Nov 28, 2023 21:46:55 GMT c said:

Speaking of raising prices, administration in the US now investigating why companies that raised their prices due to supply chain shortages have not lowered them under price gouging laws. Likely in a second Biden term there will be a push for windfall taxes under companies with artificially inflated prices.

Feels like a big nothing burger. Companies can pretty quickly point to inflation and interest rates to explain high prices. I wouldn’t expect anything to happen.

This is all tied into the price fixing investigation going on. And while they can try to explain higher costs, profit increases were far higher than increases in overall costs for many companies, many of which are celebrating quarter after quarter of record profits.

Which is what the investigation now is looking at. Did companies, along or on an industry wide level, use the pandemic based supply chain crisis to engage in advantageous pricing.

The first group was hit already from this. Egg producers got nailed for collusion. It is not just consumers pissed off about price gouging but corporations that use products that were gouged for their own products.  Very long lawsuit that expanded to include the pandemic, then dropped the pandemic side after heated court fights with plans to refile it separately.

apnews.com/article/egg-producers-price-gouging-lawsuit-conspiracy-8cd455003a3a40bab74d0f046d0f2c9d

Many states also settled with companies for price gouging eggs during the pandemic.

oag.ca.gov/news/press-releases/attorney-general-bonta-announces-settlement-smart-final-price-gouging-eggs

Nov 29, 2023 15:36:03 GMT KJ said:

Nov 28, 2023 21:46:55 GMT c said:

Speaking of raising prices, administration in the US now investigating why companies that raised their prices due to supply chain shortages have not lowered them under price gouging laws. Likely in a second Biden term there will be a push for windfall taxes under companies with artificially inflated prices.

Feels like a big nothing burger. Companies can pretty quickly point to inflation and interest rates to explain high prices. I wouldn’t expect anything to happen.

It's pretty tough to prove price fixing, companies are in all likelihood posting record profits, that doesn't mean much because the dollar value of the profit will always rise at least by CPI. The think to look at is their margin.
If prices are rising a company could be making 4% instead of 5% and still post a record profit in dollar value.

The Biden administration either has an elementary level understanding of economics or is just doing things for popularity in itself.

This billionaires tax they are proposing is going to hurt the middle class more than the rich.
They want to tax unrealised capital gains, which means if you own a 4 million dollar apartment complex and it goes up to 5 you are going to have to pay that in tax every year, that's not a tax when you sell it, but a tax on its book value (which is problematic in itself to calculate) so in a lot of cases the investor will have to sell the asset to pay the tax.

Where this hurts poor people is that the rents on apartments can stay moderate if the investor bought and owned the property outright, if someone buys it today, then they are going to raise the rents to the level required to fund the purchase.

I'm all about closing loopholes, but taxing people on the book value of their investments is a really poor idea.

In theory the anarchist/sodalist in me is all for taxing the rich. In reality, iNCY is 100% right, it will hurt lower classes more than it will them. Most of the 1% don't have money because they are morons, they have money because they know how to keep it and make more, or they've put people in place to ensure that happens. They will always find the loophole at someone else's cost.

Nov 29, 2023 21:22:16 GMT iNCY said:

It's pretty tough to prove price fixing, companies are in all likelihood posting record profits, that doesn't mean much because the dollar value of the profit will always rise at least by CPI. The think to look at is their margin.
If prices are rising a company could be making 4% instead of 5% and still post a record profit in dollar value.

Here's an example.

One of the big two supermarkets has been called out by a grower. They purchase zucchinis from him at $1.89 a kilo, and sell them at almost $5.

At that price, they're making a profit of $3.10 a kg before CODB.

But, the market price is $2.99 and this inflated price of $4.99 has reduced demand for zucchinis from consumers.

Meaning although the big retailer is buying less, they're profiting more. It's great business sense, 100% you can't argue against that.

But the grower isn't asking for a better cut of the profit for himself or for any other growers, he asking for the big supermarkets to reduce their profit margin by dropping the prices, which will increase the demand and thus growers can supply more into the supermarkets and everyone is happy. And notably pass the savings onto the customers.

This particular grower is sitting on $80 million worth of stock and as we know, fresh produce has a short shelf life.

---

But, these supermarket buyers prey on desperate growers. I recall a story told to me by a tomato buyer - he basically low balled a grower. Then told the grower essentially he had two choices - sell it us at $X or dump it, your contract is exclusive with us. And then got his jollies out of knowing the poor bastard had to dump his crop.

