CNN attempting to create a new narrative

[basballguy]

(02-17-2022, 07:06 PM)NATI BENGALS Wrote: Yea man. I did.



You said
“1) The article title implies a conflict will cause an increase in inflation.  That's just not true.  the article content (price of crude oil) is where the speculation actually is.  Again, reference my OP for thoughts.”


Again the title of the article:
Exclusive: Russia-Ukraine conflict could cause inflation to hit 10%, new analysis finds

So you either think Russia vs Ukraine and nato will have zero effect on oil prices. Or oil prices have zero impact on inflation. Or both. Either way I disagree.


I guarantee if a war breaks out. You will pay more for oil and you will pay more for just about everything else.

I don’t see them trying to create new narrative. I see them acknowledging current inflation and saying it will get worse if there is a war.

Had I known I would've spent more time explaining how inflation works and less time talking about lame journalism, I probably wouldn't have posted this.

It's not a question of if oil prices go up.  The entire study has a baseline of "What would happen to inflation if oil prices went up by 20 dollars" 

So the study/article are implying:

1) The conflict will drive the price of oil up and sets a target of $110 for a baseline.  (Not unreasonable and was never even a discussion point)
2) This $20 increase in crude oil will have a large enough impact on 31 different categories used to calculate the actual inflation rate (CPI) to increase the rate by 2.8% to a total of 10.3% (this is the shit i'm saying doesn't make sense)

For reference (since you're throwing out guarantees),

When Iraq invaded Kuwait in 1990, Crude Oil went up roughly 32% and the CPI (inflation rate) increased by 0.6%
When the US invaded Afghanistan in 2001, Crude Oil went down by 9% and the CPI decreased by 0.2%
When the US invaded Iraq in 2003, Crude Oil went down by 16% and the CPI decreased by 0.8%

So in all your infinite wisdom, please explain to me why the following makes sense:
When Russia invades Ukraine in 2022, Crude Oil will go up 22% and the CPI will increase by 2.8%

It does not pass the smell test and can't be verified because the study is not published....and that's why I posted here.  I'm not saying it can't happen, I'm not saying it won't happen.  I'm saying it's a very sensational claim to make without providing the actual analysis to support it.

I don't know how else to explain it.

[NATI BENGALS]

(02-17-2022, 08:10 PM)basballguy Wrote: Had I known I would've spent more time explaining how inflation works and less time talking about lame journalism, I probably wouldn't have posted this.

It's not a question of if oil prices go up.  The entire study has a baseline of "What would happen to inflation if oil prices went up by 20 dollars" 

So the study/article are implying:

1) The conflict will drive the price of oil up and sets a target of $110 for a baseline.  (Not unreasonable and was never even a discussion point)
2) This $20 increase in crude oil will have a large enough impact on 31 different categories used to calculate the actual inflation rate (CPI) to increase the rate by 2.8% to a total of 10.3% (this is the shit i'm saying doesn't make sense)

For reference (since you're throwing out guarantees),

When Iraq invaded Kuwait in 1990, Crude Oil went up roughly 32% and the CPI (inflation rate) increased by 0.6%
When the US invaded Afghanistan in 2001, Crude Oil went down by 9% and the CPI decreased by 0.2%
When the US invaded Iraq in 2003, Crude Oil went down by 16% and the CPI decreased by 0.8%

So in all your infinite wisdom, please explain to me why the following makes sense:
When Russia invades Ukraine in 2022, Crude Oil will go up 22% and the CPI will increase by 2.8%

It does not pass the smell test and can't be verified because the study is not published....and that's why I posted here.  I'm not saying it can't happen, I'm not saying it won't happen.  I'm saying it's a very sensational claim to make without providing the actual analysis to support it.

I don't know how else to explain it.

I'll take a shot at explaining it. I took some math and economics classes in high school 20+ years ago.

