Night and weekend work is too available and undesirable. People don't like being removed from society over a few bucks. Also having to sleep all day rather than accomplish things.

On 6/28/2021 at 10:28 PM, Brutus_buckeye said:

Its a labor shortage. The available labor is not willing to work for the iniital wage because they have other options.

 

This is art.

Edited June 30, 20213 yr by DarkandStormy

1 minute ago, DarkandStormy said:

 

This is art.

I believe it is called supply and demand. It does not matter what the minimum wage is because the market is what really determines it. Even before the pandemic, places like McDonalds had to pay more than minimum for people to work there. 

https://www.nytimes.com/live/2021/07/13/business/economy-stock-market-news

 

Quote

The Consumer Price Index climbed by 5.4 percent in the year through June, the Labor Department said, as prices for used cars and trucks accelerated rapidly and accounted for more than a third of the surge. The overall inflation change was more than the 5 percent increase reported in May and was the largest year-over-year gain since 2008.

 

The "used car and trucks" index rose 45.2% YoY.  Check your KBB values on your vehicle - it might make sense to sell right now lol

On 6/29/2021 at 4:41 PM, Brutus_buckeye said:

I believe it is called supply and demand. It does not matter what the minimum wage is because the market is what really determines it. Even before the pandemic, places like McDonalds had to pay more than minimum for people to work there. 

 

Feel free to re-read my post.  I added a bolded section.

1 hour ago, DarkandStormy said:

The "used car and trucks" index rose 45.2% YoY.  Check your KBB values on your vehicle - it might make sense to sell right now lol

 

Can confirm. KBB for my Focus ST was ~$5k higher than when I looked a year or two ago, or about 3/4 what I paid for it four years ago. We traded it in on a hybrid last month. Not too much of a discount on the new car (no reason to be, there were 20 cars on the lot instead of 400), but with crazy value on the trade I was quite happy with the full transaction.

Last week, the in-laws sold their 2016 Miata outright to one of the online car sites for even closer to what they paid.

 

Granted, both of our cars were low-mileage and super clean/accident free, but it doesn't seem all that unusual right now. It's definitely worth checking prices for anyone who can get by with one fewer car until the new car supply catches back up to demand.

1 hour ago, DarkandStormy said:

https://www.nytimes.com/live/2021/07/13/business/economy-stock-market-news

 

 

The "used car and trucks" index rose 45.2% YoY.  Check your KBB values on your vehicle - it might make sense to sell right now lol

I've been watching this.....so I just sold my 2.5 year old truck for a grand more than I paid for it.

28 minutes ago, TheCOV said:

I've been watching this.....so I just sold my 2.5 year old truck for a grand more than I paid for it.

 

My 2016 vehicle is supposedly worth ~82% of what I paid for it (in 2016) via private party sale, or ~74% if I were to do a dealer trade-in.

1 hour ago, DarkandStormy said:

 

My 2016 vehicle is supposedly worth ~82% of what I paid for it (in 2016) via private party sale, or ~74% if I were to do a dealer trade-in.

I did mine thru Carvana all online. They even came and picked it up out of my driveway.....ACH the money to my account next morning. Easiest transaction ever, since there weren't any "dealership personnel" to deal with. Just a computer using data to determine value.

 

On 7/13/2021 at 4:27 PM, TheCOV said:

I did mine thru Carvana all online. They even came and picked it up out of my driveway.....ACH the money to my account next morning. Easiest transaction ever, since there weren't any "dealership personnel" to deal with. Just a computer using data to determine value.

 

I have since looked into this and am strongly considering it now.  They are willing to pay me ~$1,750 less than what I paid for it in 2016 (or 90% of what I paid 5 years ago, basically).  Hard to pass up.  Of course, it's going to be hard to find a replacement vehicle as well.  I have three weeks to consider.

 

But thanks for this call out!

