How Accurately is Inflation Being Reported?

Member since 2023 · 6 posts · 10 votes

An interesting read: https://www.biggerpockets.com/blog/federal-reserve-to-lower-rates-six-times-says-ing-economics?utm_source=Iterable&utm_medium=email&utm_campaign=Newsletter%20%7C%2012/07/23

I’ve seen a few headlines of this, where some economic analysis “experts” are predicting large interest rate cuts. As this article mentions ING Economics released a report about a week ago claiming the Fed will cut rates 6 times over 250bp over the course of 2024 – 2025. I personally don’t see Inflation coming down to the Fed’s target of 2% anytime soon despite what some reports may claim. Just from day-to-day life from gas and grocery prices these days compared to a couple of years ago, prices are significantly higher today. Reports claim the inflation rate today is around 3.1-3.2% but I definitely think the average consumer feels this to be much higher.

What do you you’ll think, is inflation at an accurate spot according to the reports and will we face heavy cuts potentially in 2024?

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Matthew CrivelliBusiness Member

Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes

Every mainstream prediction has been wrong in the last few years. First we had transitory inflation in 2021, then we were told growth will slow in 2022, then we had a 100% probability of a recession in 2023, now we are being told that we are going to see a soft landing and the fed is going to drop rates. lol it's like opposite day around here with these predictions.

A few things to note - the treasury yields are still inverted, government spending is still out of control, the consumer is being squeezed with debt payments, student loans, cost of living hikes, and inflation is above the target goal. Oh and not to mention we haven't seen a recession in 15 years.

I'm taking the experts opinion with a grain of salt and articles like this are laughable....

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Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Jeremiah Dunakin:

I don’t know a lot I’m a simpleton. Here is what thoughts are. We live in a society that does value work. From the top down there is encouragement not to work. Culture has dictated less work more money. This is a recipe for disaster. At my shop we just went through a union contract. The new hires wanted the whole world given to them and they loathe seniority. This also goes in the public sector. We have an administration that has encouraged people not to work. The labor shortage is very real. This causes not as much to be produced and what is being produced is more expensive because of labor cost.
A short while ago I bought gas for 1.60 and a family pack of chicken thighs were 4.00. So I could go to work and eat dinner for 5.60. Today it’s 3.00$ gallon and 8 dollars for thighs. Same trip 11.00$ yes it’s doubled. Ground beef was 1.75/ 2.00 lbs. now it’s 6.00+ a lot. A 2x4 is 3$ plus used to 1.66$. This is true inflation forget all the metrics. That is just accounting. Most Americans are paying twice what they used to pay for stuff. Rent is through the roof. The cost to borrow money to invest is insane. Look at the price of a new truck compared to 5 years ago. Co pays at the hospital is higher. My work insurance is about to go up 25%. A few years ago I could go to McDonald’s get a double cheeseburger and a medium chocolate shake3.50 now it’s 8$ and it takes twice as long to get it

your dollar is devalued my friend, it's not the cost of good is rising, your dollar losing value.

for the laziness, this is why they important million of illegal immigrant to this country because people don't want to work. they even ask those people to join military lol
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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
2y
@Josh Sidhu

It's definitely worth paying attention to, but the thing about all these predictions is... there are no consequences for the predictor. There are books about this - Annie Duke's Thinking in Bets, for one.

The more interesting question has been asked - I think by @Mike Dymski @Chris Seveney :
How are your predictions impacting your investing strategy?
I'll start. My strategy hasn't really changed. I'm accepting of less cash flow IF I have other things going for me - a good area, lots of equity. But I still plan to buy good deals. I also don't only invest in RE although I have way more in RE than in anything else.
What do you think?
4 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Nicholas L.:

@Josh Sidhu

It's definitely worth paying attention to, but the thing about all these predictions is... there are no consequences for the predictor. There are books about this - Annie Duke's Thinking in Bets, for one.

The more interesting question has been asked - I think by @Mike Dymski @Chris Seveney :
How are your predictions impacting your investing strategy?
I'll start. My strategy hasn't really changed. I'm accepting of less cash flow IF I have other things going for me - a good area, lots of equity. But I still plan to buy good deals. I also don't only invest in RE although I have way more in RE than in anything else.
What do you think?

The Fed rate decision changes my perspective lol ; it's safer to put money into conservative debt fund than buy-and-hold a house. I also decided to sell houses especially out-of-state properties LOL
but yea everyone is different lol
1 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Marcus Auerbach:

What many seem to misunderstand about inflation is that prices are not going back to where they were. They think because prices are still high, "that must still be the inflation" and when its "over" prices go back to where they were.
Inflation is the rate of price increase compared to a year ago. Or the other way around the devaluation of currency. So you need to bring more paper to buy the same goods and services you needed to bring a year ago.
And inflation is good for REI: hard assets like houses (tied to cost of labor, cost of materials) go up in price ("value" is still the same) while loans and cash are equally devaluated.
Good news is that the last few months wages have been growing faster than inflation, which is beginning to restore purchasing power. Good news for your RE portfolio.
Yeah people confuse inflation is rampant because they are truly thinking it'd be deflation, they do not get the differences between inflation, deflation and disinflation. Right now our best course is disinflation, we do not want deflation but we don't want inflation too.

Wages: inflation ratio is tightening, but what teams for us REI in RTP is going to be interesting.

1 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Carlos Ptriawan:

Quote from @Marcus Auerbach:

What many seem to misunderstand about inflation is that prices are not going back to where they were. They think because prices are still high, "that must still be the inflation" and when its "over" prices go back to where they were.
Inflation is the rate of price increase compared to a year ago. Or the other way around the devaluation of currency. So you need to bring more paper to buy the same goods and services you needed to bring a year ago.
And inflation is good for REI: hard assets like houses (tied to cost of labor, cost of materials) go up in price ("value" is still the same) while loans and cash are equally devaluated.
Good news is that the last few months wages have been growing faster than inflation, which is beginning to restore purchasing power. Good news for your RE portfolio.

true, it is the rate of changes of inflation that's being measured , but not the cost of the good itself.
which create a good point, if we wait long enough, even without fed increasing rate, the inflation would go down by itself because logically speaking a price can't go up in the same vertical off-shoot. And problem with covid inflation is mainly just typical logistical supply demand issue as they are not ready, so i think Fed is unwise when they increase the rate (after they print money so much) too high too fast, they could just say oh we will have automatic policy where we will maintain 25bps to core CPE, then the policy would be making more sense.
If they would've just kept it at 4 for significantly longer we would see slower disinflation, but remove a lot more risk associated. Move Feds Funds to 4 over the course of 10 months and keep it for an additional 20. This is a lot more drastic of a way and it's hurting the middle class, new debt people, and consumers the most.
0 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Nicholas L.:

@Josh Sidhu

It's definitely worth paying attention to, but the thing about all these predictions is... there are no consequences for the predictor. There are books about this - Annie Duke's Thinking in Bets, for one.

