-
Having trouble using the site?
Contact support
Inflation.......... ?
- Thread starter Hobo Hilton
- Start date
Only an idiot would be against the subject. They’re the ones who will sell me their stuff for Pennie’s on the dollar when the recession finally hits in 2030.Been a few critics that have commented "this is a shooting website". Why all the talk about inflation / recession ? Seems inflation has filtered down to shooting. No let up in sight, on anything.
Price shock.
I am loading up some 30-40 Krag, what it is going to be fed to is in the vintage thread around here somewhere. And I had a case of reverse sticker shock.www.snipershide.com
It is appearing that the "Airlines" feel inflation will go on for at least 4 more years, American employees will get about a 10% raise every year and continue to travel while paying 10% more every year for an airplane ticket.
____________
American Airlines raised its offer for a new pilot contract by more than $1 billion to match a preliminary deal last week between rival United Airlines
and that carrier’s aviators.
The new offer from American Airlines would bring the four-year offer’s value to around $9 billion, and match United pay rates, backpay and other benefits such as sick time and life insurance, CEO Robert Isom said in a message to pilots on Friday.
Airlines and pilot unions had been negotiating new deals for years. Unions have won more bargaining power in the wake of Covid as the industry grapples with a prolonged pilot shortage just as travel demand recovered. Delta Air Lines pilots approved a new agreement in March for a deal that includes 34% raises over four years.
American’s pilots were scheduled to start voting on the current deal on Monday. The new offer includes 21% pay bonuses and pay on par with United and Delta, the Allied Pilots Association, their union, said Friday.
www.cnbc.com
____________
American Airlines raised its offer for a new pilot contract by more than $1 billion to match a preliminary deal last week between rival United Airlines
and that carrier’s aviators.
The new offer from American Airlines would bring the four-year offer’s value to around $9 billion, and match United pay rates, backpay and other benefits such as sick time and life insurance, CEO Robert Isom said in a message to pilots on Friday.
Airlines and pilot unions had been negotiating new deals for years. Unions have won more bargaining power in the wake of Covid as the industry grapples with a prolonged pilot shortage just as travel demand recovered. Delta Air Lines pilots approved a new agreement in March for a deal that includes 34% raises over four years.
American’s pilots were scheduled to start voting on the current deal on Monday. The new offer includes 21% pay bonuses and pay on par with United and Delta, the Allied Pilots Association, their union, said Friday.
American Airlines boosts pilot contract offer by $1 billion after United deal
American Airlines CEO Robert Isom said the airline will match pay rates at rivals.
As long as the FED reserve fails in it's job, inflation will continue.
The Great Reset will not be pretty.
Home prices on track for 8% increase year-over-year, says Black Knight’s Andy Walden
“Inflation is the main reason why Americans feel like they need to earn so much more than they already are just to feel comfortable,” said Sarah Foster, analyst at Bankrate.
www.cnbc.com
To feel 'comfortable,' Americans think they need a $233,000 salary and nearly $1.3 million for retirement. Here's what experts say
Americans' expectations are higher for how much they need to earn and save, surveys show. Experts say they should keep these two tips in mind.
Makes me wonder what the median income of the 2500 surveyed is? To project $233,000 as a necessary yearly income bet they are already receiving a six figure income. Bet working class folks would aim lower.“Inflation is the main reason why Americans feel like they need to earn so much more than they already are just to feel comfortable,” said Sarah Foster, analyst at Bankrate.
To feel 'comfortable,' Americans think they need a $233,000 salary and nearly $1.3 million for retirement. Here's what experts say
Americans' expectations are higher for how much they need to earn and save, surveys show. Experts say they should keep these two tips in mind.
The International Monetary Fund on Tuesday raised its growth forecast for the global economy, turning slightly more positive despite slowing momentum from China.
In the latest update to its World Economic Outlook, the IMF raised its 2023 global growth prediction by 0.2 percentage points to 3%, up from 2.8% at its April assessment. The IMF kept is 2024 growth forecast unchanged at 3%.
