From CNBC:
70% of Americans think a recession is coming: Here’s what they are doing to prepare
Experts are weighing the odds as to how likely a recession is and how fast it could come upon us.
Most Americans — 70% — already believe an economic downturn is on its way, according to a new survey from MagnifyMoney. The online survey was conducted between June 10 and 14 and included 2,082 respondents.
A recession is defined as a significant economic decline that lasts more than a few months.
The biggest recession warning sign, which 88% of respondents pointed to, is high inflation.
Respondents also reported seeing signs of an economic downturn in housing and rent prices, with 61%; rising interest rates, 56%; the stock market, 55%; declines in consumer spending, 42%; and rising unemployment, 36%.
Some of those perceptions may lean on how people feel about the economy, rather than hard numbers. While the U.S. economy still has bright spots — including a strong overall job market and rising wages — higher prices have raised Americans’ feelings of financial insecurity, according to Matt Schulz, chief credit analyst at LendingTree, which owns MagnifyMoney.
“When something as fundamental to people’s every day lives as gas prices and grocery bills goes sky high, it really has a huge impact on the way people look at things,” Schulz said.
First
From CNBC:
Demand for big mortgages is shrinking as home prices moderate and expensive houses linger on the market
As consumers worry more about inflation, fewer are buying homes — and if they are, they’re buying less expensive homes. Mortgage demand fell last week compared with the previous week, and the average loan size shrank as well.
Mortgage applications to purchase a home fell 4% for the week and were 18% lower than the same week one year ago, according to the Mortgage Bankers Association’s seasonally adjusted index. The MBA also included an adjustment for the July Fourth holiday.
Buyers have been pulling back due, in part, to higher mortgage rates, but rates held steady last week. The average contract interest rate for 30-year fixed mortgages with conforming loan balances ($647,200 or less) remained at 5.74%, with points decreasing to 0.59 from 0.65 (including the origination fee) for loans with a 20% down payment.
“Purchase applications for both conventional and government loans continue to be weaker due to the combination of much higher mortgage rates and the worsening economic outlook,” said Joel Kan, an MBA economist. “After reaching a record $460,000 in March 2022, the average purchase loan size was $415,000 last week, pulled lower by the potential moderation of home-price growth and weaker purchase activity at the upper end of the market.”
Applications to refinance a home loan, which have been incredibly weak due to higher interest rates, rose 2% for the week but were 80% lower than the same week one year ago. At the same time last year, the average mortgage rate was 3.09%. There are very few remaining borrowers who don’t already have lower rates on their mortgages and who could benefit from a refinance.
Refis down 80% year over year? Going to be a bloodbath in the mortgage industry.
I would have thought anyone that everyone who could have refinanced would have at this point.
BOA analysts say severe recession needed to cool inflation.
Just catching up on the last few days…
“I would argue, that there was and always will be two classes of employees. Those that work hard and do well, but don’t want to sacrifice everything else in their life to obtain senior management level…”
Agree 3b, except in certain professions the ‘sacrifice everything’ commitment is a prerequisite to entry, IB being one of them…going into IB with work-life balance important to you is like becoming a vet when you hate animals…just doesn’t work. Also, in those high commitment professions like IB, SD, etc I’ve found most people don’t aspire to management, they’re there for the kill and the rush and actually mostly deride management structures conceptually and chafe under them…
“…purchase of the following 3 companies. Paypal, Skyworks Solutions and Medifast… But PayPal is simply impossibly cheap here…I am still a fan of WRK…”
TY Lib. MED is tough for me, I’ll have to look at more closely…been burned on ‘health’ companies before AND specialty food manufacturers so big mental hurdle there crossing the two in one company for me. Nice pop this morning pre-market if it holds though. Funny, PYPL is something I’ve made money on over the last 12-18 months over a series of trades but on the most recent pop dumped it and didn’t pick it back up…it was the one position among many (DIS, META, etc) where I always had a little voice in the back of my mind…I mentioned pairs trades the other day, PYPL was one because of that hesitancy (long PYPL/short AFRM)…It does seem to be respecting that LT support line around 71 recently, which goes back to ’18/19, but be careful…like the other companies I mention the bottom can fall out of this one, unlike the others if it does I feel this one won’t recover…
Haha, CPI in hot…on the minute of release SPX futures dump 70 points, nearly 2%, 3860 -> 3790….
Going to take today/the rest of the week for this to shake out, first five minutes don’t indicate where it will settle by any means, but as I mentioned the other day….
CPI is a big rear view mirror stat that will show slowing going forward, with earnings coming if high quality growth services dump and they end up down with this inflation read and earnings get your pencils sharp for companies you like over the next three weeks…I do have new cash to deploy and at least I will start leaning in hard if that situation presents….markets turn earlier than economies, and they usually inflect up while the economy is still printing bad numbers…
Prices rise 9.1%.
Told you all it was getting out of control. BOA is right. Recession is the necessary medicine. FED continues to do the backstroke when it should be doing the forward crawl. Whatever. I’m patient. Come to papa.
Left: I agree, IB not for those who seek a life balance. I went into trading/ sales, long days from 7:30 to 5:00, and closing dinners and business dinners, and people wining and dining us for business purposes. But, away from that nights and weekends were ours.
