Fear The Chorizo

Should've been much more willing to bet way, way more....because that's exactly where we're at.

1) In rural areas aren't gas stations fewer and further between? Don't people have to go out of their way to get gas? Wouldn't it be much more convenient to have your own "gas station" at home instead of driving "into town" to get gas? I take it you've never actually lived in a rural area - if you did you'd understand that people have to go out of their way to get just about anything, and they tend to plan errand trips into town to take care of multiple tasks to be as efficient as possible....including filling up the tank on the way home. People don't just mindlessly drive 30 miles into town to get gas and drive home for no reason, so it really isn't "out of their way" at all.

How familiar are you with the solar panel and battery manufacturing processes, from the point of pulling raw materials out of the ground, to manufacturing these components, to the issues with manufacturing waste biproducts and end of use waste from the spent components themselves? Scaling those processes anywhere close to what it would take worldwide and expand solar and EVs to the point you're proposing would be devastating to the environment - particularly in developing countries and places where the vast majority of these materials are mined and manufactured without anywhere near the environmentally-protective regulatory controls the US has at present. Maybe if we add a wind turbine to the top of the car it'll make it drive forever, too...

Yeah I get the thought that a big market team might feel like they can try to ink Soto to a longterm extension before he hits free agency....but as long as Boras is Soto's agent it isn't based in reality. I can't think of any marquee client Boras has had who actually signed a longterm extension before reaching free agency. Probably missing one somewhere, but to me having 2.5 years to sign Soto to a 15 year extension shouldn't have any bearing on what his trade value is - for any MLB team trying to trade for him. And I'd argue not being able to afford a 15 year extension for Soto is an advantage, not disadvantage for the Brewers as an organization. In fact, if the Brewers do the impossible and acquire Soto via trade, the first thing they should state in their presser is it'll be great to get 2.5 years of service from Soto before he breaks the bank in free agency - just so we don't have to hear from Boras coming up with outrageous player values for his client the whole time he's a Brewer.

Yeah I get the thought that a big market team might feel like they can try to ink Soto to a longterm extension before he hits free agency....but as long as Boras is Soto's agent it isn't based in reality. I can't think of any marquee client Boras has had who actually signed a longterm extension before reaching free agency. Probably missing one somewhere, but to me having 2.5 years to sign Soto to a 15 year extension shouldn't have any bearing on what his trade value is - for any MLB team trying to trade for him. And I'd argue not being able to afford a 15 year extension for Soto is an advantage, not disadvantage for the Brewers as an organization. In fact, if the Brewers do the impossible and acquire Soto via trade, the first thing they should state in their presser is it'll be great to get 2.5 years of service from Soto before he breaks the bank in free agency - just so we don't have to hear from Boras coming up with outrageous player values for his client the whole time he's a Brewer.

I don't know if it's that far-fetched - I don't think it matters where he gets traded, there won't be a longterm extension signed by Soto/Boras with that team. If a huge market team winds up trading for Soto, they surely could resign him as a free agent - but that would be because they have more $ to throw at him when he does become a free agent. Soto won't be a free agent until after 2024, so a trade would be for ~2.5 years of team control before he leaves via free agency. I don't consider 2.5 years of a great player's prime to be a rental, either - it's actually a smart baseball move for a small market team (had they done the same with Yelich and not extended him they could've let him be a free agent last offseason after 4 seasons with the team). They have Chourio - who is legitimately great right now - but the Nationals are likely looking for either young MLB talent or near-MLB talent... Soto was the youngest player in MLB when the Nats called him up - just because Chourio is still a baby doesn't make him young/near-MLB talent in the eyes of MLB execs. It would still take a haul to trade for him, but I think the Brewers could put enough pieces together to swing a trade that also doesn't cripple the talent emerging in their farm system - I doubt the Brewers could put together the best package unless they include Chourio in the package, which would give me pause....but 2.5 years for one of the best players in MLB is going to require a haul.

I don't know if it's that far-fetched - I don't think it matters where he gets traded, there won't be a longterm extension signed by Soto/Boras with that team. If a huge market team winds up trading for Soto, they surely could resign him as a free agent - but that would be because they have more $ to throw at him when he does become a free agent. Soto won't be a free agent until after 2024, so a trade would be for ~2.5 years of team control before he leaves via free agency. I don't consider 2.5 years of a great player's prime to be a rental, either - it's actually a smart baseball move for a small market team (had they done the same with Yelich and not extended him they could've let him be a free agent last offseason after 4 seasons with the team). They have Chourio - who is legitimately great right now - but the Nationals are likely looking for either young MLB talent or near-MLB talent... Soto was the youngest player in MLB when the Nats called him up - just because Chourio is still a baby doesn't make him young/near-MLB talent in the eyes of MLB execs. It would still take a haul to trade for him, but I think the Brewers could put enough pieces together to swing a trade that also doesn't cripple the talent emerging in their farm system - I doubt the Brewers could put together the best package unless they include Chourio in the package, which would give me pause....but 2.5 years for one of the best players in MLB is going to require a haul.

