Bloomberg’s Market Pulse Gauge Signals PANIC and Collapses To Great Recession Lows

Everbody panic!

Bloomberg’s market pulse gauge is signalling panic.

The Bloomberg market pulse index quantifies sentiment using 6 factors — price breadth, pairwise correlation, low vol performance, defensive vs. cyclical sector performance, high vs. low leverage performance and high yield spreads.

It’s currently as panicked as in 2008!

Powell Promises Affordable Housing: Miller on the Money

House with white picket fence, smalltown America - Powell Promises Affordable HousingThe Federal Reserve raised interest rates another 3/4% and promises more increases until inflation is under control.

Yahoo Finance reports:

“Jerome Powell just warned that the US housing market needs a ‘difficult correction’ so that folks can afford homes again:

“Higher interest rates translate to bigger mortgage payments – not good news for the housing market. But cooling down housing prices is part of what needs to be done to bring inflation under control.”

…. Fed Chair Jerome Powell said, ‘….In the housing market (we probably) have to go through a correction to get back to that place.’

…. Those words might sound scary, especially to those who lived through the last financial crisis – where the housing market went through a very, very difficult correction.”

Scary thought indeed for those who lived through the Volcker years with mortgage rates over 18%. The relationship of higher interest rates on the housing market is dramatic.

30 Year Fixed Rate Mortgage Average in the US 1976-1985The blue line is 30-year fixed mortgage rates outlined on the left side. The red line is housing starts, numbered on the right side. In the ’70s, inflation was rising, interest rates were low, and the housing market was booming.

Fed Chairman Volcker raised rates in 1979 and mortgage rates climbed into double digits. He cut rates too soon and raised them again.

The rest of the 18% + mortgage rate story…

To get a loan, buyers needed good down payments, coupled with loan origination fees (called points). Lenders charged “points” (some as high as 5%) to write the loan. Buyer and seller not only negotiated the selling price, but also who pays the points to the lender. Sellers likely paid a realtor a 6% commission for finding the buyer (not easy in that tough market) and another 2-3% in points to the lender for giving the buyer a mortgage.

As mortgage rates skyrocketed, housing starts tumbled from around 2.1 million units to approximately 800 thousand. The resale market also got clobbered.

While times were as tough as I have ever seen, the recession was short. Volcker brought inflation under control in about 4 years.

Annuity Guide – Click Here!Times have changed

Our current housing debacle is different, thanks to the government’s social engineering and market interference.

President Clinton wanted to make home ownership available to low-income earners. Banks were required to lend a certain percentage of their mortgages to risky, low-income buyers. If they didn’t meet their quotas, they could lose their banking charters.

Defaults rose; banks quickly began complaining. Holding too many risky loans would put them out of business. The government authorized Fannie Mae and Freddy Mac, to buy those loans from the banks.

The Glass-Steagall act was also repealed; investment banks merged with commercial banks. They began packaging loans into funds, peddling them to investors.

The rating agencies flinched, often giving these fund packages higher ratings than they deserved, creating the illusion of safety – lying to unsuspecting investors who bought them at the recommendation of their brokers.

Lenders, making their money through loan origination fees, no longer cared about the creditworthiness of the borrower. That opened the floodgates, no money down – loan for more than 100%, no problem; step right up and get your mortgage! The mortgages were sold, transferring the risk to others.

Things were booming, until it all fell apart in 2008. The movie, The Big Short outlined how corrupt the entire system was (and continues to be).

The investment banks, who made and held bad loans, got bailed out (“Too big to fail!”). The Fed cut interest rates to historic lows and started the process all over again. It took a few years until low interest rate mortgages spurred the housing market and prices skyrocketed:

30 Year Fixed Rate Mortgage Average in the US 2008-2022Unlike 2008, the current correction is not a result of delinquent mortgages – yet. During the pandemic the government jumped in to save the day, putting a moratorium on mortgage and rent payment. Borrowers who were getting behind on their payments were no longer counted as delinquent.

Today’s mess is caused by out-of-control inflation. Pundit, Bill Bonner summarizes:

“Inflation is always…a political phenomenon. We get inflation when the politicians spend more than they can afford…and then ‘print’ money to fill the gap. It is fundamentally a default to creditors, who get back less than they were promised. For everyone else, inflation is a tax – disguised and delayed – that is levied mostly on the poor and middle classes…and people who don’t know what’s going on.

And right now, the politicians of both parties agree – they want more
of it. Inflation is the source of their wealth and power. It allows them to spend money they don’t have on programs we don’t need.

But they also need a deflationary recession…to provide cover for their renewed inflation, and to keep consumer prices down for the masses as they boost asset prices for the elite.

So, there you have it. Coming down the pike – tightening to cause a crisis; then loosening up to save the world.”

Mighty MouseLike Bill Clinton, Fed Chairman Powell, pretending to be Mighty Mouse, promises to save the day – “to where people can afford housing again.”

Affordable?

What is affordable? Who can afford it? Rising interest rates reduces the number of buyers, increasing available housing inventory – and real estate prices come down.

WORRIED ABOUT INFLATION?

The Dividend Hunter – Tim Plaehn2022 is shaping up to be the most expensive year ever. The Fed’s response is too little, too late and prices continue to soar!

How do investors protect the value of their nest egg?

How do retirees pay their skyrocketing living costs?

Luckily there’s a proven way for you to stay ahead of inflation, just like 20,000+ investors are doing right now…

Here’s how you can be one of them. Click HERE for more information.

I wasn’t surprised to see Reuters report:

“(The) Market Composite Index, a measure of mortgage loan application volume,…is now down 64.0% from one year ago. Its Refinance Index fell…was down 83.3% compared to one year ago.”

Lending Tree provides a daily graph of current mortgage rates. I typed in $500,000, Indiana, and a 700-credit score. On September 23rd, they reported:

Average Rates Chart, September 23, 2022

These rates change regularly and are affected by local market, credit score, down payment, and a lot of other factors.

