[HN Gopher] Inbound container volumes to the US are reverting to...
___________________________________________________________________
Inbound container volumes to the US are reverting to pre-pandemic
levels
Author : strict9
Score : 207 points
Date : 2022-06-07 16:51 UTC (6 hours ago)
(HTM) web link (www.freightwaves.com)
(TXT) w3m dump (www.freightwaves.com)
| baggy_trough wrote:
| Would love to be able to find a new car to buy at a reasonable
| price.
| corrral wrote:
| I think that era's ending.
|
| I guess the benefit, if there is one, is that expensive ICE
| cars make electric cars look less crazy-expensive than they did
| before.
| baggy_trough wrote:
| Massive implications if so.
| milkytron wrote:
| I'm hoping it helps the transition to other forms of
| transportation. The US has hamstrung itself to being
| dependent on foreign autos and oil for nearly all necessary
| transportation.
| [deleted]
| meristem wrote:
| An example of how some dealers see the situation:
|
| A friend went shopping for new/reasonable car, and the Toyota
| dealer told them "See you in a few years!"
| caycep wrote:
| I wonder if that means current inflation rates are probably
| COVID-inflated and will drop precipitously?
|
| in which case maybe the Fed shouldn't raise rates as
| aggressively?
|
| Or maybe there's not enough to really infer anything from this?
| jmt_ wrote:
| Not until we have returned to early 2019 levels of inflation
| should the Feds ease their funds rate increase plans in my
| opinion. Why lengthen this process if we don't have to?
| pishpash wrote:
| What aggressive? They should at least get back to neutral, and
| they're not even there yet.
| hpagey wrote:
| came to say exactly this. We are not even at neutral yet.
| la64710 wrote:
| And prices are rising? Looks like we need a Economics 101 ...
| jlbbellefeuille wrote:
| I haven't seen this mentioned yet...
|
| The West coast Port Workers Association contract is being
| renegotiated and if I was a savvy buyer I would stock up
| inventory before and after the negotiation window instead of
| having my inventory stuck on a boat in the Bay Area. This
| obviously isn't the whole answer, but a possible contributing
| cause.
|
| Also there has not been a lot of coverage on this considering how
| big of a deal a strike would be if they could not come to terms.
| The most recent article was about 4 weeks ago according to a
| cursory google news search.
|
| https://www.reuters.com/business/retail-consumer/us-importer...
| objektif wrote:
| I do not understand why this author needs to play the role of an
| economics expert. Please stay on the topic and report the facts.
| Consumer spending, inflation, rates etc are complex topics.
| jganetsk wrote:
| All signs pointing to a stock market recovery:
|
| - Decreased consumer savings - Decreased foreign savings
|
| Plugged into the profit equation:
| https://www.levyforecast.com/assets/Profits.pdf
|
| US corporate profits should be shooting back up
| mupuff1234 wrote:
| Recovery from what exactly? The market as a whole hasn't gone
| down much.
| davedunkin wrote:
| S&P 500 is down 14% from its high at the end of last year,
| Dow is down 10%, NASDAQ is down 25%. Those are significant
| drops over a 6 month period.
| legitster wrote:
| Target recently announced that they are now overstocked.
| Automakers are saying the chip drought is almost over. Lumber
| prices are going down. Seems like we are returning to normal?
| chiefalchemist wrote:
| Immediately below the article title:
|
| "Inbound container volumes to the US are reverting to pre-
| pandemic levels"
|
| The direct answer to your question is, yes.
| colechristensen wrote:
| Straight from supply crunch to recession.
| donthellbanme wrote:
| InefficientRed wrote:
| Well, yeah, there's an intentional effort right now to crush
| demand because folks realized supply chains don't normalize
| in two financial quarters (see: "transitory").
|
| All of COVID seems like a case of impatience.
|
| The fact that the pandemic would last years was kind of
| obvious by late spring 2020 -- when in the history of
| humanity have humans ever experienced a pandemic that didn't
| last for years/decades? (I'm not here to debate masks or
| whatever public health measures; that's entirely tangential
| to the point that pandemics don't just go away after a few
| months.) Pandemics do end. Just not in a few financial
| quarters.
|
| The same thing is happening with "Transitory Inflation" now.
| The supply shock IS transitory and things WILL normalize, but
| only in the same sense that pandemics do eventually end. Shit
| takes years, not quarters.
|
| I think by 2024-2025 we'll be in this weird state where
| supply is back to normal but where there have been _years_ of
| policy aimed at crushing demand.
| mchusma wrote:
| The length of the pandemic seems largely due to your
| definition of the pandemic. From a practical perspective,
| once people can vaccinate to prevent death AND get a cure,
| many people's definition of "pandemic" is that it is over.
|
| I'm curious your thoughts on the intentional efforts are to
| crush demand, can you elaborate?
| dwater wrote:
| I'm still seeing businesses close because their staff are
| out sick and I have more personal contacts who've taken
| sick leave in the past month than any time I can remember
| in the past 2 years. In my mind that's still in a
| pandemic.
| InefficientRed wrote:
| _> From a practical perspective, once people can
| vaccinate to prevent death AND get a cure, many people 's
| definition of "pandemic" is that it is over._
|
| Vaccines weren't available until summer 2021, which was
| unexpectedly early, and _still_ aren 't widely available
| in some parts of the world. No reasonable "definition"
| puts the end of a pandemic at summer 2020, but "short and
| temporary" was certainly the messaging in March 2020.
|
| What I'm saying is that in March 2020 (or perhaps April)
| it was was obvious that the world would not be out of the
| pandemic for _years_ in the best case scenario, but many
| people believed things would be back to normal in weeks
| or perhaps months. Which... just doesn 't have any
| historical precedent and was clearly wishful thinking. I
| remember expressing this on the phone to family and
| friends -- that covid would last years -- and no one
| believed me.
|
| _> I 'm curious your thoughts on the intentional efforts
| are to crush demand, can you elaborate?_
|
| Central banks change interest rates in order to shift
| aggregate demand curves. "Curbing inflation" sounds less
| negative than "destroying demand", but the central tenant
| of central bank interest rate policy is that the two are
| causally related to one another.
| tgsovlerkhgsel wrote:
| Both https://en.wikipedia.org/wiki/2002%E2%80%932004_SARS_o
| utbrea... and
| https://en.wikipedia.org/wiki/2009_swine_flu_pandemic were
| _mostly_ over relatively quickly.
| mupuff1234 wrote:
| What is being done to crush demand?
| vkou wrote:
| Tightening monetary policy in order to increase
| unemployment.
| khuey wrote:
| raising interest rates to tamp down on employment and
| wage growth
| gz5 wrote:
| Agree on the macro. Why the need to crush demand now, and
| what steps by what actors are you identifying as designed
| to crush demand?
| abvdasker wrote:
| Powell has said explicitly that one of the Fed's short
| term goals is to bring down wages.
| yellowapple wrote:
| "What's this? The American working class is struggling
| because wages haven't kept pace with cost of living in 50
| years? Surely suppressing wages even more will fix that!"
| abvdasker wrote:
| Personally, I think this slow moving inflation disaster
| is the result of the US government's inability to raise
| taxes. They have to reduce the money supply somehow to
| fight inflation and they're doing it with one hand
| (fiscal policy) tied behind their back. I suspect the
| reason is because tax increases are politically toxic
| while monetary policy changes made by the Fed are seen as
| apolitical. To be even more cynical about it, one could
| argue that the wealthy people and corporations who
| control politicians have an obvious interest in
| preventing tax increases even when it would benefit the
| economy as a whole in the long term.
| xxxtentachyon wrote:
| Tax policy also acts much more slowly for individuals.
| Beyond that, I don't think this is US-specific issue. Are
| there any countries at the moment trying to address near-
| term inflation via fiscal policy?
| minsc_and_boo wrote:
| Bring down wage _growth_ , not the wages.
|
| Basically manufacturing is at an all time low, and
| rebooting post-pandemic will be harder with higher wages
| given how strong the U.S. dollar is. Of course, wage
| stagnation is finally being corrected so there may be
| little to control that.
| mrtranscendence wrote:
| He said that a goal is to slow wage increases, not
| _decrease_ wages.
| abvdasker wrote:
| His exact words were "get wages down".
| wonderwonder wrote:
| it is vital that the poors remain poors. The entire
| economy depends on it! Wish this was sarcasm. Worst part
| is he is absolutely talking about the lower level wages
| in the $10 - $20 and hour range.
