Investing

[Screwball]

30 minutes ago, Tigeraholic1 said:

I have read on this board a number of times how people are so stuffed with stimmy money that they couldn't spend it all. However Middle/Lwr Middle class are now struggling to make ends meet, again. 

Consumer Credit (from earlier this month) from the Fed Reserve;

May 2022

Quote

In May, consumer credit increased at a seasonally adjusted annual rate of 5.9 percent. Revolving credit increased at an annual rate of 8.1 percent, while nonrevolving credit increased at an annual rate of 5.2 percent.

That was released July 8th.

Warning; most here won't like that guy, but the numbers are what they are.

I have also read, or maybe it was from a Telecom conference call that more people than ever are behind on their payments.

My point?  Seeing data like this doesn't make the case for people full of money.

And no, the stock market is NOT a reflection on the economy.

It's the same old same old; who got more wealthy and who get less wealthy during the pandemic (or any other time as well)?  Same as always, the money goes to the top.  Stimulus is just another word for "trickle down."  The money goes to the top first and it doesn't make its way to the people who need it most.  The same people who suffer the most from inflation.

You will have nothing and like it serf, so STFU.

[gehringer_2]

18 minutes ago, Screwball said:

I have also read, or maybe it was from a Telecom conference call that more people than ever are behind on their payments.

average car payment hit $700/mo recently. 

Nuts.

[Deleterious]

72 and 84 month borrowing has become more popular the past 10 years or so. I wonder how much higher that $700 average would be without those.

[Archie]

40 minutes ago, gehringer_2 said:

average car payment hit $700/mo recently. 

Nuts.

Actually that seems pretty low.  A $50k car or truck is more of the average if it isn't higher.  A $50k loan at 3.5% is over $900 a month for 60 months.  

As for houses and mortgages its even worse.  There's still plenty of $200k to $350k house available (in my area) but a $500k to $600k price range and higher is more common.  A 30 year mortgage for $500k @ 6% gives the borrower a payment of almost $3000 a month.  I used to complain about a $1000 a month payment.

[Tigeraholic1]

But hey guys were not in a recession, things are just fine....

[gehringer_2]

1 hour ago, Archie said:

A $50k car or truck is more of the average if it isn't higher. 

Over the many years I've bought cars the math has led me from new to used and back to new and now it sounds like maybe back to used! 

That's going to be a shift as EV's take significant a piece of the market. You can buy an IC car in good condition 2-4 yrs old and for all intents and purposed plan on being able to drive it as long as you could care to keep a new car. But if you are looking at at huge battery replacement cost at 7-10 yrs out, that's going mean much higher depreciation rates on E-vehicles to figure into their true ownership cost.

There are a lot of ideas and proposals for recovering value from automotive battery packs that still have a lot of functional life but not enough to keep in the car (~75%) but so far not much concrete.

Edited July 28, 2022 by gehringer_2

[Deleterious]

Apple continues to thrive and best quarterly estimates. Good job Tim Apple.

Amazon beat revenue but posted a $2B loss. Their stock is up 12% after hours.

[Tiger337]

18 hours ago, Deleterious said:

Yes the fed rate should be much closer to the inflation rate.  For the most part, the fed rate has been higher than inflation.  At least up until we lost our minds in 2008.

