20-year-old Brian Haugh has spent the past six years purchasing thousands of “:steam2016:” emoticons, which Valve created to promote the 2016 Steam Summer Sale and looks like a hot dog wearing little shoes. On Steam, you can purchase emoticons from other users in the Community Marketplace or create them by playing games that generate Steam collectibles. You can use them when chatting in Steam, to spruce up your profile description, or to create Super Mario art. Steam emoticons are typically $0.10 curios with limited practical use and aesthetic value, but they mean much more to Haugh.
“I will never stop looking for or at wieners,” he told me. “Wieners will be on my mind until the day I die.”
Some of Haugh’s dogs.Screenshot: Brian Haugh
Haugh is on a mission to buy every :steam2016: hot dog emoticon available on the Community Marketplace, and has been doing so since the day he turned 16 in 2016. He routinely refers to them as “wieners” or “the wieners,” and as of June 30, he has 2,525 of them in his collection, which cost him over $250. He tracks these numbers in a fastidious spreadsheet, which contains all wiener transaction history and visualizes data in a graph named “Wieners Purchased Over Time.”
2018 was a good wiener year.Screenshot: Brian Haugh
The wieners were a joke, at first. “I used to be a part of a small gaming group that met together to play Mount and Blade: Napoleonic Wars,” Haugh said. “During the summer of 2016, the Steam wiener emoji was released, and for whatever reason, I was stupid hyped over it. I kept spamming it, and our leader got fed up because other people were starting to join me. So he banned the use of it, stifling my rights to use the wiener emoji.”
In response, Haugh and his friends started drafting plans for a “wiener resistance,” which consisted of multiple people spamming :steam2016: until they got kicked from the server. He started buying the emoticon in bulk shortly after in celebration of the successful trolling, he says. Do you remember what it’s like to be 16?
The 2016 wiener resistance gained momentum on Steam.Screenshot: Brian Haugh
But if you look beyond the teen boy shenanigans, Haugh’s attention to detail cannot be overstated. He’s dedicated to his craft, which happens to be collecting wieners. He’s so dedicated that he still performs routine checks on Steam’s wiener load even after feeling like he already made his “final purchase,” which bought up every available :steam2016: emoticon at that point in time (aside from one priced at $400).
“It has become a religion for me,” he said. “It’s always in the back of my mind.” And it has changed his understanding of real hot dogs forever—Haugh says that it “might sound strange, but occasionally I’ll see one, and this whole experience will flash into my mind and I’ll laugh.”
In addition to motivating schematic shifts, his mass wiener purchases might also be influencing the Steam market. They’re likely to be the sole determinants of :steam2016: emoticon prices, and because of the spreadsheet and Steam’s own data visualizers, Haugh has proof that his bulk purchases often lead to price spikes.
“No less than three days earlier, I had made a purchase of 66 wieners,” Haugh says about the July 1 price hike.Screenshot: Brian Haugh
It checks out. “If I bought every single emoji worth $0.03 – $0.10 on a specific day, for example, the next day, the only [emoticons] being sold would be $0.11,” he said. “The average value would have increased, and other people would begin selling their own wieners at $0.11, which could be seen as the average trading prices for that day in the Steam market.”
“Steam’s marketplace is similar to that of a stock market,” he said. “Things are only able to be bought if someone else is selling,” which is why he let the $400 wiener live.
Our world seems to get darker and more filled with monkeypox every day, but at least one man’s loyalty to wieners stays good and strong.
“I don’t ever plan on stopping,” Haugh said. “There will always be some poor fool to list a wiener for a few cents on the market, and when he does, I’ll be there to buy it.”
Now it’s new vehicles, restaurants, energy. Game of Whac-A-Mole as some price spikes slow while others begin. But it’s a lot worse than it seems.
By Wolf Richter for WOLF STREET.
