Has the median home price in Irvine really fallen 17.7% Y-o-Y

[usctrojancpa]

Where is IndieDev? I need him to explain what you guys are saying to me.

USCTrojanCPA's last post sort of encompasses what I believe in a nutshell, except I'll go one step further. Unless we create actual jobs, aka real 9-5'ers with benefits, not temporary, seasonal, or part-time work, we won't see real wage growth, let alone inflation.

edhne's post about "inflation" saving the U.S from its debt problems completely ignores the fact that without wage growth, you simply cannot have real sustained inflation. That comment alone should show you that you should never ever take financial advice from edhne, ever.

You can thank my macro economy teachers in college for keeping me awake during their lectures for remembering that.  haha  Good point on the jobs, they do go hand-in-hand with wage growth.  I think that many of the jobs that were cut will never come back, the labor market needs to increase their education in order to be capable of work in industries that are experiencing growth (health care, tech, engineering, etc).  Anyhow, the banks hoarding cash to guard against credit losses from real estate loans (both residential and commercial) which will take many years to clear through the system will keep inflation in check for a while. 

 

[edhne]

Where is IndieDev? I need him to explain what you guys are saying to me.

USCTrojanCPA's last post sort of encompasses what I believe in a nutshell, except I'll go one step further. Unless we create actual jobs, aka real 9-5'ers with benefits, not temporary, seasonal, or part-time work, we won't see real wage growth, let alone inflation.

Sorry Indie "the people's champ" but you are incorrect. You can have inflation without "real" wage growth or even nominal wage growth. 1970's for US? 1920's for Germany? Ya, higher wages totally caused those inflationary shocks. Don't tell me, those aren't "sustained" by your definition?

What happened to your bold stagflation forecasts? What is going to cause the "flation" part of your forecast to come true without wage the growth?

edhne's post about "inflation" saving the U.S from its debt problems completely ignores the fact that without wage growth, you simply cannot have real sustained inflation. That comment alone should show you that you should never ever take financial advice from edhne, ever.

Yes, please don't take any financial advice from me, EVER. Bad idea. That is like taking relationship advice from Indie.  :'(

 

[IndieDev]

I'm going to quote this so edhne doesn't go back and try to change his post later when we're all laughing at how ridiculous his point sounds.

Sorry Indie "the people's champ" but you are incorrect. You can have inflation without "real" wage growth or even nominal wage growth. 1970's for US? 1920's for Germany? Ya, higher wages totally caused those inflationary shocks. Don't tell me, those aren't "sustained" by your definition?

See, you're talking about two different things. In this post you're misleading people by attempting to make a point about some inflationary shock, or hyperinflation that hasn't occurred yet. But in your initial post you were talking about U.S Fiscal Policy:

I think you are you are suggesting rates will rise in a deflationary environment because the credit risk of the US Government will require much higher real rates of return. I guess it is possible but it seems more likely they will inflate their way out of the debt problems.

It's obvious here that you're attempting to talk about policy, not hyperinflation or an inflationary shock.

Unless you're attempting to make the connection that the U.S Government is allowing the FED to "Zimbabwe" the U.S currency as a way to "inflate their way out of the debt problems."

Either way, your "analysis" of how the U.S Government is going to "solve its debt problems" makes it painfully obvious you really don't know what you're talking about. If you're a CPA/CFA like you claim, you're going to put a lot of people into the poor house because you don't even grasp basic fundamentals.

 

[IndieDev]

To really put a point on how much edhne doesn't know, here's an excerpt from an interview of Jerome Levy, president of Levy Forecasting Center. No, I didn't know about this interview until about 10 seconds ago. I just wanted to show that people who actually are respected enough to get paid for their analysis of markets pretty much agree with what I've said, and disagree with edhne. Levy's firm is one of the most respected market analytics firms in the country.

Despite today's data, and separate reports of rising inflation in China and Europe, Bernanke is right to resist the temptation to tighten policy, says David Levy, chairman of the Jerome Levy Forecasting Center.
"It's still fair to say we're in the midst of a dis-inflationary not an inflationary trend," Levy says. "If wages are not growing very fast ? and they're growing more and more slowly ? then the ability of people to pay those process is simply not there."

 

[irvinehomeowner]

edhne's post about "inflation" saving the U.S from its debt problems completely ignores the fact that without wage growth, you simply cannot have real sustained inflation. That comment alone should show you that you should never ever take financial advice from edhne, ever.

In the interest of keeping conversations here civil, why do you have to add the last part? Can't you just say you disagree and then discuss why?

