A place to discuss all things ADM
#1606
The media’s recession alarmism seems to be rubbing off on some RLers. The stock indexes and even BTC are all up 10-20% since as early as 2 years ago, so unless you invested everything since Joe took office or you are heavy in a handful of bad performing stocks you are just seeing what was inevitable, a bubble pop.
what I don’t understand is why the Fed thinks increasing rates is the way to stop inflation since the 3 core inflation drivers (cost of energy, cost of labor, and supply chain) are not dependent on interest rates.
what I don’t understand is why the Fed thinks increasing rates is the way to stop inflation since the 3 core inflation drivers (cost of energy, cost of labor, and supply chain) are not dependent on interest rates.
#1607
Not sure it's alarmism (at least at any higher a rate than media typically is); it's a very recent development that we're walking into a slowing economy with a gun against our heads to raise, not lower, rates. At any rate, a recession is a normal and healthy part of economic cycles. As to your question as to why monetary policy would impact cost of energy, labour, and the supply chain....it is because our current inflation has a lot to do with more traditional demand-pull inflation which is due to aggregate demand overheating, rather than cost-push inflation; this is also why the chart you referenced for the M2 in the 80s did not show massive growth despite the inflation as that was more cost-push and not a result of abnormally loose monetary policy for a long period of time. US oil production is not lower than it used to be and frankly while the US is a swing producer now, increased production will not have a big impact on oil prices. The WTI-Brent spread is the same level it was in 2018 and given that when US production ticked up and caused a surplus in 2014/15 and oil prices crashed to $30, a lot of shale production was unprofitable so oil companies are gunshy about committing capital. The demand picture is causing inflation and that's what the Fed is hoping to moderate and as aggregate demand = GDP, there's a pretty elevated chance of a recession. Whether it's short and technical or more protracted is a tougher call.
The issue I have about the Fed raising interest rates is that they are intentionally trying to f*** the economy without looking at other alternatives like increasing oil production (which by the way, if production is same as 2018... that's not enough oil for 2022), actually trying to help sort out the supply chain issues at the ports where boats full of stuff are just sitting, etc...
Anyways, RL is a horrible platform to discuss the economy. Looks like Porsche has commited to producing GT3s through December 2022, hopefully a little longer since the lists for those are still long.
#1608
The Fed increased money supply by 38% during Covid times. Any time you increase money supply that much in a relatively short period of time, you will end up with inflation. The fed can do little to control the inflation now, they will over react with rates and it will do little to curb inflation. Milton Friedman is probably turning in his grave at the Fed printing 38% more money or as he liked to say, tax receipts.
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Aorta (06-23-2022)
#1609
Small marker: I went to see a GT3T in person (have yet to see an example one on one) today at a used specialty car dealer across from where I service one of my cars. By the time I got there, the car had sold (allegedly) earlier that morning for $100K over sticker per the salesperson I spoke with yesterday who was going to show it to me. Glad I went as they had a jade green 3.6 965 that blew my mind, which belongs to a friend of the owner and the car was being stored there. #GEMS.
#1611
On the market for a couple of weeks and pending sale at $299,950. ADMs are still going strong:
https://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?listingId=645038008&makeCodeList=POR&modelCodeList= 911
https://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?listingId=645038008&makeCodeList=POR&modelCodeList= 911
#1612
On the market for a couple of weeks and pending sale at $299,950. ADMs are still going strong:
https://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?listingId=645038008&makeCodeList=POR&modelCodeList= 911
https://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?listingId=645038008&makeCodeList=POR&modelCodeList= 911
#1613
On the market for a couple of weeks and pending sale at $299,950. ADMs are still going strong:
https://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?listingId=645038008&makeCodeList=POR&modelCodeList= 911
https://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?listingId=645038008&makeCodeList=POR&modelCodeList= 911
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JAB12 (06-22-2022)
#1615
Yeah, but what did they they take? My speedster had a ADM of 200k, and it sat and I got it for MSRP. 100 cars sitting they’re not flying of the lots ………they were all in the 300k range. I’m all about free market, but they will come down I’ve watched this movie for a long time like others.
Last edited by ARC944; 06-22-2022 at 08:45 PM. Reason: Additional context
#1616
On the market for a couple of weeks and pending sale at $299,950. ADMs are still going strong:
https://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?listingId=645038008&makeCodeList=POR&modelCodeList= 911
https://www.autotrader.com/cars-for-sale/vehicledetails.xhtml?listingId=645038008&makeCodeList=POR&modelCodeList= 911
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AlexCeres (06-23-2022)
#1618
I'm sure people are paying high ADMs still; just that they're much fewer and farther inbetween. If everyone looking for a GT3 was willing to pay ADMs, there wouldn't be over 100 cars on sale. EVO rwds are also asking ADMs of $50k plus and sitting for months but still haven't gotten to 110+ cars for sale. Not to mention that they weren't a limited run model in the first place and now have 2.5 model years of production vs 1 like the GT3.
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Freddie Two Bs (06-26-2022)
#1619
Maybe so and time will surely tell, but right now cars are moving within a matter of weeks and still commanding $90-$100K over sticker. Like it or not, it is the current market.
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Juggy (06-22-2022)
#1620
And how many of those idiots...errr buyers are there left in the market? It's declining by the day and more GT3s are hitting the market as time goes by. ADMs have nowhere to go but down.
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Maverick787 (06-22-2022)