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Author Topic: Bear Pit: now the sole domicile of politics at LuLa  (Read 471949 times)

Alan Klein

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11600 on: October 03, 2021, 03:16:20 pm »

The Consumer Price Index (CPI) is based on the cost of about 80,000 consumer goods and services surveyed monthly. The CPI inflation index is a weighted averaging of those items. Some items, particularly commodities, may go up or down from one month to another rather dramatically.

https://www.investopedia.com/terms/c/consumerpriceindex.asp

The methodology and detailed percentages of increase or decrease for the many itemized categories are not a secret. They are readily available.

https://www.bls.gov/news.release/pdf/cpi.pdf

The current inflation summary is:

The annual inflation rate in the US eased to 5.3% in August from a 13-year high of 5.4% reported in June and July, matching market expectations. A slowdown was seen in cost of used cars and trucks (31.9% percent vs 41.7% in July) and transportation services (4.6% vs 6.4%) and inflation was steady for shelter (2.8%) and apparel (4.2%). On the other hand, faster price increases were seen for food (3.7% vs 3.4%), namely food at home (3% vs 2.6%) and food away from home (4.7% vs 4.6%); new vehicles (7.6% vs 6.4%); energy (25% vs 23.8%); and medical care services (1% vs 0.8%). The monthly rate eased to 0.3% from 0.5% in July, better than forecasts of 0.4%. Prices of airline fares, used cars and trucks, and motor vehicle insurance all declined over the month while increases were seen in cost of gasoline, household furnishings and operations, food, and shelter. source: U.S. Bureau of Labor Statistics

https://tradingeconomics.com/united-states/inflation-cpi
You're in denial.  Les was making a dramatic point with the 50%. 50% for a vegetable might not break you.  But a 20% rise in housing prices is a big deal if you want to buy one.  Also, 5.3% is more than double the 2% "norma" inflation the Fed wants.  And inflation is just getting started.  The Fed is still printing $120 billion per month.  That's going to make inflation worse.  Printing will increase if Congress passes those two bills regardless of the size they finally agree on. 

TechTalk

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11601 on: October 03, 2021, 03:22:37 pm »

That wasn't "their" explanation regarding tea and coffee.   Why don't you understand?  I'll give another example.  Let's say they have sirloin steak in the basket of goods they figure to determine CPI.  Due to inflation, steak goes higher.  So this year,  the government takes steak off the basket and replaces it with chop meat.  Of course, chop meat is cheaper so the CPI doesn't go up.  But now, you're eating chop meat, not steak.  So your standard of living has decreased while the government is saying the CPI hasn't changed.

The Consumer Price Index (CPI) is based on the cost of about 80,000 consumer goods and services surveyed monthly. The CPI inflation index is a weighted averaging of those items. Some items, particularly commodities, may go up or down from one month to another rather dramatically.

https://www.investopedia.com/terms/c/consumerpriceindex.asp

The methodology and detailed percentages of increase or decrease for the many itemized categories are not a secret. They are readily available.

https://www.bls.gov/news.release/pdf/cpi.pdf

They're conning the public.

You're conning yourself into believing that you have a deeper understanding of what you read than you actually posses.
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Alan Klein

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11602 on: October 03, 2021, 03:25:50 pm »

The difference between the 13-year and 30-year figures is not that "different statistics are being used to determine inflation rates". The difference is in what was actually written and how you reported it.

If you're unable to see the mistake that you made in reading and reporting the actual quotation, I'll be happy to explain it. It's very simple.
I didn't make a mistake.  The Fed's preferred measure to determine inflation is the Personal Consumption Expenditures Index.  It hit a 30 year high.  The other standard CPI figures inflation differently and matches a high from 13 years ago.  Either way, it's up a lot.  Before we're done, I suspect we'll see higher double-digit inflation like the 1970's and early 1980s which is 40 and 50 years ago.   

The Federal Reserve’s preferred gauge of inflation climbed in August at the quickest pace in 30 years, data released on Friday showed, keeping policymakers on edge as evidence mounts that rapidly rising prices are poised to last longer than practically any of them had expected earlier this year.
https://www.nytimes.com/2021/10/01/business/economy/inflation-supply-chain.html

Alan Klein

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11603 on: October 03, 2021, 03:40:58 pm »

For a picture of inflation over time, here is inflation charted over the past 25 years...

https://cloudfront.net/charts/united-states-inflation-cpi trend 25-years

Here it is charted from the 1930s...

https://cloudfront.net/charts/united-states-inflation-cpi 1930s-2021
YOu ought to check your charts before posting them.  Your first chart disproves your 13-year argument and proves my 30 years argument.  Also, take a look at the second chart for the 1970s and 1980s and note the double digit inflation.  I believe that's what we're in store for. 

