Inflation

[over9k]

Random musing: The more headlines I see about geopolitical tensions/military engagements kicking off with ukraine the more I see gas prices (BOIL) increase. Take that for whatever you think it's worth.

 

[mullokintyre]

Random musing: The more headlines I see about geopolitical tensions/military engagements kicking off with ukraine the more I see gas prices (BOIL) increase. Take that for whatever you think it's worth.

Thers a few others who will vote for your position.
From Zero Hedge
Oil prices ended higher again today, with WTI at the upper-end of its recent range and Brent with its highest close since late April.

"Crude prices are getting a boost as expectations grow for the oil market to remain tight despite all lingering growth concerns. The IEA expects strong demand from China and developing nations. The short-term crude demand outlook shouldn't be that bad as everyone is taking a vacation that requires some travel this summer," Edward Moya, Senior Market Analyst, at Oanda wrote in a note Tuesday afternoon.

however, it may not predict a rising market as Zero hedge then goes on to say


After the release of the API data, WTI leaked lower.
The spike in WTI may have been due to the massive fire at the Iranian Bandar Abas oil refinery ptting fear that supply was going to be curtailed.

Mick

 

[mullokintyre]

Just got the renewal for my house and contents insurance.
Have never made a house claim, but somehow the cost cost has gone from $2121.74 last year to $3,5661.58 this year, an increase of 67%.
Now thats what I call inflation!
Will greatly enjoy the phone call to AAMI asking them to justify this increase.
Mick

 

[over9k]

AAMI

There's your problem right there.

 

[sptrawler]

The RBA has just finished his meet the press luncheon.
I hope the answer to this question, is expanded on.

Is migration and rising house and rent prices keeping interest rates high?​

"It is not having a direct influence but through a couple of channels the fact that there are a lot more people coming into the country has eased pressures and some labour markets, particularly, in the hospitality sector because a lot of the increase in population over six months has been students. They often work in hospitality sector.

"Our liaison with firms in that sector say it is easy to get workers and has taken some of the heat out of that labour market. That works in the short term to put inflation down, on the other hand, all these people coming in have to live somewhere.

"That is pushing up rents and housing prices and with your housing prices would continue to decline this year but they are not. In Sydney, the rising quite strongly again. And that is partly to the influx of immigration.

"There are pluses and minuses in terms of inflation outlook. Helping contain wages growth that [is] putting upward pressure on rates. But we talk about it and the bank, if we're going to have a lot more people the country, which is good, we need the capital stock to support those people.

"Otherwise the capital-labour ratio declines and that is bad for productivity, so population growth brings huge advantages to the contrary but we need governments and businesses to keep investing to build a capital stock to support a stronger population.

"The housing market is the clearest example of that but there are a lot of other examples as well.

"It is a broader issue than just the short-term inflation outlook it is how we build the capital stock to support a larger or diverse population which I think is in long-term interest."

 

[mullokintyre]

There's your problem right there.

I tried RACV as I have multiple policies with them, but the quote was over 6k! Jeez says I what gives.
YOUI and also Allianz would not insure because they reckon there is a risk of inundation - we are about 15 kms from the Goulburn river, and the house was purposely built 1 meter above the 100 year flood level.
QBE knocked us back because they did not like the panel build foam construction of the walls.
I even wasted my time with those stupid meerkats at Compare the markets, but they came back and said non of the providers could provide me with a quote.
So basically, its AAMI or nothing at the moment.
Mick

 

[over9k]

Alright U.S cpi is in, 3.0 vs 3.1 estimated, markets happy!

Core, however, was still up 4.8, it was only the drops in the other stuff offsetting the main cpi metric. The number isn't nearly as good as it sounds.

 

[mullokintyre]

take on it from Zero hedge

So expect stocks to rise from here, since, regardless of where you sit in the Fed debate, inflation decelerated in June to the slowest pace in more than two years. That's the headline takeaway from today.

However, as Bloomberg notes - The questions now are: Is this a genuine turning point?

Does it reflect a material slowdown in the economy and how will the Fed respond?

Remember, policy makers in the 1970s were blamed for cutting rates at the first sight of inflation easing -- only to be later blamed for policy error.

Mick

 

[Telamelo]

I tried RACV as I have multiple policies with them, but the quote was over 6k! Jeez says I what gives.
YOUI and also Allianz would not insure because they reckon there is a risk of inundation - we are about 15 kms from the Goulburn river, and the house was purposely built 1 meter above the 100 year flood level.
QBE knocked us back because they did not like the panel build foam construction of the walls.
I even wasted my time with those stupid meerkats at Compare the markets, but they came back and said non of the providers could provide me with a quote.
So basically, its AAMI or nothing at the moment.
Mick

Just my 2c @mullokintyre as I researched/shopped around for insurance online & found Honey to be/offer the best value policy around (so perhaps check them out) Good luck!

