INFLATION--FED announces 0.50% interest rate cut
- Thread starter Chop
- Start date
If Democrats take credit for the stock market returns during their President's tenure then they own this.
But rational people know they do own it. And they want to flood the market with more money in a vote buying scheme.
They also want to recklessly destroy the fossil fuel industry.
They also want to flood our country with illegal aliens.
They also want to defund the police.
They are out of control.
But rational people know they do own it. And they want to flood the market with more money in a vote buying scheme.
They also want to recklessly destroy the fossil fuel industry.
They also want to flood our country with illegal aliens.
They also want to defund the police.
They are out of control.
A few things about this. First, it's remarkable how soft Democrats have become. During the Trump era they grew accustomed to basically getting a foot-rub from the media, and now that that's over, they can't handle a journalist asking one question that isn't a soft ball. If you're a Democrat and think Lester Holt is too tough, you're pathetic.
Second, I don't think Biden's answer is totally wrong. I'm sure the supply chain and computer chip problems are part of the equation. The problem is that he ignores the big elephant of a wildly inflated currency, massive spending, and all the shenanigans the Fed has to pull in order to force the numbers to work.
Third, from a political standpoint inflation is a real *****. You can have decent growth and low unemployment, but if people are getting their asses handed to them every time they buy food or fill their gas tanks, no amount of political spin can convince them that the economy isn't it in the crapper.
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I think it's the how dare you mentality that is epitomized most by Elizabeth Warren or Maxine Waters. They are totalitarian elitists and they will not be questioned. EVER. We are not worthy of an intellectual but straight forward explanation of anything. They are in charge. They know better. They are also corrupt and their plans are to be fulfilled no matter what.
It is also the feminization of the men; they have adopted the classic Queen Bee personna.
High Inflation is front and center in the news these days. It's effects on the market are another concern...
https://www.cnbc.com/2022/02/11/us-inflation-data-like-a-punch-in-the-stomach-for-the-fed-citi-.html
Yahoo Finance describes inflation as "out-of-control".
Inflation is 'out of control,' and it may make the Fed trigger happy: Morning Brief
Markets, still unsettled, lurch between gains and losses
"The broader market had been gaining ground earlier in the week, but the latest inflation report prompted a bout of selling that erased most of the week's gains. Investors are worried about the impact from the Federal Reserve's plan to raise interest rates to fight rising inflation. Such moves to raise interest rates could rein in inflation, but they would also put downward pressure on all kinds of investments." <----- by the way, that will include housing prices...
Wall Street wavers; U.S. 10-year yield steadies near 2%
https://www.cnbc.com/2022/02/11/us-inflation-data-like-a-punch-in-the-stomach-for-the-fed-citi-.html
Yahoo Finance describes inflation as "out-of-control".
Inflation is 'out of control,' and it may make the Fed trigger happy: Morning Brief
Markets, still unsettled, lurch between gains and losses
"The broader market had been gaining ground earlier in the week, but the latest inflation report prompted a bout of selling that erased most of the week's gains. Investors are worried about the impact from the Federal Reserve's plan to raise interest rates to fight rising inflation. Such moves to raise interest rates could rein in inflation, but they would also put downward pressure on all kinds of investments." <----- by the way, that will include housing prices...
Wall Street wavers; U.S. 10-year yield steadies near 2%
Seattle Husker
10,000+ Posts
This is capitalism run amuck.
They did announce the were raising their cereal prices.
The CEO made 4.62, then 7.97 in 2017. It was $15.9 million last year.
I found they bought back $300,000,000 in stock.
Profits were actually 3.1 billion last year.
So, fact check, true.
Commodity/manufacturing costs are certainly increasing. Lot's of companies need to look harder at internal costs before passing them onto the consumer. With that said, from my time working on the corporate side of retail price hikes are not taken lightly. At SBUX, they forecasted a decrease in customers with every price hike. When coffee or milk commodity prices increased, they waited as long as possible before announcing price hikes. Still, CEO / executive pay has gotten out of control. Recognizing the board sets CEO/key executive pay it's typically comprised of CEOs (current and former) of other companies. They don't bash an eye at a comp package of 10's of millions annually, even if primarily in stock which is what most major companies offer now.
Pricing necessarily HAS to incorporate look-ahead costs of supplies. What someone made LAST quarter does NOT mean their costs will be the same THIS quarter or even NEXT quarter. And anyone who ignores that production costs are increasing is simply not even LOOKING to pay attention to what is going on in the real world...