TechTalk

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11604 on: October 03, 2021, 03:41:51 pm »

I didn't make a mistake.

Inflation went up the highest in thirty years last month.

The Federal Reserve’s preferred gauge of inflation climbed in August at the quickest pace in 30 years, data released on Friday showed, keeping policymakers on edge as evidence mounts that rapidly rising prices are poised to last longer than practically any of them had expected earlier this year.
https://www.nytimes.com/2021/10/01/business/economy/inflation-supply-chain.html

The simple error that you're unable or unwilling to see, is conflating the rate of change with the amount of change. The amount of change was the highest in 13-years. The rate of change was the quickest in 30-years.

The rate of acceleration for a car is not the same thing as its top speed. The rate of climb for an aircraft is not same thing as its altitude.
« Last Edit: October 03, 2021, 05:05:27 pm by TechTalk »
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Alan Klein

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11605 on: October 03, 2021, 03:49:25 pm »

The simple error that you're unable or unwilling to see, is conflating the rate of change with the amount of change. The amount of change was the highest in 13-years. The rate of change was the fastest in 30-years.

The rate of acceleration for a car is not the something as its top speed. The rate of climb for an aircraft is not same thing as its altitude.
No.  Two different measurements were being used.  One- The Consumer Price Index used generally by the public and the other favored by the Fed called the  Personal Consumption Expenditures Index.  Regardless, both of them, 13 years or 30 years, respectively, do not indicate good things ahead. 

TechTalk

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11606 on: October 03, 2021, 03:56:52 pm »

You're simply trying to wriggle out of your own word trap. You said: "Inflation went up the highest in thirty years last month."—and cited the New York Times.

What you quoted is NOT what they said as I pointed out. They said it was the "quickest pace" It's just sloppy reading and writing. Nothing we haven't seen before.
« Last Edit: October 03, 2021, 04:08:38 pm by TechTalk »
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Alan Klein

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11607 on: October 03, 2021, 04:06:35 pm »

You're simply trying to wriggle out of your own word trap. You said: "Inflation went up the highest in thirty years last month."—and cited the New York Times.

What you quoted is NOT what they said as I pointed out. They said it was the "fastest pace" It's just sloppy reading and writing. Nothing we haven't seen before.
You're playing word games.  Inflation increased, went up, rate, highest, fastest pace, (It actually said quickest pace).  Who cares the word.  It hasn't happened in 30 years!

TechTalk

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11608 on: October 03, 2021, 04:09:49 pm »

Corrected fastest to read quickest.
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TechTalk

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11609 on: October 03, 2021, 04:51:59 pm »

the way they calculated keeps changing so that's not an honest representation of what was before compared to what is now.

Individual items in the index are re-weighted annually to accurately reflect changes in consumer purchasing habits and the associated prices for those items. It is the only way to provide an honest representation.

He [Here] is an extract from the UK method which is very similar to what the American CPI is based on. Showing the fact if tea gets too expensive and people start buying coffee, then the CPI goes down because coffee is cheaper.

Individual items in the index are re-weighted annually to accurately reflect changes in consumer purchasing habits and the associated prices for those items. It is the only way to provide an honest representation.

But that isn't reflected in the new CPI. So it's all fake

It is reflected by re-weighting the percentage of the individual items actually consumed at their current prices. It isn't "fake" for crying out loud! The adjustments are made to reflect the reality of changing consumer habits and prices.

The Consumer Price Index (CPI) is based on the cost of about 80,000 consumer goods and services surveyed monthly. The CPI inflation index is a weighted averaging of those items. Some items, particularly commodities, may go up or down from one month to another rather dramatically.
« Last Edit: October 03, 2021, 05:47:40 pm by TechTalk »
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TechTalk

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11610 on: October 03, 2021, 05:04:06 pm »

That wasn't "their" explanation regarding tea and coffee.   Why don't you understand? ... They're conning the public.

