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   feld (feld@bikeshed.party)'s status on Saturday, 13-Jan-2024 02:10:33 JST feld
   > “Right now, with inflation cooling very meaningfully, the real cost of money is very high rate now. So I think they’re going to have to move early,” the head of Pershing Square Capital Management said Friday morning during a CNBC “Squawk Box” interview. “We certainly could do more than three cuts.”
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     feld (feld@bikeshed.party)'s status on Saturday, 13-Jan-2024 02:11:06 JST feld

     in reply to
     Is this guy fucking retarded? Inflation went up 0.3% in December? Why would they cut rates when inflation keeps going up?
     kaia likes this.
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     feld (feld@bikeshed.party)'s status on Saturday, 13-Jan-2024 02:12:28 JST feld

     in reply to
     Inflation "nearly stopping" is not the same as the economy going back to pre-COVID status
     kaia likes this.
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     feld (feld@bikeshed.party)'s status on Saturday, 13-Jan-2024 02:12:59 JST feld

     in reply to
     I want to see JPow curb stomp these hedge fund managers
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     feld (feld@bikeshed.party)'s status on Saturday, 13-Jan-2024 03:33:48 JST feld

     in reply to

     • Matthew W. Thomas
     @mwt pay attention to the FOMC minutes as that's the only thing that matters
     
     > whereas if we don’t get inflation under control because we
     don’t tighten enough, now we’re in a situation where inflation will become entrenched and the
     costs, the employment costs in particular, will be much higher potentially.
     
     They do not want the inflation *entrenched* which means we have to get prices back down which means some deflation.
     
     https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20221102.pdf
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     Matthew W. Thomas (mwt@econtwitter.net)'s status on Saturday, 13-Jan-2024 03:33:49 JST Matthew W. Thomas

     in reply to

     @feld deflation is bad too. The goal was never to get the prices to go down. It was to make them increase less quickly.

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     feld (feld@bikeshed.party)'s status on Saturday, 13-Jan-2024 03:37:23 JST feld

     in reply to

     • Matthew W. Thomas
     @mwt
     
     CHAIR POWELL. Well, what’s happened is, time has passed, and we’ve raised interest
     rates by 375 basis points. I would not—I would not change a word in that statement, though. I
     think until we get inflation down, you’ll be hearing that from me. Again, if we overtighten—and
     we don’t want to, we want to get this exactly right—but if we overtighten, then we have the
     ability with our tools, which are powerful, to, as we showed at the beginning of the pandemic
     episode, we can support economic activity strongly if that happens, if that’s necessary. On the
     other hand, if you make the mistake in the other direction and you let this drag on, then it’s a
     year or two down the road, and you’re realizing, inflation behaving the way it can, you’re
     realizing you didn’t actually get it, you have to go back in. By then, the risk, really, is that it has
     become entrenched in people’s thinking. And the record is that the employment costs—the cost
     to the people that we don’t want to hurt—they go up with the passage of time. That’s really how
     I look at it. So that isn’t going to change. What has changed, though—you’re right—is, we’re
     farther along now. And I think as we’re farther along, we’re now focused on that. What’s the
     place, what’s the level we need to get to rates? And I don’t know what we’ll do when we get
     there, by the way. It doesn’t—we’ll have to see. There’s been no decision or discussion around
     exactly what steps we would take at that point. But the first thing is to find your way there.
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     cy (cy@fedicy.us.to)'s status on Saturday, 13-Jan-2024 03:44:16 JST cy

     in reply to
     @feld@bikeshed.party I'm sure he makes a lot of money lying about things being better than they really are.
     
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     SlicerDicer (slicerdicer@bikeshed.party)'s status on Saturday, 13-Jan-2024 04:38:06 JST SlicerDicer

     in reply to

     • Matthew W. Thomas
     @mwt @feld >> deflation is bad too. The goal was never to get the prices to go down. It was to make them increase less quickly.
     
