Dinar Posted February 25, 2023 Posted February 25, 2023 50 minutes ago, Santayana said: https://www.census.gov/library/stories/2020/07/most-families-that-received-snap-benefits-in-2018-had-at-least-one-person-working.html The Federal minimum wage is still only $7.25. Having a job doesn't necessarily mean it's full-time. You are being intellectually dishonest, working two hours a week does not mean the person is working, ignoring state minimum wage laws is also misleading. First of all, may be people should work full time? Why should I work full time to support you if you are not willing to work full time yourself (unless you are sick?) Also, you are being dishonest when you talk about federal minimum wage, since you disregard state minimum wage, given that the higher of the two applies. In NY, California, NJ minimum wage is $15 per hour, yet those states magically have around 9MM people on food stamps. New Mexico has $12 minimum wage yet 27% of the population is on food stamps, Washington DC 22%. Be intellectually honest if you want to be taken seriously. Also, you are not helping people you claim to care about by giving them welfare, you destroy them. Look at Daniel Patrick Moynihan's warnings in the 1950s and 1960s.
Santayana Posted February 25, 2023 Posted February 25, 2023 Did you even read the link? I made the statement that most people on SNAP have jobs, and you asked what I based that assertion on. Your original statement implied that anyone who receives SNAP benefits must be unemployed, and I pointed out that that is simply not true. Talk about not being intellectually honest. You were wrong, it's OK to admit it. Whether or not the program is a good idea is a separate discussion, but that debate should at least use objective facts.
Spekulatius Posted February 25, 2023 Posted February 25, 2023 3 hours ago, TwoCitiesCapital said: It basically is from a federal income tax perspective. Most people under 70k pay 0 federal income tax after considering deductions, credits, and refunds. Romney wasn't making it up when he said half the country didn't pay income tax. Depends. If you are single with $70k income, you pay ~$8.2K in Federal plus state taxes. With one dependent, it’s $6.2k plus state taxes.
Dinar Posted February 25, 2023 Posted February 25, 2023 7 minutes ago, Santayana said: Did you even read the link? I made the statement that most people on SNAP have jobs, and you asked what I based that assertion on. Your original statement implied that anyone who receives SNAP benefits must be unemployed, and I pointed out that that is simply not true. Talk about not being intellectually honest. You were wrong, it's OK to admit it. Whether or not the program is a good idea is a separate discussion, but that debate should at least use objective facts. I did read the link, which was short on actual facts and long on misleading claims. I did not see details/statistics that mattered, for instance how many hours per work the workers worked, how many adults in the family unit, and how many kids, and other relevant facts. Who cares if two adults in the family work, but work 5 hours per week? That is not working, when the regular work week is 40 hours per week. Working two hours a week is not having a job. You stated that it is hard to get by on 15K without food stamps and many people who work earn less than $15k per annum. However, anyone that actually works a regular work week, makes at least twice as much in NY, NJ, CT, California, and probably many other states as well. Be intellectually honest and say, I support food stamps for those who choose not to work 40 hours per week, and then I will not argue with you because that is a difference of opinion. But to claim that someone who works cannot make $15k per annum and thus needs food stamps without specifying that even one hour of work per week is working in your definition is misleading. When people talk about working, full time is implied unless specified otherwise. I am all for helping those who cannot help themselves. I am willing to pay taxes so that kids in bad neighborhoods can go to good schools and have safe neighborhoods. What I am not willing to pay taxes is to support adults who refuse to work or breed like rabbits and expect the rest of us to support them and their kids.
Santayana Posted February 25, 2023 Posted February 25, 2023 I notice no mention of Texas, North Carolina, Wisconsin, Pennsylvania, or any of the other many states where minimum wage is $7.25 and full-time work will get you guess how much per year....
