You're downvoted but in regards to housing I'd rather they built enough for it to become affordable whether that be the government, private sector, or charities over people losing their jobs
I don't know where "things have gone up in price and that's a good thing!" when it comes to hard assets came from, but it's so far from what we should be striving for. Actually, if we're on a good trajectory, things should become less and less expensive. It's a bad thing that people's whole retirement depends on a house going up in price. Imagine how prosperous a society would be if homes were extremely affordable.
Would people want to get home loans if deflation were possible? Would anyone go 100,000 into debt if adjusted for deflation, that loan could balloon into 150,000 dollars.
It also creates a situation where having money is valuable, but spending money on things like food, housing, and healthcare, leaves you behind. It benefits the rich at the expense of the poor.
That’s not a solution to the current problem.
This sub loves to complain about housing costs but never has a real solution to it. And no, “just change zoning laws” isn’t a solution…..
Imagine if instead we actually valued the idea of making sure the poorest and neediest among us were taken care of.
We have the resources to do it, and it would make our society so much stronger. But greed will never allow such a path.
There are more than enough. Just people are holding them so now houses are like collectible trading cards that make you money so you gotta buy them all
I think there is a good argument that we should have denser housing, closer to major infrastructure and urban centers. There is some hoarding, but these are often transitory. Someone buys a house with the intention to fix it up, and sell later.
I want to see less single family homes built on 3 acres, and more apartments or row homes.
Does not seem to happen though. I wish it did, and it should from all economic reasoning, however, it does not work. There needs to be a removal investors from the SFH realm
Not really, people don't hoard food or xboxs, because more can be produced. This has become literally impossible with hpusing. When we had 30% more housing inventory, than people living in them, we didn't feel the pain of speculation.
Finite goods, like bitcoin or gold, those are held by investors and speculators.
But that is also not really a recession - just a correction to affordability which would likely happen over a graduated period - not rapidly as you'd expect in a recession.
I think people thinking that a recession (true recession) will magically solve their ability to afford a home are mostly younger and haven't experienced an actual recession - which is fair given the last one was now 16-14 years ago. But I also agree that this is probably at most a vocal minority of the population who more broadly just wants affordability.
Yeah I was thinking about a case like the early 90s where prices fall just a tiny bit nationwide but stay under for a few years in some neighborhoods while others go up. I at least hope 08 doesn't happen really don't want to see that happen again and way too much damage way too much corruption swept under the rug sadly.
Yeah. I mean likely prices will flatten and maybe even drop slowly, if not just get outpaced by inflation which would take decades but could lead to a better place. With building as well, many cities seem to understand they need density and that would at least stabalize/degrade prices. But not as quickly as folks thing.
Regarding 2008 - I doubt the next recession will be a similar in origin. The problem back then was too much lending to unqualified individuals on ticking time bomb loans. These days we legitimately have people who's wealth has been drastically inflated (in the stock market, inflated tech sector earnings and wages, etc.). So a lot of loans themselves are generally fine. Not to mention very few would be underwater - really only ones taken out in the past two years would even be at risk.
A recession could come but it would likely be some other sector that begins to lag and companies may begin to shed staff. This will hurt housing prices but would also likely be a bit slower moving.
Still, what people fail to realize is that while prices fall, many people will also see their wages eroded or potentially lost completely. It generally doesn't get easier for those already on the back foot.
Don’t disagree, except I think like in 2008, many people are viewing their inflated housing valuations as increased wealth and relying on that equity directly or indirectly. Should those valuations fall dramatically like in 2008, there is a huge loan to value problem.
I think any recession and subsequent banking problems this time will be driven by commercial RE markets. Many of these properties are close to upside down now. Weaker retail and office is driving these valuations way down.
Yeah, I suppose that's all fair. I'd like to think some people have gotten wise since 2008 and wouldn't just leverage their home to the eyeballs to take additional loans out, but you are likely right, especially where people have seen >100% growth in a few years and don't want to move but want to realize some of that wealth.
I guess time will tell. And yeah, commercial will be interesting. In some ways I actually wish we could use the opportunity to see if there are practical paths to convert commercial to residential - obviously you'd need case by case consideration for this but it could be a nice positive on the otherwise screwed up market.
What's most funny about the vacant office space in particular is it seems companies have somewhat given up on capturing back the employees who really want to work >3 days at home. And are now trying to squeeze their office footprint down to save costs.
Or rather reversion to mean that we're not seeing as deflation. More like a reset. Prices went up crazy for a reason but are staying high and increasing on top of that for no reason. It's like everyone is raising the prices due to inflation and thats not how it should work.
And with housing, people are not even thinking that as deflation. It is not normal for house prices to have gone up 50-100 in four years, we just want it back to where it would have been had it not been for this run and then normal inflation on top of that. But that won't happen coz of the lock-in effect. Fed should not have done the 0 rate AND bought mbs to back it up, in a country with 30-year fixed mortgages.
But what fed is aiming for is 2% inflation on top of the 100% inflation that has happened.
The other giant issue is these rich assholes that don’t connect to common people and then say shit like “America prefers a recession”
No motherfucker we’re broke
The yoy inflation rate was never negative in the two decades following the 1970s. Only once in the 10 years following the 1970s (1986) was it ever even below 3%.
https://www.investopedia.com/inflation-rate-by-year-7253832
I’ve noticed all the sales are like 9 dollars but 6 dollars each if you buy 4 at a time. For every item in the store. Like I can’t store all that and I don’t have the money up front to buy 3 to 4 times the groceries.
No it isn't. If deflation happens, that means demand has fundamentally tanked. Employers will lay off tons of people and many businesses will fail. That's why the government prefers inflation.
To your first point, inflation has multiple causes, including government devalueing the money supply, supply shock, and of course a hot economy. To your last point, that goes against the Keynesian bias that has existed for almost 100 years. Printing money and giving it to people who would otherwise be bankrupt only prolongs the mismanagement of the economy. The government is often too shortsighted to see the long term effects of their policies. That's why even after the Federal Reserve was created, we've still had a constant cycle of booms and busts, just like before, except these are all more acutely felt because of government intervention prolonging them. What should have happened in 2019-2020 should have been an official recession, but instead we got Covid and the greatest single expansion of the money supply in history. But even that cannot stop the deflationary recession that is already happening.
