function research. From the science perspective, it’s very useful tool to learn about viruses. That said, it all depends on how well equipped the lab is to contain such. I mean there are active research going on with Ebola, smallpox, etc. Just imagine all of the wonderful things you could do using CRISPR these days. It’s only the facilities that matter.
But remember, there is still no scientific proof it came from a lab. It could’ve been because a pangolin kissed a bat, and their saliva cross-pollinated. And it could still end up being a conspiracy theory for all that like it was when people looked that way last year.
Glad to see my censored comment (replaced by Wolf’s pro-vac comment) resulted in follow-on comments here reminding people there is no reason to be callous towards the vaccine- hesitant. Currently in the US we are seeing the government encouraging censorship by monopoly social media, but luckily there are still people who try to resist hating those who disagree with majority opinion.
Correct comment by Fauci: ‘if there was this kind of misinformation decades ago. we would never have eradicated smallpox and polio would still be common.’
If you are over 50, when you got yr polio vax in school was it some kind of big f%%cking existential ‘am I free’ question?
No. The people with the expertise had determined it was safe
and effective. Which it was. Which is why you’ve never known anyone with polio or smallpox.
My grade 5 teacher had smallpox scars. She was prob 50 then I’m 70. it was an incredibly deadly disease, killing about 20% of victims. It’s a big step from control to rarity to eradication. Polio is not quite done. Who knows, maybe these ‘I’ve gotta be free!’ guys will give it a new lease.
I have no strong opinions about the vaccines, but part of the problem with getting people vaccinated is the messaging around it. For example: “Federal Employees Don’t Have to Get Vaccinated Before In-Person Work” says the administration.
It also does not help that reporting vaccine breakthrough cases has been discouraged. That’s just fact. The powers that be don’t want to know about those cases. Heck, let’s also just ignore all the adverse effects reports. At the very minimum, those should be investigated and fed back to the vaccine makers.
And finally, poor people can’t afford to take days off should they suffer from side effects. Logistics matter.
Let’s now see if this post gets blocked ;)
CDC has changed the data collection criteria once again.
Now it doesn’t track breakthrough infections (when a fully vaccinated person gets infected with COVID-19). Only tracks breakthrough cases resulting in hospitalizations and fatalities.
So far in USA breakthrough fatalities (as reported to CDC) have been 5492.
This, compared total of around 35000 deaths in the second quarter. Not exactly a tiny portion.
(I chose Q2 since most got vaccinated in that time period.)
Again let me preface this by saying that I am not discouraging anyone from taking any of the vaccines, but here’s another fact: you can NOT sue the vaccine makers. Now one might argue that’s because the vaccines are approved under the EUA.
Well exactly. They have not been formally approved by the FDA although that seems to be just formality at this point.
The concept of moral hazard has been touched upon by many people in this blog, but this is yet another kind of moral hazard. If you think this loophole will not be exploited again and again in the future, then I’ve got a bridge to sell you.
Disclosure: I’ve taken many vaccines in my life, and I regularly take flu shots.
Wolf Richter – Add at least 50% of drug overdoses to those suicide numbers and you get the real picture of the scope. Not many talk about the despair that leads to it.
And yet, M2 velocity is at a phenomenally out-lying low. Money is not a hot potato nor does there appear to be a buying frenzy.
M2 velocity is not a meaningful statistic. The much more important numbers are the inflation data. Some claim that the growing M2 money supply is not inflationary because the “velocity” of spending is low. This is not correct as the very imperfect velocity measurement is not an indicator or predictor of inflation. The price that someone is willing to pay for something along with having the means to pay for it is far more important than the turnover or rate at which money is exchanged (velocity).
Velocity is a calculation with the money supply as the denominator.
When you jack up the money supply like Powell has done, the velocity calculation naturally becomes a smaller number.
The new money seems to go directly into the stock market…and sits there.
I thought the new QE money is stuck in the banks since they are having trouble finding good quality borrowers.
And getting stuck in cryptos because they are all HODLers
Yes. Velocity is just computed, and reflects the ratio of GDP divided by money supply. Grow a big money supply – all things held equal, and velocity appears to fall.
Velocity – if we could accurately measure it – would tell us how many times a dollar gets re-spent during a year’s time (you buy from me, I buy from him, he buys from you, etc.)