| whimsicalism wrote:
| Because high AD is causing inflation? The Fed is trying
| to reduce demand.
| InefficientRed wrote:
| Nearly every central bank.
| minsc_and_boo wrote:
| So does that mean we _are_ in line with a recession in
| 2023, regardless of efforts in play now?
| midislack wrote:
| Consumers and businesses called the bluff by simply waiting to
| buy everything from doorknobs to drywall to lumber to cars. For
| me I'll be waiting until timber businesses start firing people
| before I buy another board foot. I'm not running a charity here
| and I want to see a little blood pooling under these businesses
| for their haughtiness.
| micromacrofoot wrote:
| Guessing we'll see waves for a couple years until anything
| returns to normal. Likely we'll be oversupplied in a recession
| soon.
|
| https://en.wikipedia.org/wiki/Bullwhip_effect
|
| What I really wonder is what should be done about it. Seems
| like too many efforts to mitigate things could cause a separate
| whip?
| lastofthemojito wrote:
| Perhaps if it weren't for the war in Ukraine - wheat and
| automotive wire harnesses from Ukraine are being sorely missed
| on world markets. And sanctions against Russia are obviously
| driving up prices on things that people would otherwise
| purchase from Russia, like natural gas.
| ejb999 wrote:
| inflation started way before Russia/Ukraine was a thing.
| zdragnar wrote:
| Target being overstocked is, I think, more a symptom of
| consumers changing demand in response to inflation. The days of
| free COVID money are over, and now everything costs more, so
| people are buying different things.
|
| Target is in the position of needing to offer discounts-
| perhaps painful ones- to clear out inventory that isn't
| selling, while they have to pay more to bring in what is.
|
| Time will tell, but I'm not optimistic on this account.
| whimsicalism wrote:
| ie. inflation slows? why wouldn't i be optimistic about that?
| Enginerrrd wrote:
| Well, let me preface by saying this is speculation from
| poor understanding, but I think it's about the difference
| between inflation slowing because the economy has slowed
| and the economy slowing because inflation is high. The
| latter is essentially the stagflation scenario, and it's
| not clear to me what caused that to last so long during the
| 70's.
| InefficientRed wrote:
| I think your parent post means "not optimistic [about
| Target's financial situation]".
| whimsicalism wrote:
| The claim was never "Target's financials are going to go
| great," it was about return to normalcy.
| InefficientRed wrote:
| _> The claim was never "Target's financials are going to
| go great," it was about return to normalcy._
|
| I guess I don't quite understand what is happening in
| this conversation :)
|
| From my perspective, OP explained why the outlook is
| negative for target and you asked "why wouldn't i
| [whimsicalism] be optimistic about [lower inflation]?".
| To which the answer is, "well, you aren't target... you
| can be optimistic about that, that's prefectly ok, but
| it's also sort of immaterial to OP's post which was about
| Target's current situation."
|
| OP wasn't analyzing whimsicalism's financial situation;
| they were analyze Target's financial situation. It's
| possible that you should be optimistic and target should
| be pessimistic.
|
| I'm either wildly misinterpreting the flow of ideas here
| or your responses just don't make any sense at all. I'm
| not sure which.
| zdragnar wrote:
| The post I responded to used target being overstocked as a
| sign of things returning to normal.
|
| Presumably, this was asb opposed to shortages; Target being
| overstocked is not normal, and is in fact a sign that
| things are not normal- rather, a sign that supply lines
| still aren't lining up with demand, but with different
| causes now than last year.
|
| Odds are we won't see 2020 prices again on many goods, so
| inflation slowing is the best we can hope for (and better
| than rising inflation, of course). It is going to take
| awhile for a new normal to stabilize, though.
| vkou wrote:
| If you owe money, or if you are one of the people who
| _were_ getting raises (Service and low-skill jobs across
| America), and were thus causing inflation in prices.
|
| 8% inflation may not sound great to you if you got a 1%
| raise last year, but it's pretty fantastic if you got a 15%
| raise.
| cwkoss wrote:
| Has domestic manufacturing ramped up in the US since covid? Or is
| this purely a demand side signal of consumers tightening their
| purse strings?
| arcbyte wrote:
| Or it's the bullwhip effect in action in this part of the
| supply chain
| mindcrime wrote:
| My money would be on this, at least for a significant portion
| of the effect. This kind of situation is nearly inevitable,
| as one can see from observing people playing the Beer
| Distribution Game[1].
|
| [1]: https://en.wikipedia.org/wiki/Beer_distribution_game
| coliveira wrote:
| No only it didn't ramp up, it is going down the tubes. Labor is
| more expensive than ever, and even at high cost there is no job
| pool to restart production. Parts of the US are suffering of
| massive draught. Interest rates are up. The stock market is
| down. All of this conspires to reduce industrial production,
| not the other way around.
| downrightmike wrote:
| Maybe factories should get smart and build machines that
| build machines to reduce labor, like china is doing.
| jmt_ wrote:
| Factories that are behind on automation cannot simply build
| & develop the machines you're describing in a short amount
| of time. It's not nearly as simple as "oh, just make a
| robot to do it. duh". Maybe some companies should have been
| more proactive about this pre-pandemic but there are many
| prohibitive reasons smaller operations were unwilling to do
| so. The economy is more likely to stabilize before the
| majority of factories (that aren't already doing so) are
| able to automate a meaningful amount of their work.
| rossdavidh wrote:
| Well I can say that the demand from domestic manufacturing
| for software support is up, confirmed from several sources,
| so it doesn't seem like it's "going down the tubes".
| khuey wrote:
| Yes domestic manufacturing is doing fine. https://www.feder
| alreserve.gov/releases/g17/current/default....
| francisofascii wrote:
| Doesn't have to be consumers tightening, but rather shifting
| demand to non-manufactured physical products like restaurants,
| concerts, travel, etc.
| rightbyte wrote:
| Ye I wonder what the shift from local consumtion to tourism
| etc leads to. All WFH porches are built by now.
|
| > Inbound container volumes to the US are reverting to pre-
| pandemic levels
|
| Does not sound too drastic.
| novaRom wrote:
| Currently, some of usually luxurious types of food are in lower
| demand in Germany than in previous years.
|
| It's basically a choice if you will first buy necessities like
| meat (+80% price increase), butter (+50%), wheat flour (+100%),
| pasta(+100%), sunflower oil (+500%), or asparagus (-11%).
| DocTomoe wrote:
| It is not only a demand question, supply seems also low:
| Usually, at this point in the year, country roads should be
| plastered with strawberry- and asparagus-selling stands (at
| least where I live). I have seen not a single one. Even if I
| wanted to get some asparagus, I wouldn't begin to know where
| to get them, as both crops when locally grown are highly
| seasonal and not all supermarkets carry them.
|
| As a single IT guy with a reasonably good salary, I didn't
| notice much of the price increases - but I do notice when
| stuff becomes harder to get.
| MandieD wrote:
| At least the supermarkets are starting to leave some items
| empty instead of spreading things out. How many times over
| the past two years did I think I'd lost my mind when I
| couldn't find something routine... no, I wasn't overlooking
| things, the supermarket employees were just trying to make
| it look nicer. I guess even they started to feel like this
| was some sort of gaslighting. "Oh, no, we're not out of
| dried yeast... we don't sell dried yeast!"
|
| For people on typical German IT/engineering wages, there's
| nothing approaching a problem getting enough to eat, or
| even a varied and balanced diet, but don't plan an evening
| around a particular recipe you don't already have all the
| ingredients to!
|
| Things are dicier for people like the old lady who looked
| to be on the verge of tears staring at artisanal canola oil
| in place of the 1 EUR/liter stuff she was used to buying.
|
| I'm glad I reacted to the glut of cheap strawberries from
| Greece this early spring by buying a couple of kilos and
| making jam out of them. Already stocked up my canning
| ingredients for wild plum season. I have a feeling there
| will not be short trees full of overripe fruit this year,
| though.
| Sohcahtoa82 wrote:
| > At least the supermarkets are starting to leave some
| items empty instead of spreading things out. How many
| times over the past two years did I think I'd lost my
| mind when I couldn't find something routine... no, I
| wasn't overlooking things, the supermarket employees were
| just trying to make it look nicer. I guess even they
| started to feel like this was some sort of gaslighting.
| "Oh, no, we're not out of dried yeast... we don't sell
| dried yeast!"
