Is Everybody Broke?

Thursday, February 1, 2024 3:51 PM

What is normal? Does anyone know what is normal these days? I’m not talking about mental health I’m talking about everything else. Price of food, vehicles, housing, flights, gas, vacations, healthcare, salaries for jobs? I don’t think anyone knows these answers. Pricing on used cars has dropped like a rock in a lake over the past 6-8 months. I see new car lots with lots of inventory. I see food pricing go down, then up, then down. Same with just about everything else we all purchase. I know my suppliers still can’t get their act together when it comes to production. COVID was four years ago!!! Why can’t anyone figure out what their new normal is? I understand this is the case over many industries. I’m talking a little tongue in cheek. I understand why industries, corporations and businesses can’t figure out what “normal” is these days but on the other hand I’m astonished they can’t. Does it even matter? I ask that because it now seems everyone is broke. The high cost of living the past 4 years has finally caught up with many people. Just go dig into the news and see how many people are defaulting on loans, how many people are behind on student loan payments since they have started back up. It also doesn’t help that this is an election year and in that case many businesses are afraid to make any major moves until they figure out who the president will be for the next 4 years. I talked to a buddy the other day who is the manager of a large grocery store. He said their sales are off 15% so far in 2024. The first time EVER the store has been down in its 15 year history. He said foot traffic is about the same, people are just buying less. I know of several small local businesses in my area who won’t be here by the end of 2024 if things don’t change fast. Two things that contradict everything I just said. 1. Stock market still kicking ass long term. 2. Vegas had its biggest gambling month EVER in December 2023 (see link below): [view link]

52 comments

'What is normal? Does anyone know what is normal these days?' This is normal, not the new normal, just the regular normal. Covid, lockdowns, supply chain shortages which led to the start of the downward spiral laid the groundwork for gougeflation. After increasing their profits the people that were able to overcharge us for everything using covid etc as an excuse aren't going to give it back. There are exceptions but overall high prices are here to stay. Sure lots of people are hurting but at the same time many are prospering.

TheeOSU

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3 months ago

SNAFU Situation Normal All Fucked Up

twentyfive

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3 months ago

My salary has increased in a way that corresponds with inflation. Overall, my discretionary spending is up even after upping my allocations to retirement and rainy day funds. That's not to say I'm rolling in dough or anything, I'm just not stressed out when egg or gas prices wobble up or down. I'm getting older, so I get sticker shock on a lot of things I buy infrequently. Like fast food prices, or concessions at sporting events and shit. Again, I attribute that to my age as much as volatility. When I was younger, I remember hearing the same shit from the OG's "$5 for a fucking beer? are you kidding me!?!?" and now I'm saying the same shit, only its 15 instead of 5. But I'm not sure I'm normal, I got lucky since I wasn't impacted much with the last recession I had money to invest when things were down. Most of the moves I made back then that everyone in my life said were crazy are now the things insulating me from the current chaos.

Dolfan

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3 months ago

Suppose you own a liquor store, and one night you're closing up. Bob the Alkie starts pounding on the locked door, saying he'll give you $100 for a bottle of whiskey, so you let him in and sell it to him. You have 100 bottles of whiskey in stock, so, since the last one sold for $100, you decide you've got $10,000 worth of whiskey. If that seems idiotic to you, remember that's how the stock market works. Bull markets are always bubbles. You only find out how big a bubble when they burst. Real estate is a little better, but not much. When you hear about cities where houses are $750K+, people there rarely sell their house. I think studies have show that lower-income people tend to gamble more. It's funny to me, that we've got so many people who whine about being broke, but minimum wage is a joke. It's like I'm so victimized because the gas that I put in my giant truck that gets 3 miles to the gallon is expensive, but fuck the people who can't put a roof over their heads.