In my second career I have been offered the managerial route, but simply have no interest.
Lib: An ugly recession is not good, but that’s the price for Fed recklessness and their asset bubbles.
“Prices rise 9.1%. Told you all it was getting out of control. ”
Just be careful brother, this reading was taken at peak commodity prices…I’m staring at these prices on my screen now and a large number of these have come off significantly…CL (oil), RBOB (gas), foodstuffs, steel (look at X for goodness sake if you don’t want to pull up futes, trading at a 1.6x forward P/E lol), copper, etc.
If you are trading on this CPI print you are driving down the Parkway by watching your rear view mirror…let’s see PPI, still backward looking but at least further up the food chain….
I get it. I was referring to me screaming how far out if control it was three months ago when the FED was poking holes in the cellophane with a fork when it should have been removing the plastic wrap entirely. I also believe pent up demand (have you gone anywhere this Summer?) is keeping the spending (discretionary) numbers higher than they should be. This is why I expect the recession to show up across the board in the Fall. Perhaps, the FED overshooting and then doing more damage than they needed to, bringing the market further down. We’ll see. These are incredibly strange times.
Here’s an explanation of the economy JJ could understand:
After decades of central planners at the Fed fluffing the economy with interest rate suppression and wealth effect asset price boosting, and then the treasury recently coming in from below and teabagging the economy with those COVID stimulus checks, it’s no surprise that the Fed finally got a big wad of jizz on their faces. Probably entering the refractory period soon.
Talked to a guy in manufacturing, us-based, yesterday afternoon.
We were chatting business climate, recession, inflation – Peloton’s previous stupid decision to own manufacturing.
He was very clear they are taking every opportunity to increase prices and drive higher margins right now. His position was that they would be crazy not to take advantage of the current market conditions (excuses) to raise prices. Yes, yes, there was some underlying raw materials and labor cost pressures, but this was far beyond that.
He was more than happy to be more profitable with smaller revenue (his words were – I want more juice with less squeezing).
They are also scaling down their equipment to appeal to a market segment that would have previously seen them as out of reach, it’s an easier segment for them, far less customization, far more out of the box – meaning they can outsource more of the complex parts manufacturing (casting, metalwork).
Left/Lib; I think the fall in oil prices might be temporary. Germany already asking people to ration their gas use. Could be a very cold winter in Europe.
Every business has cover to raise prices right now. Every price is rising, so consumers will eat it. However, if that margin gets too fat, then competitors run in and compete it down.
Biden meeting MBS on Friday…… the whole oil trade rests on whether MBS tells Biden to fuck off…..
3b says:
July 13, 2022 at 9:29 am
Left/Lib; I think the fall in oil prices might be temporary. Germany already asking people to ration their gas use. Could be a very cold winter in Europe.
Yeah…. but look at Core…. that is some real bad shit… and food prices are screwed and will continue….
leftwing says:
July 13, 2022 at 8:42 am
Haha, CPI in hot…on the minute of release SPX futures dump 70 points, nearly 2%, 3860 -> 3790….
Going to take today/the rest of the week for this to shake out, first five minutes don’t indicate where it will settle by any means, but as I mentioned the other day….
CPI is a big rear view mirror stat that will show slowing going forward, with earnings coming if high quality growth services dump and they end up down with this inflation read and earnings get your pencils sharp for companies you like over the next three weeks…I do have new cash to deploy and at least I will start leaning in hard if that situation presents….markets turn earlier than economies, and they usually inflect up while the economy is still printing bad numbers…
Inflation surges 9.1% in June, most since November 1981
When is the next episode of the January 6th erect1on drama? I mean… come on… democracy is in the balance here!! I heard somebody threw a dinner plate and possibly grabbed a steering wheel!
But… but… abortion. You know, the thing.
This is criminal. Forced to abandon positions at just the right time. What a coincidence.
What does this tell me. They knew they were going to crash the economy back then.
https://www.cnbc.com/amp/2021/10/21/fed-to-ban-policymakers-from-owning-individual-stocks-restrict-trading-following-controversy.html
I have a package of fancy Bell and Evans organic chicken breast in the fridge with a 28 handle on the sticker, it’s not even that big.
Tell you though, it’s damned delicious stuff. The current breed of grocery-store tyrannosaurus chicken breast is absolutely awful stuff, tough, tasteless, and far more work having to butterfly every enormous chicken breast to even stand chance at cooking it without it being shoe leather. I can’t buy chicken breast from Costco or Shoprite anymore, it’s the same monster meat, those birds must be as big as turkeys, god knows how much steroid they need to pump into them (“I want to pump YOU UP”). I’d rather just not eat chicken anymore.
Might be cheaper to just start raising our own chickens, I’ve got nearly unlimited spent grain from the distillery and brewery next door.
The number of U.S. workplaces where employees have started trying to organize unions jumped this year to the highest level in half a dozen years, a rise that reflects warming public attitudes toward unions amid a strong labor market. In the first half of the year, workers at 1,411 U.S. workplaces filed petitions with the National Labor Relations Board, the first step in joining a union, according to a Wall Street Journal analysis of federal data. That represents a 69% increase from the same period in 2021 and the most of any year since 2015. The union push comes as public opinion about organized labor is the most positive in decades. A Gallup poll last year found that 68% of Americans approve of unions, the highest share since 1965, David Harrison and Heather Haddon report.