The more interesting question has been asked - I think by @Mike Dymski @Chris Seveney :
How are your predictions impacting your investing strategy?
I'll start. My strategy hasn't really changed. I'm accepting of less cash flow IF I have other things going for me - a good area, lots of equity. But I still plan to buy good deals. I also don't only invest in RE although I have way more in RE than in anything else.
What do you think?

I use less or no leverage on higher quality properties, and use full leverage on more speculative properties . I do not worry about the cash flow on those & I just put the differential that I would think I'd need on a downpayment(to make it intrinsic) in a debt fund and let the cash flow there off-set the cash flow loss.

So basically less leverage on primo property= cash flow. Cash flow invested in equities.
More leverage on speculative properties= negative cash flow. Take leverage difference and buy debt fund= positive cash flow. These two net-- all my cash is essentially in hard assets, equities and debt.

0 Reply
Alan F.
Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes
2y
Quote from @V.G Jason:

Quote from @Carlos Ptriawan:

Quote from @Marcus Auerbach:

What many seem to misunderstand about inflation is that prices are not going back to where they were. They think because prices are still high, "that must still be the inflation" and when its "over" prices go back to where they were.
Inflation is the rate of price increase compared to a year ago. Or the other way around the devaluation of currency. So you need to bring more paper to buy the same goods and services you needed to bring a year ago.
And inflation is good for REI: hard assets like houses (tied to cost of labor, cost of materials) go up in price ("value" is still the same) while loans and cash are equally devaluated.
Good news is that the last few months wages have been growing faster than inflation, which is beginning to restore purchasing power. Good news for your RE portfolio.

true, it is the rate of changes of inflation that's being measured , but not the cost of the good itself.
which create a good point, if we wait long enough, even without fed increasing rate, the inflation would go down by itself because logically speaking a price can't go up in the same vertical off-shoot. And problem with covid inflation is mainly just typical logistical supply demand issue as they are not ready, so i think Fed is unwise when they increase the rate (after they print money so much) too high too fast, they could just say oh we will have automatic policy where we will maintain 25bps to core CPE, then the policy would be making more sense.
If they would've just kept it at 4 for significantly longer we would see slower disinflation, but remove a lot more risk associated. Move Feds Funds to 4 over the course of 10 months and keep it for an additional 20. This is a lot more drastic of a way and it's hurting the middle class, new debt people, and consumers the most.

Many companies, large & small, are still passing inflation through to their customers. Few people are aware that COGS have and are still going up significantly. Insurance, wholesale products & employees wages being just a few. Other lagging costs haven't been realized yet either, i.e. business taxes.
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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Alan F.:

Quote from @V.G Jason:

Quote from @Carlos Ptriawan:

Quote from @Marcus Auerbach:

What many seem to misunderstand about inflation is that prices are not going back to where they were. They think because prices are still high, "that must still be the inflation" and when its "over" prices go back to where they were.
Inflation is the rate of price increase compared to a year ago. Or the other way around the devaluation of currency. So you need to bring more paper to buy the same goods and services you needed to bring a year ago.
And inflation is good for REI: hard assets like houses (tied to cost of labor, cost of materials) go up in price ("value" is still the same) while loans and cash are equally devaluated.
Good news is that the last few months wages have been growing faster than inflation, which is beginning to restore purchasing power. Good news for your RE portfolio.

true, it is the rate of changes of inflation that's being measured , but not the cost of the good itself.
which create a good point, if we wait long enough, even without fed increasing rate, the inflation would go down by itself because logically speaking a price can't go up in the same vertical off-shoot. And problem with covid inflation is mainly just typical logistical supply demand issue as they are not ready, so i think Fed is unwise when they increase the rate (after they print money so much) too high too fast, they could just say oh we will have automatic policy where we will maintain 25bps to core CPE, then the policy would be making more sense.
If they would've just kept it at 4 for significantly longer we would see slower disinflation, but remove a lot more risk associated. Move Feds Funds to 4 over the course of 10 months and keep it for an additional 20. This is a lot more drastic of a way and it's hurting the middle class, new debt people, and consumers the most.

Many companies, large & small, are still passing inflation through to their customers. Few people are aware that COGS have and are still going up significantly. Insurance, wholesale products & employees wages being just a few. Other lagging costs haven't been realized yet either, i.e. business taxes.

Everyone I talk to big and small is realizing this and are frustrated. The one's with a little less knowledge I think were expecting deflation, not understanding its disinflation--that rises are still happening just not as sharp as they were.
1 Reply
Albert Hasson
Investor · Paradise Valley, AZ · Member since 2012 · 361 posts · 214 votes
2y
Quote from @V.G Jason:

Quote from @Carlos Ptriawan:

Quote from @V.G Jason:

Quote from @Matthew Crivelli:

Every mainstream prediction has been wrong in the last few years. First we had transitory inflation in 2021, then we were told growth will slow in 2022, then we had a 100% probability of a recession in 2023, now we are being told that we are going to see a soft landing and the fed is going to drop rates. lol it's like opposite day around here with these predictions.
A few things to note - the treasury yields are still inverted, government spending is still out of control, the consumer is being squeezed with debt payments, student loans, cost of living hikes, and inflation is above the target goal. Oh and not to mention we haven't seen a recession in 15 years.
I'm taking the experts opinion with a grain of salt and articles like this are laughable....
This.

Basically, anything that the experts are predicting, etc., take with a grain of salt. If anything, assume completely different. People expected a hard landing in 2023; therefore there was no hard landing because companies got in front of it. Basically, where we think it'll go in 3-6 months we are preparing for now. And due to that behavior it keeps kicking that can down the road. The market is going to expect to Fed to pivot & price that, then the Fed will hold on to pivot a bit too late and will have to be more drastic with it.

Once people realize the initial, inconsequential fed .25bps pivot is completely useless we will probably bleed and force to redirect course aggressively. I fully expect a hard, but shallow and quick, landing after the initial pivot.

ya and when the inverted curve is being normalized, say 30y is higher than 2y then that's the sign that recession and stock market crash is always happening hahaha ;-) it's very counter intuitive, we are in similar time to where bear stearns being wiped out in 2008
thing is , we are at the longest inverted curve ever for the last 30 years so chance are actually higher, but since everyone is waiting for that, it may happen (or not) lol
one thing for sure is we have more layoffs in 2024 and that would impact physiologically speaking how investor put their money moving forward.
Layoffs + still very high cost of capital. I mean .25bps isn't changing your rate to borrow money, it's still way too high to function. I'm progressively buying more debt and locking this in. If people think this investment rate is sustainable, then I don't know where they are living. Look around, people are getting trimmed. Everything is getting way too unaffordable and everyone is struggling.