The trouble is, there doesn’t seem to be a great way to measure it. However, intuitively we know that velocity ain’t a-happening as much.
How can we know? Well, if we had healthy velocity:
* we wouldn’t need to print as much new money. The money already in circulation would do just fine if everyone had money to spend, and was spending it…and we were buying from ourselves (.vs. imports, for ex)
* we wouldn’t see the GINI co-efficient (index of concentration of wealth) as high as it is. The wealth that collects into the hands of the few would do a lot more work (pay a lot more household bills) for the 99% before it got hoovered up by the 1%
* we wouldn’t have to inject money into the consumer households the way we are. They’d be earning it from wages instead of transfer payments
Velocity is a really interesting concept.
Too bad the government doesn’t do the work of measuring it the way they do for CPI and GDP. It may be a more relevant index of economic performance than either CPI or GDP.
The Twin Cities just welcomed a new Ferrari dealership on Thursday, 15 July. You got money and want velocity? A sweet F8 Tributo would work nicely. $280k plus tax & license & insurance; so about a third of million ought to cover it, eh?
“Velocity is the drug that I need
The wind in my face, riding at speed
Swiftly I glide singing my song
While high over head a hawk soars along
It floats without effort, smooth and free
As I spin at my pace almost effortlessly
Though gravity binds me down to the road
My spirit flies as the world I behold”
-Dan the TicketMan, 1983 after my first ride on my new racing bike – a handmade Trek 970 with Campy Super Record
My bike shop, Grand Performance in St. Paul, is slowly starting to get inventory back, but top-end bikes and components are much more expensive than they were before COVID. The technology is getting better though, so the price increase doesn’t seem too bad.
Another first here on WS… a Dan the Ticketman original.
Sales fell despite colossal price increases:
Sales fell DUE TO colossal price increases.
Prepare yourselves for covid-21, covid-22, Delta, Echo, Foxtrot…my name is Gary Yary be wary of the very scary.
LA Times has indoor mask mandates for LA County starting tonight. Scary…the mask will save you…civil unrest likely?
Lumber is down 70% from the Wolf Street WTF bubble peak.
Will the equity market follow suit? Michael Engle like the backbone of the chart analogies. i look at the floor based on personal financial experience. Bone crushing. Splat.
Great charts as usual Wolf!
These are interesting times.
You “Wolfsters” take some time to strip the economy (and maybe your clothes) for some human being enjoyment this weekend and every weekend and every day.
The new mask mandate requires that the vaccinated put on a mask indoors. The unvaccinated always had to put on a mask. So now it’s both. This is to protect the unvaccinated from the vaccinated (who can be infected but don’t get sick because their immune system can handle the virus and so they don’t even know they carry the virus).
My gut feeling is that people who refuse to get vaccinated made a decision, and they’re gambling with their health and their lives, and have to live with the consequences. I’m fine with that.
And I don’t really feel like putting on a mask indoors to protect the unvaccinated from the virus I might carry. But I will put one on anyway to be nice to them.
Good of you to do it Wolf, but there are folks with good reasons other than not ”wanting” to take one or more of the vaccines for covid:
Some friends, of the elderly sort, have been clearly instructed, by their MD type docs, not to take any vaccines due to severe allergic reactions in the past including near death experiences, etc., etc.
With approximately 10% of the population officially reported to have tested positive for the covid, and approximately 0.18% of the population dying from it, ( approximately 1.8% of cases ) the odds are small for any but the most at risk.
Rational requirement would be for those ”at risk” to take all possible precautions, stay out of public indoor settings, wear a ”real” medical grade mask, etc., rather than everyone being required by law to wear masks.
That is pretty much what workers at the few places I go indoors are telling me is happening here in the saintly part of the tpa bay area, in a state where the covid is surging once again…
It will certainly be interesting to look back on this situation if five years or so, eh?
In the United States there are 33 million confirmed COVID cases, 605,000 deaths and 188,490 hospitalizations. Many untested people died at home of COVID type symptoms and were not counted among the dead. Those who are obese and or have high blood pressure are at risk of severe complications or death.
More Americans have died of the coronavirus than all Americans killed in battle during WWI, WWII, Korean War and the Vietnam War. War is hell.