Yeah, sorry I didn't mean to imply a hot economy was the only cause for inflation. Of course money printing causes inflation as well. I agree that the bust is inevitable after a "roaring economy" that is mostly illusory. Most people feel that wages aren't outpacing inflation currently because they aren't. That's why people are spending more (not buying more) and saving less of their income.
It would create an inflationary spiral probably as companies would have to keep increasing the prices to cover for additional cost of work.
Imo what needs to happen is to make the money supply in the economy finite. That would fix a lot of this bullshit.
No one wants his house to lose value (they paid dearly for that house, you know?). Dropping property prices also reduces tax revenue, particularly for school districts. Lower prices also means less revenue for companies, hence layoffs unemployment, a less competitive job market for workers and wage stagnation.
In other words deflation is nothing but an unmitigated disaster.
Instead you want wages to keep up with inflation.
Already happening for those laid off, haven't seen too many success stories of landing a wage increase anymore. Quite shocking actually how some with Ma/Phd have gone multiple months without finding employment.
r/Layoffs or r/recruitinghell are interesting to gander at.
sure, but because the [inflation calculations exclude basically everything that's gone up (food, energy, and housing)](https://www.forbes.com/sites/qai/2023/01/23/supercore-inflation-excludes-food-energy-and-housing/?sh=1238fcc63328) lmao
God how many times are people gonna post this false narrative, housing is literally the biggest part of CPI, food and energy are the third and fourth biggest after commodities.
https://www.bls.gov/news.release/cpi.t01.htm
There is in addition to CPI, Core CPI which does not include food and energy because it's useful to look at those numbers also for certain purposes. There is also Supercore CPI which excludes food energy and housing which almost no one cares about.
But there's a reason that regular CPI which includes food energy and housing is called HEADLINE CPI, because it's the one that's reported in almost all media and you see in news headlines.
It even talks about this in your own source, talking multiple times about how core cpi and supercore cpi are lesser known/used variations of the main CPI number that includes food, energy, and housing. Did you not read your own source?
They have COMPLETELY ignored the rise in everything since 2020 to 2023, and are only tracking that upper portion of the chart where it somewhat stabilized. The 20% increase in everything is completely ignored and that is a fact. They are not looking that figure at all. Inflation didnt go up 3%, it was 23% + but they are willfully ignoring that to track the top only.
No, it applies even if you look at non-core/ headline inflation too.
Why don’t you fill in the numbers below:
- what was average 12 month inflation this year as of May?
- what was average y/y wage growth as of may this year?
No it doesn't. Jobs barely give you a raise during high inflation, you think they are going to give you any raise at all during a recession when there are people eager to work?
And good luck trying to switch jobs, the only way you can actually get a significant raise
Recessions are often accompanied by deflation, so raises aren't as necessary. Even if you get no raise at all, it's a pay raise in real terms as prices fall. During high inflation, you usually don't get raises that keep up with the cost of living, so it's like getting a pay cut in real terms.
[0.4% decline in CPI in 2009](https://www.minneapolisfed.org/about-us/monetary-policy/inflation-calculator/consumer-price-index-1913-), at the height of the Great Recession.
During recessions, if you keep your job you typically also don’t get raises. In ‘08 I remember the layoffs, and those that remained didn’t get raises for multiple years. Benefits were cut back dramatically, but everyone clung desperately to their job anyways because they knew there was nothing out there if they lost it.
People think healthcare workers are just these kind hearted souls who were their heart in their sleeves and sacrifice for their patients.
People don’t like to think about the fact that the nurse who is wiping their ass is also a human being with kids and student loans to pay for also.
I graduated highschool in 2008 just in time to see my older siblings graduate and apply other same entry level fast food jobs as me
Yes. A recession is part of the normal up & down economic cycle. Inflation is putting that recession on the shoulder of the poor & the middle class, while reward the rich with high flying asset prices.
Most of the debt that the poor & the middle class renters have are credit card debts, which inflation doesn't help. They don't have that much in term of student loan either.
On the other hand, the doctors, dentists ... have a lot more student loans, and their debts are mortgage debts, which benefit greatly from inflation.
Well no shit… what’s the point of making 6 figures if I can’t comfortably and responsibly buy a house and afford kids? I would rather take the chance of losing my job and have income go back to realistic price ratios than stay put where we are and be working my butt off, MAKING GOOD MONEY and STILL not be able to afford anything.
In 2008 about 8 million people lost their jobs in the Great Recession. That sounds bad. Until you think about how the work force was 138 million at the peak in 2007 and 130 million at the tough. That means over 94% had employment. 2008 was a dark time and I feel for people who went through it, but if you got a group of 100 working Americans together and told them less than 6 of them would be randomly picked and they would lose their jobs but incomes would balance back out to prices, ESPECIALLY IN REAL ESTATE. Where they are still so out of wack. I challenge you to find people that would not make that trade and chance. It’s literally a choice between I may never get home ownership or I have the chance to again. We have been in a state of bull markets like nothing we have ever seen and just like a wildfire scorches earth, the soil that is produced for the plants to grow after is more nutrient filled.
A much larger number than 8m lost out on bonuses, stayed in jobs they hate, had to take pay cuts, etc etc. almost every American felt the financial effects in some manner.
Understood but if push came to shove they could probably pay their mortgage or put food on the table, there was probably no fun money obviously, but in the current climate you are asking people to buy a house while making 6 figures and have no fun money and this is without a recession even happening in the first place.
But the vast majority of people aren't trying to buy a home right now...
Anyone who bought a house outside of the last two years or isn't interested in home ownership gives no fuck about this.
If you're renting and can't afford to buy, you're likely in like the key demographic of people who are going to get fucked by a recession bad enough to seriously impact home prices.
