Shipping container Inflation! (700%)

[Oldherkpilot]

T&I: taxes and insurance. You mentioned it first: PITI. TI in PITI. TI=T&I, same as P&I means principal and interest.

I'm not sure what your point is about amortization.....that's $825 at the very first payment....the amount applied towards principal increases, so it's disingenuous to imply that only $825 will be applied to principal for the life of my mortgage, as if for the life of my mortgage I'd be wasting $1,675 each month just like rent. And, even if that WERE the case, which it isn't, that'd still be $825 per month that is equity I'd get back in the end.

And, yes, there's interest paid on a loan, but at the end of 30 years (if I were to even let the loan go that far) I'll still be several hundred thousand dollars ahead than if I were to rent. Not to mention, once I pay off the mortgage I've got thousands of dollars in extra discretionary income per month at that point...I'd own my place outright.....whereas if I rented for 30 years, I'd still only be renting for the rest of my life.

That also isn't accounting for the fact that rent will rise over time, so that $900k at the end of 30 years for renting is actually an unrealistically low number and would be much higher, whereas not only will my mortgage not negatively amortize but I have the option of paying down the principal early, thus reducing the amount of interest I pay over the life of the mortgage (and no, I have no prepayment penalty).

I'm kind of baffled why you're trying to convince me that buying doesn't make financial sense.

I'm not trying to convince you of anything. Your math was fucked and I pointed it out so other readers can make an informed assessment about whether to buy a place at the top of a bubble market. 2008 an all. Carry on.

[RoyGBiv]

Just received this unsolicited email. I get these randomly from companies looking to get my shipping business.

I was quoted $25,000 for this route back in September. "Normal" is about $3500 - $4500-ish (Shenzhen to LA) depending on season, etc.

Good morning, we are back from National holiday!

Then now from SHENZHEN to LA, the rate is only usd9200/40HQ, to New york: usd13200/40HQ, do you have any containers to be arranged in Oct. ?

[peterb]

A different container price hike and supply shortage….
—————-
Here's another unexpected example of how supply chains have been upended by the pandemic: Glass bottles used for everything from vinegar to pasta sauces are getting tied up in their own bottlenecks. That's driving prices higher, when you can get the bottles at all.

Just like many other industries struggling to secure supplies, producers of pasta sauce and high-end spirits are seeing the glass used in their humble containers tied up in massive cargo jams, and that's forcing them to either absorb the higher costs or pass them on to consumers.

https://www.npr.org/2021/10/13/10453...rtage-of-glass

[GJM]

In today’s article reporting a 5.4 percent increase in inflation in September, excluding energy prices. Also today, Social Security announced the largest increase in years. Here is what the Fed said:


Fed Vice Chairman Richard Clarida said Tuesday that the underlying rate of inflation in the U.S. economy is near the Fed’s 2% longer-run objective and, thus, that the recent surge will prove “largely transitory” once the supply bottlenecks clear. However, he said the Fed would raise rates if it saw evidence that households and businesses were beginning to expect higher inflation.


“Monetary policy would react to that,” Mr. Clarida said. “But that is not the case at present.”

[ST911]

If there's an excess of containers that can't get back, what's the best way to get a used a container for bottom dollar? I see websites with containers in various conditions for sale. What's the hack for even better deals?

[Crow Hunter]

T&I: taxes and insurance. You mentioned it first: PITI. TI in PITI. TI=T&I, same as P&I means principal and interest.

I'm not sure what your point is about amortization.....that's $825 at the very first payment....the amount applied towards principal increases, so it's disingenuous to imply that only $825 will be applied to principal for the life of my mortgage, as if for the life of my mortgage I'd be wasting $1,675 each month just like rent. And, even if that WERE the case, which it isn't, that'd still be $825 per month that is equity I'd get back in the end.

And, yes, there's interest paid on a loan, but at the end of 30 years (if I were to even let the loan go that far) I'll still be several hundred thousand dollars ahead than if I were to rent. Not to mention, once I pay off the mortgage I've got thousands of dollars in extra discretionary income per month at that point...I'd own my place outright.....whereas if I rented for 30 years, I'd still only be renting for the rest of my life.

That also isn't accounting for the fact that rent will rise over time, so that $900k at the end of 30 years for renting is actually an unrealistically low number and would be much higher, whereas not only will my mortgage not negatively amortize but I have the option of paying down the principal early, thus reducing the amount of interest I pay over the life of the mortgage (and no, I have no prepayment penalty).