Grim,
Alternatively, do like real Chinese chefs, and use the non-breast meat for most of your cooking, and reserve the boring chicken breast for a dish like “strange flavor chicken”. Here’s a decent recipe.
https://mission-food.com/strange-flavor-bang-bang-chicken/
My daughter gives the spent grain from their brewery to the local animal farmers who come and pick it up. In exchange they get a nice selection of local meat from them.
No One. Exactly. Breasts and all white meat are dry and tend to cook too easily. I love boneless thighs. For barbecue, I always do quarters. They are by far the tastiest part of the chicken and dirt cheap too. Even with chicken, like all other meats, cooking with the bone in place yields the most flavor. Though it does turn you into a caveman at dinnertime.
Heck, last night, after being so disappointed at the current state of chicken, I made pork chop tikka masala. It was awesome. A bit chewier than chicken, but much more flavorful and again, dirt cheap. Had it with Dal and some basmati.
Of course this morning, I shit bright orange.
3b, agree on oil. Mentioned it previously here, the day a cease-fire occurs oil will tumble and that will be the buying opportunity…I well expect it to hang over 100, give me that dip in the 80s and I’ll pile in….
chi, don’t disagree, but again looking at the futures charts…not sure which exact day of the month the BLS actually takes the CPI survey but I’m looking at for example wheat (/ZW)….
Wheat had a June high of 1100, June low of 890, currently at 828, all of the above down from mid-May high of 1280 and an invasion high of 1290 in early March….
At the current spot price it’s down 33% from just its June high, eyeballing it…
Takes time for that to filter through economy (ie, grim’s chickens are still eating 1280 feedstock and priced accordingly)…and with a Fed, as I argued days back, that is genetically predisposed to not raising rates and fixated on transitory JPow is not sitting in his chair right now saying “OMG, I’ve got to hit 100bps in a week” he is instead of the mind that with the downward slope in inflation embedded above in futes that needs to work its way through the system he’ll be proven correct three months out…
Only 25bps in Sept…mark your calendar.
And, final point, the market reaction today on this number shows me there is a lot of hot money, ie, people are nervous about their positions. That is a setup for a ripper, and the direction of that ripper given the above is up.
Listen, to make it really simple, worst case scenarios I hear all over is 3200 for SPX, haven’t heard anyone credible with a two handle…if we’re at 3800 right now the worst case is less than 20% down…again, give me declines on ‘hot’ but historical inflation numbers and show me some discount on ER and guidance (especially if dollar or commodity related) which gets me to 3400 with high quality larger cap growth companies at or beneath their historical valuations and below the then current market multiple and I’m starting to pile in aggressively (aided by that hot money bailing)…I’m not foolish enough to imply I can catch the bottom nor would I even try but under those circumstances – which is basically where we all agree on this board the market is going – I’m guessing I’m somewhere in the 80-90 percentile range of catching that bottom…and for LT buy and holds if I can get in at that range, I’d be an idiot not to….
Again, I have a lot of dry powder so I may very well have very different goals than others (eg, those who are close to fully invested who would simply be re-allocating and would have to face a tax bill) but as I said a few days ago let’s see how these earnings play out and if we are teed up for some “baby with the bathwater” clearance sales on the back of inflation and guidance the next couple weeks…
Our distillers spent grains go out to a farmer in Sussex County who raises goats and chickens.
Our neighbor brewery is working with a hog farmer (crazy there is one in NJ).
We don’t do as much with backyard farmers anymore, we used to have a fairly regular group of crazy chicken ladies who would grab a few 5 gallon buckets worth every week. We would always get a carton of fresh eggs in exchange. We still get so much that we don’t ever buy eggs.
One of those came up with a crazy ingenious approach. She would freeze the spent grain in 3 gallon buckets, and drop a frozen block out for the chickens through the summer. The benefit is that it eliminated spoilage of the grain (it spoils fast), and actually prevented the chickens from gorging themselves on it. On the plus side, it was a nice cool treat.
We can easily generate 20 tons of high protein animal feed a year as a production byproduct. That’s sufficient for 65 hogs, probably a thousand chickens.
And, after this I’ll end market talk here, I gave Lib a cryptic message the other day when I was in a rush of “nominal vs real”.
Earnings (and therefore valuations) are priced in nominal dollars…the logical conclusion from the Fed scenario sketched out above is a slowdown in rate increases but a slightly higher than desired normalized inflation environment…
That is an ace-in-the-hole for the strategy above and potential lottery ticket…show me an FFR that tops out around 3 or so and some embedded inflation even above that number (ie, real rates aren’t even yet positive) and nominal dollar earnings can rip…it’s grim’s supplier above writ large….
No one prices shares off real (inflation adjusted) earnings….moderate rate, moderate inflation environment (JPow’s safe space) and these things rip.
Uvalde shooting surveillance footage is out there on the internet . . .