SharperDingaan Posted February 25, 2023 Posted February 25, 2023 Like it or not, the SNAP program does a great deal of good. These folks are buying food - whatever they cannot get from the foodbank, supplemented from a supermarket in a dignified way. If it's a good month maybe they can avoid the foodbank entirely, leaving more for others. Nobody wants to have to use a foodbank or SNAP stamps. A great many support elders in varying degrees of poor health, and are mothers supporting small kids going to school. Rough neighborhoods, and eldercare/child care demands are not conductive to full time jobs. The minimum wage job is also often NOT in the neighborhood, only a few hours/week at best, and net of bus fare and deductions - often a wash. Net of the safety considerations, SNAP is often the better choice for hard working folks just doing the best they can. It is well understood that SNAP contributes to community dependency, but it also enables fairly large numbers to escape the drug dealers and the poverty trap. A good portion of the US military is sourced from these communities; and for those who can avoid getting killed or maimed in state service, the resultant ticket will get you a way out and a better life. The American dream. Of course, not everybody makes it, that's life. But until there is a better, and functioning, solution at the bottom of the food chain, SNAP is not a bad thing. SD
nafregnum Posted February 26, 2023 Posted February 26, 2023 Forgive me please, reasonable people of all political leanings. My intent in mentioning SNAP had nothing to do with starting quarrels. Without wishing to offend any of you, I think the intelligent statement SD made is good enough that I'd be super grateful to shift the focus to questions related to investing: Q1. Is the impact really 2.5 billion per month or was my napkin math wrong? I found this FRED graph that makes it look like SNAP during COVID was giving out a lot more. The 2019 number was $54.7B and the 2021 number was $150.4B. We probably won't see the 2022 number until October (implied from the Updated field on the graph) If the SNAP number for 2023 drops down around $60B/year then that'd be a $90B drop from 2021 levels, meaning possibly as much as $7.5B/month, though that seems hard to believe for some reason. https://fred.stlouisfed.org/series/TRP6001A027NBEA Q2. Will the disappearance of $2-7B/month of grocery money have a real effect in the US economy? Will its effect extend to other industries or will grocery stores be the main losers? Are restaurants going to take a gut punch as millions of people tighten their belts and eat only at home? https://www.ibisworld.com/industry-statistics/market-size/supermarkets-grocery-stores-united-states/ It appears the grocery industry has around $800B in revenue per year. Losing $25B to $75B in the 10 remaining months of 2023 compared to 2022 is a loss of around 3 to 9% of revenue. Will that have an disinflationary influence on food prices? I'm inclined to think so. But it'll hurt grocery store profits, right? I went to check the price of Kroger puts, just out of curiosity. So here's the July expiration puts, to satisfy anyone else's curiosity since I just looked it up. They report Q4 on March 6, and I am guessing they'll talk about the end of the COVID SNAP benefits as they forecast leaner times ahead. This graph from the ibisworld.com link seems to think 2023 will see 0.9% growth in the size of the grocery industry as a whole, but that bump in 2020, 2021 and 2022 looks to me like that was probably the COVID emergency allotments, and perhaps 2023 will see real declines in grocery spending. Q3. The biggest question for me as an investor is whether all this is priced in already. I never really look at grocery store stocks, and I don't know how quick the market is at pricing in this kind of thing. Kroger has a P/E of 13 and a dividend yield of 2.3% so it doesn't seem expensive. Maybe there are some overpriced "darlings" of the grocery industry I don't know about that have further to fall because of the upcoming reductions in grocery spending. The Rube Goldberg machine of macro economics is a riddle wrapped in a mystery inside an enigma, but it's still fun to make _some_ guesses. Q4. What other interesting side effects do you foresee?
Spekulatius Posted February 26, 2023 Posted February 26, 2023 I don’t think if SNAP goes away that this necessarily means less grocery purchases. Remember that money is fungible. The people who get SNAP my still buy the same amount of groceries but have less money left on spent on cigarettes , lottery tickets and booze or other things. I know this is a bit cynical, but look at how poor people spent their money. In any case, I don’t think the impact will be that straightforward and limited to groceries.