And yet consumer and discretionary spending is robust with record breaking travel over the holiday’s and the stock market at record highs. The popular narrative is that “everyone is struggling” but that’s just not the case. The poor are struggling but they always struggle.
The economy is remarkably strong and people are confident enough in their jobs and their financial situation to spend like crazy.
1 Reply
Ned J.Pro Member
Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
2y
If anyone thinks consumer prices will drop as corporate costs drops, then you have no idea how our capitalist country works.
And I've heard the "no one wants to work" BS for 40 years..... no one wants to work 60--80 hrs/wk for crap pay and crap benefits and workers are finally standing up and saying NO. Good for them.
Inflation is WAY down...cost of living is not. Wages have not risen anywhere near the rate of the cost of goods. But as soon as any pressure to raise wages comes up, people go ape sh&t crazy....why> because the corporations will still want their HUGE cut of the revenue, so that cost will go straight to the consumer. So we blame the worker for the impact and not the corporation...one of the biggest snow jobs every passed off.
3 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Albert Hasson:

Quote from @V.G Jason:

Quote from @Carlos Ptriawan:

Quote from @V.G Jason:

Quote from @Matthew Crivelli:

Every mainstream prediction has been wrong in the last few years. First we had transitory inflation in 2021, then we were told growth will slow in 2022, then we had a 100% probability of a recession in 2023, now we are being told that we are going to see a soft landing and the fed is going to drop rates. lol it's like opposite day around here with these predictions.
A few things to note - the treasury yields are still inverted, government spending is still out of control, the consumer is being squeezed with debt payments, student loans, cost of living hikes, and inflation is above the target goal. Oh and not to mention we haven't seen a recession in 15 years.
I'm taking the experts opinion with a grain of salt and articles like this are laughable....
This.

Basically, anything that the experts are predicting, etc., take with a grain of salt. If anything, assume completely different. People expected a hard landing in 2023; therefore there was no hard landing because companies got in front of it. Basically, where we think it'll go in 3-6 months we are preparing for now. And due to that behavior it keeps kicking that can down the road. The market is going to expect to Fed to pivot & price that, then the Fed will hold on to pivot a bit too late and will have to be more drastic with it.

Once people realize the initial, inconsequential fed .25bps pivot is completely useless we will probably bleed and force to redirect course aggressively. I fully expect a hard, but shallow and quick, landing after the initial pivot.

ya and when the inverted curve is being normalized, say 30y is higher than 2y then that's the sign that recession and stock market crash is always happening hahaha ;-) it's very counter intuitive, we are in similar time to where bear stearns being wiped out in 2008
thing is , we are at the longest inverted curve ever for the last 30 years so chance are actually higher, but since everyone is waiting for that, it may happen (or not) lol
one thing for sure is we have more layoffs in 2024 and that would impact physiologically speaking how investor put their money moving forward.
Layoffs + still very high cost of capital. I mean .25bps isn't changing your rate to borrow money, it's still way too high to function. I'm progressively buying more debt and locking this in. If people think this investment rate is sustainable, then I don't know where they are living. Look around, people are getting trimmed. Everything is getting way too unaffordable and everyone is struggling.

And yet consumer and discretionary spending is robust with record breaking travel over the holiday’s and the stock market at record highs. The popular narrative is that “everyone is struggling” but that’s just not the case. The poor are struggling but they always struggle.
The economy is remarkably strong and people are confident enough in their jobs and their financial situation to spend like crazy.

The spending is high because the underlying products are costlier. It's an absolute value metric-- so sure it'll always be higher because guess what? Everything costs more. The only way spending wouldn't be ridiculously high is if we had deflation.
Just because spending is high for an absolute value doesn't mean it's strong. Such a misleading way to view it. People are absolutely struggling, the absolute rich are skewing this metric. The market is absolutely robust and strong; the economy is not.
1 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Ned J.:

If anyone thinks consumer prices will drop as corporate costs drops, then you have no idea how our capitalist country works.
And I've heard the "no one wants to work" BS for 40 years..... no one wants to work 60--80 hrs/wk for crap pay and crap benefits and workers are finally standing up and saying NO. Good for them.
Inflation is WAY down...cost of living is not. Wages have not risen anywhere near the rate of the cost of goods. But as soon as any pressure to raise wages comes up, people go ape sh&t crazy....why> because the corporations will still want their HUGE cut of the revenue, so that cost will go straight to the consumer. So we blame the worker for the impact and not the corporation...one of the biggest snow jobs every passed off.
Wage inflation has come for the retail and hourly fella, it's been trimmed hard in the premium white collar job like tech. It's also been trimmed at logistics, these two will need to come back up for a stimulating economy. On the next run, I think those salaries go up but the volume of hiring doesn't necessarily. In stimulus era, these tech companies added fat to keep the juice flowing. They very well knew on any tightening they had a mechanism to trim this and that's what it was created for. Those people were hired for the fall in tech-- not so much for trucking. Just logistics has been eaten up in this.
0 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @V.G Jason:

Quote from @Albert Hasson:

Quote from @V.G Jason:

Quote from @Carlos Ptriawan:

Quote from @V.G Jason:

Quote from @Matthew Crivelli:

Every mainstream prediction has been wrong in the last few years. First we had transitory inflation in 2021, then we were told growth will slow in 2022, then we had a 100% probability of a recession in 2023, now we are being told that we are going to see a soft landing and the fed is going to drop rates. lol it's like opposite day around here with these predictions.
A few things to note - the treasury yields are still inverted, government spending is still out of control, the consumer is being squeezed with debt payments, student loans, cost of living hikes, and inflation is above the target goal. Oh and not to mention we haven't seen a recession in 15 years.
I'm taking the experts opinion with a grain of salt and articles like this are laughable....
This.

Basically, anything that the experts are predicting, etc., take with a grain of salt. If anything, assume completely different. People expected a hard landing in 2023; therefore there was no hard landing because companies got in front of it. Basically, where we think it'll go in 3-6 months we are preparing for now. And due to that behavior it keeps kicking that can down the road. The market is going to expect to Fed to pivot & price that, then the Fed will hold on to pivot a bit too late and will have to be more drastic with it.