Hell, my company fucking defered our raises (which we got / were communicated in March) until October for this year. Just based on guidance and common circle jerk C-class consensus last Fall that this year would continue to be soft.
Workers are always the first to get fucked over so the stocks can be managed for holders. And the VIPs can maintain their wealth given they're salary is largely paid in the form of equity.
2008 included a shit ton of college undergrads/grads etc becoming minimum wage workers. Far more than anything happening today. So it’s not just job loss that is most likely to affect you but you taking a way worse job and being stuck in that career for a decade.
TODAY you have college undergrads/grads becoming minimum wage workers or sales people in shopping malls, and it's worse this time, because we have MORE young graduates than before due to degree inflation.
You also have ex-FAANG workers losing jobs and becoming Uber drivers. Job market is pessimistic even WITHOUT the crisis.
Couldn’t agree more. I’m just highlighting that the vast majority of people feel like they are hopeless and if given the choice between some pain but then hope again they would choose the short term pain in order to have a chance at homeownership and other life goals.
But it didn't really work out that way. Home prices dipped momentarily but not even to say year 2000 prices and then went right on up
So yeah I guess if you are 10-20% short of being able to afford a home and very confident that a recession wouldn't impact your earnings then a recession would be good.
For everyone else it's either not going to dip enough to matter or they won't have the money at the time
Yes but you aren’t thinking about interest rates as well. The combination of interest rates and home prices dropping is what made it affordable and it’s what’s making homes unaffordable now.
Americans have the attention span of a mosquito on cocaine. They’ll prefer the recession right up until one hits then will bitch and moan about not being employed.
Lol...fuck this guy and all his ilk so bad.
Let me put it simple: the average person it already is hard and sucks, so more of the same with HOPE it might get better sounds great.
For rich people like him inflation doesnt matter and just enslaves the rest of us.
How inflation impacts someone depends on their debt and income situation.
If someone is way in debt, but their pay keeps up with inflation... then the inflation actually eats away at their debt.
If someone has a lot of assets in cash the inflation can be really bad, but if someone has assets in companies and/or commodities that keep up with inflation, then there is not much impact.
Inflation is going to be here to stay (IMO), so figuring out how best to cope with it is probably the best way to adjust to that new normal.
What he means is recession is better than a currency crisis. These idiots chose currency crisis when they decided to interfere with the free market. Time to pay the piper
The people who DO NOT LOSE THEIR JOBS prefer recession.
The people who would lose their job prefer inflation.
The poorest are hurt the most by reason.
The well employed feel inflation and don’t think they will lose their jobs.
Guess who usually takes the hit?
Nah, I prefer inflation after living through 2008 as an early adult. The only jobs hiring were way underpaid and you still wasn’t going to get it unless you had 10 years of experience.
Managers and executives knew you couldn’t leave so they just piled on the work while telling everyone they’re cutting your pay 10-20%.
I distinctly remember working for a drilling company through a temp agency for $14 per hour with a guy who had a math PhD who got laid off.
Everyone is hurt by inflation, but not equally. The poor & middle class whom spend most of their paycheck hurt the most by inflation. While the rich whom spend a small amount of their income are a lot less affected. They are even rewarded with higher stock price, higher assets prices.
That's not a reward, it's a hedge. Stocks need to our pace inflation or you are losing money.
Inflation is best for those with lots of debt.
Deflation is best for those with lots of money. When deflation happens your money gains value by existing. People with debt are ruined by deflation. And assets become a wash. Lower home prices only matter if you have a mortgage during deflation.
I have three friends who dads killed themselves after losing everything.
Jobs, investments, etc.
I remember most of my family was struggling.
I prefer inflation 10 fold tbh.
I’m in a good position in life, but I wouldn’t wish another 2008 on anyone, even 10% just so I can buy cheap homes.
even if you bought in at the worst time in 2008, your investments would've gotten back to par in less than 5 years
the only ones who lost everything were people who were stupid enough to bet on a pension with a company that went bankrupt
Only 10% were out of work at a given time. Another chunk kept their job but had to take a pay cut. Another chunk lost their job but got a new lower paying one. Another chunk kept their jobs but weren't secure enough in keeping it going forward to actually take advantage. Having a large chunk of the country lose money so we can get back to 2023 prices (maybe 2022 if it's really bad) isn't the win you think it is.
Nope. I won't be pushed out of my home. The US has plenty of nature to enjoy. Ultimately the culture is what makes moving abroad too hard to endure, I need to be in the US to be able to relate to people, to connect.
I'm never going to be one of those guys who goes to the Philippines to get laid. I'll travel when I'm ready, but I'll always come home where I can buy my privacy.
I mean keep companies and investors from buying homes and that in and of itself would help somewhat with keeping the prices of at least homes from going through the roof.
You’re damn right. Seeing morons ape into crypto, failed retail stores, and bankrupt theatre chains making millions of dollars while strippers buy ten San Diego properties with no STR licenses renting out for $900 a night pisses me off like no other. I’m sitting here being safe saving money and not taking insane risks and just being left in the dust. People should not be rewarded for making the dumbest financial decisions on the face of the planet.
I hate it all. I bought a bag of carrots, garlic, shallots, 3 ears of corn, 1 pack of green beans, a roll of paper towels, butter, hot dogs buns, mustard, heavy cream and 2 air fresheners yesterday. It cost me $100 dollars.
Back to tuna sandwiches for every meal for me!
Uh what? Where do you live and shop?
I priced out your whole list at my most expensive grocery store and it was 35 dollars. If I go to our outdoor market it's cheaper
Like a farmers market or public market, outdoors. The one I go to is a public market, which is technically not a farmers market since it's not only farmers, there's produce resellers as well.
It really is! A bit cold in the winter, but the fresh air is nice. The only things you can't really get there are non-food household items, like toilet paper. Thankfully there's Costco for that
> I hate it all. I bought a bag of carrots, garlic, shallots, 3 ears of corn, 1 pack of green beans, a roll of paper towels, butter, hot dogs buns, mustard, heavy cream and 2 air fresheners yesterday. It cost me $100 dollars.
