Secular inflation is here

Inflation and unemployment are both right about where the Fed should want them.
Why change anything?

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Why change? Because Fed policy has long lead time. By the time signs of slowdown caused by high rates show up in data it will be too late to avoid recession.

But Fed is always late. Late to raise in 2021 and late to cut now.

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Base pay is $100k+, bonus is up to 200% of base, and $20k/yr or stock grants. That’s for store managers. Lower-level managers won’t make as much, but that’s still amazing. 75% of managers started as hourly associates, and the average is 5 years to be promoted to a management role.

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Rate cut is programmed for this year.

Maybe Americans should be eating smaller portions of snacks, since the obesity rate is so high.

CPI YoY 3.1%, expected 2.9%
CPI MoM: 0.3%, expected 0.2%

CPI core YoY 3.9%, expected 3.7%
CPI core MoM 0.4%, expected 0.3%

Treasury yields jump after CPI reading

Core looked even worse. So much for falling inflation.


Is why Fed is reluctant to cut rates. Only forecast 3 cuts to please politicians. First cut probably in May or Jun or Jul. Market is in euphoria, forecasting 6-8 cuts and think there will be one in Mar. Truflation is not accurate too.

Maybe no rates cuts this year unless numbers improve.
I’m a skeptic when it comes to “Truflation” as well - I can throw up sources that claim inflation is a lot higher than reported and not lower. But that’s all beside the point. One can’t just change the metric when one doesn’t like the numbers. Well - one can, but it’s bogus.

Well, people like @manch keeps voting for Democrats to spend $ for their desires: homeless, drug addicts, illegal immigrants, etc.

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Cost benefit analysis implies you need to look at both sides of the ledger. Too many people just look at cost but fail to account for benefits.

It’s what Buffett calls “knowing the price of everything but the value of nothing.”

Benefits? Lol. SF literally spends a more and more on homelessness and it keeps increasing. What benefits? They’ve literally created a homeless industrial complex that spends billions without helping the issue. There’s only a couple of reasons you can support that stuff.


I listed out the “benefits”

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Strikes me as a sad way to live life. Constantly afraid of made up threats.

Be an optimist for a change.


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Low interest rates lead to malinvestment. Look at all the solar and EV companies going bust because their business model, if you can call it that, only worked when money was practically free. Malinvestment , whether in the pubic or private sector, creates bubbles in the short run while crushing growth in the long run.

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Stock market does not seem to reflect the real economy.
Time to sell some stocks?

Sell NVDA? For good or intend to buy back after retracement?

Disclosure: No intention to sell. If retracement is more than 10%, would sell other stocks to add to NVDA.

The bull thesis for NVDA lasts a few years. Currently is corporate LLM AI, later would be sovereign AI infrastructure, and simultaneously accelerated computing.

Something about our numbers doesn’t add up. Bloomberg reported federal revenues fell last year. How do get falling revenues out of a strong economy, inflation and no tax cuts? Remittances from the Fed explain some of it but not all of it.