Once people realize the initial, inconsequential fed .25bps pivot is completely useless we will probably bleed and force to redirect course aggressively. I fully expect a hard, but shallow and quick, landing after the initial pivot.

ya and when the inverted curve is being normalized, say 30y is higher than 2y then that's the sign that recession and stock market crash is always happening hahaha ;-) it's very counter intuitive, we are in similar time to where bear stearns being wiped out in 2008
thing is , we are at the longest inverted curve ever for the last 30 years so chance are actually higher, but since everyone is waiting for that, it may happen (or not) lol
one thing for sure is we have more layoffs in 2024 and that would impact physiologically speaking how investor put their money moving forward.
Layoffs + still very high cost of capital. I mean .25bps isn't changing your rate to borrow money, it's still way too high to function. I'm progressively buying more debt and locking this in. If people think this investment rate is sustainable, then I don't know where they are living. Look around, people are getting trimmed. Everything is getting way too unaffordable and everyone is struggling.

And yet consumer and discretionary spending is robust with record breaking travel over the holiday’s and the stock market at record highs. The popular narrative is that “everyone is struggling” but that’s just not the case. The poor are struggling but they always struggle.
The economy is remarkably strong and people are confident enough in their jobs and their financial situation to spend like crazy.

The spending is high because the underlying products are costlier. It's an absolute value metric-- so sure it'll always be higher because guess what? Everything costs more. The only way spending wouldn't be ridiculously high is if we had deflation.
Just because spending is high for an absolute value doesn't mean it's strong. Such a misleading way to view it. People are absolutely struggling, the absolute rich are skewing this metric. The market is absolutely robust and strong; the economy is not.

yes, what's the metrics that "discretionary spending is robust ?"
We are at the highest of consumer default cycle right now including credit card and auto loan.

In Hawaii, I usually got fully book 3 months ahead but now only 1 month.

I see in bay area even richer folk are started to hoarding cash and not to spend too money as company is very cautious about spending. Even company that has large cash position like Google is also laying off people the most

1 Reply
Albert Hasson
Investor · Paradise Valley, AZ · Member since 2012 · 361 posts · 214 votes
2y
Quote from @V.G Jason:

Quote from @Albert Hasson:

Quote from @V.G Jason:

Quote from @Carlos Ptriawan:

Quote from @V.G Jason:

Quote from @Matthew Crivelli:

Every mainstream prediction has been wrong in the last few years. First we had transitory inflation in 2021, then we were told growth will slow in 2022, then we had a 100% probability of a recession in 2023, now we are being told that we are going to see a soft landing and the fed is going to drop rates. lol it's like opposite day around here with these predictions.
A few things to note - the treasury yields are still inverted, government spending is still out of control, the consumer is being squeezed with debt payments, student loans, cost of living hikes, and inflation is above the target goal. Oh and not to mention we haven't seen a recession in 15 years.
I'm taking the experts opinion with a grain of salt and articles like this are laughable....
This.

Basically, anything that the experts are predicting, etc., take with a grain of salt. If anything, assume completely different. People expected a hard landing in 2023; therefore there was no hard landing because companies got in front of it. Basically, where we think it'll go in 3-6 months we are preparing for now. And due to that behavior it keeps kicking that can down the road. The market is going to expect to Fed to pivot & price that, then the Fed will hold on to pivot a bit too late and will have to be more drastic with it.

Once people realize the initial, inconsequential fed .25bps pivot is completely useless we will probably bleed and force to redirect course aggressively. I fully expect a hard, but shallow and quick, landing after the initial pivot.

ya and when the inverted curve is being normalized, say 30y is higher than 2y then that's the sign that recession and stock market crash is always happening hahaha ;-) it's very counter intuitive, we are in similar time to where bear stearns being wiped out in 2008
thing is , we are at the longest inverted curve ever for the last 30 years so chance are actually higher, but since everyone is waiting for that, it may happen (or not) lol
one thing for sure is we have more layoffs in 2024 and that would impact physiologically speaking how investor put their money moving forward.
Layoffs + still very high cost of capital. I mean .25bps isn't changing your rate to borrow money, it's still way too high to function. I'm progressively buying more debt and locking this in. If people think this investment rate is sustainable, then I don't know where they are living. Look around, people are getting trimmed. Everything is getting way too unaffordable and everyone is struggling.

And yet consumer and discretionary spending is robust with record breaking travel over the holiday’s and the stock market at record highs. The popular narrative is that “everyone is struggling” but that’s just not the case. The poor are struggling but they always struggle.
The economy is remarkably strong and people are confident enough in their jobs and their financial situation to spend like crazy.

The spending is high because the underlying products are costlier. It's an absolute value metric-- so sure it'll always be higher because guess what? Everything costs more. The only way spending wouldn't be ridiculously high is if we had deflation.
Just because spending is high for an absolute value doesn't mean it's strong. Such a misleading way to view it. People are absolutely struggling, the absolute rich are skewing this metric. The market is absolutely robust and strong; the economy is not.

That doesn’t explain record breaking travel and packed restaurants and malls. The economy is strong. I’ve been around during bad economies and this doesn’t feel that at all.
1 Reply
Kerry Noble JrPro Member
Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
2y
Quote from @Account Closed:

Quote from @Josh Sidhu:

What do you you’ll think, is inflation at an accurate spot according to the reports and will we face heavy cuts potentially in 2024?

The inflation # is no where near accurate. I predict we will see things in 2024 that this country has never seen. Hang on tight.

Totally agree!
1 Reply
Kerry Noble JrPro Member
Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
2y
Im currently listening to the Creature from Jekyll island........its crazy!! thats all ill say
0 Reply
David Dachtera
Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
2y
Purely my opinion ...
What we've been seeing is not inflation, it's corporate price gouging.
There was a report on Good Morning America today about breakfast cereal, for example. It was reported that even with decreasing sales, General Mills increased retail prices of it's cereal products. GM claimed that supply chain and other issues increased production costs. Yet, instead of decreasing production to match reduced sales they raised retail prices further reducing sales.
It appears that America's business schools are failing miserably.
2 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @David Dachtera:

Purely my opinion ...
What we've been seeing is not inflation, it's corporate price gouging.
There was a report on Good Morning America today about breakfast cereal, for example. It was reported that even with decreasing sales, General Mills increased retail prices of it's cereal products. GM claimed that supply chain and other issues increased production costs. Yet, instead of decreasing production to match reduced sales they raised retail prices further reducing sales.
It appears that America's business schools are failing miserably.