Why they resist vaccinations is beyond me. Not many people are getting $50,000 hospital bills from vaccination reactions. I got a sore arm and some mild weakness for a day or two.
In FL, where I live, we have a Covid explosion. This state represents 20% of all new cases?
Why? Because our Covid Don Mini-Mi Gov. wants to take over Covid Don’t kkkult. To so do means he sells anti-Fauci t-shirts on his website as part of his kkkulture wwwar. Gotta throw red meat to the dupes.
I know, I mean KNEW a guy. He thought Covid was a hoax. He died drowning on his own lung fluids and his 86 yr old Mother had to bury him.
So sure, don’t get vaccinated, whine about China and what a hoax it is. Slit your own throats….if that’s what you want to do!
Me? I got vaccinated, no side effects and I don’t mind putting on a mask for a few mins when I go into a store.
History will remember the anti-science buffoons (especially Covid Don and his death kkkult) that made this so much worse than it ever had to be.
Wolf, I’d rather not be nice to the unvaccinated adults I know because, for the most part, they are stupid. And while recent events have revealed such things as supply chain shortages, they have also revealed there is no shortage of stupid in America. This sad and obvious condition, however, does not mean I should endeavor to encourage it.
The choice is clear
1. Get vaccinated
2. Stay Isolated and wear a useless unhealthy mask and inhale your own CO2.
3. or do neither and risk death or an expensive hospital stay.
Everyone on my block or in a high risk job has done #1. No one has complained. #2 is a personal choice which we all had to do for a year until the vaccines came out. I know some who’ve done #3 and they have regretted it if they are still on the planet.
It’s even worse than that. I don’t have a problem with stupid. Stupid can be fixed. I’m stupid in a lot of subject areas and smart in others. We have a dunning-kruger epidemic in this country of people who are stupid, insecure about it, and then convinced themselves that they’re actually geniuses.
There is still a lot we don’t know that will come out in time.
My parents who are in their 90’s got the Moderns vaccine and had zero side affects.
A 50 year old female friend got the Pfizer vaccine and the second dose left her bedridden with flu like symptoms for three days. She says she will not ever take a booster. Her symptoms were nearly as bad as my son 35 years old who got covid early on in NYC.
I can isolate myself pretty well and am going to wait a while til all side affects of vaccines are known. In general it is good practice to wait until pharmaceutical s have been on the market for five years to be sure all side affects have become known. It is a risk reward calculation and because I can stay pretty isolated I am going to wait at least a few more months to get more data. I especially want to see warnings on vaccines when final approval is given by FDA.
The second Moderna shot got me. I was shivering for two days,
in bed, under a heavy blanket, with ski jacket. My lower back “cold” was the worst. I was worried about getting hit by a cykotine storm, but after two days, I fine. My son had the same. The Moderna dbl doses help fighting inflammation, boost the immune system, for free.
Both my wife and I got both Moderna shots in January as we are both in our 70’s. Neither of us had ANY reaction. I guess the vaccine affects people differently
Three days of bad flu feelings are sooooo much worse than death.
Ok, that makes no sense at all.
I’ve heard that the immune response dictates the severity of the side effects. So the 2nd doses hit harder because of the response developed from the first dose and it also hits younger people harder than older people because they have a more robust immune system.
The great thing about vaccination is that it turns ordinary people into asymptomatic spreaders. More folks have an opportunity to get natural immunity from a less than catastrophic case. I’m like VV. Head down, limit exposure, watch for FDA authorization, not government induced emergency authorization. I am regularly vaccinated by my GP when it’s appropriate and safe.
Correction. I’m waiting for FDA _APPROVAL_. Vaccines already have no recourse, hold blameless, emergency authorization.
I’m holding out for drinkable bleach or nano UV lights. The ORIGINAL idea from the stable genius, not all this Pharma crapp.
Besides, if almost 50% of the people believed in this moron, Covid is the least of our worries,
What know one seems to talk about is that people who got covid are now naturally vaccinated — no shots required. Why risk a vaccine when your own immune system provides a superior immune protection?
But no $ grnerated for big pharma, I suppose.
Trump got Covid, and later when the vaccines were widely available, he got vaccinated. Best of both worlds. Rich powerful people know how to do this. It’s just us peons that argue over it.