In terms of inflation, the Fund also expects an improvement from last year. Headline inflation is projected to reach 6.8% this year, falling from 8.7% in 2022. However, core inflation, which strips out volatile items, is seen declining more slowly to 6% this year, from 6.5% last year.
www.cnbc.com
In the latest update to its World Economic Outlook, the IMF raised its 2023 global growth prediction by 0.2 percentage points to 3%, up from 2.8% at its April assessment. The IMF kept is 2024 growth forecast unchanged at 3%.
In terms of inflation, the Fund also expects an improvement from last year. Headline inflation is projected to reach 6.8% this year, falling from 8.7% in 2022. However, core inflation, which strips out volatile items, is seen declining more slowly to 6% this year, from 6.5% last year.
IMF raises global growth forecast despite China's recovery 'losing steam'
The International Monetary Fund on Tuesday raised its growth forecast for the global economy, turning slightly more positive despite slowing momentum from China.
Inflation is being "Dialed In" for the next 4 - 5 years.....
This is happening because Jerome Powell sat on his ass a year ago and did not tackle inflation.
Read it and weep.
_____________________
Under the terms of the deal, existing full- and part-time UPS Teamsters will get $2.75 more per hour in 2023, and $7.50 more per hour over the length of the contract, the union said. Meanwhile, existing part-timers will see their pay raised immediately up to no less than $21 per hour.1 hour ago
Instead, UPS and the Teamsters struck a five-year tentative agreement that raises wages for all workers, creates additional full-time jobs and imposes dozens of workplace protections and improvements, the Teamsters said in a statement on Tuesday.
abcnews.go.com
This is happening because Jerome Powell sat on his ass a year ago and did not tackle inflation.
Read it and weep.
_____________________
Under the terms of the deal, existing full- and part-time UPS Teamsters will get $2.75 more per hour in 2023, and $7.50 more per hour over the length of the contract, the union said. Meanwhile, existing part-timers will see their pay raised immediately up to no less than $21 per hour.1 hour ago
Instead, UPS and the Teamsters struck a five-year tentative agreement that raises wages for all workers, creates additional full-time jobs and imposes dozens of workplace protections and improvements, the Teamsters said in a statement on Tuesday.
UPS and Teamsters union reach agreement, avert strike
UPS and Teamsters faced a July 31 deadline.
abcnews.go.com
Car repair costs are up almost 20% over the past year. Here are 6 reasons why
Motor vehicle repair costs are up almost 20% in the past year, according to the consumer price index.
www.cnbc.com
The excuses crack me up.Car repair costs are up almost 20% over the past year. Here are 6 reasons why
Motor vehicle repair costs are up almost 20% in the past year, according to the consumer price index.
1. Longer Vehicle ownership... not shit, can't afford a new or a better car - FJB
2. Higher labor costs - yup FJB created this aswell.. lets print some more money to give away, see what happens
3. The prevalence of car crashes jumped in the pandemic era - odd, because I read people drove less, not more
4. Fewer auto repair tech - yup, they can't work for free, cause their paycheck isn't covering rent, let alone food. Hence, need more money, see # 2
5. High tech service appoitments. = yup, taking a fk'n picture and posting it or sending to customer, huge bucks right there. Hell, my kids send pictures all the time. I guess they are in 'Tech Service Training'
Load of BS... FJB and the Dems, money printers go Brrrrrrrrrrr
Massive illegal aliens (15M+ under BiDeN) driving around with no license and no insurance. Police won't arrest them.
Insurance rates skyrocketing. My agency told me 25% or more of the accidents in Dallas area are illegals with no insurance.
FJB
they should hire scabsInflation is being "Dialed In" for the next 4 - 5 years.....
This is happening because Jerome Powell sat on his ass a year ago and did not tackle inflation.
Read it and weep.
_____________________
Under the terms of the deal, existing full- and part-time UPS Teamsters will get $2.75 more per hour in 2023, and $7.50 more per hour over the length of the contract, the union said. Meanwhile, existing part-timers will see their pay raised immediately up to no less than $21 per hour.1 hour ago
Instead, UPS and the Teamsters struck a five-year tentative agreement that raises wages for all workers, creates additional full-time jobs and imposes dozens of workplace protections and improvements, the Teamsters said in a statement on Tuesday.