.. totally and it's not just one company
1 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Albert Hasson:

Quote from @V.G Jason:

Quote from @Albert Hasson:

Quote from @V.G Jason:

Quote from @Carlos Ptriawan:

Quote from @V.G Jason:

Quote from @Matthew Crivelli:

Every mainstream prediction has been wrong in the last few years. First we had transitory inflation in 2021, then we were told growth will slow in 2022, then we had a 100% probability of a recession in 2023, now we are being told that we are going to see a soft landing and the fed is going to drop rates. lol it's like opposite day around here with these predictions.
A few things to note - the treasury yields are still inverted, government spending is still out of control, the consumer is being squeezed with debt payments, student loans, cost of living hikes, and inflation is above the target goal. Oh and not to mention we haven't seen a recession in 15 years.
I'm taking the experts opinion with a grain of salt and articles like this are laughable....
This.

Basically, anything that the experts are predicting, etc., take with a grain of salt. If anything, assume completely different. People expected a hard landing in 2023; therefore there was no hard landing because companies got in front of it. Basically, where we think it'll go in 3-6 months we are preparing for now. And due to that behavior it keeps kicking that can down the road. The market is going to expect to Fed to pivot & price that, then the Fed will hold on to pivot a bit too late and will have to be more drastic with it.

Once people realize the initial, inconsequential fed .25bps pivot is completely useless we will probably bleed and force to redirect course aggressively. I fully expect a hard, but shallow and quick, landing after the initial pivot.

ya and when the inverted curve is being normalized, say 30y is higher than 2y then that's the sign that recession and stock market crash is always happening hahaha ;-) it's very counter intuitive, we are in similar time to where bear stearns being wiped out in 2008
thing is , we are at the longest inverted curve ever for the last 30 years so chance are actually higher, but since everyone is waiting for that, it may happen (or not) lol
one thing for sure is we have more layoffs in 2024 and that would impact physiologically speaking how investor put their money moving forward.
Layoffs + still very high cost of capital. I mean .25bps isn't changing your rate to borrow money, it's still way too high to function. I'm progressively buying more debt and locking this in. If people think this investment rate is sustainable, then I don't know where they are living. Look around, people are getting trimmed. Everything is getting way too unaffordable and everyone is struggling.

And yet consumer and discretionary spending is robust with record breaking travel over the holiday’s and the stock market at record highs. The popular narrative is that “everyone is struggling” but that’s just not the case. The poor are struggling but they always struggle.
The economy is remarkably strong and people are confident enough in their jobs and their financial situation to spend like crazy.

The spending is high because the underlying products are costlier. It's an absolute value metric-- so sure it'll always be higher because guess what? Everything costs more. The only way spending wouldn't be ridiculously high is if we had deflation.
Just because spending is high for an absolute value doesn't mean it's strong. Such a misleading way to view it. People are absolutely struggling, the absolute rich are skewing this metric. The market is absolutely robust and strong; the economy is not.

That doesn’t explain record breaking travel and packed restaurants and malls. The economy is strong. I’ve been around during bad economies and this doesn’t feel that at all.

It is very segmental market , hard to decipher wacca going on in this market , but some cities are starting bleeding hard …… we can cherry pick statistic that work in our city and what does not work too.
What is certain is that 2024 would be the pivot year just like 2008. The structural job market changes are the one that worried me the most, even company like Microsoft is actually having declines receivables.

Main Street would see the impact later on if and if there is pivot.
1 Reply
Ned J.Pro Member
Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
2y
Quote from @David Dachtera:

Purely my opinion ...
What we've been seeing is not inflation, it's corporate price gouging.
There was a report on Good Morning America today about breakfast cereal, for example. It was reported that even with decreasing sales, General Mills increased retail prices of it's cereal products. GM claimed that supply chain and other issues increased production costs. Yet, instead of decreasing production to match reduced sales they raised retail prices further reducing sales.
It appears that America's business schools are failing miserably.

Exactly..... one of the biggest scams in history. Big corporations will play victim and blame any need to increase prices on workers desire for wage increases....supply issues....inflation...whatever...... while doing huge share buybacks, paying insane salaries to CEO and upper management, cutting the job force and all while recording record profit margins.
But its all the fault of the worker who wants to make a livable wage...or the political administration.... NOT the rampant corporate greed.
2 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Albert Hasson:

Quote from @V.G Jason:

Quote from @Albert Hasson:

Quote from @V.G Jason:

Quote from @Carlos Ptriawan:

Quote from @V.G Jason:

Quote from @Matthew Crivelli:

Every mainstream prediction has been wrong in the last few years. First we had transitory inflation in 2021, then we were told growth will slow in 2022, then we had a 100% probability of a recession in 2023, now we are being told that we are going to see a soft landing and the fed is going to drop rates. lol it's like opposite day around here with these predictions.
A few things to note - the treasury yields are still inverted, government spending is still out of control, the consumer is being squeezed with debt payments, student loans, cost of living hikes, and inflation is above the target goal. Oh and not to mention we haven't seen a recession in 15 years.
I'm taking the experts opinion with a grain of salt and articles like this are laughable....
This.

Basically, anything that the experts are predicting, etc., take with a grain of salt. If anything, assume completely different. People expected a hard landing in 2023; therefore there was no hard landing because companies got in front of it. Basically, where we think it'll go in 3-6 months we are preparing for now. And due to that behavior it keeps kicking that can down the road. The market is going to expect to Fed to pivot & price that, then the Fed will hold on to pivot a bit too late and will have to be more drastic with it.

Once people realize the initial, inconsequential fed .25bps pivot is completely useless we will probably bleed and force to redirect course aggressively. I fully expect a hard, but shallow and quick, landing after the initial pivot.

ya and when the inverted curve is being normalized, say 30y is higher than 2y then that's the sign that recession and stock market crash is always happening hahaha ;-) it's very counter intuitive, we are in similar time to where bear stearns being wiped out in 2008
thing is , we are at the longest inverted curve ever for the last 30 years so chance are actually higher, but since everyone is waiting for that, it may happen (or not) lol
one thing for sure is we have more layoffs in 2024 and that would impact physiologically speaking how investor put their money moving forward.
Layoffs + still very high cost of capital. I mean .25bps isn't changing your rate to borrow money, it's still way too high to function. I'm progressively buying more debt and locking this in. If people think this investment rate is sustainable, then I don't know where they are living. Look around, people are getting trimmed. Everything is getting way too unaffordable and everyone is struggling.

And yet consumer and discretionary spending is robust with record breaking travel over the holiday’s and the stock market at record highs. The popular narrative is that “everyone is struggling” but that’s just not the case. The poor are struggling but they always struggle.
The economy is remarkably strong and people are confident enough in their jobs and their financial situation to spend like crazy.