Current lists
GDP global list 
Russia #11
Kuwait #59
Iraq #53
Afghanistan #116

Oil production global list
Russia #2- 9.8 million barrels a day
Kuwait #10- 2.6 million barrels a day
Iraq #5- 4.1 million barrels a day
Afghanistan doesn't make the list

Natural gas production global list
Russia #2- 669,500 cubic meters a year
Kuwait #35- 16,910 cubic meters a year
Iraq #67- 1,002 cubic meters a year
Afghanistan #78- 165 cubic meters a year

Oh and china is buddying up with russia

[basballguy]

(02-17-2022, 09:12 PM)NATI BENGALS Wrote: I'll take a shot at explaining it. I took some math and economics classes in high school 20+ years ago.

GDP global list 
Russia #11
Kuwait #59
Iraq #53
Afghanistan #116

Oil production global list
Russia #2- 9.8 million barrels a day
Kuwait #10- 2.6 million barrels a day
Iraq #5- 4.1 million barrels a day
Afghanistan doesn't make the list

Natural gas production global list
Russia #2- 669,500 cubic meters a year
Kuwait #35- 16,910 cubic meters a year
Iraq #67- 1,002 cubic meters a year
Afghanistan #78- 165 cubic meters a year

Oh and china is buddying up with russia

Ok, I'll bite.  Why are any of these data points relevant to the price of Crude Oil impacting the US inflation rate?

To me, I feel like i'm saying "The Bengals will win the Super Bowl next year" and your response is "No they won't, the stadium holds 65,000 people"

[NATI BENGALS]

Supply and demand.

You want to buy a gallon of gas. Or turn on your furnace.

The #2 supplier in the world will no longer sell to you since you are at war with them.

Demand remains the same, and supply drastically drops. What happens to the cost?




And I would have to imagine there is a lot more global competition and dependence on oil and gas than there was at the time of the conflicts you noted.

[basballguy]

(02-17-2022, 09:27 PM)NATI BENGALS Wrote: Supply and demand.

You want to buy a gallon of gas. Or turn on your furnace.

The #2 supplier in the world will no longer sell to you since you are at war with them.

Demand remains the same, and supply drastically drops. What happens to the cost?

Haha, we're so far off that if this were a book you're explaining Chapter 1 while i'm trying to talk about Chapter 12....and so polite too.  :)  

Let's meet at Chapter 6.

Here are some handy facts:

1) The article is focused on the price of crude oil and it's impact on the US inflation rate...and only these two items.
2) It's not talking about natural gas, GDP, or actual oil production rates.  (I'm not saying these don't matter, I'm saying it's not mentioned....though I for the life of me can't understand why you think GDP matters for this discussion. :) )
3) This article states the price of crude oil could be the reason the US inflation rate (why is based on CPI) increases by 2.8%
4) The article states a price increase from $90 to 110$ (a $20 dollar difference) will be the cause of this 2.8% increase
5) CPI is an aggregate of of various categories, none of which are crude oil.  The price of crude oil can potentially impact aspects of these categories.

So with that said (since you seem to agree with the article):  Why do you think a projected $20 dollar increase in the price of crude oil will cause a 2.8% increase in inflation?  Is there a precedence for this?  

Remember, the study isn't published so we're limited to what CNN provided in the article.  

[NATI BENGALS]

(02-17-2022, 10:10 PM)basballguy Wrote: Haha, we're so far off that if this were a book you're explaining Chapter 1 while i'm trying to talk about Chapter 12....and so polite too.  :)  

Let's meet at Chapter 6.

Here are some handy facts:

1) The article is focused on the price of crude oil and it's impact on the US inflation rate...and only these two items.
2) It's not talking about natural gas, GDP, or actual oil production rates.  (I'm not saying these don't matter, I'm saying it's not mentioned....though I for the life of me can't understand why you think GDP matters for this discussion. :) )
3) This article states the price of crude oil could be the reason the US inflation rate (also known as CPI) increases by 2.8%
4) The article states a price increase from $90 to 110$ (a $20 dollar difference) will be the cause of this 2.8% increase
5) CPI is an aggregate of of various categories, none of which are crude oil.  The price of crude oil can potentially impact aspects of these categories.