On 8/5/2021 at 12:52 PM, DarkandStormy said:

 

I have since looked into this and am strongly considering it now.  They are willing to pay me ~$1,750 less than what I paid for it in 2016 (or 90% of what I paid 5 years ago, basically).  Hard to pass up.  Of course, it's going to be hard to find a replacement vehicle as well.  I have three weeks to consider.

 

But thanks for this call out!

My biz needed a small cargo van anyway, and I was able to find one. So I sold to Carvana and will drive that temporarily. I'll lease a real vehicle when the market straightens out. Plus, spouse has a vehicle as well.

Don't sit too long. They still reserve right to cancel an offer any time.

Carvana is infamous for overpaying for their cars.  They are backed by significant capital investments and can afford to lose hundreds of millions every year (they lost $462 million in 2020). They technically make a small profit on each vehicle, but obviously nowhere near enough to cover their expenses.

 

When I was looking for a car about a year ago, I thought Carvana's sale prices were also high. We bought a car locally and got out the door with a price 12% lower than what the same car on Carvana was listed at, and Carvana's had 20k miles vs. 17k on ours. People are apparently willing to pay a premium to avoid dealerships. So they're selling at a premium, just not as much of a premium that they are purchasing at.

36 minutes ago, Ram23 said:

Carvana is infamous for overpaying for their cars.  

 

They offered the most vs Carmax and Vroom (all of which were crazy high in my option) when I was getting rid of my 4-year-old, 35k mile Focus ST back in June. Ultimately I traded it in for even more, since I found an okay deal on the car we wanted (and the effective value was even greater with the sale tax advantage). The in-laws went with Carvana to sell their 5-year-old Miata for not much less than they paid for it last month.

 

My assumption is they make their money on financing, along with add-ons like warranties and TruCoat. Not unlike traditional dealerships, which a significant percentage of people do indeed despise dealing with.

I think the "finance office" come-ons aren't nearly as pushy with Carvana though as compared with B&M dealers. People like that.

 

16 hours ago, KJP said:

 

 

That's certainly a cherry-picked stat. Lumber is down relative to that arbitrary date, but is still roughly 20% higher than the average pre-COVID.  Pandemic shortages caused a huge price spike that has since corrected. What we're left with - that 20% jump - is the real number we should all be worried about.

 

That 20% number is relatively in line with what I've been seeing for the past few months in commercial construction, so it isn't just lumber that's had a big price jump. It's pretty much everything, including labor. Commercial construction is coming in between 20-30% higher than it was pre-COVID. Certain things, like furniture, have almost doubled.

 

This is all in the ballpark if 10X the escalation you would expect in normal economic conditions.

 

 

9 minutes ago, Ram23 said:

 

That's certainly a cherry-picked stat. Lumber is down relative to that arbitrary date, but is still roughly 20% higher than the average pre-COVID.  Pandemic shortages caused a huge price spike that has since corrected. What we're left with - that 20% jump - is the real number we should all be worried about.

 

That 20% number is relatively in line with what I've been seeing for the past few months in commercial construction, so it isn't just lumber that's had a big price jump. It's pretty much everything, including labor. Commercial construction is coming in between 20-30% higher than it was pre-COVID. Certain things, like furniture, have almost doubled.

 

This is all in the ballpark if 10X the escalation you would expect in normal economic conditions.

 

 

Is it coming down further or is this spike in overall prices pretty much here to stay?  This is exactly what poorer people and people on fixed incomes do not need. And especially with housing and not enough being built(at least in the Cbus area) and particularly not enough affordable housing(in nearly all areas). 

2 hours ago, Ram23 said:

 

That's certainly a cherry-picked stat. Lumber is down relative to that arbitrary date, but is still roughly 20% higher than the average pre-COVID.  Pandemic shortages caused a huge price spike that has since corrected. What we're left with - that 20% jump - is the real number we should all be worried about.

 

That 20% number is relatively in line with what I've been seeing for the past few months in commercial construction, so it isn't just lumber that's had a big price jump. It's pretty much everything, including labor. Commercial construction is coming in between 20-30% higher than it was pre-COVID. Certain things, like furniture, have almost doubled.