You take offense when people do that to you (slander vs. libel), so why degrade the level of discussion? Can you not have a debate without resorting to insults? That is a bit telling about your personality (to crib from your own salvo of comebacks).

 

[edhne]

1970's for US?

US in 1970's was Zimbabwe?
Out of context, in context, your statement that inflation cannot occur without "real" wage growth are simply WRONG. This doesn't make my forecasts right. But it does make you wrong.

See, you're talking about two different things. In this post you're misleading people by attempting to make a point about some inflationary shock, or hyperinflation that hasn't occurred yet. But in your initial post you were talking about U.S Fiscal Policy:

Ok, and now that "the people's champ" has been shown contradictory data, "the people's champ" changes the parameters of his claims...as usual.
Sorry, wrong again. You made a blanket general statement which stated that inflation cannot happen with "real" wage growth and better 9 to 5 jobs.
Simply wrong.

Next, your propensity to read and interpret for everyone else my "advice" is as usual incorrect. You claim I am talking about something very specific, like this year's fiscal policy and that it will some how be inflationary.

Incorrect again on multiple levels. If you actually bothered to read the dialogue throughout the posts, I stated multiple times there will be deflationary pressures and double dip concerns when Qe2 ends and hence rates might stay low.

Oh just so the you are aware, QE2 is a monetary policy, not fiscal. But I guess in your "fundamentals" world, slander, libel, its all the same thing.

Unless you're attempting to make the connection that the U.S Government is allowing the FED to "Zimbabwe" the U.S currency as a way to "inflate their way out of the debt problems."

Be a little more creative. The US can inflate their way out of debt without being Zimbawe...its called lowering COLA adjustments. This isn't a statement about today or tomorrow. It will take decades to inflate their way out this way. But you don't need "real" wage inflation to do it. All they need to do is play with the COLA formula so that they are reducing benefits without "reducing benefits" and their constant dollar benefits will fall.

They will inflate their way out of the debt problem through a combination of monetary policy and fiscal policy changes because their is no political will to cut nominal spending or raise taxes sufficiently to address the debt.

This is my prediction (READ NOT ADVICE) for the future. You disagree, then disagree. But just so you are aware, you can usually disagree without attacking people's intelligence or calling them cowards for blaming their kids.

I thought I would just let you know that in case you didn't know it.

 

[IndieDev]

Oh just so the you are aware, QE2 is a monetary policy, not fiscal. But I guess in your "fundamentals" world, slander, libel, its all the same thing.

But you were talking about the U.S Governments policy to escape from its debt, that involves Fiscal policy, but you (maybe) know that. You're just trying to deflect the conversation away from this gem.

Be a little more creative. The US can inflate their way out of debt without being Zimbawe...its called lowering COLA adjustments. This isn't a statement about today or tomorrow. It will take decades to inflate their way out this way. But you don't need "real" wage inflation to do it. All they need to do is play with the COLA formula so that they are reducing benefits without "reducing benefits" and their constant dollar benefits will fall.

Now this is funny, I have to quote this once again so edhne can't go back and change his post.

edhne's solution basically comes down to "If we have a $14 Trillion debt, let's wait 100 years until $14 Trillion is worth only $14 Billion in real dollars."


He calls this "creative". Decades of no real wage inflation because we can just wait decades for things to work themselves out because you can toy with a formula.

GENIUS.

 

[IndieDev]

edhne's post about "inflation" saving the U.S from its debt problems completely ignores the fact that without wage growth, you simply cannot have real sustained inflation. That comment alone should show you that you should never ever take financial advice from edhne, ever.

In the interest of keeping conversations here civil, why do you have to add the last part? Can't you just say you disagree and then discuss why?

You take offense when people do that to you (slander vs. libel), so why degrade the level of discussion? Can you not have a debate without resorting to insults? That is a bit telling about your personality (to crib from your own salvo of comebacks).

Hey IHO,

I don't think you understand. I know you're hyper sensitive, but I'm not really insulting edhne, he really is that bad.

If someone comes into a bakery and says, "Here's a great way to make sugar cookies. Get some dough, eggs, cloves, hot sauce, and a little bit of nut meg." The number one question someone is going to ask is, "What about the sugar?"

It's a basic element/ingredient to make that cookie, yet edhne has failed to identify it, and is now telling people his recipe is going to save the cookie industry. Of course people are going to call him out on it. In fact I'm going to tell you not to buy cookies from edhne, ever, because it's obvious his cookies probably won't taste good. Is that insulting him? I don't think so, unless you're one of those hyper sensitive types where your heart breaks on anything negative ever said.