UPS and Teamsters union reach agreement, avert strike
UPS and Teamsters faced a July 31 deadline.
They could put the homeless to work for 3 hots and a cot.
Companies have either written off 2024 or simply factoring increasing the cost of their products for another 18 months.
No light at the end of the tunnel.
_______________________
Tootsie Roll Industries (TR) experienced higher ingredient costs in 2023, and expects more of the same for 2024.
The confectioner said second quarter and first half 2023 sales contributed to improved net earnings, but added "significantly higher input costs mitigated much of the benefits of these higher sales."
Ellen Gordon, the company's chairman, said second quarter and first half 2023 gross profit margins and net earnings were adversely affected by higher costs for ingredients, among other items. Gordon added input unit costs moved "significantly higher" in 2023, following the expiration of supply agreements and subsequent new deals.
"These higher costs in 2023 are incremental to the significant increase in input costs that we experienced last year in 2022 when compared to 2021. We believe that the increases in ingredients and packaging materials costs from 2021 to present are the greatest that we have experienced over any two-year period in decades," Gordon said.
Gordon also said the company believes costs for ingredients will be even higher in 2024 than in 2023.
www.morningstar.com
No light at the end of the tunnel.
_______________________
Tootsie Roll Industries (TR) experienced higher ingredient costs in 2023, and expects more of the same for 2024.
The confectioner said second quarter and first half 2023 sales contributed to improved net earnings, but added "significantly higher input costs mitigated much of the benefits of these higher sales."
Ellen Gordon, the company's chairman, said second quarter and first half 2023 gross profit margins and net earnings were adversely affected by higher costs for ingredients, among other items. Gordon added input unit costs moved "significantly higher" in 2023, following the expiration of supply agreements and subsequent new deals.
"These higher costs in 2023 are incremental to the significant increase in input costs that we experienced last year in 2022 when compared to 2021. We believe that the increases in ingredients and packaging materials costs from 2021 to present are the greatest that we have experienced over any two-year period in decades," Gordon said.
Gordon also said the company believes costs for ingredients will be even higher in 2024 than in 2023.
Tootsie Roll sees 'significantly higher' ingredient costs into 2024
Once again, the FED is doing too little, too late.
Best to plan on 10% inflation, each year, for the next 4 years.
_____________________
www.foxbusiness.com
Best to plan on 10% inflation, each year, for the next 4 years.
_____________________
Fed hikes interest rates to 22-year high as inflation fight resumes
The Federal Reserve delivered another interest rate hike on Wednesday, raising rates to the highest level since 2001 as it tries to crush high inflation.
www.foxbusiness.com
I've been on a metals buying spree lately with the preference going to jewelry. The mark up for 24K jewelry is high compared to bullion, but might as well bling for a little bit before I have to start cutting it up to buy an extra allotment of crickets for dinner.
The interesting thing is the price for 10K, 14K, and 18K jewelry. At the prices for those you are better off buying pure bullion and sticking it in the safe.
The interesting thing is the price for 10K, 14K, and 18K jewelry. At the prices for those you are better off buying pure bullion and sticking it in the safe.
You are competing with the people of India on the gold jewelry.
Bullion from a reputable source is the safest bet.
I actually bought some gold items from India, and a bunch from the U.S.
Apmex sells 1 Troy oz .999 gold bracelets which is kind of neat.
Really just looking at ways to have real money on me at all times without carrying a pocket full of bullion.
Last edited:
btw, this girls laughing at you, because it fits your cock and her finger
Basically this move by the FED Reserve will simply add to inflation.
Too little, too late.
__________
Everything from credit cards and car loans to student loans and mortgages will be affected by the central bank’s 11th rate increase.
www.cnbc.com
Too little, too late.
__________
Everything from credit cards and car loans to student loans and mortgages will be affected by the central bank’s 11th rate increase.
Here's what the Federal Reserve's 25 basis point interest rate hike means for your money
Everything from mortgages and credit cards to student and car loans has been affected by the Federal Reserve's rate hike cycle.