Nov 30, 2023 1:03:14 GMT NATH45 said:

Nov 29, 2023 21:22:16 GMT iNCY said:

It's pretty tough to prove price fixing, companies are in all likelihood posting record profits, that doesn't mean much because the dollar value of the profit will always rise at least by CPI. The think to look at is their margin.
If prices are rising a company could be making 4% instead of 5% and still post a record profit in dollar value.

Here's an example.

One of the big two supermarkets has been called out by a grower. They purchase zucchinis from him at $1.89 a kilo, and sell them at almost $5.

At that price, they're making a profit of $3.10 a kg before CODB.

But, the market price is $2.99 and this inflated price of $4.99 has reduced demand for zucchinis from consumers.

Meaning although the big retailer is buying less, they're profiting more. It's great business sense, 100% you can't argue against that.

But the grower isn't asking for a better cut of the profit for himself or for any other growers, he asking for the big supermarkets to reduce their profit margin by dropping the prices, which will increase the demand and thus growers can supply more into the supermarkets and everyone is happy. And notably pass the savings onto the customers.

This particular grower is sitting on $80 million worth of stock and as we know, fresh produce has a short shelf life.

---

But, these supermarket buyers prey on desperate growers. I recall a story told to me by a tomato buyer - he basically low balled a grower. Then told the grower essentially he had two choices - sell it us at $X or dump it, your contract is exclusive with us. And then got his jollies out of knowing the poor bastard had to dump his crop.

I know nobody gives a shit at all, and people just see me as a conservative blow hard, but I am not.
There is a system that has to work, you can pull out examples like you have on a micro number, but we can look at the actual numbers as they are all published:




You can read the outrage in the article

The country’s biggest supermarket chain, Woolworths, has recorded a dramatic lift in margins for its Australian food business to well above pre-pandemic levels, underpinning a strong profit result amid a cost-of-living crisis.

You can read the full article here: www.theguardian.com/business/2023/aug/23/woolworths-posts-162bn-profit-with-dramatic-lift-in-margins-despite-cost-of-living-crisis

So let's look at the numbers that Woolworths reported:

www.woolworthsgroup.com.au/content/dam/wwg/investors/reports/f23/full-year/Woolworths%20Group%20F23%20Profit%20Announcement.pdf



The numbers don't lie, the profit is 6% of sales, people look at the cost of zucchinis on a farm and then overlook the incredible overhead that comes with distribution and sales all over Australia.
I don't think anyone can argue against a corporation making 6% on the amount of capital they deploy.
If we didn't have the big chains, there is a good chance the prices would be a lot higher.

Places like Aldi get their prices lower by consolidating their purchasing to fewer items, greatly reducing their requirements for purchasing managing and turning over stock.
I really feel bad for the farmers, it is a tough deal.
Most suburbs have farmers markets these days where you can go and purchase your produce directly from Farmers, usually on a Sunday, it is cheaper and always fresher.
Most people don't though... They prefer the convenience of a Supermarket, but they don't want to pay for it.
Same deal when the Supermarkets brought in the $1 a liter milk, I refused to buy because I don't want to screw the dairy farmers... But that is always the milk people buy.

Spot on, iNCY.

It's incredibly easy to downplay the significance of $1.6b as only, only.. only being 6%. Although I think it has since been revised to $1.72b.

As your article says very clearly, this is the highest margin for the groceries division recorded at Woolworths over the past decade. In addition to Woolworths now enjoying double the margins recorded by some peers in more competitive markets, such as UK chain Sainsbury’s.

Earnings from its Australian food division climbed up 19.1% to $2.87bn. (remembering Woolworths isn't limited to just Supermarkets.. there's Big W, hotels, property, venture capital, etc)

I'm a money hungry grub as much as the next, but surely and ethically during a cost of living crisis, they could be doing their part to ease the pain.

But Woolworths and ethics don't go hand in hand, I spent nearly 14 years with that cult and at the top, and even all the way down to state and zone levels there aren't a lot of nice guys left.

I've shared stories of Woolworths deliberately reducing its supply of tomatoes in stores and claiming "supply issues" and then raising the price, when in actuality they told growers they weren't interested in the abundance of supply that was available. It's smart, maybe more so, cunning. But it's also unethical. They do this more often than most people realise.

Could they aim for 5% or 4% and still post an impressive profit and ease the pressure... they sure could. But they won't.