ilbbaicnl

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3 months ago

Yes a lot of people are broke right now. I work in the credit department of a bank and the numbers from Q4 of 2023 are very concerning. The delinquency rate (percentage of accounts at least 30 days late late on payments), net credit loss (percentage of accounts that wither charged off at 180 days delinquent or filed for bankruptcy) and bankruptcy rates on our accounts are all at their highest level in 5 years. The average outstanding balance on our credit card accounts are nearing their all-time high when adjusted for inflation. The percentage of customers who are making only their minimum payment is also nearing all-time highs. We have also seen the average credit scores of our customers drop from 685 at the start of 2023 to 645 as of December 31 despite a mid year shift requiring higher scores to open new credit accounts. In speaking with colleagues in other departments the average balance in both checking and savings accounts has been dropping for the past 18 months and started dropping more sharply around September of last year. Our bank has also seen in uptick in early withdrawals from CDs in Q4 as well. The one upside is that average balances in our 401k, IRA and other investment accounts are up due to decent returns in the market. From listening to earnings calls from a few competitors last week these trend is repeated among most banks. That adds up to a lot of people who are struggling to get by. A lot of banks, including the one I work for, are going to be tightening who they lend to this year and that is going to make it even tougher on those that have been barely getting by because now they are going to have a much tougher time getting credit if an unexpected expense comes up and they don't have enough cash in the bank to cover it.

whodey

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3 months ago

There’s no such thing as free money for everyone. The government printing money(a commodity) and putting a portion in people’s pocket is a loan. The repayment terms are inflation and it’s loan shark rates. Too many people don’t understand this and thereby are harmed by one big happy hooray then a thousand paper cuts. Fiduciary/inflation ignorance is widespread. For example, anyone suggesting more free checks or forced increases in minimum wage.

Brahma2k

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3 months ago

A data point, only 44% of American households can pay an unplanned $1,000 expense without going into debt. The key takeaway then is first save up $1,000 and hold that for any unplanned expenses. If you ever dip into the $1,000 unplanned expense fund, stop everything else and build up the unplanned expense fund.

LVclubber

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3 months ago

Lots of great comments. Dolfan - I get what you’re saying I feel the same way. I used to never check the prices on anything when shopping and then during COVID when it was thrown in your face everyday on the news I took notice. I was largely unaffected by COVID. No stimulus checks, work continued the same as usual, so I feel I am largely unaffected. Some of my friends that own business are sweating right now and I worry for them and their staffs. Whodey - what you said here is very alarming. I have heard similar things but I think a lot of people ignore it or worse, do not want to talk about it because they are in the delinquent group. I have a relative that’s in banking as well (same state as you) and they’ve been saying the same thing.

shailynn

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3 months ago

“A data point, only 44% of American households can pay an unplanned $1,000 expense without going into debt.” I wonder what percentage that was pre COVID / during COVID / 4 years post COVID? Would be interesting to see how much the 44% has changed in either direction.

shailynn

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3 months ago

It's true that minimum wage cannot be increased until inflation comes down. But the last increase was in 2009. One third of US workers make less than $15 per hour. The Fed (a government agency) sets interest rates as low as possible, without causing inflation, for the general good. So, the government could gradually increase minimum wage, as long as it didn't cause inflation. For the direct benefit of the truly broke, but also for a better society in general.

ilbbaicnl

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3 months ago

I think inflation affected people's purchasing patterns. There's definitely stuff I could afford that I just have sticker shock on the value

JamesSD

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3 months ago

"Stock market still kicking ass long term." Remember, the equity market is not a proxy for economic health. We are still in a "bad news is good news" cycle because poor economic data brings an end to tighter monetary policy, sooner. Even a single stock does not correlate well with the fundamentals of the underlying company. They can diverge greatly for many reasons over even a long period of time (years). Also, it is true that elevated multiples in equities adds to the wealth effect, but it's disproportionally skewed to wealthy people who actually own stocks. So, it means that some people have more money, but it doesn't say much about the underlying economy.

5footguy

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3 months ago

“Is Everybody Broke?” — Well, if you believe some of young girls on YouTube - the answer is no. (Not that I do). I seem to get a constant feed of YouTube videos of guys walking up to strangers and asking how much money they have in the bank. The answers range from $5 to huge amounts. If they are telling the truth - and that’s a big IF, every marginally cute girl is on Only Fans making huge bucks. There were two cute girls who claimed to be making $10,000 per month selling pictures of their feet. They said they had over $100k in their checking accounts

motorhead

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3 months ago

I think the richest 5-10% are doing very well, but everyone else is hurting and being very careful about spending their money. CNN had an article Tuesday saying half of US tenants can't afford their rent. I think the average auto insurance went up about 15% year over year. Factor in utilities, groceries, and car maintenance, and most people have no money left for vacations, strip clubs, bars, date night, etc. Credit card debt is at a record high. People that can't get credit cards are using "buy now, pay later" just to buy groceries and toiletries. In my area, there was a stupid idea to build more casinos, thinking it would create more jobs and bring in more tax revenue. Now the casinos are oversaturated, and there are only so many gamblers out there. Now, the degenerates are just spread thinner across the growing number of casinos. When people are barely getting by, things like concerts, movies, eating out, and sports games are the first thing to be cut out. I saw a lot of strip clubs close firsthand in the last year or two. I have seen stories about food banks and soup kitchens not having enough food to feed people anymore. The amount of homeless and hungry people has doubled or tripled in some areas, while donations to support these charities have fallen. Some stocks are blowing out earnings (Amazon, Meta), while other companies are in big trouble (New York Community Bank, Peloton). Gold is not far off its all time high in December 2023. There are lots of mixed signals.