Jerome Powell has moved to the position of "do nothing". Below are his comments and some comments of people that follow him.
Inflation will continue. The "real numbers" of the inflation rate will be spoken by those on Main Street, America. The government numbers will just be their "Wish List" .
How does the "Great Reset" feel ?
_________
“We now believe that the Fed is on a prolonged ‘hawkish hold,’” Tanaya Macheel
The Dow Jones Industrial Average remained positive, but only marginally so. The 30-stock Dow was up about 10 points, or 0.02%, as of 3:15 p.m.-Darla Mercado
On the topic of rate cuts next year, Powell said it’s going to be a “judgement” they make based on how “confident” they are.— Samantha Subin
“If you go through a period where inflation expectations are not anchored [and] inflation is volatile, it interferes with people’s lives and with economic activity. — Hakyung Kim
“In our opinion, the rate hiking cycle is done and the Fed will now pause for the rest of the year,” he said.— Alex Harring
Federal Reserve Chair Jerome Powell indicated that the central bank is willing to wait things out as it follows the latest data.
“We have to be ready to follow the data, and given how far we’ve come, we can afford to be a little patient, as well as resolute,” he said.— Samantha Subin
“I would say that what our eyes are telling us is that policy has not been restrictive enough for long enough to have its full desired effects,” Powell said. “We intend to keep policy restrictive until we’re confident inflation is coming down sustainably to our 2% target, and we’re prepared to further tighten if that’s appropriate.”— Brian Evans
“We need to see that inflation is durably down that far. ... We think we’re going to need to certainly hold policy at a restrictive level for some time, and we need to be prepared to raise further if that, if we think that’s appropriate,” Powell said, pointing out that core inflation is still running above 3%.— Jesse Pound
“We’re going to be going meeting by meeting and as we go into each meeting, we’re going to be asking ourselves the same questions. Tanaya Macheel
www.cnbc.com
Inflation will continue. The "real numbers" of the inflation rate will be spoken by those on Main Street, America. The government numbers will just be their "Wish List" .
How does the "Great Reset" feel ?
_________
“We now believe that the Fed is on a prolonged ‘hawkish hold,’” Tanaya Macheel
The Dow Jones Industrial Average remained positive, but only marginally so. The 30-stock Dow was up about 10 points, or 0.02%, as of 3:15 p.m.-Darla Mercado
On the topic of rate cuts next year, Powell said it’s going to be a “judgement” they make based on how “confident” they are.— Samantha Subin
“If you go through a period where inflation expectations are not anchored [and] inflation is volatile, it interferes with people’s lives and with economic activity. — Hakyung Kim
“In our opinion, the rate hiking cycle is done and the Fed will now pause for the rest of the year,” he said.— Alex Harring
Federal Reserve Chair Jerome Powell indicated that the central bank is willing to wait things out as it follows the latest data.
“We have to be ready to follow the data, and given how far we’ve come, we can afford to be a little patient, as well as resolute,” he said.— Samantha Subin
“I would say that what our eyes are telling us is that policy has not been restrictive enough for long enough to have its full desired effects,” Powell said. “We intend to keep policy restrictive until we’re confident inflation is coming down sustainably to our 2% target, and we’re prepared to further tighten if that’s appropriate.”— Brian Evans
“We need to see that inflation is durably down that far. ... We think we’re going to need to certainly hold policy at a restrictive level for some time, and we need to be prepared to raise further if that, if we think that’s appropriate,” Powell said, pointing out that core inflation is still running above 3%.— Jesse Pound
“We’re going to be going meeting by meeting and as we go into each meeting, we’re going to be asking ourselves the same questions. Tanaya Macheel
Fed recap: Details from the Federal Reserve's July hike and Powell's market-moving comments
The central bank boosted rates by a quarter percentage point on Wednesday, bringing the benchmark borrowing rate to a range of 5.25%-5.5%.
Inflation is running at 10% +. McDonald's just verified that number.