So with that said (since you seem to agree with the article):  Why do you think a projected $20 dollar increase in the price of crude oil will cause a 2.8% increase in inflation?  Is there a precedence for this?  

Remember, the study isn't published so we're limited to what CNN provided in the article.  

1. from article "Russia is the world's second largest producer of both oil and natural gas and global oil supplies." ""Heating the home and putting gasoline in the car will become more expensive in the immediate aftermath of a Russian invasion," Brusuelas said, adding that there would be a "shock to consumer confidence" and diminished corporate investment."

Somebody did a study and came up with 2.8%. It was clearly summarized in this article. I get it. You want the study and the author failed at their job. The part I don't get is that you think we would be immune to the cost of this conflict?

[basballguy]

(02-17-2022, 10:20 PM)NATI BENGALS Wrote: 1. from article "Russia is the world's second largest producer of both oil and natural gas and global oil supplies." ""Heating the home and putting gasoline in the car will become more expensive in the immediate aftermath of a Russian invasion," Brusuelas said, adding that there would be a "shock to consumer confidence" and diminished corporate investment."

Somebody did a study and came up with 2.8%. It was clearly summarized in this article. I get it. You want the study and the author failed at their job. The part I don't get is that you think we would be immune to the cost of this conflict?

Nah, I never said we're immune to it (or even used similar phrasing).  I said it was an absurdly high increase to claim (and thus the ridiculous headline) without providing the data to back it up.  Now we're just getting into the details on why i'd like to see the study which is super ok by me.  

Here's my terrible analogy and explanation:

One of the components in the CPI is Energy.  This is where "Heating the home and putting gasoline in the car" exist.  Let's assume Crude Oil impacts everything under Energy equally even though it doesn't. 

Energy is weighted to be responsible for 7.348% of the CPI.  Think of it as if we were taking an exam, the Energy homework would be 7.348% of my final grade.  

Assuming every other category does not change in value, Energy would have to increase by 22.8% to have enough influence to move the inflation rate by 2.8%.  

For reference, Energy increase by 1.7% from Dec to Jan and that was considered a large change.

So will my electric bill go up by 22.8% because of a $20 dollar increase in Crude Oil (caused by the conflict)?  Very unlikely.  

Note: I left out the indices and my bad math but if you're interested in exploring you can here:  https://www.bls.gov/news.release/cpi.toc.htm

[NATI BENGALS]

(02-17-2022, 11:56 PM)basballguy Wrote: Nah, I never said we're immune to it (or even used similar phrasing).  I said it was an absurdly high increase to claim (and thus the ridiculous headline) without providing the data to back it up.  Now we're just getting into the details on why i'd like to see the study which is super ok by me.  

Here's my terrible analogy and explanation:

One of the components in the CPI is Energy.  This is where "Heating the home and putting gasoline in the car" exist.  Let's assume Crude Oil impacts everything under Energy equally even though it doesn't. 

Energy is weighted to be responsible for 7.348% of the CPI.  Think of it as if we were taking an exam, the Energy homework would be 7.348% of my final grade.  

Assuming every other category does not change in value, Energy would have to increase by 22.8% to have enough influence to move the inflation rate by 2.8%.  

For reference, Energy increase by 1.7% from Dec to Jan and that was considered a large change.

So will my electric bill go up by 22.8% because of a $20 dollar increase in Crude Oil (caused by the conflict)?  Very unlikely.  

Note: I left out the indices and my bad math but if you're interested in exploring you can here:  https://www.bls.gov/news.release/cpi.toc.htm

My bad. I read what you wrote in post 10 of this thread “The article title implies a conflict will cause an increase in inflation. That's just not true.”

And thought you were saying the hypothesis that the conflict will increase inflation is not true.

[Belsnickel]

I always find the discussion of inflation to be interesting when you think about the record profits some of these companies have been making. Personally, the increase in the CPI just smells like corporate greed, to me. But hey, let's all just sit back and watch socioeconomic inequality become worse.