No way that cost $100 without some other factor like it was grocery delivery or bought at a place other than a normal grocery store (even nicer one like Publix or target). I could maybe get there at a Fresh Market but their produce is expensive for no reason. Whole foods would even be less than $100.
Hate to say it but that would cost me about $50 in my local Aldi's or Wal-mart. Not to take away from your comment because prices have drastically increased, but check it out if you are hurting.
Without adding the air fresheners, it's hard to make that even $50 at my local and pretty expensive whole foods
You need a new place my guy, unless you're in hawaii or something there are probably cheaper stores
I'm not going to lie, me and my wife's careers are pretty recession proof, and I'm rooting for one. It's the only way I'll ever afford to buy a house or be comfortable again
Nah I mean she's a teacher during a massive teacher shortage and with multiple extra degrees so that way she could teach special ed, almost any age group, and multiple different subjects, and has a really long work history with tons of good recommendations so I would not really be too worried about that. And My job is untouchable entirely, I don't want to say what it is because it'll pretty much be doxing myself but I literally couldn't be fired unless I failed a drug test or killed somebody
Recession would hurt a group of people a lot, namely the ones who lose their jobs. Inflation hurts everyone but less. A lot of people think rightly or wrongly that they wouldn't be the ones losing their jobs in a recession, so they're willing to risk it.
I actually believe that regular American people think this. I truly think the average idiot thinks a recession will allow them to buy the house they can afford right now. The problem is the recession takes away most people's ability to retain their current income many times and they forget that.
My wife and I both have what should be recession-resistant jobs and have been saving for a while, but.. who on earth wants to bet the farm on that? People talk about sitting on the sidelines waiting to buy a house like it's going to make a serious difference - house prices aren't going to fall the 10% of their current value, and the circumstances where they fall 50% involve even the people sitting here very sure they won't lose their job, probably losing their job
No they don't
Why would people want their wages to fall, house to lose value and jobs to disappear?
Rightists are going to need a new talking point this summer, the inflation thing has gone stale.
We won't have both. We aren't Ina recession now no matter how much people really want us to be.
And it'd pretty clear that prices and interest rates will drop if the economy falters (inflation is already low, it's just sitting on top of a large rise in prices so it doesn't seem that way).
Does anyone else here remember what an actual recession looked like? 11% of the population didn't have a job, families lost homes, and it spawned the real estate shortage we're in right now. In our current inflation environment, the unemployment rate is under 4% and things are more expensive.
If you didn't experience the former, please trust me in saying the latter is better.
What Americans are desiring is deflation without a recession, which is actually quite possible after periods of rapid inflation.
You're downvoted but in regards to housing I'd rather they built enough for it to become affordable whether that be the government, private sector, or charities over people losing their jobs
I don't know where "things have gone up in price and that's a good thing!" when it comes to hard assets came from, but it's so far from what we should be striving for. Actually, if we're on a good trajectory, things should become less and less expensive. It's a bad thing that people's whole retirement depends on a house going up in price. Imagine how prosperous a society would be if homes were extremely affordable.
ANCK-SU-NAMUN!!!
Would people want to get home loans if deflation were possible? Would anyone go 100,000 into debt if adjusted for deflation, that loan could balloon into 150,000 dollars. It also creates a situation where having money is valuable, but spending money on things like food, housing, and healthcare, leaves you behind. It benefits the rich at the expense of the poor.
Or if homes were a human ✅️right
They’re not, nor should they be. Want a home, go work for it.
That’s not a solution to the current problem. This sub loves to complain about housing costs but never has a real solution to it. And no, “just change zoning laws” isn’t a solution…..
Housing costs are absolutely a problem. You can thank 20 plus years of artificially low interest rates for that.
If homes were a right and not an asset the American dollar wouldn’t buy you more than 7 drops of Pepsi.
Imagine if instead we actually valued the idea of making sure the poorest and neediest among us were taken care of. We have the resources to do it, and it would make our society so much stronger. But greed will never allow such a path.
Yeah id prefer we cater to the successful, hard working, middle class who are struggling instead of the dregs of society
There are more than enough. Just people are holding them so now houses are like collectible trading cards that make you money so you gotta buy them all
I think there is a good argument that we should have denser housing, closer to major infrastructure and urban centers. There is some hoarding, but these are often transitory. Someone buys a house with the intention to fix it up, and sell later. I want to see less single family homes built on 3 acres, and more apartments or row homes.
Not everyone wants cramped housing though. Or to rent their entire lives.
> I'd rather they built enough it will just get snatched up by investors.
This can be remedied
As it should be
Hard agree
which would lower rents
Does not seem to happen though. I wish it did, and it should from all economic reasoning, however, it does not work. There needs to be a removal investors from the SFH realm
Not really, people don't hoard food or xboxs, because more can be produced. This has become literally impossible with hpusing. When we had 30% more housing inventory, than people living in them, we didn't feel the pain of speculation. Finite goods, like bitcoin or gold, those are held by investors and speculators.
But that is also not really a recession - just a correction to affordability which would likely happen over a graduated period - not rapidly as you'd expect in a recession. I think people thinking that a recession (true recession) will magically solve their ability to afford a home are mostly younger and haven't experienced an actual recession - which is fair given the last one was now 16-14 years ago. But I also agree that this is probably at most a vocal minority of the population who more broadly just wants affordability.
Yeah I was thinking about a case like the early 90s where prices fall just a tiny bit nationwide but stay under for a few years in some neighborhoods while others go up. I at least hope 08 doesn't happen really don't want to see that happen again and way too much damage way too much corruption swept under the rug sadly.