|
| It frustrates the shit out of me that grocery stores will
| move product to fill in empty space rather than make it
| obvious something is sold out, mainly because they don't
| move/remove price tags. As a result, items sit over the
| price tag for another product and it causes confusion.
|
| Customers don't read the small print indicating what the
| price tag is for, just what the price says on it. So, for
| example, if they're out of the 50-count Advil bottles,
| they'll fill in the empty space with 200-count bottles
| that normally sit next to them. Except now, you have
| 200-count bottles sitting over the 50-count price tag,
| and customers will expect the 50-count price.
| mrtranscendence wrote:
| > It frustrates the shit out of me that grocery stores
| will move product to fill in empty space rather than make
| it obvious something is sold out
|
| I work in the grocery industry. Shelf facings are set
| centrally by category managers and, although store
| management does have some discretion, if staff is willy
| nilly moving items just to cover up out-of-stocks that's
| absolutely against the rules. Not that this fact helps
| anyone, I guess.
|
| I'd definitely complain to management if you see that
| kind of behavior.
| MandieD wrote:
| Where did you find butter that's only 50% more?! I've got a
| tip on some 3 EUR/liter sunflower oil in exchange ;)
|
| Nothing quite like seeing Rapsol (that's canola oil for North
| Americans) marketed as an artisanal product, for 5-6 EUR in
| little half liter dark bottles to preserve the nutty aroma,
| instead of clear plastic liter bottles for 1 EUR.
|
| Meat is "only" about 20% more than I was used to paying -
| though that's a side-effect of buying non-caged/free-range
| which was already way more expensive than the cheap stuff.
| Eggs are also about 20% more, but again, free-range.
| zdragnar wrote:
| In the US, I've been buying more eggs lately, because free
| range eggs haven't gone up in price nearly as much as
| unmarked (i.e. probably caged) eggs. Now that the
| difference in price is small enough, I'm using them more...
| though part of that is also from cutting back on meat as
| well, which have the same trend of higher end cuts not
| changing but cheap cuts / ground meat rising quite a bit.
| yellowapple wrote:
| That's definitely an interesting effect - both surprising
| (you'd think everyone would be affected by supply chain
| issues) and unsurprising (of course the industrial
| outfits feel the pain more acutely when they've spent so
| much effort min-maxing their production of animal
| products).
| JumpCrisscross wrote:
| > _Has domestic manufacturing ramped up in the US since covid?_
|
| Yes[1].
|
| [1] https://fred.stlouisfed.org/series/IPMAN
| bmitc wrote:
| > Has domestic manufacturing ramped up in the US since covid?
|
| How would that even be possible? The U.S. had very little
| manufacturing know-how leftover even before COVID, and now
| that's coupled with one of the most serious pandemics in
| history, political and economic turmoil if not chaos, and
| supply chain issues. How would a domestic manufacturing
| industry rise out of this? Where would people get the chips to
| build out the manufacturing?
|
| Of course, maybe it did ramp up (?), but I would be wholly
| surprised.
| corrral wrote:
| US manufacturing has roughly doubled in inflation-adjusted
| dollar terms, while dropping by 30-something percent as a
| share of GDP (because GDP was rising much faster than that,
| over the same time span) since 1997.
|
| Our factories are much more productive than they used to be,
| so may require fewer workers, and they've not been growing as
| fast as e.g. services and finance, but we still have plenty.
| bmitc wrote:
| Is this "doubling" simply in terms of production dollars?
| If our factories are more productive, that's great, but I
| don't think it addresses my point, which is more about
| diversity and capability versus production numbers. Even
| you point out that manufacturing production has not grown
| with the rest of the economy. And I didn't mean to imply
| the U.S. has no manufacturing.
| corrral wrote:
| People _employed_ in manufacturing in the US--not
| productivity, employees--is about the same as in 1941
| just before Pearl Harbor. We had worse tech then, about
| the same number of people working in manufacturing, and
| our factories produced a tiny fraction of the output per
| worker that a modern factory does.
|
| IOW we _should_ be way _more_ capable of rapid expansion
| of industrial capacity than 1941 America was, and 1941
| America did a pretty damn good job of it over the
| following few years (months, even).
|
| We do also have a lot more domestic demand than then, for
| multiple reasons, but again, modern factories are way
| more productive per worker than a factory in 1941.
|
| What could lag is specifically _high tech_ manufacturing.
| A car factory or aluminum plant is one thing. A chip fab
| is another. That kind of extremely-high-capital-cost
| ultra-specialized manufacturing, we probably should have
| been forcing to be at least partly on-shore for security
| reasons, even if it caused higher prices.
| usrn wrote:
| America was very different in 1941. The culture and
| demography have completely changed.
| layer8 wrote:
| Same in percentage or in absolute numbers?
| corrral wrote:
| Absolute numbers. Which means we should be able to add
| even more capacity, faster than they did then, by a large
| multiple over a similar time period, thanks to
| productivity increases. Which, again, might be needed
| because demand is far higher than it was then
| (population's far higher, standard of living in material
| terms is higher) but kinda like how we can now produce
| more food than we need with low-single-digits percentages
| of the population working in food production, we can
| produce more with far fewer manufacturing workers than we
| had back then.
|
| How much more productive are we? US employment in
| manufacturing peaked, in absolute numbers of workers, in
| 1979. In 2009, we produced about 50% _more_ than in 1979,
| despite being well on our way to dropping to 1941 levels
| of people-in-manufacturing (sheer count, not percentage
| of pop) by that time.
|
| My point with the comparison to 1941 is that we should
| have plenty of expertise around to increase production at
| a rate similar to the increases in the 6-12 months after
| Pearl Harbor, if we really needed to. IOW, at least a 50%
| increase inside a year, or probably about double our 1979
| domestic manufacturing output (total, after the
| increase), and 1979 was solidly in the "the US is a
| manufacturing titan" phase of US history.
|
| Again, however, certain specialized high-tech
| manufacturing might be an exception (chip fabs, for
| example). Supply of raw materials might also become a
| problem. Ability to build or restore/refit normal,
| industrial factories is _not_ a place I 'd expect us to
| be lacking in know-how, though, because we still do
| _tons_ of manufacturing.
| Aloha wrote:
| We do have a bunch of manufacturing knowhow, we still make
| things - just not consumer goods.
| 0xfaded wrote:
| That's simply not true: https://en.wikipedia.org/wiki/Manufac
| turing_in_the_United_St...
|
| Manufacturing in the US has imo been surprisingly resilient,
| and when it comes to components it's remarkably easy to order
| just about anything from a US supplier, perhaps electronics
| being the exception.
|
| Europe only retains its place because of low labor costs in
| Eastern Europe. Western Europe is in real trouble after years
| of policy push for "Services Based" economies.
| bmitc wrote:
| When you say "that's simply not true", what do you mean by
| "that"? You linked to a general article with several data
| points.
|
| When I said "very little", I of course meant relatively
| speaking. In my experience in buying industrial equipment,
| very little of it is made in the U.S. aside from things
| that would be prohibitively expensive (like heavy
| equipment) or things simply assembled in the U.S.
|
| And in hearing conversations internal to companies that do
| have manufacturing, the general sentiment has been "not
| only can we not afford to make this in the U.S., we simply
| can't make it".
| Barrin92 wrote:
| >Western Europe is in real trouble after years of policy
| push for "Services Based" economies
|
| I'm not sure where this narrative comes from because
| Western Europe is still industrialized, in particular
| compared to the US[1].
|
| the industrial belt roughly from the UK midlands through
| northern France, Benelux, Switzerland, the Rhine-Ruhr area
| and South West Germany, Northern Italy and to some extent
| Spain is one of the most productive industrial regions in
| the world. [2]
|
| [1]https://en.wikipedia.org/wiki/List_of_countries_by_GDP_s
| ecto...
|
| [2]https://en.wikipedia.org/wiki/Blue_Banana
| 0xfaded wrote:
| Thank you for changing my mind on this one, the data
| clearly contradicts what I said.
|
| I'm not European, but I have been living in Scandinavia
| for the last 4 years. I think I overgeneralized based on
| what I've seen here.
| coliveira wrote:
| > electronics being the exception
|
| You say this like it's a minor thing. In fact practically
| any product of real value in 2022 has to include advanced
| electronics. What this means is that the US manufacturing
| capacity is, with a few exceptions, based on legacy
| products that have for some reason being difficult to
| offshore (I imagine big household appliances, etc).
| sdenton4 wrote:
| Crack that whip!
|
| https://en.wikipedia.org/wiki/Beer_distribution_game#:~:text....