Those vaccines, and their wide availability in the US, were the biggest accomplishment of the Trump administration, and they should have called them the “Trump vaccines.” Can you imagine how much of a hoot it would have been watching Biden encouraging people to get the “Trump vaccine?” That would have turned into an instant classic moment in American politics.
The people who say they have had Covid have not been tested for antibodies. Remember you can be reinfected, everything we know about Covid we learned the first two weeks. People who had Covid or been vaxxed can transmit the disease. Irony that the unvaxxed want to move freely without masks. They really don’t get it. The post vaccination wave might be the worst. No where to hide. Then the virus mutates and goes after those whose antibodies have weakened. Is this so much better than flu vaccine which is some years only 10% effective? I don’t trust their efficacy numbers. Interesting that flu has almost disappeared due largely to social distancing. The Japanese have worn masks in public for years. They have lower Covid infection rates and lower vaccination rates.
And admit Trump did something right? Wolf, did you hit your head and land in an alternate reality. In no way would Trump ever be given credit for anything. The reverse is also true. And remember, up until they got elected. Harris was busy telling everyone how she wouldn’t trust the vaccine done under the Trump administration. So, we know where some of the original vaccine hesitancy came from.
It’s a good thing that the American public doesn’t remember anything past yesterday and are so uneducated in general that you could sell the ice cubes in the middle of a winter storm that’s freezing their butts off, otherwise the political class wouldn’t be in charge.
Immunity due to having had covid starts to wane after 90 days.
Spin the wheel as to how long your personal immunity will last.
One big reason the Japanese have been wearing masks in public for many years because of the high levels of pollution (particulate matter, VOCs, ozone, in general) in their crowded cities.
Dr Seigal who I have a lot of respect for, recommended getting vaccinated after about 3 months of getting Covid to protect against fading Antibodies and protect from any Covid variants. Dr Scott Goitleb also recommended the same strategy.
The one thing Trump actually did right was get the vaccine. However, he got it behind closed doors and didn’t even bother to tell his so-called followers about it or encourage them to get vaccinated themselves. Had he even cared enough about anyone other than himself and done this, we most likely would have reached herd immunity by now and wouldn’t be stricken with a potential fourth wave of COVID-19 at this moment.
All I needed to know is vac one makers have legal immunity and the politician says the vaccine is safe. Saying something is safe is saying nothing. Driving a car is safe? Riding motorcycle is safe? These are relative terms.
I will probably take it, but I don’t want it to be classed as experimental when I do if I can stay out of the public until FDA approval.
This for OS:
Vaccine makers have had restricted or no liability for years OS,
otherwise, no responsible company would ever make any vaccine because, statistically, no vaccine can possibly be 100% effective for every single human being.
We are just too diverse a species, support for which can be easily seen by the fact that other than cockroaches and possibly rats within the last century or so, humans are distributed over more area than any other species…
There is however, a GUV MINT organization to which folks can apply to be compensated if they can PROVE that a vaccine has harmed or killed family.
I do not remember the total awards distributed over the years, but they are not insignificant.
“What a wonderful Word !”
Thank you Mr Richter for indicating those ephemeral and utterly meaningless dips.
New Normal teaches us that every dip is ferociously bought or somehow wisely corrected by the Almighty Fed.
Also New Normal teaches us that every economic dip lasting no more than 2 months will be followed by the 10-15 years of economic skyrocketing expansion.
Stock markets have a shorter time frame.New Normal Bear Markets, which nowadays last 2-3 days, will be followed by months of soaring – leading to new All Time Highs !!!
I watched some more videos on GFC including after event panel discussion s with Paulson, Geitner and Bernanke. All three guys are above average intelligence. It’s not hard to fast forward to today and get into playbook of Yellen and Powell.
The system is too over leveraged, but the thing that came up several times is in a crisis you have to do what is normally bad. So in a crisis when over leveraged you have got to add to the leverage and hope to deal with it another day. I think economic shock from Covid is bigger deal than most think and it’s why QE is continuing to run. It’s why Congress is over spending $3T per year. It’s why the Fed is risking a housing bubble. They are still in firefighting mode. If they can get through it, they are hoping they can slowly pay for it as we carry around huge debt burden.
“If they can get through it, they are hoping WE can slowly pay for it as we carry around huge debt burden.”