In Arizona, we are seeing a huge influx of California refugees helping to keep our housing prices high. A south Florida realtor reports they are experiencing a similar situation, new residents fleeing high tax states; essentially voting with their feet and relocating. Other states are struggling.

Higher mortgage rates are impacting sellers nationally. Wolf Richter tells us:

“Housing Bubble Woes: Home Builders Cut Prices, Pile on Incentives, amid Plunging Traffic of Buyers, Spiking Cancellations….

Buyer traffic is weak in many markets as more consumers remain on the sidelines due to high mortgage rates and home prices that are putting a new home purchase out of financial reach for many households,” according to the National Association of Home Builders (survey) this morning.

…. With today’s index value of 46, the NAHB/Wells Fargo Housing Market Index is now below where it had been in May 2006, on the way down into the Housing Bust.

Wolf Street NAHB Wells Fargo Housing Market Index

Across the US, the cancellation rate among home builders in August jumped to 19%, the highest in years, up from 17.6% in July, and up from 16.5% during the worst lockdown month….”

Raising interest rates to make homes more affordable sounds logical, but what about the cost of money?

Let’s assume a well-qualified buyer, with an adequate down payment, feels they can afford a monthly payment of $2500/month. How big a mortgage can they get?

Loan Amount vs. Interest Rate

In January, 3% interest rates qualified them for a $592,973 mortgage. As interest rates have gone above 7%, $2,500/month gets them $375,769. Still want to borrow $592,973? It will cost you 58% more, $3,945/month.

The 3% rates were NOT free market rates. Buyers should have jumped at it and locked in the rate for 30 years.

The Fed vows to continue to raise rates until they “break” inflation. Currently, the Fed funds rate is 3-3.25%. Many predict the rate to increase to 4.5-5%, which will raise mortgage interest rates much higher. At 10%, the $592,973 mortgage will cost $5,205/month, double what it was in January 2022.

Waiting for rates to come back down to “the good old days of 3-4%” is taking a big risk. The Fed stopped buying government and corporate debt.

The biggest debtors are going to be competing for funds in a free market, meaning real savers lending them money, not the Fed printing fake money.

As the government and corporate America begins rolling over their debt, sucking up most of the available capital, getting a mortgage will become even more expensive. Yes, real estate prices will come down, but much of that cost savings will be captured by the banks in the form of higher interest.

Should you buy now or wait?

If you want a new home, and require a mortgage, things are going to get worse – and may stay that way for some time. Get a good mortgage at today’s rates and refinance later, if/when rates come down.

If you are a cash buyer, be patient, some real bargains are on the horizon.

“Will I say there will never, ever be another financial crisis? No, probably that would be going too far. But I do think we’re much safer and I hope that it will not [happen] in our lifetimes and I don’t believe it will.”

— Former Fed Chairperson Janet Yellen 2017

Despite their denials, the Fed is political. I’ve heard whispers that Powell realizes he can’t bring inflation under control before the mid-term elections. We are seeing Fed forecasts for things to return to normal in late 2023. Unlike Volcker, Powell is raising rates slowly and is likely to drag us into stagflation. Until interest rates are higher than borrowing/lending rates, progress will be very slow.

I anticipate the Fed will do something before the 2024 presidential election, even if it is the exact wrong thing to do.

A little help means a lot!

Seven years ago, I vowed to keep our newsletter FREE! I plan to keep my promise.

It’s an expensive, time-consuming hobby, but also a labor of love.

Recently a reader asked why I didn’t charge for our weekly letter. I explained that I want it available for everyone. Some readers may be on limited budgets and may benefit the most from our advice.

He pressed on with his questions. How much does your letter cost? How many readers do you have? He concluded, “If each reader paid $10/year, you would be fine.

I responded, “Yes, $10 per reader would work, BUT I am committed to keeping it FREE even if it costs me money.”

Several readers suggested we add a donations button to help us offset the cost of our publication. It helps when people pitch in and we certainly appreciate it.

If readers want to donate, it sure helps out, however, it’s strictly voluntary – no pressure – no hassle!

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On The Lighter Side

Hurricane Ian has come and gone. Jo sent me a short video of the devastation Ian caused on Fort Myers Beach. We have ridden out a few hurricanes and never seen such widespread damage.

Jo and I met in Fort Myers and lived there for a few years. We spent a lot of time enjoying that beach, good dining, sunsets, you name it. Watching the video tugged at our hearts a bit.

What many don’t understand is a lot of residents in Ian’s path may be without power for weeks. They may have been spared heavy damage to their homes, but the tropical climate, with no air conditioning will cause all kinds of mold and mildew problems.

Insurance may cover the damage, but it certainly is disruptive to the lives of those who are affected.

2004 Hurricane CharleyIn 2004, we followed the path of hurricane Charley. It came ashore just north of Fort Myers, in Punta Gorda. It followed Route 17 north through the central part of the state and came out on the east coast…much like Ian.

Power lines were down the entire way. Jo and I were amazed at the armada of utility trucks from several states that were working feverishly to put the power lines back up. They were replacing the older wooden poles with concrete poles which would withstand much stronger winds.

One unforgettable experience was seeing a restaurant with extensive exterior damage, all the windows were blown out.

Inside all the tables were set with tablecloths, silverware, etc. We were dumbfounded, how could something like that happen.

Hockey season is starting up once again. We are looking forward to watching our favorite team, the Tampa Bay Lightning. Hoping they have a good season.

Quote of the Week…

FED white stamp text on red octagon Federal Reserve“We do know that the Federal Reserve System must be abolished. The creature has grown large and powerful since its conception on Jekyll Island. It now roams across every continent and compels the masses to serve it, feed it, obey it, worship it.