|
| https://www.youtube.com/watch?v=j_QLzthSkfM
| SN76477 wrote:
| I have noticed at the local grocery, they will strike out any old
| costs that are going down and they have a lot of them lately.
| Things are good
| mediaman wrote:
| Drops in containerized freight, and the following drops in China-
| US freight prices, will start putting pressure on a lot of
| manufacturing onshoring initiatives started during the pandemic.
|
| For many classes of bulk goods, freight was becoming 50-100% or
| more of total landed cost for goods imported from China, which
| overwhelmed labor cost differentials. In addition, Chinese
| production problems provided more reasons to move production
| closer to demand.
|
| But US labor costs increased substantially during the labor
| crunch of 2021. Prevailing wages that were around $15 ramped to
| $18-22 as companies worked to compete against the likes of Amazon
| hiring hundreds of thousands of warehouse workers. Entry level
| Chinese wages have not increased nearly as much.
|
| So if freight costs collapse such that the landed cost only has
| 25% of landed cost as freight, and US manufacturers have
| experienced an increase in labor costs relative to Chinese
| production, this could spell some very challenging times over the
| next 1-2 years as a recession applies cost management discipline
| on the supply chain and US manufacturers find themselves in
| potentially an even worse comparative cost position than pre-
| pandemic, vis-a-vis offshore production.
|
| This is also why many US manufacturers were wary about adding
| capacity: they know about the bullwhip effect, and they also knew
| that it would affect not only consumer demand but also their
| supply chain advantage versus offshore production, and so any
| capital intensive capacity added to meet short-term demand may go
| idle 1-2 years afterward. And most manufacturing capacity doesn't
| pencil out if you only get a couple years of good utilization out
| of it.
| throwawaymaths wrote:
| I think there is an argument for semi-onshoring, aka not quite
| getting it to the US but reducing supply chain risk: Mexico for
| low cost labor with low value-added and near zero supply chain
| risk (if it's a maquiladora on the border), Colombia for low
| cost with high value added but slightly higher supply chain
| risk.
| JumpCrisscross wrote:
| > _there is an argument for semi-onshoring, aka not quite
| getting it to the US but reducing supply chain risk_
|
| "Friend shoring" [1].
|
| [1] https://www.bloomberg.com/news/articles/2021-06-24/-onsho
| rin...
| Teever wrote:
| Is Mexico really a zero supply chain risk?
|
| I don't know much about the cartels or violence in Mexico,
| but that's the first thing I think of when you describe
| Mexico as low risk.
| wsinks wrote:
| I think their parenthetical about a maquiladora on the
| border was the hedge on Mexico as zero supply chain risk.
|
| There is increased cartel risk. I follow a former White
| House geopolitical analyst after I met him at a conference.
| Here's his latest talk on Mexico:
| https://www.youtube.com/watch?v=yilSJg5CMd4
| toolz wrote:
| This guy speaks with a great deal of confidence. I love
| listening to him talk, but the claims he make are
| breathtaking and he seems to make them without a second
| thought. For that reason I was curious to see what sort
| of predictions he's made in the past and see how accurate
| he has been.
|
| Well, maybe not quite as powerful at predictions as he is
| at making geopolitical claims.
|
| (He made a bunch of claims in 2009, for the coming decade
| I'll paraphrase and link to his predictions)
|
| He claimed the middle eastern wars would be withdrawn
| from and the world would see it as American weakness.
| That appears to be incorrect from any metric I can find.
|
| He claimed chinas economy would collapse within the
| decade in 2009. Well, that's not anywhere approaching
| corret.
|
| He claimed Germany in the same timeframe would ascend to
| late 1930 levels of political power. I'm not sure how to
| quantify that, but I sincerely doubt anyone looks at
| Germany as strongly as they looked in late 1930s.
|
| He predicted Russia would push their western front, but
| I'm not so sure that was a bold prediction given the
| russia-georgia war, but he's definitely correct here.
|
| Made a soft prediction of an eastern asia conflict due to
| Japans collapsing demographics, not correct, but not a
| strong prediction either.
|
| Concluded by saying we're going to invert into a
| deflationary economy, which also appears to be very
| wrong.
|
| I don't know nearly enough to call the guy out by any
| means, but I do take his word with a lot of hesitancy. I
| can't think of anyone who speaks as boldly and
| confidently across such a large domain without feeling
| the need to evidence their claims.
|
| https://www.businessinsider.com/stratfor-predictions-for-
| the...
| qiskit wrote:
| They are zero risk in that they are completely within our
| sphere of influence. Canada and Mexico are as zero risk as
| you can get from an american perspective.
| Teever wrote:
| As a Canadian I agree with you on Canada but im a little
| skeptical about Mexico.
|
| Again, im no expert on Mexico but from my understanding
| of the cartel situation Mexico isn't even in the sphere
| of influence of Mexico.
|
| I don't thing the US would want to put critical supply
| chains Ina country like Mexico unless they're willing to
| put troops there to eliminate the cartels, which to be
| honest would be a terrible idea.
| brendoelfrendo wrote:
| It's unquestionable that violent crime in Mexico has gone
| up over the past several years, but the question is: does
| that represent a supply chain risk? I don't have the data,
| but it doesn't seem like cartels or violent criminals
| typically target civilian manufacturing infrastructure.
|
| Mexico has a lot of manufacturing already, and a relatively
| healthy demographic distribution (that is, unlike the US
| and some other developed countries, they actually have
| enough young folks to replace the old folks leaving the
| workforce). I feel like Mexico would have to try _very
| hard_ to fail at being a manufacturing powerhouse in North
| America.
|
| As an aside, this is a good reason for the US to really
| strengthen its relationship with Mexico and try to help
| Mexico fix its problems; the US is probably going to be
| even more dependent on Mexican manufacturing in the future
| when this whole supply chain shuffle shakes out.
| throwaway0a5e wrote:
| The cartels generally don't wanna destroy the factories.
| They wanna tax them.
| anonAndOn wrote:
| >try to help Mexico fix its problems
|
| Do you mean like returning the former Defense Minister to
| Mexico before trial? It's so nice that we can "help".
|
| [0]https://www.cbsnews.com/news/salvador-cienfuegos-
| zepeda-dism...
| milkytron wrote:
| Auto manufacturers are already doing this.
|
| https://tax.thomsonreuters.com/blog/mexico-as-a-new-
| capital-...
| munk-a wrote:
| If we saw increased off-shoring to Colombia would it possibly
| finally result in a continuous Freight rail line through
| Central America? It's always struck me as exceedingly odd
| that Panama is the terminus for all land-borne
| transportation.
| wahern wrote:
| Nobody seems to have figured out how to make bridging the
| Darien Gap cost effective.
| https://en.wikipedia.org/wiki/Dari%C3%A9n_Gap#By_land
|
| Plus, there's not even any rail line reaching Panama. The
| southern terminus of the North American rail infrastructure
| is Mexico, I think. I doubt trucking everything through
| Central America would be very cost effective. So you're not
| only building a new line through 66 miles of some of the
| most difficult and remote terrain in the world, you're
| building or refurbishing another ~1500+ miles of rail.
|
| And then you're only reaching Columbia and Venezuela, with
| the Andes and the Amazon between you and the two biggest
| markets in South America: Brazil and Argentina.
|
| It would be cool if it happened, but I think it would have
| to be a regional public works project funded primarily by
| the U.S. government. Unless Musk is looking for his next
| challenge (and he can make it pencil out with his Fermi-
| math voodoo). Maybe the U.S. can sell it to taxpayers as a
| jobs and economic development program to stem the tide of
| Central American refugees.
| presidentender wrote:
| The Darien Gap is insufficiently friendly to construction
| to permit that.
| barelysapient wrote:
| Who needs rail when there's massive port capacity in
| Cartagena and Panama?
| i_am_proteus wrote:
| Such a rail freight line would have to compete with
| comparatively-inexpensive sea freight, and probably
| couldn't do so cost-effectively.
| [deleted]
| derevaunseraun wrote:
| > It's always struck me as exceedingly odd that Panama is
| the terminus for all land-borne transportation.
|
| Might be because there's this chunk of Panama/north
| Columbia that's run by Guerillas and is one of the most
| dangerous places in existence
| (https://en.wikipedia.org/wiki/Dari%C3%A9n_Gap)
| minsc_and_boo wrote:
| Not just that, you have some of the highest
| concentrations of sea shipping lanes in the world
| competing nearby, with rugged landscape, earthquakes, and
| multiple socipolitical barriers along the route.