 

This is all in the ballpark if 10X the escalation you would expect in normal economic conditions.

 

 

 

 

 

Queueing the oversimplified reasons to blame/fix this in 3-2-1....

 

Interesting thread by Cleveland's port authority director. Worth reading and sharing...

 

 

 

The world's most profitable traffic jam

Clogging up the ports is a $150 billion business, but a bipartisan bill to re-regulate the sector is moving through Congress. Why is Congress about to do the right thing?

https://mattstoller.substack.com/p/the-worlds-most-profitable-traffic

https://twitter.com/RonFilipkowski/status/1500927950593613834?t=3H4uVIahqil1H-s4MWVncg&s=19

 

Will demand remain high at that price?

6 minutes ago, LibertyBlvd said:

Will demand remain high at that price?

Of course it will.   Other essentials will suffer however, like rent, food and tribal tattoos.  

In addition to oil company record profits, here's another source of inflation...

 

 

1 hour ago, KJP said:

In addition to oil company record profits, here's another source of inflation...

 

Rather than just go on a generic, mindless anti-corporate screed, why not stop for a moment and think of just why transportation and energy companies have so much pricing power all of a sudden?

 

After all, I'm sure you're not saying that oil companies were so much less "greedy" when gas was $1.49/gal.

25 minutes ago, Gramarye said:

 

Rather than just go on a generic, mindless anti-corporate screed, why not stop for a moment and think of just why transportation and energy companies have so much pricing power all of a sudden?

 

After all, I'm sure you're not saying that oil companies were so much less "greedy" when gas was $1.49/gal.

Major increase in demand from people going back to the office coupled with reduced output by OPEC countries (although they are slowly increasing.)

 

sanctions on Russian, Venezuela and Iran

 

 

 

 

Edited June 8, 20223 yr by freefourur

3 hours ago, KJP said:

In addition to oil company record profits, here's another source of inflation...

 

 

Ocean freight rates are volitile. It's a real boom or bust business as shown by the Baltic Dry Index at this site:

https://investmenttools.com/futures/bdi_baltic_dry_index.htm

 

In fact rates are down significantly over the past six months or so.

I wanted to go on a generic, mindless PRO-corporate screed but it occurred to me that after taking in all the legitimate reasons for high gas and oil prices I kept coming back to one troubling question. How to account for the extraordinarily high oil company profits EVERY time there is a correspondingly high price of a barrel of oil? Must be a coincidence. 

2 hours ago, freefourur said:

Major increase in demand from people going back to the office coupled with reduced output by OPEC countries (although they are slowly increasing.)

 

sanctions on Russian, Venezuela and Iran

 

All of this plus people starting to travel more for leisure, too, especially as we move into the summer.

 

Memorial Day weekend has always been an expensive time to fill the tank.

The switch to summer blend gas raises the price too.

2 hours ago, cadmen said:

. How to account for the extraordinarily high oil company profits EVERY time there is a correspondingly high price of a barrel of oil? Must be a coincidence. 

Prices get bid up faster than costs.  In Econ 101 terms, prices are highly elastic; costs are sticky.  It basically works for all commodities if we ignore forward sales

.

I took Micro-Econ in college too. So sure plugging oil costs into those supy/demand graphs makes some sense. 

 

But l think part of the answer is in Macro-Econ where human nature (greed) plays a role. 

8 hours ago, cadmen said:

I wanted to go on a generic, mindless PRO-corporate screed but it occurred to me that after taking in all the legitimate reasons for high gas and oil prices I kept coming back to one troubling question. How to account for the extraordinarily high oil company profits EVERY time there is a correspondingly high price of a barrel of oil? Must be a coincidence. 

Let's unpack the record corporate profits a bit. Would you agree that oil companies are entitled to make a "fair profit" for their services? The question then becomes what is a fair profit or profit margin? If the oil companies kept $.10 of every dollar as their gross profits, I think most people would say that a 10% profit margin is not excessive or generally unscrupulous. 