If it is not slain, it will become our eternal lord and master. Can it be slain? Yes, it can. How will it be slain? By piercing it with a million lances of truth. Who will slay it? A million crusaders with determination and courage. The crusade has already begun.” — G. Edward Griffin, The Creature from Jekyll Island

And finally…

Friend Char P. shares some clever definitions:

  • ARBITRATOR: A cook that leaves Arby’s to work at McDonald’s
  • SELFISH: What the owner of a seafood store does
  • ECLIPSE: What an English barber does for a living
  • PARASITES: What you see from the top of the Eiffel Tower
  • BURGLARIZE: What a crook sees with
  • POLARIZE: What penguins see with

And my favorite:

  • BERNADETTE: The act of torching a mortgage

Until next time…

Dennis Miller

“Economic independence is the foundation of the only sort of freedom worth a damn.” – H. L. Mencken

Affiliate Link DisclosureThis post contains affiliate links. If you make a purchase after clicking these links, we will earn a commission that goes to help keep Miller on the Money running. Thank you for your support!

U.S. Foodstuffs UP 50%, Heating Oil UP 130%, Gasoline UP 61.4%, Public Debt UP 12%

Nothing from nothing. The should be the campaign motto for the midterm elections.

What do we have? Regular gasoline prices are UP 61.4% under Biden, the strategic petroleum reserve is DOWN -35% before Biden’s latest release of another 10 million barrels. Foodstuffs are UP 50% under Clueless Joe, and heating oil futures are UP 130% under dementia Joe.

And thanks to free-spending Joe, Nancy and Chuckie, US public debt is at $31.1 TRILLION. That is ANOTHER 12% in national debt under the 4 Horsemen of the Economic Apocalypse.

For an additional 12% in national debt (to be paid by our children and grandchildren), we have crippling inflation.

Great job DC!

According to Milton Friedman, Inflation Is the HIGHEST Hidden Tax the Public Will Ever Pay

According to Milton Friedman, inflation is the HIGHEST hidden tax the public will ever pay. With each passing day, Americans are paying for the Fed’s printing press FRENZY. Take a listen:
Sir, also check it .
And billionares avoiding paying taxes and receiving tax cuts is the perfect storm.
Because they have been able to claim unlimited losses through interest free debt. If you are always operating in the red there are no “profits” to tax.
And so . …
Yes, hence I said even street children in 🇮🇳 with their meagre daily earnings and consumption pay a real tax via inflation

No. It wasn’t the fed. It was Congress’s $2T American Rescue Plan that lit the inflation fire!

Larry Summers blasts $1.9 T stimulus as ‘least responsible’ economic policy in 40 years
thehill.com/policy/finance

I watched this whole series on Youtube. Did this air on TV back in the days? How come you never see a program like this now?

Netherlands: Inflation Rate Up to 14.5 Percent in September

CBS also calculates monthly average price developments if energy and motor fuel prices are not taken into account. Excluding energy and motor fuels, inflation would have increased from 6.0 percent in August to 6.5 percent in September.

Inflation is measured each month as the increase in the consumer price index (CPI) relative to the same month in the previous year. The consumer price index shows the price development of a package of goods and services as purchased on average by Dutch households. An inflation of 14.5 percent in September 2022 means that consumer product prices were 14.5 percent higher than in September 2021. This means the 14.5-percent inflation in September was not on top of the 12.0-percent inflation in August.

Inflation (CPI)
2017 January 1.7
2017 February 1.8
2017 March 1.1
2017 April 1.6
2017 May 1.1
2017 June 1.1
2017 July 1.3
2017 August 1.4
2017 September 1.5
2017 October 1.3
2017 November 1.5
2017 December 1.3
2018 January 1.5
2018 February 1.2
2018 March 1
2018 April 1.1
2018 May 1.7
2018 June 1.7
2018 July 2.1
2018 August 2.1
2018 September 1.9
2018 October 2.1
2018 November 2
2018 December 2
2019 January 2.2
2019 February 2.6
2019 March 2.8
2019 April 2.9
2019 May 2.4
2019 June 2.7
2019 July 2.5
2019 August 2.8
2019 September 2.6
2019 October 2.7
2019 November 2.6
2019 December 2.7
2020 January 1.8
2020 February 1.6
2020 March 1.4
2020 April 1.2
2020 May 1.2
2020 June 1.6
2020 July 1.7
2020 August 0.7
2020 September 1.1
2020 October 1.2
2020 November 0.8
2020 December 1
2021 January 1.6
2021 February 1.8
2021 March 1.9
2021 April 1.9
2021 May 2.1
2021 June 2
2021 July 1.4
2021 August 2.4
2021 September 2.7
2021 October 3.4
2021 November 5.2
2021 December 5.7
2022 January 6.4
2022 February 6.2
2022 March 9.7
2022 April 9.6
2022 May 8.8
2022 June 8.6
2022 July 10.3
2022 August 12
2022 September 14.5

Soaring energy prices

Prices of energy (electricity, gas and district heating) rose further in September and had an upward effect on inflation. In September, energy was 200 percent more expensive than one year previously. In August, the year-on-year increase was amounted to 151 percent.

Price index electricity, gas and heat energy
Jan 196.49 104.43
Feb 187.87 106.13
Mar 275.85 107.18
Apr 255.21 107.97
May 221.75 108.22
Jun 201.81 109.99
Jul 240.6 115.79
Aug 294.51 117.17
Sep 369.46 123.29
Oct 136.56
Nov 163.61
Dec 182.04

Study on energy prices progressing

Energy currently makes a significant contribution to overall inflation. The price development of energy is measured by CBS on the basis of new energy contracts. However, there are also households that have a fixed contract for gas and electricity. CBS is studying a new method for the measurement and calculation of energy prices as part of the CPI, in which current energy price developments will be presented in a more refined manner.

Inflation also higher due to education and clothing

Price trends in education and clothing had an upward effect on inflation as well. For a study programme in the 2021-2022 academic year at adult general secondary education (VAVO), secondary vocational education (MBO), higher professional education (HBO) or university, students received a 50-percent discount on the course fee or tuition fee. This discount was a government measure in connection with the coronavirus crisis and is no longer available as of the 2022-2023 academic year, with education becoming more expensive as a result. Prices of clothing were 8.0 percent up year on year in September; in August, the increase was 3.3 percent.