| scythe wrote:
| There has also been concern that a land-based link would
| hamper the containment of foot-and-mouth disease that was
| eradicated from North America, and there are
| environmental concerns. Colombia proposed building a road
| through the whole gap:
|
| https://www.latimes.com/archives/la-
| xpm-1995-08-20-mn-36988-...
|
| But this has been heavily protested by environmentalists
| and natives alike. It might be less controversial to go
| northeast to Acandi by tunneling under the mountains,
| which would leave almost all of the forest untouched.
| Then you could build a long bridge, a coastal highway, or
| just keep using the ferry.
| jameshart wrote:
| https://en.wikipedia.org/wiki/Dari%C3%A9n_Gap
| gumby wrote:
| > Panama is the terminus for all land-borne transportation.
|
| Does the Panamerican highway not qualify as land-borne
| transportation?
| gumby wrote:
| The US also has to take antitrust seriously so that there
| aren't single points of failure at a corporate level.
|
| Geographically it's a huge country so really would benefit
| from having factories scattered around the country/NAFTAland.
| Even if some of them clustered in a preferential region
| (lumber in Canada, car parts in Mexico, certain foodstuff is
| in California) it offers some risk.
|
| Remember when a fire in a single factory in Japan crippled
| the semiconductor industry world wide a few years ago?
| Zigurd wrote:
| Both globalization and deglobalization can become fashionable
| herd mentalities. As long as the populist isolationists can be
| held at bay in the US and most of Europe, a sane balance should
| return.
| chrisseaton wrote:
| > freight was becoming 50-100% or more of total landed cost
|
| How can freight be more than 100% of total cost? Everything
| else was zero or negative?
| ketzo wrote:
| Maybe just sloppy language, but OP might have meant "50-100%
| or more of the cost of producing the good itself".
| chrisseaton wrote:
| 'Landed' means total cost for producing and getting into
| country.
| mediaman wrote:
| Yes, you're right, I meant as a percent of the FOB price of
| the product. So 100% of the FOB price would be 50% of the
| landed cost. 100% of landed cost doesn't make sense and was
| the wrong term.
| akira2501 wrote:
| A $4 item costs $4 to ship, making it $8 to get it on shore.
| chrisseaton wrote:
| That's $8 landed so that freight is 50%.
| arcticbull wrote:
| I assume they meant percentage of the cost excluding
| shipping. Probably shouldn't have said 'landed' but I do
| know of some goods that cost over 100% of BOM to ship.
| taf2 wrote:
| If what you say is true/correct than it stands to reason
| removing the tariffs, would just make this issue even worse for
| US manufacturers and drive us into an even deeper recession?
| Animats wrote:
| "Inbound container volumes to the US are reverting to pre-
| pandemic levels".
|
| This does not sound like a problem.
| frankcort wrote:
| Does anyone know a good way to access this sort of data (not
| using OP's SONAR service?)
| howmayiannoyyou wrote:
| This is not an onshoring story.
|
| Vehicles and automobiles - $306.7 billion. Global supply chain
| issues have GREATLY reduced imports (availability of vehicles,
| while increasing prices).
|
| Machinery (including computers and hardware) - $386.4 billion.
| Chip shortage has greatly reduced both that category and
| categories the depend on chips (autos aside as previously
| mentioned).
|
| Aerospace - $139.1 billion. Airlines continue to struggle, now
| due to staffing challenges that find them cutting flights. FAA
| oversight has stalled Boeing production on 777X and possibly
| other models, cutting imports necessary to build these aircraft.
|
| Gems and precious metals - $60.8 billion. Massive asset price
| increase and expectations that cannot continue has greatly
| reduced speculative demand.
| salawat wrote:
| ...oversight hasn't stalled Boeing production.
|
| Boeing has stalled their own production by kneecapping their
| own Quality apparatus. The oversight is a given part. Don't
| blame the guy whose there to tell you you're doing it wrong.
| ilamont wrote:
| It's very strange. Some items have a glut of inventory, others
| are very difficult to find. Weird substitutions are taking place
| in some cases, like the GE light bulbs from Mexico a friend
| spotted at a local retailer in Boston.
|
| Prices seem higher regardless, which ties into higher fuel and
| labor costs.
| denimnerd42 wrote:
| The GE light bulbs I find in big box stores are GE as a
| licensed brand name. They are made all over by someone
| licensing the name.
| NonNefarious wrote:
| Or the oligopolies that are allowed to operate unfettered in
| the USA.
| ffggvv wrote:
| socialists in 2019: "evil oligoplies are driving down prices
| unfairly meaning local businesses cant compete and are forced
| to close"
|
| socialists in 2022: "evil oligopolies are raising prices
| unfairly causing inflation"
|
| havent found one that could explain why they didnt "collude"
| to raise prices in 2008-2019.
|
| whereas its quite clear what caused the high prices was
| rather insane govt spending caused by socialist policies.
| paulmd wrote:
| isn't the whole "walmart cycle" of "aggressively undercut
| local businesses until a monopoly has been established,
| then increase prices once you have control of the market"
| pretty well-established at this point? you're phrasing the
| two halves of that cycle as if it's supposed to be some
| sort of a contradiction.
|
| Applies to Amazon too nowadays.
| skinnymuch wrote:
| The core aspect of socialism is the means of production and
| the fruits of labor [and exchange of all this] in the hands
| of the people. Only the distribution part are what any
| safety net programs are about. I assume socialist policies
| means govt programs.
|
| The people you're referring to would not be saying
| companies are taking advantage of the zeitgeist and raking
| in bigger profits knowing inflation talks will take all the
| blame or straw manning like your 2022 line. Gas prices
| rising so much providing incredible profits is an obvious
| example of this.
|
| No one in the White House or Senate are socialists. Bernie
| is like the Nordic model: capitalism + large safety nets +
| govt programs. The senate has been in republican control or
| with the useless Dem leaning current situation with too
| many conservative Dems. Trump's regime did some of the
| biggest "socialist policies" spending. It is wild to assert
| the right pass socialist policies.
| donthellbanme wrote:
| 1. Between 2008-2019 they just didn't realize they could. I
| have found the years you quote to be high priced.
| Competition just went done in every sector I depend on.
| Banks, cell phone companies, cable, energy prices went up
| without inflation, etc.
|
| 2. The minute we started talking about inflation, every
| company in my life took advantage of it--overnight.
|
| 3. I'm with you on the government spending. I understood
| the money thrown at Covid, but that's done, and the working
| poor will never see those checks ever again. And I'm no fan
| of the Infrastructure Bill.
|
| 4. If you don't wonder why gasoline prices fluctuate by a
| dollar hourly at some stations, while making record
| profits; I don't know what to say.
|
| 5. Every large company made record profits during Covid,
| and we don't know why? They didn't lower prices.
|
| Again the $300 extra per week for unemployed people
| affected by Covid was a one time thing. Companies might get
| free money as usual, but not the little guys.
|
| It was conservatives (Trumpy) that passed first 2 trillion
| stimulious package.
|
| America has just a few badly run "socialist" programs.
|
| I think we all have seen our homeless population get bigger
| each month.
|
| Oh yea, federal government programs. Basically (Cal-fresh,
| and medi-cal)have gone back to make qualifying very hard.
| AnimalMuppet wrote:
| You are spot-on about your criticism of oligopolies as an
| explanation. But for your theory, you have to explain the
| absence of inflation from 2008-2019. It's not like
| government spending was _sane_ during those years...
| BbzzbB wrote:
| I doubt the lightbulb cartel is still a thing. While
| oligopolies and monopolies exist, it's not the answer to
| every inflating article.
| midislack wrote:
| Of course it's still a thing.
|
| Why wouldn't it be?
| BbzzbB wrote:
| Because manufacturing lightbulbs today is a well
| established process and basically any manufacturer can
| produce them if they so chose, as opposed to 1925's
| situation. It also quite empirically is no longer a thing
| as LED bulbs can last up to 100k hours [1] and are often
| rated for 50k [2], as opposed to the cartel's 1k [3].
|
| 1: https://www.inlineelectric.com/lifespan
|
| 2: https://www.bulbs.com/learning/ledfaq.aspx
|
| 2: https://en.wikipedia.org/wiki/Phoebus_cartel
| coliveira wrote:
| You don't seem to understand how modern markets work. See
| for example Coca-cola. Anyone can create a drink that
| looks like Coca-cola. However, we know it has a near
| monopoly on that segment of the market. Just because a
| product can be manufactured, doesn't mean that companies
| have the capacity to create and produce it at the scale
| needed to become profitable.