Here is "their" explanation including some parts you edited out and don't appear to understand.

https://www.ons.gov.uk/economy/inflationandpriceindices/articles/ukconsumerpriceinflationbasketofgoodsandservices/2021#main-changes

"Although kept constant within year, the contents of the consumer price inflation basket of goods and services and their associated expenditure weights are updated annually. This is important in helping to avoid potential biases that might otherwise develop over time. This could be because of the development of entirely new goods and services, or the tendency for consumers to move away from buying goods and services whose prices have risen relatively rapidly to goods and services whose prices have fallen. For example, if the price of tea rose dramatically during one year, consumers might switch their spending towards coffee, making it necessary to adjust the expenditure weights accordingly in the following year.

These procedures also help to ensure that the indices reflect longer-term trends in consumer spending patterns."

Do you understand why they are weighted? Do you understand what weighting is?

If in one year tea was 80% of consumer purchases and coffee was 20% and the next year it was different, for whatever reason, and Coffee was now 80% and tea 20% of purchases; the weighting would change in order to reflect that for the sake of accuracy—not to "con the public".

You're conning yourself into believing that you have a deeper understanding of what you read than you actually posses.
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TechTalk

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11611 on: October 03, 2021, 05:10:14 pm »

You're in denial.

You do realize that updates to reflect changes in consumer purchases of goods and services are designed to more accurately reflect the current economy, correct? If you're calculating today's personal transportation costs on the price of a horse and buggy rather than on car and trucks, you're not getting a very accurate measure.
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TechTalk

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11612 on: October 03, 2021, 06:58:07 pm »

I hate to break it to you, but you are the ideologue here.  You may profess otherwise, but you, on [at] every opportunity, always take the left position.

You're entitled to believe what you like, naturally. I would guess that from your point of view, there is quite a lot that appears to be "the left position".

I think that every ideology offers little more than a set of blinders and a sieve for the brain to strain out what it doesn't want to see, hear, acknowledge, or understand. That said, I'm certainly not an antigovernment libertarian, which is the direction "conservatism" (however that may be defined at any given moment) and the Republican party have been drifting in the U.S. for decades.

I think that government has a legitimate purpose. I think that it can do too much or too little; can be good or bad; can act in ways that are more positive than negative and vice versa; etc.; and requires evaluating specific situations, actions, and both the positive and negative consequences that frequently result from any action; rather than wholesale praise or condemnation, support or rejection. I think that people of most ideological persuasions have legitimate concerns which are discounted or ignored by those that embrace other ideologies—which is a huge impediment to communicating and problem solving.

No matter the person, politician or otherwise, I can usually find things to both admire and criticize, depending on the individual. I also think that nearly every politically charged term has been stripped of any useful or generally accepted meaning. They mean what individuals want them to mean—usually based on their ideology.

In any event, I don't really care what the opinions of me might be outside of family, friends, and business associates. The perceptions of those with whom I have close personal interaction matter to me. Judgements made based on what I write here, don't concern me.
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Alan Klein

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11613 on: October 03, 2021, 07:11:56 pm »

Here is "their" explanation including some parts you edited out and don't appear to understand.

https://www.ons.gov.uk/economy/inflationandpriceindices/articles/ukconsumerpriceinflationbasketofgoodsandservices/2021#main-changes

"Although kept constant within year, the contents of the consumer price inflation basket of goods and services and their associated expenditure weights are updated annually. This is important in helping to avoid potential biases that might otherwise develop over time. This could be because of the development of entirely new goods and services, or the tendency for consumers to move away from buying goods and services whose prices have risen relatively rapidly to goods and services whose prices have fallen. For example, if the price of tea rose dramatically during one year, consumers might switch their spending towards coffee, making it necessary to adjust the expenditure weights accordingly in the following year.

These procedures also help to ensure that the indices reflect longer-term trends in consumer spending patterns."

Do you understand why they are weighted? Do you understand what weighting is?

If in one year tea was 80% of consumer purchases and coffee was 20% and the next year it was different, for whatever reason, and Coffee was now 80% and tea 20% of purchases; the weighting would change in order to reflect that for the sake of accuracy—not to "con the public".

But the reason they went to the cheaper substitute is because inflation has driven the price of the more expensive products too high.  So they have lowered their standard of living by eating cheaper chop meat or coffee instead of more expensive steak or instead of more expensive tea.  The CPI inflation is not an abstract number. It reflects the changing standard of living we have. 