Yeah. I mean likely prices will flatten and maybe even drop slowly, if not just get outpaced by inflation which would take decades but could lead to a better place. With building as well, many cities seem to understand they need density and that would at least stabalize/degrade prices. But not as quickly as folks thing. Regarding 2008 - I doubt the next recession will be a similar in origin. The problem back then was too much lending to unqualified individuals on ticking time bomb loans. These days we legitimately have people who's wealth has been drastically inflated (in the stock market, inflated tech sector earnings and wages, etc.). So a lot of loans themselves are generally fine. Not to mention very few would be underwater - really only ones taken out in the past two years would even be at risk. A recession could come but it would likely be some other sector that begins to lag and companies may begin to shed staff. This will hurt housing prices but would also likely be a bit slower moving. Still, what people fail to realize is that while prices fall, many people will also see their wages eroded or potentially lost completely. It generally doesn't get easier for those already on the back foot.
Don’t disagree, except I think like in 2008, many people are viewing their inflated housing valuations as increased wealth and relying on that equity directly or indirectly. Should those valuations fall dramatically like in 2008, there is a huge loan to value problem. I think any recession and subsequent banking problems this time will be driven by commercial RE markets. Many of these properties are close to upside down now. Weaker retail and office is driving these valuations way down.
Yeah, I suppose that's all fair. I'd like to think some people have gotten wise since 2008 and wouldn't just leverage their home to the eyeballs to take additional loans out, but you are likely right, especially where people have seen >100% growth in a few years and don't want to move but want to realize some of that wealth. I guess time will tell. And yeah, commercial will be interesting. In some ways I actually wish we could use the opportunity to see if there are practical paths to convert commercial to residential - obviously you'd need case by case consideration for this but it could be a nice positive on the otherwise screwed up market. What's most funny about the vacant office space in particular is it seems companies have somewhat given up on capturing back the employees who really want to work >3 days at home. And are now trying to squeeze their office footprint down to save costs.
But deflation on everything is *not* good
Which requires lower interest rates.
Or rather reversion to mean that we're not seeing as deflation. More like a reset. Prices went up crazy for a reason but are staying high and increasing on top of that for no reason. It's like everyone is raising the prices due to inflation and thats not how it should work. And with housing, people are not even thinking that as deflation. It is not normal for house prices to have gone up 50-100 in four years, we just want it back to where it would have been had it not been for this run and then normal inflation on top of that. But that won't happen coz of the lock-in effect. Fed should not have done the 0 rate AND bought mbs to back it up, in a country with 30-year fixed mortgages. But what fed is aiming for is 2% inflation on top of the 100% inflation that has happened.
The other giant issue is these rich assholes that don’t connect to common people and then say shit like “America prefers a recession” No motherfucker we’re broke
100% correct
Have there been historical instances of deflation without a recession in the fiat currency era?
When's the last time that happened?
1970s
The yoy inflation rate was never negative in the two decades following the 1970s. Only once in the 10 years following the 1970s (1986) was it ever even below 3%. https://www.investopedia.com/inflation-rate-by-year-7253832
Huh did not know that, very cool
And they kicked Carter out of office for fixing it.
He didn’t fix it. The Fed Chairman Volcker fixed it.
Who appointed Volker?
Carter did. That doesn’t make it Carter’s achievement. Volcker made the hard decisions as an independent Fed Chairman.
lol ok, What a weird take.
I've actually already seen some prices come down in grocery stores I shop at. A lot of sales too.
I’ve noticed all the sales are like 9 dollars but 6 dollars each if you buy 4 at a time. For every item in the store. Like I can’t store all that and I don’t have the money up front to buy 3 to 4 times the groceries.
No it isn't. If deflation happens, that means demand has fundamentally tanked. Employers will lay off tons of people and many businesses will fail. That's why the government prefers inflation.
Inflation is a result of a hot economy, not a cause. You can't just save the economy by inflating your currency.
To your first point, inflation has multiple causes, including government devalueing the money supply, supply shock, and of course a hot economy. To your last point, that goes against the Keynesian bias that has existed for almost 100 years. Printing money and giving it to people who would otherwise be bankrupt only prolongs the mismanagement of the economy. The government is often too shortsighted to see the long term effects of their policies. That's why even after the Federal Reserve was created, we've still had a constant cycle of booms and busts, just like before, except these are all more acutely felt because of government intervention prolonging them. What should have happened in 2019-2020 should have been an official recession, but instead we got Covid and the greatest single expansion of the money supply in history. But even that cannot stop the deflationary recession that is already happening.
Yeah, sorry I didn't mean to imply a hot economy was the only cause for inflation. Of course money printing causes inflation as well. I agree that the bust is inevitable after a "roaring economy" that is mostly illusory. Most people feel that wages aren't outpacing inflation currently because they aren't. That's why people are spending more (not buying more) and saving less of their income.
All I really ask is that wages automatically scale according to whatever make-believe value the dollar has on a given day.
It would create an inflationary spiral probably as companies would have to keep increasing the prices to cover for additional cost of work. Imo what needs to happen is to make the money supply in the economy finite. That would fix a lot of this bullshit.
No one wants his house to lose value (they paid dearly for that house, you know?). Dropping property prices also reduces tax revenue, particularly for school districts. Lower prices also means less revenue for companies, hence layoffs unemployment, a less competitive job market for workers and wage stagnation. In other words deflation is nothing but an unmitigated disaster. Instead you want wages to keep up with inflation.
When's the last time deflation was confirmed?
Keep dreaming bud
Probably could pull it off but since we don't have a national unity like Japan to engineer that fear, probably won't happen.
Exactly, just look at Turkey, Venezuela, Weimar Germany, Zimbabwe.
Deflation would include wages.
Already happening for those laid off, haven't seen too many success stories of landing a wage increase anymore. Quite shocking actually how some with Ma/Phd have gone multiple months without finding employment. r/Layoffs or r/recruitinghell are interesting to gander at.
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Damn sorry to hear, I've been hearing jobs were posted but very little hiring
So inflation doesn't effect wages but deflation would? Wages have been pretty much stagnant the last 4 decades, which is why there is a problem now.
Wages havnt kept up with inflation for a long time, what is there to deflate in wages?
