 John Galt6Forward, March
Premium Member
join:2004-09-30
Happy Camp |
Wal-Mart CEO Warns of Serious Price InflationLooks like margin compression is catching up with reality.... quote:
U.S. consumers face "serious" inflation in the months ahead for clothing, food and other products, the head of Wal-Mart's U.S. operations warned Wednesday.
The world's largest retailer is working with suppliers to minimize the effect of cost increases and believes its low-cost business model will position it better than its competitors.
Still, inflation is "going to be serious," Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY's editorial board. "We're seeing cost increases starting to come through at a pretty rapid rate."
More: » www.usatoday.com/money/i ··· on_N.htm |
· actions · 2011-Mar-31 2:42 pm · (locked) |
pandora
Premium Member
join:2001-06-01
Outland |
pandora
Premium Member
2011-Mar-31 2:49 pm
Someone better tell our federal reserve folks, they still seem to think inflation isn't a problem ... well actually I think 3 of the member bank heads have expressed concern ... but NY and DC still think we have a mostly inflation free future ahead.
If rates have to go up to head off inflation, our government budgets are going to look a lot worse than they do now. |
· actions · 2011-Mar-31 2:49 pm · (locked) |
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to John Galt6
I hate to say it, but inflation is the only thing that is going to cure the housing market. I realize that families will have less money for housing, but the cost of housing will inflate, like everything else, and return equity to home owners. who are currently under water. |
· actions · 2011-Mar-31 5:38 pm · (locked) |
pandora
Premium Member
join:2001-06-01
Outland |
pandora
Premium Member
2011-Mar-31 6:20 pm
This is something I don't exactly get. If I were underwater in my home, eventually my self amortizing mortgage would correct for this. If there were a need to relocate while underwater, abandonment of the property would also make sense as the mortgage holder assumed risk when making a weak equity loan.
Being underwater doesn't increase the mortgage cost. Only needing to relocate would be a problem. In my case, as I don't plan to sell anytime into the near or mid term future, even if I had a mortgage it wouldn't matter one bit if it were above or underwater. The only concern for me would be ability to make payment. |
· actions · 2011-Mar-31 6:20 pm · (locked) |
 SnakeoilIgnore Button. The coward's feature.
Premium Member
join:2000-08-05
united state |
to John Galt6
Like I told the kids tonight as they were bitching about Mashes potatoes.
Get used to it. Meat will be to expensive to buy, and a pound of veggies will cost as much as a pound of Bubba burgers [currently 8 bucks in my local market].
Might be time to go invest in some local farmers live stock. My dad would do that. Go in with a few people and buy 1/4 to half a cow/pig. He'd buy chickens and turkeys by the whole. At the house he planted a 2 acre garden. Talk about cheap eats year round. |
· actions · 2011-Mar-31 7:11 pm · (locked) |
1 edit |
to pandora
said by pandora:This is something I don't exactly get. If I were underwater in my home, eventually my self amortizing mortgage would correct for this. If there were a need to relocate while underwater, abandonment of the property would also make sense as the mortgage holder assumed risk when making a weak equity loan.
Abandonment of the property puts you out of the housing market for 7 years. Housing is currently at a 7 year low. That basically means that the average person who has purchased a home in the past 7 years has no equity or only the equity that they put down on the purchase. That down-payment equity is further decreased by the current 10% cost of sales. In other words, the average person, who has purchase a home in the past 7 years, would loose money if they were to sell today. Coincidentally, the mortgage and real estate industry (it is a business), relies on the fact that the average home mortgage lasts for only 7 years. The average home is sold or refinanced every 7 years. There in lies the problem. Since the average home has not appreciated in the past 7 years, it is not eligible for sale or refinance. At that point, the industry (system) fails. Since the average homeowner relies on appreciation to cover the cost of sales and to provide a larger down on an upgrade, they are also out of the market, until they have equity in their current home. You then factor in the fact that lenders are more cautious and requiring better credit and at least 20% down and it is easy to see that the market is not going to turn around at any time in the near future. Without major inflation, it will take at least 7 years. EDIT: If you don't have a mortgage and you've purchased in the past 7 years, you are basically living in a used car, that is going down in value and may take 7 years to come back. If you've owned for over 7 years, you have had no return on investment for the past 7 years. You would have been better off selling 7 years ago and renting. |
· actions · 2011-Mar-31 10:01 pm · (locked) |
 fukitolSolon for President
Premium Member
join:2001-06-11
PonziWorld |
to John Galt6
Uh oh! Mr. Simon needs rational minds to cover for him. After all, no one needs food or clothing. The poor don't already spend a large proportion of their incomes on food, either; I'm sure they'll welcome price increases with open arms, especially since employment is totally on the rise, wages are absolutely exploding upwards, and people are making 20% on their savings accounts. IGNORANCE IS STRENGTH! |
· actions · 2011-Mar-31 10:26 pm · (locked) |
 dogmaXYZ
Premium Member
join:2002-08-15
Boulder City, NV
1 edit |
to Waterbug
said by Waterbug:EDIT: If you don't have a mortgage and you've purchased in the past 7 years, you are basically living in a used car, that is going down in value and may take 7 years to come back. If you've owned for over 7 years, you have had no return on investment for the past 7 years. You would have been better off selling 7 years ago and renting.
