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Saturday, October 21, 2023

Inflation -- For The Archives -- Thanksgiving -- October 21, 2023

Locator: 45784INFLATION. 

UPDATES

October 22, 2023: The WSJ. Wow, they're reading the blog. 

ORIGINAL POST

Earlier today I posted the price of turkey at Target earlier this week, $1.19 / pound. Target had only a handful off turkeys. Today, the coffin coolers were filled with turkeys priced at ... 99 cents / pound. 


 Let's see what googling tells us:

One year ago, at Thanksgiving:

November 18, 2022: a reader sent me another note about Thanksgiving dinner and inflation. My reply:

Apparently you've noted that this whole issue is a burr under my virtual saddle -- I've posted this many times on the blog.
Knock off the price of the turkey and we're talking about $30 for the dinner. If you can't find a free turkey this holiday season, you're not trying hard enough.
Regardless, a 16-pound turkey can be had for 98 cents / pound -- as noted below -- or less than $16 -- compare to the nearly $30 in the graphic above (from a mainstream media site).
By the way, we bought five big turkeys (16 to 22 pounds) earlier this week to donate to charity -- $92 from Target. Less than $20 / turkey. And most of the turkeys well above 16 pounds. All turkeys for 98 cents / pound sold out; had to settle for $1.19 / pound and two were Butterballs.
All this has been posted on the blog numerous times.

And eggs, down 60% from earlier this year:

Talk to me again about inflation. It gets tedious.

As long as we're playing this game, computers? Link here:

And beef? Oh, give me a break. It's been significantly worse

Good News For Apple Folks -- October 21, 2023

Locator: 45783APPLE. 

From Reuters:

UAW -- Update — October 21, 2023

Locator: 45782UAW.

Link here.

I had wondered about Fain's end game.

It's now becoming clear.


Game theory.

Excellent analysis. This is a must-read. I've only included three paragraphs -- which don't do the analysis justice:


 Wired also looks at the UAW strike using game theory.

Bottom line: it's very possible, for some of those on strike, it's only begun -- $500 / week. The rest are getting full pay plus lots of overtime.

One Year Ago: 100% Probability Of A Recession Within Twelve Months -- Bloomberg -- October 21, 2023

Locator: 45781ECON. 

The Fed: to move from 3% to 2% inflation, the Fed will kill the housing sector, the auto industry and renewable energy.  

JPow's memoirs title: Doing It My Way: The Operation Was A Success But The Patient Died.

Mester's memoirs title: No Regrets: How We Stopped Renewable Energy.

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The Economy

One year ago, Bloomberg Economics predicted with a 100% probability a recession within 12 months.

100% probability.  

100% probability.  

So, what happened?

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The Blog

The area under the curve:

This, the area under the chart, without a doubt, the largest ever in the history of mankind.

My favorite chart.

Link here.


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Transfer of Wealth -- Already in Play

Now, let's add another data point: the greatest wealth transfer in the history of mankind. Link here.

My parents' generation transferred to me and my generation: $16 trillion.

My generation will transfer to the next two generations, our children, Gen X and Gen Y: $53 trillion.

First off all, I can't get my mind around one trillion dollars, much less $15 trillion, much less $60 trillion.

This transfer has only just begun.

My generation, the baby boomers: 1946 - 1964.

Today: ages 77 years of age - 59 years of age.

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RMDs

Baby boomers: first generation with tax-deferred (and tax-exempt) IRAs.

IRS changed the rules and now inherited tax-deferred IRAs must be exhausted in ten years.

The phenomenon of RMDs from the baby boomers has also just begun.

Age 73: must begin to take RMDs from IRAs.

Human nature: most folks who have sizeable IRAs and understand investing will try to wait as long as they can to start taking their RMDs each year. So, now, we're coming to the end of the year, and the holidays are coming. RMDs for 2023 start to hit their stride now.

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Housing

Baby boomers: big families. Common for folks like me to have four, five, or six siblings. But, Gens X, Y, and Z will have youngsters with zero or one sibling and that's it. 

Much less money being spent on housing (high interest rates, also, of course, but less money on housing translates into more money in non-housing retail sector.

Link here

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Transportation

Due to high cost of automobiles, shortage of vehicles, etc., folks spending a lot less on autos. That leaves a lot more money for non-auto retail sales.