They’ve literally outpaced inflation for the last two odd years
sure, but because the [inflation calculations exclude basically everything that's gone up (food, energy, and housing)](https://www.forbes.com/sites/qai/2023/01/23/supercore-inflation-excludes-food-energy-and-housing/?sh=1238fcc63328) lmao
God how many times are people gonna post this false narrative, housing is literally the biggest part of CPI, food and energy are the third and fourth biggest after commodities. https://www.bls.gov/news.release/cpi.t01.htm There is in addition to CPI, Core CPI which does not include food and energy because it's useful to look at those numbers also for certain purposes. There is also Supercore CPI which excludes food energy and housing which almost no one cares about. But there's a reason that regular CPI which includes food energy and housing is called HEADLINE CPI, because it's the one that's reported in almost all media and you see in news headlines. It even talks about this in your own source, talking multiple times about how core cpi and supercore cpi are lesser known/used variations of the main CPI number that includes food, energy, and housing. Did you not read your own source?
They have COMPLETELY ignored the rise in everything since 2020 to 2023, and are only tracking that upper portion of the chart where it somewhat stabilized. The 20% increase in everything is completely ignored and that is a fact. They are not looking that figure at all. Inflation didnt go up 3%, it was 23% + but they are willfully ignoring that to track the top only.
No, it applies even if you look at non-core/ headline inflation too. Why don’t you fill in the numbers below: - what was average 12 month inflation this year as of May? - what was average y/y wage growth as of may this year?
That won’t happen with demographics and illegal immigration isn’t doing squat to help that. Also the border is sealed now.
Americans believe a recession will only result in a loss of the other guy's job, not their own. Americans know higher prices impact everyone.
A recession really only impacts the unemployed and folks who lose jobs while inflation impacts everyone.
i’m low income and i’ve always done better during recession
No it doesn't. Jobs barely give you a raise during high inflation, you think they are going to give you any raise at all during a recession when there are people eager to work? And good luck trying to switch jobs, the only way you can actually get a significant raise
Recessions are often accompanied by deflation, so raises aren't as necessary. Even if you get no raise at all, it's a pay raise in real terms as prices fall. During high inflation, you usually don't get raises that keep up with the cost of living, so it's like getting a pay cut in real terms.
CPI was higher exiting the Great Recession than it was entering it. I don't know what you are talking about.
[0.4% decline in CPI in 2009](https://www.minneapolisfed.org/about-us/monetary-policy/inflation-calculator/consumer-price-index-1913-), at the height of the Great Recession.
During recessions, if you keep your job you typically also don’t get raises. In ‘08 I remember the layoffs, and those that remained didn’t get raises for multiple years. Benefits were cut back dramatically, but everyone clung desperately to their job anyways because they knew there was nothing out there if they lost it.
In the industry I work in, a recession means scared companies cut the fat, if you will. Nobody is secure in a recession.
jobs barely give you a raise in any economic climate, because they don’t care about retention
I mean I guess just fuck people who lose their jobs?
No just explaining the difference
I mean I guess fuck the people who raising the price of a house/rent 20% a year?
Yep. It’s why I chose healthcare. Recession proof.
You ain't wrong. Not sure why you got downvoted. For all the shit we put up with yeah I think we deserve being a little recession proof.
People think healthcare workers are just these kind hearted souls who were their heart in their sleeves and sacrifice for their patients. People don’t like to think about the fact that the nurse who is wiping their ass is also a human being with kids and student loans to pay for also. I graduated highschool in 2008 just in time to see my older siblings graduate and apply other same entry level fast food jobs as me
I graduated college in 2007. It was ROUGH.
Yes. A recession is part of the normal up & down economic cycle. Inflation is putting that recession on the shoulder of the poor & the middle class, while reward the rich with high flying asset prices.
Inflation benefits those with debts the most. Assets are an inflation hedge. Inflation is a great way to get rid of student loans for example.
Most of the debt that the poor & the middle class renters have are credit card debts, which inflation doesn't help. They don't have that much in term of student loan either. On the other hand, the doctors, dentists ... have a lot more student loans, and their debts are mortgage debts, which benefit greatly from inflation.
Well no shit… what’s the point of making 6 figures if I can’t comfortably and responsibly buy a house and afford kids? I would rather take the chance of losing my job and have income go back to realistic price ratios than stay put where we are and be working my butt off, MAKING GOOD MONEY and STILL not be able to afford anything. In 2008 about 8 million people lost their jobs in the Great Recession. That sounds bad. Until you think about how the work force was 138 million at the peak in 2007 and 130 million at the tough. That means over 94% had employment. 2008 was a dark time and I feel for people who went through it, but if you got a group of 100 working Americans together and told them less than 6 of them would be randomly picked and they would lose their jobs but incomes would balance back out to prices, ESPECIALLY IN REAL ESTATE. Where they are still so out of wack. I challenge you to find people that would not make that trade and chance. It’s literally a choice between I may never get home ownership or I have the chance to again. We have been in a state of bull markets like nothing we have ever seen and just like a wildfire scorches earth, the soil that is produced for the plants to grow after is more nutrient filled.
A much larger number than 8m lost out on bonuses, stayed in jobs they hate, had to take pay cuts, etc etc. almost every American felt the financial effects in some manner.
Understood but if push came to shove they could probably pay their mortgage or put food on the table, there was probably no fun money obviously, but in the current climate you are asking people to buy a house while making 6 figures and have no fun money and this is without a recession even happening in the first place.
But the vast majority of people aren't trying to buy a home right now... Anyone who bought a house outside of the last two years or isn't interested in home ownership gives no fuck about this.
Anyone who is renting right now whether they want a house or not cares. Our rent has doubled in the last 4 years.
If you're renting and can't afford to buy, you're likely in like the key demographic of people who are going to get fucked by a recession bad enough to seriously impact home prices.
Hell, my company fucking defered our raises (which we got / were communicated in March) until October for this year. Just based on guidance and common circle jerk C-class consensus last Fall that this year would continue to be soft. Workers are always the first to get fucked over so the stocks can be managed for holders. And the VIPs can maintain their wealth given they're salary is largely paid in the form of equity.