The spending is high because the underlying products are costlier. It's an absolute value metric-- so sure it'll always be higher because guess what? Everything costs more. The only way spending wouldn't be ridiculously high is if we had deflation.
Just because spending is high for an absolute value doesn't mean it's strong. Such a misleading way to view it. People are absolutely struggling, the absolute rich are skewing this metric. The market is absolutely robust and strong; the economy is not.

That doesn’t explain record breaking travel and packed restaurants and malls. The economy is strong. I’ve been around during bad economies and this doesn’t feel that at all.

Record breaking travel was something documented since 2000. This year won't beat 2019, likely. Travel is for holidays is almost a staple these days, not really 100% consumer discretionary in my opinion. Even with that said, you're getting a packed look at airports due to less flight paths now since Covid. Packed malls & restaurants, maybe, but again look at how this spending is going. This isn't disposable income spending outright, a lot of this is levered spending. Higher % of levered spending than anytime before(meaning put on credit card debt or payment plans without intending to pay it off in 30 days +).

I am not also seeing packed malls and restaurants, are they busier than expected? Sure but packed, far reach.

If I am looking at my pulses--four restaurants I invest in had their worst July-Oct this year than any year in the last 7, and some even longer than that. When I booked my medium term place in SoCal this fall & winter I had 37 houses available to me within 72 hours, last year I couldn't even find one. So I ditched it.

Last year at this exact time I could charge $40 per weekend night for any car in my parking lot valet spots in Dallas and Houston, Texas. It was slammed, and some would offer more to make sure there's is visible from the bars/restaurants. These are A grade areas. Now I can't even get away with $20 per night, I have to drop it to $10/night to get people to park and even then it's not full. My brother's Sedona boutique hotel had record spending, but booking rate was lower. How is that? Rates are higher per night. He was on average 88% full in 2021 & 2022, he's 64% full this year. He has never below 70%, not even in 2020. His prices skyrocketed in 2023 though, so that's also a culprit. Our ranch in the Rockies too had record spending, but lowest vacancy ever. We had 48% full, and never have been below 60%. We are usually in the low 70s percent.

The Astros are top team in the MLB. For the playoffs last year our downtown parking was 100% full and going $30-$50/spot. This year in October we had to adjust to $15/night and still only 70% full if we were lucky. You can charge top dollars for the Taylor Swifts, but nowadays if they are not A+++ you're getting 50c on the dollar. One of our family friends manages bookings for artists; over half his top tier artist list had to cancel or re-book 25% of their shows due to lack of ticket sales.

I have a huge list of stuff that show discretionary spending isn't the same or isn't as strong. I also see the macro stuff like credit card spending but there's a limit to what that'll do. Our average Gen Z employee here has given up on assuming a house but will put a $5,000 Bora Bora trip on her credit card. She will also not renew her lease and go live with her Dad. So yes there's your discretionary spending, but it's definitely not as simple as that. The macro trends are negative.
1 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Carlos Ptriawan:

Quote from @Albert Hasson:

Quote from @V.G Jason:

Quote from @Albert Hasson:

Quote from @V.G Jason:

Quote from @Carlos Ptriawan:

Quote from @V.G Jason:

Quote from @Matthew Crivelli:

Every mainstream prediction has been wrong in the last few years. First we had transitory inflation in 2021, then we were told growth will slow in 2022, then we had a 100% probability of a recession in 2023, now we are being told that we are going to see a soft landing and the fed is going to drop rates. lol it's like opposite day around here with these predictions.
A few things to note - the treasury yields are still inverted, government spending is still out of control, the consumer is being squeezed with debt payments, student loans, cost of living hikes, and inflation is above the target goal. Oh and not to mention we haven't seen a recession in 15 years.
I'm taking the experts opinion with a grain of salt and articles like this are laughable....
This.

Basically, anything that the experts are predicting, etc., take with a grain of salt. If anything, assume completely different. People expected a hard landing in 2023; therefore there was no hard landing because companies got in front of it. Basically, where we think it'll go in 3-6 months we are preparing for now. And due to that behavior it keeps kicking that can down the road. The market is going to expect to Fed to pivot & price that, then the Fed will hold on to pivot a bit too late and will have to be more drastic with it.

Once people realize the initial, inconsequential fed .25bps pivot is completely useless we will probably bleed and force to redirect course aggressively. I fully expect a hard, but shallow and quick, landing after the initial pivot.

ya and when the inverted curve is being normalized, say 30y is higher than 2y then that's the sign that recession and stock market crash is always happening hahaha ;-) it's very counter intuitive, we are in similar time to where bear stearns being wiped out in 2008
thing is , we are at the longest inverted curve ever for the last 30 years so chance are actually higher, but since everyone is waiting for that, it may happen (or not) lol
one thing for sure is we have more layoffs in 2024 and that would impact physiologically speaking how investor put their money moving forward.
Layoffs + still very high cost of capital. I mean .25bps isn't changing your rate to borrow money, it's still way too high to function. I'm progressively buying more debt and locking this in. If people think this investment rate is sustainable, then I don't know where they are living. Look around, people are getting trimmed. Everything is getting way too unaffordable and everyone is struggling.

And yet consumer and discretionary spending is robust with record breaking travel over the holiday’s and the stock market at record highs. The popular narrative is that “everyone is struggling” but that’s just not the case. The poor are struggling but they always struggle.
The economy is remarkably strong and people are confident enough in their jobs and their financial situation to spend like crazy.

The spending is high because the underlying products are costlier. It's an absolute value metric-- so sure it'll always be higher because guess what? Everything costs more. The only way spending wouldn't be ridiculously high is if we had deflation.
Just because spending is high for an absolute value doesn't mean it's strong. Such a misleading way to view it. People are absolutely struggling, the absolute rich are skewing this metric. The market is absolutely robust and strong; the economy is not.

That doesn’t explain record breaking travel and packed restaurants and malls. The economy is strong. I’ve been around during bad economies and this doesn’t feel that at all.

It is very segmental market , hard to decipher wacca going on in this market , but some cities are starting bleeding hard …… we can cherry pick statistic that work in our city and what does not work too.
What is certain is that 2024 would be the pivot year just like 2008. The structural job market changes are the one that worried me the most, even company like Microsoft is actually having declines receivables.