The Consumer Price Index (CPI) jumped 0.5% in July from June, after having jumped 0.9% in June, 0.6% in May, for a three-month annualized rate – the three-month momentum – of 8.1%. Year-over-year, CPI jumped 5.4%, same pace as in June, and the fastest since June 2008 (5.6%), all of which had been the fastest since January 1991, according to data released by the Bureau of Labor Statistics today.
The CPI without the volatile food and energy components (“core CPI”) rose by 0.3% for the month and by 4.3% year-over-year.
The CPI measures the loss of the purchasing power – well, part of the loss of the purchasing power, as we’ll see in a moment – of the consumer dollar and thereby the purchasing power of labor. In July, this purchasing power dropped another 0.5% for the month, and for the past three months annualized, it dropped by 8.6% – “Honey, where did my big raise go?”
CPI vastly understates one-third of its components: housing cost.
Homeownership costs and rents account for 31% of CPI. These are the largest categories, the most important categories, but they hardly budged despite exploding housing costs and thereby suppressed the CPI.
“Rent of primary residence,” which weighs 7.6% in the overall CPI, ticked up just 1.9% year-over-year despite the chaos going on in the rental market, as many cities experienced double-digit rent increases, while others experienced declines. Every month this year, it nudged up 0.2% from the prior month as if nothing had happened. This is the CPI for rent, which has dropped from the 4% range in 2019 to 1.9%:
“Owners’ equivalent rent of residences” – the component that tracks the costs of homeownership and weighs 23.6% in the overall CPI – rose just 2.4% year-over-year despite the historic price explosion in the housing market.
The CPI’s homeownership component doesn’t track actual home-price inflation, but it is based on surveys that ask what homeowners think their home might rent for and is therefore a measure of rent as seen by the homeowner.
Meanwhile, back at the ranch, the national median price of existing homes spiked by 23.4% year-over-year, according to the National Association of Realtors.
The Case-Shiller Home Price Index, which tracks the price changes of the same house and is therefore a measure of house price inflation, spiked by 16.6% year-over year, the most in the data going back to 1987 (purple line). And yet, the measure for the costs of homeownership by the BLS barely budged (red line):
Energy costs spiked 23.8% year-over-year.
Energy accounts for 7.2% of the overall CPI. The spike was driven by gasoline, a surprise to no one who has filled up a tank of gas recently, which jumped 41.8% year-over-year. Natural gas jumped 19% year-over-year. The CPI for electricity service to the home rose 4.0% year-over-year.
Durable Goods inflation spiked 14.3% year-over-year, along with June the biggest since at least 1957.
The crazy new and used vehicle prices drove, so to speak, the spike in the CPI for durable goods. Other items in this category are appliances, consumer electronics, furniture, tools, bicycles, sports equipment, etc. The CPI for durable goods spiked by 14.3% year-over-year, after having spiked by 14.6% in June, both of which were the biggest jumps in the data going back to 1957.
The CPI for used vehicles jumped by 0.8% in July, but given the crazy spike that began last summer, July’s jump was a lot smaller than the jump in July last year. And on a year-over-year basis – due to this base effect – it spiked a tad less than in June, but by a still mind-bending 41.7%. Not much comfort yet for used vehicle shoppers, but price resistance has finally started to crop up and a portion of this crazy price spike is going to unwind:
New Vehicle CPI spikes the most since 1982, even as the used vehicle CPI’s spike is slowing. This is the game of inflation Whac-A-Mole, where one price spike here is replaced by another price spike there.
The CPI for new cars and trucks jumped by 1.5% in July, the third month in a row of these types of price spikes, the biggest since the cash-for-clunkers program during the Great Recession. This brought the year-over-year spike to 6.4%, the fastest since January 1982. But as we’ll see in a moment that price spike is understated by “hedonic quality adjustments.”