Excluding autos, sales were up 0.6%, also well ahead of the forecast for just 0.2%. The so-called control group, which strips out items such as auto dealers, gas stations, office supply stores, mobile homes and tobacco stores and is used for the department’s GDP calculation, rose 0.6% as well.

***********************
Disposable Income

In the US, averages $50,000 per capita. Previously reported. Link provided by a reader, thank you.

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Bottom Line

From the linked CNBC article:

 “The U.S. consumer cannot stop spending,” said David Russell, global head of market strategy at TradeStation.
“All three retail sales reports for Q3 were above estimates, which puts us on track for a strong GDP number later this month. It also gives the Fed zero reason to loosen policy, which keeps the 10-year Treasury yield pushing toward 5%.”
Sales gains were broad-based on the month, with the biggest increase coming at miscellaneous store retailers, which saw an increase of 3%.
Online sales rose 1.1% while motor vehicle parts and dealers saw a 1% increase and food services and drinking places grew by 0.9%, good for a yearly increase of 9.2%, which led all categories.
There were only a few categories that showed a decline; electronics and appliances stores as well as clothing retailers both saw decreases of 0.8% on the month.

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GDPNow

Link here.

Estimates for 3Q23 coming in at 5.4%.

No Hurry To Invest -- For The Archives -- October 21, 2023

Locator: 45780EVCHARGING.

Automakers: only two major automakers haven't adopted Tesla's charging standard. Link here

ChargePoint: rolls out support for Tesla's EV connector. Link here.

For investors: EV charging stocks for investors. Link here.

  • Wallbox (WBX)
  • EVgo (EVGO)
  • Blink Charging (BLNK)
  • Allego (ALLG)
  • Enphase (ENPH)
  • Beam Global (BEEM)
  • Charge Point (CHPT)

Tickers

EVGO:

CHPT:

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.  

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.

For An 80-Year-Old He Can Still Draw Viewers -- October 21, 2023

Locator: 45779TV. 

Some say this was his best speech ever.

Link here.

President Joe Biden‘s Oval Office address Thursday evening drew a sizable audience.

Across six broadcast networks and the three biggest cable news channels, the address — in which the president laid out the case for continued aid to Israel and Ukraine — averaged a little over 22 million viewers (22.12 million).
Broadcast networks pushed their regular primetime schedules back by about 20 minutes to air the address.

ABC drew the largest share of the the total audience with 4.65 million viewers, followed by fellow broadcasters NBC (3.57 million) and CBS (3.46 million).
Fox News led cable with 3.35 million viewers in preliminary ratings, followed by MSNBC (2.11 million), the Fox broadcast network (1.45 million) and CNN (1.4 million). Univision drew 1.27 million viewers for the address and Telemundo, 858,000.

ABC: of the three major networks, ABC is considered the most liberal.

Without question, Fox is considered the most conservative.

Having said that, among cable networks can anyone really challenge Fox News. It used to be CNN but that train left the station long ago and is now sitting on some siding waiting for Greta.

I've never considered MSNBC a news network; it's a liberal talk show.

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If Israel Needs Us

Preparing For Thanksgiving Now -- October 21, 2023

Locator: 45778THANKSGIVING.

Get prepared for all those click bait stories we'll start seeing after Halloween on how much more expensive your Thanksgiving will be compared to last year.  

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Thanksgiving -- PSA

Grocery shopping list.

September: before October, start buying a little bit of candy each time you stop by Walmart, Target. Or Amazon. If you're buying candy now, you are already behind the 8-ball, as they say.

October: start stocking up for Thanksgiving. After Halloween, it will be too late to start getting ready for Thanksgiving.  If you have a freezer, buy your turkey now. 




A Butterball turkey for $1.19 / pound? Wow!

Biggest Investing Story Of The Day? October 20, 2023

Locator: 45777ECONOMY.
Locator: 45777RETAIL. 

Updates 

October 22, 2023: The WSJ.

October 21, 2023: not so much talk about a recession right now. JPow has lots of room to maneuver.

October 21, 2023: just out of curiosity, if one was living paycheck to paycheck, if one was worried about the economy, if one was worried about saving money for retirement, what part of your life would you give up first to save cash? Everybody will answer differently.

For me, I would argue that going out to eat would be number one on my list, and if not number one on the lists of other folks, it would certainly be among the top ten "things" to give up. 