 

[Belli]

I tried RACV as I have multiple policies with them, but the quote was over 6k! Jeez says I what gives.
YOUI and also Allianz would not insure because they reckon there is a risk of inundation - we are about 15 kms from the Goulburn river, and the house was purposely built 1 meter above the 100 year flood level.
QBE knocked us back because they did not like the panel build foam construction of the walls.
I even wasted my time with those stupid meerkats at Compare the markets, but they came back and said non of the providers could provide me with a quote.
So basically, its AAMI or nothing at the moment.
Mick

I am with AAMI as well. My insurance went from $1,313.85 to $1,687.28 (28.4%) so looks like I got out of it cheaply.

While I am not in a flood zone being on top of a rise and 5km from any water source, insurers apply the Bushfire Attack Level developed by the CSIRO a few years ago and I am probably impacted by that. Insurers have the ability to geolocate your property.

Bush Fire Cover for Home Insurance - AAMI

AAMI's Home Building Insurance COVERS You for the Worst in the event of a Bushfire - Learn More and Make Sure You are Insured to the Value of Your Home

www.aami.com.au

in addition, here is AAMI's supposed breakdown of costs for a premium. If the re-insurers increase their premiums, it will be passed on to consumers so there is that to consider.

Why do home insurance premiums change?

Find out what impacts your home insurance premium and how you can review your policy

www.aami.com.au

Make sure you do not under-insure otherwise you could be financially screwed. Insurance is an agreed risk* sharing contract. In simple terms if you insure for $200k and it costs $400k to rebuild, you have agreed to take on 50% of the risk so it is possible you may end up with only $100k.

* https://www.bdo.com.au/en-au/accounting-news/accounting-news-march-2021/insurance-contract
* https://www.mcgqs.com.au/replacement-cost-estimates/

I went with this option from AAMI many years ago.

Complete Replacement Cover | AAMI

No Matter the Loss or Price of Damage, We will Repair or Pay You the Total Cost If Your House is Damaged by an Insured Event. Get an Online Quote Today!

www.aami.com.au

 

[divs4ever]

China inflation at 0%.....

will be manufacturing artillery shells for themselves , Russia and North Korea soon enough , maybe even Iranian -designed drones under license as well

China has officially started the tit-for-tat trade war , this is what the west begged for

 

[over9k]

And on the work from home argument:

 

[over9k]

 

[Belli]

And on the work from home argument:

Work-from-home deal 'groundbreaking', but business groups warn of CBD 'death knell'

Thousands of Australian public sector staff will be allowed to permanently work from home following a "groundbreaking" union deal — but business lobby groups in one capital city say any move to follow suit at local level would be a "death knell" for CBD retail.

www.abc.net.au

What the workers appear to be saying to the CBD is "We don't need you" whereas the business community is saying "Waaaaa."

 

[qldfrog]

I tried RACV as I have multiple policies with them, but the quote was over 6k! Jeez says I what gives.
YOUI and also Allianz would not insure because they reckon there is a risk of inundation - we are about 15 kms from the Goulburn river, and the house was purposely built 1 meter above the 100 year flood level.
QBE knocked us back because they did not like the panel build foam construction of the walls.
I even wasted my time with those stupid meerkats at Compare the markets, but they came back and said non of the providers could provide me with a quote.
So basically, its AAMI or nothing at the moment.
Mick

and when you try farm insurance, there is no real competition either

 

[mullokintyre]

and when you try farm insurance, there is no real competition either

WFI (which is "backed" by IAG) or Elders ( which is owned by QBE anyway).
Mick

 

[over9k]

Alright U.S cpi is in, 3.0 vs 3.1 estimated, markets happy!

Core, however, was still up 4.8, it was only the drops in the other stuff offsetting the main cpi metric. The number isn't nearly as good as it sounds.

 

[Knobby22]

Alright U.S cpi is in, 3.0 vs 3.1 estimated, markets happy!

Core, however, was still up 4.8, it was only the drops in the other stuff offsetting the main cpi metric. The number isn't nearly as good as it sounds.

It's on the right side though, and the USA is still not in recession. Inflation is dropping more quickly than previously thought.

I think the markets have reason to be happy.

 

[waterbottle]

It's on the right side though, and the USA is still not in recession. Inflation is dropping more quickly than previously thought.

I think the markets have reason to be happy.

True, but will they remain happy to have 5% rates until 2025? And what happens to CPI then?
What happens to China's exports when US student loan repayments restart and credit remains tight?
It's an engineered slow down.

 

[over9k]

Markets barely moved in response. Gut instinct says the fed will stick to forward guidance of one more hike and then pause (give it the old "wait and see").