Let me give an example.  Let's say last year steak was going for $5 a pound and less desirable chop meat for $4 a pound.  Last year, the government had been using steak in its basket of goods.  However, this year, due to inflation, meat went up 25% across the board.  So now steak is $6.25 and chop meat is $5, the same as steak was last year.  The government decides to eliminate steak in its basket of goods and substitute chop meat.  There is a net 0% change in the CPI since meat is still $5.  However, we are now eating chop meat not steak.  Our standard of living has gone down.  So it seems that because the CPI has a 0% change, we are still the same.  But we're not.  We're not living as well.

That's what inflation does and the government tries to hide the fact that it's increasing more than it is by playing with what's included in the basket of goods.  The bolder words show that the government even admits what they're doing.  What they're not saying is that they're the ones causing the higher prices because they're printing too much money. 

TechTalk

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11614 on: October 03, 2021, 07:23:33 pm »

So, you don't understand what weighting is and you believe, based on nothing, that if the price goes up on one of the 80,000 items they survey every month; "The Government" simply yanks it from the list. Got it.
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TechTalk

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11615 on: October 03, 2021, 07:34:48 pm »

Enough of this nonsense. 60 Minutes is supposed to be doing a segment on Tony Bennett tonight. I've loved Tony Bennett since I was a kid.

https://www.youtube.com/Tony Bennett - Steppin' Out With My Baby (Official Video)
« Last Edit: October 03, 2021, 07:42:50 pm by TechTalk »
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Alan Klein

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11616 on: October 03, 2021, 07:48:55 pm »

So, you don't understand what weighting is and you believe, based on nothing, that if the price goes up on one of the 80,000 items they survey every month; "The Government" simply yanks it from the list. Got it.
quote: Three problems with the CPI deserve mention: the substitution bias, the introduction of new items, and quality changes. Let's examine each of these in detail.
https://www.sparknotes.com/economics/macro/measuring1/section2/

TechTalk

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11617 on: October 03, 2021, 08:01:46 pm »

The Consumer Price Index (CPI) is based on the cost of about 80,000 consumer goods and services surveyed monthly. The CPI inflation index is a weighted averaging of those items. Some items, particularly commodities, may go up or down from one month to another rather dramatically.

You do realize that updates to reflect changes in consumer purchases of goods and services are designed to more accurately reflect the current economy, correct? If you're calculating today's personal transportation costs on the price of a horse and buggy rather than on cars and trucks, you're not getting a very accurate measure.
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TechTalk

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11618 on: October 03, 2021, 08:44:16 pm »

But that isn't reflected in the new CPI. So it's all fake

Why don't you understand?  I'll give another example.  Let's say they have sirloin steak in the basket of goods they figure to determine CPI.  Due to inflation, steak goes higher.  So this year,  the government takes steak off the basket and replaces it with chop meat.  Of course, chop meat is cheaper so the CPI doesn't go up.  But now, you're eating chop meat, not steak.  So your standard of living has decreased while the government is saying the CPI hasn't changed.  They're conning the public.

Let me give an example.  Let's say last year steak was going for $5 a pound and less desirable chop meat for $4 a pound.  Last year, the government had been using steak in its basket of goods.  However, this year, due to inflation, meat went up 25% across the board.  So now steak is $6.25 and chop meat is $5, the same as steak was last year.  The government decides to eliminate steak in its basket of goods and substitute chop meat.  There is a net 0% change in the CPI since meat is still $5.  However, we are now eating chop meat not steak.  Our standard of living has gone down.  So it seems that because the CPI has a 0% change, we are still the same.  But we're not.  We're not living as well.

the government tries to hide the fact that it's increasing more than it is by playing with what's included in the basket of goods.

https://www.bls.gov/news.release/pdf/cpi.pdf

Meats...Unadjusted percent change (Aug. 2020—Aug. 2021)
 Beef and veal...
  Uncooked ground beef...............6.9%
  Uncooked beef roasts...............13.1%
  Uncooked beef steaks..............16.6%
  Uncooked other beef and veal...14.1%
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LesPalenik

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Re: Bear Pit: now the sole domicile of politics at LuLa
« Reply #11619 on: October 03, 2021, 11:04:02 pm »

https://www.bls.gov/news.release/pdf/cpi.pdf

Meats...Unadjusted percent change (Aug. 2020—Aug. 2021)
 Beef and veal...
  Uncooked ground beef...............6.9%
  Uncooked beef roasts...............13.1%
  Uncooked beef steaks..............16.6%
  Uncooked other beef and veal...14.1%

Many other items were increased in a similar ratio. I haven't seen one which would be cheaper (except a few products where the packaging size was reduced).
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