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Price changes?


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140 replies to this topic

#126 OFFLINE   lparsons21

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Posted 09 February 2013 - 04:14 PM

Because the CPI is used to figure lots of things, like SS increases and such, they have it well twiddled to not show real inflation. It is always very, very low compared to reality.

Do you like peanuts in the shell? I do. But now for the same money, the bag is 1/2 the size it was last year. :(

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#127 OFFLINE   BillJ

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Posted 10 February 2013 - 08:28 AM

Have to disagree with you on CPI, although I certainly hear that comment a lot. CPI is a very broad measurement of inflation. Every individual has his own inflation rate and it can differ widely for the published number. If you like peanuts and there is a bad crop one year, you're going to think the inflation rate is 50%. If you like beef and ranchers send a lot to slaughter because a drought makes it difficult to feed them, you might think the inflation rate is -10%. If you live in a fast growing city with a housing shortage, you think inflation is through the roof. If you live in small town that lost a big employer, your housing inflation factor is negative.

I finally got a social security COLA this year. I heard people complaining the CPI number was too low. I never heard anyone complain the year we got over 5% that the CPI was too high.

Even age has an effect. If you are young and have good health insurance through an employer you have no idea why someone 60 years old who buys his own health insurance is complaining about the double digit rise in health care cost.

So figure your personal inflation rate and understand it might be very different from the CPI for the nation as a whole.

#128 OFFLINE   lparsons21

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Posted 10 February 2013 - 08:48 AM

You are certainly welcome to disagree with me as I don't claim to be an expert.

But if you look at the CPI and corresponding COLA increases over the last few years, and then look at everything except housing, and you'll see that everything increased well beyond the 'official' figures.

CPI is weighted fairly heavily with housing costs from what I can determine, but yet the housing price increases and decreases that get all the press are really only in the city/suburb markets and even there weighted around the east/west coast. Much of the rest of the country doesn't see those big swings. And just how many homes do you buy each year?

When I look at prices and inflation, I look at those things that people buy all the time. Food, energy of all forms and others. To give much weight to those things you only buy 2-3 times in your lifetime on average is just a way to twiddle numbers.

Lloyd
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#129 OFFLINE   Hoosier205

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Posted 10 February 2013 - 08:58 AM

You are certainly welcome to disagree with me as I don't claim to be an expert.

But if you look at the CPI and corresponding COLA increases over the last few years, and then look at everything except housing, and you'll see that everything increased well beyond the 'official' figures.

CPI is weighted fairly heavily with housing costs from what I can determine, but yet the housing price increases and decreases that get all the press are really only in the city/suburb markets and even there weighted around the east/west coast. Much of the rest of the country doesn't see those big swings. And just how many homes do you buy each year?

When I look at prices and inflation, I look at those things that people buy all the time. Food, energy of all forms and others. To give much weight to those things you only buy 2-3 times in your lifetime on average is just a way to twiddle numbers.


http://www.bls.gov/cpi/cpifaq.htm
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#130 OFFLINE   lparsons21

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Posted 10 February 2013 - 09:12 AM

Thanks Hoosier.

Even worse than I thought. All urban, no suburban or rural included in their calculations. Definitely skews housing costs a bit.

Lloyd
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#131 OFFLINE   Hoosier205

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Posted 10 February 2013 - 09:55 AM

Thanks Hoosier.

Even worse than I thought. All urban, no suburban or rural included in their calculations. Definitely skews housing costs a bit.


Not if you understand how it works.
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#132 OFFLINE   phrelin

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Posted 10 February 2013 - 02:04 PM

Actually, you can get for most parts of the country data for all communities under 50,000 population broken down, including a report for "all items less shelter." Using the java engine at http://www.bls.gov/cpi/ you see options:

Posted Image


In the upper screen on the left you see Size Class D (under 50,000) which would be for the nation. Let's suppose you want to look at the midwest. In the lower screen on the left you see Midwest - Size Class D. And suppose you want to factor out the cost of rents, mortgage payments, etc. So on the right you scroll down to All items less shelter. The results you get indicate that without shelter, the CPI went up 32% since the end of 2001. If you choose to check shelter, you find that it is 25% higher than 2001 as it stalled out beginning in 2008. On the other hand, gasoline prices are 2.5 times what they were ten years ago.

Is it perfect data? No. But it isn't as bad as you think it is. It's just that statistical data is based on averages and they assume things like how much gasoline the average household buys. Nobody lives an average life.

Now me, I grumble about the fact that they don't have a Size Class D for the West.:sure:

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#133 OFFLINE   phrelin

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Posted 10 February 2013 - 02:14 PM

And you can get this:

Posted Image


I thought proudly that my costs didn't go up like that until I remembered I added SiriusXM when we bought a new car two years ago.

"In a hundred years there'll be a whole new set of people."
"Always poke the bears. They sleep too much for their own good."

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#134 OFFLINE   sregener

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Posted 11 February 2013 - 04:56 AM

CPI is a very broad measurement of inflation.


CPI is a very broad, cooked-books measurement of inflation. It is in the government's own interests to make the CPI appear low.