     Why is it bad? It forces zombie debt to ooze to the surface every time. That is cleansing not bad.
     feld likes this.
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     feld (feld@bikeshed.party)'s status on Saturday, 13-Jan-2024 04:39:26 JST feld

     in reply to

     • SlicerDicer
     • Matthew W. Thomas
     @SlicerDicer @mwt so what you're saying is deflation is the colonic of our economy system.
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     feld (feld@bikeshed.party)'s status on Saturday, 13-Jan-2024 04:43:48 JST feld

     in reply to

     • SlicerDicer
     • Matthew W. Thomas
     @mwt @SlicerDicer the layoffs are good. Increased unemployment is exactly what the Fed wants. This has also been in FOMC minutes.
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     Matthew W. Thomas (mwt@econtwitter.net)'s status on Saturday, 13-Jan-2024 04:43:49 JST Matthew W. Thomas

     in reply to

     • SlicerDicer

     @SlicerDicer @feld there are lots of problems, but the main one is that people delay their purchases and wait for prices to go down. This reduces the need for production and causes layoffs.

     I don't know what debt you're talking about. Lenders love deflation.

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     feld (feld@bikeshed.party)'s status on Saturday, 13-Jan-2024 04:50:50 JST feld

     in reply to

     • Matthew W. Thomas
     @mwt we aren't even at Volcker rates yet. We can still go higher. Much much higher.
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     Matthew W. Thomas (mwt@econtwitter.net)'s status on Saturday, 13-Jan-2024 04:50:51 JST Matthew W. Thomas

     in reply to

     @feld you're talking about one downside, but ignoring the other. If you keep the interest rate where it is, you could find down the road that you're in a recession.

     It's not like there's an obvious "safe" choice and a corrupt "dangerous" choice. The fed has to walk a tightrope with dangers on both sides.

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     SlicerDicer (slicerdicer@bikeshed.party)'s status on Saturday, 13-Jan-2024 04:58:08 JST SlicerDicer

     in reply to

     • Matthew W. Thomas
     @mwt @feld Things are horrifying right now did I say otherwise?
     
     I could cite example after example of how the working class is being nuked by inflation. However no we can’t have deflation? Like who can afford these houses or anything without deflation. What does that mean for wage price spiral if we keep this up?
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     feld (feld@bikeshed.party)'s status on Saturday, 13-Jan-2024 04:58:08 JST feld

     in reply to

     • SlicerDicer
     • Matthew W. Thomas
     @SlicerDicer @mwt if we don't have deflation a lot of people are gonna have to sell their homes just to be able to afford their insurance which will just cause deflation anyway as the market gets flooded
     
     so like Henry Ford said, you can have it in any color you like as long as it's Deflation Black
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     SlicerDicer (slicerdicer@bikeshed.party)'s status on Saturday, 13-Jan-2024 04:58:10 JST SlicerDicer

     in reply to

     • Matthew W. Thomas
     @mwt @feld Uhh the layoffs are a result of bad business planning the revolving credit.
     
     Layoffs are exactly what the Fed is after anyway so like what’s the deal? Are you saying that the unemployment of 10% neel said is needed is bad so we should just left inflation tear?
     
     I don’t think so.
     
     Never mind that when he said that to congress it looked like he hit them all with a idiot stick. They couldn’t even comprehend what it means. So how are our leaders making rational decisions? One way or another we gotta pay for the damage done.
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     Matthew W. Thomas (mwt@econtwitter.net)'s status on Saturday, 13-Jan-2024 04:58:10 JST Matthew W. Thomas

     in reply to

     • SlicerDicer

     @SlicerDicer @feld what are you talking about? I explained why deflation would be bad and you answered something about how things don't seem so bad right now...

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     feld (feld@bikeshed.party)'s status on Saturday, 13-Jan-2024 05:21:05 JST feld

     in reply to

     • SlicerDicer
     • Matthew W. Thomas
     @mwt @SlicerDicer > The people who receive layoffs are obviously worse off.
     