Lower price increase for petrol and holiday park accommodations

The price development of petrol, on the other hand, had a downward effect on the inflation rate. In September, the price increase of petrol amounted to 6.7 percent year on year, against 12.9 percent in August. The price development of a stay in a holiday park also had a downward effect. The year-on-year price increase was 1.0 percent in September, down from 5.7 percent in August.

CPI: Major contributions to year-on-year change
All items 14.5 12.0
Housing, water and
energy
8.84 6.60
Food and non-alcoholic
beverages
1.60 1.65
Transport 1.17 1.55
Furnishing and household
equipment
0.66 0.58
Restaurants and hotels 0.45 0.58
Miscellaneous goods
and services
0.42 0.40
Clothing and footwear 0.38 0.14
Recreation and culture 0.36 0.34
Consumption abroad 0.30 0.38
Education 0.30 -0.30

Inflation excluding energy also increasing

In addition to the general inflation rate, CBS also publishes the average price increase every month if the development of energy and motor fuel prices is not taken into account. The price developments of gas, electricity, district heating and motor fuels are not included in the calculation of this figure. Inflation excluding energy and fuel prices is also increasing. In September, consumer goods and services excluding energy and motor fuels were 6.5 percent more expensive than in the same month last year. In August, the year-on-year price increase was 6.0 percent.

Inflation (CPI) excluding energy and motor fuels
2021 January 1.6 2.1
2021 February 1.8 2
2021 March 1.9 1.7
2021 April 1.9 1.3
2021 May 2.1 1.5
2021 June 2 1.4
2021 July 1.4 0.5
2021 August 2.4 1.5
2021 September 2.7 1.5
2021 October 3.4 1.6
2021 November 5.2 2.3
2021 December 5.7 2.4
2022 January 6.4 2.7
2022 February 6.2 2.9
2022 March 9.7 3.1
2022 April 9.6 4.1
2022 May 8.8 4.4
2022 June 8.6 4.7
2022 July 10.3 5.7
2022 August 12 6
2022 September 14.5 6.5

Euro area inflation rate at 10 percent

Since 1996, CBS has published two different inflation rates: one based on the Consumer Price Index (CPI) and one based on the Harmonised Index of Consumer Prices (HICP). According to the European HICP, consumer goods and services in the Netherlands were 17.1 percent more expensive in September than in the same month last year, up from 13.7 percent in August. Inflation in the euro area rose from 9.1 percent in August to 10.0 percent in September.

European harmonised inflation (HICP)
2017 January 1.6 1.7
2017 February 1.7 2
2017 March 0.6 1.5
2017 April 1.4 1.9
2017 May 0.7 1.4
2017 June 1 1.3
2017 July 1.5 1.3
2017 August 1.5 1.5
2017 September 1.4 1.6
2017 October 1.3 1.4
2017 November 1.5 1.5
2017 December 1.2 1.3
2018 January 1.5 1.3
2018 February 1.3 1.1
2018 March 1 1.4
2018 April 1 1.2
2018 May 1.9 2
2018 June 1.7 2
2018 July 1.9 2.2
2018 August 1.9 2.1
2018 September 1.6 2.1
2018 October 1.9 2.3
2018 November 1.8 1.9
2018 December 1.8 1.5
2019 January 2 1.4
2019 February 2.6 1.5
2019 March 2.9 1.4
2019 April 3 1.7
2019 May 2.3 1.2
2019 June 2.7 1.3
2019 July 2.6 1
2019 August 3.1 1
2019 September 2.7 0.8
2019 October 2.8 0.7
2019 November 2.6 1
2019 December 2.8 1.3
2020 January 1.7 1.4
2020 February 1.3 1.2
2020 March 1.1 0.7
2020 April 1 0.3
2020 May 1.1 0.1
2020 June 1.7 0.3
2020 July 1.6 0.4
2020 August 0.3 -0.2
2020 September 1 -0.3
2020 October 1.2 -0.3
2020 November 0.7 -0.3
2020 December 0.9 -0.3
2021 January 1.6 0.9
2021 February 1.9 0.9
2021 March 1.9 1.3
2021 April 1.7 1.6
2021 May 2 2
2021 June 1.7 1.9
2021 July 1.4 2.2
2021 August 2.7 3
2021 September 3 3.4
2021 October 3.7 4.1
2021 November 5.9 4.9
2021 December 6.4 5
2022 January 7.6 5.1
2022 February 7.3 5.9
2022 March 11.7 7.4
2022 April 11.2 7.4
2022 May 10.2 8.1
2022 June 9.9 8.6
2022 July 11.6 8.9
2022 August 13.7 9.1
2022 September 17.1 10

Difference between CPI and HICP

In order to facilitate comparison between countries, EU member states calculate a consumer price index according to internationally agreed definitions and methods. The European Central Bank (ECB) uses the HICP to formulate its monetary policies in the euro area. In addition, most countries produce their own national consumer price index.

The main conceptual difference between the CPI and the HICP for the Netherlands is that, unlike the CPI, the HICP does not take into account the costs related to home ownership. In the Dutch CPI, these costs are calculated based on developments in rental property prices.

Implications of the coronavirus crisis for consumer price measurements

Due to the government’s COVID-19 countermeasures, several services were either limited or unavailable as of March 2020. As a result, there were no transactions that allowed for price measurements for some of the services. In accordance with Eurostat guidelines, CBS opted for the most appropriate estimation method in each situation. Price estimates for September 2022 are no longer related to COVID-19, but estimates made for the same month last year do still affect this month’s inflation rate.

Cuba’s Inflation Rate is Now 208%/yr

In #Cuba, disastrous economic policies have left the country in shambles. Today, I measure inflation in the Communist paradise at a punishing 208%/yr.
Abajo el comunismo 🇨🇺
Why do you cry entire day in your timeline.
Be happy dude, atleast sometimes.
Ven y se feliz en Cuba…al menos a veces… serás feliz…
It’s really worst than that…the country it has collapse. There’s no public services working properly people is famine.
Its been like that forever. The people are more afraid of the “government” than hunger
And that’s is only numbers compared with the dark reality. The people of Cuba suffering the worst nightmare off misery and poverty on is all history, but can’t even see through his fears . And for now,only the shames lives with #CubaFailedState ,someday we arrived ,now only wait
Auch!!!