Nov 30, 2023 6:25:06 GMT NATH45 said:

It's incredibly easy to downplay the significance of $1.6b as only, only.. only being 6%. Although I think it has since been revised to $1.72b.

As your article says very clearly, this is the highest margin for the groceries division recorded at Woolworths over the past decade. In addition to Woolworths now enjoying double the margins recorded by some peers in more competitive markets, such as UK chain Sainsbury’s.

Earnings from its Australian food division climbed up 19.1% to $2.87bn. (remembering Woolworths isn't limited to just Supermarkets.. there's Big W, hotels, property, venture capital, etc)

I'm a money hungry grub as much as the next, but surely and ethically during a cost of living crisis, they could be doing their part to ease the pain.

But Woolworths and ethics don't go hand in hand, I spent nearly 14 years with that cult and at the top, and even all the way down to state and zone levels there aren't a lot of nice guys left.

I've shared stories of Woolworths deliberately reducing its supply of tomatoes in stores and claiming "supply issues" and then raising the price, when in actuality they told growers they weren't interested in the abundance of supply that was available. It's smart, maybe more so, cunning. But it's also unethical. They do this more often than most people realise.

Could they aim for 5% or 4% and still post an impressive profit and ease the pressure... they sure could. But they won't.

You are passionate and have worked in the sector, I am not arguing your experience, only the numbers.
I am not claiming they are good people, I know they are not, my job crosses into the industry as well.
They are soulless mercenaries with a focus on running lean and profitable and to hell with any farmer, worker, or customer in their way.

I still don't think a 6% operating margin is anything much, in fact it is precarious as one hiccup can push you into a loss. My business runs at about a 15% margin when it is all washed up.
Remember that 6% is pretty close to inflation.
You are also assuming that all increase in sales is due to price hikes and not an increase in volume.
Yes, Woolworths could drop their margin to 4%, but it wouldn't make much difference to the prices.

Revenue is 6% of EBIT if they dropped there sales margin to make it 5% it would be about a 1% price reduction in a Zucchini.
That's how skinny the numbers are.


I am not saying it is good, or that it is right, but that is how the numbers work

Nov 30, 2023 9:29:36 GMT iNCY said:

You are also assuming that all increase in sales is due to price hikes and not an increase in volume.

Volume or... 'items' are a hot topic. 

The reason for tracking and budgeting items was, it dictated labour hours. The more items you process, the more labour need. Nothing revolutionary. As opposed to solely basing a wage budget on a percentage of your sales budget. An example, a single $300 item takes less time to process through the register than 200 $1.00 items. Hence why labour hours x items are the key to rostering. 

Up until I left the business approx. a year ago, items were tracking down, despite sales tracking up. Many a Store Manager would passionately argue for " more hours " or more money to spend because " sales were up " and very quickly a Group Manager would argue back.. " but your items are down - if you want more hours, sell more items " 

I did an exercise to see where wage spend, hours, items and sales tracked against the previous year for our group of stores. Wage spend was naturally up due to a number of significant wage increases in the sector. Overwhelmingly, we were spending more. Overwhelmingly, sales were up (covid was great for business) but overwhelmingly we had less hours in the business (and it shows, there's less people in the stores, longer lines and the stores look like shit) because on average across these 9 stores, items were tracking down approx. 12% - sure across a few thousand stores across the country, that number will vary. 

I saw Fresh Produce Departments in 2018/19 receiving 8-10 pallets a day and barely breaking $50,000 a week in department sales. Fast Forward to 2021/22 and I'd see those same departments receiving 4 or 5 pallets a day and exceeding $70,000. A good GP% back in the day was around 20%.. I kept seeing 30-35% in the end. 

Respectfully, they're making a lot from a little - as opposed to traditionally making a little from a lot. 

Greens (yes, those guys) call for senate inquiry into major supermarkets price hikes during cost-of-living crisis.

Australia’s major supermarkets will be ordered to front up to a senate inquiry examining whether customers are being subjected to “price gouging” during the cost-of-living crisis.

The select senate inquiry will scrutinise the impact of market concentration on food prices and the pattern of pricing strategies employed by the supermarket “duopoly” – Coles and Woolworths.

“Coles and Woolworths are making billions in profits by price gouging in a cost of living crisis,” Greens Economic Justice spokesman Senator Nick McKim said.

“For too long the big supermarkets have had too much market power. This allows them to dictate prices and terms that are hitting people hard.”