sinclair

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3 months ago

Supposedly the inflation rate for 2024 is supposed to be around 3% / way down from the 9+ % of 2022. But I don’t see it. Sure, eggs aren’t $5 a dozen any longer, but I see inflation all around me. I’m a fast food junkie so that’s my barometer of inflation. It costs $15 to go to Taco Bell or Wendy’s. $30 for a pizza. $25 for a couple of cheeseburgers at Five Guys. And the portions are less!

motorhead

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3 months ago

The core inflation and other indicators that my firm cares about are all terribly high. Sure, inflation rate has come down, but prices are still high. Household debt is still increased and savings rates are down (I think) pre-Trump. The gain in employment isn't a true gain, it's still below pre-Covid, and worse compared to last year which is crazy. As for me, I made more money last year than pre-Covid, but adjusted for inflation and according to my accountant, I am spending more because thing cost more.

chiefwiggum

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3 months ago

Personally I think a lot of this is sticker shock, it wasn't so long ago when everyone was complaining about how much everything cost, and that was pre-covid, before this round of inflation we just had. I'm retired a few years now and truthfully my financial situation hasn't changed much, I bitch about the cost of everything just like most, yet I still spend on many of the same stupid things I always did, and crazy as this sounds my financial accounts are growing at a faster rate then ever. The world is still turning, and where I live the luxury goods are selling like hotcakes, amazing every other new vehicle is a Mercedes, a BMW, or an Audi, very few American cars around here, the restaurants are packed with lines at the better places for dinner, the mall is crowded on the weekends, dozens of Amazon, UPS and Fed Ex delivery trucks making deliveries seven days a week, Uber Eats and Door Dash vehicles causing lines to get in to the gated communities every evening, I don't know how to explain what's going on with our economy, all I know is my own economy is just fine.

twentyfive

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3 months ago

Yeah I mean I do see that a lot of things have gone up, but honestly shit's still very good in America imo. I think the people with the most problems either don't have a career or maybe they got good income but are overleveraged.

blahblahblah23

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3 months ago

The most shocking thing I have seen on this thread is 25 saying "the mall is crowded on the weekends." I don't remember the last time I was in a mall or even saw a mall parking lot even 25% full as I drove by it. Three of the six large shopping malls around greater Cincinnati have closed in the past 2 years because everyone, especially younger people, are doing so much of their shopping either online or at small locally owned boutique shops.

whodey

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3 months ago

^ You should come down to South Florida check out Town Center in Boca Raton, or Sawgrass Mills in Sunrise, our malls here are busy most weekends or check out, Whole Foods even Costco those stores are packed down here not just weekends but all week long

twentyfive

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3 months ago

^ it’s a big country, many places are doing better than ever, some not so much.

twentyfive

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3 months ago

One good saving grace we have is all these illegals that we now have to pay for with all our tax money (instead of you know, maybe having some of that back to help the working folk out) Damn that healthcare and social security for these new arrivals is gonna be expensive as shit, wow. What kind of fucking asshole would let all these people in, holy shit.

Muddy

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3 months ago

^ well at least you have someone to snuggle with when you’re sleeping in a Walmart parking lot!

shailynn

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3 months ago

The stock market is going to be fine as long as nothing is scaring people with stock in major corporations. It has nothing to do with whether regular people can afford food and housing. The stock market is near its highest mark ever, and wages are pretty much where they were 50 years ago.