Also lost is that many of the memes about 'profit' never look at the taxes that have to be paid. Of course, those same people ALSO tend not to understand how markets work to begin with...which is sad since schools USED to teach at least a little about economics in the United States. Instead, we have a generation that if you asked them what GAAP was, they would announce that the person asking the question misspelled the name of the store...
Also lost is that many of the memes about 'profit' never look at the taxes that have to be paid. Of course, those same people ALSO tend not to understand how markets work to begin with...which is sad since schools USED to teach at least a little about economics in the United States. Instead, we have a generation that if you asked them what GAAP was, they would announce that the person asking the question misspelled the name of the store...
The CEO is tasked with maximizing share price through the other variables that they actually control. When the shares increase in value, compensation made through stock options is not money out of the corporate coffers. It isn't as though General Foods or any other company paying primarily in stock options is cutting a check for those millions of dollars.
People with common sense would recognize this reality.
Seattle Husker
10,000+ Posts
Please quote where I stated or even inferred that? The company is giving a company owned asset to the CEO sometime in the form of an option to purchase the stock or sometimes a stock award. The company has to own a pool of shares in order to have options to grant, shares they could sell on the market if they choose. A side benefit of stock buybacks are to replenish their own internal pool of stock to give employees options. That stock option is an expense to the company. Here is a simple explanation of the options affect on the companies income statement.
I'm sure we'd both agree, these compensation packages with stock option are not free to the company. They've become en vogue to incentivize the CEO to take more risks albeit lots of research has demonstrated that it's not really effective.
LOL at SH trying to link to a primer on options to people who have been involved with investing, to include buying and selling options for more than forty years...
The simple reality is that the millions don't come out of the corporate bank account. Thus the claim of 'inflated' salaries is just plain wrong. However, sadly, the mainstream media allows the lie to be perpetuated and does not step in to correct it...quite possibly because too many of them never traded options contracts and lack the ability to discuss them. The media ALSO likes to ignore that not all of those options immediately vest...there have been plenty of companies where the options were not executable for several years down the road. There are ALSO typically no tax consequence to the officer until those options are executed.
The simple reality is that the millions don't come out of the corporate bank account. Thus the claim of 'inflated' salaries is just plain wrong. However, sadly, the mainstream media allows the lie to be perpetuated and does not step in to correct it...quite possibly because too many of them never traded options contracts and lack the ability to discuss them. The media ALSO likes to ignore that not all of those options immediately vest...there have been plenty of companies where the options were not executable for several years down the road. There are ALSO typically no tax consequence to the officer until those options are executed.
Seattle Husker
10,000+ Posts
That's a longwinded way to admit that the company stock options are not "free" to the company. They are represented in their income statement which public companies publish quarterly.
Let me repeat, the stock options are an expense to the company no different than if @Seattle Husker gifted $10M of stock options to @mb227. There would be tax consequences for us both. In corporations, this issuance of stock options to employees (CEO or individual contributor) are an expense not much different than a salary on the income statement. I say this as someone with 20+ years supporting various stock administration teams at MSFT, SBUX and a few other well known brands. You are correct that the expense is incurred only when the option is exercised but that cost is incurred, it's not free to the company.
Who pissed in your Cheerios?This is capitalism run amuck.
They did announce the were raising their cereal prices.
The CEO made 4.62, then 7.97 in 2017. It was $15.9 million last year.
I found they bought back $300,000,000 in stock.
Profits were actually 3.1 billion last year.
So, fact check, true.
If you don't like the price hike, buy from Post or Kellogg. See how the system works?
Duck Dodgers
1,000+ Posts
Yeah, start your own cereal company - isn't that what we're told every time YouTube censors someone who's viewpoint they don't like?
"Bubba Crunch Cereal"- chock full of lies, innuendo, and conspiracy, with a strong odor of B.S. Mix it with your favorite pee and enjoy anytime of the day. Find it at your local Brookshire Bros. in a a crimson and cream box. Yum.
Duck Dodgers
1,000+ Posts
If you don't buy it his QB will shoot you!
Gotta have a plastic crack pipe in there as a toy for the Okie kids.
OUBubba
5,000+ Posts
Or, maybe the cereal company should, pay said CEO $x,000,000 with a 10% increase per year and pass the savings on to the consumers, you know, the people. This is one of many examples of "inflation" being related NOT to increasing inputs but increasing overhead.
Duck Dodgers
1,000+ Posts
Apple's Tim Cook was paid almost 100 million bucks last year. But Big Tech, as a stanch supporter of the Democrat Party, and prime helpers in their censorship programs, are exempt from the spotlight.