The inquiry will examine the price setting practices between the two major supermarket chains, the large increase in price of essential items, as well as the prevalence of opportunistic pricing and mark-ups.

www.news.com.au/finance/business/retail/greens-call-for-senate-inquiry-into-major-supermarkets-price-hikes-during-costofliving-crisis/news-story/876d6210917e708fd8fceae7f35e3cd8

Could be wrong, but isn't profiteering in Aussieland legal like it is in the US? Like it is a BAD COMPANY DONT DO THAT thing but not actually illegal?

Find it interesting that prices rose about 8%. Which is what prices in the US rose after supplies colluded to jack up prices.

The ACCC outlines it clearly.


Businesses can decide the prices of their goods and services based on a variety of factors, including:



- Recovering the costs they face in supplying the goods or services

- Earning a profit

- Conditions in the market – demand and supply for those goods or services.


Prices that people think are too high, or sudden increases in price, are not illegal. However, the business's behaviour around setting prices may be illegal if it harms competition in a certain way.



It's also illegal for businesses to make false or misleading claims about prices, including the reason for any changes in prices.


----

That has been my gripe in bold - lying about ' supply issues ' or purposely limited stock volumes to increase the price. Using simply " Covid " as a justification to increase prices. Or a recently as last year " the war in Ukraine " to explain why Australian Grown Potatoes saw a 200% increase approx. overnight. 

A conspiracy theorist leading this inquest should ask for prices change data and marry it up with lock downs. As heads from Coles, Woolworths and Aldi all sat on the National and State level Covid Response Teams. We used to joke upon receiving 10 pallets of toilet paper in a single drop that a lock down must be coming. Because a lockdown usually followed. 

Loving how the majority of people covering the economy do not get why there is US recession, and why most people sense economic doom. If the lower and middle class control less than 30% of the wealth in the US, they merely do not have the economic power to effect the macroeconomy anymore. The whims of the economy now are decided solely by multimillionaires and above. Middle class reduces spending and it barely makes a blip.

And of course the people on the tails of inequality do not have a good economic output at they are not gaining wealth at record rates, they are losing it as prices keep rising and homes increasingly become investment tools rather than places to live.

The 1% now also control 50% of all corporate wealth in the US, so can pretty much kiss talk of small business goodbye.

Well now inflation is over, and prices dropped, US feds gonna start to slash the rate with at least 3 cuts expected next year. Got to keep that money flowing to the top.

Dec 13, 2023 19:59:14 GMT c said:

Well now inflation is over, and prices dropped, US feds gonna start to slash the rate with at least 3 cuts expected next year. Got to keep that money flowing to the top.

Do you believe interest rate drops help the “common folks”?

Absolutely not. Consumers save a little bit on their loans but then get fucking hosed hard when the US needs to do massive bailouts every few years because companies are leveraged to the max and any economic wobble threatens to destroy the economy.

Businesses benefit from low rates, consumers not so much. And with housing rates the way they are, most are straight out priced out of the housing market, where rates matter the most.  My area houses are 500k median.  

Dec 13, 2023 19:59:14 GMT c said:

Well now inflation is over, and prices dropped, US feds gonna start to slash the rate with at least 3 cuts expected next year. Got to keep that money flowing to the top.

Prices haven't dropped inflation at 3.1% means prices are still rising, but more slowly than the peak of 9%

Projected interest rate cuts are bullish, but when they actually happen they are a trigger for a market correction. Inflation means the market is too hot, cuts means it's too cold.

Awesome, since the market just broke a new record should have more hikes then.

And reason rates are going down is simply donor pressure at this point. The rich to buy, borrow and die, need low rates to go infinite. With an election coming up they now got leverage on the treasury to drop rates. And the rich are the ones who fuel election campaigns, so need to please them first.

None of this involves the people themselves.

Dec 13, 2023 21:28:09 GMT c said:

Awesome, since the market just broke a new record should have more hikes then.

And reason rates are going down is simply donor pressure at this point. The rich to buy, borrow and die, need low rates to go infinite. With an election coming up they now got leverage on the treasury to drop rates. And the rich are the ones who fuel election campaigns, so need to please them first.

None of this involves the people themselves.

I didn't know we were playing "made up horse shit that suits my narrative"
Let me know when you want to talk about reality.

Sorry, the dow did not set a record today, that was just liberal nonsense.