Inflation is an increase of the money supply, and with the Fed ceasing to release M3 numbers (the most accurate measure of just how much money the Fed is pumping into the economy) it is hard to know exactly what that is. What people commonly call "inflation" is the general rise of prices, but prices do not immediately rise generally because inflation does not happen generally. When new money is pumped into the economy, it goes to specific industries which then see the increased demand as a signal to increase prices. That money, then re-spent, goes to other parts of the economy where eventually, given enough time, it all evens out. However, since the Fed never stops pumping new money in, it never evens out and the market is riddled with false signals.

Rising prices are the effect, not the cause. And trying to measure the effect is in many ways backwards.

That said, I think if we took a reasonable look at prices for satellite television since 1995, and worked out a cost/channel, the prices are still quite favorable without needing to take inflation into account. Add to that the abundance of HD channels, and we're truly getting more for our devalued dollar.

#135 OFFLINE   Hoosier205

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Posted 11 February 2013 - 06:55 AM

CPI is a very broad, cooked-books measurement of inflation.


Not unless you favor conspiracy theories.
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#136 OFFLINE   MCHuf

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Posted 11 February 2013 - 07:41 AM

We can use all of the figures we want to prove or disprove how tv rates have been going up compared to general infaltion rates. But the fact remains that pay-tv isn't a necessary expense such as electricity or food. If people perceive that rates are going up too much, eventually they will cut back or even drop it to be able to better afford the essentials. Content providers better start keeping their costs and greed under control or they will be in for a rude awakening.

While someone said that the AT250 used to be AT180, what are you getting that is worth it? Do we really need NatGeo/NatGeo Wild, History/H2, Rural/RFD, etc? Does a market really need to have 3 or 4 rsn's? I see a lot of multiple channels showing content that could be shown on one channel.

#137 OFFLINE   tampa8

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Posted 11 February 2013 - 10:14 AM

I was waiting for someone to use that argument. Whatever channels you watch regularly, do we really need them? Lets get rid of those first if we are judging what I can watch. So, YES, I watch those channels. They are pennies and don't add squat. Only channels like USA or TNT or AMC etc have a little more cost to them. (And are popular)
If you took out the sports and made that a separate package, hardly anyone would be complaining about cost of other packages. RSN's are a completly different discussion, because of the cost involved and as you point the prolific amount of them.

Edited by tampa8, 11 February 2013 - 10:21 AM.


#138 OFFLINE   MCHuf

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Posted 11 February 2013 - 11:34 AM

I was waiting for someone to use that argument. Whatever channels you watch regularly, do we really need them? Lets get rid of those first if we are judging what I can watch. So, YES, I watch those channels. They are pennies and don't add squat. Only channels like USA or TNT or AMC etc have a little more cost to them. (And are popular)
If you took out the sports and made that a separate package, hardly anyone would be complaining about cost of other packages. RSN's are a completly different discussion, because of the cost involved and as you point the prolific amount of them.


I doubt that the programming those channels provide would disappear if the channels did. They would be consolidated on the sibling channel. With dvr use, it barely matters what time a cable network show comes on anymore anyway.

And while those channels may each "only" add pennies, that still is money that could be saved by the consumer if content providers used their channels more efficiently.

#139 OFFLINE   sregener

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Posted 11 February 2013 - 04:59 PM

If people perceive that rates are going up too much, eventually they will cut back or even drop it to be able to better afford the essentials. Content providers better start keeping their costs and greed under control or they will be in for a rude awakening.


There is theory and there is reality. We were told for decades that we needed to conserve electricity, that all our energy-saving purchases would save us money. And then, when everybody started cutting back, the electricity rates were raised to keep revenues up for the utilities, because lo-and-behold, their business model requires ever-more money, even if demand is falling. I fear that cutting back on pay TV programming will lead to another spiral: we'll cut back, they'll raise the prices so their revenues stay consistent. Eventually, the bubble will pop, but what the entertainment world will look like then is anybody's guess.

#140 OFFLINE   MCHuf

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Posted 12 February 2013 - 06:52 AM

There is theory and there is reality. We were told for decades that we needed to conserve electricity, that all our energy-saving purchases would save us money. And then, when everybody started cutting back, the electricity rates were raised to keep revenues up for the utilities, because lo-and-behold, their business model requires ever-more money, even if demand is falling. I fear that cutting back on pay TV programming will lead to another spiral: we'll cut back, they'll raise the prices so their revenues stay consistent. Eventually, the bubble will pop, but what the entertainment world will look like then is anybody's guess.


There is a difference between utlities and and the pay-tv industry though. Utilities are highly regulated industries that are basically guaranteed profits by state commisions. Pay-tv providers aren't guaranteed anything. Didn't Charter file for bankruptcy a few years ago?

#141 OFFLINE   sregener

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Posted 12 February 2013 - 07:33 AM

There is a difference between utlities and and the pay-tv industry though. Utilities are highly regulated industries that are basically guaranteed profits by state commisions. Pay-tv providers aren't guaranteed anything. Didn't Charter file for bankruptcy a few years ago?


You will never find a perfect analogy. They all break down somewhere. Unless or until I see a general willingness from the public to cut the cord, the analogy is still useful. Charter/Comcast/et al will not allow their profits to drop if they can help it, and when customers cut back on their packages, it merely gives them more incentive to raise prices generally.




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