Hell, gas tanks only get ~350 miles. EV's aren't far behind that. An ICE vehicle's range is entirely dependent on the size of its gas tank and not on a battery that takes much longer to recharge in order to regain its full travel range - throw a pair of jerry cans in the back of your pickup and suddenly that range doubles. Plus if you drive a car 349 miles and show up at a gas station on fumes, 5 minutes later you can completely reset its range to 350 miles after filling up. An EV simply can't and won't ever be able to offer that level of convenience no matter how many charging stations pop up - particularly in rural areas that often require vehicles with significant towing or storage capacity, or for people living in urban areas that don't have the means or real estate room to have their own secure charging station. However, that's not saying EVs aren't a good option for anybody to have. EVs can supplement the overall auto fleet in the US and serve that sought after niche as a suburban around-town errand runner for those who can afford its higher upfront cost along with having reliable and private charging capabilities. That's maybe 15% of the population in the US, but it's a far lower percentage across the rest of the world. I think EVs make up roughly 5% of the US personal vehicle fleet at present, so 15% would be tripling it existing market share in this country - and I think that's a realistic ceiling for this type of technology. EVs are simply not the answer to replacing the ICE on a worldwide scale, particularly if people are looking for ways to improve the environment. One exception is Norway (population a bit smaller than WI). To dramatically increase their country's use of EVs, Norway has taxed the crap out of any ICE cars (sales, gas, maintenance, basically everything gets taxed at very high levels) while foregoing any taxes on EV sales/maintenance/charging cost as a way to make them cost competitive and disincentivize ICE cars - at least up until recently as they've had to scrap the EV sales tax exemption because they've blown too big a hole in their fiscal budget. The primary funding mechanism that has made this even sort of a reality in Norway is, of course, the enormous amount of money they collect in royalties from oil exports - which is a huge part of their economy and the only reason they're among the wealthiest nations on a GDP per capita basis. So Norway can say they're very clean domestically in terms of vehicle emissions - but all the oil that gets pumped out of their seafloor and shipped elsewhere to be guzzled that actually funds this endeavor still winds up churning out CO2 on the same planet Norway is on.

When Tesla is pleading for people in Texas to only charge their EVs at night and not during peak demand, it's evidence that if people charge whenever they'd prefer to do on their own that the additional strain on the grid from charging EVs even at the limited % they are part of the overall auto fleet is a problem. Dramatically increasing the % of EVs on the road would only make this much worse. Part of that reason is the existing grid and power supply is strained to its limits at present, too. That's not just in the US, it's happening in many developed countries as they've become steadily more reliant on renewables instead of excess generating capacity from nuclear/fossil fuels to support antiquated peak demand estimates that growing populations are easily able to exceed. And there's still a significant limitation with EVs on how far you can actually drive them before needing to take a significant chunk of time to recharge the battery, not to mention being held hostage to traveling where charging stations are available and actually functioning properly. To me the next step would be for families/households in population centers who have multi-vehicle households to have an EV primarily for in-town local driving and keep an ICE vehicle for more flexibility with longer drives - particularly when not planning to return home to your garage charging station at night to take advantage of that coal-fired trickle charge during bedtime.