 

So, back when gas was at $2.50/gallon at 10% the oil companies would earn $.25 for every gallon of gas they sell. Now, gas goes up to $5.00/gallon, at that 10% margin, they are now earning $.50/gallon profit. it is still that same 10% profit margin which was not considered excessive when gas was cheaper but now oil companies are taking it on the chin for charging the same margin they charge when gas was much cheaper. Now assume the oil companies in the run up of prices cut their margin to 6.5% gallon. That is a pretty paltry margin by most standards outside of supermarkets. At that margin, they still earn more than they would earn with a 10% margin at $2.50/gallon. 

 

I think the majority of Americans feel it would not be reasonable to expect the oil companies to provide their product for free or at cost with zero profit after a certain level. With demand the way it is, as oil prices rise, of course the oil companies are going to have higher profits, even if they cut their profit margins in the process. I think placing the blame on the oil companies and corporate greed is generally misguided. 

^After working in the oil and gas industry for 8 years I can ensure you they do not give a sh*t about consumers, are using this as means to drive up record profits and using “inflation” as an excuse for it all, and will probably use it for executive packages/stock buybacks. If you don’t think price gouging is occurring I would encourage you to reflect if you’re saying that just to justify your own predetermined political beliefs. There are an insane amount of permitted wells underutilized here in the US and these companies know they can charge it all to “inflation”.

17 minutes ago, Clefan14 said:

^After working in the oil and gas industry for 8 years I can ensure you they do not give a sh*t about consumers, are using this as means to drive up record profits and using “inflation” as an excuse for it all, and will probably use it for executive packages/stock buybacks. If you don’t think price gouging is occurring I would encourage you to reflect if you’re saying that just to justify your own predetermined political beliefs. There are an insane amount of permitted wells underutilized here in the US and these companies know they can charge it all to “inflation”.

Now, I do not have inside info on the oil and gas industry. Certainly, some can be taking advantage of this by keeping supply lower than it should be. In the short term, that is always a problem, in the long term, it will even itself out as more wells open. 

To your point, a lot of wells were capped or not even tapped into going back to the pandemic because the demand was not there. Now that the demand is there, there is not the urgent incentive to invest or open them up. Over time there will be. However, there is certainly some fear amongst the oil companies that if they invest in the wells to bring down the price, they may not necessarily recoup the investment on the timetable they desire. 

 

I am not going to say that gouging does not exist in certain pockets, it is not the primary driver of gas prices. as prices go up, the oil companies are going to make more money just on price inflation alone. 

22 hours ago, cadmen said:

I wanted to go on a generic, mindless PRO-corporate screed but it occurred to me that after taking in all the legitimate reasons for high gas and oil prices I kept coming back to one troubling question. How to account for the extraordinarily high oil company profits EVERY time there is a correspondingly high price of a barrel of oil? Must be a coincidence. 

It isn't easy to increase the supply of oil, nor is it easy to decrease it. Hence why oil prices (per barrel) can occasionally go into the negative. Oil companies will only increase supply when long term trends are favorable. 

 

If supply is constant and demand increases what happens to the price? If the price increases and cost stays the same what happens to profit margins?

 

Oil companies were losing money like crazy not that long ago, was that because they were saintly? No of course not. But they probably were forced to undertake actions (loans, layoffs, etc) that likely required future higher profit margins to be tenable. Now the market is more favorable to them, that's it. 

 

When overall prices go up middlemen benefit as well, just how Brutus mentioned, as their overhead is the same, but prices are higher, a 3% cut is a lot more off of $5 gas than $3 gas. 

Edited June 9, 20223 yr by Ethan

It's been awhile but I remember reading about elastic/inelastic supply/demand in class. Isn't oil supply elastic? I get that increasing the production of oil is a relatively long term process but sitting on well leases in a time of greater demand strikes me as curious. Most businesses increase production in a time of increased demand as that adds to their bottom line. 