Lettuce at $8? Inflation in Australia Is Hurting Everyone From Restaurant Owners to Diners

  • Food prices are rising at one of the fastest rates among consumer goods in Australia. Costs of fruit and vegetables rose 18.6% in August compared to a year ago, according to the latest update by the Australian Bureau of Statistics. 
  • Australia, like many countries, is battling record-high inflation. Annual inflation in August has risen to 6.8% from just under 2% before the pandemic.
  • The east coast floods this year exacerbated price increases pushing up the price of a head of lettuce to nearly A$12 a head.
The restaurant scene such as the one in Chinatown should brace for change amid rising inflation.
Anadolu Agency | Anadolu Agency | Getty Images

SYDNEY — In Sydney’s food mecca, Chinatown, menu prices at long-time restaurant Mother Chu’s have risen between 20% and 30% since the start of the pandemic. 

Alan Chu, owner of the Taiwanese eatery, said price increases in lettuce and most vegetables, as well as other food ingredients in Australia, have driven up prices at his restaurant — known for serving affordable meals for roughly under $30 Australian dollars, or about $20, a dish.

“There’s been a very large increase in the price of vegetables, for example even a small cabbage or lettuce can go up to A$10 to A$12 dollars which is unheard of,” Chu said. 

“One of the most difficult things many businesses are facing as a result of inflation is also the cost of wages. This is also in part due to Covid and as businesses have to balance this, as well as the rise of ingredients, it’s really difficult for them to keep on going.”

Why food is getting more expensive for everyone

Food prices soar

People are hesitant to spend more, everyone’s tightening their belts, being more selective with the things that they buy.
Sydney grocer

Prices of dumplings and other tasty Shanghainese fare at well-known Australian restaurant, Taste of Shanghai, have also gone up between 6% and 8% since the start of the year.

Owner Jennifer Du said she had to balance staying ahead of inflation and not raising prices too quickly for fear of alienating customers.

The east coast floods this year exacerbated price increases pushing up the price of a head of lettuce to A$12 a head.
Pool | Getty Images News | Getty Images

“I don’t want to reduce food sizes and plates for example .. sure, we need to raise prices, but we need to raise it slowly,” she said. 

For Du, the rise in prices of vegetables and raw ingredients — including those that are imported — has been particularly sharp this year. 

“Prices shot up at the end of lockdowns and coupled with the floods, goods like vegetables and fresh foods have become very expensive,” Du said. 

Spending habits change

Businessman Chris Lam, who runs a grocery store in Chinatown agreed that the price spike in food was particularly acute this year, and said it had started to rise quickly after Easter.

Lam said prices have been rising since the start of the pandemic as pressures from disruptions in supply chains and high freight costs built up. The rise in energy and fuel — largely exacerbated by the war in Ukraine — also contributed to the cost of transporting food, he said.  

Inflation in Australia could be nearing its peak, says HSBC

The biggest price hikes were in rice and cooking oil, which were imported, Lam said. He said many Australian consumers are now cutting back. 

“We see it every day, you know, with our customers. Shopping habits have been impacted,” Lam told CNBC. 

“People are hesitant to spend more, everyone’s tightening their belts, being more selective with the things that they buy.”

Inflation vs. wage growth

Australian personal finance comparison platform Finder, which has been tracking prices of consumer goods, said increased prices have outstripped wages growth across Australia since the pandemic started. 

In that time, aside from vegetables, prices of beef and veal also rose sharply by 33% while staples like milk, cheese and eggs also jumped by nearly 12%, according to Finder’s Consumer Sentiment Tracker.

Petrol prices have risen over 30% since 2019. 

“It’s something we’ve all experienced. I ordered a pot of tea in the Sydney [central business district] last week and I was shocked when I saw the price: A$6.70!” said money expert at Finder, Sarah Megginson. 

“These figures confirm that, overall, the cost of living has increased significantly for Australians.”

RBA decision in line with expectations: Strategist

Household stress over grocery bills has also increased in the past year, Finder said. 

The expenses stressing out Australians are rent and mortgage repayments, groceries, petrol and energy, according to its Consumer Sentiment Tracker for September.

The tracker also shows 56% of Australians are “somewhat stressed” about their current financial situation, and almost 1 in 5 are extremely stressed. But a quarter of Australians are not stressed at all.  

End in sight?

Many restaurants are not able to pass on increased costs to consumers which will result in lower profits.
Jack Zhang
accountant, Accentor Associates

Most, however, say Australia can tolerate up to the top end of the Reserve Bank of Australia’s 2% to 3% target band, or just above it.

Beyond interest rate raises, many cited winding back government spending as a means to cool inflation. About a third polled said the government should impose a super-profits tax on fossil fuel producers, with the proceeds used to reduce cost of services.

In the interim, restaurant owners should brace for change, Jack Zhang, an accountant with Accentor Associates told CNBC. 

Zhang said he has been helping many restaurants restructure their businesses since the government withdrew financial support after the lockdowns ended.

Some have gone into voluntary administration. Others have had to cut shifts for staff, while food wastage is becoming a challenge, Zhang added. 

“Many restaurants are not able to pass on increased costs to consumers which will result in lower profits,” the accountant said. 

Why everyone is so obsessed with inflation

We Survived The Last Nuclear Standoff Through Compromise And De-Escalation

Listen to a reading of this article:

Vladimir Putin has signed documents finalizing the Russian annexation of four regions in eastern Ukraine, meaning there’s now a western-backed Ukrainian counteroffensive underway to recapture what Russia officially considers parts of its homeland.

Moscow has made it clear that it will use all weapons systems at its disposal to defend against attacks on territories it claims as its own, which could include nuclear weapons. Depending on if and how that happens and what kind of day all the relevant decision makers are having when it does, there is a distinct possibility that a chain of events could follow which leads to the end of the world.