Yes, but that decline doesn't really mean much - going from 9+% in June year over year to say 7% in July year over year still means stuff costs a ton more a full year after inflation started spiking. Changes from the interest rate hikes won't be seen in inflation numbers for another few months, at which time the rest of the economy will be firmly entrenched in a progressively worse recession (we're already in a recession that will get worse). The big rate hikes coming now are kind of like a fire department showing up to a kitchen fire and then proceeding to wait until the entire house is a raging inferno before starting to run the hose to the nearest hydrant, then proceed to extinguish the fire on a destroyed house and not turn the water off until they've flooded the rest of the homes in the neighborhood. There should never have been a 2021 round of COVID stimulus printed out (frankly there probably shouldn't have been any in 2020 either but gov't policy panicked). And as soon as that bill was passed the Fed should have started significant rate hikes a full year ago to offset what they knew was coming. Gas/fuel prices are the biggest inflation driver, since everything sold in a store at one point or another got there after being transported by something running on fuel. Gas prices will drop a bit due to reducing demand as summer moves to fall (prices always go down during this stretch), but now the problem is the US needs to stop drawing from its strategic reserves and actually try to replenish them when the cost of oil is near a record high. That will curtail supply and prevent gas prices from dropping faster than they otherwise would have - so we'll get a fresh round of blaming oil companies raking in huge profits. Meanwhile, US refining capability is basically running at max capacity and there are terrible permitting/financing disincentives for those companies to even try to use profits for building new refineries, expanding existing ones, or increasing drilling/production to try and get more in line with demand and get prices at the pump to a reasonable level for consumers. The other option is to make everyone buy electric cars they can't afford to destroy the environment much faster by mining the heavy metals needed to produce batteries, and then subsequently blow out the existing electrical grid. It's going great...

When was that CBO estimate made and what were the actual revenue streams? The article you linked is dated in early February 2019, before increased revenue streams from the economic growth the tax cuts created were actually realized. Throw the intentional recession COVID lockdown policies created and really the first year's revenue that can be looked at to see what impact those tax cuts had on the broader economy was 2021....and thus far in 2022 the reduced deficit in large part is due to those cuts enacted as well whether people will admit to it or not. Those cuts haven't been removed, right? So they are still impacting government revenue streams. Deficits in 2020 and 2021 were incredibly influenced by the trillions of dollars printed out in COVID relief - take those huge amounts off the government's books for 2020 and 2021 and those years' deficits would likely resemble what we are seeing so far in 2022. The problem with CBO scoring is that it is forced to use current economic conditions extrapolated over 10 years or however long they project and don't have a good way to adjust that scoring for either improved or diminished economic growth that makes those projections worthless after a few years.

The key takeaway for me in that article is its headline...I get why states value shifting people from welfare rolls they have a bigger part in funding to federal disability - but the fact there are jobs whose role is strictly to move people from one unit of government's dole to another just to achieve some cost savings on their own books speaks to how additional layers of bureaucracy across government lead to programs costing more tax dollars $ to deliver the same services, and that bureaucracy just fails to see the forest through the trees. Money could actually be saved and tax revenues for these programs at both the state and federal levels could increase if there was more emphasis/funding for programs whose goal is to get people who can work back to work by providing necessary training/offering relocation assistance/etc.

"trickle down" is a phrase opponents of lower taxes came up with to villify policies that promote capital investment as a way of creating more economic opportunities for people who instead want increased government spending as a way of propping up the ground floor. And no, there isn't a need to increase both taxes and slash spending due to the size of the national debt - they key is to rein in the deficit to stop adding to the debt by freezing or finding ways to decrease spending for an extended period of time so revenue from existing tax policy starts making that debt look smaller in the long run. The last round of tax cuts enacted by orange man bad were having a positive impact on increasing government revenues because the economy was thriving and expanding in 2019....then revenues actually spiked significantly in 2021 in large part to corporate tax revenues following that 2017 tax cut. However, we unfortunately didn't see the deficit/debt benefit from those increasing revenues because government COVID policies from both political parties blew it up by cratering business growth that was driving the increased tax revenue and also printing out trillions more in debt with no way to pay for it.

Exactly, and because of that a smaller percentage of the US is actually in the workforce and we've been skirting around a tipping point due to prolonged economic expansion for the past 10ish years - small decreases in the labor rate percentage are significant on a macro scale when the programs supported by payroll wage garnishments are already running at a loss. There needs to be a marked increase in labor participation of working-age adults in order to offset the group of baby boomers entering into retirement, otherwise the gov't programs (social security, medicaid/medicare, etc) don't have enough wage earners to sustain them and the whole thing implodes on itself. That and substantial reform of these programs that likely push back the age when people can start collecting from them and limiting the amount they receive. People on fixed incomes are getting crushed right now and it won't get better for them for a substantial amount of time. COVID forced alot of two parent working households back to 1 parent working households because the extended school shutdowns and forced restriction on activities, and to their credit many families realized the benefits of having one parent at home running the show outweighed the benefits of two wage earners chasing their tails running errands and shuttling kids between day cares/schools/after school activities. It's going to take awhile to unwind things economically to reach a new and sustaintable economic normal, and inflationary pressures are just amplifying the pain while we and the rest of the world start working through it. This turmoil is all happening as jobs are still plentiful and there are still a good number of working age people who aren't choosing to fill those jobs - whether that be due to a population wide skills gap or unwillingness to perform various tasks is beside the point. When the economy does start contracting jobs and people who are currently employed find themselves out of work, there's going to be much more economic desperation than their already is - even in the richest country on earth.