The 80 minute or so video that I saw was a camera pointed at the relevant school hallway outside the classroom that the shooter was massacring the kids in (so, no footage of actual deaths).
The video I saw is terrible for police. In it, the shooter enters the classroom at the 5 minute mark. He then shoots for three minutes.
At the 8 minute mark, about ten officers show up. Great police response to be on-site with so much force in 3 minutes! That’s quick.
The ten officers include some with either light body armor or maybe tactical vests AND at least one officer with a small rifle or semi-auto weapon. All other officers with pistols in hand, at least.
Shooter shoots at the officers and they scatter. Ok, fine. That’s understandable.
Officers re-group until about the 10 minute mark. Ok, fine. That’s understandable that they’d want to plan a bit before taking action.
At about 10-minute mark, one officer starts advancing back into a forward postion. And, in the meantime, it seems that the shooter has stopped shooting. Ok, fine.
Then, inexplicably, the officers all stand around doing nothing. Big fail. Public perception of police just declined. I wonder if either the right or the left introduces a bill that de-pensions an officer that fails to take on an active shooter or soemthing. Maybe this might be the motivation necessary for an end to police officer qualified immunity AND some states to start requring individual police officers to carry individual police-office-insurance (get civilian complaints and your premiums go up; get enough marks on your insurance record, and no insurer will cover you AND Whoops, insurance is required to maintain employment as a police officer).
https://www.youtube.com/watch?v=I3poHE3nOb8
Darling Ingredients are actually raising flies to use as proteins for animal feed. They are also the worlds largest recycler of cooking wastes (mainly oils) which they convert into cleaner burning diesel than petroleum based. It’s a profitable green company that is impossibly undervalued. Big partnership with Valero too.
Hasn’t the supreme court already established that the police do not have any duty to defend?
You can argue they didn’t follow policy, but you probably can’t argue they should have done anything differently. They have no duty to put themselves in harms way, despite what Police Office Public Relations and Marketing teams would like you to believe.
The cheese farm by me uses their whey water byproduct to feed their pigs. They have some of the tastiest pork I’ve ever had. Problem is you are paying high end steak price for it
Once again, Lakewood’s famous special education school is in the news. NJ Education Report has extensively covered the School for Children with Hidden Intelligence (SCHI), mainly because the city school district forks over immense amounts of money every year in tuition to a thinly-veiled yeshiva for ultra-Orthodox children with disabilities: during the school year 2020-2021, the total was $32,499,860.
Money is also driving current headlines about SCHI but in this case it’s whether Executive Director Rabbi Osher Eisemann who has been on a rollercoaster of court verdicts:
In 2017 the State said he stole $630,000 in tuition paid by Lakewood Public Schools to SCHI.
In 2018 the State said the actual amount stolen was $979,000, used by Eisemann to repay debts to SCHI, to settle credit card debt, for a private business venture, and to pay back taxes.
In 2019 Eisemann was acquitted of corruption of public resources but convicted of money laundering and misconduct by a corporate official. Superior Court Judge Benjamin Bucca sentenced him to 60 days in jail even though each charges carries prison terms of 5-10 years.
In 2020, via the Asbury Park Press, a panel of appellate judges issued a “scathing opinion” to Judge Bucca for being too lenient and ordered Eisemann’s resentencing by a different judge.
And now, miraculously, a former SCHI bookkeeper has testified that she made an “accounting error” and mistakenly listed a $200,000 payment to Eisemann. In fact, Eisemann’s lawyer argues, SCHI actually owes the Rabbi $300,000!
What’s fact and what’s fiction? We’ll wait with bated breath. Meanwhile, Thursday’s Lakewood Board of Education meeting agenda includes one student’s annual tuition to SCHI for $157,491.95 (not including transportation).
“Of course this morning, I shit bright orange.”
Thanks for sharing!
re: spent grains, I grew up near one of the (at the time) last free standing regional breweries which would crank out about half a million barrels a year…they used to dump massive piles of spent grains outside in their side parking lots, man they stank, and given the surrounding area was rural with a lot of commercial farmers these guys would show up with trucks and backload it in. Funny sight to me as a kid, downtown in a city with all these farmers piling in with filthy trucks and driving away with steaming piles of grains draining water all along the city’s streets….
I keep telling the hog guys to take my spent bourbon mash for their pigs.
What better way to describe the pork than as being “Bourbon Fed”?
Don’t tell me the bourbon fed pork wouldn’t get a crazy premium. What flag waving BBQ joint doesn’t want to say they are serving bourbon fed pigs?
This idea is a winner.
Heroes!!! Except when they actually are supposed to be.
Glorified secretary for tickets, car accidents, and domestic issues. That’s all they really are. Yet, they sell themselves as heroes. Frauds…
grim says:
July 13, 2022 at 11:12 am
Hasn’t the supreme court already established that the police do not have any duty to defend?
You can argue they didn’t follow policy, but you probably can’t argue they should have done anything differently. They have no duty to put themselves in harms way, despite what Police Office Public Relations and Marketing teams would like you to believe.
“To Protect and Serve” is a marketing message, it’s not a mission statement.
Fed should do a 100bp increase in between meetings that will send a message.
Left: I don’t see a ceasefire in Ukraine anytime soon.