This happens as Ukraine’s President Zelensky signs a decree officially ruling out the possibility of any peace talks with Putin, who recently publicly requested such talks. The US empire, which has been driving this proxy war from the beginning, is also not currently engaged in peace talks with Moscow. Things are accelerating faster and faster toward the absolute worst thing that could possibly happen, and as far as we know nobody’s got a foot anywhere near the brake pedal.

Meanwhile, everyone has gone insane. The propaganda blanket has been laid on so thick since this war started that it has become the mainstream position that only continual escalation is acceptable. Public calls for de-escalation and detente are met with accusations of Kremlin loyalty, as we just saw with the vitriolic responses to Elon Musk’s online proposal of possible terms to end the war.

There’s a popular post going around Twitter right now by a pro-Kyiv pundit named Thomas Theiner which sums up the delusional sentiments we’ve been seeing on this front.

“I grew up during the Cold War. I studied the Cold War,” Theiner writes. “When the russians/Soviets say: ‘We will use nuclear weapons!’, the only answer must be: ‘Try and die.’ All else is seen as weakness by the kremlin and will lead to the russians using nukes.”

Theiner is wrong, and has made no serious study of the cold war (or to be more precise the last cold war, since we’re in another one now). The only reason we survived the most dangerous part of that era was because of compromise and a sincere commitment to de-escalation, not because anyone was yelling “Try and die” at Moscow.

Back in 2013 The Atlantic published a solid article titled “The Real Cuban Missile Crisis,” subtitled “Everything you think you know about those 13 days is wrong.” Its author Benjamin Schwartz details how the crisis was peacefully resolved not because JFK was on the phone yelling “Try and die” at Nikita Khrushchev, but because he secretly cut a deal to remove the Jupiter missiles the US had stationed in Italy and Turkey which provoked the 1962 incident in the first place.

Moscow perceived that the only reason why that type of midrange weapon would be placed in such a way would be if the US was planning a nuclear first strike to disarm Russia, and Schwartz writes that that suspicion was entirely well-founded: the Kennedy administration had indeed strongly contemplated such a strike during the Berlin crisis of 1961. In response to this threat, as well as the 1961 Bay of Pigs invasion, Khrushchev moved ballistic missiles to Cuba, whose discovery led to the tense standoff which brought us far closer to nuclear annihilation than most of us care to contemplate. A secret deal was struck whose nature wouldn’t become public knowledge until decades later, resulting in both sides removing their offending missile placements.

#NuclearWeapons #nuclearwar #JFK #Russia #Ukraine #NATO #diplomacy noriginal.antiwar.com/Ted_Snider/202… “,”username”:”Antiwarcom”,”name”:”Antiwar.com”,”date”:”Tue Oct 04 17:04:22 +0000 2022″,”photos”:[{“img_url”:”https://pbs.substack.com/media/FePZr71UAAAtO-L.jpg”,”link_url”:”https://t.co/3pl7YRylgY”,”alt_text”:null}],”quoted_tweet”:{},”retweet_count”:19,”like_count”:59,”expanded_url”:{},”video_url”:null,”belowTheFold”:true}”>

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You and I are alive today because Kennedy backed down from the brink and struck a compromise (as well as our sheer dumb luck at having one cool-headed Soviet officer on a nuclear-armed submarine refuse to deploy the weapon while being bombarded by the US navy during the standoff between JFK and Khrushchev). Kennedy conditioned his acquiescence to Moscow’s demands on assurances that his doing so would be kept secret, because then, as now, there were tremendous political pressures not to be seen as “backing down” and “looking weak” before the enemy.

But as history tells us, it’s not caveman chest-thumping that has allowed us to remain alive on a planet full of stockpiled armageddon weapons. It’s the sensibility to know when to compromise and relent rather than pushing continuously toward the edge.

Detente used to be a household term. It was a routine subject of mainstream political discourse; mainstream politicians were expected to have a clear and articulate position on the diplomatic easing of tensions with the USSR. Now people don’t even know detente is a thing. I say that word to people and it’s clearly the first time they’ve ever encountered it, and the concept itself is completely alien to them. People I talk to tend to believe the only options on the table are either (A) continuing to escalate this insane game of nuclear chicken with Russia, or (B) giving Putin everything he wants. They’re completely unaware that a third option of negotiation, compromise and de-escalation exists, much less that it has historically been viable and successful.

This is entirely by design. People don’t know that detente is an option because the political/media class virtually never mentions it anymore. The news media are supposedly responsible for helping to create an informed populace, but because their real job is propaganda they generally end up doing the exact opposite. If the public were permitted to become widely aware that these games of nuclear brinkmanship are not a necessity but a choice that is being made on their behalf, and that their leaders are rolling the dice on their lives and the lives of everyone they know and love for no other reason than to work toward securing unipolar planetary hegemony, they would no longer consent to this madness.

If people really understood how much is being risked here, and how little it benefits them, Washington DC would be on fire right now. That’s why their understanding is continually manipulated and obscured by the managers of empire.

_________________

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US Buying $290M Worth Of Anti-Radiation Drugs for Use In “Nuclear Emergency”

Authored by Chris Menahan via InformationLiberation.com,

The Biden regime is buying up $290 million in anti-radiation drugs for use in “nuclear emergencies” amid escalating tensions with Russia and heightened threats of a nuclear war.

From Health and Human Services:

FOR IMMEDIATE RELEASE
October 4, 2022

Contact HHS Press Office
202-821-9446
[email protected]
www.hhs.gov/news
Twitter: @HHSgov

HHS purchases drug for use in radiological and nuclear emergencies

As part of long-standing, ongoing efforts to be better prepared to save lives following radiological and nuclear emergencies, the U.S. Department of Health and Human Services is purchasing a supply of the drug Nplate from Amgen USA Inc; Nplate is approved to treat blood cell injuries that accompany acute radiation syndrome in adult and pediatric patients (ARS).