SharperDingaan Posted February 26, 2023 Posted February 26, 2023 (edited) Look around you, people are buying smaller quantities and less of the meats as inflation raises the price of groceries. There isn't the budget to just pay more for everything, so you pay the same as you were and just take home more 'no name' brands, in smaller packages. Minimal change in revenue. SNAP payments aren't going to fall much from Covid lockdown levels, if only because there are now both more recipients and inflated costs. As long as you can qualify, SNAP stamps can replace grocery spend, freeing cash up to pay for higher rent and utilities, etc. Grocery stores rely on size, and the net addition of new stores. The bigger the store the cheaper the rent, and the greater the grocers collective buying power. But when everyone is now big, the solution is consolidation into bigger still and further out of town. Costco's 4-5x current size, and customers picking directly from the warehouse pallet. A Whole Foods continues to do well. Their custom is largely price inelastic, and just buys $150/month more of high-end groceries while saving $250 on going out less. If more reasonable people do not shop there, we really don't matter. Luxury goods equivalent. SD Edited February 26, 2023 by SharperDingaan
Intelligent_Investor Posted February 27, 2023 Posted February 27, 2023 The interesting thing is that a dozen eggs at my local Whole Foods is now cheaper than at my local Walmart/Kroger/Aldi/Albertsons
TwoCitiesCapital Posted February 27, 2023 Posted February 27, 2023 17 minutes ago, Intelligent_Investor said: The interesting thing is that a dozen eggs at my local Whole Foods is now cheaper than at my local Walmart/Kroger/Aldi/Albertsons I noticed this as well. I've been paying $3.50/4.00 per dozen for large, organic, cage free eggs from my local grocer for years now. And they're the same $3.50-4.00/dozen today. The typical dozen of small white eggs that used to be quite a bit cheaper is now $5+/dozen sitting right next to them.
Ulti Posted February 27, 2023 Posted February 27, 2023 On 2/25/2023 at 11:23 PM, SharperDingaan said: A Whole Foods continues to do well. Their custom is largely price inelastic, and just buys $150/month more of high-end groceries while saving $250 on going out less. That's me ... rarely go out ....its getting to be price per unit cost at whole paycheck is about the same as publix
fareastwarriors Posted February 27, 2023 Posted February 27, 2023 31 minutes ago, Ulti said: That's me ... rarely go out ....its getting to be price per unit cost at whole paycheck is about the same as publix Whenever I go to Florida to visit friends, I shop at Publix and is always surprised at how expensive that place is. And I come from expensive SF Bay Area. I don't get the hype.
Ulti Posted February 27, 2023 Posted February 27, 2023 convenience.... i can walk ... but having a pisceterian diet... i'm doing most of the shopping at the local farmers market....almost the same cost
Castanza Posted February 27, 2023 Posted February 27, 2023 Anyone else see grocery stores just becoming warehouses with pickup lanes over the next decade? I can't remember the last time I went in the store to get a full order of groceries. Instacart is way too convenient and Wegmans charges no fee. Fill the cart throughout the week, place my order and have my pickup time set so I can swing by after the gym. Comes neatly packed in paper bags. Never had an issue with broken eggs, expired or wilting veggies and fruit. Although one time early on instead of getting a bunch of 6 bananas I got 6 bunches of bananas... Can imagine stores might save costs on employees, store space, and spoiled food that some lazy customer decided to :put back" on some random shelf. Some items are slightly more expensive but it's like $0.10 more or something negligible.