I don't agree with your assessment here. As I have pointed out before, there are asset classes that 1.) Appreciate 2.) Perform 3.) Appreciate and Perform. 4.) Depreciate Your scenario; I buy a home in 2000 for $100K using a 7%/30 year mortgage w/10% down. The P&I cost me $600/Mo. I sell in Jan. 2005 near the top of the market for $200K. After the cost of selling I pocket about $85K. (I'm excluding some other expenses for the sake of simplicity). So I'm happy because my house appreciated 15% YoY & my pockets are now full. I then rent in the same neighborhood for $800/Month. So from Feb 2006 until April 2011, assuming no rent increases, I have paid 74 Months of rent @ $800/Mo. which = $59,200. I have about $25K in the bank, which also means I have 2 years and 6 Months before my $85K has been completely depleted. After June 2013 I'm flat broke. Again. My scenario: Whereas had I not sold, and added just another $250/Mo to my P&I payment ($850/Mo.,) from Month one, I would be paying off my home in 2 years and 6 Months. And as of June 2013, my only hard housing expense will be taxes & insurance. So in July 2013 my house begins to pay me $800/Mo. - Taxes/insurance. This asset performs. It does this until the day I die, then it begins performing for my heirs! Say I live for another 40 years, it would have paid me $384,000.00 vs. "renting" under any scenario... **even if I bought back into the market today when the prices are the same as they were in 2000.** or **if you paid your rent out of income, and invested your $85K, it would have to grow at 3.5% compounded annually for 40 years to match my $384K in savings. Good luck with that bet** My paid for house may indeed appreciate as well over this time. But I wouldn't care because I ain't selling, That's fools gold. (If I do sell, the proceeds will go to purchase the next home cash). Hell, even if I don't pay it off ASAP, at some point the home will be paid for, and at that time, it will begin performing for me ... because WE ALL HAVE A HOUSING EXPENSE ... like food and clothes. Minimizing ones basic expenses is the equivalent to putting the difference in ones pocket. |
· actions · 2011-Mar-31 11:57 pm · (locked) |
pandora
Premium Member
join:2001-06-01
Outland |
to Waterbug
said by Waterbug:Abandonment of the property puts you out of the housing market for 7 years. Housing is currently at a 7 year low.
-- rest snipped to save space --
I don't know that you will be put out of the housing market for 7 years. There are a lot of way people can purchase a home. I doubt there is some absolute rule preventing anyone who abandons a property from getting a mortgage on another one for 7 years. Even if there is, if you must move, abandon ship, let the bank take its loss, and rent. My home is not an investment, it's where I live. For too long, people have been buying home as investments and expecting to flip them quickly for a lot of profit. If being upside down in a home, means people come to terms with their debt situation, with their community, and with their home as a home and not a profit center, I see that as a relative positive. |
· actions · 2011-Apr-1 1:42 am · (locked) |
nonymous (banned)
join:2003-09-08
Glendale, AZ |
to Waterbug
said by Waterbug: I hate to say it, but inflation is the only thing that is going to cure the housing market. I realize that families will have less money for housing, but the cost of housing will inflate, like everything else, and return equity to home owners. who are currently under water.
How will being unable to afford food be a good thing. So your house is worth more. You will have to sell it to buy bread. Housing is not an investment. It is a place to live. |
· actions · 2011-Apr-1 10:25 am · (locked) |
| nonymous |
to Waterbug
said by Waterbug:EDIT: If you don't have a mortgage and you've purchased in the past 7 years, you are basically living in a used car, that is going down in value and may take 7 years to come back. If you've owned for over 7 years, you have had no return on investment for the past 7 years. You would have been better off selling 7 years ago and renting.