____________________________________________
The company’s global same-store sales climbed 11.7%, topping StreetAccount estimates of 9.2%. All three of McDonald’s divisions reported double-digit growth for same-store sales. In the U.S., its largest market, same-store sales climbed 10.3%. McDonald’s also reported that visits to its U.S. locations grew for the fourth consecutive quarter.
www.cnbc.com
____________________________________________
The company’s global same-store sales climbed 11.7%, topping StreetAccount estimates of 9.2%. All three of McDonald’s divisions reported double-digit growth for same-store sales. In the U.S., its largest market, same-store sales climbed 10.3%. McDonald’s also reported that visits to its U.S. locations grew for the fourth consecutive quarter.
McDonald's earnings top estimates as mascot Grimace fuels U.S. sales
McDonald's same-store sales grew 11.7%, driven in part by a strong showing in Europe and the chain's Grimace promotion.
www.cnbc.com
On a side note My grandfather (Died in the early 80's) always liked .gov bonds. Said if the .gov goes broke you are going to have worse problems. He was a smart man, too young for WWI, too old for WWII, he owned a lumber company when the war started, his company got awarded a contract for PT boat parts. .gov said you are in your 30's, stay here run your company if we need you we know where to find you. He had money and this was his view.
I would be very interested in seeing what he has to say about the world now. I highly doubt he would say the same thing.
I would be very interested in seeing what he has to say about the world now. I highly doubt he would say the same thing.
One last thing on the metals. After picking and choosing parts in the book brought up in the other thread:
prephole.com
It can get to a point where gold is worth less then a can of spam. It really depends on how far the hill we are going to slide down. Personally I don't think it will be all the way down like in his book. I think we will slide down about as far as Russia slid during the bust up of the USSR. It will not go full Walking Dead....it might seem like it in specific areas, but not over all.
How I survived a year of SHTF in 90s Bosnia
No electricity, no food, no running water, no law. In a now legendary forum thread, a user named Selco tells preppers about his experiences and what he and his family did to stay alive.
prephole.com
It can get to a point where gold is worth less then a can of spam. It really depends on how far the hill we are going to slide down. Personally I don't think it will be all the way down like in his book. I think we will slide down about as far as Russia slid during the bust up of the USSR. It will not go full Walking Dead....it might seem like it in specific areas, but not over all.
On paper, inflation is giving the impression that the GDP is increasing and resilient.
Businesses are selling less and charging more. Ask the man on Main Street.
___________________________
The U.S. economy showed few signs of recession in the second quarter, as gross domestic product grew at a faster than expected pace during the period, the Commerce Department reported Thursday.
GDP, the sum of all goods and services activity, increased at a 2.4% annualized rate for the April-through-June period, better than the 2% consensus estimate from Dow Jones.
www.cnbc.com
Businesses are selling less and charging more. Ask the man on Main Street.
___________________________
The U.S. economy showed few signs of recession in the second quarter, as gross domestic product grew at a faster than expected pace during the period, the Commerce Department reported Thursday.
GDP, the sum of all goods and services activity, increased at a 2.4% annualized rate for the April-through-June period, better than the 2% consensus estimate from Dow Jones.
GDP grew at a 2.4% pace in the second quarter, topping expectations despite recession calls
Gross domestic product was expected to increase at a 2% annualized pace in the second quarter.
The "slide down" will be on a path full of rocks, ruts, briars, and mud puddles.One last thing on the metals. After picking and choosing parts in the book brought up in the other thread:
How I survived a year of SHTF in 90s Bosnia
No electricity, no food, no running water, no law. In a now legendary forum thread, a user named Selco tells preppers about his experiences and what he and his family did to stay alive.
It can get to a point where gold is worth less then a can of spam. It really depends on how far the hill we are going to slide down. Personally I don't think it will be all the way down like in his book. I think we will slide down about as far as Russia slid during the bust up of the USSR. It will not go full Walking Dead....it might seem like it in specific areas, but not over all.
If I have to go down that path.... Best do it on a full stomach and be warm during the winter..