Main Street would see the impact later on if and if there is pivot.
very sector specific. housing to a degree, manufacturing at inflection point, logistics in garbage. the top 7 of stocks is why s&p up, bottom 493 are flattish +/- up or down. That's a better understanding of it.
I don't think we see a full blown devastating recession, I just expect we see a quick jab to Main Street. Easy come, easy go. Quick fix.
1 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @V.G Jason:

Quote from @Albert Hasson:

Quote from @V.G Jason:

Quote from @Albert Hasson:

Quote from @V.G Jason:

Quote from @Carlos Ptriawan:

Quote from @V.G Jason:

Quote from @Matthew Crivelli:

Every mainstream prediction has been wrong in the last few years. First we had transitory inflation in 2021, then we were told growth will slow in 2022, then we had a 100% probability of a recession in 2023, now we are being told that we are going to see a soft landing and the fed is going to drop rates. lol it's like opposite day around here with these predictions.
A few things to note - the treasury yields are still inverted, government spending is still out of control, the consumer is being squeezed with debt payments, student loans, cost of living hikes, and inflation is above the target goal. Oh and not to mention we haven't seen a recession in 15 years.
I'm taking the experts opinion with a grain of salt and articles like this are laughable....
This.

Basically, anything that the experts are predicting, etc., take with a grain of salt. If anything, assume completely different. People expected a hard landing in 2023; therefore there was no hard landing because companies got in front of it. Basically, where we think it'll go in 3-6 months we are preparing for now. And due to that behavior it keeps kicking that can down the road. The market is going to expect to Fed to pivot & price that, then the Fed will hold on to pivot a bit too late and will have to be more drastic with it.

Once people realize the initial, inconsequential fed .25bps pivot is completely useless we will probably bleed and force to redirect course aggressively. I fully expect a hard, but shallow and quick, landing after the initial pivot.

ya and when the inverted curve is being normalized, say 30y is higher than 2y then that's the sign that recession and stock market crash is always happening hahaha ;-) it's very counter intuitive, we are in similar time to where bear stearns being wiped out in 2008
thing is , we are at the longest inverted curve ever for the last 30 years so chance are actually higher, but since everyone is waiting for that, it may happen (or not) lol
one thing for sure is we have more layoffs in 2024 and that would impact physiologically speaking how investor put their money moving forward.
Layoffs + still very high cost of capital. I mean .25bps isn't changing your rate to borrow money, it's still way too high to function. I'm progressively buying more debt and locking this in. If people think this investment rate is sustainable, then I don't know where they are living. Look around, people are getting trimmed. Everything is getting way too unaffordable and everyone is struggling.

And yet consumer and discretionary spending is robust with record breaking travel over the holiday’s and the stock market at record highs. The popular narrative is that “everyone is struggling” but that’s just not the case. The poor are struggling but they always struggle.
The economy is remarkably strong and people are confident enough in their jobs and their financial situation to spend like crazy.

The spending is high because the underlying products are costlier. It's an absolute value metric-- so sure it'll always be higher because guess what? Everything costs more. The only way spending wouldn't be ridiculously high is if we had deflation.
Just because spending is high for an absolute value doesn't mean it's strong. Such a misleading way to view it. People are absolutely struggling, the absolute rich are skewing this metric. The market is absolutely robust and strong; the economy is not.

That doesn’t explain record breaking travel and packed restaurants and malls. The economy is strong. I’ve been around during bad economies and this doesn’t feel that at all.

Record breaking travel was something documented since 2000. This year won't beat 2019, likely. Travel is for holidays is almost a staple these days, not really 100% consumer discretionary in my opinion. Even with that said, you're getting a packed look at airports due to less flight paths now since Covid. Packed malls & restaurants, maybe, but again look at how this spending is going. This isn't disposable income spending outright, a lot of this is levered spending. Higher % of levered spending than anytime before(meaning put on credit card debt or payment plans without intending to pay it off in 30 days +).

I am not also seeing packed malls and restaurants, are they busier than expected? Sure but packed, far reach.

If I am looking at my pulses--four restaurants I invest in had their worst July-Oct this year than any year in the last 7, and some even longer than that. When I booked my medium term place in SoCal this fall & winter I had 37 houses available to me within 72 hours, last year I couldn't even find one. So I ditched it.

Last year at this exact time I could charge $40 per weekend night for any car in my parking lot valet spots in Dallas and Houston, Texas. It was slammed, and some would offer more to make sure there's is visible from the bars/restaurants. These are A grade areas. Now I can't even get away with $20 per night, I have to drop it to $10/night to get people to park and even then it's not full. My brother's Sedona boutique hotel had record spending, but booking rate was lower. How is that? Rates are higher per night. He was on average 88% full in 2021 & 2022, he's 64% full this year. He has never below 70%, not even in 2020. His prices skyrocketed in 2023 though, so that's also a culprit. Our ranch in the Rockies too had record spending, but lowest vacancy ever. We had 48% full, and never have been below 60%. We are usually in the low 70s percent.

The Astros are top team in the MLB. For the playoffs last year our downtown parking was 100% full and going $30-$50/spot. This year in October we had to adjust to $15/night and still only 70% full if we were lucky. You can charge top dollars for the Taylor Swifts, but nowadays if they are not A+++ you're getting 50c on the dollar. One of our family friends manages bookings for artists; over half his top tier artist list had to cancel or re-book 25% of their shows due to lack of ticket sales.

I have a huge list of stuff that show discretionary spending isn't the same or isn't as strong. I also see the macro stuff like credit card spending but there's a limit to what that'll do. Our average Gen Z employee here has given up on assuming a house but will put a $5,000 Bora Bora trip on her credit card. She will also not renew her lease and go live with her Dad. So yes there's your discretionary spending, but it's definitely not as simple as that. The macro trends are negative.
2024 is the key year whether 2024 would exceed 2020 covid default year or whether we are trending down ....

The difference between 2008 and 2023 is in 2008 wall street crashes while main street is still relatively okay (tech is untouched) and residential real estate is crashing.

in 2023 wall street is okay but main street is bleeding with residential real estate is okay while commercial real estate is crashing and tech is on recession.
For financial and tech it's kinda combo of 2001 and 2009, more like dejavu feeling you know, kinda bad nightmare lol
0 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Carlos Ptriawan:

Quote from @V.G Jason:

Quote from @Albert Hasson:

Quote from @V.G Jason:

Quote from @Albert Hasson:

Quote from @V.G Jason:

Quote from @Carlos Ptriawan:

Quote from @V.G Jason:

Quote from @Matthew Crivelli:

Every mainstream prediction has been wrong in the last few years. First we had transitory inflation in 2021, then we were told growth will slow in 2022, then we had a 100% probability of a recession in 2023, now we are being told that we are going to see a soft landing and the fed is going to drop rates. lol it's like opposite day around here with these predictions.
A few things to note - the treasury yields are still inverted, government spending is still out of control, the consumer is being squeezed with debt payments, student loans, cost of living hikes, and inflation is above the target goal. Oh and not to mention we haven't seen a recession in 15 years.
I'm taking the experts opinion with a grain of salt and articles like this are laughable....
This.

