He let the economy run too hot. He was begging the fed for negative interest rates in 2018. He okayed the lockdowns and money printing in 2020. Biden sucks too but he isnt to blame.
Trump is to blame for inflation
- Thread starter DaBadass
- Start date
Who appropriates money? Congress or the president ? Also, to the round table this goes….
OP has been working on this concept since 2020 and he finally pieced it all together.
No no no--Trump is to blame because he is still the president. Right @TigerGrowls??
I tell who doesn’t know. Joe Biden. He doesn’t know a thing.
Both Trump and Biden are responsible. The first outlay of free money was the right move as we weren't sure the world was going to ever return to normal and the velocity of the dollar wasn't flowing through the economy creating further long term challenges if not dealt with. The second outlay came when we were still south of normal but we were trending in the right direction so purely for votes/popularity with middle of the road voters running into the 2020 election and the third (under Biden) was purely for approval rating.
We were 15% past normal retail spending when that third allotment of free money hit the market so we went from low grade fever to on fire. The next mistake was pretending inflation wasn't a massive issue for well over a year and the third is a very late but ultra aggressive approach of a ton of rate hikes in a single year and ending QE at the same time. The housing, job and stock markets are going to break.
The fed doesn't appear to have considered how much corporate debt has been taken from large corps since debt became so cheap and the constant roll of low interest rate bonds puts lots of firms in higher risk categories. As rates go up, many firms are going to struggle to find enough free cash flow to service their debt positions so a whole new bubble is approaching. (There are lots of bad debt to ebitda positions out there from companies you aren't even thinking about.) They will be forced to cut costs to find cash flow as well as maintain healthy margins which means labor/unemployment is going to be the first issue, the shutdown of key products/business lines the second and bankruptcy the third.
Long story short, we haven't seen the worst yet.......in my opinion anyway.
Stanley Druckenmiller gives a pretty good assessment on why we are where we are.
If you guys figure out that there isn't a damn bit if difference b/t Ds and Rs when it comes to retaining power let me know. Printing money is their lifeblood. $30trillion in debt and $129trillion in unfunded liabilities. Thats over 2million dollars per taxpayer in the us. NEVER will it or can it be paid back. China realized this in 2000 and then 2008 it was reinforced that we would further financialize our system rather than make hard decisions like letting banks fail. And so they've been retiring treasuries ever since. As that money comes back home-more inflation. More countries will begin retiring us treasuries. Because they cant take the chance that the US might freeze their assets. As that money "comes home" that causes even more inflation.
Whoever is running the show is either very evil or very stupid.
Whoever is running the show is either very evil or very stupid.
more to my point, you need 50% more income this year than you did last year to buy a house at present prices and interest rates. The reality is the jump from 3% to 4% disqualified 40% of loan applications per my buddy that runs Mortgage Backed Securities at a top 4 global bank. Worst is yet to come for housing.
Buyers need nearly 50% more income to purchase homes in top metro areas, report finds
Many are flocking to cities in the Sun Belt, with the most popular destinations being Tampa, Phoenix and Las Vegas.
justthenews.com
Both sides are at fault to one degree or another, along with external reasons that neither side can realistically control. The political blame game will go on like usual, and your average person will suffer like usual.
How can a stuffed dummy designed to look human with a speaker with outside left wing socialists animating him and speaking for him be blamed
Give Biden a break he is totally a ZOMBIE President
The people behind the scenes are pulling the strings on the puppet
Look for the puppet master not the puppet
You need 50% more currency. The value of the average us house stays roughly stable in gold(money) for 20+ years. About 235oz.more to my point, you need 50% more income this year than you did last year to buy a house at present prices and interest rates. The reality is the jump from 3% to 4% disqualified 40% of loan applications per my buddy that runs Mortgage Backed Securities at a top 4 global bank. Worst is yet to come for housing.
Buyers need nearly 50% more income to purchase homes in top metro areas, report finds
Many are flocking to cities in the Sun Belt, with the most popular destinations being Tampa, Phoenix and Las Vegas.
Housing market was fine in 2019 when rates were above 4%. We still have a major supply and demand imbalance. I would not not count on a housing market crash if that’s what you were suggestingmore to my point, you need 50% more income this year than you did last year to buy a house at present prices and interest rates. The reality is the jump from 3% to 4% disqualified 40% of loan applications per my buddy that runs Mortgage Backed Securities at a top 4 global bank. Worst is yet to come for housing.
Buyers need nearly 50% more income to purchase homes in top metro areas, report finds
Many are flocking to cities in the Sun Belt, with the most popular destinations being Tampa, Phoenix and Las Vegas.
Might not be a crash but certainly going to see a few dents.
