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hmmm
what do you think the rate of inflation for the last 5 years has been for
the cost of buying earnings?
On or about 9/21/00 2:35 PM,James Taylor at jptaylor@xxxxxxxxxxxxxxx sent
the following message
> Surely there are pockets of weakness, look at the devastating deflation
> farmers have seen.
> The fact is, this country has experienced the greatest speculative mania
> since
> the Tulip mania of old, many of the smaller cap stockholders are getting
> their due, but the major
> averages are still defying gravity, along with real estate prices in much of
> the US.
> Wage pressure is also rampant, a few examples:
>
> Union electricians in the San Francisco area have received a $10 per hour
> raise over the next three years ($3 + $ 3 + $4). They already make over $38
> per hour now. In three years they will make $48 per hour. That is 100k
> annual pay.
>
> Another example:
>
> I've also observed inflation many times recently, such my own health care
> insurance up $30.00 a month, a friend of mine with a family of four [whose]
> policy jumped $180.00 a month. Recently I got an estimate on getting my
> house painted, [the painter] said he couldn't do it for six weeks, after six
> weeks he informed me their union contract had just gotten a boost and would
> add $8.00 times 200 hrs. to the bill. He also said the price of paint had
> recently gone up too. A similar thing happened when I hired an electrician a
> few months back, got an estimate, waited two months for the work to start
> because his schedule was backed up, then two days before the work started he
> called to inform me their labor rate had gone up ten dollars an hour and the
> job would cost an additional $100.00.
>
> Another:
>
> These two episodes from the wacky world of health care show how inflation
> psychology can be contagious. First, a reader's note about rising insurance
> premiums:
>
> My Regence Blue Shield health insurance premium just jumped over 25% (not
> an individual specific rate increase either). I'm only 30 years old. But
> there's no inflation so I don't have to worry.
> Another reader sent in this note about the affects of rising wages on
> premiums and inflation:
>
>
> Another data point for you: A friend who works for a major integrated HMO
> told me that they recently concluded national bargaining with staff for pay
> raises -- 5 year contract term. Depending on specialty, RNs are getting in
> the range of 7 percent/6 percent/5 percent/5 percent/5 percent TOTAL raises
> over 5 years. That is about a 32% raise over 5 years. Some specialties are
> getting more. What do you think will happen to premiums?
> Another:
>
> in Metro Denver area. One of the five-year leases is up for renewal in
> January. Based on the comparables, the rent increase to the little high-tech
> company is to be about 100 percent. So roughly 15 percent per year for five
> years. This unit is in an area of a large industrial park development where
> there are good comparables and good choices.
>
> and....
>
> Schools can't find enough bus drivers, even after boosting starting pay to
> $11.50 an hour. Last month, a job fair was held at the Travis County
> Community Justice Center, a state jail, that attracted headhunters who
> pitched jobs paying as much as $25 an hour, plus benefits that included
> retirement plans, company cars and the promise of career advancement, to
> many of the inmates scheduled to be released in the next two months. .
> .economist Angelos Angelou.
>
> "United Airlines became the fourth U.S. airline in two days to boost fares
> $20 for roundtrip domestic flights, as airlines try to make up for a
> 27-percent rise in jet fuel prices the past month." I thought the boys at
> the Fed just said oil price rises wouldn't impact inflation.
>
> . There is no inflation. I live in Manhattan. The cost of co-ops has only
> risen by 45 percent the last two years (but that's OK due to productivity
> gains). The cost of gas to the country house has doubled in a year (but
> that's OK since the government drops energy prices from its CPI index).
> Heating costs are soaring for the country house (but that's OK since we heat
> with electricity, our bills might only rise by 40 percent). Our daughter
> goes to private school with costs going up 10 percent a year (but that's OK,
> since they have been going up by 10 percent each year for the last 10
> years). My basketball season tix are up by 10 percent this year (but that's
> OK since they are up 487 percent since 1990).
>
>
> No inflation my arse. The pied piper Greenspan is leading the sheep right
> to the edge of the cliff, when will they go over ?
> Wish I could help with a well deserved shove.
>
>
> ----- Original Message -----
> From: "The Doctor" <droex@xxxxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Cc: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Thursday, September 21, 2000 10:08 AM
> Subject: [RT] Re: Oil inflation
>
>
>> In the greater Chicago area .... not the city itself .... prices are
>> relatively unchanged for the last decade. The city itself has gone nuts
>> with the bull market, but you can't give a house away in many of the
>> burbs.
>>
>> Gary Fritz wrote:
>>
>>>> Huh ? Yes, check the dismal scientist site, prices did rise over
>>>> 15% in California last year. Over 40% in the San Jose area. If
>>>> that aint RAMPANT asset price inflation, I sure don't know what is.
>>>
>>> James. Did you READ what Dennis wrote? Yes, housing inflation in
>>> the Bay area is insane. But the Bay area is an ANOMALY. Look at the
>>> Dismal Scientist site again and you'll see San Jose has the HIGHEST
>>> rate of housing inflation in the country. (If I remember right,
>>> anyway. The site seems to be down now.)
>>>
>>> As Dennis pointed out, the AVERAGE housing inflation rate, across the
>>> country, is closer to 3-5%. Which is NOT "RAMPANT asset price
>>> inflation" by any stretch of the imagination.
>>>
>>> If you have 100 people and ONE of them has a temperature of 106 degF,
>>> do you slap all 100 of 'em into the hospital? Of course not. And if
>>> ONE small area of the country has housing hyperinflation, should you
>>> expect it to appear across the entire country? Of course not. Sure,
>>> it's possible the Bay area's "fever" could spread, but that would
>>> require fundamental changes in the economy around the country, and
>>> even then it's hardly likely to spread in the same degree as found in
>>> California.
>>>
>>> If the entire country was in the 15-40% range, that would indeed be a
>>> major problem. If isolated pockets are in the 15-40% range, that is
>>> a problem ONLY for the people who **CHOOSE** to live there, and it
>>> should not be a driver for national economic policy.
>>>
>>> If you don't like the housing inflation in the Bay area, go live
>>> somewhere else. But quit calling people stupid because they don't
>>> think the Bay area is the only thing in the whole freakin' country.
>>>
>>> Gary
>>
>>
>>
>
>
>
--
Kim Hanson
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