This I agree with and understand. I’ve often said that if the SHTF I’d give someone a tomato for a pound of gold.One last thing on the metals. After picking and choosing parts in the book brought up in the other thread:
How I survived a year of SHTF in 90s Bosnia
No electricity, no food, no running water, no law. In a now legendary forum thread, a user named Selco tells preppers about his experiences and what he and his family did to stay alive.
It can get to a point where gold is worth less then a can of spam. It really depends on how far the hill we are going to slide down. Personally I don't think it will be all the way down like in his book. I think we will slide down about as far as Russia slid during the bust up of the USSR. It will not go full Walking Dead....it might seem like it in specific areas, but not over all.
I’m hedging for that in between time when CBDC becomes a thing and you want to buy tangible items with tangible money.
I usually turn cash into tangible things, and not just precious metals.
There is nothing magic about stopping inflation. It was done in the past, right here in America.
____________________
What did Paul Volcker do to stop inflation?
Ultimately, it took a crackdown by cigar-chomping Fed chairman Paul Volcker to break the cycle of rising prices and wages. Volcker slammed the brakes on the economy by raising interest rates to 20% — tough medicine to prove he was serious about getting inflation under control.
____________________
What did Paul Volcker do to stop inflation?
Ultimately, it took a crackdown by cigar-chomping Fed chairman Paul Volcker to break the cycle of rising prices and wages. Volcker slammed the brakes on the economy by raising interest rates to 20% — tough medicine to prove he was serious about getting inflation under control.
Appearing that Japan is making some moves to insulate itself against inflation. Financial markets of the world have lost faith in the FED Reserve and the USD.
____________
“Fighting inflation was not the official reason for the policy tweak, as that would surely imply stronger tightening moves, but the Bank recognized obstinately elevated inflationary pressure by revising up its forecast,” Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, said in a note.
www.cnbc.com
____________
“Fighting inflation was not the official reason for the policy tweak, as that would surely imply stronger tightening moves, but the Bank recognized obstinately elevated inflationary pressure by revising up its forecast,” Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, said in a note.
The Bank of Japan just shocked markets with a policy tweak — here's why it matters
The Bank of Japan loosened its yield curve control in an unexpected move with ramifications across global financial markets.
www.cnbc.com
...the thanks we get from Japan, even though the Fed has financially supported them with how many billions in US dollars. Like a drug user they received 740million last summer only to be asking for a re-up 30 days later. As a working class American how safe is our 401K, have we been duped into investing, only too be the piggy bank for the elites when the value disappears from corporate loses.Appearing that Japan is making some moves to insulate itself against inflation. Financial markets of the world have lost faith in the FED Reserve and the USD.
____________
“Fighting inflation was not the official reason for the policy tweak, as that would surely imply stronger tightening moves, but the Bank recognized obstinately elevated inflationary pressure by revising up its forecast,” Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, said in a note.
The Bank of Japan just shocked markets with a policy tweak — here's why it matters
The Bank of Japan loosened its yield curve control in an unexpected move with ramifications across global financial markets.
Last edited:
How much of that is also people downgrading from 5-guys?Inflation is running at 10% +. McDonald's just verified that number.
View attachment 8191314
____________________________________________
The company’s global same-store sales climbed 11.7%, topping StreetAccount estimates of 9.2%. All three of McDonald’s divisions reported double-digit growth for same-store sales. In the U.S., its largest market, same-store sales climbed 10.3%. McDonald’s also reported that visits to its U.S. locations grew for the fourth consecutive quarter.
McDonald's earnings top estimates as mascot Grimace fuels U.S. sales
McDonald's same-store sales grew 11.7%, driven in part by a strong showing in Europe and the chain's Grimace promotion.
Lead?
Japan's bank bailout: some simple arithmetic
web.mit.edu
JAPAN'S BANK BAILOUT: SOME SIMPLE ARITHMETIC
"I welcome the substantial assistance in Japan's legislation to repair its troubled banking system," declared President Clinton this weekend. But what exactly have the Japanese done? Some press reports suggest that the most important part of the package - the injection of capital into the biggest banks - will face trouble, because the banks themselves do not want the money. I have been trying to understand all this, and offer the following illustrative example.