[SunsetBengal]

(02-18-2022, 08:31 PM)Belsnickel Wrote: I always find the discussion of inflation to be interesting when you think about the record profits some of these companies have been making. Personally, the increase in the CPI just smells like corporate greed, to me. But hey, let's all just sit back and watch socioeconomic inequality become worse.

That is a noble thought, indeed.  Not akin from Ms. Universe stating that she "want's to solve world hunger", and such.  The truth is that most of those suffering from socioeconomic inequality in the United States live in the metro areas, where the opportunity to improve one's self by programs already in place is readily abundant, yet goes to waste from it's intended purpose.  The people in the sticks that are poor, are just plain poor, but they're not any better off than the poor in the city, why? Because improving one's economic position requires serious effort, laziness and/or "gaming" the system just does not get the job done.  

Why do we have people in excess crossing our borders to "do the jobs we don't want to do"?  I'll tell you why, because the government is giving the lazy way too much.  (the people who choose to work for a living are tired of it, despite the fact that the mega-wealthy actually foot most of the bill.)    

[Belsnickel]

(02-18-2022, 08:55 PM)SunsetBengal Wrote: That is a noble thought, indeed.  Not akin from Ms. Universe stating that she "want's to solve world hunger", and such.  The truth is that most of those suffering from socioeconomic inequality in the United States live in the metro areas, where the opportunity to improve one's self by programs already in place is readily abundant, yet goes to waste from it's intended purpose.  The people in the sticks that are poor, are just plain poor, but they're not any better off than the poor in the city, why? Because improving one's economic position requires serious effort, laziness and/or "gaming" the system just does not get the job done.  

Why do we have people in excess crossing our borders to "do the jobs we don't want to do"? I'll tell you why, because the government is giving the lazy way too much. (the people who choose to work for a living are tired of it, despite the fact that the mega-wealthy actually foot most of the bill.)    

I really don't even know how to respond to this without coming across as condescending. Your post shows a clear lack of understanding of the issue at hand.

[NATI BENGALS]

It's Friday. I've been drinking since Sunday too

[basballguy]

(02-18-2022, 08:31 PM)Belsnickel Wrote: I always find the discussion of inflation to be interesting when you think about the record profits some of these companies have been making. Personally, the increase in the CPI just smells like corporate greed, to me. But hey, let's all just sit back and watch socioeconomic inequality become worse.

While it's a cynical point of view, I don't know if you're wrong for thinking it.  So let's look at the data in some of the industries that are actually having a gross effect on inflation (meaning not crude oil related, CNN).  

Let's look at rental cars since it's well known rental car prices have been out of control over the last year.

CPI data says the current inflation relate as it related to car/truck rentals is 29.3%.  This one is actually coming down after peaking somewhere around 50% last year.  So a reasonable person would assume profits were to be made. 

Enterprise saw a net income increase of almost 79% in 2021 when comparing to 2020.  That's actually absurdly high lol.  I'm wondering why it's so high if there wasn't an increase cost in all things operating a business.  So yes, stating the obvious with just a single example, some companies appear to be getting rich off inflation.

However, what do you think they do with these profits?  Yes, executives will likely benefit but so will employees and shareholders.  Is that really such a bad thing?  Remember, "wage growth" is a factor that drives inflation too.  

[Belsnickel]

(02-18-2022, 09:57 PM)basballguy Wrote: While it's a cynical point of view, I don't know if you're wrong for thinking it.  So let's look at the data in some of the industries that are actually having a gross effect on inflation (meaning not crude oil related, CNN).  

Let's look at rental cars since it's well known rental car prices have been out of control over the last year.

CPI data says the current inflation relate as it related to car/truck rentals is 29.3%.  This one is actually coming down after peaking somewhere around 50% last year.  So a reasonable person would assume profits were to be made. 

Enterprise saw a net income increase of almost 79% in 2021 when comparing to 2020.  That's actually absurdly high lol.  I'm wondering why it's so high if there wasn't an increase cost in all things operating a business.  So yes, stating the obvious with just a single example, some companies appear to be getting rich off inflation.

However, what do you think they do with these profits?  Yes, executives will likely benefit but so will employees and shareholders.  Is that really such a bad thing?  Remember, "wage growth" is a factor that drives inflation too.  