Federal Commercial Reserve bankers don’t pay for anything.
“Old soldiers never die,they just fade away”
Japan is in financial firefighting mode since 1989,piling up debt and going nowhere,slowly fading away from the world scene.Which disproves the concept of ” Central Bank as the Prime Mover of the Economy and Everything Else”
Japan will slowly be absorbed into China’s ‘greater prosperity sphere.’ Especially as the US declines economically. Wealth is shifting east and bankrupt countries are in time beggars, not choosers.
Just a hunch.
Japan is in financial firefighting mode since maybe 1992, and in fact, far from going nowhere, they have managed to maintain a stable society, make improvements to infrastructure, augment their Navy (oops, Coastal Self Defence Force), keep their citizens healthy, and still have a very high standard of living.
Also, the notion that they will be absorbed into China, is quite ridiculous.
Maybe it’s not the Fed that sets prices….
If only America had a competitive market environment to drive down prices again.
but then who would we scapegoat?
Plain 2x4x8 at Home Depot, Menards and Lowes now less than $7.00.
I’ll bet a lot of their 2x4x8 inventory is drying out and looking like bananas by now. They are in those stores around here.
You need to go to lumber yard that contractors buy from. They do exist. Worth a longer drive for sure.
I’ve been in const off and on for 50 years and have yet to see a Home
Depot truck on a job site. There is a reason for that.
Hi Paulo. Thanks and agree on independents. Was using those 3 as better-known indicators for the group here. In Chicago area I can use independents in Hillside in west burb, Oak Lawn in Southwest burb and Oak Forest in South burb. About 80% fewer of them than 40 years ago, however. I can’t pull up to any docks at Chicago Mercantile Exchange where the lumber futures “market” is, however.
Union Pacific suspends inbound international container shipments to Chicago for a week. Reading this on trains. com made me think that it will induce more supply shocks into the mix
…latest pandemic-related disruption, Union Pacific has told customers it will halt all shipments of international containers from West Coast ports to its Global IV terminal in Chicago for up to a week
Those containers will be getting hauled by trucks, like so many other containers. Trucks are competing with rail, no problem. A truck will take it directly from the Port of LA to the final destination a lot faster than by rail. UP is just losing some more business to truckers.
There are a lot of problems with moving containers long distances by truck. The trailers they use to haul containers aren’t really road worthy. They are more like the skids lumber trucks use. Most of those loads need to be broken down. Then there is the matter of refrigeration if needed and the type of fuel they use and access on the highway. Then there is a driver shortage. It would like closing all the gasoline pipelines and trucking the fuel.
“The trailers they use to haul containers aren’t really road worthy.”
You’re confusing the trailers that are used for drayage inside the port with the trailers that are used to haul containers by over-the-road trucks.
I’m not putting on any mask to protect adults who are too stupid to get the vaccine which has proven effective and low risk. I’ll put it on in Metro or health care offices or high risk areas only.
What’s more stupid, not getting the vaccine or wearing a mask after getting the vaccine? I would say they are both equally stupid.
Wearing a mask won’t hurt you and it may help someone else. It may help a kid to not get sick or get long covid.
Not getting vaccinated helps no one, including the unvaccinated person.
Less than 400 people under 18 have died with covid. Stop with this BS already.
That may be true or not, depending on where and when;
however, one state reported recently that 7 young kids were in ICU, with 2 of those kids on life support.
We will not likely have clear information for a long time, maybe never, as reporting deaths from covid is and has been very sketchy to say the least, if for no other reason, mentioned above, folks dying at home and never autopsied due to lack of sufficient resources, etc., etc.
Certain responsible epidemiologists have said that the actual death totals around the world may be as much as 3X what has been reported; and we can be sure that some nations have not been reporting accurately either the cases or the resulting deaths from the beginning…
I’m with Jon. It’s like the people saying we should ban peanut butter for the people who have allergies. At some point, it’s enough. There is always going to be risk. Of the people under 18 who died most were above 12, and obese, or with other health conditions. So basically, nearly everyone in America who is actually vulnerable to COVID has already or CAN get vaccinated.
We’re not going to wear masks forever and distance to protect a few hundred people who legitimately can’t protect themselves with a vaccine.
So being fully vaccinated does not prevent you from spreading the virus around to others for a long time?