“Hedonic quality adjustments” suppress the CPIs for new & used vehicles. The BLS uses “hedonic quality adjustments” to account for improvements in vehicles over the years. For example, the estimated added costs of the decades-long transition from a four-speed automatic transmission to a 10-speed electronically controlled transmission are removed from the CPI at every step along the way. For an illustration what that means, here is my real-world F-150 and Camry price index compared to this CPI for new vehicles going back to 1989.
In theory, CPI measures price changes of the same item over time; and any improvements change the item, which then boils down to a price increase based on an improvement rather than just the loss of the purchasing power of the dollar. In theory, this makes sense.
In practice, these hedonic quality adjustments have been aggressively applied to push down the CPI, and thereby suppress the appearance of inflation. Under-reporting the loss of the purchasing power of the dollar is a convenient political thing, an effort to keep workers in the dark about the purchasing power of their labor.
The effect can be seen in the new vehicle CPI as an index, which shows that new vehicle prices fell in the years after hedonic quality adjustments took effect, and that in 2019, you could have bought a Camry or an F-150 for the same price as in 2000, which is of course a total farce. It’s only the recent spike that outran the hedonic quality adjustments, but it too will eventually be reeled in by them.
Restaurant prices are next in the inflation Whac-a-Mole.
Everyone who has been eating out or has followed the announcements by the fast-food chains knows that this has been happening, and it is now working itself ever so gradually into the CPI for “Food away from home,” which jumped by 0.8% in July from June, after having jumped 0.7% in June and 0.6% in May. Year-over-year, the index is up 4.6%, the most since 2009. But this is just the beginning.
Restaurants, struggling to hire workers, have increased their wages, and they also face increases in the costs of commodities, ingredients, and services they use, and they face higher operating costs due to the pandemic, and they’ve begun to pass those costs on to consumers:
This loss of purchasing power is “permanent.”
Only a period of deflation – with prices across the board actually dropping – would recuperate the purchasing power of the dollar. But that won’t be allowed. In my lifetime, there were only a few quarters of deflation. The rest of the time, it was either inflation or rampant inflation. And now, after a period of inflation, we’ve got rampant inflation. As the first chart above shows, the loss of purchasing power isn’t “transitory” or “temporary” but rock-solid permanent. What is transitory is the pace of the future losses of purchasing power.
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Housemargue was recently acquired by Sony as part of its PlayStation Studios, but according to the CEO of the Finish studio, Sony wasn’t the only company that was interested in a purchase.
Following the announcement of the deal between Sony and Housemarque, Finish outlet interview founders Ilari Kuittinen and Mikael Haveri about the acquisition, and according to co-founder, the multiple major companies expressed their interest in the development studio.
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“Usual Suspects”, Kuittinen said in the interview.“[That is] major players in the field from China, Sweden, and the United States. I have to say that there is a very special spring behind us and the fact that we have been competing even feels a little surreal.”
The co-founder added, “this deal gives us the financial freedom to develop the company towards the best gaming studios in the world. It allows us to create new gaming experiences that are even bigger and more ambitious.”
Major players from the above-mentioned countries could possibly include Tencent, the Embracer Group (former Nordic), and possibly Microsoft.
Terms of the deal between Sony and Housemargue including the acquisition cost were not disclosed due to contractual commitments.
Sony announced the deal with Housemarque last week. “We are so excited to finally join the PlayStation Studios family!”, Kuittinen said upon the announcement. “This gives our studio a clear future and a stable opportunity to continue delivering on gameplay-centric approaches, while still experimenting with new methods of narrative delivery and pushing the boundaries of this modern artform. Locally here in Helsinki, this also means that we will officially expand the PlayStation family to a growing industry hub and secure the legacy of the oldest game studio in Finland.”
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Interestingly, while announcing the deal last week, Sony might have ‘self-leaked’ the long-rumored purchase of the popular remake studio BluePoint Games. Sony has yet to officially announce this deal.
Housemarque released PS5-exclusive Returnal last month – the studio’s first AAA title, and what a ride that is…