That only takes into account housing as an investment. Housing is usually bigger than an apartment. Has a yard and can do with it as you want. Raising my son in a house is just better to me. i like the neighborhood still. Thinking of housing as an investment is not a really good idea. Thinking of it as something you want and the other stuff is better. Then think of it as an investment second. In that do not overbuy or pay too much just because. |
· actions · 2011-Apr-1 10:32 am · (locked) |
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said by nonymous:said by Waterbug:EDIT: If you don't have a mortgage and you've purchased in the past 7 years, you are basically living in a used car, that is going down in value and may take 7 years to come back. If you've owned for over 7 years, you have had no return on investment for the past 7 years. You would have been better off selling 7 years ago and renting.
That only takes into account housing as an investment. Housing is usually bigger than an apartment. Has a yard and can do with it as you want. Raising my son in a house is just better to me. i like the neighborhood still. Thinking of housing as an investment is not a really good idea. Thinking of it as something you want and the other stuff is better. Then think of it as an investment second. In that do not overbuy or pay too much just because. Renting doesn't mean an apartment, there are plenty of houses for rent. For example my neighbor had to moved so their house is rented out for less than I pay in mortgage, despite it being a bigger house with a better yard. So all of the things you mentioned are capable as a renter. The difference comes as Dogma pointed out, in x years if the house is paid off your monthly housing expense becomes significantly less vs just continuing to pay rent. |
· actions · 2011-Apr-1 12:16 pm · (locked) |
nonymous (banned)
join:2003-09-08
Glendale, AZ |
to John Galt6
Even if renting a house you can not usually paint as you wish, plant or not outside as you wish. It also depends on when you buy. We have had the house awhile. Bought before drastic price increase and got an ok mortgage. Because of life and credit rating never tried to refinance at the super low rates. Still have a decent fixed rate. Our mortgage is still lower than some rents. We would have it all paid off but paid off a loan on land my wife inherited. Inherited the loan also.  Still that loan was less than the value of the property. Besides renting now may be an ok time to buy while interest rates and prices are low. Another thread says Walmart predicts inflation. So still a good time to buy just keep in mind inflation or other stuff may happen and buy within your means even if everything seems cheap. So if you have to finance now is a good time with still low rates. Prices in most areas will not go lower. I said most areas not all. So if I knew I was staying put I would purchase. It is an intangible feeling of owning or paying the bank. The people that bought on price speculation as prices went up. Or bought beyond their means. IE we can give you an adjustable mortgage and of course when and if it adjusts you will be mnaking more. (wouldn't touch a longer term adjustable now with maybe inflation) . Or a low starting interest going up later. Or interest only. Then you can easily buy into more than you can pay. |
· actions · 2011-Apr-1 7:36 pm · (locked) |
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to John Galt6
Inflation occurs during the rising edge of an oil price shock. When Japan begins rebuilding the earthquake damage, the demand for fuel and building products will increases. If Libya's oil production remains shut in due to war, then there will not be enough oil to meet demand. As prices continue to climb, wages will remain stagnant and consumers will have to cut back discretionary spending causing job loss. Helicopter Ben and his friends will be the only ones buying houses. I think Wal Mart is predicting consumer price inflation because they expect the price of energy to rise. |
· actions · 2011-Apr-2 3:57 am · (locked) |
SipSizzurpFo' Shizzle
Premium Member
join:2005-12-28
Houston, TX
1 edit |
to John Galt6
Cotton up 313% in just the last two years. » www.indexmundi.com/commo ··· onths=24Lots of categories to see at that page, and the charts are even two months old. Everything except oranges is on a steep vertical slope, and nobody eats oranges anyway. Edit - Updated link. |
· actions · 2011-Apr-2 6:08 am · (locked) |
fukitolSolon for President
Premium Member
join:2001-06-11
PonziWorld |
to Spice300
Good guess, Spice, but not quite. Commodity prices in general have been rising on a rather space-shuttle-like trajectory over the past several months - corn, wheat, oil, cotton, and much, much more, all thanks to our pal Bernanke's free money. The beginnings - yes, the beginnings, it'll get worse - of those price increases have made their way through the supply chain to Mall-Wart. The next stop on this crazy train is left as an exercise for the reader - and the reader won't like it. Then again, such a reader may need rational minds to cover for him. |
· actions · 2011-Apr-2 6:12 am · (locked) |
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disconnected to Waterbug
Anon
2011-Apr-2 9:31 pm
to Waterbug
I don't see what all the big rave is over renting and I don't see why so many people play with homes as if they were stocks. Stop it already! You're making my property tax assessments go through the roof!