House prices were much much lower in 2019. So 4% on a house that was several hundred thousand dollars cheaper was easier for a lending agent to accept some risk outliers. Let's use Charleston as an example. I was considering buying a vacation/future retirement home in Charleston in late 2019. A 4-5 BR, 3800 sq ft house in Mt. Pleasant or Daniels Island was right around the $800k mark......those houses from late 2020 to now are hovering closer to $2m if not above in some cases.
Income levels haven't kept up with the inflation, especially not on surging home prices so either the price of the house has to drop (which could cause some problems depending on when the sellers bought) or interest rates will need to come back down.
Yea I agree certain pockets of the market will experience more of a dip than others. I think it’ll take at least a year or more though. Places like you just described are still in such high demand and there’s still plenty of stupid money out there chasing it. Demand SHOULD decrease as rates continue to rise, peoples 401k and brokerage account balances continue to fall/remain stagnant, bonuses decrease, inflation persists, etc. But you can’t underestimate American consumerism.
My only thing is that supply is still almost nothing and it is nothing in some places. And the people who own are mostly well underwritten or were cash buyers that can always refi if shit hits the fan. Is supply going to suddenly increase in the next 6, 12, 24 months? That’s the million dollar question and what’s going to determine if the housing market slows down or declines. When, why, and how are we going to see a drastic supply increase? Do you have any theories on that?
Oh, it will crash if that is the fed's target. They need something to "break". They need a sector to sh!t itself so they can rescue it with QE 14.0. They have to inflate away our debt. Printing gobs of money could do that. It creates inflation which hurts the poor the most.
that's true, you said he would regain the presidency after the vote fraud was revealed.
American corporations are responsible also. They are maximizing value to their shareholders through price gauging. Price margins continue to rise. Especially for the monopolies that control so much oil, farming, and consumer goods.
Oil companies have more than enough federal leases to start drilling. And I read that in the US we have 700+ active wells, where there are only 800+ in all other countries combined. Something doesn't smell right.
We will soon start seeing some dems in congress proposing legislation to combat this. I don't think it will get bipartisan support. Pubs are not big on regulation, and I also think they don't want inflation to end before November. As long as @Cocks are Number 1 is running around putting Biden stickers on gas pumps, the pubs know their messaging is working.
I don’t do that type thing, but I’m laughing… because someone actually gave me a stack of those stickers. 😂
By legislation do you mean Elizabeth Warren's proposed caps on pricing and profit? Yeah, that worked so well in the 70's.
They aren't maximizing shareholder value, they are trying to maintain shareholder value so that there isn't a run on the stock so you were almost correct there, you just left out the part that mentions they don't have any choice as bad fundamentals mean downward pressure on stock price (in a non-meme, retail stimmy, covid market anyway). Their cost of goods sold has gone through the roof and when your COGS go up, you have to increase price to maintain margin which has a ton of impact on EBITDA, PE and cash flow which in turn means no R&D/innovation, no investments, no hiring and certainly no new drilling.
No energy companies are going to take a punt on new oil fields/wells given the message coming from the admin is it's all dead in a few years. The ROI horizon wouldn't show a return if you consider the current rhetoric from mandated
As for food, look no further than the cost of fertilizer and transport to figure out why food is up.
I said profit margins are growing, not just profits. For many of these companies, COGS have already subsided, but they continue to charge high prices.
Groundwork Collaborative is a group that listens to all of the big companies quarterly earnings meetings. Here is some of what they heard:
- The CEO of 3M, maker of masks and medical equipment, bragged on the company’s Q1 earnings call that the “team did an amazing job” driving higher prices which have “more than offset the amount of inflation.”
- 3M is “already working on higher prices” to expand its profit margins even further.
- Kimberly-Clark is well-aware that higher prices will “create stress on the consumer,” but that hasn’t stopped the company from implementing “multiple rounds of pricing” on essential products families cannot do without, like diapers.
- The company exceeded investor expectations in Q1, sending its stock surging 9% on the back of their earnings release and higher financial expectations for 2022.
- Credit card giants Mastercard and Visa have found inflation to be “net-net, a positive” as prices rise, consumers continue to spend and family budgets get stretched to a breaking point:
- Analysts view Visa as a major pandemic beneficiary as it continues to beat earnings expectations and its stock rises with higher fees and interest rates.
- Visa and Mastercard, which control more than 70% of the credit card payment market, have doubled their revenues from merchant fees and processing fees over the last decade.
- Nestle, the world’s largest food company, credited strong Q1 sales numbers to “increased pricing” – which they will continue to do “with the best interest of shareholders in mind.”
- Nestle’s CEO blamed the war in Ukraine, inflation, and rising labor costs on higher prices – but told investors that price hikes would maintain the company’s fat profit margins and its billions in stock buybacks.
