Inflation here? gas/grocery prices just continue to climb (3 Viewers)

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brandon8283 said:
Believing that this is a short-term spike is betting against history, however. Outside of the easy money times post-Great Recession and again post-COVID, historical rates have almost always been above 6%, and in the 80s, another time of runaway inflation similar to now, the rates were as high as 14%.

In recent history, interest rates were starting to creep back up from around 2013-2019, right around the time we were truly in full recovery from the Great Recession, before they crashed again from COVID.

It's VERY possible that this is not a short-term spike, but rather a return to where interest rates would have been if not for the Great Recession and COVID.

www.freddiemac.com

Mortgage Rates

See the mortgage rate a typical consumer might see in the most recent Primary Mortgage Market Survey, updated weekly. The PMMS is focused on conventional, conforming fully-amortizing home purchase loans for borrowers who put 20% down and have excellent credit.
www.freddiemac.com www.freddiemac.com
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I think there is a good chance you are correct. I see how a return to late 70s economic conditions is very possible. I also see a 40yr downward trend for rates with occasional 2.5-2.75% spikes along the way. We went way low on mortgage rates rapidly and I think a run up to 6.5-7 is possible.

I just don’t see that as a sustainable rate. Consumers, business, and governments are so reliant on debt today that small increases in rates have a much bigger effect than in the 70s. I also see homeowners flipping out when property values drop 20-25% because rates are 6.5-7.5%. That would bring the housing market to a standstill.

I think we are going to see a less than 5-year spike in rates and a return to sub-5%. That’s why I’d do a 5/1 ARM today for 1-1.25% below fixed rates of 5.25%. But again, you could be right and I just may be more risk tolerant.


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I was told by folks in our Personal Lines division ( home, auto etc ) that realtors are saying they are seeing 6% now.

We have several issues in SE LA affecting the market- one being insurance. Now, with Risk Rating 2.0, a flood policy that once cost $700 can be $2000. Then couple that with homeowner insurance rates that have doubled, and folks are not able to close because the note is just too much ( with Escrow )

On top of ALL of that, carriers are reaching " capacity " ( cap being what they are willing to take on, $$$ wise, in a specific region ) meaning no capacity, no offer of insurance as we head into Hurricane season. MANY are telling agents you have til May 31 to bind coverage, after that, no can do.

So this summer, the home buying will more than likely hit the brakes hard.
 
I think inflation may be about to crash along with the global economy.

Basically what I'm starting to piece together is the mega corporations were ordering way more than what they were needing with the expectation of shortages more severe than what we saw which created many of the shortages. Just look at Wal-Mart's quarterly report yesterday. Missed on retail sales in store, missed on the online sales and inventory levels were 1000% higher than normal with so much crap they wont be able to sell it all. It was a great business strategy to buy surplus inventory when supply lines were tight to make sure your business keeps running while keeping the little guys from being able to get inventory. You can go ahead and bet that all the big companies were doing the same. This was not only putting way more pressure on the supply chains but it was putting inflationary pressures on goods because companies were fighting over a limited supply. Ironically, it could be what tanks the economy. Now that the big companies are going to have excess inventory they will have to try an dump it with fire sales. Meanwhile, they are going to hit a pause button on ordering which is going to create a sudden shift to supply chain excess. This will likely be lagging with computer chips but I think those are even about to catch up with interest rates rising enough to start deterring new car sales and crypto crashing which tends to crash out the chip market since the latest high end chips and graphics cards losing demand.

Freight prices are suddenly cratering because they geared up for this huge global demand while meeting global pressures to increase capacity. Now all the sudden the ordering is going to stop and freight prices have only one way to go. We could even swing hard to deflationary pressures really fast here. If we do, then there is going to be a window for the consumer to pull the economy out of a death spiral but it's going to be a big ask without a FED backstop.
 
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So, this morning, on the way to work, the two gas stations across from each other that I reported on a little bit ago were both at $4.19. I said to myself, "Yep, I bet they're going to be up to $4.25 on Friday." I was wrong. They were up to $4.25 by the time I passed back this afternoon. :covri:
 
bclemms said:
I think inflation may be about to crash along with the global economy.

Basically what I'm starting to piece together is the mega corporations were ordering way more than what they were needing with the expectation of shortages more severe than what we saw which created many of the shortages. Just look at Wal-Mart's quarterly report yesterday. Missed on retail sales in store, missed on the online sales and inventory levels were 1000% higher than normal with so much crap they wont be able to sell it all. It was a great business strategy to buy surplus inventory when supply lines were tight to make sure your business keeps running while keeping the little guys from being able to get inventory. You can go ahead and bet that all the big companies were doing the same. This was not only putting way more pressure on the supply chains but it was putting inflationary pressures on goods because companies were fighting over a limited supply. Ironically, it could be what tanks the economy. Now that the big companies are going to have excess inventory they will have to try an dump it with fire sales. Meanwhile, they are going to hit a pause button on ordering which is going to create a sudden shift to supply chain excess. This will likely be lagging with computer chips but I think those are even about to catch up with interest rates rising enough to start deterring new car sales and crypto crashing which tends to crash out the chip market since the latest high end chips and graphics cards losing demand.

Freight prices are suddenly cratering because they geared up for this huge global demand while meeting global pressures to increase capacity. Now all the sudden the ordering is going to stop and freight prices have only one way to go. We could even swing hard to deflationary pressures really fast here. If we do, then there is going to be a window for the consumer to pull the economy out of a death spiral but it's going to be a big ask without a FED backstop.
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finance.yahoo.com

Big retailers might soon be forced to offer big discounts: Morning Brief

Here's what to watch in the markets on Thursday, May 19, 2022.
finance.yahoo.com finance.yahoo.com
 
bclemms said:
The good news. I'm very alone with my thinking. Everyone else is calling for stagflation but that Wal-Mart earnings report was really screwed up.
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Not anymore lol
 

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