US Price Inflation Year-to-Year Prediction - Reset after Mid-Term - December 2022 Title Update

RQA wrote:

Trapper Gus wrote:corporations today have the option of buying back stock to keep their P/E growing.  

More Trapper ignorance on full display.   It is simply amazing to me how one man can spew out so much bullshit and then just come back and repeat and repeat.

A stock buyback will increase EPS.   EPS is the denominator in the P/E ratio.   Increasing EPS will decrease P/E not "grow it".

You're right. I have corrected the post, thank you.

I meant to say stock price, which happens because of course the stock owners have a P/E ratio in mind so when stock buy backs drop the P/E the market bids up the stock price back to near the former P/E.  Totally means that a poor management can stay in place for years via stock manipulation instead of running the corporations well.

RQA wrote:The idea that a stock buyback is bad management is more plain and simple ignorance.   The leftists that are against stock buybacks are never against stock sales.   Why is that?   A company should be able to sell shares to raise capital but never be allowed to buy shares back?  

As an investor stock buybacks are probably more often good than bad, but not always.   The reverse is true for stock sales.  

A company like Apple has huge amounts of cash and a good way for them to return that cash to their investors is through share buybacks particularly if management cannot find a better use for that money.

A company like Ford, on the other hand, needs large amounts of capital to build their new facilities in KY and TN and a stock buyback for them would be bad management.

These transactions are completely transparent and you can factor them in to your decisions to buy, sell or hold shares in a company.

Both new stock sales and stock buybacks are market manipulation.

Stock buybacks were illegal before 1980, and, as I have explained, the use of stock buy backs creates sn environment of poor business management.

If a corporation has excess cash it wants to return to stockholders it can easily issue a one time dividend.

RQA wrote:

Trapper Gus wrote:

Both new stock sales and stock buybacks are market manipulation.

Yet you are against only one of them.  

Who said I wasn't against new stock.sales?

Technically, back when company stock wasn't being manipulated with buy backs, stock owners used to shout bloody murder about more stock being issued which watered down the value of their existing shares of stock, so the pratice didn't have as much traction.

For a company which is properly managed in an enviorment which restricts market share to less than 5%, bonds, bank loans & preferred stock are financing methods for money for ligitimate business expansion.

Even now companies tend to avoid issuing new stock unless there is a corresponding asset which justifies the additional stock, such as the purchase of another company.

RQA wrote:

Trapper Gus wrote:

Who said I wasn't against new stock.sales?

So in your view once a company goes public:  that's it.    The number of shares is forever fixed.

As I explained the issuing of new shares should not water down the value of existing shares, meaning, since on the balance sheet stockholder equity is a liability for the corporation there needs to be a corresponding asset to keep the balance sheet balanced.

Stock splits also create new shares, however those, for good reasons are given to the owners of existing  shares to keep them "whole"

I'm getting you know nothing about corporate balance sheets and just think of stock markets as a casino.

Seems like one of the most successful investors agrees with avoiding issuing more stock and even stock splits.  Well at least for the original stock owners.

https://www.cnbc.com/2022/03/17/why-warren-buffett-says-berkshire-hathaway-will-never-split-its-stock.html

Not sure that FoMoCo has ever increased the number of shares of the "family stock" (class B I believe)

So, looking at the month to month over the last year, and the trend over the last two quarters, just due to the numbers, inflation should be dropping into the 3% year-to-year range by this time next year.

Here are my guesses for the year-to-year for the next 12 months. (Remember the report in January is for December, in February for January ...)

