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Old 05-12-2020, 07:18 PM
 
39 posts, read 9,682 times
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Increases in prices for food are offset by the drastic decreases in costs for fuel. For clothing and other items like that, at some point it makes sense to sell at a loss to clear out inventory that you would otherwise have to keep incurring costs to store. Rents are going to be weird for a while as access to rentals is tough due to social distancing and a significant unemployed rate balanced against eviction moratoriums means that it's just gonna be kind of haywire I think.

The real number you want is core inflation - which is down from 2% to 1.4% year-over-year in April and probably will drop a bit more as this goes on. Largest monthly decline since the recession. Source: CPI
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Old 05-12-2020, 07:44 PM
 
8,697 posts, read 2,418,954 times
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Quote:
Originally Posted by Therblig View Post
Kind of circular logic here. As with the whole rental/eviction etc. situation... who are they going to sell to, if prices are unstable and there are no student renters?

I predict that in general we will be about where we were, with some shakeups at the individual level. There just isn't anywhere for panic reactions... to go.

There are always some buyers. Some people like you will think prices will be stable. But there is somewhere for prices to go. If a bunch of houses go through foreclosure that put downward pressure on prices. That can create its own momentum. Plus its supply and demand. If supply exceeds demand that puts downward pressure on prices. Just look back at 2008. I know there are different factors today but you can learn from that.
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Old 05-12-2020, 07:57 PM
 
3,839 posts, read 2,524,929 times
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My 2 examples:

Went to a Hyundai dealer Thursday with $2k on me, was contemplating a Palisade. Dealer told me that they were at one point hard to get but now they had 3 that had been sitting on the lot for 6 weeks plus, yet they were still demanding a $5k over the $42,500 sticker and would not budge and let me walk with no effort to get me to yes. Even though there was no trade involved, documentable $45k income and a 760 FICO.

Next morning, went to Home Depot with $1,000, I had been replacing my old crappy manufactured home windows with Anderson's at a rate of 2 every 6 months. I had been getting 25% off on all the prior 2 window buys, this time on a 4 window buy....no applicable discounts.
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Old 05-13-2020, 05:25 AM
 
Location: Boston
12,976 posts, read 3,737,209 times
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Quote:
Originally Posted by armourereric View Post
My 2 examples:

Went to a Hyundai dealer Thursday with $2k on me, was contemplating a Palisade. Dealer told me that they were at one point hard to get but now they had 3 that had been sitting on the lot for 6 weeks plus, yet they were still demanding a $5k over the $42,500 sticker and would not budge and let me walk with no effort to get me to yes. Even though there was no trade involved, documentable $45k income and a 760 FICO.

Next morning, went to Home Depot with $1,000, I had been replacing my old crappy manufactured home windows with Anderson's at a rate of 2 every 6 months. I had been getting 25% off on all the prior 2 window buys, this time on a 4 window buy....no applicable discounts.
you want to buy a $42,000 car with $45,000 income? Wow!
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Old 05-13-2020, 07:36 AM
 
8,697 posts, read 2,418,954 times
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Originally Posted by skeddy View Post
you want to buy a $42,000 car with $45,000 income? Wow!

That is a problem when people can get loans for things they should not be able to buy. What is the monthly payment on a $42,000 car?
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Old 05-13-2020, 08:01 AM
 
9,278 posts, read 8,116,304 times
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There's 5 million barrels per day less demand. The lower price is having less of an impact. Unfortunately, under the way the government calculates inflation, they automatically assign a larger weight to a component that falls in price. The fake weightings, substitutions, and hedonic adjustments only work one way --- to suppress the index.
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Old 05-13-2020, 08:32 AM
 
Location: Riverside Ca
20,895 posts, read 23,285,166 times
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Quote:
Originally Posted by Happs View Post
Contractor prices haven't declined and neither have consumer electronic prices.

Give it time. Some people will run out of money. You’re only gonna be able to pass these moratoriums and close down businesses for so long before you might as well pour a gallon of gas on the whole thing and set it on fire

Quote:
Originally Posted by ddeemo View Post
I am actually surprised that prices haven't gone up much for staples like food. For us, our income hasn't really changed much (retired) but our costs have gone down.
Prices on food in my area have gone up 10-20% depending on what you buy. There are very few specials especially on meats and fruit. household and essentials have gone up.



Quote:
Originally Posted by armourereric View Post
My 2 examples:

Went to a Hyundai dealer Thursday with $2k on me, was contemplating a Palisade. Dealer told me that they were at one point hard to get but now they had 3 that had been sitting on the lot for 6 weeks plus, yet they were still demanding a $5k over the $42,500 sticker and would not budge and let me walk with no effort to get me to yes. Even though there was no trade involved, documentable $45k income and a 760 FICO.