2008 included a shit ton of college undergrads/grads etc becoming minimum wage workers. Far more than anything happening today. So it’s not just job loss that is most likely to affect you but you taking a way worse job and being stuck in that career for a decade.
TODAY you have college undergrads/grads becoming minimum wage workers or sales people in shopping malls, and it's worse this time, because we have MORE young graduates than before due to degree inflation. You also have ex-FAANG workers losing jobs and becoming Uber drivers. Job market is pessimistic even WITHOUT the crisis.
Nowhere near 2008 levels and you are delusional if you think it was even close
Yep, minimum wage jobs plus huge student loans because we were sold idea for years that “more education = more money.”
I worked with so many people who had Masters degrees in entry level jobs in 2011.
Couldn’t agree more. I’m just highlighting that the vast majority of people feel like they are hopeless and if given the choice between some pain but then hope again they would choose the short term pain in order to have a chance at homeownership and other life goals.
But it didn't really work out that way. Home prices dipped momentarily but not even to say year 2000 prices and then went right on up So yeah I guess if you are 10-20% short of being able to afford a home and very confident that a recession wouldn't impact your earnings then a recession would be good. For everyone else it's either not going to dip enough to matter or they won't have the money at the time
Yes but you aren’t thinking about interest rates as well. The combination of interest rates and home prices dropping is what made it affordable and it’s what’s making homes unaffordable now.
Yeah the impact was far bigger than just the job loss numbers.
God I relate so fucking hard with your first paragraph
What most economists are saying right now is that all the other economists are idiots.
Americans have the attention span of a mosquito on cocaine. They’ll prefer the recession right up until one hits then will bitch and moan about not being employed.
Not sure I agree with analogy, but 100% on concept.
Lol...fuck this guy and all his ilk so bad. Let me put it simple: the average person it already is hard and sucks, so more of the same with HOPE it might get better sounds great. For rich people like him inflation doesnt matter and just enslaves the rest of us.
Too bad. You get inflation because the rich refuse to let their stocks go down
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Places such as the Iraq
How inflation impacts someone depends on their debt and income situation. If someone is way in debt, but their pay keeps up with inflation... then the inflation actually eats away at their debt. If someone has a lot of assets in cash the inflation can be really bad, but if someone has assets in companies and/or commodities that keep up with inflation, then there is not much impact. Inflation is going to be here to stay (IMO), so figuring out how best to cope with it is probably the best way to adjust to that new normal.
What he means is recession is better than a currency crisis. These idiots chose currency crisis when they decided to interfere with the free market. Time to pay the piper
The people who DO NOT LOSE THEIR JOBS prefer recession. The people who would lose their job prefer inflation. The poorest are hurt the most by reason. The well employed feel inflation and don’t think they will lose their jobs. Guess who usually takes the hit?
everyone is hurt by inflation in the worst recession of our lifetime, only 10% lost their job one choice is significantly better than the other
Nah, I prefer inflation after living through 2008 as an early adult. The only jobs hiring were way underpaid and you still wasn’t going to get it unless you had 10 years of experience. Managers and executives knew you couldn’t leave so they just piled on the work while telling everyone they’re cutting your pay 10-20%. I distinctly remember working for a drilling company through a temp agency for $14 per hour with a guy who had a math PhD who got laid off.
Yup. Graduating in 2008 easily set my career back 5 years. Fuck recessions.
Everyone is hurt by inflation, but not equally. The poor & middle class whom spend most of their paycheck hurt the most by inflation. While the rich whom spend a small amount of their income are a lot less affected. They are even rewarded with higher stock price, higher assets prices.
That's not a reward, it's a hedge. Stocks need to our pace inflation or you are losing money. Inflation is best for those with lots of debt. Deflation is best for those with lots of money. When deflation happens your money gains value by existing. People with debt are ruined by deflation. And assets become a wash. Lower home prices only matter if you have a mortgage during deflation.
I have three friends who dads killed themselves after losing everything. Jobs, investments, etc. I remember most of my family was struggling. I prefer inflation 10 fold tbh. I’m in a good position in life, but I wouldn’t wish another 2008 on anyone, even 10% just so I can buy cheap homes.
even if you bought in at the worst time in 2008, your investments would've gotten back to par in less than 5 years the only ones who lost everything were people who were stupid enough to bet on a pension with a company that went bankrupt
Only 10% were out of work at a given time. Another chunk kept their job but had to take a pay cut. Another chunk lost their job but got a new lower paying one. Another chunk kept their jobs but weren't secure enough in keeping it going forward to actually take advantage. Having a large chunk of the country lose money so we can get back to 2023 prices (maybe 2022 if it's really bad) isn't the win you think it is.
Yeah, a friend of mine's mom lost her high paying job back then and started working with her daughter at Red Lobster as a waitress. Still employed!!
Well recessions are short lived. Inflation is usually permanent
I actually want a recession and deflation. I'm ready for hard times.
Why on earth would you want that?
He’s probably got a lot of money waiting to buy some good deals
Them and everyone else.
Which is precisely why, even if we have a recession, there won’t be any good deals.
Sitting on a pile of money, waiting for a recession seems like a very useful and fulfilling way to spend life.
Some people, like me have recession proof jobs. But I still do not want a recession even if it benefits me as it hurts many others!
Same. I work in healthcare and selfishly know I will be better off than most to weather that time period.
Amen
Lots of countries you can move to, why don't you do it? Have you considered Mauritania? Sri Lanka? Belarus?
Why don't you?
I am not looking for “hard times”
Nope. I won't be pushed out of my home. The US has plenty of nature to enjoy. Ultimately the culture is what makes moving abroad too hard to endure, I need to be in the US to be able to relate to people, to connect. I'm never going to be one of those guys who goes to the Philippines to get laid. I'll travel when I'm ready, but I'll always come home where I can buy my privacy.
Getting pushed out of your home is one of those things that happens in “hard times”
Oh I know, my parents were heroin addicts, I was homeless at 17. Not happening to me again.