6.7% (a 0.4% drop)      Dec - 2022 --- actual 6.5%
6.3% (a 0.4% drop)      Jan - 2023 --- actual 6.4%
5.8% (a 0.5% drop)      Feb - 2023 --- actual 6.0%
4.8% (a 1.0% drop)      Mar - 2023
4.7% (a 0.1% drop)      Apr - 2023
4.0% (a 0.7% drop)      May - 2023
3.0% (a 1.0% drop)      Jun - 2023
3.1% (a 0.1% increase) Jul - 2023
2.9% (a 0.2% drop)      Aug - 2023
2.8% (a 0.1% drop)      Sep - 2023
2.6% (a 0.2% drop)      Oct - 2023
2.5% (a 0.1% drop)      Nov - 2023

https://fred.stlouisfed.org/series/CPIAUCSL#0

edit - I'm going to say that if the guesses are within +/- 0.2% they are accurate.  Also, the drop each month is based on the guess value the month before, so the likelihood is higher deviation as the year progresses.

Of course, if someone starts another war, or a new pandemic breaks out all guesses are out the window.

edit - The Fed will keep raising rates, not because the economy needs it but because their chairman is in Trump's pocket & because they have hated having such low rates and are using inflation as an excuse to raise them.

https://www.axios.com/2023/01/12/consumer-inflation-december

The index, which captures price changes across a basket of consumer goods and services, fell 0.1%, following an increase by the same amount in November. Over the past 12 months ending in December, the index is up 6.5%, falling from 7.1% through November.

Core CPI, which excludes food and fuel costs, rose by 0.3% last month. Over the last 12 months through December, the index rose 5.7%. In November, those figures were 0.2% and 6%, respectively

The more I read on the business press the more I am thinking the Fed has an agenda that is different from controlling either inflation or employment. Either that or they don't understand how the inflation numbers are calculated.

Wall Street investors seem confident that the Fed has largely whipped inflation, which would make additional rate hikes unnecessary. By some measures, investors think inflation could drop to nearly 2% — from 6.5% now — by the end of this year, according to Deutsche Bank. The Fed’s policymakers, by contrast, have collectively forecast that inflation will still be 3.1% by year’s end.

https://apnews.com/article/inflation-federal-reserve-system-financial-markets-business-d6606dbd98927d5a1e6978011d5b2024

GRR Spartan wrote:Inflation is at a 15 month low

The year-to-year number has a whole year of past numbers to unwind. For the last six months or so the month-to-month numbers have been fairly tame with no big upside surprises.

Trapper Gus wrote:The more I read on the business press the more I am thinking the Fed has an agenda that is different from controlling either inflation or employment. Either that or they don't understand how the inflation numbers are calculated.

Wall Street investors seem confident that the Fed has largely whipped inflation, which would make additional rate hikes unnecessary. By some measures, investors think inflation could drop to nearly 2% — from 6.5% now — by the end of this year, according to Deutsche Bank. The Fed’s policymakers, by contrast, have collectively forecast that inflation will still be 3.1% by year’s end.

https://apnews.com/article/inflation-federal-reserve-system-financial-markets-business-d6606dbd98927d5a1e6978011d5b2024

I believe the agenda is to keep the fed rate at a more sustainable level than the past decade or more. When we do officially have a recession and high unemployment, they can cut the rate to 3 or so, instead of 0.

Motown Spartan wrote:

Trapper Gus wrote:The more I read on the business press the more I am thinking the Fed has an agenda that is different from controlling either inflation or employment.  Either that or they don't understand how the inflation numbers are calculated.



https://apnews.com/article/inflation-federal-reserve-system-financial-markets-business-d6606dbd98927d5a1e6978011d5b2024

I believe the agenda is to keep the fed rate at a more sustainable level than the past decade or more. When we do officially have a recession and high unemployment, they can cut the rate to 3 or so, instead of 0.  

That is the story they tell, based on Milton Friedman's monetary theory I am told.  They planned to do this way back in 2008 when they had to expand their balance sheet because of the global financial meltdown.  They were reducing their balance sheet until Trump complained and forced them to increase it to help his election chances.  Then covid hit and all hell broke loose on their balance sheet.




