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harperdc posted:A fun little side effect of the IRA’s investments and incentives for EV components, and the current hate-boner for Chinese components. I would imagine Ford is not the only OEM looking at this setup. A while (over a year) back I posted about how many industrial batteries I was seeing imported. That was all CATL. CATL is like 80-90 percent of all industrial battery imports to the US in recent years. Basically all manufacturing that is adding battery and hybridizing their systems or adding the capability to store power from n cheaper times of the day, or to not lose the plant when brownouts happen, all of that is basically all CATL. Edit: I thought I was in another thread… oops. Bar Ran Dun fucked around with this message at 03:13 on Nov 22, 2023 |
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Nov 21, 2023 06:19
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Half of those categories (housing and food) are being affected by algorithmic pricing that basically let businesses act like cartels without having to be cartels/monopolies. The rental pricing algorithm companies are pretty well documented at this point. On the retail side it’s come out that Amazon explicitly designed algorithms to do that (though they’ve stopped using the specific ones mentioned in articles). On the grocery side there is less information and it’s not always clear who does price setting for individual goods (often it’s the suppliers, especially when it’s the bigger ones). But going to nearby stores of the same chain in neighborhoods with different demographics it’s clear pricing (and the stocking of generics) varies by store. I’ve been playing around with my purchases of individual items and purchase locations, and it very much seems like I can drag higher prices of individual low volume items from higher priced stores to lower priced ones.
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Nov 27, 2023 19:14
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drk posted:But, overall, wages rose more than inflation. Thing is nobody cares about the aggregate. When you average or assert “overall“ one erases nuance and that specific demographics are disproportionately affected. It’s like the elephant curve (the Lakner-Milanovic graph). Global growth was great on average, it was great over all. But hey it’s not like we have an international fascism problem now, because of all the: on average a rising tide lifts all boats talk.
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Nov 27, 2023 19:21
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drk posted:Sure it erases nuance, but only focusing on things that have increased in price more than the aggregate ignores the things that increased *less* in price than the aggregate. My wages haven’t and the pandemic caused a move. I think it’s extremely important to ask these questions of: for who? I mean think about it this way: I have 2020 wages and 2023 prices. There is a lot of variation here. Some folks are much worse off and to the ones disproportionately affected. And a lot of it is proximity to price insensitive folks. Where I am bone in whole Turkey was 1.79 to 2.69 a pound (at the same chain) and where my parents are it was .49 a pound. That wide of a variation is well above any transportation costs differences. Pricing has almost completely departed from cost based calculations to “value” / market based. It’s bifurcated, if you live in a rich area some prices are stunningly high. An average doesn’t capture how angry less well off folks who live proximate to well off folks (and thus get the higher prices) are going to be.
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Nov 27, 2023 21:06
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Lockback posted:but there are also "normal" people who are doing better. https://rooseveltinstitute.org/2022/04/04/increasing-wages-for-low-income-workers-is-key-for-a-full-economic-recovery/ There is a graph in this link : Figure 1. Average Hourly Real Wage Changes by Occupational Percentile, January and February 2020–2022 50th percentile looks to be about 0% in mean average wage change. For most average or better folks relative wages fell 2020-2022 based on that graph.
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Nov 27, 2023 21:10
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Do we have more recent figures Lockback? I’ve seen average salary increase data for b this year but not anything that deals with hourly folks.
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Nov 27, 2023 21:49
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Leperflesh posted:Whereas regular grocers selling normal packaged foods are being squeezed by inflation hitting costs and consumer's inability to spend more to keep up. Some of the items that have increased substantially, particularly packaged items think Oreos, chips, canned soups, etc. A lot of that the grocer isn’t the price setter, which I briefly mentioned earlier. They sell the shelf space to manufacturers, manufacturer sets pricing, in some cases stocks the shelves on their own independent of the chain, and the sales money merely passes through the grocery retailer. (My dad used to stock a half shift for Nestle after hours at the SweetBay store he worked at when we needed money) So some of the increases might not show up in the grocers margin, and instead would be in the manufacturers. Or the grocers margin increase could lag the manufacturers increase by a year or two depending on when shelf space contracts came up.