Fed Funds futures for 100bp increase in July goes from 0.2 percent to 28 percent after CPI release.
While SCOTUS can rule, as a matter of common law, that an aggrieved crime victim does not have a civil negligence case against a police officer due to the officer having no duty to prevent a particular crime . . . in my opinion, the state legislatures have the power to impose such a duty by statute. Similarly, congress could adopt a duty with respect to federal law enforcement agents. I think it would be sensible for our legilsatures to mandate that every police officer does have an affirmative duty to engage an active shooter, and that an officer who fails to do so should face civil lawsuits (obviously, millions and millions in damages so that officer will be bankrupt forever unless he has assets away in trusts).
If I was in a state legislature and I was guided only by my sense of “right and wrong” rather than polticial pandering, I’d introduce a bill that DOES place such a duty on police officers. I’d also put severe limitations on qualified immunity’s protections for both individual police officers and police departments. Further, I’d mandate that officers must carry individual insurance. Probably also should create mandatory body cams and really permissive and easy OPRA rights for the public to get body cam footage.
Lol, I would be promptly voted out of office due to pushback from the police unions, though, probably.
“Defund the police” is the stupidest slogan in the history of politics. Reforming the police has the potential to be popular and to create utility for the public. Especially after recent high-profile police failures like Uvalde (from the perspective of the right – what’s up with all the cowardly “good guys with guns”) and George Floyd (from the perspective of the left).
Jill Biden doesn’t know how to pronounce “bodega.” Wow. Terrible.
Especially because the Jose Alba bodega thing has been in the news the last few days.
You could say this about medicine as well:
“going into IB with work-life balance important to you is like becoming a vet when you hate animals…just doesn’t work.”
Crushed,
No duty to protect, no duty to investigate, no duty to file an accurate police report-
Those 3 I can document. My guess is that there are hundreds of things that they don’t have any “duty” to do.
You pay them, and you hope they do the right things. And sometimes they do.
But not always.
“I don’t see a ceasefire in Ukraine anytime soon.”
Germans aren’t going to freeze come Oct-Nov for a bunch of Ukranians facing an outcome that was known before tanks started rolling…something, somewhere will spring Russian oil and natgas …the politicians can call it what they want to preserve face…
You know how they calculate those percentages on FFR at a fixed move at a specific date? I still see max in the 3.5s on the futures curve right now but it has been brought forward from April ’23 to Jan…
Never traded FFR, but tempted….Powell =/= Volckler
Left: Good point on the Germans and winter cold. Time will tell.
“You could say this about medicine as well…”
Funny I almost did but didn’t want to open a tangential debate off point. Surgeons in particular seem to fit that category…I’m there when I need to be, I do what I do incredibly well, I leave it all on the court, so give me the resources to do what I do well and otherwise get the fuck out of my way and let me just run (and I certainly don’t want to be part of that management infrastructure I see as an impediment).
Crushed: That’s because Jill and the rest of those elites have never been in a bodega.
I know I said I’d stop the market stuff but this is more a PSA than debate…
One of my favorite screening tools, especially if you are more visual than lines-of-data oriented…
https://finviz.com/map.ashx?t=sec_all
I thought Canada already caved to proving Russia with gas turbines to fix the current broken pipelines, likely due to European pressure.
This is the reason for the shutdown. Two turbines needed for redundancy. One of the turbines is in Canada for repair. How do you do maintenance on the other? You gotta shut it all down.
I saw a post of some foodie looking for a restaurant that served a “chopped cheese”. They wanted it so bad but they didn’t want to go into the ghetto bodega to get it.
LW
https://www.youtube.com/watch?v=y8hcfTFVJ9k
btw, that’s Dr. Jill Biden, thank you very much
America enjoys the war cause the wealthy here can just bleed the middle class in the name of “freedom” to send billions to Ukraine fighting it’s proxy war.
Russia weakened. Europe weakened. American middle and poor classes, weakened.
America always needs a nemesis, an archenemy, a boogey man. You can’t be the hero if you don’t have one.
It’s such an illness that when Russia suggests nuclear war America brags about winning it as if that is actually possible.
Didn’t anyone learn anything from Wargames?
They don’t sell Grey Poupon in a bodega. Why would “Doctor” Jill go there anyway?
My ex MIL was a “doctor” of family therapy.
Yeah that worked out well for all of her children….
Bloomberg article : So called housing shortage may not save the housing market. Inventories rising, people can’t do 6 percent mortgages.
Phonic: Don’t shrinks have their own shrinks?
I’m there when I need to be, I do what I do incredibly well, I leave it all on the court, so give me the resources to do what I do well and otherwise get the fuck out of my way and let me just run (and I certainly don’t want to be part of that management infrastructure I see as an impediment).
This is a universal characteristic of the best sales people I’ve ever worked with. It is also coincidentally why companies lose their best salespeople, because they refuse to get the fuck out of the way.
Europe is nowhere near replacing 150 billion cubic meters of Russian gas imports. Without it their entire economy dies and people will freeze this winter. The USA can only export about 10% of that via ship and we are sending most of our exported gas now.
You can bet the Europeans will continue to push Ukraine to settle with Russia for the loss of that land they now occupy as this war will drag on for perhaps another year.