Correct. The vaccine prevents you from getting seriously sick and dying because your own immune system can control the virus. But there is a chance that you could carry the virus and spread the virus during that process. And since the vaccinated have no symptoms, they’re not getting tested. So no one really knows how many people are infected. And this is a HUGE threat to the unvaccinated.
People really need to understand how risky it now is — with the economy fully open — to not be vaccinated.
Masks are very unhealthy. You breath in your own CO2 and cut off oxygen flow. And to top it off they don;t work very well to prevent infection. Data shows they provide you about 20% protection. They only protect others from yourself if you are carrying the virus. Two of my friends who are no longer on the planet were wearing masks.
Being a nurse or Dr must be a deadly profession as they wear masks most of the day for 30+ yrs. I guess the surgeons die off first.
My wife has been going to the office for the entire time during the pandemic — the company is considered “essential” because it’s in the food supply chain — and everyone has been wearing masks ALL DAY at the office, every workday, for 16 months, no problem.
In Asia, particularly in Japan, many people wear masks all day. This has been going on for decades. No problem.
Following a large sharp decrease in sales as we had in 2020, using monthly sales figures to calculate a percentage increase is a meaningless exercise – a “damned statistic”.
That’s why I provide 20-year charts, so you can get the whole picture.
With gasoline consumption basically back to normal, and oil prices still in the vicinity of near term highs, I am kind of surprised to see energy ETF’s such as XLE and VDE down 13% from their recent highs. Perhaps like the recent 22% drop in Chinese stocks (CXSE), maybe it’s time to buy the dip since everything looks to be 15 to 20% off right now. For that matter the price of many country specific emerging market ETF’s are looking more and more attractive (e.g. Turkey, Mexico, Indonesia, Malaysia, Philippines, etc.).
For what it is worth, one of the Chinese companies that I follow that are on the Trump/Biden banned list did pay its dividend on July 9 to owners of shares that trade in Hong Kong. Owners of the ADR’s that used to trade in New York were paid on July 16, as expected. Foreign investors who are not subject to Biden’s Executive Order might want to take a look at this segment of the market. Those who are subject to the list must dispose of these shares by June 2022.
Some Arabs agreed to pump an additional 2 MBOD recently.
The drill rig count in the U.S. and Canada has increased in the past 12 months. The international drill rig count slumped YOY (Baker Hughes rig count).
GMC has been running TV ads to sell trucks. I presume there is pain at the pumps. When gasoline prices increased in the past, habitual drivers considered buying an economy car instead of a large SUV.
There is an EV charging station at a Walmart. I have not seen anyone use it.
I believe Friday was options expiration. That may be effecting price action for the last week or two. Give it a day or two more and expiration will be over. During the last week I increased my XLE holdings by a factor of 17. So you know what I think is about to happen. Of course, you places your bets and you take your chances!
It is weird. Energy stocks are down big yet oil is barely down at all
Went to sherwin Williams last week for a quart of paint. Nothing fancy just some satin. Was told nope. Nothing available.
Offered the last gallon to make my color
Then was told I could sign up on a list to be notified when they come on. Weeks maybe months. For quarts. Guess that supply chain issue still reverberating
Bet, In south central New Jersey, I have had luck getting Benjamin Moore paints pretty much off the shelf with no wait at all. It is a little more pricier than Sherwin Williams paint, but the coverage seems to be superior and a gallon goes further. Good color choices too. Good luck.
A couple of weeks ago one of the national hardware store chains had a sale on a well-known specialty primer, limit 2 gallons at sale price. I stopped at 4 stores.
I was told by the Sherwin-Williams manager (when going to buy a single gallon of paint for a “color test” patch) that he might be able to scare up a gallon but the 10 gallons I would need to do the job might be a few months out.
According to this guy, the Feb storm in TX collapsed the roof of one of their manufacturing plants and everything that was in process was lost and they were having to essentially rebuild the plant.
I’m trying to decide on whether to go with another brand (kind of partial to SW) or just push the job off another year :)
I’m for putting the job off until conditions stabilize. Procrastination is its own reward.
Meanwhile in other news, Kenneth Rogoff has an article up in Financial Times headlined… wait for it…
“Don’t panic: a little inflation is no bad thing”
In the past, in the history of this nation…
when inflation rose, so did short term interest rates.