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Nov 27, 2023 22:01
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hypnophant posted:In short, there's no technocratic fix to the inequality in America. It's a political problem which must be addressed by Congress - the Fed simply doesn't have the tools, or the authority, to try and address it. This I agree with. The answer is pretty clearly to tax the rich. I’ll have to play with that Fed page when I’m at a computer to see if I can get it to break out by income percentile.
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Nov 27, 2023 22:05
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Lockback posted:That's not due to gouging, the rural store has higher shipping costs, probably higher spoilage due to less dense customer base, etc. Do the math. I’m serious here. You’ll find it’s not. I did the math on the Turkey price per pound difference between my location (Seattle suburbs) and my parents (northern Florida). It’s not transportation. Most grocery frozen warehousing is in the Chicago area. I know the warehouse used for the specific chain. So how much does a reefer rail car hold net? 194,000 lbs. At .49 cents a pound what is that worth? At 1.79 a pound what is that worth? At this point in the math (with a straight face) tell me those costs, that the shipping accounts for that difference. One doesn’t have to get very far at all to see that’s bullshit. Now think about that rural store vs your St. Paul store. Think about a truckload, what’s the relative cost difference in shipping for a truck load to St. Paul vs the rural location. A dry or reefer trailer is going to be 44,000 ish pounds payload. Be generous assume they aren’t going to get a back haul from the rural location. You’re going to find the difference doesn’t make sense. Pricing variation is well above relative transportation and shrink cost differences, because it’s value/market based not cost based. Bar Ran Dun fucked around with this message at 20:10 on Nov 28, 2023 |
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Nov 28, 2023 20:04
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Lockback posted:You ignored the other factors pretty conveniently. Present your calculation. Of course I did because I know what they are. I’m a marine guy. I work stock throughput and transportation claims. I know what these costs are and how they vary across the country. A 20-30 cent per pound difference makes sense. A buck or nearly a buck fifty per pound difference very very much does not. Pull some sku prices in person at the stores you want to compare. Call a trucking broker and figure out how much the trucking is. Look up typical shrink rates ( or just outright ask a manager at the stores ) See if the relative price differences makes a goddamn bit of sense.
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Nov 28, 2023 20:30
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Lockback posted:Basically, if you think the there's a huge margin to be made by your parents grocery store why don't you get a group together and undercut that store? The margins are astronomical, if you cut prices by a third you'd be giving people lower prices and still making tons of money. Maybe there's a reason that hasn't happened yet? That was my very first thought actually. I should arbitrage a rail car of turkey, goddamn. I don’t know that we can assume that profits would even show up. These chains are constantly buying each other, spinning off regionally, being acquired by equity, etc. There is plenty of debt to shed in good times. I think a more detailed dig into actual reports is probably warranted. Lockback posted:Yes, a company prices things so that they make the most money, that's not new. That has literally always been true. But its also not different now, and food prices in particular are very stuck to cost-basis as they are generally elastic This part is different now. They are very much using POS data to price set by market independent of cost basis. And I very much would push a large portion of it back down to the producers. It’s not like there haven’t been several recent price fixing cases for things like egg and meat.
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Nov 28, 2023 21:08
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hypnophant posted:there's probably more cost in the last mile than in shipping to a regional warehouse anywhere in the conus It’s not that much of a difference though. A rail car strips in 3.5 X 40’ cans. Drayage to the local frozen warehouse… then last mile to the stores. The difference between Seattle and north Florida for those things isn’t hundreds of thousands of dollars.
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Nov 28, 2023 21:14
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hypnophant posted:but dollar general? no one's in a hurry to acquire dollar general I wouldn’t even consider dollar general the same segment honestly. But the food lion, piggly wiggly, Harvey’s, sweet bay level is constantly getting bought back and forth by the equity companies like south eastern groceries.
