The trade and economy mega-thread (1 Viewer)

[superchuck500]

Is there a trade deal with China? Is it really a deal or just a pull-back to status quo ante? Is Trump advancing US interests in this well-executed trade battle plan or was this poorly conceived from the start . . . and harmful?

I think the jury's still out, but I haven't seen that the Chinese are offering much in compromise - and it's not even clear if there's going to be an agreement. But it's clear they are working on something and I'm sure Trump will sell it as the greatest trade deal ever. The proof will be in the details.

 

[bird]

The automakers are pissed. You know they are in his ear. I read an article that said average price of new car is about to go up 5K

Not to mention what that will do to the price of used cars. Availability will be more scarce and dealers will raise prices because they can.

 

[longtime lurker]

About a third of Americans stop buying eggs due to rising costs, study shows

Data says 34% of those in US stopped purchasing breakfast staple and won’t buy again until costs lower to $5 a carton

www.theguardian.com

I noticed the egg case at my local grocery store was stacked full of eggs…at outrageous prices. They are going to have to start giving them away for free or either throw them out.

 

[Optimus Prime]

Not to mention what that will do to the price of used cars. Availability will be more scarce and dealers will raise prices because they can.

I actually wondered about that

If there was a real reason the price of used cars would also go up

Something like a rule or guideline saying 'The cost of a 3 year old car with this many miles in excellent condition must be between X% and Y% cost of current year model of the same car'

Or if the answer is simply 'because they can'

 

[efil4]

I actually wondered about that

If there was a real reason the price of used cars would also go up

Something like a rule or guideline saying 'The cost of a 3 year old car with this many miles in excellent condition must be between X% and Y% cost of current year model of the same car'

Or if the answer is simply 'because they can'

its the latter- simple supply vs demand.

If demand for used cars increases, while inventory is relatively static ( meaning no influx of used vehicles coming in ) then price increases are simply "because we can" - there is no supply out there, so if you really want this car, it will cost you $2000 more than 6 mo ago.

you can "shop around" only to find that other used dealers are doing same and on cars you may not "really" want. Are you gonna settle for a lesser priced car with lesser features?

or eat the $2000 and get what you want? But keep in mind, you overpaid, so eventually as the market corrects, that cars value will drop and depending on financing, you may be upside down even after year 4. ( lots of factors in that tho )

 

[Optimus Prime]

I noticed the egg case at my local grocery store was stacked full of eggs…at outrageous prices. They are going to have to start giving them away for free or either throw them out.

its the latter- simple supply vs demand.

If demand for used cars increases, while inventory is relatively static ( meaning no influx of used vehicles coming in ) then price increases are simply "because we can" - there is no supply out there, so if you really want this car, it will cost you $2000 more than 6 mo ago.

you can "shop around" only to find that other used dealers are doing same and on cars you may not "really" want. Are you gonna settle for a lesser priced car with lesser features?

or eat the $2000 and get what you want? But keep in mind, you overpaid, so eventually as the market corrects, that cars value will drop and depending on financing, you may be upside down even after year 4. ( lots of factors in that tho )

Shouldn't this mean that the prices of eggs will come down?

Demand is low, which means supply is just sitting there and they are persishable

Why let them rot on the shelves and take a 100% loss on them?

 

[Optimus Prime]

its the latter- simple supply vs demand.

If demand for used cars increases, while inventory is relatively static ( meaning no influx of used vehicles coming in ) then price increases are simply "because we can" - there is no supply out there, so if you really want this car, it will cost you $2000 more than 6 mo ago.

you can "shop around" only to find that other used dealers are doing same and on cars you may not "really" want. Are you gonna settle for a lesser priced car with lesser features?

or eat the $2000 and get what you want? But keep in mind, you overpaid, so eventually as the market corrects, that cars value will drop and depending on financing, you may be upside down even after year 4. ( lots of factors in that tho )

I thought that's what it was more likely to be

When does that become price gouging?

The dealer has already paid X for the car and planned to sell it for Y but now gets to sell it for Y+ $2000 just cuz they can get away with it

 

[J-DONK]

Shouldn't this mean that the prices of eggs will come down?

Demand is low, which means supply is just sitting there and they are persishable

Why let them rot of the shelves and take a 100% loss on them?

You would think so, but you are also talking about volume vs price.

If I sell 2000 eggs at 8 for 16k, but my peak in the last 5 years was 5000 eggs at 3 for 15k. I have no reason to lower the price.

McDonalds did this crap.

 

[efil4]

I thought that's what it was more likely to be

When does that become price gouging?

The dealer has already paid X for the car and planned to sell it for Y but now gets to sell it for Y+ $2000 just cuz they can get away with it

So now you start getting into the nuances of "industry" right?

When is the mark-up on a car, gouging the customer? Well the argument could be had, never. Because you have alternatives. 100s of cars and models to choose from. Dont want to pay $3000 more, then find something cheaper, because there is something cheaper out there. May not be exactly what you want, but its available.

Unlike say gasoline. We have seen it happen post storm. Limited supply, limited delivery, so stations go to $4-5/gal when prior to storm was $2.50 - thats gouging. You dont have options, especially if only one or two stations open near you and have gas available and both charging same price. Small number of suppliers meaning no real competition with the ecosystem, so pricing "because you can" is in fact, gouging.

Same in theory for auto market, but there are 100s of used car dealers/online dealers that you can find a car in your price range. So supply ( cars in general ) is not as limited.

 

[efil4]

You would think so, but you are also talking about volume vs price.

If I sell 2000 eggs at 8 for 16k, but my peak in the last 5 years was 5000 eggs at 3 for 15k. I have no reason to lower the price.

