Interview with LDS Farnsworth who defeated LDS Rusty Bowers, Jan 6. Witness, in Arizona

[ttribe]

8 minutes ago, bsjkki said:

Maybe it’s semantics. https://www.forbes.com/sites/adammillsap/2022/08/10/inflation-still-high-and-bidens-policies-are-not-helping/?sh=5e174fa17106

That is one of the finest examples of misnaming a piece of legislation as we've seen in a while. I see nothing in it which will move the inflation needle.

Really want to fix things? Help companies get the supply chain working again; the "too few goods part."

Edited August 18, 2022 by ttribe

[ttribe]

35 minutes ago, bsjkki said:

But isn’t the massive increase in money supply a big factor? This looks like more than a blip and many experts point out the infrastructure bill made things worse.

I never said it wasn't a big factor; it is. But the focus on money supply is being used for political rhetoric when there are a number of other factors which are at least as important.

Edited August 18, 2022 by ttribe

[bsjkki]

6 minutes ago, ttribe said:

That is one of the finest examples of misnaming a piece of legislation as we've seen in a while. I see nothing in it which will move the inflation needle.

Really want to fix things? Help companies get the supply chain working again; the "too few goods part."

I’ve being reading that the supply chain is improving rapidly. Container costs have decreased and stores expect to have excess goods and are slashing prices. You agree?

[ttribe]

1 minute ago, bsjkki said:

I’ve being reading that the supply chain is improving rapidly. Container costs have decreased and stores expect to have excess goods and are slashing prices. You agree?

In some cases, yes. However, there yet remain significant problems in technology (the auto industry continues to have significant problems with chip shortages). Moreover, may of the suppliers who are overseas are moving at a slower pace on restoring some normalcy to production. Finally, and unrelated to COVID, Russia's invasion of the Ukraine has, and will continue to have, a significant impact on certain commodities which impact the food supply and food costs.

[Chum]

28 minutes ago, bsjkki said:

I’ve being reading that the supply chain is improving rapidly. Container costs have decreased and stores expect to have excess goods and are slashing prices.

That sounds like a fine, fine thing - especially if it helps affordable housing construction.

[Stargazer]

3 minutes ago, ttribe said:

[sigh] How many times do I have to say this? The free money WAS A FACTOR, but there are many other factors as well.

That think tank came straight out and called it THE cause of inflation; nothing else in their conclusion. I didn't say they were lying, but there is such a thing as bias in research and presentation of results. I'm simply suggesting that their report be read with some amount of skepticism and critical thinking.

I wasn't arguing with you, really. I was just discussing the topic, which I find fascinating. I agree entirely with the need for skepticism and critical thinking, which is sometimes in too short supply around here, among other places. I probably should have read your statement with more care, for which I apologize not doing.

My late wife and I used to hang around a particular patriot group which had weekly (or monthly, don't remember any longer) meetings in which many of the kinds of things you might expect were talked about and presented and since we lived near the Washington State Law Library in Olympia (in the state Supreme Court building), we'd go there are look up the court cases and both state and federal laws and regulations to verify that what the main guy was presenting was accurate -- not wanting to be deceived. The astonishing thing was that much of what was being claimed was factual, although there were some things that turned out to be totally misunderstood, or bogus.

One of the interesting claims that turned out to be true was that the Federal Reserve is not a federal government agency, despite the name. Not that it matters, but there it is. I learned how to read court opinions and found them to be sometimes quite fascinating, which is why I actually read some of those recent controversial SCOTUS opinions. Law is a fascinating field of study, and one can sometimes be quite surprised. I remember digging through some case law decided back decades ago in the law library basement (don't remember why), and ran into a civil case involving a personal injury suit in which the court (a US appeals court of some kind) decided it in favor of a party, and as part of its decision it cited a British court decision as support! This would be because we inherited English Common Law from the Brits. It is a surprising fact that English Common Law is still in force in the US (to a certain extent) and is also referred to as "the law of the land". Except in Louisiana, whose "law of the land" still retains features of the Napoleonic Code (or French Civil Code) with some influence from Spanish civil codes -- because that was the law in force in that territory when Louisiana was purchased by the US. I found this provision in the Code of the State of Washington: "The common law, so far as it is not inconsistent with the Constitution and laws of the United States, or of the state of Washington nor incompatible with the institutions and condition of society in this state, shall be the rule of decision in all the courts of this state." (RCW 4.04.010) And once in a very occasional while, courts will in fact make decisions based on common rather than statute law. When appropriate, I guess.

Of course, the US Constitution is called the "supreme law of the land" in all cases.

I'm just running off at the keyboard at this point, sorry! Like I say, it fascinates me! And boring other people to death is one of my peculiar characteristics.

[Chum]

31 minutes ago, ttribe said:

the auto industry continues to have significant problems with chip shortages

Cars with physical controls and no continually-distracting computer displays - those would require fewer chips.