Not this time..
So Kenny is missing the point….people are getting whacked by holding dollars, saving. And as they get whacked, the defensive measure is to hunker down, trim sail.
What is missing is a fair return on money, and the Fed has decided to break with the financial history of this nation and STEAL (there, I said it) from the People, the working families of this nation.
And one might ask, “to the benefit of whom?” I’ve got some guesses….
With the 10-year bond yield dropping and inflation way up, it is a good time to wait and see how this resolves. Stocks didn’t do so well this week in spite of good headline retail sales and jobs numbers. Consumer sentiment came in a bit low. The fed is pumping liquidity so this dip will most likely be shallow unless something earth shattering comes along. Personally I feel the actions of LA county are making investors nervous. The LA sheriff has pushed back saying he won’t enforce it. As this thread shows, people are all over the map regarding vaccines and masking. If LA goes into lockdown then stocks will tank pretty hard (-10%). Politically, I don’t think Newsom can allow a lockdown to happen. So, most likely a typical late summer shallow dip. The other troubling issue is geopolitics. The transition to this new administration has not been smooth. A big blunder is not out of the question. If you have been waiting to buy into this stock market, waiting a month or two won’t hurt.
One more thing, we have some capital gains tax rule changes coming up, and that could put some downward pressure on stocks and bond (prices) for a short time late this year.
Thanks for that summary kcef:
I have been waiting (and hoping) to get back into the SM after being out of that mkt in favor of RE mostly and minor commodities for several decades.
We, the family we, don’t need to resume owning rental RE in our antiquity, with all the subsequent headaches social and maintenance wise.
The most important part of the SM, besides the actual low threshold these days, is the liquidity, far more liquidity than RE of course, and at least somewhat more stable than commodities IMO…
Studying every article by THE Wolf, and appreciating them and the commentariat on here immensely, far shore!!
1) Crime & punishment, war and peace, boom & bust that never last.
2) The commodity cycle is 20 years.
3) WWII commodity boom was followed by a 20Y bust until the late
60’s. The 70’s & the 80’s boom led to a 20Y decay until the late 90’s.
4) EEM used to be slave labor and commodity countries. Today it’s
large growth stocks in China & Taiwan.
5) In the late 90’s oil was crawling between $10-$20, gold tarnished,
soybean decayed to the 60’s prices, cattle froze and the dollar rose. Argentina was under UK embargo.
6) Argentina stocks collapsed in 1992. HK 1997 bust & Chins RMB devaluation ignited a global bust, because in the 90’s commodity countries were fragile.
7) Brazil, Mexico, Chile, Venezuela, Argentina… and Korea all busted in 97/98.
Hugo Chavez took over in 1999.
8) The commodity bust and US dollar debt fx pipeline built China.
9) Wall street globalist used communist China to crush the unions
Then there was NAFTA 1994 to deflate our workers.
10) The REAL weekly earnings of production employees peaked under
Nixon in 1973 @ $ 872, plunged to $664 in 1995 and reached a lower
in 2021, after the Trump jump.
The 1920’s to Nixon I, to Nixon II is a 50Y political cycle.
What next : a bigger mess.
Looking at the long term charts on banks
Jpm gs there is trouble ahead. Inflation the most likely cause to finally pull the pin on the absolutely Batchit parabolic market run since 2016. I think Toonces is going to start driving the markets soon
Please define,,, thanks
Toonces… Hahahaha… Bet, that was a good one.
VintageVNvet, “Toonces” is the name of a cat that was shown in a clip on Saturday Night Life to be driving a car. You can google that. It’s hilarious in the context that Bet mentioned.
Kuntz the self driving cat.
Not much of a ”TV” watcher since I grew up without it being available,,,
Just watch live sports and old movies,,, ya know, the kind with plot, character development, etc.,
This whole inflation fiasco would not be as bad had it not been a direct result of the Fed’s deliberate and relentless efforts to stoke it. Had it been a totally unavoidable consequence of a Black Swan event like the pandemic that nobody welcomed, it would at least be a bit easier to accept (but not by much for those most adversely impacted). However, the fact that the Fed misused the power entrusted in it to deliberately create this inflation spiral is…[pick your own word to describe it.]