Imagine a bank with 105 billion yen in deposits, whose assets consist of loans with a face value of 115 billion yen. (Yes, Japanese banks have stocks and land as well, but this will not change the principle). Unfortunately, many of these loans are of doubtful quality. Let's suppose that there is a 50 percent chance that Japan's economy will improve, and all the loans will be repaid; but there is also a 50 percent chance that the bank will get only 85 billion yen.
In terms of expected value, this bank is insolvent - it has a net worth of minus 5 billion. But its stock will have a positive value, which is essentially due to the deposit insurance "put". Ignoring risk premia, the value of the stock will be 0.5(115-105) = 5 billion yen.
Now along comes the government, offering to inject capital into the bank, by buying preferred stock - in effect, by giving the bank a loan that is senior to the equity but subordinate to the deposits. Say the government offers 5 billion. In the plan as currently described, this money would come with strings attached: the bank would have to write off bad debts, etc.. But we can also imagine a "soft money" version of the plan, in which the money is given without questions asked. In the best case, it turns out, the bank is indifferent. More likely, the bank will positively disdain the offer.
First consider the conditional capital injection. We may represent this in a stylized way by supposing that the bank is forced to revalue its assets at their true expected value. This immediately wipes out the stockholders (not to mention the managers). I don't think the bank will ask for money under those conditions.
Alternatively, suppose no questions are asked. The bank's assets are now 115 loans plus 5 billion government bonds, with a supposed capital of 10 billion, half of which is a government claim in the form of preferred stock. If things go well, then, the original owners will receive 10 billion (120 - 110). If they go badly, as before, the owners get nothing. So their expected payoff is unchanged.
Notice, incidentally, that if the government bought common stock rather than preferred, the return to the original shareholders would actually be reduced (to 3.75). The basic logic here is the essential theorem of financial moral hazard: if you can borrow money without regard for risk - which is what deposit insurance does - you want to maximize leverage and hence minimize capital.
So there doesn't seem to be any reason why Japan's big banks, which surely are either underwater or close to it if their assets were marked to market, would accept the government's offer without coercion.
Finally, suppose that the government were in fact to simply give this bank money, say by buying off some of its questionable loans at par. Would this make the bank more willing to lend? On the contrary: If the logic of moral hazard applies - and the unwillingness of the banks to accept capital injections suggests that it does - better capitalized banks will be less willing to make risky loans, because they will care more about the left tail of the distribution of returns.
Strange, isn't it? The Japanese bank bailout is supposedly the key to the recovery of Japan's economy, which is supposedly the key to recovery in Asia; optimism sparked by that bailout has fueled a definite improvement in the mood in the whole region. Yet a simple example suggests that the rescue program is likely to end in farce, as banks decline to be rescued; and that if somehow the Japanese government finds the will to force the banks to take money anyway, it will actually be counterproductive.
Please tell me that I am missing something.
Last edited:
The culture at MIT has a different perspective on the world than the man on Main Street.
There is a lot to grasp with the Japanese culture. Look at what they have over come and look at how far back they go in history.
What ever their financial moves may be, I would not sell them short.
The headline says it all. No new products, no new manufacturing plants... Just the same old, same old... Only difference is selling less and charging more. I call that inflation.
_________
www.cnbc.com
_________
Procter & Gamble sales rise slightly, fueled by higher prices
Procter & Gamble sales rise slightly, fueled by higher prices
The Tide detergent maker also issued guidance for the new fiscal year that came in under Wall Street's expectations.
If you look at a NASDAQ chart (1 year) what you will see is an excellent example of inflation.
12,744 one year ago and now 14,363..... That is an increase of 11.2% (+/-)
Same companies, same facilities, same customers, same employees. They are paying higher wages, paying more for raw materials, paying more for rent, paying more for insurance, etc. And, all the talking heads of the financial world, the FED Reserve and the politician's are selling a bill of goods to "We the People".
If your investments have increased by 11.2% over the past year... Congratulations, you broke even.