Juice: Will the Ukrainians accept that? I don’t see it.
Chopped cheese at Salt, Pepper, Ketchup in Hawthorne
Phoenix, Marissa Tomei in that movie….would have gladly cleaned out my bank account for one night…..smoking….
You can bet the Europeans will continue to push Ukraine to settle with Russia for the loss of that land they now occupy as this war will drag on for perhaps another year.
A year might be optimistic, this is the kind of conflict that might go on for years in a tit-for-tat fashion. Ukraine won’t capitulate at this point. I have serious doubts we would even see a ceasefire as a potential interim outcome. Ukraine is not going to budge unless Russia pulls back, somewhere, in some material way. Putin’s hard line stance will all but guarantee the equal response.
Grim,
I have often been asked why I don’t work in sales. I always point to lack of autonomy and that I can’t stand lying for a living. I’ve always been pretty lucky in that my managers have always given me enough rope to hang myself.
Maybe the Germans will burn their country mates for heat again.
They’d certainly burn Poland again for it.
Up to 42 percent now for 100bp increase at July Fed meeting.
I read 70% 3B. Canada did 100 last Wednesday.
Not sure if any GTG is scheduled, but I have a rare event for me that is. Off Friday and Sat, no child.
Just throwing it out.
Lib: Could have increased again from what I saw. I say it more likely happens than not. Meanwhile, my Mother in Laws house is no closer to getting on the market. Can’t fix stupid!!
Lib: And Canadas housing market went cold. Prices expected to drop 15 to 20 percent from what my Canadian friends tell me.
Another house was just list in our neighborhood and another elderly couple. They all missed the boat by a couple of months.
I am hearing mixed bag on pricing. Though bidding wars have cooled down, prices are still the same as those who were constantly shut out in bidding wars are stepping in now ahead of further interest rate increases. Like I’ve been saying all along, the shit hits the fan late August early September, IMO. Housing turns like an aircraft carrier. Always has. Always will. No doubt prices will drop 20% or more. It it will take a year or so to happen.
Lib; Just read an Opinion piece by Kevin Muir in Bloomberg, gloomy to say the least. Says Fed will pay a huge price to contain inflation, but basically no other way. I just skimmed through it, so need to go back and read. In short, believes like you said that the effects of the Feds tightening has not been really felt yet, and Powell has not gotten any pushback, but that will change as rate increases continue.
The point you guys miss is that housing is not stalling from lack of demand. It is being artificially paused by the Fed creating a recessionary environment. You have to be an idiot to sell now unless you are forced to. The demand is still there, just wait to the face ripper once they drop rates. Get ready for a stampede of buyers who are drooling at the mouth to buy a home. There simply is not enough housing for everyone that wants it. 2024 mania stage coming to a housing market near you.
And remember…if prices do drop 20%: how long of a supply is there of sellers willing to drop that low? Not many. The supply will be eaten up quickly of anything that drops 20% in north jersey.
Supply and demand…no way around it.
The housing decline in the last cycle was a 4 year event, and there wasn’t really any point in that decline that represented any kind of sizable drop.
Slow grind, no winners.
If home prices decline now, why on earth would we expect it to be any faster than the 2008 bust? Especially given the current inflation and employment trends.
It’s going to play out in a way that screws everyone, like 6 years to decline 9%, and all of it at a higher annual inflation rate than previously. Followed by 4-5 years of single digit up and down moves.
We’ll all be bragging about the price savings in “real terms”, while eating $37 shoe leather chicken breasts.
Oh, and rents are going to go through the roof.
I could see that happening, grim. Def makes sense.
I’m still standing by my 2024 mania stage. Will see if it happens. Thought this since 2012, can’t back down from my call now.
“Up to 42 percent now for 100bp increase at July Fed meeting…I read 70% 3B. Canada did 100 last Wednesday.”
Smoking dope. I hear CNBC on Sirius that 100+75 is over 50%…NFW we are at 350bps FFR in Sept….Reading CBOE tear sheets on specs for FFR futures at red lights as I’m driving. JFC…
Not panic buying futes, but did some risk reversal trades on MS for tomorrow ahead of earnings to have some new exposure, somewhere, that I’m comfortable…
100 in July is super unlikely…projects weakness without getting anything done…effectively says we are behind the curve – again – but we’re only willing to give you an additional limp wristed 25bp…if they are going higher than 75bps in July just let both barrels go and stop the fucker in its tracks with a 150 FFS…100 is a horrible compromise, can’t see that happening.
Grim: Biggest rent increase since 1986.
Left: You make some valid points, but you are looking at from a component Fed rationale, which they have not been. Reckless policies on their part for years. They should have known better. So why you may view a 100 bp increase as a sign of weakness on their part, they may view it as “ok we are serious now and will do what we have to do”. We shall see.
Grim: Perhaps, but you are viewing it from 2008, this time around we had a 20 percent increase in a year! That as you know is unprofessional, and I could see that 20 percent that blown off quickly. Inventories are rising , so people will sell for a variety of reasons. 7 new listings in my town in the last few days, after months of little to nothing. Time will tell, but I would not rule anything out.