SharperDingaan Posted February 27, 2023 Posted February 27, 2023 (edited) Lot of grocers do local delivery for a $5-10 fee. Similar to instacart, but groceries at the store price, and delivered to your door at a pre-set time - even when it is in the middle of a snow/ice storm. Still seen as a 'convenience' by many, but the real market is the elderly/infirm aging in place at home. Lot different to the Uber Eats, or DoorDash model. Cashiers cost, and their real value is security. Live in a rich neighborhood and there are few cashiers, simply because customers don't steal enough! Customers simply check out their own stuff, and the cost of their theft/hour is less than the cost of a cashier per hour. Paying someone to just scan goods has zero value add. All that is really needed is a warehouse on cheap land, a good on-line portal, robotic loaders/sorters to unload/stack/load, a reliable fleet of electric delivery vans, a roof full of solar panels, and the odd windmills. Charge an average 20% less for everything, keep a small quantity of manual labor on hand for resilience, and ideally don't permit any customer pickups or in-store shopping as well. Combine bigger players together, save 35% and give back 20% in discounts. SD Edited February 27, 2023 by SharperDingaan
coc Posted February 27, 2023 Posted February 27, 2023 On 2/8/2023 at 7:28 AM, dealraker said: As to buy/hold investing. I worked full time for a salary from 1978 until 1994, I've not worked for $ since. But only towards the end of my work life did I make enough money to fund an 401K. So I contributed a total of $30,000 over the 1988 to 1994 time frame while still in business. I never made over $45,000 working in my entire life. This isn't the money I inherited, nor does it have anything to do with our foray into the insurance business that created what is my largest personal holding the result of merging with AJ Gallagher. This is piddley stock investing from the small contributions to the 401K. But in any event there were no sales of stock in this account ever and it began with a total of $30k to a 401K. I think the return over the entire lifetime is over 13%. I transferred it to Wells obviously in 2011. Buy and hold doesn't have to mean boring or loser as nearly all project it to be. 13% adds up over time. I am simply presenting an example. We have those stating, actually screaming, here to their investors to buy Bitcoin and sell stocks. My reply is, "OK...but I'm not getting poorer holding stocks either." Since Performance Inception +15.27% $126,513.16 +$118,684.57 +$1,033,594.13 $1,278,791.86 YTD +6.59% $1,199,701.17 $0.00 +$79,090.69 $1,278,791.86 2022 +0.81% $1,190,031.46 $0.00 +$9,669.71 $1,199,701.17 2021 +20.59% $986,824.87 $0.00 +$203,206.59 $1,190,031.46 2020 +12.82% $874,655.60 $0.00 +$112,169.27 $986,824.87 2019 +24.56% $702,183.47 $0.00 +$172,472.13 $874,655.60 2018 -1.26% $711,136.40 $0.00 -$8,952.93 $702,183.47 2017 +12.33% $633,078.14 $0.00 +$78,058.26 $711,136.40 2016 +15.75% $546,940.28 $0.00 +$86,137.86 $633,078.14 2015 +0.15% $546,101.43 $0.00 +$838.85 $546,940.28 2014 +19.64% $456,465.26 $0.00 +$89,636.17 $546,101.43 2013 +41.70% $322,142.95 $0.00 +$134,322.31 $456,465.26 2012 +19.51% $269,559.28 $0.00 +$52,583.67 $322,142.95 2011 +16.33% $126,513.16 +$118,684.57 +$24,361.55 $269,559.28 Performance Disclosures and Definitions Dealraker, this is an account with a few hundred stocks (just reading your other posts) and you managed to outperform by a few points? That's pretty interesting. Can you share what % of the total is in the top, say 10 stocks?
StevieV Posted February 27, 2023 Posted February 27, 2023 17 minutes ago, SharperDingaan said: Paying someone to just scan goods has zero value add. I don't know. I really, really dislike self-checkout. My local grocery store went to 1 cashier lane, got a ton of complaints and long lines and quickly reversed course. I was going to switch grocery stores to be able to have a cashier.
SharperDingaan Posted February 27, 2023 Posted February 27, 2023 (edited) The reality is that tech drives to full automation and uses price to get there, whereas people are social. Where I see automation, I deliberately use the cashier and deliberately pay using a credit card - to inflict as much cost as possible. Whereas in a small mom/pop with the kids behind the till, I will deliberately do the impulse buy and pay in cash wherever I can - to reduce cost as much as possible. Just one person doing this, is no big deal. But scale it up in the thousands, and it bites. The social over robotics. SD Edited February 27, 2023 by SharperDingaan
fareastwarriors Posted February 27, 2023 Posted February 27, 2023 As a former cashier in college, I took pride in being friendly, polite, and efficient. I was consistently ranked highest items per minute among all cashiers at Whole Foods in White Plains, NY! But too many of my coworkers should not had been customer facing...