The issue is that the monetary theory method allows significant distortions in the economy, such as the windfall profit taking which caused at least 50% of the inflation over the last two years.  I'm unsure what other tools the Fed has in its tool kit, but this one is too big a hammer to deal with the size of nails in the economy.

edit- the anti-elite would suggest that what the Fed has done is transferred much of the wealth in the economy to the wealthy to the detriment of everyone else, which is pretty hard to disagree with.

https://www.bls.gov/news.release/cpi.nr0.htm

Waiting to see how this shakes out this month, last month included the yearly adjustment to the numbers.

https://wolfstreet.com/2023/02/21/how-the-cpi-weights-changed-and-moved-cpi-meet-the-surprises/

TG wrote:Here are my guesses for the year-to-year for the next 12 months. (Remember the report in January is for December, in February for January ...)

6.7% (a 0.4% drop)      Dec - 2022 --- actual 6.5%
6.3% (a 0.4% drop)      Jan - 2023 --- actual 6.4%
5.8% (a 0.5% drop)      Feb - 2023 --- actual 6.0%
4.8% (a 1.0% drop)      Mar - 2023
4.7% (a 0.1% drop)      Apr - 2023
4.0% (a 0.7% drop)      May - 2023
3.0% (a 1.0% drop)      Jun - 2023
3.1% (a 0.1% increase) Jul - 2023
2.9% (a 0.2% drop)      Aug - 2023
2.8% (a 0.1% drop)      Sep - 2023
2.6% (a 0.2% drop)      Oct - 2023
2.5% (a 0.1% drop)      Nov - 2023

https://www.bls.gov/news.release/cpi.nr0.htm

So far so good, running a bit higher than I guessed but within the 0.2% that I gave myself.

edit - I have to say I fear that the Republican's effort to destroy the economy via putting the US in default is one of these events which could totally invalidate these predictions.

TG wrote:Here are my guesses for the year-to-year for the next 12 months. (Remember the report in January is for December, in February for January ...)

6.7% (a 0.4% drop)      Dec - 2022 --- actual 6.5%
6.3% (a 0.4% drop)      Jan - 2023 --- actual 6.4%
5.8% (a 0.5% drop)      Feb - 2023 --- actual 6.0%
4.8% (a 1.0% drop)      Mar - 2023 --- actual 5.0%
4.7% (a 0.1% drop)      Apr - 2023
4.0% (a 0.7% drop)      May - 2023
3.0% (a 1.0% drop)      Jun - 2023
3.1% (a 0.1% increase) Jul - 2023
2.9% (a 0.2% drop)      Aug - 2023
2.8% (a 0.1% drop)      Sep - 2023
2.6% (a 0.2% drop)      Oct - 2023
2.5% (a 0.1% drop)      Nov - 2023

TG wrote:So far so good, running a bit higher than I guessed but within the 0.2% that I gave myself.

edit - I have to say I fear that the Republican's effort to destroy the economy via putting the US in default is one of these events which could totally invalidate these predictions.

https://www.bls.gov/news.release/cpi.nr0.htm

TG wrote:Here are my guesses for the year-to-year for the next 12 months. (Remember the report in January is for December, in February for January ...)

6.7% (a 0.4% drop)      Dec - 2022 --- actual 6.5%
6.3% (a 0.4% drop)      Jan - 2023 --- actual 6.4%
5.8% (a 0.5% drop)      Feb - 2023 --- actual 6.0%
4.8% (a 1.0% drop)      Mar - 2023 --- actual 5.0%
4.7% (a 0.1% drop)      Apr - 2023 --- actual 4.9%
4.0% (a 0.7% drop)      May - 2023
3.0% (a 1.0% drop)      Jun - 2023
3.1% (a 0.1% increase) Jul - 2023
2.9% (a 0.2% drop)      Aug - 2023
2.8% (a 0.1% drop)      Sep - 2023
2.6% (a 0.2% drop)      Oct - 2023
2.5% (a 0.1% drop)      Nov - 2023

TG wrote:So far so good, running a bit higher than I guessed but within the 0.2% that I gave myself.

edit - I have to say I fear that the Republican's effort to destroy the economy via putting the US in default is one of these events which could totally invalidate these predictions.

https://www.bls.gov/news.release/cpi.nr0.htm

Trapper Gus wrote:

TG wrote:Here are my guesses for the year-to-year for the next 12 months. (Remember the report in January is for December, in February for January ...)