Next morning, went to Home Depot with $1,000, I had been replacing my old crappy manufactured home windows with Anderson's at a rate of 2 every 6 months. I had been getting 25% off on all the prior 2 window buys, this time on a 4 window buy....no applicable discounts.
Dude why are you looking at a 42,000 or 47000 dollar car when you make 45k. Especially right now. They did you a favor by letting you walk. Do yourself a favor and at the most you should be looking at is a 3-4k car. They're out there.

There is no reason for a business to give discounts or specials unless there is a reason like overproduction. Construction hasn’t stopped.
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Old 05-13-2020, 01:34 PM
 
1,967 posts, read 503,478 times
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Quote:
Originally Posted by Oklazona Bound View Post
There are always some buyers. Some people like you will think prices will be stable. But there is somewhere for prices to go. If a bunch of houses go through foreclosure that put downward pressure on prices. That can create its own momentum. Plus its supply and demand. If supply exceeds demand that puts downward pressure on prices. Just look back at 2008. I know there are different factors today but you can learn from that.
I think you can analyze til your 'lyzers fall off, but it's on insufficient data and a complete lack of meaningful indicators. You can't apply generalities to this; I don't think you can even compare the last two recessions to it. The dot bomb was comparatively tiny and mostly affected those heavy into tech stocks and some bottom third of employees working for shaky VC startups... pretty much everyone else was fine or even prospered.

2008 was bigger, deeper and wider but still didn't affect anyone much outside the overinflated mortgage arena, which although big is not "everyone and everything." And by most metrics we recovered pretty quickly. (And even built ourselves a whole new layer of bought-'em-cheap investor landlords. Oh, well.)

This is different. It's everything, everywhere, everyone... globally. There hasn't been an event like this in at least 90 or so years, and I could make an argument that the GD isn't much of a comparision, either, due to vast economic and other changes, if I wasn't in a hurry to get to lunch. So maybe this is the first real event of this scope and scale in industrialized times.

New territory for absolutely everyone from Greenspan, Smith and Krugman on down to, well, some of puffier pundits here. I suspect that no large consensus of great minds will get the outcome even mostly right until the trends are quite obvious. (In other words, economists doing what they do best.)

But analyze away on a small scale and with old indicators. I don't mind.
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Old 05-14-2020, 08:04 PM
 
8,697 posts, read 2,418,954 times
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Quote:
Originally Posted by Therblig View Post
I think you can analyze til your 'lyzers fall off, but it's on insufficient data and a complete lack of meaningful indicators. You can't apply generalities to this; I don't think you can even compare the last two recessions to it. The dot bomb was comparatively tiny and mostly affected those heavy into tech stocks and some bottom third of employees working for shaky VC startups... pretty much everyone else was fine or even prospered.
I agree the dot com bubble was not a big deal to most people.

Quote:
Originally Posted by Therblig View Post
2008 was bigger, deeper and wider but still didn't affect anyone much outside the overinflated mortgage arena, which although big is not "everyone and everything." And by most metrics we recovered pretty quickly. (And even built ourselves a whole new layer of bought-'em-cheap investor landlords. Oh, well.)
2008 had 10% unemployment rates. It effected the economy across the board. It did effect parts of the country worse than others. Nothing like what we are dealing with today of course but it was probably the most severe downturn since the great depression at that point. Nothing to sneeze at. It started in the mortgage market but spread all over. I would argue that the recovery was slow and sluggish compared to past recoveries and considering all the money that was thrown at the Great Recession.

Quote:
Originally Posted by Therblig View Post
This is different. It's everything, everywhere, everyone... globally. There hasn't been an event like this in at least 90 or so years, and I could make an argument that the GD isn't much of a comparision, either, due to vast economic and other changes, if I wasn't in a hurry to get to lunch. So maybe this is the first real event of this scope and scale in industrialized times.

New territory for absolutely everyone from Greenspan, Smith and Krugman on down to, well, some of puffier pundits here. I suspect that no large consensus of great minds will get the outcome even mostly right until the trends are quite obvious. (In other words, economists doing what they do best.)

But analyze away on a small scale and with old indicators. I don't mind.

No one knows exactly how it will shake out. But to get back to the OP prices are dropping on many things and it makes sense that real estate will take a hit. I am an real estate investor. Last thing I want is falling prices and lower rental demand. But to ignore that possibility is silly.
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Old 05-15-2020, 05:24 AM
 
Location: Boston
12,976 posts, read 3,737,209 times
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people can speculate all they want about the price of goods in the future, much is unknown, but this much requires no speculation....if you're unskilled and/or uneducated and struggle to make ends meet before the pandemic, you'll be in the same shape once this ends. Conversely, people who have means before this pandemic in most cases will end up back on top.
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