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trying to suck the old(er ) folk into keeping working ( putting into super )The plebs are getting nervous, they've seen it before.
The average retirement age in Australia is growing. An economist explains why
New analysis from KPMG shows how COVID has pushed more people over 55 back into the workforce, with the retirement age steadily increasing over the past 20 years.www.abc.net.au
At least with them working, they aren't drawing down on the super funds stash of cash, must be easy doing the accounting.trying to suck the old(er ) folk into keeping working ( putting into super )
maybe super is doing all the heavy lifting in the stock market
Yep, this could easily turn out like the housing bubble burst that never happened in Australia that everyone waited for. I wouldn't budge on my theory of not much happening in terms of interest cuts until I see large unemployment figures rise.Jamie Dimon thinks 8% interest rates are coming so he clearly thinks inflation is not done with . He recently sold $150 mill JPM stock so he putting his money behind that opinion
Jamie Dimon—Head Of U.S.’ Largest Bank—Warns Of 8% Interest Rates Along With Recession
The billionaire chief of JPMorgan Chase said he’s “more concerned” than most about the American economy’s prospects.www.forbes.com
View attachment 174414
Early in the fed rate cycle Powell stated many times he needed UE at 4.5% to put a full stop on ending inflation , that last print will have him sweating . US CPI this week also pivotal . Another hot MoM core of 0.4% will stir things up . Looking at ZQ futures these rate cuts are getting priced further out and shallower terminally . I would not be super surprised to see no rate cuts in '24 given the trend in interbank futures . In less than 4 months its gone from 160 BPS of cuts priced in dec '24 to 53 BPS this very minute . Thats a significant paradigm shift and the market just isnt seeing it at all .Yep, this could easily turn out like the housing bubble burst that never happened in Australia that everyone waited for. I wouldn't budge on my theory of not much happening in terms of interest cuts until I see large unemployment figures rise.
am not so sure about 8% ( maybe more maybe less ) , but yes i think inflation still has a healthy heartbeatJamie Dimon thinks 8% interest rates are coming so he clearly thinks inflation is not done with
but that would mean accurate employment/unemployment dataYep, this could easily turn out like the housing bubble burst that never happened in Australia that everyone waited for. I wouldn't budge on my theory of not much happening in terms of interest cuts until I see large unemployment figures rise.
I know what you mean but trust me there's a lot of money still floating around, you're not seeing house prices going in reversal. Brisbane is pretty tough going when it comes to the cost of living problems with low wages. I live in a working class area and the eateries here are packed more than ever after working hours, never seen it like this in the 50 years I've been alive.but that would mean accurate employment/unemployment data
so we have a chicken and egg scenario
General observation there seems to be a lot of conflicting things going on at the moment.I know what you mean but trust me there's a lot of money still floating around, you're not seeing house prices going in reversal. Brisbane is pretty tough going when it comes to the cost of living problems with low wages. I live in a working class area and the eateries here are packed more than ever after working hours, never seen it like this in the 50 years I've been alive.
I think it’s a combination of things, a lot of people have just not saved enough to retire and want to maintain their hyper-consumption life styles, while also blood pressure and cholesterol meds are keeping the population healthy enough to work longer.The plebs are getting nervous, they've seen it before, it isn't covid that has made people stay at work, it is not knowing when inflation is going to back off.
The average retirement age in Australia is growing. An economist explains why
New analysis from KPMG shows how COVID has pushed more people over 55 back into the workforce, with the retirement age steadily increasing over the past 20 years.www.abc.net.au
@Value Collector And then are the types like me who are still working full time and way past that magical mark of 65.I think it’s a combination of things, a lot of people have just not saved enough to retire and want to maintain their hyper-consumption life styles, while also blood pressure and cholesterol meds are keeping the population healthy enough to work longer.
well depending on the gearing ( some home loans were approved with as little as 5% deposit ) some lenders can't afford house prices to fall too far , or they are in long term negative equity , given many mortgages are over 25 years , or even interest only repaymentsI know what you mean but trust me there's a lot of money still floating around, you're not seeing house prices going in reversal. Brisbane is pretty tough going when it comes to the cost of living problems with low wages. I live in a working class area and the eateries here are packed more than ever after working hours, never seen it like this in the 50 years I've been alive.