The US still drives the global economy, so when it sucks here it more or less is going to suck everywhere else with a few exceptions that for one reason or another can isolate themselves, and probably sucks even more in countries that don't produce their own energy...I believe California itself has a much higher GDP than the UK.

Oil prices also started falling in October of last year, so there was reason to believe that inflation would subside. Then Russia. In general, oil prices always slide in the fall of the year after peak demand most summers - so that really isn't a surprise or should have been viewed as a sign that inflation would actually not be a problem after printing trillions of dollars for the heck of it. IMO there shouldn't have been a stimulus in either 2021 or the ones they doled out in 2020 - we are reaping the after effects of all of that right now. The roadblocks set up for banks and other financial institutions to invest in expanded oil exploration and oil distribution infrastructure projects (pipelines/refining capacity, etc) coupled with essentially throwing a proverbial wet blanket on any and all new leases/drilling permits has been far more destructive to the global oil market than Russia invading Ukraine. It's not nearly as simple as yelling at oil companies to "pump faster or pump more". The brief unemployment rate increase a little more than a year ago was a product of the government finally pointing to a stop on the extended unemployment benefits and a glut of workers actually trying to rejoin the workforce. The US labor force still isn't close to where it was pre COVID in terms of the number of people actually working - despite that really low unemployment rate...it's because a smaller percentage of the country is actually in the workforce.

Things are going to get worse but at least we're being somewhat proactive this time which is unusual for the government. The last time the Fed jacked up rates 75 basis points was 1994, when Greenspan was roundly criticized by government officials for suppressing economic expansion. At the time, I think inflation was around 2.5-3.5%, and Greenspan indicated he initiated the rate hike to prevent what appeared to be a rebounding economy from overheating. The overall rate increases by Greenspan were relatively short-lived (about a year) and the Fed was able to keep inflation in check even after lowering the rates. Since May 2021, the monthly inflation rate has progressively increased from 5.0% in May 2021 to 8.6% in May 2022, with little sign of dramatically dropping in the coming months. This time around, what the Fed is doing is hardly proactive, and they are going to be forced to be punitively reactive to try put a stopper on the inflation spigot they've let run largely uncontrolled for more than a year. As for student loan repayments, my final loan payment will be made next billing cycle roughly 19 years after I graduated...so that definitely means that huge swaths of student loan debt are going to be forgiven in next 2-3 months.

It's important to continue investing/contributing to retirement accounts consistently through peaks and valleys of the market - eventually it does rebound and even if your account is losing money during a downturn, you're at least buying shares at discounted prices that will realize bigger gains as the market rebounds at some point. I shifted a pretty large chunk of my retirement account to essentially a money market stable value fund earlier this year when it was apparent both the bond and stock markets were going to suck for an extended period of time. Granted that fund is getting dinged by inflation like everything else, but its dollar value hasn't changed and at least it didn't get further crushed by being in a stock or bond market diving firmly into bear territory. I'm not going to try and be perfect predicting the true bottom and best time to shift that part of my portfolio back into stock funds, but the way things are shaping up economically I don't have an immediate sense of urgency to pull the trigger, either.

Reminder that q1 gdp was already negative, so by the end of June we are probably already in a recession by its definition of 2 straight quarters of declining activity. Also, the monthly inflation rates are based on year over year comparisons of each month - since inflation really started ramping up after the last covid stimulus package printed a few trillion out of thin air again last summer, the inflation numbers will probably start dropping into the 3-4% range as early as when July gets reported simply because they have nowhere to go but down when they've been setting fresh 40 year highs...but even that is too much for this economy.

Wages aren't up anywhere close to actual inflation. I'd much rather get a 3% wage increase when the CPI/inflation is 2-4% compared to a 6% raise when inflation is 8-10%. Give it a month or two - there will still be "now hiring" signs left in the doors of businesses that close down. Most of those positions companies are looking to hire are the result of staff switching jobs and leaving openings, not due to economic expansion as we reached a post-pandemic equilibrium. Tech industries are already starting to announce layoffs. The labor participation rate remains on the low side historically, too. Not too many of us have been around long enough to experience a US economy that truly is experiencing stagflation, but unfortunately I think we're all about to find out how much it sucks.