Rentals are awful.. someone smokes and your apartment burns. You can't have decent hi-fi. You can't have a Moluccan cockatoo. You can't have dogs, cats, children, etc. What kind of life is that? May as well go live in Tokyo, at least the neighbors are civilized.
For me, a house is a home and a future tomb. I planned to stay forever at my retirement home. I don't get these people that sell every 4-7 years. What is it, the seven year itch? What's wrong with you people?? A house is a shelter and a home. Not a commodity to be traded like pork bellies. |
· actions · 2011-Apr-2 9:31 pm · (locked) |
 DannyZGentoo Fanboy
Premium Member
join:2003-01-29
united state |
DannyZ
Premium Member
2011-Apr-3 8:26 am
said by disconnected :May as well go live in Tokyo, at least the neighbors are civilized. Yep, they don't smoke, blast their stereo, or have noisy birds  |
· actions · 2011-Apr-3 8:26 am · (locked) |
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lugnut
Anon
2011-Apr-3 1:16 pm
said by DannyZ:said by disconnected :May as well go live in Tokyo, at least the neighbors are civilized. Yep, they don't smoke, blast their stereo, or have noisy birds Last time I checked, Asians smoked like chimneys  |
· actions · 2011-Apr-3 1:16 pm · (locked) |
DannyZGentoo Fanboy
Premium Member
join:2003-01-29
united state |
DannyZ
Premium Member
2011-Apr-3 2:57 pm
An adult rate of 24% vs 20% here in the US, but that wasn't my point |
· actions · 2011-Apr-3 2:57 pm · (locked) |
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to disconnected
said by disconnected : A house is a shelter and a home. Not a commodity to be traded like pork bellies.
You might think differently if you were a hog farmer. To them pork bellies (bacon) are a food item that they provide as a service and not an item to be capitalized on by speculators. Speculation in any industry hurts the actual producer and deflects income/profits to a third party (the speculator). Speculation rarely benefits the actual producer. If it didn't benefit the speculator, there would be no speculation. |
· actions · 2011-Apr-3 5:08 pm · (locked) |
 MrMoodyFree range slave
Premium Member
join:2002-09-03
Smithfield, NC
Asus RT-AC68
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MrMoody
Premium Member
2011-Apr-5 2:29 pm
said by Waterbug: You might think differently if you were a hog farmer. To them pork bellies (bacon) are a food item that they provide as a service and not an item to be capitalized on by speculators. Speculation in any industry hurts the actual producer and deflects income/profits to a third party (the speculator). Speculation rarely benefits the actual producer.
And hurts the consumer. It's parasitic. This goes for basically all consumable commodities. If only producers and users of the commodity were allowed to speculate in it, that would solve the problem while still allowing producers to hedge against trouble as well as diverting the investor money into the stock market where it would do good instead of bad. |
· actions · 2011-Apr-5 2:29 pm · (locked) |
 J E F F4Whatta Ya Think About Dat?
Premium Member
join:2004-04-01
Kitchener, ON |
to Waterbug
said by Waterbug: I hate to say it, but inflation is the only thing that is going to cure the housing market. I realize that families will have less money for housing, but the cost of housing will inflate, like everything else, and return equity to home owners. who are currently under water.
Price if houses will only inflate if wages inflate. Keep in mind too, with inflation comes higher interest rates, making every $100,000 mortgaged that much more money. Inflation might cure the deficit (in the long run) but not the housing market, as the house prices are still way out of line with everything else. |
· actions · 2011-Apr-6 8:12 pm · (locked) |
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said by J E F F4:said by Waterbug: I hate to say it, but inflation is the only thing that is going to cure the housing market. I realize that families will have less money for housing, but the cost of housing will inflate, like everything else, and return equity to home owners. who are currently under water.
Price if houses will only inflate if wages inflate. Keep in mind too, with inflation comes higher interest rates, making every $100,000 mortgaged that much more money. Inflation might cure the deficit (in the long run) but not the housing market, as the house prices are still way out of line with everything else. Property and wages don't have a direct relationship when it comes to inflation. My property value as gone up 5.7% between January 2010 and March 2011 verified via a $400 bank ordered appraisal. I could only dream of getting a 5.7% wage increase! |
· actions · 2011-Apr-7 10:50 am · (locked) |
Still that loan was less than the value of the property.
