Posts
Click to enlarge.
October 6, 2001
A Flawed Stimulus Plan
Democratic and Republican leaders of the Senate and House Budget Committees agree that a stimulus should be temporary and should not push up long-term interest rates.
January 17, 2008
Bernanke endorses quick, temporary fiscal stimulus
Finally, any program should be explicitly temporary.
Source Data:
St. Louis Fed: Temporary Help Services
16 comments:
I keep waiting for the chart that shows some hope for the next 10 years. I'm still waiting.
Off topic, every time I go back and review my old i-bonds, I am pleasantly surprised. I have one from 2002 paying 6.89% right now. That looks darn sweet now compared to the alternatives.
Mr Slippery,
I keep waiting for the chart that shows some hope for the next 10 years. I'm still waiting.
Have you tried flipping the charts upside down? It works well for some of the less stagnant ones, lol. Sigh.
OT but think you might be interested: the retail TIPS market is currently bid-only for all maturities under 10-15 years. (Both Vanguard and Fidelity show nothing offered for sale with short maturities!)
This has many... implications...
I posted on it over at my site but haven't got time amidst everything else to grind through ALL the implications.
Stunning that the peak of the recovery is just to the bottom of the previous recession.
This is not your father's recession.
Wisdom Seeker,
From your site, "Another way of saying it is that the supply of 5 and 10-year TIPS is inadequate and the government is, in effect, manipulating perceived inflation expectations to the downside."
There is no doubt in my mind that official inflation is less than real inflation. By how much, I don't know. It varies for everyone.
The government has debts it cannot pay at full value, so it must tax everyone through inflation to meet obligations. It will pay negative interest for as long as possible. That alone will probably not be enough, it must also reduce promised benefits, and probably also raise official (non-inflation) tax rates. A triple play where everyone loses except the government.
Wisdom Seeker,
Both Vanguard and Fidelity show nothing offered for sale with short maturities!
Quick! Someone tell Jeremy Siegel! ;)
Troy,
This is not your father's recession.
This is your father's economy though, assuming your father is hooked up to life support of course. Sigh.
Mr Slippery,
There is no doubt in my mind that official inflation is less than real inflation.
I'm not seeing it. If inflation had been measured like it once was (tied to housing prices directly), then I would not have wanted to own inflation protected treasures tied to the CPI (as the housing market collapsed).
Further, the inflation rate I am seeing in the CPI matches my own expenses fairly closely.
Gasoline is more expensive and we see that every time we fill our tanks, and yes, health care is more expensive. However, I can point to many, many things that are cheaper (especially if you are a tech junkie).
What really gets me is the price of spaghetti. My hoard of that wheat-based item bought at Costco has actually fallen in price. That is not something I would have guessed would happen clearly (or I would not have hoarded it). Seriously.
Check this wheat chart out. I don't think the market knows what to make of it any more than I do. Are we on wheat bubble #3 (1996, 2008, 2011) or is this sustainable? How can one know for sure? I certainly don't.
Not knowing is a fairly good reason to own TIPS. Clearly if one knew for sure, serious money could be made betting on it directly. Not knowing turns it into casino action though, and I'll pass on that.
Further, the inflation rate I am seeing in the CPI matches my own expenses fairly closely.
Inflation is experienced by different households according to consumption. I don't think most households are as good at being a consumer as you, Mark. That's a compliment. My food and gasoline costs are up considerably the last two years with roughly the same consumption patterns.
Some of my costs have gone down, but only after action on my part. Congress seems ready to declare that the CPI over estimates inflation and wants to go with chained-CPI so it can lower Social Security COLAs. All part of the triple play to reduce debt and promises made in real terms (IMO of course).
Yes, tech seems to always go down, but wait, deflation means no one would ever buy a tech gadget. Hmmm, maybe deflation is not the most fearsome outcome after all.
Mr Slippery,
My food and gasoline costs are up considerably the last two years with roughly the same consumption patterns.
What is food as a percentage of your overall budget? For me (and unlike the poorest of the world), it is quite low.
My biggest expense is property tax and it has been flat for the past few years (even as housing prices crashed, sigh).
Mark,
Food and gas (counting tolls) run about 18.5% of my monthly budget. That may be higher than most people because my wife and I both commute to work, different places, two cars. We are also a family of 4.
Mr Slippery,
18.5% is definitely in the painfful zone. Ouch. I can see your frustration.
I'm well at the other end of the spectrum. I spend about $6 per day on food (just me) and far less on gasoline.
They are heading down the toll path for one of our bridges here. Fortunately, I haven't used that bridge in years. It is going to @#$% for those who commute daily across it though.
Slippery - We're not seeing a raging inflation here either. Can't help with your commute problem - we live within 5 miles of our school and 10 miles of work so use far less fuel than most. (It irritates me no end when people who drive 50,000 miles/year in their Prius complain that my 7000 mile/year small SUV burns too much gas!) But I have a suggestion for you when you write "My food and gasoline costs are up considerably the last two years with roughly the same consumption patterns."
The tip is to keep shopping around for food stores willing to compete on price for your business. We have a good friend who analyzes consumer spending patterns for food producers, and knows how the supermarket industry tends to work. Companies start with low prices, establish a loyal customer base, and then raise the prices. Only when the store starts to lose profitability do they reboot the cycle. So you have to keep shopping at different stores and figuring out which ones are actually trying to compete on price.
For instance, Costco used to be hands-down cheapest on everything, but now that's not always the case. (I have been reading the same thing about Walmart lately.) Safeway here used to be reasonable, but they tried to move upscale in 2007-2008 (bad timing!) and haven't won our business back yet. Trader Joe's used to be as cheap as Costco for staple items, but now it's not, and their trendy stuff is often overpriced. We now find a lot of good deals at Target, of all places! (Like Mark, we stockpile into a spacious pantry... Target's not so good for fresh veggies but for staple shelf items, it's our friend right now...)
Wisdom Seeker,
Companies start with low prices, establish a loyal customer base, and then raise the prices. Only when the store starts to lose profitability do they reboot the cycle.
Comcast has mastered that business model. They are dangerously close to me rebooting their cycle for them. It wouldn't be the first time. In the past simply calling them to say I wanted to drop services got me a discount. I think it helped that they realized I wasn't bluffing. "Unemployed" is an especially good word to bring up.
"In the past simply calling them to say I wanted to drop services got me a discount."
Was this discount a lasting result? Or did they simply allow the discount to run for 6 or 12 months and then revert your bill back to the original amount.
That has been my experience with Comcast. I don't remember them saying it was "temporary" when they offered to make the change to keep my business but I could be wrong I guess.
Anonymous,
Was this discount a lasting result?
It was not. It was temporary and if memory serves it was pretty much exactly as you described it.
Post a Comment