6.7% (a 0.4% drop)      Dec - 2022 --- actual 6.5%
6.3% (a 0.4% drop)      Jan - 2023 --- actual 6.4%
5.8% (a 0.5% drop)      Feb - 2023 --- actual 6.0%
4.8% (a 1.0% drop)      Mar - 2023
4.7% (a 0.1% drop)      Apr - 2023
4.0% (a 0.7% drop)      May - 2023
3.0% (a 1.0% drop)      Jun - 2023
3.1% (a 0.1% increase) Jul - 2023
2.9% (a 0.2% drop)      Aug - 2023
2.8% (a 0.1% drop)      Sep - 2023
2.6% (a 0.2% drop)      Oct - 2023
2.5% (a 0.1% drop)      Nov - 2023

https://www.bls.gov/news.release/cpi.nr0.htm

So far so good, running a bit higher than I guessed but within the 0.2% that I gave myself.

edit - I have to say I fear that the Republican's effort to destroy the economy via putting the US in default is one of these events which could totally invalidate these predictions.

Don't buy into the scare tactic of the debt ceiling.

Motown Spartan wrote:

Trapper Gus wrote:

https://www.bls.gov/news.release/cpi.nr0.htm

So far so good, running a bit higher than I guessed but within the 0.2% that I gave myself.

edit - I have to say I fear that the Republican's effort to destroy the economy via putting the US in default is one of these events which could totally invalidate these predictions.

Don't buy into the scare tactic of the debt ceiling.

"Scare tactic"?

The last time the Republicans fucked us up with this game (2011) it had serious effects on the economy.

6 years of below potential growth in the economy in the long term and a downgrading of US debt in the short term. Economic choices are built on trust, and every time the Republicans show they don't give a fuck about the United States, as they are doing with this "Scare tactic" people begin to think that US debt is not the ultra-safe investment it has been.

edit - However, my disclaimer on my predication is only reasonable.  If the Republicans blow up existing conditions with a default, crashing the global economy, or cutting of the policies the Democratic Congress passed during the 117th Congress, what happens to Consumer Prices is unpredictable, versus the glide path the economy is on back to normality that the prediction is based upon.  This total disregard for the good of "the People" is why, in 1995 I vowed never to vote for any of the stupid ass Republicans until they changed their principles.

...Biden noted that lawmakers, including Republican lawmakers, don’t want the government to default on its obligations. He also suggested he is considering invoking the Fourteenth Amendment, which declares the national debt inviolable, ...

Okay, so President Biden is backstopping this, which provides some rather grim belief that a default will not happen, and there are several legal principles beyond just the 14th which say that the budget bills, being much more recent than the borrowing limit bill, take precedence if they are in conflict, so there are strong cases that ignoring the debt limit is legal and probably the debt limit isn't Constitutional.

https://heathercoxrichardson.substack.com/p/may-9-2023-tuesday

However, I'm still very angry at the Republicans for even suggesting that the United States would default and forcing President Biden into this position.

Trapper Gus wrote:

TG wrote:Here are my guesses for the year-to-year for the next 12 months. (Remember the report in January is for December, in February for January ...)

6.7% (a 0.4% drop)      Dec - 2022 --- actual 6.5%
6.3% (a 0.4% drop)      Jan - 2023 --- actual 6.4%
5.8% (a 0.5% drop)      Feb - 2023 --- actual 6.0%
4.8% (a 1.0% drop)      Mar - 2023 --- actual 5.0%
4.7% (a 0.1% drop)      Apr - 2023 --- actual 4.9%
4.0% (a 0.7% drop)      May - 2023 --- actual 4.0%
3.0% (a 1.0% drop)      Jun - 2023
3.1% (a 0.1% increase) Jul - 2023
2.9% (a 0.2% drop)      Aug - 2023
2.8% (a 0.1% drop)      Sep - 2023
2.6% (a 0.2% drop)      Oct - 2023
2.5% (a 0.1% drop)      Nov - 2023