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Nov 28, 2023 21:28
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hypnophant posted:https://www.usatoday.com/story/money/2023/06/06/price-of-eggs-dropping/70290647007/ They just hit rose acre now for fixing that occurred in 04-08, so give it decade before we hear about it. Yes the avian flu contributed. Yes the Ukraine war has been contributing. These things aren’t exclusive and they’re all partially explanatory. There was a break down done several months ago for the European price increases. All of the things, all of us are talking about had percentages of contribution in the 20-25 percent range of the total inflation. I’m getting on a flight now I’ll see if I can dig that up later.
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Nov 28, 2023 21:37
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Lockback posted:Your parent's grocery store isn't able to sell an entire rail car full of frozen turkeys. You're missing an entire distribution step. Or for the frozen warehousing and spotting they have national contracts and rates with vendors so I don’t really have to care.
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Nov 28, 2023 21:52
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Lol it was half https://www.imf.org/en/Blogs/Articles/2023/06/26/europes-inflation-outlook-depends-on-how-corporate-profits-absorb-wage-gains Half of the European inflation was corporate profits, per IMF. Baddog posted:(and related to this discussion, the FTC shouldn't let the krogers/albertsons merger go through, but they are too distracted by "big tech" to pay attention to a real goddamn problem). Yes you are correct. They 100% should not have allowed it. Baddog posted:Kind of the entire issue I reached that same conclusion quickly. The big thing for me was that they likely purchased at a huge quantity. I would not get whatever price they did for my single rail car. I can get buyers, I mean I arrange salvage sales regularly. Then the question was well why aren’t the other grocers undercutting them , which rolled back to the krogers/albertsons merger. I’ve seen just about everything that’s transported by vessel (which is everything including people and all the high consequence ). I’m not saying these things from a outside perspective. If the rail car reefer fails and they lose 100 tons of pork , I’m taking pictures of the frozen maggots and totaling the costs from the freight invoices and commercial invoices. bob dobbs is dead posted:the accounting allocates the big delta to merchandising/transportation costs Merchandising includes sales discounting. That’s going to be it I’d bet. Watch your own grocery store, watch the pattern of normal price to sale discount that occurs right before new stock inventory arrives. Ask which day they get trucks. Look at the posted prices, permanent sales, and intermittent sales prices for skus. I think they are bifurcating. Rich price insensitive folks just buy whatever and don’t care. normal people are price sensitive and wait for reasonable sales prices. That discount may be showing up in merchandising. It’s a stunning delta on some products.
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Nov 29, 2023 03:15
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This was posted in USCE https://www.nytimes.com/2023/12/11/business/economy/profit-margins-inflation.html?smid=nytcore-ios-share&referringSource=articleShare TLDR focus has switched to margin dollar not revenue dollar, and margins are definitely up. Companies have been testing how high they can raise prices.
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Dec 11, 2023 17:33
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More recent wage income data too. https://www.nber.org/digest/20235/pandemic-related-shifts-low-wage-labor-markets
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Dec 11, 2023 23:09
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Leperflesh posted:companies have always tested how high they can raise prices Of course, but they are significantly better at it now. And I think algorithms now allow them to approximate cartel pricing without having to cartel!
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Dec 11, 2023 23:24
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ultrafilter posted:I've spent some time working on algorithmic pricing and I can verify that collusion among pricing algorithms is a real concern. See here for a recent paper. Well it came out in the Amazon Nessie stuff it was also the explicit goal. The apartment rental price stuff is probably the worst, but that lawsuit is moving forward. https://www.wsj.com/us-news/law/justice-department-clears-the-way-for-collusion-suit-against-apartment-owners-e545f260 If one reads the public comments from RealPage that were in the news that’s also extremely explicit regarding the goal of the algorithm. The RealPage folks are just awful. Back when I was thinking about this stuff more during grad school the conclusion I reached was : The objective function isn’t. Basically it’s super easy to pretend that whatever subjective goal one wants and can write into the objective function is automatically objective and fair because it’s an algorithm, and it of course isn’t. Bar Ran Dun fucked around with this message at 00:20 on Dec 12, 2023 |
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Dec 12, 2023 00:16
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Those price impulse graphs it’s like a perfectly damped control bringing it right back to a monopoly pricing set point. That’s something else, that’s stunning.