Instead the word has gone out - inflation isn't the fault of Slow Joe going through trillions faster than he goes through a box of diapers, it's those greedy CEO's of cereal/meat packers/tire companies. Meanies!
https://www.cnbc.com/2022/01/06/apple-ceo-tim-cook-compensation-fy-2021.html
Instead the word has gone out - inflation isn't the fault of Slow Joe going through trillions faster than he goes through a box of diapers, it's those greedy CEO's of cereal/meat packers/tire companies. Meanies!
https://www.cnbc.com/2022/01/06/apple-ceo-tim-cook-compensation-fy-2021.html
Dude, you really don't have a clue. This is more complex than you can grasp. Just let it go along with your simpleton answers to a salary and income problem that does not exist. I will educate you if you prefer, but I know you are strongly against facts and logic and I don't want to make you feel uncomfortable.
Duck Dodgers
1,000+ Posts
As above, it's not his fault (as such). The Democrat Party's line on inflation has been:
- It doesn't exist
- It's only temporary
- It's actually good as it only hurts the rich
- It's the fault of those meanie CEO's, not Big Tech ones though, those are great! Look it's a media puff piece on how wonderful Apple and Alphabet's CEO's are. No, it's those other CEO's that are making you have to pay more.
Inflation isn't happing because CEO's and stock holders are making more money. The CEO's and stock holders are making more money because of inflation. It works like this whether you believe it or not. These numbers are completely made up but it sure feels pretty close knowing the things I do in the grocery retail industry, but this is just for example sake. This is the simplified version of a very complex business scenario.
Cost of ingredients in a box of XX cereal:
$1.50 each
Profit margin of 30% means they charge retailers:
$2.14 each
Gross profit
64 cents per box
This isn't their net income, they pay all other expenses out of that 64 cents per box. Labor, insurance, rent, taxes, etc, etc. Let's just say their net income is 10 cents per box.
Now add 10% inflation:
Cost of ingredients in a box of XX cereal is now:
$1.65
Keep the same profit margin of 30% so cost to retailers is now:
$2.36
Gross profit
71 cents per box
Cereal company is now making .06 cents more per box because of inflation adding zero additional "other expenses" so now their net income is 16 cents per box or a whopping 60% increase in net income.
In a publicly held company that profit goes to the share holders, CEO and owners.
The RIGHT thing to do is for them to temporarily reassess and reduce their profit margin % to keep costs down to the consumers, but mega corporations are just like the government. They don't react fast and quite frankly just like the government the more money of mine they can keep the more they can pocket.
My guess is they do reduce margins some but absolutely will not reduce margins to the the same profit per box they were before. This way they can go to their stock market meetings and say "Hey we reduced our margins from 30% to 27% to minimize the hit to the consumer" and they aren't lying but in reality they're still pocketing more cash. Inflation can be a windfall for some companies.
Sooner or later the competitive market will catch up and they will lower their margins more even if the costs stay the same to be competitive as their competition goes.
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Seattle Husker
10,000+ Posts
The child argument is the continuous flow of strawman arguments being advanced. Let me tell you what all Republican's say so I can point out how silly they are. Nah...if you have to consistently state the oppositions argument then there is a very good chance you really don't understand the opposition and simply need a caricature to shoot at. That is a child's ploy. They think they have the world figured out when in actuality they don't know what they don't know and that wisdom only comes with age. If you are 30, 40 or 50 using the same strategy then the listening skills are underdeveloped.
Maybe the federal government will refund the $600 million + in taxes the company paid so prices can be lowered and bubba can buy a box of cheerios.
Go become a shareholder and make a proposal. Or buy cereal from some other company.
I have no idea of the meaning of anything you just wrote, but DD stated the Dem's responses to inflation. He restated them because they are idiotic, and only a child would believe them. The opposition's argument is understood, and is found lacking any viability.
But be sure and include optimal capital structure in your arguments to the board, along with your in depth understanding of debt structure, cash flow, and capital expenditures. Throw in a little HR and international experience in selling cereal too.
Bubba, the Board of Directors, elected by the shareholders (ie Owners) determines CEO salary, and approves equity repurchases. They told me to tell you they appreciate your offer to price their cereals, but they are comfortable with the current decisions. I think they are mailing you a 10% off coupon. Hopefully, this satisfies your needs.