Basically, anything that the experts are predicting, etc., take with a grain of salt. If anything, assume completely different. People expected a hard landing in 2023; therefore there was no hard landing because companies got in front of it. Basically, where we think it'll go in 3-6 months we are preparing for now. And due to that behavior it keeps kicking that can down the road. The market is going to expect to Fed to pivot & price that, then the Fed will hold on to pivot a bit too late and will have to be more drastic with it.

Once people realize the initial, inconsequential fed .25bps pivot is completely useless we will probably bleed and force to redirect course aggressively. I fully expect a hard, but shallow and quick, landing after the initial pivot.

ya and when the inverted curve is being normalized, say 30y is higher than 2y then that's the sign that recession and stock market crash is always happening hahaha ;-) it's very counter intuitive, we are in similar time to where bear stearns being wiped out in 2008
thing is , we are at the longest inverted curve ever for the last 30 years so chance are actually higher, but since everyone is waiting for that, it may happen (or not) lol
one thing for sure is we have more layoffs in 2024 and that would impact physiologically speaking how investor put their money moving forward.
Layoffs + still very high cost of capital. I mean .25bps isn't changing your rate to borrow money, it's still way too high to function. I'm progressively buying more debt and locking this in. If people think this investment rate is sustainable, then I don't know where they are living. Look around, people are getting trimmed. Everything is getting way too unaffordable and everyone is struggling.

And yet consumer and discretionary spending is robust with record breaking travel over the holiday’s and the stock market at record highs. The popular narrative is that “everyone is struggling” but that’s just not the case. The poor are struggling but they always struggle.
The economy is remarkably strong and people are confident enough in their jobs and their financial situation to spend like crazy.

The spending is high because the underlying products are costlier. It's an absolute value metric-- so sure it'll always be higher because guess what? Everything costs more. The only way spending wouldn't be ridiculously high is if we had deflation.
Just because spending is high for an absolute value doesn't mean it's strong. Such a misleading way to view it. People are absolutely struggling, the absolute rich are skewing this metric. The market is absolutely robust and strong; the economy is not.

That doesn’t explain record breaking travel and packed restaurants and malls. The economy is strong. I’ve been around during bad economies and this doesn’t feel that at all.

Record breaking travel was something documented since 2000. This year won't beat 2019, likely. Travel is for holidays is almost a staple these days, not really 100% consumer discretionary in my opinion. Even with that said, you're getting a packed look at airports due to less flight paths now since Covid. Packed malls & restaurants, maybe, but again look at how this spending is going. This isn't disposable income spending outright, a lot of this is levered spending. Higher % of levered spending than anytime before(meaning put on credit card debt or payment plans without intending to pay it off in 30 days +).

I am not also seeing packed malls and restaurants, are they busier than expected? Sure but packed, far reach.

If I am looking at my pulses--four restaurants I invest in had their worst July-Oct this year than any year in the last 7, and some even longer than that. When I booked my medium term place in SoCal this fall & winter I had 37 houses available to me within 72 hours, last year I couldn't even find one. So I ditched it.

Last year at this exact time I could charge $40 per weekend night for any car in my parking lot valet spots in Dallas and Houston, Texas. It was slammed, and some would offer more to make sure there's is visible from the bars/restaurants. These are A grade areas. Now I can't even get away with $20 per night, I have to drop it to $10/night to get people to park and even then it's not full. My brother's Sedona boutique hotel had record spending, but booking rate was lower. How is that? Rates are higher per night. He was on average 88% full in 2021 & 2022, he's 64% full this year. He has never below 70%, not even in 2020. His prices skyrocketed in 2023 though, so that's also a culprit. Our ranch in the Rockies too had record spending, but lowest vacancy ever. We had 48% full, and never have been below 60%. We are usually in the low 70s percent.

The Astros are top team in the MLB. For the playoffs last year our downtown parking was 100% full and going $30-$50/spot. This year in October we had to adjust to $15/night and still only 70% full if we were lucky. You can charge top dollars for the Taylor Swifts, but nowadays if they are not A+++ you're getting 50c on the dollar. One of our family friends manages bookings for artists; over half his top tier artist list had to cancel or re-book 25% of their shows due to lack of ticket sales.

I have a huge list of stuff that show discretionary spending isn't the same or isn't as strong. I also see the macro stuff like credit card spending but there's a limit to what that'll do. Our average Gen Z employee here has given up on assuming a house but will put a $5,000 Bora Bora trip on her credit card. She will also not renew her lease and go live with her Dad. So yes there's your discretionary spending, but it's definitely not as simple as that. The macro trends are negative.
2024 is the key year whether 2024 would exceed 2020 covid default year or whether we are trending down ....

The difference between 2008 and 2023 is in 2008 wall street crashes while main street is still relatively okay (tech is untouched) and residential real estate is crashing.

in 2023 wall street is okay but main street is bleeding with residential real estate is okay while commercial real estate is crashing and tech is on recession.
For financial and tech it's kinda combo of 2001 and 2009, more like dejavu feeling you know, kinda bad nightmare lol

Everyone of these downturns is different. I don't think this will be anything like 2008 or even dot-com in magnitude. I think it'll be just be a more recognizable hit after the fact. I think residential real estate hit it's hard spot in Q4 of 2022. I think it'll hit another hard spot in late Q2/early Q3 of 2024 for different reasons. Q4 of 2022 was not a recession or that bad, but it was the low spot. That's how the economy will be for 3-6 months here in 2024, I bet.

Tech was destroyed all of 2022. They trimmed their 2020-2021 in 2023 after that hit. And they'll continue to trim into 2023. This isn't as rosy as people are making it out to be, but it's not as bad maybe I am conveying. For the record, I am still a net bull on america and my money says so.

Of the few stories I shared in my previous post, I have well over 100 probably closer to 100s of accounts of HNW individuals understanding the economy isn't as great as it appears to be. I have a couple that disagree with me, but for the most part they all recognize it. However, it's not as bad as making us change how we move. So that's probably the best way to convey it; it's definitely tightening and struggling, but it's not stopping how we live our lives. In other economic classes, we're noticing them giving up on the saving aspect and are more likely & encouraged to spend on the now.
1 Reply
Andrew SyriosPro Member
Moderator
Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
2y
They don't include housing (nor stocks and bonds) nor insurance in the CPI, which I think makes inflation look better than it is. I also think they conjole the numbers to a certain degree. I don't think inflation is wildly higher than what's reported, but it's definitely higher IMO
Podcast Guest on Show #121
2 Reply

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