Spekulatius Posted February 28, 2023 Posted February 28, 2023 16 hours ago, Castanza said: Anyone else see grocery stores just becoming warehouses with pickup lanes over the next decade? I can't remember the last time I went in the store to get a full order of groceries. Instacart is way too convenient and Wegmans charges no fee. Fill the cart throughout the week, place my order and have my pickup time set so I can swing by after the gym. Comes neatly packed in paper bags. Never had an issue with broken eggs, expired or wilting veggies and fruit. Although one time early on instead of getting a bunch of 6 bananas I got 6 bunches of bananas... Can imagine stores might save costs on employees, store space, and spoiled food that some lazy customer decided to :put back" on some random shelf. Some items are slightly more expensive but it's like $0.10 more or something negligible. I have yet to use instacart. For us here, it seems too expensive to use. We also do a trip to Costco every two weeks and grab most of our groceries there. As for eggs, we buy these at Costco too mostly. I checked and we paid $5.99 for two dozen XL eggs there, so it still beats Whole Foods.
Castanza Posted February 28, 2023 Posted February 28, 2023 1 hour ago, Spekulatius said: I have yet to use instacart. For us here, it seems too expensive to use. We also do a trip to Costco every two weeks and grab most of our groceries there. As for eggs, we buy these at Costco too mostly. I checked and we paid $5.99 for two dozen XL eggs there, so it still beats Whole Foods. It's only 1.99 for pickup if you're not an Express member. I figure 1.99 is worth the hour I would spend once a week at the store.
Xerxes Posted February 28, 2023 Posted February 28, 2023 On 2/24/2023 at 2:47 PM, SharperDingaan said: It is pretty clear that from now through the end of May, Canadian CPI is going to drop to around 4.7% from the current 6.8%. Simply because the cumulative Feb-May 22 change of 2.1% drops off, and is replaced with Feb-May 23 change, where the average monthly change has trended at near zero for the last six months. Similar story in the US. https://www.bankofcanada.ca/rates/price-indexes/cpi/ The yield curve drops 200bp+, millions of people instantly have lower mortgage payments, and all just in time for the nice weather of summer. Getting below 4.7% doesn't happen unless we have successive monthly deflation ... so keep firing those tech bro's in the hundreds of thousands, and speed it up! It would be pretty surprising if we didn't have a nice summer rally, but that's not the 'story' being sold. Opportunity is knocking SD The 10-year bond yield will have an effect of the fixed-rate mortgage. Therefore "new" mortgage buyers (not existing who got their mortgage) will see a windfall. However, variable-rate mortgage is hostage to the central bank rate changes. So you assertion about "instantly lower mortgage payment" is only valid if central bank lower rates and it applies to variable-rate mortgage.
SharperDingaan Posted February 28, 2023 Posted February 28, 2023 (edited) 'So you assertion about "instantly lower mortgage payment" is only valid if central bank lower rates and it applies to variable-rate mortgage.' Canadian mortgages are primarily priced off the 5-yr Canada bond rate, and 'reset' every 5 years or less; dependent upon the agreed term. The 5 yr fixed-rate mortgage just prices at a higher premium to the Canada bond than the 5 yr variable mortgage does. Alternatively, a HELOC will typically price at the T-Bill rate plus a spread, and reset every time there is a significant change in rate. Agreed all variable and HELOC payments instantly drop as the BoC lowers rates. However the payment on ALL MATURING, fixed rate mortgage amortizations ALSO instantly drops as the BoC lowers rates. 1/60 of all 5 year fixed rate mortgages, 1/48 of all 4 year, 1/36 of all 3 year, 1/24 of all 2 year, 1/12 of all 1 year. And that is just the amount THIS month ...... it ALSO repeats every month until the end of the mortgage term. A fixed rate mortgage may reset at a higher rate than it currently has, but it is still going to reset at a rate lower than it would have been at before the BoC reduced rates. The modeling needs to be more sophisticated, than simply using a duration x bp change x o/s principal. SD Edited February 28, 2023 by SharperDingaan
Red Lion Posted February 28, 2023 Posted February 28, 2023 15 hours ago, StevieV said: I don't know. I really, really dislike self-checkout. My local grocery store went to 1 cashier lane, got a ton of complaints and long lines and quickly reversed course. I was going to switch grocery stores to be able to have a cashier. I really hate BAD self checkout. Our raleys/belair is an overpriced chain that has the worst self checkout I’ve ever seen. Sam’s club on the other hand I’d seemless.
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