Cunnbunn

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3 months ago

Actually in my suburb the fucking mall and their parking is fucking crowded, but I suspect it has to do with the fact we only have one indoor mall for a county of about 400kish last I checked. Also Portland is too much of a cesspool for a proper indoor mall so it helps suburbs shopping centers to thrive.

blahblahblah23

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3 months ago

Wages where they were 50 years ago? Ok I am too lazy to do research, but I highly doubt that it was normal for regular nurses (not practitioners/anesthetists or whatever else) to be making 6 figures 50 years ago? There's also a fuckton of technician type jobs paying 6 figures. If this was true 50 years ago then send my lazy ass some links so I can read up cuz I cba right now.

blahblahblah23

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3 months ago

hell in some states u got regular school teachers making like 90k 100k now. i mean school teachers that get summers off yeah

blahblahblah23

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3 months ago

"wages are pretty much where they were 50 years ago." Real (inflation-adjusted) wages are higher than they were 50 years ago: https://fred.stlouisfed.org/series/LES1252881600Q

5footguy

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3 months ago

So wages are up 6.4% since 1979. While real per capita GDP has more than doubled since then: https://fred.stlouisfed.org/series/A939RX0Q048SBEA

ilbbaicnl

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3 months ago

Things cannot be that bad. Half of the population is still supporting Biden and the democrats.

shadowcat

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3 months ago

I agree with Shadowcat and the number of new vehicles on the road. Either every one is deeply in debt or they are doing well financially. Just earlier this week I was stopped at a red light watching all the vehicles pouring out of the Kroger parking lot at 5 pm. Car after car were new vehicles. Mostly Toyotas, Hondas and other imports. And the vast majority were SUV’s. A few large pick up trucks and mini vans. It struck me - where did all of the American sedans go? And doesn’t anyone drive a beater car anymore? Now, even high school and college kids have nice cars. Every kid I went to high school with drove a beater. I’m not kidding you when I saw a VW I had in college that was literally held together with duct tape the headlight brackets were so rusty

motorhead

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3 months ago

Orwell predicted that Government figures would all be lies in order to control people and that people would be encouraged to believe that these figures meant everything was good, when in fact due solely to the Democrats, this country has zero chance of a successful future. 2+2=5 if the Democrats tell their supporters to believe that.

skibum609

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3 months ago

@shadow some people just understand the phrase "out of the frying pan and into the fire". How exactly is Trump going to make the economy better? Just with the magic power of his orangeness?

ilbbaicnl

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3 months ago

If it were a simple matter of being broke, I think I'd see more subcompact cars (like the one I drive) out on the roads. If people want to take a YOLO approach to their finances, fine. That's not inherently wrong, just a personal choice one can make in free society. But those people should not feel victimized by the consequences of that choice. My expectation of the gubment is, what are you going to do for people making $40K or less? They can't have a lot of financial security, no matter how careful they are with their $.

ilbbaicnl

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3 months ago

"So wages are up 6.4% since 1979. While real per capita GDP has more than doubled since then:" The point is that wages have outpaced inflation. So, the median person buying the median stuff has more purchasing power. What exactly is your point? It seems you may be implying that there's a huge wealth gap, to which I would reply "duh," but I'm not sure what that has to do with the discussion.

5footguy

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3 months ago

"How exactly is Trump going to make the economy better? Just with the magic power of his orangeness?" What's wrong with the economy?

5footguy

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3 months ago

The economy can always be better. If we all could afford extras from blah, that would be a really good economy. The point is, higher productivity with relatively stagnant wages mean those whose income is primarily from investments are getting by far most of the additional goods and services. If they're plowing it all back into more investment, that would be one thing, but seems dubious that's what's happening.

ilbbaicnl

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3 months ago

I mean just because I can't afford a fucking castle with a moat full of alligators doesn't mean the economy sucks. It means I'm fucking lazy and should get off my ass and go to work hahaha

blahblahblah23

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3 months ago

White males who favor prostitutes will now tell us that the economy is great lol. Remember when the explosive inflation under Biden was a blip due to supply chain issues and prices would go down? Lmao. The best thing about this terrible economy is that while the Democrats pretend to help the poor, white liberals are getting richer every minute, while the poor suffer. Wages have outplaced inflation if you believe lying Joe Biden the Plagiarizer and groper of women, but in the real world people are suffering and progressives are laughing at them as they collect their votes.

skibum609

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3 months ago

Most people, including a large minority of Biden supporters, rate the economy as "fair" or "poor." We're a higher economic tier than average; you have to be to partake in this hobby. The average American making $50-75k is a lot harder up than we are.