4:35 . . .
Pumpkin wrote the below quoted point – asking who would sell their North Jersey home if prices dropped 20%.
Same people as were selling in 2010:
-death (either granny has 8 heirs and they just want the cash for their portion or the breadwinner died without enough life insurance)
-divorce
-time to retire to Florida or an active adult condo because maintaining a SFH is too much work
-job loss (so, can’t make the payments even if the mortgage monthly price is good)
-underwater people that have the above gets foreclosed, and the REO’s eventually get sold
-new construction finally gets finished in a down market after being greenlit and financed in a good market
“And remember…if prices do drop 20%: how long of a supply is there of sellers willing to drop that low? Not many. The supply will be eaten up quickly of anything that drops 20% in north jersey.”
The Fed will increase at end of July, 75 a given, possibly 100. Come August, Biden does his student loan thing. On one hand a lot of borrowers will get a big chunk or all of their debt paid off, and more money to spend. On the other hand others will now have to start paying back loans again. I am guessing they extend the payment pause through end of year.
Quality of workers declining…worse and worse they become. Entitled workers these days…
“Delta is at 95% of 2019 staffing levels but only 85% of 2019 capacity — so there really has been a productivity issue as they’ve ramped back up: @TheStalwart @RenMacLLC @ModeledBehavior”
https://twitter.com/conorsen/status/1547308439885447168?s=21&t=82rHl0jUj8iEeMWfwsljBw
Crushed, how many of those instances exist to support a market? Not enough. And chances are most of that supply will be pos housing that wasn’t maintained. Aka not desirable. People like 30 year realtor will buy them for clients to fix and flip.
“So why you may view a 100 bp increase as a sign of weakness on their part, they may view it as “ok we are serious now and will do what we have to do”. We shall see.”
Agree. Listen, I rarely pound the table hard as you guys know usually I’m a pro/con kind of guy supporting an underlying view…last time I was this vocal was likely on AARK and individual CW shit-tech companies that a blind man could see were going south…If I’m wrong here I’ll gladly eat crow (and sadly take a not insignificant p/l hit) but with a Fed genetically predisposed to not tightening hard and the commodities spectrum off anywhere from 20-30% just since the reading this morning, not to mention the continuing loss of credibility of course correction yet again, I just can’t see it happening. July 29, stay tuned….
Left: No need to eat crow, it could go either way. I would say that perhaps the Fed may realize their genetic disposition not to tighten or to decrease was/ is a massive mistake.
https://www.housingwire.com/articles/struggling-loandepot-to-cut-nearly-5000-jobs-in-2022/
“Entitled workers these days”
You mean like the ones that don’t work weekends? That have every holiday and summers off? That were afraid of Covid?
Yeah I know some of them.
3b, yeah, there are lots of opportunities for it to go either way…contra to my position (what I think about when I wake up early am to take my obligatory old man piss) includes dollar strength and its ability to fuck up the commodity complex and inflation ROW, European deep recession they are hurting and could be contagious making our dip harder, and QT which I continue to believe can be more relevant than FFR and doesn’t start until Sept and which no one is paying any attention to whatsoever (potential for real blind side surprise).
Chinese proverb, right, may you live in interesting times….
Phoenix, the data doesn’t lie. Same amount of workers, but less performance. I wonder why.
“My favorite trading situation is when there’s lots of bearish sentiment but stocks are breaking out of bases and few believe in them. I get worried when there’s tons of bullish sentiment and amateurs are making easy money for an extended period, like in mid 2021.”
“Inflation numbers look to be going down from here, this seems to be the peak. Gas prices continue to decline as well as other costs. July will start to show the effect of rate hikes on the economy. The economy is clearly slowing and the Fed needs to be very careful here…”
Absolutely.
And lithium batteries are the new oil.
https://twitter.com/elonmusk/status/1547271599555940352?s=21&t=82rHl0jUj8iEeMWfwsljBw
“Some of this CPI is just bizarre. Like used autos going up again? The challenge of over a year of upside surprises is patience wanes, but you have to look through a lot of this. Relief is coming in Q3”
Supplier raised grain prices today, and I’m told bulk raw sugar is now a 3 week lead time.
Truth to this…
“Almost every other measure. OER is such nonsense. 40% of CPI is shelter and 65% of people own their homes ie they don’t experience the largest component of CPI.”
Businesses love to take advantage of an environment where they can blame inflation for raising prices. It’s comical. Greed is a hell of a drug.
For years Apple has been surprising everyone, especially its critics when it comes to the market performance of Apple devices. Be it sales, revenue, or profit garnered by these iPhones or iPad, Apple has been raising bars with each passing year and giving its closest competitors a run for their money.
However, the latest statement from Tim Cook, CEO – Apple Inc. (NASDAQ:AAPL), has left many surprised.
In an interview with Bustle, a popular journal focused on Health and Wellness, Tim Cook expressed his concern about the endless, mindless scrolling that most mobile device users are engaged with nowadays. The increasing use of technology by social media companies that inspires such activity to a great degree remained at the target for Tim Cook.
The interview included a lot of discussion about Apple’s backing of Shine – the app created to tackle social stigmas associated with mental health issues.