There are people who would buy them, if only someone was willing to build less complicated (to operate) cars.

Edited August 18, 2022 by Chum

[bsjkki]

28 minutes ago, Chum said:

That sounds like a fine, fine thing - especially if it helps affordable housing construction.

Lumber, Steele, and copper prices are down. Not yet getting reflected in buildings costs. PVC (oil based) is still up. Labor and energy costs persist. 

[ttribe]

24 minutes ago, bsjkki said:

Lumber, Steele, and copper prices are down. Not yet getting reflected in buildings costs. PVC (oil based) is still up. Labor and energy costs persist. 

I don't see labor costs coming down anytime soon.

[bsjkki]

 

[The Nehor]

The primary cause of the inflation is the ongoing crisis in Ukraine. The gas price thing was private business doing private business stuff. Covid has an impact. The President and Congress had a marginal impact.

The lack of people to fill jobs is partially due to the increased death rate and some people refusing to believe that employees now have more bargaining power and we have a minor labor shortage. I know a guy trying to hire at his store. He is offering minimum wage and will not go above 30 hours to avoid having to give benefits. Down the street there is a similar chain store offering full time work at about twice the pay. The guy insists that the problem is that people are just lazy and don’t want to work.

[Chum]

4 hours ago, The Nehor said:

The gas price thing was private business doing private business stuff.

My understanding: The single most pressing factor on gas/diesel prices has been that refineries are up against processing capacity. We had been steadily winding down petroleum refining ability - from the end of Obama and thru the Trump administrations.

[Tacenda]

5 hours ago, The Nehor said:

The primary cause of the inflation is the ongoing crisis in Ukraine. The gas price thing was private business doing private business stuff. Covid has an impact. The President and Congress had a marginal impact.

The lack of people to fill jobs is partially due to the increased death rate and some people refusing to believe that employees now have more bargaining power and we have a minor labor shortage. I know a guy trying to hire at his store. He is offering minimum wage and will not go above 30 hours to avoid having to give benefits. Down the street there is a similar chain store offering full time work at about twice the pay. The guy insists that the problem is that people are just lazy and don’t want to work.

Need to save this for when I'm up against some people in my family, haha. Thanks!

[ttribe]

2 hours ago, Chum said:

My understanding: The single most pressing factor on gas/diesel prices has been that refineries are up against processing capacity. We had been steadily winding down petroleum refining ability - from the end of Obama and thru the Trump administrations.

Actually, they dropped capacity significantly during COVID as a result of the huge drop in demand. But, they were slow to bring capacity back to recoup their losses from the lock downs.

[Danzo]

19 hours ago, The Nehor said:

It is a myth. Some idiots discovered for the first time (for them) the IRS Special Criminal Division that deals with things like money laundering, organized crime, cybercrimes, drug trafficking, financial fraud, and the like. Lately they have been busy tracking down the assets of Russian oligarchs that were squirreled away in the US. Funding for firearms and ammo for that unit are roughly the same as they previously were. This Division does not do conventional audits, either the by mail versions or the auditor comes in person to review books audits. These are the guys who took down Capone back in the day.

It is just lying and deceit. Standard stuff.

I actually have interacted with IRS CI (criminal investigation) agents, instead of just read about then in the internet.  I also teach classes to other tax professionals on the IRS criminal enforcement. It is true they are involved in money laundering, drug trafficking's, etc like you said, but they also go after otherwise upstanding tax cheats as well.  While it is true conventional audits are done by Revenue Agents, TCOs (tax compliance officers), these people can and refer the audits to the CI and the CI will then audit the individuals.  Accounting and auditing is very much part of a CI agent's responsibilities. 

Recently, our (now former) stake president was indicted and convicted of tax evasion (He pleaded guilty).  He wasn't accused of anything more than not filing and paying taxes as well as using nominee accounts.  He wasn't part of any larger criminal organization, just a tax cheat. 

The IRS CI and by extension the US Department of Justice tax division take great care to make sure CI doesn't just go after low life criminals but make sure enough upstanding tax cheats are prosecuted to send a message to the larger community.  They go as far as apologizing to other US attorneys for not going after more drug dealers, organized crime, etc because they need to focus their attention on ordinary tax cheats. They are afraid the general public will get a message that as long as they are not involved in other criminal activities, they needn't fear the IRS.  At a recent meeting that involved IRS CI agents they explained that normally they won't take on a case where less than $200,000 of taxes were at stake, however they will make exceptions and go much lower if the person is from a small town or heavily involved in their local community, or are famous, or are politicians. .  They love famous people. Gives them extra publicity. 

 

The IRS CI is not anything new, however and out of the 80,000 new hires from the new tax law, a very small percentage of them will be CI agents.  They are hiring right now. According to a recent meeting I had with them in July, they want to have around 3000 agents nationwide, they are down to 1800 and want to hire 500 more this year and hopefully 700 next.  If you are under 37 years old and have some accounting experience this may be the Job for you.  USAJobs.gov.