[Moving to a state with no state income tax might be the best way to save money, but that's not a reasonable option for many / most.]

US retail sales in September, 2023, came in 4x what was forecast.

Quick! What sector inside "retail sales" led the pack? Answer: restaurants and bars. Is anyone paying attention? Households still have a lot of money.

From CNBC:

 “The U.S. consumer cannot stop spending,” said David Russell, global head of market strategy at TradeStation.
“All three retail sales reports for Q3 were above estimates, which puts us on track for a strong GDP number later this month. It also gives the Fed zero reason to loosen policy, which keeps the 10-year Treasury yield pushing toward 5%.”
Sales gains were broad-based on the month, with the biggest increase coming at miscellaneous store retailers, which saw an increase of 3%.
Online sales rose 1.1% while motor vehicle parts and dealers saw a 1% increase and food services and drinking places grew by 0.9%, good for a yearly increase of 9.2%, which led all categories.
There were only a few categories that showed a decline; electronics and appliances stores as well as clothing retailers both saw decreases of 0.8% on the month.

Original Post

Time to answer the question. Yesterday I posted this:

Link here.

Will be posted later. Connects a lot of dots.

See if you can think what that story will be.

Hints:

  • Fortune 500 company;
  • earnings;
  • record results;
  • meme: it's for old, rich people
  • fact: millennial and Gen Z customers fastest growing demographics

******************************
The Answer: American Express

I think this was the most important retail / financial story yesterday. It connects a lot of dots.

The biggest dot to connect: just where is all that money coming from that allows Americans to keep spending. Remember: in September, American-retail-spending came in four times what was forecast.

Imagine if the headline had been: Apple's profits come in four times expectations.

And yet the fact that Americans spend four times what was forecast seemed to get very, very little media play.

So, from where is all that money coming?

Here are the dots to connect:


They're living at home, rent-free, mortgage-free:

Another dot to connect: how much money is being saved by working from home, not buying gasoline, or even a car in some cases?

Enough of that. I'm sure you can think of a lot more examples. 

Oh, one more example: the millennials have no health care expenses. Their health insurance premiums are being paid for by their employer and because they are in great health (young age and not pregnant) they don't have any deductibles or co-pays about which to be concerned. 

Think how much more discretionary / disposable income you would have if you had:
no mortgage

  • no mortgage or rent expenses
  • no swimming pool expenses
  • no internet, Hulu, Netflix, HBO expenses
  • no car (gasoline, maintenance even if paid for; monthly payments)
  • no health care premiums or out-of-pocket health care expenses
  • no college payments for child (children)
  • no diapers, no formula for new babies
Now back to American Express.

Link here (same as above). From the very, very well-respected Barron's:

From the article:
Consumers keep shopping and traveling and that translated to American Express announcing its sixth consecutive quarter of record revenue.
Revenue at American Express climbed 13% from the year-ago quarter to $15.4 billion.
Profit topped expectations -- by 12% -- growing 30% to $2.45 billion, amounting to earnings of $3.30 a share, another record for American Express. Analysts had been projecting that Amex would earn $2.95 a share. [Think what AAPL would do if profits topped expectations by 12%.]

Total card member spending climbed 7% to $420 billion on a currency-adjusted basis. In the U.S., card spending climbed 9% year over year, while the company’s international segment saw a 15% increase in spending after adjusting for currency. [Of course a lot of that has to do with inflated prices.]

American Express noted that households and businesses have not lost their propensity to spend on going out with travel and entertainment expenditures climbing 13%, helped in large part by restaurant spending.
And then look at this:
The company also was optimistic about its continued ability to court younger clients. Millennial and Gen Z customers are American Express’s fastest growing demographic, with spending up 18% year over year and the group accounting for 60% of new accounts.

Why are millennials and Gen Zers using the most expensive, most prestigious credit card available? Because they can. These are folks with high paying tech jobs with no car payments, no mortgages, no health care costs.

And that's why retail sales came in four times greater than expected

If it weren't for Sophia, I wouldn't need a car. As it is, I'm spending $25 / month on gasoline for a car that has been paid off since 2017. 

EVs -- Think Dylan -- And I'm Not Talking About Bob -- October 21, 2023

Locator: 45776EVS.

Link here to The WSJ.  

I don't know if folks are seeing the same thing I'm seeing, but EVs are ... well, starting to look MIA ...