 

I'll deviate from this discussion by adding that as long as we STILL need oil (not just for gas but all the other products that require oil in their production) I prefer a government policy of drilling here rather than buying foreign oil. There are some benefits to doing that. In theory we know that American oil companies would be subject to stricter environmental regulation than you would expect from some oil producing countries. It would reduce the trade deficit and best of all by not buying oil from 3rd world dictators we would not be an accessory to propping up said dictators. 

It is not perfectly elastic due to decisions made by OPEC, governments and companies. Plus things like disasters and other necessary shutdowns. 

47 minutes ago, cadmen said:

Isn't oil supply elastic? I get that increasing the production of oil is a relatively long term process but sitting on well leases in a time of greater demand strikes me as curious.

“There is probably going to be six-to-nine months’ lag between today’s high prices and the time when the oil industry can bring significant amounts of new production online.”

 

https://www.marketplace.org/2022/03/09/domestic-oil-could-increase-supply-but-it-wont-be-cheap-or-quick/amp/

 

Unless oil companies are confident demand will still be high next year they won't increase supply, and even if they do it will still take time to get that new supply flowing. 

Edited June 9, 20223 yr by Ethan
.

^ Right, and that six-to-nine month's lag time will remain in effect until they actually start to bring those wells online. If they had started that timeline, say... two to three months ago we would be that much closer to new supply. I don't know about you but I haven't read about any increase in drilling so apparently that lag time is still lagging. 

 

You can't reach your destination until you begin the journey. 

 

Imagine how much closer to clean, renewable energy we would be if we had started on the process 20-30 years ago. Rather than focus on the real energy problem we continue to argue about green energy vs. fossil fuel energy. What a stupid people we are. 

7 minutes ago, cadmen said:

^ Right, and that six-to-nine month's lag time will remain in effect until they actually start to bring those wells online. If they had started that timeline, say... two to three months ago we would be that much closer to new supply. I don't know about you but I haven't read about any increase in drilling so apparently that lag time is still lagging. 

 

You can't reach your destination until you begin the journey. 

 

Imagine how much closer to clean, renewable energy we would be if we had started on the process 20-30 years ago. Rather than focus on the real energy problem we continue to argue about green energy vs. fossil fuel energy. What a stupid people we are. 

 

Two to three weeks for a fracking well.   Or less.

 

https://www.ipaa.org/fracking/

 

"Green" energy seemed to exclude nuclear.   That was the problem.

Edited June 9, 20223 yr by E Rocc

I thought the problem was how to reduce our dependency on fossil fuels. With our present technology we will still need oil as a component of a great many products but we CAN wean ourselves off of fossil fuel energy if we develop more efficient and cleaner green energy. Our efforts seem to be in fits and starts because of a recalcitrant fossil fuel industry. The industry and its workforce needs to transition. None of this will happen overnight but as clean energy phases in fossil fuels need to phase out. 

 

I have come around to reinvesting in Nuclear as part of a clean solution because apparently the plants are much safer now. I know it's still a red flag to most environmentalists but if Nuclear helps us wean ourselves off fossil fuels sooner them l'm in favor of it.

https://finance.yahoo.com/news/may-inflation-data-june-10-2022-212834308.html

 

Quote

U.S. consumer prices accelerated in May at the fastest rate since 1981, as Americans grapple with a surge in the cost of gas, food, and shelter, data showed Friday.

 

The Bureau of Labor Statistics' May Consumer Price Index (CPI) showed a year-over-year increase of 8.6% last month, up from 8.3% in April. Economists were expecting an 8.3% increase in May, according to estimates compiled by Bloomberg.

 

On a month-over-month basis, the broadest measure of inflation climbed 1.0%, compared to 0.3% in April. "Core" inflation, which strips out the more volatile costs of food and gas, rose 6% over the prior year in May, more than the 5.9% that was expected.