I am not going to come around to your view of economics because most believe they are no longer relevant on a fundamental level.  Why the predicted crash of the last two years never manifested.

Former reserve head on why most of that pundit economic drivel on inflation does not work.  Simply put the data does not support it.

www.brookings.edu/wp-content/uploads/2017/10/es_wp33_tarullo.pdf

Looks like this is all moot. Trump will fix the economy within 6 weeks of being elected, and a month before he becomes president again.  So one more year is economic doom, then the dark skies will part and paradise will be here.  

Dec 13, 2023 23:56:40 GMT c said:

Sorry, the dow did not set a record today, that was just liberal nonsense.

I am not going to come around to your view of economics because most believe they are no longer relevant on a fundamental level.  Why the predicted crash of the last two years never manifested.

Former reserve head on why most of that pundit economic drivel on inflation does not work.  Simply put the data does not support it.

www.brookings.edu/wp-content/uploads/2017/10/es_wp33_tarullo.pdf

Again, congrats all the best for your fictitious life believing in whatever the hell suits your narrative, I hope it gives you great pleasure.

Dec 14, 2023 0:48:51 GMT c said:

Looks like this is all moot. Trump will fix the economy within 6 weeks of being elected, and a month before he becomes president again.  So one more year is economic doom, then the dark skies will part and paradise will be here.  

It’s pretty nuts how crazy the construction boom was here in East Texas starting immediately November 2016, just bonkers all the building we did over that stretch to 2020 one house after another after another, then I think we stayed busy building houses for Cali transplants(imagine being such a second amendment weirdo that you leave a place as beautiful as that to come here lol) in 2021-2022. It finally started to slow down this time last year, now it’s the slowest it’s been since probably 2009-2010, little to nothing going on. I recently had to park my tool trailer stick a fork in my business and take a job at a cabinet shop. I doubt it was anything Trump did for it to pop off like it did but it’s crazy to me was how people in this area responded to him getting elected like Jesus himself won president. I think Trump is a clown hustler working these marks down here but I can’t deny I built more houses and made more money than ever 2016 to 2020 people here were happy and spending money and building. Biden won and it’s end times gloom and doom. Nuts to me how gullible of a mark people can be to let bullshit control life.

Dec 14, 2023 1:11:17 GMT iNCY said:

Dec 13, 2023 23:56:40 GMT c said:

Sorry, the dow did not set a record today, that was just liberal nonsense.

I am not going to come around to your view of economics because most believe they are no longer relevant on a fundamental level.  Why the predicted crash of the last two years never manifested.

Former reserve head on why most of that pundit economic drivel on inflation does not work.  Simply put the data does not support it.

www.brookings.edu/wp-content/uploads/2017/10/es_wp33_tarullo.pdf

Again, congrats all the best for your fictitious life believing in whatever the hell suits your narrative, I hope it gives you great pleasure.

That was literally from the former gov of the federal reserve bank of florida.  But hey, what do they know right?

Dec 13, 2023 23:56:40 GMT c said:

Sorry, the dow did not set a record today, that was just liberal nonsense.

I am not going to come around to your view of economics because most believe they are no longer relevant on a fundamental level.  Why the predicted crash of the last two years never manifested.

Former reserve head on why most of that pundit economic drivel on inflation does not work.  Simply put the data does not support it.

www.brookings.edu/wp-content/uploads/2017/10/es_wp33_tarullo.pdf

A core part of his thesis is about observable inflation vs. making policy changes to hypothetical/forecasted inflation,

The fed raised rates well into an observable bout of inflation. Arguably they were late.

It's pretty crazy that this thread started because of stupid things like those "Day in the life" tech videos mostly by women who weren't actually doing much work...

Now Social media is flooding with people live streaming their layoffs...
Like lots of them... And the SPX is near all time highs, it's all quite artificial.

Not sure live streaming your dismissal is going to make other companies want to hire you... But more power to them

Why would you post that? That’s one of the dumbest things I’ve ever seen. Talk about burning bridges.

Jan 14, 2024 22:34:35 GMT iron maiden said:

Why would you post that? That’s one of the dumbest things I’ve ever seen. Talk about burning bridges.

I think the same as you, but that's because we're boomers. It seems younger people really think they are stars of their own movies and everyone else is a bit part.

The only reason to do this is if you think you can pivot into being an influencer or content creator 24/7 and don't need the corporate world. Otherwise few HR departments are going look past this behaviour

I mean the videos themselves are probably their real job.