     Are we discussing how to return the economy to sanity or how to protect every American citizen from the effects of a damaged economy? Some people are gonna lose and there's nothing we can really do about that.
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     Matthew W. Thomas (mwt@econtwitter.net)'s status on Saturday, 13-Jan-2024 05:21:06 JST Matthew W. Thomas

     in reply to

     • SlicerDicer

     @SlicerDicer @feld you're trying to say that an interest increase is good for someone with a mortgage because last year they got a credit for 20% of the interest rate increases that they faced.

     This is not true. They still pay most of the increase and therefore are worse off.

     Anyway, not all of the disadvantages of high interest are though debt. The people who receive layoffs are obviously worse off.

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     SlicerDicer (slicerdicer@bikeshed.party)'s status on Saturday, 13-Jan-2024 05:21:07 JST SlicerDicer

     in reply to

     • Matthew W. Thomas
     @mwt @feld That explains nothing elaborate.
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     Matthew W. Thomas (mwt@econtwitter.net)'s status on Saturday, 13-Jan-2024 05:21:08 JST Matthew W. Thomas

     in reply to

     • SlicerDicer

     @SlicerDicer @feld they're just paying more money and getting less than all of it back...

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     SlicerDicer (slicerdicer@bikeshed.party)'s status on Saturday, 13-Jan-2024 05:21:09 JST SlicerDicer

     in reply to

     • Matthew W. Thomas
     @mwt @feld High interest rates allow for your mortgage interest tax credit to offset cost instead of double paying.
     
     Try again when the standard deduction doesn’t cover the difference to historical norms.
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     Matthew W. Thomas (mwt@econtwitter.net)'s status on Saturday, 13-Jan-2024 05:21:10 JST Matthew W. Thomas

     in reply to

     • SlicerDicer

     @SlicerDicer @feld the wages are supposed to go up. High interest rates are a form of belt tightening. They negatively impact the working class.

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     feld (feld@bikeshed.party)'s status on Saturday, 13-Jan-2024 05:34:36 JST feld

     in reply to

     • SlicerDicer
     • Matthew W. Thomas
     @mwt @SlicerDicer making low-income people worse off reduces their ability increase or maintain inflation through discretionary spending, right?
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     Matthew W. Thomas (mwt@econtwitter.net)'s status on Saturday, 13-Jan-2024 05:34:37 JST Matthew W. Thomas

     in reply to

     • SlicerDicer

     @feld @SlicerDicer they are part of the greater picture. Even the people who don't have layoffs are not receiving raises, etc. Things that are bad for a group of people are bad for them. They don't need the things that are bad for them.

     The idea that causing a recession would make it easier for low-income people to stay in their homes makes no sense.

     It's not obvious what they should do, but you're writing about the costs of high interest rates as though they were benefits.

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     feld (feld@bikeshed.party)'s status on Saturday, 13-Jan-2024 05:39:23 JST feld

     in reply to

     • SlicerDicer
     • Matthew W. Thomas
     @mwt @SlicerDicer IT'S ABOUT THE GODDAMN PRICE DISCOVERY DUDE! 📢
     
     Crank the interest rates, the valuation of that pile of lumber and drywall MUST GO DOWN ⬇️ for people to be able to afford the mortgages
     
     That's how it helps
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     Matthew W. Thomas (mwt@econtwitter.net)'s status on Saturday, 13-Jan-2024 05:39:24 JST Matthew W. Thomas

     in reply to

     • SlicerDicer

     @SlicerDicer @feld so, again a deduction off your income still means that you are paying most of the increase in interest. The interest rate deduction is not a credit.

     Homes are expensive for a median household to buy. Would increasing the interest rate help with that? Obviously not. It would make a mortgage more expensive.