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Dec 12, 2023 06:07
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Leperflesh posted:Nobody can really fully explain why prices would stabilize in an environment of full employment. Overseas demand destruction.
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Dec 29, 2023 07:47
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GhostofJohnMuir posted:this makes some sense, especially the decrease in global demand for commodities which has driven total cpi below core cpi, but i guess i would find it mildly surprising that overseas demand could fall enough to bring inflation steadily down while seeing barely any slackening in the domestic labor market. Add the supply chain crisis and the reaction of a new trend of supply chains starting to move to be more regional and in country rather than global. Add the pandemics effects on the labor pool, regarding child care, elder care, retirement, death. Add the effects of the IRA and CHIPs acts.
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Dec 30, 2023 05:34
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hypnophant posted:all of these factors are inflationary. Supply shortages are inflationary. Labor shortages are inflationary. Fiscal spending is inflationary. Nevertheless there is disinflation. The things you and Sr. P have brought up are not explanatory, they instead increase the need for explanation. All these factors also increase demand for labor within the United States! The move from a more global world to a move regional world starts to move production back on shore (or to Canada /Mexico) and reducing it where it had been occurring overseas. Other countries have to match our federal reserve moves, but that causes the demand destruction our Fed intended to cause here, in those countries. The long running feed back loop driving off shoring production for decades is beginning to reverse for the United States, becausev the supply chain crisis happened. Increased international tensions particularly in shipping (like the recent Red Sea diversions ) are going to increase this trend. These also tend to affect Europe Asia trade far more than US Asia trade or US Europe trade.
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Dec 30, 2023 05:59
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drk posted:I think a lot of people might think that China is the US' largest trading partner, but it isn't: both Canada and Mexico do more trade with the US. Yep it’s still a big deal though. The rather vulgar metaphor I’ve been using is that we are up to the elbow up each other’s rear end. They can’t really replace our grain (and they tried during the trade war) and we can really replace things like CATL batteries or Rare earths metals. But each country is going to try. The thing people don’t get is that a lot of trade occurs within the supply chain now. Disruptions affect that type of trade more than they do trade in finished goods. What would have been best for the world would have been to get even closer.
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Dec 30, 2023 06:05
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hypnophant posted:, though I haven’t seen any academic papers on changing trade patterns yet. Sigh. One sees things on the waterfront well before any papers. I see less than I used now that I’m on the claims / insurers side rather loss prevention / regulatory on the carriers side. But I’m still going to see it years before any paper. I’m rather literally paid to go watch it, in person. hypnophant posted:I don’t really understand what point you’re trying to make about a feed back loop, but globalization has been petering off as far back as 2010, and has little to do with the pandemic supply chain problems. Actually the Great Recession accelerated a bunch of JIT trends it even as it knocked the overall trade volume down. A vitally important thing increased, inventory (and not finished goods in supply chain inventory) moved from warehouses to in transit on containerships, facilitated by extremely low carrier rates. But one wouldn’t have seen that just looking the total amount of trade. And it laid the ground work for the supply chain crisis. Any way that trend bit everybody in manufacturing in the rear end during the pandemic when rates shot up and delays got excessive. GhostofJohnMuir posted:my naive theory is that the ira/chips act and at least some of the lingering effect of covid stimulus is driving non-inflationary growth. but that's probably only because it matches my priors I’m not sure people get the size of the facilities opening up between chips and ira. The news is talking about things like GM drawing back. But these auto battery facilities are huge 40-50 fully chartered multipurpose vessels of machinery for each one and all that logistics is already done. The poo poo is mostly here already and installed. The chips stuff was stunningly fast too.