| BbzzbB wrote:
| That's a separate subject to anti-competitive
| oligopolies. Let me doubt people are loyal to lightbulb
| manufacturers and that the situation is remotely
| comparable to one of the most powerful and well
| established consumer brands in history.
|
| But since you brought up this subject, why should I care
| consumer brands are exercising their pricing power for as
| long as I have access to the low-margin alternatives?
| People paying $5 for takeout coffee at Starbucks doesn't
| affect me in any way. It would affect me if Coke and
| Starbucks prohibited the existence of competitors or
| extinguished them, but that isn't the case (for these
| examples at least, such anti-competitive behaviors do
| exist) as you have yourself implicitly noted in your
| comment.
| tablespoon wrote:
| >> Or the oligopolies that are allowed to operate
| unfettered in the USA.
|
| > I doubt the lightbulb cartel is still a thing. While
| oligopolies and monopolies exist, it's not the answer to
| every inflating article.
|
| An oligopoly doesn't have to also be a cartel, it just has
| to have few competitors.
|
| I think the GP is complaining about how the US as pretty
| much allowed any market consolidation short of outright
| monopoly for a long time, which means a lot of companies
| have too little competition and therefore too much market
| power.
| BbzzbB wrote:
| Is an oligopoly that isn't a cartel problematic? If the
| lightbulb manufacturers jack up their prices, how long
| can that last until new incumbents come around and
| compete margins away?
|
| You know what people hate more than oligopolies? High
| prices. Consolidation is not de facto problematic. Unless
| said consolidation leads to cartel-like behavior or
| entrenching regulations (which even Adam Smith recognized
| as a problem and a propensity of elites, I'm not arguing
| in favor of laissez-faire capitalism), margins will be
| cyclical in a free market and colluding oligopolies will
| eventually face new incumbents, because high margins
| attracts competition and investments.
|
| There are exceptions like markets where cost is
| prohibitive for new participants, say telecom (hello
| Rogers-Bell-Telus), but I don't see how that applies to
| lightbulbs in the 21st century.
| minsc_and_boo wrote:
| Well that shouldn't come at a surprise since U.S.
| antitrust law is aimed at protecting consumer interests,
| not protecting competition.
| bombcar wrote:
| Pricing and supply can cause strange results during shortages -
| if bulbs from China are even a fraction of a penny cheaper in
| normal times they'll be picked, but if they're not available
| the closest could be mexico or even the US.
|
| I've noticed the local "free range fancy chicken eggs" have
| remained $4 since two years ago but the cheap eggs have gone
| from a Buck (sometimes 50 cents on sale) to almost the same $4.
| cwkoss wrote:
| Single data point: a rural egg seller on the washington
| peninsula just raised their prices from $4->$5 per dozen
| because their feed costs recently doubled.
| bombcar wrote:
| Yep, lots of price changes will happen and apparently
| random intervals as contracts and prices expire. Some farms
| will be almost entirely isolated from much of it (if they
| grow their own feed corn for the chickens it could be a
| year or two) others will be affected immediately.
| Frost1x wrote:
| >I've noticed the local "free range fancy chicken eggs" have
| remained $4 since two years ago but the cheap eggs have gone
| from a Buck (sometimes 50 cents on sale) to almost the same
| $4.
|
| I noticed this too and stared buying the free range eggs
| again (used to get these all the time for my ramen eggs).
| There's definitely a difference but I don't go through enough
| eggs or cook them in a way that I typically care (no time to
| prep ramen and therefor nitamgo anymore).
| mountainb wrote:
| Check again. Our rich person eggs are 9.99, spent years
| around 4.99.
| adamc wrote:
| At that price, I would seldom buy eggs.
| bombcar wrote:
| We'll know it's really bad when grocery stores start
| selling "singles" - individual eggs.
| rootusrootus wrote:
| The only difference I've ever noticed is that the more
| organic or free-range an egg claims to be, the more likely
| it is to have defects like blood inclusions. If I don't
| know where the egg came from, the actual taste isn't
| distinguishable. Yolk color is easily manipulated and means
| nothing.
| Frost1x wrote:
| The only difference I notice is in the white which seems
| to have more protein from the cage free eggs. It's
| usually not too noticeable to me except with hard and
| soft boiled eggs where the egg white just seems more
| dense/thicker. I use these for my soft boiled marinated
| eggs so there's more white to absorb my marinate
| goodness.
| puranjay wrote:
| I don't think we're going to a regime of low prices and
| suppressed wages. That phase of the world's economic cycle is
| on its last legs. Demographics are collapsing across the world
| and the most prosperous, numerically largest baby boomer
| generation are entering their non-productive, fiscally
| conservative retirement years.
|
| This just might be the "new normal". The lack of readily
| available products might be a problem, but there's also a good
| chance we see much higher wages across the board
| FredPret wrote:
| Actually there are more millenials than baby boomers. If we
| see significant wage increases and Real Estate decreases, the
| millenial generation might start to procreate to a reasonable
| extent.
| conductr wrote:
| Big ifs attached to a short fuse
| tablespoon wrote:
| > Actually there are more millenials than baby boomers. If
| we see significant wage increases and Real Estate
| decreases, the millenial generation might start to
| procreate to a reasonable extent.
|
| And cheat on Capital?
| corrral wrote:
| > If we see significant wage increases and Real Estate
| decreases, the millenial generation might start to
| procreate to a reasonable extent.
|
| The leading edge of millennials are already _way_ out of
| their best reproduction years. Middle 's very much iffy.
| The youngest are OK but will be starting to enter that
| "your risk of complications and birth defects are
| increasing _a ton_ year over year " territory soon.
| bee_rider wrote:
| I think we're already "procreating to a reasonable extent,"
| where "reasonable" is defined in a context where many of us
| aren't in a stable enough financial situation to
| responsibly have kids. An alternative phrasing would be
| "might be able to buy houses and start families."
| killjoywashere wrote:
| Eh, not really. I mean, yes, but no. Based on terminology,
| I'm going to stick with the US demographic. In that
| setting, the peak 5 year bracket of millennials is
| currently 7.2% of US population and 23.8M people against a
| world background of 7.8B people. The boomer peak at the
| same age was was 8.4% and 22.7M people against a global
| population of 5.9B. So, yes, there are quantitatively more
| millennials now, and the number of millennials is larger at
| the same cohort timepoint, but as a fraction of population,
| they're smaller and will have a smaller effect on global
| affairs.
|
| Globally, it's a bit different, the bulge of millennials is
| in fact larger by all measures, but that bulge isn't really
| driven by the US or Europe, it's the Middle East, and to a
| lesser extent, East Asia.
|
| https://www.populationpyramid.net/united-states-of-
| america/2...
|
| https://www.populationpyramid.net/world/2021/
|
| https://www.populationpyramid.net/united-states-of-
| america/1...
|
| https://www.populationpyramid.net/world/1997/
| BirAdam wrote:
| Well, all of that is true. There's also the printing of many
| trillions of dollars to raise all prices on all things.
| willcipriano wrote:
| Not if the fed has anything to say about it. The plan now is
| to let it crash since hourly workers have gotten uppity and
| are refusing to work terrible jobs for even worse pay. All
| the talk of "wage price spiral" and all that shows their
| hand.
| zaptheimpaler wrote:
| Its incredible to me how more people don't revolt just
| watching Powell talk. He flat out does not acknowledge the
| possibility that wages should rise due to increased
| productivity. Any wage increase is just a sign of
| inflation.
| coliveira wrote:
| The whole goal of the Fed is to keep salaries down. The
| reason is that inflation is measured only on household
| items that can be bought by low income families. You
| don't see the Fed worrying about inflation in housing, in
| stocks, and investments in general. That inflation they
| consider to be good.
| rootsudo wrote:
| Mexico makes sense, there's NAFTA, just pay transport,
| tariffs/customs are waived. Not really weird, take a look at
| cars and manufacturing and it's been that way for the over the
| past two decades.
| TedDoesntTalk wrote:
| I thought Trump got rid of NAFTA?
| minsc_and_boo wrote:
| No, he 're-negotiated' NAFTA as the United States-Mexico-
| Canada Agreement, or USMCA.
|
| There weren't that many changes, but he did implement the
| TPP's intellectual property rules.