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     SlicerDicer (slicerdicer@bikeshed.party)'s status on Saturday, 13-Jan-2024 05:39:25 JST SlicerDicer

     in reply to

     • Matthew W. Thomas
     @mwt @feld first off read this.
     
     https://bipartisanpolicy.org/explainer/is-it-time-for-congress-to-reconsider-the-mortgage-interest-deduction/
     
     Secondary you are not considering what price discovery does to the lending standards, what is the debt to income ratio tolerated? with that you can get a rough basis with dual income what the median home price should be then just run the math.
     
     What does that mean?
     
     Standards and guidelines vary, most lenders like to see a DTI below 35─36%
     
     Remember that includes cars, personal loans and all of that.
     
     https://www.investopedia.com/terms/d/dti.asp#:~:text=What%20Is%20a%20Good%20Debt,a%20mortgage%20or%20rent%20payment.
     
     no more than 28% going to home or mortgage.
     
     The median male salary in 2022 was $52,612.
     
     dual income $105,224
     
     $29,462 allocated to loan.
     
     $2,455 per month for payment is tolerated for ideal. This prevents default.
     
     Give or take thats a 320,000 house
     
     That is crushed by the current prices.
     
     Lets do this another way that is even simpler.
     
     $105,224 x 3 = $315,672
     
     Now we can do it even more complicated.
     
     median house at 7% total payments
     
     495,100 x 3 1485300
     
     divide that by 350 you get 4125.83 per month.
     
     $315,672 x 3 = 947016
     
     divide that by 360?
     
     2630.60 per month.
     
     Look the math checks, the data is solid. Show me how I am wrong.
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     feld (feld@bikeshed.party)'s status on Saturday, 13-Jan-2024 05:46:49 JST feld

     in reply to

     • SlicerDicer
     • Matthew W. Thomas
     @mwt @SlicerDicer The home is not more unaffordable because they won’t be able to sell it at the current valuation. They (everyone who really wants to sell their homes) will have to lower the valuation by a LOT in order to meet the buyers. This, deflation of the entire real estate market and the rippling effects across the entire economy.
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     Matthew W. Thomas (mwt@econtwitter.net)'s status on Saturday, 13-Jan-2024 05:46:50 JST Matthew W. Thomas

     in reply to

     • SlicerDicer

     @SlicerDicer @feld you don't even need this math. The home is more unaffordable if you have to pay more interest. If I charge you an extra 3% for your loan, you're worse off even if I give some of that 3% back in the form of tax breaks.

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     SlicerDicer (slicerdicer@bikeshed.party)'s status on Saturday, 13-Jan-2024 05:46:51 JST SlicerDicer

     in reply to

     • Matthew W. Thomas
     @mwt @feld
     >> Homes are expensive for a median household to buy. Would increasing the interest rate help with that? Obviously not. It would make a mortgage more expensive.
     
     Did you even read what I wrote? I want to see math of why I am wrong.
     
     The fact is that currently the houses are entirely too expensive, that means there is no buyers. What percentile of earners can afford 4100 a month.
     
     If you are econtwitter show me the math.
     
     I just asserted that the 4100 dollar home will drop to 2400 based on lending standards and interest rate to earned income.
     
     The argument this does not help with price discovery is indefensible. Then stack the credit on top of it where are you at?
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     SlicerDicer (slicerdicer@bikeshed.party)'s status on Saturday, 13-Jan-2024 05:52:30 JST SlicerDicer

     in reply to

     • Matthew W. Thomas
     @mwt @feld
     >> the price decrease would be lower than the interest rate increase. Why do you think it would be larger?
     
     because of lending standards????? what banks require for you to borrow? amortization?
     
     Its not like its just 3% of the cost, compound that shit out.
     feld likes this.
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     Matthew W. Thomas (mwt@econtwitter.net)'s status on Saturday, 13-Jan-2024 05:52:31 JST Matthew W. Thomas

     in reply to

     • SlicerDicer

     @feld @SlicerDicer the price decrease would be lower than the interest rate increase. Why do you think it would be larger?