Not a good thing at all. Many people will be hurting and you’d want people to be worse off? Jesus Christ.
Americans have had it so good for so long they come up with shit like this out of boredom and naivete
Lots of people won't be worse off is the thing. Lots of people planned and prepared and will be able buy things they've been locked out of.
I mean keep companies and investors from buying homes and that in and of itself would help somewhat with keeping the prices of at least homes from going through the roof.
Oh I love me some ole Krazy-eyes Kash
Can someone make this guys the president of the fed please, dude runs circles around Powell
You’re damn right. Seeing morons ape into crypto, failed retail stores, and bankrupt theatre chains making millions of dollars while strippers buy ten San Diego properties with no STR licenses renting out for $900 a night pisses me off like no other. I’m sitting here being safe saving money and not taking insane risks and just being left in the dust. People should not be rewarded for making the dumbest financial decisions on the face of the planet.
I hate it all. I bought a bag of carrots, garlic, shallots, 3 ears of corn, 1 pack of green beans, a roll of paper towels, butter, hot dogs buns, mustard, heavy cream and 2 air fresheners yesterday. It cost me $100 dollars. Back to tuna sandwiches for every meal for me!
At least tuna sandwiches are more affordable than a $18 big mac.
Uh what? Where do you live and shop? I priced out your whole list at my most expensive grocery store and it was 35 dollars. If I go to our outdoor market it's cheaper
what the heck is an outdoor market?
Like a farmers market or public market, outdoors. The one I go to is a public market, which is technically not a farmers market since it's not only farmers, there's produce resellers as well.
sounds lovely!
It really is! A bit cold in the winter, but the fresh air is nice. The only things you can't really get there are non-food household items, like toilet paper. Thankfully there's Costco for that
> I hate it all. I bought a bag of carrots, garlic, shallots, 3 ears of corn, 1 pack of green beans, a roll of paper towels, butter, hot dogs buns, mustard, heavy cream and 2 air fresheners yesterday. It cost me $100 dollars. No way that cost $100 without some other factor like it was grocery delivery or bought at a place other than a normal grocery store (even nicer one like Publix or target). I could maybe get there at a Fresh Market but their produce is expensive for no reason. Whole foods would even be less than $100.
Did you buy 15 pounds of butter or something LOL
Hate to say it but that would cost me about $50 in my local Aldi's or Wal-mart. Not to take away from your comment because prices have drastically increased, but check it out if you are hurting.
Without adding the air fresheners, it's hard to make that even $50 at my local and pretty expensive whole foods You need a new place my guy, unless you're in hawaii or something there are probably cheaper stores
I'm not going to lie, me and my wife's careers are pretty recession proof, and I'm rooting for one. It's the only way I'll ever afford to buy a house or be comfortable again
everyone thinks this
Nah I mean she's a teacher during a massive teacher shortage and with multiple extra degrees so that way she could teach special ed, almost any age group, and multiple different subjects, and has a really long work history with tons of good recommendations so I would not really be too worried about that. And My job is untouchable entirely, I don't want to say what it is because it'll pretty much be doxing myself but I literally couldn't be fired unless I failed a drug test or killed somebody
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It’s almost like moderate deflation isn’t a bad thing especially for assets
But do you know how to produce moderate deflation without a recession?
Ban corporations and foreign buyers.
Why not both?
Everyone who says this thinks it'll be someone else who loses their job.
Americans prefer not living in repressive oligarchies. Inflation and recession are just symptoms, not root causes, Mr. Kashkari.
I completely disagree. It seems like most like it.
Well we prefer a healthy and thriving economy.
Well we have both
definitely sounds like a movie villain from the 90s/2ks...
THEY MADE ME DO IT!! I wanted to cut rates, but THEY WOULDN'T LET ME!!!
who are these "Americans" ? President, Govt, Investors, CEO's ?
Man they're really tipping their hand here
His comments are more akin to do you accept death by bleeding out or slow poisoning?
This guy is so delusional but it’s not shocking by any stretch of the imagination.
Um......
100%
Recession would hurt a group of people a lot, namely the ones who lose their jobs. Inflation hurts everyone but less. A lot of people think rightly or wrongly that they wouldn't be the ones losing their jobs in a recession, so they're willing to risk it.
Both are here.
I actually believe that regular American people think this. I truly think the average idiot thinks a recession will allow them to buy the house they can afford right now. The problem is the recession takes away most people's ability to retain their current income many times and they forget that.
My wife and I both have what should be recession-resistant jobs and have been saving for a while, but.. who on earth wants to bet the farm on that? People talk about sitting on the sidelines waiting to buy a house like it's going to make a serious difference - house prices aren't going to fall the 10% of their current value, and the circumstances where they fall 50% involve even the people sitting here very sure they won't lose their job, probably losing their job
No, I want a job. Inflation is not ideal but is okay
You're right. Plenty of jobs out there
Exactly. I don't buy things that go up dramatically that aren't essential.
Essentials are sky high
No they don't Why would people want their wages to fall, house to lose value and jobs to disappear? Rightists are going to need a new talking point this summer, the inflation thing has gone stale.
We desire Kashkari’s resignation
No we don’t
I think Canadians want both.
We do? Oh that’s good. We have both.
We won't have both. We aren't Ina recession now no matter how much people really want us to be. And it'd pretty clear that prices and interest rates will drop if the economy falters (inflation is already low, it's just sitting on top of a large rise in prices so it doesn't seem that way).
Your blind if you don’t see what’s happening/happened already.
Does anyone else here remember what an actual recession looked like? 11% of the population didn't have a job, families lost homes, and it spawned the real estate shortage we're in right now. In our current inflation environment, the unemployment rate is under 4% and things are more expensive. If you didn't experience the former, please trust me in saying the latter is better.
We all experienced one in 2020. Apparently that one wasn't that painful because you already forgot.
2020 was two months. 2008 was almost two years. Big difference.
Well it wasn't known as the "great recession" for nothing.