1) Big tech, IWF :
Draw a resistance line from Sept 3, big red, open –> Feb 16 high –> July 14 high.
2) Kelt (26, 3.0, 13).
3) The nerve system : dot #1 between Sept & Oct highs –> dot #2 above Mar 2021 high –> dot #3 above May 2021 high.
4) Dot # 4, if exist, might indicate a flip.
5) Option #1 : the min length is : #2 to #4, which will send prices to Sept hi/lo, or below, to a spring.
6) Option #2 : after a bear market rally : #1 to #4.
This is a matter of supply and demand, retail demand is spiking so prices rise. Online retailers like to drop ship so it all goes back to the supplier to meet just in time. I still don’t know why people are buying cars, the last year I have barely driven the one I have. Is there a demographic on this that explains?
On State Highway 24 near San Francisco (4 or 5 lanes in each directions), traffic appears to back up to pre-covid-19 levels. Hi tech appears to be doing well even if some other parts of the country are still struggling.
People living in large cities who owned no vehicle moving to the ‘burbs (pandemic, remote work) and now needing a vehicle. That’s at least part of the reason.
A massive market crash is what’s needed to get society back to a more comfortable, sustainable path. There is way too much debt in the system, and Weimar Boy Powell is trying to grow that even more. A wipeout of 75% in all asset classes would allow a cleansing and healing, and would provide opportunity for the responsible people instead of debt junkies.
I remember back in early 2008 when oil prices were at US$147 per barrel, and then came a crash a few months later.
By the way, what is it with the COVID conspiracy theorists? In Canada, they are wealthy.
Sons of billionaire corporate developers and restaurant moguls, getting millions of dollars in donations from right wing supporters and FBI-designated hate groups. A few of their supporters were charged for serious hate crimes.
I’m surprised that anti-COVID conspiracy theorists are on a financial blog…
Depends what you mean by anti-COVID. I am a big believer that COVID was a big threat to a lot of people (not everyone) and that some measures were sensible in response. Most of what the government did, financially and otherwise, was obscene.
Because we knew it was an aerosol spread the thought was: if everyone went home and stayed there for a month or so the spread would stop. If people stayed apart the virus could not spread and would die out.
But people would not do it. State governments would not shut down. Then some decided to make money feeding people conspiracy theories. It became more politics than science.
We learned only one thing – people will not run away from zombies.
That’s all true; I thought a two week lockdown plus a closure of the borders made more sense. But the fact is, it never made sense to pay people more to stay home than work, and it never made sense to print $4 trillion and spend $6 trillion to replace $1.5 trillion of lost economic output.
I know the virus is very real, very deadly, and not a “hoax” or any other sort of conspiracy. However, I have ZERO confidence in the government and big pharma. I believe we are being lied to from all directions.
Have to agree, like, totally DC…
Those of us who have been close to GUV MINT politicians in various and sundry states, especially if more than one,,, know full well that they, politicians, are not going to ”approve” any new laws, and the rules and regulations following, UNTIL they get their ”cut.”
Nothing new, far shore, as it has clearly been going on for at least generations, if not for eva..
Only real systemic fix is,,,
”Clean House, Senate Too.”
Until all politicians elected by WE the Peons are actually and certifiably representing WE the Peons instead of the oligarchs who are always willing, and able, to pay off anyone and every one as soon as they are elected…
Evidence of that is everywhere for anyone to see.
IF WE the Peons keep electing those that clearly represent on the oligarchs and themselves, WE will get what WE deserve,,, just more of the same…
When one is being lied to from all directions and can trust nobody, the best thing to do is start a radio talk show and invent your own reality.
Side benefit; many have become very wealthy that way.
Too much whining. You want a better government? This is America. Build a company. Make a billion dollars. Buy yourself a better government. It’s the American way.
1) The mega tech market cap is > than China’s GDP.
2) US gov will squeeze the large growth co, loaded with cash, promoting small and mid size co that operate mostly in US.
3) The mega cap are rising vertically on the log chart, but the fragile MID tremble lower in high freq.
4) US mfg don’t commit CAPEX, because the hyperinflation might be a dead cat bounce.
5) They disregard expert positively bias, promoting inflation expectations with their charts.
6) The mulatto fleet might not be able to protect the global E-commerece.
7) $SPXA200R : !GT20MID is shivering.