TG wrote:So far so good, running a bit higher than I guessed but within the 0.2% that I gave myself. edit - May update is dead nuts on!  (brag brag)

edit - I have to say I fear that the Republican's effort to destroy the economy via putting the US in default is one of these events which could totally invalidate these predictions.  edit - their attempt failed, seemingly.

https://www.bls.gov/news.release/cpi.nr0.htm

Trapper Gus wrote:

TG wrote:Here are my guesses for the year-to-year for the next 12 months. (Remember the report in January is for December, in February for January ...)

6.7% (a 0.4% drop)      Dec - 2022 --- actual 6.5%
6.3% (a 0.4% drop)      Jan - 2023 --- actual 6.4%
5.8% (a 0.5% drop)      Feb - 2023 --- actual 6.0%
4.8% (a 1.0% drop)      Mar - 2023 --- actual 5.0%
4.7% (a 0.1% drop)      Apr - 2023 --- actual 4.9%
4.0% (a 0.7% drop)      May - 2023 --- actual 4.0%
3.0% (a 1.0% drop)      Jun - 2023 --- actual 3.0%
3.1% (a 0.1% increase) Jul - 2023
2.9% (a 0.2% drop)      Aug - 2023
2.8% (a 0.1% drop)      Sep - 2023
2.6% (a 0.2% drop)      Oct - 2023
2.5% (a 0.1% drop)      Nov - 2023

TG wrote:So far so good, edit - May & June updates
are dead nuts on!  (brag brag)

https://www.bls.gov/news.release/cpi.nr0.htm

Trapper Gus wrote:

TG wrote:Here are my guesses for the year-to-year for the next 12 months. (Remember the report in January is for December, in February for January ...)

6.7% (a 0.4% drop)      Dec - 2022 --- actual 6.5%
6.3% (a 0.4% drop)      Jan - 2023 --- actual 6.4%
5.8% (a 0.5% drop)      Feb - 2023 --- actual 6.0%
4.8% (a 1.0% drop)      Mar - 2023 --- actual 5.0%
4.7% (a 0.1% drop)      Apr - 2023 --- actual 4.9%
4.0% (a 0.7% drop)      May - 2023 --- actual 4.0%
3.0% (a 1.0% drop)      Jun - 2023 --- actual 3.0%
3.1% (a 0.1% increase) Jul - 2023 --- actual 3.2%
2.9% (a 0.2% drop)      Aug - 2023
2.8% (a 0.1% drop)      Sep - 2023
2.6% (a 0.2% drop)      Oct - 2023
2.5% (a 0.1% drop)      Nov - 2023

TG wrote: So far so good, edit - May & June updates were dead nuts on, however in July, though I predicted an increase it went up to 3.2 instead of 3.1, however that is within my self imposed +/- 0.2% margin.

https://www.bls.gov/news.release/cpi.nr0.htm

Trapper Gus wrote:

TG wrote:Here are my guesses for the year-to-year for the next 12 months. (Remember the report in January is for December, in February for January ...)

6.7% (a 0.4% drop)      Dec - 2022 --- actual 6.5%
6.3% (a 0.4% drop)      Jan - 2023 --- actual 6.4%
5.8% (a 0.5% drop)      Feb - 2023 --- actual 6.0%
4.8% (a 1.0% drop)      Mar - 2023 --- actual 5.0%
4.7% (a 0.1% drop)      Apr - 2023 --- actual 4.9%
4.0% (a 0.7% drop)      May - 2023 --- actual 4.0%
3.0% (a 1.0% drop)      Jun - 2023 --- actual 3.0%
3.1% (a 0.1% increase) Jul - 2023 --- actual 3.2%
2.9% (a 0.2% drop)      Aug - 2023 --- actual 3.7%
2.8% (a 0.1% drop)      Sep - 2023
2.6% (a 0.2% drop)      Oct - 2023
2.5% (a 0.1% drop)      Nov - 2023

TG wrote: So first miss, & it is huge, off by 0.8%.  Better luck next month, maybe. Best excuse I have is there was a time, before 2008, when 3.7% year-to-year was considered outstanding)

https://www.bls.gov/news.release/cpi.nr0.htm

Year-to-year is up for 2 months in a row.