[Danzo]

19 hours ago, The Nehor said:

I am still amazed how people are trying to tie inflation to a few thousand dollars that were given out over a year ago and say that is why people aren’t working. How does that make any sense at all?

Not even true.

my family received $16,400 in total economic impact payment stimulus money (EIP, the money that was just sent by the IRS because), I know many who received much more.  Also there was a huge amount of money dumped on businesses through the PPP Program (hundreds of thousands of dollars per business).  A family with 5 children were receiving 15,000 in child tax credits (more if some of their children were under 3) This was huge.   The government was paying people $30,000.00/ year not to work. (15/hour *2000 hours in a year).  That was not counting the state unemployment payments which could often ad half again as much to the amount.   Remember all of this money for no work.  No work means less production, less supply. More money means more demand. 

More demand + less supply = inflation.   Econ 101. 

I highly recommend everyone take an economics class.  Tthere is a good class available on the great courses for someone that doesn't want to deal with the hassle of going back to college. 

 

As for people not working because of government payouts, that was a big problem among the businesses I consulted for. (actually a bigger problem was everyone insisting they be paid in cash so they could earn money and unemployment at the same time).  I had to delay hiring someone because she wanted to wait until the 15/hour free money was over.  (why work for money when you can get it for not working).

[Danzo]

15 hours ago, ttribe said:

I don't see labor costs coming down anytime soon.

Wages, unfortunately are highly inelastic. Which is why a company has to lay people off to reduce wage costs.  People psychologically usually can't handle a wage reduction.  You can pay someone 100/hour and the minute you change it to 99/hour the employee things you hate them and stops being a happy employee.  I discuss this a lot with my clients.  If a company gets a windfall and wants to share with employees it is much better to give a bonus than to raise wages.  Once you raise someone's wages,  you can't take it back. 

[The Nehor]

1 hour ago, ttribe said:

Actually, they dropped capacity significantly during COVID as a result of the huge drop in demand. But, they were slow to bring capacity back to recoup their losses from the lock downs.

We should follow the European model and implement a windfall tax on excess profits due to limited supply to remove the incentive to restrict supply for easy short-term profits.

[SeekingUnderstanding]

21 hours ago, bsjkki said:

I generally agree with you…it’s complicated. There are a lot of moving parts. Energy is a big factor. 
 

Economists definitely don’t all agree and my knowledge has come from long form interviews with economists…hard to cut and paste. Printing money, supply chain issues, increased wages due to labor shortages and energy. They all are contributing. 
 

Europe is facing an unprecedented energy problem that is scary. 

Printing money was a cause for sure. So is the war in Ukraine. As a small manufacturer, we import most of our goods from China and Nepal. I can confirm that supply side issues are at least as much a factor as an increase in demand via monetary supply. Factories in China still shut down routinely (for Covid). Freight costs and shipping times for us are still up at least 3x vs pre pandemic. You just can’t make stuff quickly to meet demand. 

[InCognitus]

21 hours ago, bsjkki said:

PVC (oil based) is still up.

I had to pay over 4 bucks for a two foot piece of PVC at Home Depot recently.  All I really needed was a 3 inch piece, but they didn't sell it that way of course.  Fortunately I found a different solution and I returned it and got my money back.

[bsjkki]

In todays news. I heard Target has done the same. https://www.google.com/amp/s/www.freightwaves.com/news/walmart-cancels-billions-of-dollars-in-orders-to-right-size-inventory-levels/amp

[Chum]

9 hours ago, ttribe said:

Actually, they dropped capacity significantly during COVID as a result of the huge drop in demand. But, they were slow to bring capacity back to recoup their losses from the lock downs.

If I read your graph correctly, it doesn't show absolute capacity but utilized capacity. It's shows the gap between what we could and do use.

This one shows inputs, capacity and utilization.

I should note my graph doesn't support the timeline I suggested earlier. That might be due to lag between industry restructuring and the eventual offlining of capacity. I'll have to read up some more.

 

[Chum]

8 hours ago, The Nehor said:

We should follow the European model and implement a windfall tax on excess profits due to limited supply to remove the incentive to restrict supply for easy short-term profits.

I agree that refining industries declined any opportunity to ease US hardship by simply holding to their pre-shortage profit levels.

Going back to calls for more/cheaper crude - more oil can't help fuel prices if no one has room to refine it.

As for me, I appreciate that gasoline is down (we're about 3.60/g) but it's diesel I keep fretting over.

[bsjkki]

Where does this lead? 
 

 

[ttribe]

@bsjkki It's not clear what this will mean long-term, yet, IMO. I believe what you are seeing is largely a function of the increase in the U.S. Treasury Daily Yield Curve. As the Fed has raised rates, the cost of borrowing by the government has gone up. The flip side is that investors are getting a much better return on what is considered a 'risk-free' bond investment.