I mean, talking about shareholders benefitting is irrelevant to me. But that's a larger discussion. We haven't seen things improving for employees, though. Sure, wage growth does impact inflation, but if wage growth were significant enough to actually have a real impact then it wouldn't have negated itself in the process. The money isn't going to the workers. It's going to management and the gamblers (i.e. shareholders).

[basballguy]

(02-18-2022, 10:06 PM)Belsnickel Wrote: I mean, talking about shareholders benefitting is irrelevant to me. But that's a larger discussion. We haven't seen things improving for employees, though. Sure, wage growth does impact inflation, but if wage growth were significant enough to actually have a real impact then it wouldn't have negated itself in the process. The money isn't going to the workers. It's going to management and the gamblers (i.e. shareholders).

When you say we haven't seen things improve, are you basing this off social sentiment or data?  

How do you know it's not going to the workers?  I'm not arrogantly asking, I'm wondering what gave you this impression.  Also, so I don't mince your words, what is your definition of management?  How high up the food chain is management?  

[Belsnickel]

(02-18-2022, 10:31 PM)basballguy Wrote: When you say we haven't seen things improve, are you basing this off social sentiment or data?  

How do you know it's not going to the workers?  I'm not arrogantly asking, I'm wondering what gave you this impression.  Also, so I don't mince your words, what is your definition of management?  How high up the food chain is management?  

The data: https://www.bls.gov/news.release/realer.t02.htm

So, while we have seen wages increase, they have been outpaced by inflation. This is based on wages for production and non-supervisory employees, which would mean everyone that isn't management. Now, the majority of these profits aren't going to your line or even mid-level management, but they do benefit from these things more than the labor does.

[SunsetBengal]

(02-18-2022, 09:27 PM)Belsnickel Wrote: I really don't even know how to respond to this without coming across as condescending. Your post shows a clear lack of understanding of the issue at hand.

Yeah, I get that you might see it that way, being a policy guy and all.  I didn't mean it as a personal affront, just speaking from personal experience and perceptions from observation.  After all, it's just my real world opinion of observing policy in action.

[Belsnickel]

(02-18-2022, 11:03 PM)SunsetBengal Wrote: Yeah, I get that you might see it that way, being a policy guy and all.  I didn't mean it as a personal affront, just speaking from personal experience and perceptions from observation.  After all, it's just my real world opinion of observing policy in action.

That's always the problem with relying on anecdotal evidence versus empirical. When we rely on anecdotal evidence we are looking at issues through a series of biases, both internal such as our own opinions and external such as the limited scope of what we can see in front of us based on our life experiences.

[basballguy]

(02-18-2022, 10:48 PM)Belsnickel Wrote: The data: https://www.bls.gov/news.release/realer.t02.htm

So, while we have seen wages increase, they have been outpaced by inflation. This is based on wages for production and non-supervisory employees, which would mean everyone that isn't management. Now, the majority of these profits aren't going to your line or even mid-level management, but they do benefit from these things more than the labor does.

Ok, cool, I'm aligned with what you're referring to.  I'm in no position to disagree with your sentiment on this because it's correct.  Trying to argue whether management's kick back on performance is significant or not really detracts from the conversation.  

A lot of these talking points are tricky to discuss (with you specifically) because all this CPI data is centered around the demographics you frequently defend...and no i'm not trying to imply the data is biased.  :)

[Belsnickel]

(02-18-2022, 11:22 PM)basballguy Wrote: Ok, cool, I'm aligned with what you're referring to.  I'm in no position to disagree with your sentiment on this because it's correct.  Trying to argue whether management's kick back on performance is significant or not really detracts from the conversation.  

A lot of these talking points are tricky to discuss (with you specifically) because all this CPI data is centered around the demographics you frequently defend...and no i'm not trying to imply the data is biased.  :)

Eh, you're fine. I'll get lazy and lose interest in the discussion, anyway.

I just don't have the bandwidth for discussions on here like I used to have. Too much going on.