I'm kind of baffled why you're trying to convince me that buying doesn't make financial sense.

The only catch, and what I am sure he was demonstrating is what "almost" happened to me and just something to be aware of.

In May of 2001 I moved to Clarksville TN and bought a very nice house in a very nice new subdivision. I paid $150k for the house. ($232,466 in 2021 according to CPI data). Then 9/11 happened.

Not only did we have a serious economic crisis but being a military town, there were a lot of shakeups in people leaving/coming etc that seriously depressed the housing market (and had the potential to have been much worse). So the house that I purchased for $150k was suddenly worth significantly less, but my mortgage was still for $142k (5% down with PMI). So I was in a job that I hated, that was in jeopardy, with a house that I owed more for than I could sell it for. This was not even considering the 6% closing costs that I would have to pay to a realtor to sell it.

The first few years that I was making my payments, very little was going to the principal of the loan. Instead, I was paying exclusively interest.

In effect, I was "renting it" from the bank for the interest payments and wasn't building any equity at all and wouldn't for several years.

"Luckily" I was in the house/job for 7 years, which wound up being enough time for the market/economy to recover enough that when I sold, I did not have to take a haircut and luckily got out selling it for $185k minus my closing costs but I still owed the bank a significant amount of money because even at 7 years in to a 30 yr mortgage my payment was very biased towards interest over principal. A few months after selling the even bigger housing crash of 2008/09 happened. If I had waited just a few more months to sell, it is very likely I would have owed money when I sold the house after paying closing costs.

Over a long period of time, it definitely makes more sense to own than rent since you "earn" the imputed rent that you don't have to pay once you have your home paid for. But there is a point that the rent vs own intersects and normally, in the short term, you will be better of renting than owning. If you have a stable job and you plan on staying in the area/home long term, you absolutely should buy. If you job is unstable and you may be transferred or you may decide you don't want to live there in less time that it takes to make that intersection point, you could very well lose money, sometimes A LOT if we hit a major rough patch in the economy/area.

But you have to roll the die either way.

[blues]

And to think, back in the 90's, the Colombian cartels and their confederates wouldn't even use the same container twice. It would end up in Barcelona, and after the dope was removed from the walls and floor, it was brought to a location where it was destroyed. (This based upon firsthand interrogations of Colombian and Cuban based narco-traffickers.)

Maybe the cartels can help out with some containers in the interest of facilitating commerce. It seems only fair.

[Borderland]

In today’s article reporting a 5.4 percent increase in inflation in September, excluding energy prices. Also today, Social Security announced the largest increase in years. Here is what the Fed said:


Fed Vice Chairman Richard Clarida said Tuesday that the underlying rate of inflation in the U.S. economy is near the Fed’s 2% longer-run objective and, thus, that the recent surge will prove “largely transitory” once the supply bottlenecks clear. However, he said the Fed would raise rates if it saw evidence that households and businesses were beginning to expect higher inflation.


“Monetary policy would react to that,” Mr. Clarida said. “But that is not the case at present.”

That's about $1200/yr. for me. Not a bad pay increase for doing absolutely nothing.

[Totem Polar]

Look at 1982!

Damn. 1981 too. No wonder my parents hated financing things.

[TGS]

Over a long period of time, it definitely makes more sense to own than rent since you "earn" the imputed rent that you don't have to pay once you have your home paid for. But there is a point that the rent vs own intersects and normally, in the short term, you will be better of renting than owning. If you have a stable job and you plan on staying in the area/home long term, you absolutely should buy. If you job is unstable and you may be transferred or you may decide you don't want to live there in less time that it takes to make that intersection point, you could very well lose money, sometimes A LOT if we hit a major rough patch in the economy/area.

But you have to roll the die either way.

100% why my post specifically said renting makes more sense if you're only going to be in an area short term.

No disagreement from me there.

I'm not trying to convince you of anything. Your math was fucked and I pointed it out so other readers can make an informed assessment about whether to buy a place at the top of a bubble market. 2008 an all. Carry on.

My math was fucked? Sure thing, pops. Maybe you're just making assumptions.

Glad you know more about my own mortgage than I do. Phew. What would I do without you. I've never looked at the loan at all, so these numbers are completely new to me. AN INTEREST RATE!? By golly gee, what's that!?