As for you commenting on my personality, well, that's your opinion. I am the type to call people out when they are dishing out trash information, so there may some be some truth to your claim/attack/etc. 

 

[irvinehomeowner]

I know you're hyper sensitive...

Is that slander or libel? Should I call my lawyer to find out? 

Once again, IndieDev displays his excellent grasp of irony. Weren't you the one crying about people pulling a TMZ on you?

You miss my point (again)... if you are really interested in having a discussion here, it would be better served by discussing the opinions... not the people.

There is some good content in your posts, but I'm afraid the color you add to them turns readers away. But if you like just seeing how good you can zing other members... have at it... it's easy to be a bully on the Internet.

And just because someone didn't mention "sugar" doesn't mean they don't know about it. This medium tends to be unforgiving in expressing the totality of your opinions or knowledge so maybe you need to consider that.

This is how I view your analogy:

IndieDev: "Duh... what about sugar? No one should EVER EVER ask you to bake cookies."

Whereas... the discussion could have been furthered this way:

IndieDev: "What about sugar?"
Someone: "Sorry... I forgot to mention it as that's assumed. Yes... sugar too."

Are you really interested in having a discussion here? Or just ending them?

 

[IndieDev]

There is some good content in your posts, but I'm afraid the color you add to them turns readers away.

Except for you. As long as you're my number one fan, I'll always be able to sleep at night.

And just because someone didn't mention "sugar" doesn't mean they don't know about it. This medium tends to be unforgiving in expressing the totality of your opinions or knowledge so maybe you need to consider that.

I'm not sure what you mean here. While I will admit that the internet cannot inherently express things like someone's vocal intonation, facial expressions, and other physical elements, it can express very succinctly a cookie recipe.

edhne doesn't know how to make cookies and it's obvious. I honestly don't understand why you're so sensitive about it, unless you sort of see a little edhne in yourself, which honestly, makes a lot of sense.

Are you really interested in having a discussion here? Or just ending them?

If someone is spreading garbage or trash that could cost people money, or pollute their learning, then it's best to end it especially if they don't even know that they're wrong, or they do know they're wrong but are too proud to admit it (as is the case with edhne).

 

[usctrojancpa]

Where is IndieDev? I need him to explain what you guys are saying to me.

USCTrojanCPA's last post sort of encompasses what I believe in a nutshell, except I'll go one step further. Unless we create actual jobs, aka real 9-5'ers with benefits, not temporary, seasonal, or part-time work, we won't see real wage growth, let alone inflation.

Sorry Indie "the people's champ" but you are incorrect. You can have inflation without "real" wage growth or even nominal wage growth. 1970's for US? 1920's for Germany? Ya, higher wages totally caused those inflationary shocks. Don't tell me, those aren't "sustained" by your definition?

What happened to your bold stagflation forecasts? What is going to cause the "flation" part of your forecast to come true without wage the growth?

edhne's post about "inflation" saving the U.S from its debt problems completely ignores the fact that without wage growth, you simply cannot have real sustained inflation. That comment alone should show you that you should never ever take financial advice from edhne, ever.

Yes, please don't take any financial advice from me, EVER. Bad idea. That is like taking relationship advice from Indie.  :'(

The reality is that what we are going through is more simple to what Japan has and still is going through rather than what the US went through in the 70s or Germany did in the 20s.  The fact that banks are still having to deal with credit losses now and for the foreseeable future with the bad commercial and residential loans, will limit the velocity of money combined with higher capital requirements via the Frank-Dodd act and Basel III (aka tighter lending).  There is too much in the system right now and it needs to be reduced, whether it be by defaults or why pay downs.  I would argue that loan defaults are deflationary to the general economy as it reduces the money supply.  The QE just absorbed all of the money supply that was destructed via credit defaults/write-offs.  I think that Bernanke is doing a good job in resisting raising interest rates as that's what's keeping the growth going (even though it's slow).  The EU has it wrong and will suffer from the interest rate increases as they are dealing with their own loan crisis.  Watch, by the end of the year the EU will be back to lowering their interest rates because growth will be suffering. 

 

[IndieDev]

y combined with higher capital requirements via the Frank-Dodd act and Basel III (aka tighter lending).  There is too much in the system right now and it needs to be reduced, whether it be by defaults or why pay downs.  I would argue that loan defaults are deflationary to the general economy as it reduces the money supply. The QE just absorbed all of the money supply that was destructed via credit defaults/write-offs.

i.e - The banks stole most of it.

Honestly, we need to just take it on the chin and roll with the punches. Tighter lending standards, no more funny money, and punish people's credit severely for bolting on their debts. This generation of Americans is too entitled, and we paid dearly for it.