- Paint company PPG Industries stated that “we’re not going to be giving this pricing back” as the cost of raw materials decreases because the higher prices are “being accepted by our customers.”
- Industrial real estate giant Prologis stressed the benefits of the war in Ukraine – which has increased demand for industrial rental spaces: “So there’s a lot of emotional angst in Europe. It’s all understandable, but the business is pretty good.”
- Even before Russia’s invasion of Ukraine, Prologis more than doubled its profits from 2020 to 2021 as real estate boomed and inventory demand went up.
this isn't entirely accurate, and it's getting tiring having to explain this every few weeks on this board because no one seems to understand it, or would rather ignore it to try and falsely score political points.
1. it's more profitable for O&G companies to hold leases and not actually drill on them
2. we're producing 11.3m bpd currently, which is about 1000 less than what we were producing pre-covid. furthermore, production started declining well before any price declines or covid shutdowns. however, production numbers are growing each month and we should be back over 12k bpd before eoy.
3. PV9 loans have declined DRAMATICALLY because banks are skittish on loaning to O&G companies and private equity has practically vanished. unless you're a public company that can issue stock to raise money there isn't much capital to be found currently to fund a drilling program.
you want to blame someone for the lack of drilling being done in the US? blame the banks and private lenders who threw money into the industry despite seeing no ROI, and now investors are realizing they need to focus on cash growth instead of production growth. it's what happens when you throw a shitload of cheap capital at an industry that spends it recklessly for a decade until capital providers realize they aren't actually making any money and the industry behavior has changed.
Some truth to the above but at $100 a barrel you think it’s more profitable not to drill and just hold the lease? At $35 or less, maybe but not at $100 and holding firm. Unless the cost of transport is too expensive.
Private lenders (the banks) disappeared and are skittish because of ESG and relative scoring/indices. Some can’t lend to O&G.
lots of O&G focused PE’s lost millions when it was at negative pb pricing, most won’t climb back in as the horizon for ROI isn’t long enough to get through risk modeling as the govt policies reflect a focus on renewable energy or bust. (Was at Blackstone today actually, they are focusing on where the government is looking to spend large sums)
Was at Blackstone today actually, they are focusing on where the government is looking to spend large sums
I thought the republicans were guaranteed a midterm sweep of congress and senate? You are saying they plan to promote renewable energy?
Money already flowing into renewables/green. Even if the repubs pull back, green will maintain some relevance regardless if they win out in midterms.
Nothing is a guarantee but hard to imagine it not flipping red at this point.
I know one thing for certain. If the dems maintain the house and the senate, 80% of this board will be on here claiming "stolen elections" and "massive election fraud" that will never be proven in a court of law (or anywhere else). Sad!
it's easier for O&G companies to raise money when they sit on land they own with oil reserves/open leases/etc vs when they're actually drilling for oil. the main reason for that is how expensive it is in the US to drill and operate wells vs elsewhere in the world (our labor costs are dramatically higher than anywhere else.)
the O&G PEs and management teams that made money were the ones that mainly focused on flipping land - but the majority of the capital behind it didn't make anything. i deal with this everyday and i can tell you that the main reason why banks are hesitant to loan out to O&G is because they've spent 15 years taking an absolute pounding and now require actual cash growth and positive ROI vs the original stance of "we'll just keep growing production and eventually we'll see positive cash growth."
IMHO, the housing market NEEDS to bust.
I can't speak to the million dollar homes, but I've a friend who bought a small home 6 or 7 years ago for just over $80K. It's absolutely average in every way. About 1100 square feet, 3 bedrooms, 1.5 baths. Fairly decent neighborhood and a pretty good backyard. She then got married and soon after they upsized, but kept that house as rental property. They just sold it last month for $245K on the first day it was listed (10K over the asking price). While I'm happy for them, there's NO WAY that house is worth even close to that amount. It's a $100K house MAXIMUM.
But that's how capitalism works. Supply and demand. There are shortages and surpluses and those things drive the market. Right now, there's a shortage of housing and the market is WAY over valued. That's going to correct itself at some point.
I can't speak to the million dollar homes, but I've a friend who bought a small home 6 or 7 years ago for just over $80K. It's absolutely average in every way. About 1100 square feet, 3 bedrooms, 1.5 baths. Fairly decent neighborhood and a pretty good backyard. She then got married and soon after they upsized, but kept that house as rental property. They just sold it last month for $245K on the first day it was listed (10K over the asking price). While I'm happy for them, there's NO WAY that house is worth even close to that amount. It's a $100K house MAXIMUM.
But that's how capitalism works. Supply and demand. There are shortages and surpluses and those things drive the market. Right now, there's a shortage of housing and the market is WAY over valued. That's going to correct itself at some point.
