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Inflation

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qldfrog said:
If you take the raw data, not the adjusted,they are losing. Jobs at. High speed.
Could it be the case that the very people forging data are now believing these?
Click to expand...

It's possible, but we'd have no way to prove it.

I think there are a number of arguments to make against the soft-landing theory:
  1. Central bankers (US and Aus) have re-affirmed their committment to a 2% target and are willing to stick to hiking if necessary to get to that level. Their own forecasts (as of Jan 2023) see inflation elevated until 2024.
  2. The NFP numbers, as with any other data, is also susceptible to noise. In the past year alone, there have been 3 blips, but the overall trend is down.
  3. Jeff Snider (courtesy of @InsvestoBoy) summed it up best with his thoughts - it always looks like a soft landing until it isn't and the economy falls off a cliff. Jobs numbers always look their best at the beginning of a recession.
  4. Central bankers have communicated several times throughout 2022 that the unemployment rate is expected to head upwards. Services inflation remains high and the jobs market remains tight - JPowell is on record stating that both will need to be addressed to bring inflation down over the long-term.
  5. 10/2 yr yields and the NFTS are both inverted. Both have a strong history for identifying recessions in the short term.

Anywho, it remains to be seen...
 
In the meantime, I've got that place at airlie beach talked down from 2.6 before christmas to 2.1 and still dropping. Got a couple of friends that are real estate agents and ooooh boy do they have some horror stories from the past few months.

There's some absolutely desperate vendors panic selling out there if you know where to look
 
Gearing is great on the way up, not so good on the way down. ?
 
I have been throwing some cash low balls myself in melb but nothing to report... yet
 
mullokintyre said:
W

Wait till there is blood in the streets. You need to convince the existing owners there is more pain to come.
As more exit at any price it becomes self fulfilling.
mick
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Yep, but it has to be legit. It can't be some kind of empty threat. How I know I'm holding the cards: Take a look at the number of places advertised in airlie beach and surrounds in the last ~5-6 weeks and try to tell me why so many have been advertised in such a short space of time

If you aren't dealing from a position of strength then you WILL get crushed.
 
There are also places where price do not drop.
Pretty aware as I have been looking at finding the final home in oz for the last year after the lady decided to stick to Australia as ppor following OS trip
The top level of sunshine coast hinterland remains crazy..cash buyers.
Everything is 2m plus..just slightly less offer
I am morever surprised that lifestyle properties on slightly bigger acreages..aka 10 to 30+ acres remains elevated..aka far too high imho when we go further inland or North toward Gympie.
I would have thought it would be mortgages belt area.
I am not sure about you but not coming from Sydney, 2m seems to me like a lot of money for a house on 10 or 30 acres with no proper local economy or 45min drive to a beach...
Inflation may not worsen but no real backward move
 
mullokintyre said:
W

Wait till there is blood in the streets. You need to convince the existing owners there is more pain to come.
As more exit at any price it becomes self fulfilling.
mick
Click to expand...
In discussion on a specific property for more than a month now, we offer what I believe is a fair high price, 3 sellers 1 sticking to his her position and wanting far too much..based on required complete reno work.
At least it seems they are moving a bit but even our offer price is imho over the top and more an emotional issue..we really like place and house, in no way does it make financial sense..a bit like buying an EV ?
Will see how it goes...
 
More layoffs, this time from Disney. Maybe these huge jobs numbers are a massive deck shuffle - highly paid employees, now laid-off, looking for lower paid work.

Disney to lay off 7,000 workers, cut $5.5 billion worth of costs in latest reshuffle

Disney will lay off 7,000 workers as the company seeks to slash $5.5 billion in costs as new CEO Bob Iger continues his overhaul of the media giant.
finance.yahoo.com

The other side to this is severance pay. There seems to be a trend of 2-6 months severance pay in the US - does any keep any data on this? I would imagine it'd be the US-equivalent of the AUS fixed-rate mortgage cliff - once funds dry up, discretionary spending will drop and we may be looking at another dip at that stage.
 
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What will also be interesting is when these mass lay-offs begin to be reflected in the employment data. The latest jobs data from the US, which came out on Friday, blew past expectations, and it seems like central banks want to remain hawkish until the employment figures really start to come down.
 
If you look behind the official figures, the raw unemployment data was pretty bad before the adjustment.can not get the graph /figures now but was pretty shocking in my non expert eyes
 
qldfrog said:
If you look behind the official figures, the raw unemployment data was pretty bad before the adjustment.can not get the graph /figures now but was pretty shocking in my non expert eyes
Click to expand...
That's a great point, although it seems like the market's interpretation is that it supports more rate hikes from the Fed, or at least their "higher-for-longer" narrative
 


Realistically speaking, this is just hangover from the pandemic - already bought a new fridge/couch/tv/whatever then, don't need another one now.
 
over9k said:
View attachment 152834

Realistically speaking, this is just hangover from the pandemic - already bought a new fridge/couch/tv/whatever then, don't need another one now.
Click to expand...

Even if they wanted to, the average consumer wouldn't be able to.
Credit is becoming difficult to access thanks to rising costs spurred by central bankers. Even the BNPL squad are struggling, reporting worse than expected retail sales (Open Pay has gone under, ZIP fast running out of money, AFRM losing more money despite raising merchant fees).
Meanwhile consumers have had dump any excess funds into mortgages with repayments at 50% (moreso a problem for Oz), while highly-paid employees are now being fired (moreso for US).
 
I guess inflation includes a 28% increase in my house and contents insurance which is somewhat offset by a 55% deflation in the agreed amount I pay for electricity - seems the provideer didn't like I was happy to pay over the odds to build up credit for use during Winter. Utter Ricks with a silent "P."
 
It is kind of satisfying to game their own rigged game though.
 
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