  • Tesla falters, 2Q23;
  • darlings of Wall Street: Polestar, Rivian, Lucid, Arrival, Canoo -- reality sucks
  • high interest rates will have huge effects on EV industry
  • GM delays; Ford delays -- huge stories -- hardly being reported by mainstream media, analysts
  • the graphite issue (posted moments ago)
  • the UAW strike -- the hourly rate pales in comparison to what manufacturers are paying for health care
  • federal government charging standard will "go away" -- to be replaced by Tesla, "The Electric Company" or to be called the "X-Lectric Company;

Now, on top of everything else, we have the Dylan Mulvaney effect.

Which leads us to this:


From the linked WSJ article:

The EV transition is running head on into polarizing politics.
Already this year, pricier electric vehicles got even more expensive for many potential buyers thanks to higher interest rates, which affect loan costs.
Now, anti-“woke” backlash and high-profile politics are increasingly making the suggestion of owning an EV a political cudgel. Or, as Ford Motor Chief Executive Officer Jim Farley recently lamented: “They have become a political football.”
President Biden’s support of the transition, through subsidizing manufacturing, extending tax credits for EVs and giving money for charging stations, has come under attack from Republican rivals seeking to challenge him for the White House next year.
As the Democrat talks about trying to protect automotive jobs and help the environment with green technology, they raise concerns about losing work and question whether the governments should subsidize them or mandate future zero-emission vehicle sales, as California has done.

How To Charge Your New EV -- One Needs A Degree In Electrical Engineering -- October 21, 2023

Locator: 45775EVS.
Locator: 45775EVSCHARGING.

 Updates

August 27, 2023: tech writer for The WSJ buys an EV for the family. The "buying experience" here at "YouTube." Exactly why EVs will not catch on for a long, long time.

Original Post

I know very little about car engines, but when shopping for a new car, all I need to know is mpg. One number. Okay, two: city / highway.
  • I never ask about range
  • I never ask about the kind of fuel pump I need to use
I know nothing about electricity and nothing about EVs, but when shopping for a new car, I need to know:
  • type of EV connector
  • type of charging station -- and which national service stations support which types of connectors
  • the size of the tire which affects range
  • range on a fully charged battery (see below)
    • a very cold day
    • a “normal” day
    • a very hot day
  • level charging station: level 1, 2, or 3
  • how long it takes to fully charge the vehicle
  • how I know when my EV is optimally charged? What is the optimal charging range?
  • advertised range vs actual range (this is more relevant than you will ever realize until after you’ve bought the car);
  • with pickup trucks: range with / without cargo in the box.
This is how I understand it (right, wrong, or indifferent) now. This is how I would explain it to Sophia, subject to editing, correcting, and adding more information as I get a better understanding and as technology, batteries, charging stations evolve over time.

The links:
This is the most important graphic. It doesn't require any understanding of anything; just keep the graphic in you mind. 


What to note in the graph:
  • the left side of the graph/chart: 
  • the charging stations you see in parking lots around town
  • measured in kW (you don't even have to know what a kW is -- just know that's how EV charging station ports are "rated;
  • in the example: one charging port is rated at 7.5 kW; the other charting port is rated at 60 kW
  • some existing ports are now rated higher than 60 kW
  • as time goes on, the ratings will increase in size (power)the right side of the chart:
    • this is your car, your EV
    • when you talk to your dealer or to you friend, you will ask about / talk about the "size of the battery" or the "battery's energy" -- or whatever the phrase is
    • if you don't have much money, the EV you buy will have a battery with a lower energy rating, such as 15 kWh in this example;
    • if you are rich, you will be able to afford an EV with a "bigger battery" -- such as 120 kWh in this example
    • like most things in life (but not golf scores), bigger is better
    • buy the "biggest" EV you can afford
Charging: in the graph above -- 
  • when you pull into a charging station, the greater the rating of the charging station, in this case 7.5 vs 56, the faster you can charge your EV
  • so, why doesn't everyone just plug into the the charging port / station with the higher / highest rating, 56 in this case
  • you can't plug your cheap little EV into a charging station that has too much power for your little pathetic EV
  • so, in the example above, if your pathetic little EV is rated at 15 kWh, it cannot plug into a charging unit with a higher rating. 
  • so, in the example above, you can only plug your 15-kWh-rated pathetic little EV into the 7.5-kW-rated charging port / station
And that's all you need to know.