If your investments increased by 11% over the past year, you are feeling pretty good.... LOL
American's are in the casino and may be winning 49% of the time but the House (inflation) is winning 51% of the time.
The "Great Reset" has become the norm. 4 years from now, with inflation at 10% / year, things will not look so good.
12,744 one year ago and now 14,363..... That is an increase of 11.2% (+/-)
Same companies, same facilities, same customers, same employees. They are paying higher wages, paying more for raw materials, paying more for rent, paying more for insurance, etc. And, all the talking heads of the financial world, the FED Reserve and the politician's are selling a bill of goods to "We the People".
If your investments have increased by 11.2% over the past year... Congratulations, you broke even.
If your investments increased by 11% over the past year, you are feeling pretty good.... LOL
American's are in the casino and may be winning 49% of the time but the House (inflation) is winning 51% of the time.
The "Great Reset" has become the norm. 4 years from now, with inflation at 10% / year, things will not look so good.
I assume most people by the time they hit middle-aged have a good sense of when they are losing ground. I feel like I am losing ground and living in fantasyland where the business world, the banks, and the elites don't even think they need rules at all. It's like the majority has decided Jim Cramer is a guru and we can all run it off a cliff.
I started noticing "it" when business quarterly reports / merger's / stock buy back's started being reported in the Billions $$$ and no longer in the Millions $$$
The average American has a hard time grasping the thought of $1,000 so grasping the thought of a Billion $$$ is so far out there it just does not compute in an American's mind.
Both the Lotto and Mega Millions are paying off more than $1 billion in recent weeks.
Where did those millionaires go ?
Two years ago, Jerome Powell / FED Reserve should have jumped the interest rate 2% above the rate of inflation.
If he would have done that, we would not be hearing this:
He singled out GM CEO Mary Barra, who received $29 million of compensation in 2022, and said it would take an entry level worker at a GM joint venture battery plant 16 years to earn as much as she made in a week.
When the UAW signs a "double digit" pay increase, inflation is seated in place for the next 4 years.
www.cnbc.com
If he would have done that, we would not be hearing this:
He singled out GM CEO Mary Barra, who received $29 million of compensation in 2022, and said it would take an entry level worker at a GM joint venture battery plant 16 years to earn as much as she made in a week.
When the UAW signs a "double digit" pay increase, inflation is seated in place for the next 4 years.
UAW seeks double-digit pay hikes in Detroit Three auto contract talks
United Auto Workers is pushing for pay increases and defined-benefit pensions for all workers in contract negotiations with Detroit Three auto manufacturers.
The story of inflation, as told through your child's backpack
Americans are expected to spend a record amount of school supplies this year. They're feeling sticker shock as inflation continues to push up prices.
The books are being cooked in order to reduce the COLA and squeeze those on fixed income even more.
___________________
As previously reported by GOBankingRates, a 3.0% COLA would represent a big drop from this year’s COLA of 8.7% — the highest since the early 1980s. Social Security beneficiaries can thank the soaring 2022 inflation rate for their bigger payments this year.
A COLA of 3.0% would raise the current average monthly benefit of $1,787.00 by about $53.60, according to The Senior Citizens League. However, Social Security recipients “won’t learn the bottom line” until Medicare Part B premiums are announced. Part B premiums are automatically deducted from most beneficiaries’ Social Security checks and those deductions
finance.yahoo.com
___________________
As previously reported by GOBankingRates, a 3.0% COLA would represent a big drop from this year’s COLA of 8.7% — the highest since the early 1980s. Social Security beneficiaries can thank the soaring 2022 inflation rate for their bigger payments this year.
A COLA of 3.0% would raise the current average monthly benefit of $1,787.00 by about $53.60, according to The Senior Citizens League. However, Social Security recipients “won’t learn the bottom line” until Medicare Part B premiums are announced. Part B premiums are automatically deducted from most beneficiaries’ Social Security checks and those deductions
Social Security: Latest 2024 COLA Estimate Inches Higher
Although inflation in the United States continued to fall in June -- hitting its lowest level in more than two years -- the latest Social Security cost-of-living adjustment (COLA) estimate for 2024...
Similar threads