McDonalds did this crap.

And they also already account for "shrink" or "spoilage" in pricing everything.

Now, let that spoilage happen for 2-3 mo straight, they will adjust price. But they wont after just one down week in sales. It has to be multiple, consecutive.

 

[bird]

And they also already account for "shrink" or "spoilage" in pricing everything.

Now, let that spoilage happen for 2-3 mo straight, they will adjust price. But they wont after just one down week in sales. It has to be multiple, consecutive.

Or, depending on quantities of laying hens and maintenance costs vs projected future sales they might sell layers to someone else. Or in the case of factory production kill off a certain percentage of layers again after cost analysis.

Supply and demand is used not to match pricing but to maximize profit. In the case of goods such as food (non-existent) “markets” never “clear”. They are in constant motion with the goal of obtaining as much revenue as possible with highest profit possible and the lowest costs possible.

Eggs going bad on the shelves due to consumers not buying will only go on for a finite length of time. Alternatives after that are guess work but, imo, attempts will be made to ramp down current and future production.

 

[efil4]

Or, depending on quantities of laying hens and maintenance costs vs projected future sales they might sell layers to someone else. Or in the case of factory production kill off a certain percentage of layers again after cost analysis.

Supply and demand is used not to match pricing but to maximize profit. In the case of goods such as food (non-existent) “markets” never “clear”. They are in constant motion with the goal of obtaining as much revenue as possible with highest profit possible and the lowest costs possible.

Eggs going bad on the shelves due to consumers not buying will only go on for a finite length of time. Alternatives after that are guess work but, imo, attempts will be made to ramp down current and future production.

and there is that- manipulation of the supply to create demand.

You and I have to take Rouses "word for it" that supply is low, right? How do we know? we arent privy to the actual supply inventory of eggs. So Rouses could tell suppliers to cut back on eggs because demand waning, when in fact its same, just doing to drive price up.

Lots of moving parts in the equation of "supply and demand"

 

[Optimus Prime]

So now you start getting into the nuances of "industry" right?

When is the mark-up on a car, gouging the customer? Well the argument could be had, never. Because you have alternatives. 100s of cars and models to choose from. Dont want to pay $3000 more, then find something cheaper, because there is something cheaper out there. May not be exactly what you want, but its available.

Unlike say gasoline. We have seen it happen post storm. Limited supply, limited delivery, so stations go to $4-5/gal when prior to storm was $2.50 - thats gouging. You dont have options, especially if only one or two stations open near you and have gas available and both charging same price. Small number of suppliers meaning no real competition with the ecosystem, so pricing "because you can" is in fact, gouging.

Same in theory for auto market, but there are 100s of used car dealers/online dealers that you can find a car in your price range. So supply ( cars in general ) is not as limited.

I remember when the day after Katrina hit some local gas stations (I'm in Maryland) tripled and quadrupled their prices

That was definitely called gouging and they were told "if you don't lower these prices you will charged with price gouging and the fine will be X hundred of dollars per gallon"

The prices came down

 

[faceman]

I remember when the day after Katrina hit some local gas stations (I'm in Maryland) tripled and quadrupled their prices

That was definitely called gouging and they were told "if you don't lower these prices you will charged with price gouging and the fine will be X hundred of dollars per gallon"

The prices came down

I saw the same in South Georgia. The day after Katrina the price was 6 dollars a gallon.

 

[Lapaz]

and thats on AVERAGE - some models could see upwards of $10k added. IF the mfg doesnt absorb some of the cost of tariff.

So that slows new car sales to a crawl. Conversely, used car prices will jump simply off demand. So folks working at new car dealerships have to be wondering what to do. At some point, as new car sales plummet, dealers will be forced to lay off folks.

And the downward spiral continues...

We're going to start looking more like Cuba with a lot more old cars, and domestic cars becoming more utilitarian and boring. On the plus side, there should be a lot more jobs for mechanics, and auto parts stores. MAWA!

 

[longtime lurker]

Shouldn't this mean that the prices of eggs will come down?

Demand is low, which means supply is just sitting there and they are persishable

Why let them rot on the shelves and take a 100% loss on them?

Good question….demand seems to be cooling over the sky high prices, so the hope is the egg producers will start lowering their cost and the sellers (grocery stores) pass those savings on to consumers. Fingers crossed.

 

[Lapaz]

Shouldn't this mean that the prices of eggs will come down?

Demand is low, which means supply is just sitting there and they are persishable

Why let them rot on the shelves and take a 100% loss on them?

It will be a vicious cycle. Grocery stores prices will have to be dropped on the eggs they've already bought, but that may mean they are taking a loss on those eggs. That will mean they will buy fewer eggs until their supply doesn't exceed the price they can sell them for. Egg suppliers are the ones that will suffer, because grocery stores will adjust their supplies to assure they don't lose too much with them. On the other hand, egg suppliers will have a lot of pressure to lower their prices, but they may end up losing money if they can't sell enough to pay their bills. If so, then some will go out of business, which will lower the supply, that will put upward pressure on prices. As inflation increases on everything else, people will cut back further on some luxuries, and egg suppliers will suffer even more. Soon eggs will be as valuable as gold, and I'll have to start guarding my chickens, that will further raise their prices!

 

[efil4]

so he spoke for 40 min and no one is really clear on who getting what other than effective midnight 25% on automobiles.

 

[efil4]

here is the list- with reciprocal US tariff. yet no one knows when they will take effect.

And Canada and Mexico NOT on this list. ( after spending 10 min on them RIPPING OFF US )