Except for this, in the graph above: the small print.
In the graphic above, the bigger car rated at 120kWh pulls up to the charging unit rated at 60kW. The car takes a charge for two hours. Two (2) hrs x 60 kW = 120 kWh which is what the bigger car in the graph above is rated. 
So, a "big" car with a rating of 120 kWh can be fully charged in two hours if plugged into a charger rated at 60 kW.

If that "big" car with a rating of 120 kWh pulls into a charging station rated at 7.5 kW, it will take .... 120 / 7.5  = 16 hours to fully charge.

Okay, so that's all you need to know.

But there's a lot more one can know if one is interested.

We shouldn't have to say this but an EV rated at 120 kWH can "last longer" (longer range, all things being equal) than a pathetic little EV rated at 15 kWh.
 
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Charging Stations

Level 1 vs level 2 vs level 3 charging stations
 
Level 1
  • 120 volts — AC
  • your garage
  • absolutely worthless
Level 2
  • 240 volts — AC
  • can be installed in your garage
  • In the Target parking lot
  • at 60 kW, two hours to “achieve” 120 kWh, so four hours to fully charge a soccer mom’s SUV
Level 3
  • 480 volts — DC
  • not at your house, ever

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Connectors
 
Connector type: non-Tesla
  • J1772: level 1 and level 2
  • CCS1: level 3
NCAS for all Tesla models: link here.

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Miscellaneous

Other facts / factoids / opinions / comments:
  • hybrids are fake EVs -- they are the worst thing one can buy in the "EV family" but Ford is now transitioning to hybrids ... more on that later. Ford will sell a lot of hybrids, as well as Toyota will. That's good for the car companies but bad for you; really bad for the roads (but you won't care about that); and really, really, bad for the environment (again, something yo won't care about. You will be happy just knowing that you are part of the EV community.
  • Ford is "going all out" with hybrids. Link here.
  • charging stations prone to “breaking down”; generally, outside of big cities, if the charging station you visit is “out of order,” you are really “out of luck.” If you thought running out of gas is bad, you haven’t experienced the seventh level of hell until you experience a dead battery and a broken charging unit.

The Keystone XL Would Have Solved This Problem -- October 21, 2023

Locator: 45775EVS. 

From Reuters:

Disruptive:

GRAPHITE: link here

  • update: Barron's.
  • as you read this article, just remember: the Keystone XL would have solved this problem

China’s stricter controls over graphite exports mean companies, including electric-vehicle makers such as Tesla, will have to accelerate their search for alterative sources of the mineral. 

Demand for graphite for use in batteries has grown by 250% globally since 2018, and is expected to continue to increase as the electric-vehicle market grows. The batteries found in an average electric vehicle each need about 175 to 200 pounds of graphite.

The problem is that China produces more graphite than any other country, while the U.S. heavily relies on imports. That gives Beijing leverage to push back, as it did Friday, when the U.S. takes advantage of its dominance in semiconductors by limiting China’s access to the highest-end chips.

In the U.S., there are four lithium-ion battery plants in operation, with another 21 in development. At full capacity, these plants are expected to require about 1.2 million tons of spherical graphite—a refined form used as anodes in lithium-ion batteries—every year, according to the United States Geological Survey.

Graphite can be produced either from naturally mined material or in a synthetic process using petroleum feedstocks. China is by far the leader in both areas.

Last year, China mined 850,000 tons of natural graphite, about 65% of the world’s total production. The country also processed most of the battery-grade spherical graphite.

Toyota And BMW To Use Tesla Charging Systems — October 21, 2023

Locator: 45774EVS.

See this post

Add two more to the list.

Both Toyota (including Lexus) and BMW (including Mini and Rolls-Royce) this week announced their plans to adopt NACS. Toyota will incorporate NACS ports into certain Toyota and Lexus battery electric vehicles starting in 2025, and it will offer NACS adapters to customers with EVs relying on the Combined Charging System (CCS). 

BMW announced almost identical plans. With both Toyota and BMW pledging to adopt NACS, that leaves Stellantis and Volkswagen as two of the only major automakers still holding out

General Motors, Ford, Honda, Nissan, Hyundai, Volvo, Mercedes-Benz, Rivian, Polestar, Fisker and more have already announced plans to build EVs that can tap into Tesla’s massive global network of more than 50,000 Superchargers.

Disruptive: