patrick.net

This is the second time I received from Ace Hardware a coupon ($5 off for $25 or more purchase). I also noticed Amazon has a lot of deals going like an additional 5% plus free shipping.

Most of the "luxury" apartments (vinyl planking, quartz counter tops, free internet service, pool, gym, etc.) in Panama City Beach are offering free month of rent for 13 month lease.

Gas is about $2.90 a gallon when it was nearly $4.90 a gallon last year.

I also noticed food prices at Walmart on 23rd street in Panama City have remained flat for at least 4 months like $2.60 for 12 eggs, $1.20 for a pound of chicken legs, $2 for box of Great Value corn flakes, $4.25 for gallon of milk, $1.10 for loaf of Great Value wheat bread, etc. Its about the same price for food at Piggly Wiggly in Panama City.

Also I notice Tucktec is keeping its kayak prices steady. I bought my yellow one for around $320 back in 2021 and I see the new ones are at $350 now.

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Money supply was $4,000 billion at start of COVID pandemic. It is $19,300 billion now.

The Fed selling its assets like Treasuries as part of quantitative tightening is helping some to reduce money supply.

Money supply and interest rates have an inverse relationship. A larger money supply lowers market interest rates, making it less expensive for consumers to borrow. Conversely, smaller money supplies tend to raise market interest rates, making it pricier for consumers to take out a loan.
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I noticed prices dropping at Amazon. I just bought a saltwater and freshwater fly rod set for $70 on Amazon. It includes 8 flies and a fly tackle box as well as a carrying case for the rod set. It was selling for $90 a few months ago.

Then I read this article below about California's Inland Empire expecting major job cuts to Amazon, Walmart, etc. warehouses there.

https://www.msn.com/en-us/money/markets/the-us-warehouse-capital-boomed-during-the-pandemic-now-it-s-facing-a-slowdown/ar-AA19s7HZ

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ad says

I noticed prices dropping at Amazon.

I noticed that prices for bike accessories and computer RAM have fallen also. Wonder if the prices will fall for autos soon.

,,,

Job market is cooling some, which will reduce risk of inflation. My immediate inflation concern is about the Saudis cutting oil production now.

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https://www.usatoday.com/story/money/2023/04/04/job-openings-jolts-data-openings-fell/11597277002/

"The U.S. labor market is definitively cooling off," says Nick Bunker, head of economic research at the hiring lab for Indeed, a top online job board.

Since there were 5.9 million unemployed Americans in February, the 9.9 million vacancies amounted to 1.7 available jobs for each unemployed person, down from a near-record 1.9 openings in January.

Openings declined by a whopping 278,000 in professional and business services; 210,000 in trade, transportation and utilities; 150,000 in health care; and 87,000 in leisure and hospitality.

https://rudy.substack.com/p/flashback-hasnt-janet-yellen-done

I've been bashing the "there's no inflation, inflation is too low, we need more inflation, inflation is transitory, inflation is good for you, it's Putin's inflation, we need to raise the inflation target" animals for 10 years online. Anytime there's a discussion of inflation, the only ones calling for more are inbred economists, people who own lots of [levered] assets, people who make a living off of either of these groups, & kids still living at home. The other 90% will chew your ear off about the high cost of living.

Patrick says

people who own lots of [levered] asset

Yes, if you own real estate then you will see appreciation in value. Rental property owners benefit.

I know someone who bought a townhome (3 bedrm, 2.5 bath, 2 car garage, 2 miles to beach) in my HOA for $115,000 in 2011. It sold for $275,000 in 2006. Only put in about $7,000 into renovation just after buying it.

He rents it now for $2100 a month (and could probably get away with $2300 but his tenant has been there since 2011).

He rented it for $1500 in 2016.

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Again, more bad news as this may put help to reduce inflation. We'll see how the job numbers are in tomorrow's Bureau of Labor Statistics jobs report.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

https://www.zerohedge.com/economics/small-businesses-file-bankruptcy-record-pace-surpassing-covid-crash

The note from UBS Evidence Lab shows private bankruptcy filings in 2023 have exceeded the highest point recorded during the early stages of the COVID pandemic by a considerable amount. The four-week moving average for private filings in late February was 73 percent higher than in June 2020.

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https://finance.yahoo.com/news/billionaire-investor-barry-sternlicht-says-131632072.html

Billionaire investor Barry Sternlicht says inflation is going to ‘drop hard’—just look at rents

Personally, I will believe it when I see it.

cisTits says

How would this help reduce inflation?

More private (or personal) bankruptcies mean people will reduce consumption. It may mean a 30 year old former technology startup owner moving back to live with their parents for a couple of years to recover from this.

This puts less demand on housing since they leave their apartment and move into their parent's home.

They also may refrain from their indulgent consumer lifestyle for a couple of years after having filed bankruptcy. Hence, this results in less demand for the latest Apple product and other consumer goods sold on Apple store or Amazon.

Perhaps they default on their car loan and their repossessed 2 year old car gets put on the used car market. That is an additional car on the market, hence increasing supply of used vehicles.

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Cal - Maine Foods is a major egg producer. Look at its dividend of nearly 9%.
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https://www.msn.com/en-us/money/markets/u-s-money-supply-is-doing-something-it-hasn-t-done-in-90-years-and-it-may-signal-a-big-move-for-stocks/ar-AA1axP9c

M2 money supply which includes savings accounts and certificates of deposit has taken a major drop recently.

This could help to decrease demand enough to slow down the rate of inflation.

My cousin works for Dotty's in Las Vegas and she has noticed a major decrease in tips over about the last 6 months. Also she works part time and has noticed that the full time workers are calling in sick less and taking less unpaid time off because they need as many work days as possible.

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Interesting as the big techs tighten their budget belt and do go on hiring spree in order to prevent tech workers from working at their competiton....

This should reduce the rate of inflation as there is less money for them to buy shit on Amazon and buy second homes in Sedona, Arizona, Breckinridge, Colorado, Boise, etc.... anybody saw the recent M2 money supply graph lately ?

https://www.wsj.com/articles/tech-workers-arent-as-rich-as-they-used-to-be-d2292d64

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ad says

anybody saw the recent M2 money supply graph lately ?

Patrick says

And take back more than they gave you.

Trucking industry says we are in a trucking recession. Lesser trucks on the road means the price of diesel (and also gas) should go down.

https://www.businessinsider.com/frieght-recession-trucking-companies-struggle-to-stay-afloat-2023-5

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Also the Baltic Dry Bulk Index is a good indicator for forecast a recession seems to have stalled after bottoming recently to around 550.
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https://rudy.substack.com/p/noted

Patrick says

https://rudy.substack.com/p/noted

That is why people have to downgrade in other areas to afford housing such as eat less quality food, and not go on vacation.

Or they have to lower their housing standards like share their home with a roommate.

All of this is just quality of life or standard of living getting progressively reduced as annual wage growth is +1% less than CPI :-(

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https://www.calculatedriskblog.com/2023/05/update-framing-lumber-prices-down-57.html

Framing Lumber Prices Down 57% YoY, Below Pre-Pandemic Levels

https://www.homedepot.com/p/2-in-x-4-in-x-8-ft-Prime-Whitewood-Stud-058449/312528776
Shows $3.35 in my area.

CPI (or 12 month inflation)is 4.9% for April 2023. CPI peaked around 9.1% back in June 2022.

I suspect the CPI for June 2023 will be much lower than 4.9% given how high prices were in June 2022.

What is promising is the Fed Funds rate is at 5.25% and is finally higher than CPI. This is the first time this has happened since 2007.

Recall CPI averaged 1.5% for Obama's 8 years in office, yet the Fed Funds rate was kept for about 7.5 years at 0.25%.

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zzyzzx says

Framing Lumber Prices Down 57% YoY, Below Pre-Pandemic Levels

Lumber is at 2005 price levels. This will help to drive down housing costs.

I wonder also if this price drop in lumber is in part due to a 20% drop in housing construction.

https://fred.stlouisfed.org/series/HOUST

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ad says

Lumber is at 2005 price levels. This will help to drive down housing costs.

Lower lumber costs will not lower house costs as the cost of labor more than makes up for it. Talk to someone who recently contracted a home improvement.

HeadSet says

Lower lumber costs will not lower house costs as the cost of labor more than makes up for it. Talk to someone who recently contracted a home improvement.

Perhaps labor inflation has peaked and will at worse remain constant.

With a major drop in material for construction, then that should help reduce housing construction costs.

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Have you all noticed food prices at least stabilizing ? CNN reports egg prices are declining.

The biggest egg producer, Cal Maine Foods, stock price is down about 30%.

https://www.cnn.com/2023/05/15/business/egg-prices/index.html

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This Alabama lumber mill (Thorsby Wood Manufacturer) had planned to cut 200 jobs. But it decided not to as 40 workers left due to attrition and the economy is doing well enough not to lay off workers.

https://www.bizjournals.com/birmingham/news/2023/05/15/thorsby-wood-manufacturer-lay-off-construction.html

But check out how much lumber prices have crashed over the last few months.

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So if you’ve got space to hoard it, and you’ve been planning a project, now’s probably a good time to buy your lumber order huh? Or wait more???

Yep. Prices now really affordable. Post was for $42, now. $12.

ForcedTQ says

So if you’ve got space to hoard it, and you’ve been planning a project, now’s probably a good time to buy your lumber order huh? Or wait more???

Dollar cost average. Buy and store some lumber each month.

I think there is more downside to lumber prices but no more than 10 to 15% below current price.

I don't see housing construction stopping in the Florida panhandle.

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Personal Consumption Expenditure is more comprehensive than Consumer Product Index such as it takes also into account non urban area inflation.

The latest 12 month PCE is 4.4%, so its been slowly trending down from the annual peak PCE of 7% in 2022. I would not be surprised if the Federal Reserves readjusts its annual inflation target to 3% to 3.5% (from originally 2%).

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From copper to wheat to natural gas, the cost of some of the world’s most important products is crashing, bringing long-awaited relief for consumers that were stung by last year’s soaring prices.
The commodity crunch unleashed by Russia’s invasion of Ukraine has taken a sharp reversal, with a Bloomberg gauge dropping more than 10% since the start of the year to the lowest since 2021.

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For households and businesses, the benefits are already starting to show up as headline inflation rates fall, taking some pressure off central banks to keep aggressively raising borrowing costs.

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Energy prices have been at the forefront of this year’s commodities plunge, particularly in Europe, where natural gas futures have tumbled by about two thirds this year after shooting to records last summer. 
Even oil and its derivatives have gotten cheaper, despite an agreement by producing countries to curb crude output. Diesel prices in the US have fallen more than 30% from their 2022 peak, providing relief for truckers, farmers and consumers in the world’s largest economy.
In Germany, inflation slowed more than forecast in May, driven by energy, according to data published Wednesday. Price growth is cooling across the region, a trend expected to be seen in euro-area numbers due Thursday.

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Futures for wheat have more than halved from last year’s record high.

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Brazil is collecting its biggest-ever corn and soybean crops, tempering feed bills for chicken and hog herds. And vegetable oil prices have dropped sharply.
Restaurants and retailers are starting to take note. Last week, the chief financial officer of US burger chain Red Robin Gourmet Burgers Inc. said on an earnings call that commodity inflation was less strong in the first quarter than expected and should continue to moderate. The head of BJ’s Wholesale Club Holdings Inc. said the retailer has “seen disinflation across the business.”

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“I would expect food prices to fall over the next six months, that’s certainly the forecast here in the US,” said Joseph Glauber, senior fellow at the Washington-based International Food Policy Research Institute. “All the signs on the commodity side still point to essentially lower prices by the end of the year with the new harvest in. It’s just taking a while for this inflation at the consumer level to abate.”

-- Bloomberg

The drop in commodity prices isn't as dramatic when priced in other currencies.

As bad off as the dollar is with our banks sitting on about $620 billion of unrealized losses (that's not even factoring in non-payment losses), what sorta passes as currency in the rest of the world has been going down against the dollar.