Year to year energy (gas et al) is down 3.6%

Year to year used vehicles are down 6.6%

Year to year big gainers are Transportation Services, Shelter & Food Away from Home.

Three-month inflation annualized is 4.0%

steveschneider wrote:Groceries are more expensive, going to a restaurant is more expensive, concert tickets are outrageous, pet food is more expensive, restaurants are expensive, rents are outrageous, college keeps getting more expensive …I keep seeing these charts that inflation is going down but I call BS.

Perhaps you are thinking of prices, some of which, like used cars and gasoline, are less than they were 12 months ago.

The overall basket of prices used in the CPI is higher than 12 months ago, that number is hugely driven by how shelter is calculated and what percentage of the CPI it is (about 40%)

kingstonlake wrote:Cool. More stats to tell people who are real world affected by inflation and the rising cost of everyday life to STFU, you’re doing fine.

Egg prices have dropped, too, but are still higher year-to-year.

You are absolutely correct. I don't take any of these things personally in the short term. I support progressive policies which would help if followed, and the political party which is more likely to make that happen, which is all I can personally do to help.

Zurn wrote:

steveschneider wrote:Groceries are more expensive, going to a restaurant is more expensive, concert tickets are outrageous, pet food is more expensive, restaurants are expensive, rents are outrageous, college keeps getting more expensive …I keep seeing these charts that inflation is going down but I call BS.

The spin is BS. The effects of inflation are real and devastating to the low and middle class.

If prices started at, for example, $100 and now because of inflation are now $130, you are supposed to be happy because last month they only went from $129 to that $130. That's the spin. "inflation is lower". Maybe, but prices aren't lower.

Spin?

The numbers are the numbers.

If you want to make the button 50% of the population better off you will vote for Democratics and force everyone you know to go the same so as to have government programs like child tax credits which cut child poverty in half during the pandemic.

The recent burst of inflation was caused by the wealthy who control corporations gouging the rest of the population by raising the profits on the corporation via the simple method of raising prices. Establish laws to stop this sort of thing if you want to control inflation.

Zurn wrote:

Trapper Gus wrote:

Spin?

The numbers are the numbers.

If you want to make the button 50% of the population better off you will vote for Democratics and force everyone you know to go the same so as to have government programs like child tax credits which cut child poverty in half during the pandemic.

The recent burst of inflation was caused by the wealthy who control corporations gouging the rest of the population by raising the profits on the corporation via the simple method of raising prices.  Establish laws to stop this sort of thing if you want to control inflation.

Spin?   Absolutely.  There are ads on my local tv stations where Biden is bragging about having "reduced inflation" The inflation rate could return to zero and gas would still cost the poor and middle class $3.90/gallon, rent would remain at record levels and have you seen the price of Triscuts at your local Meijer?  

My post wasn't about the wonders of Democratic policies in improving the lives of the lower 50% or about the causes of inflation.   Those are spins of a different color, of which I see you are a devoted practitioner.

So you post is not about the inflation rate, which apparently is what the Biden ad is talking about, but the fact that prices are higher.

And you are putting that in isolation, ignoring the fact that average wages are also rising, and the have been rising the most for the bottom 50%, maybe more than inflation, though people argue about that.

The facts that the Republicans policies, economically, screw the 99% and the Democratic policies, recently, have been better for the 99% are only spun by Republicans, but the numbers support this statement, as do the details about why inflation recently spiked, and that Biden took actions to reduce the rate of increases in prices.

Oh and BTW, for a post that wasn't about the effect of higher prices on the bottom 50% you seemed to spend a out 50% or more of your post talking about it.