Year	Inflation Rate YOY4	Fed Funds Rate*5
1954	-0.70%	1.25%
1955	0.40%	2.50%
1956	3.00%	3.00%
1957	2.90%	3.00%
1958	1.80%	2.50%
1959	1.70%	4.00%
1960	1.40%	2.00%
1961	0.70%	2.25%
1962	1.30%	3.00%
1963	1.60%	3.50%
1964	1.00%	3.75%
1965	1.90%	4.25%
1966	3.50%	5.50%
1967	3.00%	4.50%
1968	4.70%	6.00%
1969	6.20%	9.00%
1970	5.60%	5.00%
1971	3.30%	5.00%
1972	3.40%	5.75%
1973	8.70%	9.00%
1974	12.30%	8.00%
1975	6.90%	4.75%
1976	4.90%	4.75%
1977	6.70%	6.50%
1978	9.00%	10.00%
1979	13.30%	12.00%
1980	12.50%	18.00%
1981	8.90%	12.00%
1982	3.80%	8.50%
1983	3.80%	9.25%
1984	3.90%	8.25%
1985	3.80%	7.75%
1986	1.10%	6.00%
1987	4.40%	6.75%
1988	4.40%	9.75%
1989	4.60%	8.25%
1990	6.10%	7.00%
1991	3.10%	4.00%
1992	2.90%	3.00%
1993	2.70%	3.00%
1994	2.70%	5.50%
1995	2.50%	5.50%
1996	3.30%	5.25%
1997	1.70%	5.50%
1998	1.60%	4.75%
1999	2.70%	5.50%
2000	3.40%	6.50%
2001	1.60%	1.75%
2002	2.40%	1.25%
2003	1.90%	1.00%
2004	3.30%	2.25%
2005	3.40%	4.25%
2006	2.50%	5.25%
2007	4.10%	4.25%
2008	0.10%	0.25%
2009	2.70%	0.25%
2010	1.50%	0.25%
2011	3.00%	0.25%
2012	1.70%	0.25%
2013	1.50%	0.25%
2014	0.80%	0.25%
2015	0.70%	0.50%
2016	2.10%	0.75%
2017	2.10%	1.50%
2018	1.90%	2.50%
2019	2.30%	1.75%
2020	1.40%	0.25%
2021	7.00%	0.25%
2022	9.10%	2.50%
2023	2.7% (est.)	2.8% (est.)
2024	2.3% (est.)	2.8% (est.)

 

interesting chart.  The thing is though that inflation has been kept under control (although I don't think they are that honest about inflation) until the last two years even with a low interest rate.  

[Tigeraholic1]

1 hour ago, gehringer_2 said:

Over the many years I've bought cars the math has led me from new to used and back to new and now it sounds like maybe back to used! 

That's going to be a shift as EV's take significant a piece of the market. You can buy an IC car in good condition 2-4 yrs old and for all intents and purposed plan on being able to drive it as long as you could care to keep a new car. But if you are looking at at huge battery replacement cost at 7-10 yrs out, that's going mean much higher depreciation rates on E-vehicles to figure into their true ownership cost.

There are a lot of ideas and proposals for recovering value from automotive battery packs that still have a lot of functional life but not enough to keep in the car (~75%) but so far not much concrete.

I work for GM and a 2019 bolt battery will cost you $8500 plus 12 hours of labor at $125 an hour so another $1500 that factor warranty is 8 years/100k miles so it would be awhile before you hit that. There is a huge recall on those batteries due to fire hazard. They tell you not to park in your garage so your house don’t catch on fire. There is a back log on batteries for the recall of about 30k infilled units. There is a major shortage of nickel so the line is moving slow. 

Edited July 28, 2022 by Tigeraholic1

[Tiger337]

2 hours ago, Tigeraholic1 said:

But hey guys were not in a recession, things are just fine....

Is inflation the recession?  People are employed, people are eager to consume after two years of Covid and businesses are doing business. The problem is that inflation is killing consumers and killing profits.  

[gehringer_2]

2 hours ago, Tigeraholic1 said:

I work for GM and a 2019 bolt battery will cost you $8500 plus 12 hours of labor at $125 an hour so another $1500 that factor warranty is 8 years/100k miles so it would be awhile before you hit that. There is a huge recall on those batteries due to fire hazard. They tell you not to park in your garage so your house don’t catch on fire. There is a back log on batteries for the recall of about 30k infilled units. There is a major shortage of nickel so the line is moving slow. 

I'm waiting to see what the fast chargers do the the battery cycle life. I've been working with Li chemistry batteries for a good number of years and in general, there is no free lunch. If you do things that heat them up or stress them it's going to have an effect. There are so many 'little' design details in terms of heat management, dimensional stability and cell management that are not likely to be fully optimized in the 1st couple of design/manufacturing generations. I'm fairly confident they are going to get it right, just not necessarily in the 1st couple of go 'rounds.