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Dec 30, 2023 07:42
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hypnophant posted:you can't seriously believe you're seeing the whole pattern of global trade from one location. Not all of it but a very large portion of it, I’m also a phone call away from other people at other ports who are either colleagues or people I’ve trained and I ask what they see. In several categories of vessel, containership, bulk carrier, and handy sized multipurpose I’ve boarded about 20ish % of the world’s fleet in those categories. I can glean an awful lot of information even just at a glance. I know where to look to get future vessel schedules. I can estimate how much cargo a vessel is carrying just by looking at it. I know if those thousands of containers on deck are empty or loaded by looking at the ships draft. By looking at the container ships I can even know their routes. I see the cargo manifests , bills of lading, and stow plans But yes, I rather can know a great deal about trade volumes just by looking at a vessel running an Asia - US - Europe.
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Dec 30, 2023 17:46
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Nothingtoseehere posted:I think the general outcome of the latest crisis is we do not understand macroeconomics nearly well enough to make scientific statements of cause and effect, even with the most basic principles. I think we should look at global trade with stock and flow modeling instead of the models of macroeconomics. Systems thinking to build models instead of statistics and the assumptions of neoclassical economics.
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Dec 30, 2023 19:53
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Hypnophant I wrote a response but awful has eaten it and I’m not sure where it posted. I’ll get to redoing it later probably this evening.
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Dec 30, 2023 21:07
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hypnophant posted:
Because we backed off JIT (not completely but a fair bit) and how supply chains work incorporated more warehousing and carried inventory costs money. I wrote this several years ago: “” posted:
Any way after that I posted a good deal about the the health of the containership lines at the time and predicted what would eventually happen in the supply chain crisis. Though I did not realize they would cartel up and voluntarily reduce capacity together ( because that’s human behavior and lol autism). But to what’s going on now, so after the supply chain crisis firms started holding more inventory to have more stable supply chains. This means warehousing and diversified sourcing some portion of which is more local. That’s less efficient but more stable. So it costs more to make poo poo as a consequence. Good analysis that I’ve seen of how much more have it at being 15% to 25 % of the inflation that happened. So is not a sole factor but it’s a big portion. Bar Ran Dun fucked around with this message at 00:33 on Dec 31, 2023 |
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Dec 31, 2023 00:27
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Baddog posted:We go a few years and supply chain starts getting cut again, because reducing inventory and sole sourcing is an easy place to find money. But for certain goods (semiconductors, batteries) we’ve decided to not do that and to move some production back to on shore or regional (Canada / Mexico), and that’s a large part of what the IRA and CHIPs is intentionally doing. The other part is that a gasoline to electric transition means accelerating the trend of the US as a net exporter of oil. And this stuff means jobs and also more inflation.
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Dec 31, 2023 00:53
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Right and if we transition to electric we drop our demand on top of that. 9 states have banned the sale of new gasoline powered cars by 2035.
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Dec 31, 2023 02:32
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hypnophant posted:maybe you can find something interesting to do with them. They make money with stock and flow models. These are real models of systems that use differential equations and control theory not linear programming matrix operations. You know like what Tim Cook at Apple does (that he picked up at IBM.) hypnophant posted:
Yes is not an energy exporter Yes Europe has so far failed to come up with a competing industrial policy. Yes that means then their inflation is going to be worse. All this supply chain stuff affects them more than the US too. Their international trade is affected more by this change and new post pandemic conditions. The US benefits in a relative way (but not an absolute way ) from a world that is more regional and less global. That’s part of the reason why we are doing better than everybody else.