Amgen, based in Thousands Oaks, California, developed Nplate for ARS with support from the Biomedical Advanced Research and Development Authority (BARDA), part of the HHS Administration for Strategic Preparedness and Response (ASPR), as well as the National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health.

BARDA is using its authority provided under the 2004 Project Bioshield Act and $290 million in Project BioShield designated funding to purchase this supply of the drug. Amgen will maintain this supply in vendor-managed inventory. This approach decreases life-cycle management costs for taxpayers because doses that near expiration can be rotated into the commercial market for rapid use prior to expiry and new doses can be added to the government supply.

ARS, also known as radiation sickness, occurs when a person’s entire body is exposed to a high dose of penetrating radiation, reaching internal organs in a matter of seconds. Symptoms of ARS injuries include impaired blood clotting as a result of low platelet counts, which can lead to uncontrolled and life-threatening bleeding.

To reduce radiation-induced bleeding, Nplate stimulates the body’s production of platelets. The drug can be used to treat adults and children.

Nplate is also approved for adult and pediatric patients with immune thrombocytopenia, a blood disorder resulting in low platelet counts. Repurposing drugs for acute radiation syndrome that also are approved for a commercial indication helps to sustain availability of the product and improves healthcare provider familiarity with the drug.

“The US government said the procurement of Nplate was not in response to the war in Ukraine,” The Telegraph reported.

“An HSS spokesman told The Telegraph: ‘This is part of our ongoing work for preparedness and radiological security. It has not been accelerated by the situation in Ukraine.'”

The State Department last week urged all Americans to leave Russia “as soon as possible” in the wake of the sabotage of the Nord Stream pipelines.

The official reasoning they gave was to avoid getting conscripted in their mobilization effort but that logic only applied to dual citizens and their advisory was for all Americans.

As I noted at the time, the real reason they told everyone to leave is more likely the risk of a full-blown war breaking out due to the US, Ukraine or Poland being responsible for the belligerent bombing of the Nord Steam pipelines.

While Russia has issued statement after statement warning the US they will use nuclear weapons to defend their territory and are “not bluffing,” the US has been shipping billions in high-tech weaponry to Ukraine to attack Russian forces and strike inside of Russia.

Just last week, Congress voted to send another $12.3 billion in military and economic aid to Ukraine.

Biden said in February after the war broke out that Americans should not be worried about a nuclear war then spent the next eight months antagonizing Russia (and China) with endless provocations to make nuclear war more likely than ever.

Here’s Why Biden Is Wrong About the Deficit

President Joe Biden is annoyed. On Saturday, during a speech to the Congressional Black Caucus, he complained that “I’m so sick of Republicans saying we’re the ‘big spenders.’ Give me a break. Give me a break.” He all but said in one portion of the speech that he is spending a lot of money on special interests and yet “doing all of this while reducing the deficit—last year, $350 billion, and this year by $1 trillion.” It’s magic.

It’s amazing to watch a speech in which so few fiscal facts are correct. First, the Committee for a Responsible Federal Budget estimates that “the Biden administration has enacted policies through legislation and executive actions that will add more than $4.8 trillion to deficits between 2021 and 2031.” That’s exclusively his administration, and these sums will be added to the trillions in debt accumulated by previous administrations.

And let’s not forget that the $4.8 trillion figure would be significantly larger if he and his Democratic friends in Congress had passed the roughly $2.5–$5 trillion Build Back Better (BBB) legislation they pushed so hard for. The figure also rests on the dubious assumption that the Inflation Reduction Act of 2022, which was passed in lieu of BBB, will reduce the deficit. Last but not least, this figure doesn’t include Biden’s student-loan forgiveness order, which the Congressional Budget Office (CBO) calculates will alone add over $400 billion in deficit spending over 10 years.

If you need more evidence that the president is no budget cutter, look also at the size of recent budget deficits compared to projections released just three weeks after his inauguration. These forecasted that the combined 2021 and 2022 budget deficits would be $3.31 trillion. They now stand at $3.72 trillion, with a month still left in FY 2022. So, the Biden administration has expanded deficits by $400 billion more than expected, even before we count the recent spending mentioned above.

Next, let’s look at what’s driving the “deficit reduction” Biden cites from peak pandemic levels.

The first factor is the expiration of fiscal stimulus spending. After passing the American Rescue Plan and blowing up spending and creating massive inflation, FY 2021 spending outpaced 2020’s by almost $300 billion. Yes, as the stimulus spending expired (BBB was meant to extend many of the programs, so it is fair to say this happened against the Democrats’ will), spending is down almost $1.5 trillion in the first 11 months of fiscal 2022.

Those were unusual circumstances, so a better comparison is the first 11 months of 2019. By that measure, spending in 2022 is now up by $1.2 trillion. This is not evidence of fiscal responsibility.

The second factor driving supposed deficit reduction is the highest surge in inflation in four decades. Inflation pushes millions more Americans into higher tax brackets, thus causing them to pay more taxes and, hence, driving up revenue. These higher tax bills are coming due even as people’s real earnings decline. Due to this regressive form of deficit reduction, combined federal revenues in FY 2021 and 2022 are almost $1 trillion higher than CBO forecasted, with receipts in the first 11 months of 2022 almost $1 trillion higher than 2019 levels.

One last thing. None of this takes under consideration the increase in interest payments on the debt with rates rising substantially for the first time in decades. According to the Treasury Department, in August, payment on U.S. government debt was $63 billion, up from $34 billion in January. What’s more, the CBO’s interactive budget tool illustrates what an interest rate increase above the baseline means for interest payments. The answer is “expensive.” As Jack Salmon and I wrote over at Discourse magazine, “If the interest rate on the 10-year Treasury note is…1 percentage point higher than expected, the cumulative deficit will be $2.85 trillion larger over the decade.”

Depending on how the CBO calculates the annual interest rate, we could find ourselves in territory even worse than these projections, especially since half of our debt has a maturity of three years or less, and these interest rates are even higher. With inflation still not under control and the Federal Reserve continuing to increase rates, it isn’t hard to understand how our fiscal situation will be severely stressed.

