Economic News Thread | 3Q Annual GDP 2.8%

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I'm in the mind that fixing the problem vs the blame is infinitely more productive. That said the whole TP hoarder/hand sanitizer/etc. should have been enough for all of us binging Netflix etc to appreciate the folks doing the work while we complained about the delivery.

Oh yeah how quickly you/we forget.
 
nycfan said:
About food prices … bumper crops on American farms may mean good news for American consumers but farmers are bummed.

Gift link —>. https://www.wsj.com/finance/commodi...zpssiwgrx9to&reflink=mobilewebshare_permalink

The U.S. Corn Crop Is Great. Farmers’ Finances, Not So Much.​

Grain prices have been in free fall since the Covid commodity boom ended, forcing some growers to consider difficult changes​


“…
Grain prices, under pressure since the Covid commodity boom crested, have fallen further in 2024. Rainfall has been ample across farm country for the first time in years, staving off the drought that has plagued the central U.S. and putting Midwestern corn and soybean harvests on track to set records.

That is intensifying what was already shaping up as a dismal year financially on the farm. Budgets drawn up in the spring are no longer viable. Persistently high costs for farm essentials such as seeds and fertilizer are gobbling up revenue.

… It is a return to leaner prepandemic times for many farmers. Prices for corn and soybeans were rangebound in the second half of the 2010s, weighing on farm returns. The record-high prices in 2021 and 2022 gave farmers a boost, but momentum has once again turned against them. …”
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Has anyone considered paying farmers not to grow crops? We could take the money from student debt forgiveness because we know that is communism but agricultural handouts are not.
 
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finance.yahoo.com

Fed's preferred inflation gauge shows prices increased in line with Wall Street's expectations in July

The latest inflation reading comes as investors debate how much the Federal Reserve will cut interest rates by in September.
finance.yahoo.com finance.yahoo.com

Over the prior year, prices rose 2.6% in July, matching June's annual increase and below analyst expectations for a 2.7% increase.

Investors are expecting a rate cut in September but the debate remains how much the Fed will cut by. As of Friday morning, market's are pricing in a roughly 33% chance the Central Bank cuts interest rates by 50 basis points by the end of its September meeting
 
grimes70 said:
Kroger. Known for buying up regional grocery chains then closing the Krogers in that market. Why? Kroger is a union shop; the regionals not so much. See Harris-Teeter.
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You might want to head over to The Phog and get into the extended discussion of the proposed Kroger-Albertsons merger in their Politics thread.
 
TarHeeledTexan said:
You might want to head over to The Phog and get into the extended discussion of the proposed Kroger-Albertsons merger in their Politics thread.
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Appreciate the heads up. Might check it outbut not a subject that holds too much interest.
 

“… The market for office buildings — already reeling from higher vacancy rates amid the rise in remote-work policies — has been crushed by high borrowing costs, and while the Federal Reserve is at last preparing to cut interest rates, it may be too little, too late. Investors, banks and property owners are now beginning to accept that some commercial buildings will never recover their pre-pandemic value, and that’s leading to a steady drumbeat of distressed sales.

The market’s troubles have caught the attention of Congress — with one New York lawmaker calling it a “ticking time bomb” for banks as nearly $1 trillion in commercial real estate loans are coming due this year. Faced with vacant office buildings and a shortage of millions of homes to meet demand, a bipartisan group of lawmakers is trying to make it easier for developers to convert underused properties into housing.
“This would absolutely help lenders recoup some of their investment while allowing them to align with the current needs of the market,” said Rep. Mike Carey (R-Ohio) who introduced a bill this summer establishing a temporary 20 percent tax credit for qualified property conversion expenditures. …”
 
nycfan said:

“… The market for office buildings — already reeling from higher vacancy rates amid the rise in remote-work policies — has been crushed by high borrowing costs, and while the Federal Reserve is at last preparing to cut interest rates, it may be too little, too late. Investors, banks and property owners are now beginning to accept that some commercial buildings will never recover their pre-pandemic value, and that’s leading to a steady drumbeat of distressed sales.

The market’s troubles have caught the attention of Congress — with one New York lawmaker calling it a “ticking time bomb” for banks as nearly $1 trillion in commercial real estate loans are coming due this year. Faced with vacant office buildings and a shortage of millions of homes to meet demand, a bipartisan group of lawmakers is trying to make it easier for developers to convert underused properties into housing.
“This would absolutely help lenders recoup some of their investment while allowing them to align with the current needs of the market,” said Rep. Mike Carey (R-Ohio) who introduced a bill this summer establishing a temporary 20 percent tax credit for qualified property conversion expenditures. …”
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The bank failures in March 2023, particularly Signature Bank, were the first tremor of this slow-moving train wreck.

Lowering interest rates can only do so much to rectify the problem in this highly leveraged market because the post-pandemic changes in remote work habits have undermined demand for urban center office tower space and exurban office park space for the foreseeable future.

Unfortunately, it is extremely expensive and often impractical to convert office towers to condos or apartments — all the plumbing and HVAC generally runs up the central well of the building and was not built for a multiple kitchen and bathroom split on each floor. In some ways, exurban office park buildings are even worse candidates for conversion because of lower building quality and locations that are not ideal for residential purposes for a variety of reasons, including lack of surrounding infrastructure (schools, medical facilities, etc.).
 
nycfan said:

“… The market for office buildings — already reeling from higher vacancy rates amid the rise in remote-work policies — has been crushed by high borrowing costs, and while the Federal Reserve is at last preparing to cut interest rates, it may be too little, too late. Investors, banks and property owners are now beginning to accept that some commercial buildings will never recover their pre-pandemic value, and that’s leading to a steady drumbeat of distressed sales.

The market’s troubles have caught the attention of Congress — with one New York lawmaker calling it a “ticking time bomb” for banks as nearly $1 trillion in commercial real estate loans are coming due this year. Faced with vacant office buildings and a shortage of millions of homes to meet demand, a bipartisan group of lawmakers is trying to make it easier for developers to convert underused properties into housing.
“This would absolutely help lenders recoup some of their investment while allowing them to align with the current needs of the market,” said Rep. Mike Carey (R-Ohio) who introduced a bill this summer establishing a temporary 20 percent tax credit for qualified property conversion expenditures. …”
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Office space has been a slowly unfolding disaster that everyone should have seen on the horizon.
 
nycfan said:
Unfortunately, it is extremely expensive and often impractical to convert office towers to condos or apartments — all the plumbing and HVAC generally runs up the central well of the building and was not built for a multiple kitchen and bathroom split on each floor. In some ways, exurban office park buildings are even worse candidates for conversion because of lower building quality and locations that are not ideal for residential purposes for a variety of reasons, including lack of surrounding infrastructure (schools, medical facilities, etc.).
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Maybe they could turn them into youth hostels...
 
wmheel1287 said:
Office space has been a slowly unfolding disaster that everyone should have seen on the horizon.
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Everyone paying attention has, the issue is no one know what to do about it. It was one of the driving forces behind the Big Banks demanding that their teams to work in person … trying to pied piper other businesses to do the same and protect the Big Bank exposure to office building debt. But other businesses found they needed hybrid remote to keep top employees and liked the cost-savings of reducing their office space footprint.
 
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