Bad news: Inflation, gas prices That list is about to get a whole heckuva lot longer - they basically have to force a bad recession in order to get a handle on inflationary/supply chain and energy pressures coupled with deficit spending and dramatic low level wage hikes conducted over the past few years. Home sales are about to come to a screeching halt due to rising mortgage rates and while I don't see home values plummeting like 2009-2011 because housing market isn't going to be the reason for the incoming recession, removing that economic contribution is going to hurt many industries. Consumers are indeed still spending but are needing to burn through savings or even worse use run up credit card debt to cover basic needs - discretionary spending will take a big hit later this year, too. I saw that the average family is having to pay roughly $1,000 more per month to cover basic living expenses (gas, utilities, food, shelter) now than they were at the start of 2021....the exact figure varies from state to state, but it's just not sustainable to shift that much money to things without sacrificing/limiting other discretionary spending. The entertainment/restaurant industry is going to get hammered again once the initial pent up pandemic-related demand wears off this summer with trips that were pushed back the last few years. Specific to what the market will wind up doing, I think it's going to get worse before it gets better, because there really isn't a safe haven to turn to when you have high inflation, stumbling corporate profits, and yet to be resolved supply chain/energy production issues. In short, I feel very fortunate to be nowhere near retirement age right now...and even more fortunate to not already be on a fixed income retirement like my parents.

If you have plenty of money to put down 20% and still have a ton of reserve funds I think most should avoid PMI. Sure - but if I were a 1st time homebuyer in my current neighborhood in 2016, that would have meant needing to come up with ~$60K at closing to avoid a PMI payment of roughly $115 a month on a 3.5% mortgage. Instead we put 10% down, dealt with the nominal PMI payment for a couple years that wound up totaling $3K in extra money out the door over that time, and got rid of it after the home appreciated in value by almost $200K. Now in our neighborhood, 20% down would be roughly $100K for the same home - had we stayed in our previous home and location, there's no way our current home would be affordable to us. I'd add the caveat that part of our move coincided with my wife opting to leave the workforce for a few years to enjoy as much time with our young kids (and one on the way at the time) as possible before they got older, so we opted to not make the perfect financial move in order to improve this time as a young family - different strokes for different folks, and as long as you're happy with the reasons why various financial decisions are made it's all good!

You'd be surprise how much lower monthly PMI is if you can swing 10% down vs just 5% - I think people trying to save at least 20% down before even thinking about buying a house may actually cost themselves in the long run when home prices are increasing in markets faster than people can save. If you're in the right market you may be better served buying the house sooner than later at a great interest rate without having a full 20% down, deal with the PMI payments for a year or two and after the home appreciates in value work with your lender to try and get PMI removed based on an updated appraisal.

I might win the prize for buying a home at the wrong time - we bought our 1st home in IL spring of 2008, with a 0 down, 6% 30 year fixed - after the fact we realized we may have been one of the last people to get a $0 down mortgage because it was right as the bubble started popping. The thing we did do right is we didn't listen to our realtor/mortgage broker when they told us we could afford a home in the $500K pricerange (lol), and instead shopped at the pricepoint just over half that much. Our loan terms were terrible (rates were much higher then), but we were able to make significant extra principle payments the first few years before our kids started showing up to plow through the worst portion of that 30 yr mortgage quickly. Doing that for just a couple years helped get the percentage of our typical monthly mortgage payment dedicated to principle elevated much quicker than had we just paid our mortgage on autopilot, and a refinance 3 years in got our rate down to ~4% on a 20 year term without changing what our monthly mortgage/PMI payment was. Would have loved to eliminate all PMI during the 1st refi but the house value just wasn't there due to the crash, but at least that amount was reduced. We were thankfully able to sell our home for the same price we bought it in 2016 and used the accumulated equity for a big downpayment on our current home in MN so we no longer have a mortgage with PMI and it's at a great rate - also picked the right time to leave IL, as the home value of our 1st place is roughly the same as it was when we bought it in 2008, and our current home has basically doubled in value ~6 years after moving here. At some point home values in this market will stop skyrocketing, but I agree that another housing crash like 2008-2011 isn't going to happen - rent prices are actually outpacing home value increases in most markets, so people waiting on the sidelines are winding up having to pay more for nothing while they wait to start building property equity.

He won't be DFA'd, simply because the September roster expansions will allow for him to stick with the club and be their option when there's multiple lefty hitters due up in the 6th or 7th inning of a tight ballgame. Unless Norris turns it around significantly or if a series matchup warrants, I doubt he sees a postseason roster at this point, though.