Duck Dodgers
1,000+ Posts
My post listed exactly what the talking points from the Democrat Media complex have been since they printed trillions of bonds from thin air this year. If they sound childish and foolish when listed in bullet points - don't blame me, they're from your side, not mine.
And look I realize everyone in office loves to spend money. There were about 8 of us as of 2016 who cared that the USA needed 20 trillion dollars to become broke. And about 7 of them after I stopped caring. The Tea Party movement was the last hope of not borrowing the country into ruin, and they were called racist extremists by everyone in DC - mostly by chumps like Schumer on your side, but also by pieces of **** like McCain.
I'm done with worrying about the debt - what I would like though is at least enough fiscal self-control such that I don't get 10% poorer each year from inflation. One of dozens of reasons why the lockdowns, and associated borrowing of trillions of dollars to keep the economy going during the Wuhan, was perhaps the worst decision the USA has made in the past 50 years.
And another trillion plus dollar stimulus this year, combined with another trillion in phony "infrastructure" spending, plus the original 3 trillion the the hardcore left wanted to spend on Build Back Bolshevik ain't cutting the mustard on keeping inflation at anything less than Banana Republic levels.
But sure, maybe you all can blame it on the pay of the CEO of a cereal company. Since the Democrat voting base is Ivy League grads, government workers, felons, illegal aliens, and via vote-by-mail-fraud, the dead, it's a good as plan as any you have.
And look I realize everyone in office loves to spend money. There were about 8 of us as of 2016 who cared that the USA needed 20 trillion dollars to become broke. And about 7 of them after I stopped caring. The Tea Party movement was the last hope of not borrowing the country into ruin, and they were called racist extremists by everyone in DC - mostly by chumps like Schumer on your side, but also by pieces of **** like McCain.
I'm done with worrying about the debt - what I would like though is at least enough fiscal self-control such that I don't get 10% poorer each year from inflation. One of dozens of reasons why the lockdowns, and associated borrowing of trillions of dollars to keep the economy going during the Wuhan, was perhaps the worst decision the USA has made in the past 50 years.
And another trillion plus dollar stimulus this year, combined with another trillion in phony "infrastructure" spending, plus the original 3 trillion the the hardcore left wanted to spend on Build Back Bolshevik ain't cutting the mustard on keeping inflation at anything less than Banana Republic levels.
But sure, maybe you all can blame it on the pay of the CEO of a cereal company. Since the Democrat voting base is Ivy League grads, government workers, felons, illegal aliens, and via vote-by-mail-fraud, the dead, it's a good as plan as any you have.
Agree with the expressions above that the shareholders ultimately elect the Board and can ultimately hold them accountable. If enough shares think the CEO and the 18 VPs are making way too much money, they can run candidates for a new Board that can sack them and/or cut their salaries dramatically.
For a simplified and entertaining Hollywood version, go back and watch Wall Street—Gordon Gecko’s “Greed is Good” speech. The stuff before “greed is good” was mostly spot on. The company is supposed to be run for the benefit of the shareholders—not for the benefit of a management class. Too many modern highly compensated executive class officers (including excessive VPs) are divorced from the real ownership of the company. This is unlike the days of Carnegie, Rockefeller, Ford, etc. So he did what pissed off large shareholders should do if they don’t like it—he ran a new slate of candidates, took over the Board, and saved Teldar Paper. Happens in the real world, although it’s mostly the bad decisions of management (rather than their high compensation) that gets them sacked by the Board (or higher up officers) before the shareholders sack the Board.
And if you are ever asked to be on a board—> make sure they pay for lots of D&O insurance that covers you.
For a simplified and entertaining Hollywood version, go back and watch Wall Street—Gordon Gecko’s “Greed is Good” speech. The stuff before “greed is good” was mostly spot on. The company is supposed to be run for the benefit of the shareholders—not for the benefit of a management class. Too many modern highly compensated executive class officers (including excessive VPs) are divorced from the real ownership of the company. This is unlike the days of Carnegie, Rockefeller, Ford, etc. So he did what pissed off large shareholders should do if they don’t like it—he ran a new slate of candidates, took over the Board, and saved Teldar Paper. Happens in the real world, although it’s mostly the bad decisions of management (rather than their high compensation) that gets them sacked by the Board (or higher up officers) before the shareholders sack the Board.
And if you are ever asked to be on a board—> make sure they pay for lots of D&O insurance that covers you.
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Monahorns
10,000+ Posts
All in devalued dollars. And they are a big corporation in bed with the government. They are raising prices because their costs are going up. What is their profit margin? If you don't know that you don't know anything.
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