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Trpdoc t1_j6j2lb9 wrote

Reply to comment by CropDuster921 in Recession concerns overtake inflation concerns by Infamous_Sympathy_91

whats it normalizing tho, how the hell do people still have so much damn money to buy a fast food chicken sandwich for like $13

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Zzirg t1_j6j3m0w wrote

They dont, cC debt is exploding for the avg american

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Trpdoc t1_j6j42ig wrote

We always talk about cc debt exploding but nothing ever comes of it. Why the hell are prices not coming down at all it’s getting ridiculous.

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crumbaker t1_j6jlyin wrote

It takes time for the negative effects to happen. It's really started to soar within the last 4 months or so. We're starting to see raising defaults on car loans uptick quite a bit. I'd expect to see the same thing with other forms of loans/credit within the next 6 months.

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Trpdoc t1_j6jo61e wrote

I’m just annoyed a fast food level chicken sandwich is 13 and rising. No end in sight.

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renok_archnmy t1_j6jz62q wrote

My employer has been seeing all loan misses and defaults ride for months now, not just cars.

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MoneyForPussy t1_j6j60zh wrote

the cc company just gets bailed out by tax payers of course they don't want to remind ppl of that

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Trpdoc t1_j6j6hzx wrote

This happens often?

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MoneyForPussy t1_j6j79fh wrote

only if the cc company goes belly-up from too many ppl not paying...most unpaid cc debt goes paid by tax payers & it doesn't get mentioned bc they assume most folks will get upset & just max out their cc's then never pay it

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renok_archnmy t1_j6jyw2h wrote

Ehh, the underwriter will sell the debts before that happens. There’s also insurance.

If they just sat back and did nothing, yeah they’ll go out of business. But they aren’t in the business of going out of business.

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MoneyForPussy t1_j6kihfp wrote

very good point did not consider that.... they prob know other lenders with deep pockets & can sell to another creditor who can afford to take on the risk too which would avoid having to make any claims

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renok_archnmy t1_j6kl8am wrote

Just sell it down until it settles somewhere with efficient collections divisions or easy to claim insurance.

We had to offload and cut off a lot of high risk debts we were buying because our insurance was harder to tap than previous projected. The margin was getting eaten up on operations expenses making the claims as they defaulted. Essentially, we stood to profit even in default except that the hourly wage of the staff processing the default, the lag time from default to paperwork, and the cost file the claims made it less profitable than other options.

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renok_archnmy t1_j6jyols wrote

Underwriters carry insurance against loan default. They can write off the losses, make a claim, recoup funds, hold them in suspense type GLs as various losses for accounting trickery over the years.

Having a loan go bad for a bank isn’t a black and white affair of money lost forever. They get it back.

It happens all day every day.

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Trpdoc t1_j6jz7y6 wrote

That’s what I’m saying then. Nothing is going to change, prices aren’t coming back down no fucking chance.

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renok_archnmy t1_j6k1b0l wrote

No they aren’t. I don’t get the feeling anyone thinks they are (except for some of the children on here who only started paying attention during COVID).

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MoneyForPussy t1_j6kk95j wrote

i think it's a little more complex...seems that as prices of essential goods/services continue to rise, people will tend to compensate by purchasing less non-essential stuffs (or none at all)

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renok_archnmy t1_j6km3k8 wrote

This does happen. But often the cost to produce a luxury good is not far off from a standard one. Eventually demand drives up register price of regular products too. It’s like in the 90s Airwalks were the hot shit for a minute and vans were practically knockoff. Tables can turn. My dad bought a brand spanking new bare bones f150 in the 90s for $9000. Now pickup trucks are minimum $40k and have all sorts of amenities people back then didn’t even want in a work vehicle. Coupes were once the sport cars for people who didn’t need a full fledged sports car (or couldn’t afford one). Now people are buying high horsepower sedans and treating them like sports coupes.

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Trpdoc t1_j6knbrr wrote

Airwalks and eggs/chicken are different bro.