| jacobolus wrote:
| There were some slight changes in a few areas but it's
| essentially the same.
| https://en.wikipedia.org/wiki/United_States-Mexico-
| Canada_Ag...
|
| What Trump sank was the US joining the Trans Pacific
| Partnership.
| at-fates-hands wrote:
| Target just announced they're going to start reducing prices on
| a lot of their inventory and signaled their profits are going
| to drop for this year.
|
| _Target Corp. will cut prices, cancel orders and take other
| steps to cut its bloated inventory, moves that will lower its
| profit in the current quarter more than executives thought just
| three weeks ago._
|
| _Demand softened for home products, like furniture, that were
| popular during the height of the pandemic. In addition to
| presenting a financial cost, a lot of those items are bulky and
| take up considerable space in stores and warehouses._
|
| _" We got more of that product than we want to have, and we
| think dealing with that head-on by being aggressive now
| positions us with the right flexibility for the back half of
| the year," he said._
|
| But it will come at a cost. .
|
| _While its excess inventory will be marked down, Target may
| see its overall price level rise this summer as it grapples
| with transportation and other costs that are being affected by
| inflation._
|
| _" Price is the last lever that we pull. ... But price
| increases are unavoidable given the inflationary pressures that
| we've seen in many categories," Fiddelke said._
|
| https://www.startribune.com/target-will-slash-prices-to-get-...
| reaperducer wrote:
| I read an article in the newspaper about this which quotes
| analysts saying this isn't about Target trying to fix its
| prices, but because Target is trying to recover from a series
| of big mistakes.
|
| Apparently, it handled the start of the pandemic poorly and
| couldn't keep anything in stock. Then just as the winter wave
| started to ease, it bet big that people would continue to
| stay locked up and bought tons of home improvement things it
| should have had in stock a year ago.
|
| Personally, my Target runs have gone from every other week to
| almost never, because it simply doesn't seem to ever have the
| things I want and need anymore.
| taylodl wrote:
| So it's not just me? I'm trying to think what my Target
| store would mark down! It's kind of hard to mark down aisle
| after aisle of sparsely-stocked shelves!
| ericbarrett wrote:
| I'm not a regular Target shopper, but when I've gone in for
| specific purchases (basic clothes, small appliances, gifts)
| I've found only empty shelves where what I wanted should
| have been, surrounded by stuff that looks like it's been
| there for years. Reminds me a lot of K-Mart or Sears in the
| first years of their decline-nothing you want and
| everything you don't.
| tootie wrote:
| Well, silver lining is that seems like a really strong signal
| that we're heading towards disinflation.
| AnimalMuppet wrote:
| No, it's a signal that we're heading for lower demand, at
| least partly because of inflation.
| jeromegv wrote:
| The point is this might stop inflation in its track.
| somenameforme wrote:
| I am not saying that this is the scenario but it's worth
| considering that the start of economic collapse from
| inflation tends to happen when companies have products to
| sell, but they can't afford to sell them for prices that
| people can afford to pay.
|
| This does not end inflation, but tends to exasperate it.
| The company goes out of business and you now have fewer
| things in the economy, but the same amount of money. The
| result is further inflation.
| SoftTalker wrote:
| But Target is likely not going out of business. Even if
| they have to sell stuff at a loss. And even if they did,
| their inventory would be auctioned off and resold, it
| would not just be chucked in a landfill.
| SV_BubbleTime wrote:
| Which is counter intuitive. If your money is going to
| worth less soon, you should probably spend it. This is
| the idea behind why "gentle inflation is good".
|
| I'm looking at expensive hard good rights now. Purchases
| that I've been putting off for awhile because I know
| those prices are going up soon.
| SoftTalker wrote:
| However if your money is going to be worth less soon, you
| might be inclined to avoid all non-essential purchases so
| you have more money left for stuff you need (food, rent,
| gas).
| whimsicalism wrote:
| You've got cause and effect backwards.
| AnimalMuppet wrote:
| I'm saying that higher inflation causes lower demand. Are
| you saying that lower demand _causes_ higher inflation?
| If so, can you explain how you think that cause-and-
| effect works?
| whimsicalism wrote:
| Lower demand causes lower inflation, lower demand is
| indicative of Fed tightening. Higher inflation often goes
| hand in hand with higher demand. Don't reason from a
| price change.
| tootie wrote:
| I mean, it's literally lower prices which means lower
| CPI. You can make an academic debate over whether that's
| technically disinflation, but the BLS report is going to
| post a lower number.
| dwater wrote:
| No, it means lower prices on the limited number of goods
| which were oversupplied that nobody wants right now. It
| doesn't mean lower prices on the stuff everyone is still
| buying like food and gas.
| reaperducer wrote:
| _Weird substitutions are taking place in some cases, like the
| GE light bulbs from Mexico a friend spotted at a local retailer
| in Boston._
|
| People in border states have seen this since the start of the
| pandemic. I remember the first time that the only toilet paper
| available in Kroger was all Mexican brands.
|
| I suspect that Mexican companies can make more money shipping
| goods to the U.S. than selling them locally. I also wonder if
| the demand from the north had made shortages in Mexico worse.
| dukeofdoom wrote:
| Things are getting insanely expensive in Canada. Seems like the
| wave will hit here first, since the government printed 300
| billion and lockdown extra hard. To say things are broken is an
| understatment. Joe Six pack would have to save up a week to go
| camping with a pack of beer.
|
| Gas $100
|
| Beer $50
|
| Cigs $15
|
| Park Pass $59 x 2 = $120
|
| Firewood 2 x $15 = $30
|
| Some basic sausages and food = $50
|
| Total $375
|
| Wage $15/hour. Hours of work = 25 hours
|
| This is nuts. Communist level standard of living.
| hbn wrote:
| But at least our great leader goes on TV and cries about
| plastic straws and the supposed influx of nazis, so the tax-
| funded propaganda department can write positive articles about
| him and young people can rest assured that they're being lead
| by people with consistently popular, corporate-backed Good
| Opinions(tm) as the value of their labour nosedives into
| nothing
| kylehotchkiss wrote:
| Wildfire risk too high. Reduce expenses by $45. 3 hours of work
| saved.
| danans wrote:
| > Beer $50
|
| That's 28 bottles of Molson
| (https://www.thebeerstore.ca/beers/molson-canadian). Hope
| you're sharing!
|
| > Park Pass $59 x 2 = $120
|
| Isn't that park pass enough for a whole year's camping?
|
| > Hours of work = 25 hours
|
| 25 hours is a full work week in Canada?
|
| > Gas $100
|
| That seems like the big one.
| dukeofdoom wrote:
| One day of camping is $59/night at Ontario Parks. 25 hours is
| just based on the hourly rate.
|
| This does not factor normal living expenses, or include taxes
| or deductions, or everyday food or housing expenses which are
| crazy. So 25 hours if he lives with Grandma, and Grandma
| feeds him.
|
| Realistically if lives alone he would have to save for a
| month to have $375 left over for a camping trip, if not
| months.
| danans wrote:
| > One day of camping is $59/night at Ontario Parks.
|
| Sorry to hear that.
|
| Even in batshit-crazy-expensive California, you can still
| find state park campsites for as little as $15/night - but
| a reservation is required. Most average $25-$35/night. I
| just found a campsite in the stunning Emerald Bay on the
| shores of Lake Tahoe for $30/night.
| loofatoofa wrote:
| great cost breakdown of a typical canadian outing. would love
| to see one for a hockey game, and then one for ice fishing.
| 0des wrote:
| Meanwhile there's folks like Camping With Steve who walk in
| to Canadian Tire with a 20 and come out with a river boat and
| a 7 day camp.
| more_corn wrote:
| Working as intended. This will add a dip to offset the supply
| chain spike, biting into inflation.
| shadowgovt wrote:
| I've been playing an interesting game as of late where about a
| dozen players participate in a goods-trading economy. The economy
| is small, and money values, though they can of course be
| fractionalized to the hundredths digit, are also generally small
| (each player tends to start with about 200).
|
| It's interesting to observe, over and over again, how an economy
| that size will just _seize_ if only one or two players become
| someone whom everyone wants something from but they want for
| nothing. Money just pools in their coffers and since they never
| spend it, it 's just gone from the economy. Eventually, people
| struggle to conduct basic transactions because the amount any
| individual is holding dips too close to the minimum
| fractionalization threshold, nobody can afford anything in the
| market place (except, of course, the one or two players who never
| spend), and what trade happens happens on a per-unit bartering
| basis (massively inconvenient given players in different
| timezones) or not at all.