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Dec 31, 2023 06:51
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hypnophant posted:Am I misreading you here? Yes. You’re missing the part that matters because of the way you think about the question. A general trend to carry move inventory in warehouses and to source regionally and onshore rather than source from giant single factories will make everything cost cost more to make. A failure to have a coherent industrial policy that accounts for this trend change for critical goods will be more inflationary. Energy self sufficiency is less efficient, because it generally costs more to get it out of the ground here rather than overseas and is thus inflationary. Not being energy self sufficient is inflationary because there are wars occurring and certain sources are sanctioned (Russia) and other sources have their logistics threatened (any tracker transits through the Red Sea) All of these things are inflationary, because it all makes making goods harder and less efficient. But these changes also move production around and relative to other countries than movement benefits the United States.
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Dec 31, 2023 18:41
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hypnophant posted:What you are saying here contradicts basic economics. If the US is overpaying to produce its own oil and manufactured goods, that will lower, not raise, prices of the output of the lowest-cost producers for countries that are not doing that. This is 101-level supply and demand; if supply goes up, cost goes down for any given level of demand. All supply chains are carrying more inventory and diversifying to more regional and in country suppliers. That’s happening in Europe too, they just don’t have a coherent economic policy addressing it. A large part of international trade is within the manufacturing process, not in finished goods. What happens to supply chains when containerships divert around the horn from the Red Sea with shoes that just had the soles glued on in China, but still need to be finished in Europe? Econ 101 supply and demand? Nonsense! Most international trade is within the supply chain. A term for this is “work-in-progress” goods. It’s hard to get percentages on it but in 2013 it was 80% of international trade by valuation. https://unctad.org/press-material/80-trade-takes-place-value-chains-linked-transnational-corporations-unctad-report My conclusions don’t make sense to you because there are many things you just don’t know.
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Dec 31, 2023 23:23
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Leperflesh posted:I think you say a ton of words but don't explicitly tie it to inflation or employment, except for when you just declare that a thing is or isn't inflationary without an actual explanation for how. Goods just costing more to make is inflation! Monetary policy caused inflation isn’t the only type of inflation.
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Dec 31, 2023 23:55
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Leperflesh posted:I think you are a domain expert but are really struggling to present a coherent, clear argument for why we see inflation falling off without an loss of jobs. Right my argument isn’t a complete explanation. It’s like 15% - 20% of an explanation. I do get a bit carried away, I like getting surly about supply chains.
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Jan 1, 2024 00:17
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Leperflesh posted:If goods cost more to make, why are corporate profits up, and why is inflation falling? When inflation started companies used it as an opportunity to raise prices above what their in cost increases were. The supply chain stuff is mostly calming down. Think about it this way: Business has an overseas partner they’ve been using for years. Crisis hits their ability to use that vendor gets harder and slower. They begin partially sourcing at other suppliers, or a brand new suppliers. It takes a couple years to work the kinks out of new logistics. The new CFS forgets desiccants and loads on a hot wet day. hosed container. Customs in the country of the new supplier works differently, hosed shipment. New international supply chains have a more expensive period at the beginning. So cost start at a lower stable level. They shoot way the hell up. Then they stabilize at a new level (above the original) a couple years of later once all the problems in the new logistics chains are worked out. We are starting to enter that later period and leaving the mistakes are made period. That and rates per teu have mostly normalized.
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Jan 1, 2024 00:31
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hypnophant posted:Costs can't go up across the board if wages don't go up, because consumers can't afford to buy all the things they did before if prices have gone up and incomes haven't. They can spend down their savings and borrow money to do it. Have you looked at graphs for those things recently? Cause you should. And they are buying less things because they are paying more for them. Have you not experienced that over the last year?
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Jan 1, 2024 05:32
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hypnophant posted:this would imply a negative savings rate which has not happened. buying less things would imply a fall in gdp growth which has also not happened. this is what i meant when i said you couldn't possibly believe you were seeing all of global trade from a single viewpoint. I said a very large portion of it. Not all of it. And you should think about what what a global to regional transition of supply chains means for GDP. When you have a value chain or works in progress each of those steps are additions to GDP in the countries where they occur. If you move steps in the supply chain onshore the GDP generated by those steps moves home. Supply chains can become less efficient and gdp can increase at the same time.
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Jan 1, 2024 06:03
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