The president’s claims are bunk bordering on carelessness. His policies, I am afraid, deserve even harsher words.

COPYRIGHT 2022 CREATORS.COM.

Global Trade: Is This The Next Major Threat For Oil Demand?

Is This The Next Major Threat For Oil Demand? | OilPrice.com

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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  • Manufacturing growth in the United States slowed in September to its lowest rate since the pandemic recovery started
  • Global maritime trade growth is slowing in a sign that the global economic slowdown is underway.
  • Major trading houses are not concerned about a serious pullback in crude demand.

Manufacturing growth in the United States slowed in September to its lowest rate since the pandemic recovery started, in another sign that the U.S. economy is cooling amid aggressive interest rate hikes from the Fed.

If the trend continues in the coming months, it would mean a recession is coming to the United States, analysts say.  

Still, most believe it could be a mild recession, or at least a very short one, which may not have a significant impact on oil demand.

Major forecasters, such as the International Energy Agency (IEA) and the U.S. EIA, continue to expect oil demand to grow year over year both in 2022 and 2023.

However, the oil market is focused on fears of a recession instead of on fundamentals, as Saudi Aramco’s chief executive Amin Nasser said earlier this week. The market is currently ignoring the very low global spare capacity and the fact that producers will struggle with oil supply once economies recover, Nasser says.

Economies will rebound sooner or later from the current slowing growth. Some major European economies, including Germany, are teetering on the brink of recession.

The question is whether economies, including in the United States, will see a “harder landing” than the Fed is aiming for. According to Reuters market analyst John Kemp, the latest data on U.S. manufacturing activity, coupled with monetary tightening and fears of recession “greatly increases the probability of a harder landing.”

The U.S. manufacturing sector continued to expand in September, but at the lowest rate since the pandemic recovery began, according to the latest survey of the Institute for Supply Management (ISM) published on Monday. Related: OPEC+ To Cut Oil Production By 2 Million Barrels Per Day

Demand eased, the New Orders Index contracted, and the New Export Orders Index showed a contraction for the second month in a row, said Timothy Fiore, Chair of the ISM Manufacturing Business Survey Committee.

The good news is that manufacturing expanded for the 28th straight month. The bad news is the expansion was the slowest since May 2020, at the height of the pandemic-driven economic slump.

Commenting on the most recent U.S. economic data, Jennifer Lee, a senior economist at BMO Capital Markets, told Reuters, “It all comes back to higher borrowing costs and weaker demand.”

“The mild recession call still holds,” Lee added.

A mild recession may not dent oil demand materially, especially if the gas to oil switching across Europe and Asia accelerates this winter amid a shortage of natural gas.

Yet, distressing signs of a global economic slowdown have emerged in recent weeks.

Last month, FedEx reported quarterly figures below its own expectations due to macroeconomic weakness in Asia and service challenges in Europe. Amid expectations for a continued volatile operating environment, FedEx withdrew its fiscal year 2023 earnings forecast from June. 

In addition, global maritime trade growth is slowing in a sign that the global economic slowdown is underway and a recession in major markets could soon materialize, threatening oil demand.

According to shipping data provider Xeneta, the global Xeneta Shipping Index (XSI®) saw in September its first month-on-month fall since January 2022, falling by 1.1%.

“In September, spot rates on many trades fell by their largest margin yet as lower global demand and easing global congestion saw shippers gain a decisive advantage,” Xeneta said in a report last week.

Still, oil and commodity trading giants say oil demand is resilient.

Global oil demand remains resilient despite slowing economies and is likely to hold up even if recessions materialize, executives at some of the largest commodity trading houses said at a conference on Tuesday.

Oil consumption has surprised to the upside in recent months, and there hasn’t been significant demand destruction, as previously expected, economists and researchers at the top traders said at the Argus European Crude Conference in Geneva.

“All the different factors suggest, yes, we may be heading into a slowdown but it will be shorter and shallower than people are expecting,” said Saad Rahim, Chief Economist for Trafigura.

By Tsvetana Paraskova for Oilprice.com

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Morgan Stanley: Oil Prices Will Hit $100 Next Quarter

Morgan Stanley: Oil Prices Will Hit $100 Next Quarter | OilPrice.com

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Oil prices will rise again to $100 per barrel faster than previously estimated, Morgan Stanley said on Thursday, lifting its price forecast for the first quarter of 2023 to $100 from $95 per barrel.

“Brent will find its way to $100 per barrel quicker than we estimated before,” the investment bank said in a note carried by Reuters after OPEC+ decided on Wednesday to make the largest nominal cut to its oil production quota since 2020.  

OPEC+ agreed on a 2-million-bpd cut from November, but the actual reduction in supply from the alliance is estimated at around 1 million bpd-1.1 million bpd, considering that many producers haven’t pumped to quotas for months because of a lack of capacity and/or investment, or – in Russia’s case – because of sanctions. Most of the actual cuts will come from Saudi Arabia and other Gulf producers.

Morgan Stanley sees the deficit on the oil market swelling to 900,000 bpd next year, up from the 200,000 bpd deficit previously expected.

“Those forecasts assume that Russia’s oil production will fall by 1-1.5 million bpd after the EU oil import embargo comes into force,” Morgan Stanley’s strategists said.

Other banks also reacted to the OPEC+ cut with increased oil price forecasts. Goldman Sachs, for example, raised its Brent Crude forecast for this quarter by $10 to $110 per barrel.

“All the developments we have seen on the supply side at this point very much sets the stage for what we believe will be higher prices into the end of this year,” Damien Courvalin, head of energy research at Goldman Sachs, told Bloomberg TV.   

“Given the large supply cut recently announced by OPEC+, the global market will likely be in deficit through the whole of 2023, suggesting that there is upside to our current forecasts,” Warren Patterson, Head of Commodities Strategy at ING, said on Thursday. The bank currently sees Brent trading largely within the $90 area for the remainder of this year and into the first half of 2023 before strengthening over the second half of 2023. 

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