And it's definitely true that for most people, after handling flashlight batteries for a lifetime, there is a little cognitive dissonance in understanding that a 100kWh Li battery is every bit as dangerous as a 15 gallon tank of gasoline. Again, no free lunch. If you store a huge amount of energy in a small volume, the potential damage from a uncontrolled release is an inevitable part of the equation.

[Tigeraholic1]

1 hour ago, Tiger337 said:

Is inflation the recession?  People are employed, people are eager to consume after two years of Covid and businesses are doing business. The problem is that inflation is killing consumers and killing profits.  

I think they both have the same result capabilities.

[Tigeraholic1]

After Washingtons decision today, enter the new branch of OPEC.

 

[gehringer_2]

23 minutes ago, Tigeraholic1 said:

I think they both have the same result capabilities.

It's not all bad for everyone. If you are a young homeowner with a low fixed interest rate mortgage, inflation is going to be a big boost to your wealth accumulation because you are going to get to pay off that mortgage with dollars that are worth a lot less  in the out years. One of the reasons a lot of boomers are sitting on more wealth than the succeeding generations is exactly that. A lot of us were in our first houses before inflation hit and ended up owning our homes essentially for half price or less.

Edited July 29, 2022 by gehringer_2

[gehringer_2]

4 minutes ago, Tigeraholic1 said:

After Washingtons decision today, enter the new branch of OPEC.

 

The difference with graphite is that there is no natural resource or geographic limitation. It can be made anywhere, starting with cheap petroleum coke. You just have to make the capital investment.

[Tigeraholic1]

13 minutes ago, gehringer_2 said:

The difference with graphite is that there is no natural resource or geographic limitation. It can be made anywhere, starting with cheap petroleum coke. You just have to make the capital investment.

Next piece legislation that needs pushed. We seem to be constantly reacting slow and late with new technology challenges. 

[oblong]

2 hours ago, gehringer_2 said:

It's not all bad for everyone. If you are a young homeowner with a low fixed interest rate mortgage, inflation is going to be a big boost to your wealth accumulation because you are going to get to pay off that mortgage with dollars that are worth a lot less  in the out years. One of the reasons a lot of boomers are sitting on more wealth than the succeeding generations is exactly that. A lot of us were in our first houses before inflation hit and ended up owning our homes essentially for half price or less.

Another group is those in their mid to late 30s.  They came of age when the housing collapsed. I have some cousins who had good jobs out of college that have a house worth $500K now that they got for a lot less.  Timing. 

[pfife]

 

[Deleterious]

Every time I read that Tweet I find something else wrong with it.

[gehringer_2]

39 minutes ago, pfife said:

 

Great photo of John Foster Dulles.

[pfife]

7 hours ago, Deleterious said:

Every time I read that Tweet I find something else wrong with it.

a true work of art

[1776]

20 minutes ago, pfife said:

a true work of art

Fireside chat anyone?

[Archie]

15 hours ago, gehringer_2 said:

Over the many years I've bought cars the math has led me from new to used and back to new and now it sounds like maybe back to used! 

That's going to be a shift as EV's take significant a piece of the market. You can buy an IC car in good condition 2-4 yrs old and for all intents and purposed plan on being able to drive it as long as you could care to keep a new car. But if you are looking at at huge battery replacement cost at 7-10 yrs out, that's going mean much higher depreciation rates on E-vehicles to figure into their true ownership cost.

There are a lot of ideas and proposals for recovering value from automotive battery packs that still have a lot of functional life but not enough to keep in the car (~75%) but so far not much concrete.

The 50k number I used is a little less than my new truck cost.  I was lucky to be able to get one.  Similar used trucks with up to 100k miles were still in the 40s.  Nothing is cheap right now.

I don't know how EV will go over.  I still think the majority of people will avoid them and auto mfg that are going to mainly all EVs will be in trouble.  A lot of things will have to change to make EVs practical and I don't see that happening for a very long time.  They are probably good for around town driving but taking a long trip would be a problem.

 

[oblong]

I love 3YearLetterman..... a friend and I try to do that kind of thing with each other but that guy nails it.  One of my favorite twitter accounts.

[pfife]

It truly is a masterful account.