PuddyTat69

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3 months ago

“Is everybody broke?” Apparently not EVERYBODY? The four airports immediately around Las Vegas have about 475 parking spaces for private jets - and they are all full this week. (And poor Tay Tay can’t find an open spot)

motorhead

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3 months ago

People are spending less as a result of the company-induced inflation. Companies are raising prices under the guise of inflation, but it's mostly a sham, as they know they CAN raise prices, so they DO. The result? People buyer fewer items, or downgrade quality/brands. I planned to purchase a new vehicle a year ago. Between the "give me a deposit, and me might be able to get you a vehicle in 6 months" nonsense, and "we charge $x above MSRP" scam, I chose to forego a new vehicle, and instead ensure I properly maintain my current vehicle in an effort to maximize its life. I've also reduced dining out, as I find there is much price gouging occurring. It's simply not reasonable anymore. Do you want a smaller profit in exchange for more customers, or do you want to limit number of customers with your exhorbitant prices, and have difficulty absorbing your fixed costs? There becomes a point where customers push back over excessive pricing. Yes, there's inflation. But, I feel that companies are using the inflation news to push up prices even further.

funonthaside

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3 months ago

^ gouging has become commonplace.

twentyfive

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3 months ago

It rarely makes sense for companies to raise the price of a product, and sell fewer. To begin with, lower volume means fewer economies of scale, so higher unit cost (cutting into profit). And in a market economy, your competition will undercut you. Government regulations could be reformed to make our markets work better. But there are usually lobbyists standing in the way of that happening. And neither party has a good record for standing up to lobbyists. And, the market system isn't a perfect one, just the least bad one so far. It can have inflationary or deflationary spirals, bubbles, and it can't adapt quickly enough to catastrophes like wars and pandemics. It's a wolf, not a domesticated dog. If people are dumb enough to vote for anyone who claims they can make a wolf shake hands and roll over on command, they are too dumb to keep a republic.

ilbbaicnl

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3 months ago

This comment will be one of the most insane views on the economy. As I’ve said in the past I’m a sales rep and my company sells products. Prior to COVID we routinely offered discounts, to the point that if we didn’t offer discounts our customers didn’t want to product or they would buy much less if discounts weren’t offered. During COVID we stopped offering discounts, nobody complained and everyone made more money, because the end consumer was the one paying the price. We realized this couldn’t go on forever, I’m not sure what most of our customers thought on that matter. Im sure it was a mixed bag. As sales finally started slowing we started offering discounts again hoping it would pick sales back up. Our customers flipped out and their end consumers did as well thinking there was something wrong with the products since we were offering discounts. As a result of all of this we stopped offering discounts on some items or trimmed the discounts (example) 10% off instead of the usual 20%. The moral of the story is people are stupid, and the consumer has a very short term memory.

shailynn

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3 months ago

This reminds me of one example where some well off dude who was a landlord was trying to rent out a house in south Florida and couldn't rent it out for shit. He finally jacked up the price and it rented out nearly immediately. LOL!

blahblahblah23

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3 months ago

^Many years ago, I heard the same from a co-worker. He said a house in his neighborhood was for sale at a reasonable price. There was no interest. Prospective buyers probably thought the house needed a lot of work at that price. Eventually, the same house was relisted at a higher price and was quickly sold.

WiseToo

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3 months ago

^ that's the concept of Veblen Goods. The idea that a luxury item's price is what makes the item desirable in the first place.

crosscheck

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3 months ago

^ that's the concept of Veblen Goods. The idea that a luxury item's price is what makes the item desirable in the first place.

crosscheck

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3 months ago

^ that's the concept of Veblen Goods. The idea that a luxury item's price is what makes the item desirable in the first place.

crosscheck

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3 months ago

I don't do escorts, but I see something like this on escort ads. Price too low (or offer especially disgusting acts), or even sound especially desperate and the first thought is "crack/meth whore." Of course you see the same girls doing flattering photoshoots, calling themselves some exotic luxury brand, and pricing an hour of sex at $750.

PuddyTat69

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3 months ago

Government inflation figures do not take the cost of gas and food into account, so the reality is that Bidenflation, which was due to the supply chain problems and would go back down, never went down so a 20% price hike was built into everything, inflation then resumed its normal climbs, food increased exponentially and the people Progressives pretend to care about are get ass fucked by the Democrats without lube. Add in the cost of illegals and the democrats will fuck their constituents in the ass without lube and throw them into the street in 2025. My life won' t change a bit and this weekend, because Utah is getting pounded with snow we'll fly there and ski for just 2 days, before flying home. The added benefit is my carbon footprint lol.

skibum609

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3 months ago

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