It is “another impressive illustration of how technology can be used to enhance the lives of people,” according to Cook.
In the conversation, Cook declared that “mental well-being is an ongoing problem” in addition to stating that he tries to manage the pressures of daily life as Apple’s CEO through meditation and “being out in the nature and feeling so small on the planet.“
Speaking about the internet and technology dependency, Cook repeated a claim that he made before when he declared that “technology is meant to serve humanity and not vice versa”, and he is concerned about people who use technology too much. Cook emphasized the statement that Apple’s mission is to help those who need help.
“What flag waving BBQ joint doesn’t want to say they are serving bourbon fed pigs?”
I told you years ago that Bacon Flavored Bourbon was the way to go.
https://www.local10.com/news/local/2021/08/18/ex-school-cop-scot-peterson-emotional-after-hearing-on-parkland-shooting/
grim says:
July 13, 2022 at 11:12 am
Hasn’t the supreme court already established that the police do not have any duty to defend?
You can argue they didn’t follow policy, but you probably can’t argue they should have done anything differently. They have no duty to put themselves in harms way, despite what Police Office Public Relations and Marketing teams would like you to believe.
WSJ:
Fed Chairman Jerome Powell last month said the central bank was likely to consider a rate increase of either a half percentage point or 0.75 point at its July 26-27 meeting after it raised rates in June by 0.75 point. On Wednesday, Ms. Mester suggested recent economic data would lead officials to choose between raising rates by 0.75 point or a full point.
Investors in interest-rate futures markets and some analysts judged that the central bank would approve a one-percentage-point rate increase at its meeting in two weeks. The probability of a one-point increase rose to around 79% on Wednesday, up from around 12% before the report, according to CME Group.
“Lemme ask one of those tone deaf economist questions that annoy almost everyone. Today, many families learned that the amount they owe on their mortgage has declined—in real terms—by 9.1% over the past year. Why do we hear so little about this? Why don’t we see folks celebrating?”
“Oe of the most fascinating things about the psychology/politics of inflation is that the redistribution is first order–it has huge winners and huge losers. And NO ONE thinks they’re winning.
Another example: six months ago profits were rising but CEOs still hated inflation.”
Regarding lead times.
We are observing leadtimes in the electrical construction field of 80+ weeks For equipment that previously would’ve been under 30 weeks.
This is having massive impact on clients ability to expand and deliver product to market. Or even just move or downsize to a different new office. I cannot even begin to predict what that’s gonna do to the economy, but I imagine coupled with everything else going on it probably won’t be good.
So true.
“Buy and hold is the best strategy for retail investors in my honest opinion
Whether it’s real estate, stocks, ETFs, small businesses
Just buy and hold
Don’t get into trading”
Make that 4 weeks:
” I’m told bulk raw sugar is now a 3 week lead time.”
https://www.nj.com/gloucester-county/2022/07/police-id-driver-killed-in-crash-with-truck-hauling-42k-pounds-of-sugar.html
Lakewood like cases will be coming to Bergen too. There is a clear movement from Monsey area to North Bergen. They bought area for schools in Chestnut Ridge NY and Woodcliff Lake NJ that I know of. More and more members in Lifetime. Migration is there clearly.
I had increased rents for my tenants ~ 7%. Shoot with 9.1% CPI reading it was a treat. Next year will try to overshoot.
In other WAR news it seems the new longer range weapons we shipped are highly effective in Ukraine, can shoot beyond Russian artillery range and are mobile and can be loaded by small crews very quickly. They have taken out many Russian ammo supply dumps in the last week alone, the Russians need this ammo to keep up their scorched earth campaign of firing over 7,000 artillery shells and rockets every single day. NASA satellite imagery shows the Russian shelling has decreased significantly in the last week.
We have taught the Ukrainians well in the last few weeks on how to effectively use our longer range howitzers and HIMARS GPS guided rockets which are accurate within a few meters when fired 50 miles away. Much less ammo needed for sure and better results with minimal civilian casualties. Interesting enough the Russians have learned nothing from the west since WWII, they do not use fork lifts and pallets to handle the ammo, it’s all hand loaded from trains to warehouses to trucks, so we are targeting their supply chain now.
We did not yet ship our GPS guided $68,000 dollar for a single round 155 mm shells to them. These M982 Excalibur weapons are truly bad ass, and are fired from Howitzers. I did read we are sending another 1,000 rounds of artillery shells. I suspect these new shells we are shipping are those Excalibur weapons. The Ukraine Army is using about 3,000 shells a day now. With these newer shells they don’t need to fire a wide volley as they are super accurate and if they are getting our targeting coordinates they will make fast work of Russian forces and equipment.
You can expect the Russians to escalate, perhaps even start flying sorties again, their airforce has not been in the war for some time now as they don’t want to get shot down. News says thee Russians are in Panic mode. How does a Putin respond? I can see it getting messier before any kind of cease fire is negotiated.
https://www.newsweek.com/russia-panic-mode-ukraine-war-himars-strikes-haidai-luhansk-1724238
I read yesterday that Russia is taking shipment of drones from Iran…means they are losing a lot of their own.
Morning humor.
https://youtu.be/KMcny_pixDw?t=3