|
| ... fortunately, global-scale economies are far more immune to
| this effect; with millions more players, millions more categories
| of good, and far more currency in cycle, such a seizing is
| basically impossible.
|
| ... unless the disparity between median holdings and maximum
| holdings is proportionately similar to that 200-a-person economy
| and the few who have all the money can't (or won't) spend it fast
| enough to keep it in circulation, perhaps...
| rossdavidh wrote:
| I have read that the "Opium wars" in China were a result of
| European annoyance that China didn't want to buy anything from
| them. In order to prevent the scenario you describe, Europeans
| tried to ship them opium, and then when China tried to ban it,
| they went to war.
|
| One (of many) disproofs of the "international trade makes war
| less likely" theory.
| karpierz wrote:
| I'm not sure how that's a disproof?
|
| The claim is: if "international trade" then "war less
| likely".
|
| The example you've proposed is: "Europe couldn't effectively
| trade with China, and so waged war on China." The issue from
| the outset is the lack of international trade?
| jtdev wrote:
| jandrese wrote:
| Lots of companies are predicting a crash in the near future.
| Companies are in pure profit taking mode and inventory imbalances
| are growing and the situation is becoming less stable by the day.
| China shutting down entire towns for weeks at a time is
| contributing to the problem. It's a big problem for a highly
| connected economy, if you have way too much of parts A, B, C, and
| E, but none of part D you are in the worst position. Not only are
| you making no widgets, but you are also paying to warehouse all
| of your excess of the extra parts. An entirely predictable result
| of over-consolidation of numerous industries.
| molyss wrote:
| no only paying the warehouse, but also you'll soon be on the
| hook to pay for part A, B, C and E even though you have no way
| to sell the widget you were supposed to build with them. And if
| you're really lucky, those stored parts might be either
| perishable or quickly deprecating due to technological changes.
| margalabargala wrote:
| > Lots of companies are predicting a crash in the near future.
|
| Note that when a person/company/whatever believes this, they
| tend to take steps that improve that entity's position, but
| slightly destabilizes the system as a whole. So if enough
| entities believe that a crash is coming, it can become a self-
| fulfilling prophecy.
| teeray wrote:
| Is there a scenario where predicting a crash and taking
| action anticipating one can lead to a reduced crash or none
| at all?
| [deleted]
| mberning wrote:
| I am very concerned about the state of the economy in the near to
| mid term. Working class people are getting absolutely crushed by
| inflation and high asset prices. Many of the things people depend
| upon have a relatively inelastic demand (such as housing and
| transportation) and the money to pay for those things will come
| at the expense of something else. I feel that the "trickle up"
| effect is going to lead to low revenues, low profits, cost
| cutting, job loss, etc. across the board.
| joshstrange wrote:
| > I feel that the "trickle up" effect
|
| What do you mean by this?
|
| Corporations are posting record profits all while raising
| prices. It's greed pure and simple.
| baggy_trough wrote:
| Alternately, it's supply and demand.
| mberning wrote:
| They are, for now. Keep in mind those record profits are
| tallied in an increasingly devalued currency. So there is
| certainly a greed component, but it's not the only factor.
|
| The pain of the lower classes in society trickles up to
| higher classes as they constrict their spending, default on
| loans, etc.
|
| In demand and highly compensated engineers may find
| themselves jobless and struggling if the economic pain
| carries on for too long.
| givemeethekeys wrote:
| So, we finally have some demand destruction for goods. What about
| fuel, services, housing, and food? Is there an oversupply of
| those?
| [deleted]
| chiefalchemist wrote:
| Immediately below the (hyperbolic) title / headline:
|
| "Inbound container volumes to the US are reverting to pre-
| pandemic levels"
|
| The news is: supply chain is evening out and returning to
| previous norms.
|
| But such honest would certainly be less click-worthy.
| rossdavidh wrote:
| Should be top-rated comment.
| adamc wrote:
| But it will cause some dislocation for, say, truckers.
| sandbx wrote:
| Good news, hopefully folks have decided they don't need to buy
| more shit
| lifeplusplus wrote:
| i haven't bought anything but food in last 4 months, the only
| thing I bought before that was a table subsidized partially by
| work firm. i have this estimate/sense/quota whether if i've
| over spent recently, and if i splurge on something that quota
| gets filled that i spent too much and need to delay or let go
| of future non-essential stuff, but recently just paying
| inflated prices on grocery has been triggering that sense and
| therefore not really even considering spending on anything
| else. Really feel the difference when $30 gives you only one
| bag and not too long ago it was 4 bags worth of items. hell i'm
| eating more carrots and eggs now, just stings less to eat this
| then say fish which costs $9 for small piece, that you need two
| of per person to have sizable portion for one meal only.
| count wrote:
| The uh, entire economy of the world depends on some level that
| people are going to need to buy more shit.
| rossdavidh wrote:
| They could shift to buying more services and less (not zero)
| shit, so this isn't necessarily true. Not that "dropping off
| a cliff" sounds great...
| lkbm wrote:
| Yes, it's easy to read this as an "Oh no, our economy!"
| article, but it's not. It's an "Oh no, our sector!" article
| for people in shipping and consumer goods.
|
| If you look at charts of consumer spending, the pandemic
| caused an explosion in spending on goods, while spending on
| services "dropped off a cliff". Now stuff is going back
| down to pre-pandemic levels. What are services doing?
| Climbing back to pre-pandemic levels:
| https://www.statista.com/chart/23574/consumer-spending-on-
| go...
|
| Obviously, we "should" be about two years of growth higher
| than pre-pandemic levels, and I'm not saying the economy is
| 100% fine and dandy, but this article needs to be
| understood as being about a sector of the economy, not the
| economy as a whole.
| silicon2401 wrote:
| Hence the catastrophic environmental damage that goes on
| every single day
| bufferoverflow wrote:
| Can't afford, not "don't need". And that is not good news.
| [deleted]
| coliveira wrote:
| The big problem for the US in the near future is: the US dollar
| is suffering massive inflation. As this happens, they lose
| purchasing power, even compared to nations like China, and
| especially oil producing nations of OPEC.
|
| This happens at the same time when China and their trading
| partners are looking to decouple from USD holdings, afraid of the
| threats made by the US. Don't be fooled, this is the beginning of
| a realignment where commodity exporting nations will start to
| privilege Asian countries and reduce their exposure to US/EU
| nations that will spend several years mired on stagflation.
| pirate787 wrote:
| This isn't really supported by the data. Chinese inflation is
| comparable to US inflation and many other countries are
| experience worse inflation than the States.
| somenameforme wrote:
| What data in particular are you talking about?
|
| US Inflation Rate (currently 8.3%) :
| https://tradingeconomics.com/united-states/inflation-cpi
|
| Chinese Inflation Rate (currently 2.1%):
| https://tradingeconomics.com/united-states/inflation-cpi
|
| I'll grant CPI is not necessarily apples to apples because
| how companies compose their weightings tends to vary heavily,
| but it seems like the most reasonable figure to look at that
| I can think of?
| sarchertech wrote:
| https://www.xe.com/currencycharts/?from=USD&to=CNY&view=1Y
|
| You can directly compare the 2 currencies against each
| other.
| jtdev wrote:
| pirate787 wrote:
| Bond market perspective -- Chinese govt bond yields are
| basically the same as the US.
|
| https://www.cnbc.com/2022/04/12/china-inflation-makes-it-
| har...
| thehappypm wrote:
| This would make sense on the surface except the US dollar is
| strengthening against basically all currencies. Perhaps we're
| inflating but everyone else is simply inflating far more.
| jjtheblunt wrote:
| how do you find the data to support this? finance.google.com
| or similar?
| engineer_22 wrote:
| just google "usd [country] exchange rate"
| coliveira wrote:
| This happens because the US is exporting inflation. That is,
| countries need to sell more of their local currency and use
| more USD to buy the same quantities of dollar denominated
| products, resulting in the USD going up. This is one of the
| reasons why they will try to decouple from the USD.
|
| In the past, countries had no other option than to continue
| using dollars. Nowadays there is a growing group of nations
| willing to trade in other currencies.
| adamc wrote:
| Maybe in Euros. Otherwise, I'll believe it when I see it.
| China's handling of its economy has not been stellar and I
| don't know that folks will be in a hurry to use RMB.
|
| There's lots wrong with the dollar (or even the Euro),
| but... the alternatives aren't so great either.
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