According to the BLS there have been six majpr revisons in the methodology of calculating the CPI since it stated collecting the data in 1913, with the first being in 1940, the last being in 2018. There have also been numerous small changes in data collection and additions or withdrawals of data points.This is doing the rounds, it's all academic in a way, but the commentary is interesting.:
View attachment 174458
.
" ...Some of you will be aware that they changed the way they calculate U.S inflation in 1983.
In essence they changed how they calculate housing related costs.
The NBER paper can be found here.
https://www.nber.org/system/files/working_papers/w32163/w32163.pdf
The following is an extract from the paper.
“This changed with the CPI redesign of 1983 (Bolhuis et al. 2022a, b). Before January of that year, homeownership variables, including housing prices and mortgage rates, entered directly into the CPI.
The inclusion of these components made inflation increase mechanically at the beginning of a tightening cycle and decline once policy normalization began.
It also led to a volatile series with disproportionate weight for a component—housing—that is both a consumption and an investment good.
After years of research, the Bureau of Labor Statistics (BLS) moved to a system of owners’ equivalent rent, which has a stronger theoretical justification (Gillingham, 1983).
Housing prices and financing costs were removed from the index. But it did not disappear from the effective costs borne by would-be home buyers or others reliant on financing due to liquidity constraints, including those borrowing to finance cars and other forms of consumption.
This paper argues that this disconnect in inflation measurement, on the one hand, and actual increases in the cost of living due to higher financing costs faced by consumers, on the other, underpins the recent divergence between official inflation data and consumer sentiment.”
"As you can see in the chart above, if they had continued to measure housing/shelter costs in the same way that they had prior to 1983, then U.S CPI would have reached a level above 16% in 2022.
This would have exceeded the rate of inflation seen in the late 70s and early 80s. .... "
The running costs are up so profits are down but in general, people are still spending. My main point is if people continue to spend with credit or savings with highly inflated prices, it still adds to inflation, Unfortunately.well depending on the gearing ( some home loans were approved with as little as 5% deposit ) some lenders can't afford house prices to fall too far , or they are in long term negative equity , given many mortgages are over 25 years , or even interest only repayments
my last trip to the big smoke , did highlight the number of businesses closed ( and not replaced ) and i don't get into the weeds ( industrial estates ) , that often either to see what is happening there
is Brisbane now mainly driven by consumption
The question(s) to ask with any of this stuff is whythe housing bubble burst that never happened in Australia that everyone waited for.
How much denial of this have we seen for what, a year now?I would not be super surprised to see no rate cuts in '24 given the trend in interbank futures . In less than 4 months its gone from 160 BPS of cuts priced in dec '24 to 53 BPS this very minute . Thats a significant paradigm shift and the market just isnt seeing it at all .
From memory we don't include housing or rent rises in our CPI calculations.This is doing the rounds, it's all academic in a way, but the commentary is interesting.:
View attachment 174458
.
" ...Some of you will be aware that they changed the way they calculate U.S inflation in 1983.
In essence they changed how they calculate housing related costs.
The NBER paper can be found here.
https://www.nber.org/system/files/working_papers/w32163/w32163.pdf
The following is an extract from the paper.
“This changed with the CPI redesign of 1983 (Bolhuis et al. 2022a, b). Before January of that year, homeownership variables, including housing prices and mortgage rates, entered directly into the CPI.
The inclusion of these components made inflation increase mechanically at the beginning of a tightening cycle and decline once policy normalization began.
It also led to a volatile series with disproportionate weight for a component—housing—that is both a consumption and an investment good.
After years of research, the Bureau of Labor Statistics (BLS) moved to a system of owners’ equivalent rent, which has a stronger theoretical justification (Gillingham, 1983).
Housing prices and financing costs were removed from the index. But it did not disappear from the effective costs borne by would-be home buyers or others reliant on financing due to liquidity constraints, including those borrowing to finance cars and other forms of consumption.
This paper argues that this disconnect in inflation measurement, on the one hand, and actual increases in the cost of living due to higher financing costs faced by consumers, on the other, underpins the recent divergence between official inflation data and consumer sentiment.”
"As you can see in the chart above, if they had continued to measure housing/shelter costs in the same way that they had prior to 1983, then U.S CPI would have reached a level above 16% in 2022.
This would have exceeded the rate of inflation seen in the late 70s and early 80s. .... "
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