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MoneyForPussy t1_j6kpi01 wrote

i would say prices of new cars have mostly remained fairly flat when compared to wages though, i remember my old man paid $15k for a manual trans 2000 Honda civic ex coupe brand new (which i would definitely not consider to be a sports car even though insurance classified it that way)

i saw a 2023 nissan the other day (also 5 speed manual trans) but while it was the base model sedan, i would bet the car is at least 10 times nicer than that civic was - for only $15k as well, which would probably be about 1/3 the price of that civic when adjusted for inflation

many folks would take that over a $50k camry even if it means they have to learn to drive a stick shift. but from what i understand, many car dealers are hiking prices in order to produce less cars & manage less inventory but maintain the same bottom line, and maybe that makes sense if the shift to EV accelerates, or maybe they will fall short. anyone's guess i suppose

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renok_archnmy t1_j6ktwve wrote

I was just trying to make the point that what is a luxury hood today may not be in years to come. What might be cheap basic thing today may become a luxury good tomorrow.

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MoneyForPussy t1_j6kuf6a wrote

i definitely would not have foreseen n64 games selling for $500-1k that's for sure

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renok_archnmy t1_j6kv4xw wrote

MTG cards, comic cards from the 80s, my wrecked gen 1 turbo 4g63 with no crank walk eclipse and manual 5 speed, so many things mooned after I sold them.

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Zzirg t1_j6jdx2k wrote

Takes time to reach a breaking point. Will we get there? Idk time will tell

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renok_archnmy t1_j6jycnn wrote

Availability of currency can drive inflation. The total CC debt doesn’t affect much. The ability to swipe it for more spend when the sand which is now $5 more than it was last month is what props it up.

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Trpdoc t1_j6kosa1 wrote

Well people are straight fucked not gonna lie.

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renok_archnmy t1_j6jy51h wrote

Credit cards

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Trpdoc t1_j6jz3ra wrote

And that comes to pass well never. When was the last time you ever ever saw prices actually go down substantively. That fucking sandwich should be $8-9 max. And now everything 14-15 is just normal.ohhhhhh and don’t forget tip!!!!

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renok_archnmy t1_j6k0wi3 wrote

When I was 16 you could buy a hamburger at McDonald’s for $0.89 on Tuesdays.

Not 100% following your reply, but prices rise because people pay them. They can pay them because they can put them on credit. Right now there is a tinge of hope this shot passes and their incomes might increase and stock markets return to COVID valuations. They won’t, there’ll be defaults, prices of goods will remain high, more people will become poor, rich people will become more rich. Same as happens the last few times this happened.

If you don’t like spending whatever McDonald’s charges for a hamburger today because you could buy one in high school for next a dollar, then don’t buy McDonald’s hamburgers.

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Trpdoc t1_j6kn2vr wrote

The point was how the hell are people affording these prices. Ok let’s say it’s bc people will default on their credit cards and that’s the reason which you all claim. Then how does any rebalancing occur. All these people plan to just default on their cards bc they want to buy $13 fried chicken sandwich

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renok_archnmy t1_j6kt7l1 wrote

Not sure they’re planning anything. They want chicken sandwich, chicken sandwich is $14, they whip out that visa and charge it because bank account balance is $10.

6-12 months later they’ve maxxed out the credit card, can’t afford chicken sandwiches anymore and can’t afford the payments. Now they’re fucked.

It’s rebalanced in bankruptcy court, collections departments, insurance carried by the banks, debt settlements, you name it. They could’ve eaten beans and rice all year and not been in the spot. Instead they traded future credit worthiness for a chicken sandwich.

It’s literally that simple. Banks insure against this kind of loss and sell off bad loans all the time. Those get utilized for various things to avoid taxes or whatever over time. Interest rates climb. Taxes climb. That’s where it gets balanced back out.

I wouldn’t sweat it too much. Just Americans spending irresponsibly driven by consumerist lifestyles.

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Trpdoc t1_j6kweyh wrote

Not sweating it. Just don’t want to pay $14-20 for chix sando any more

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renok_archnmy t1_j6kxyp7 wrote

I hear ya. 10 years ago I could eat for $2/meal healthily. Now it’s $10/meal. By 2033 it’ll be $50/meal.

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