Inflation

[3 hound]

To be fair, about half of it is thanks to the sanctions. Without them, we'd be sitting at a much more moderate official stat of about 5ish% rather than the 8-9% we see now.

The sanctions seem to be hurting everyone except the intended target.

 

[3 hound]

Agreed, transitory inflation is real

Transitory inflation transitions from one value to another value that is higher than the previous value it transited from as it transits in translation therefore it is transitory like the passage of time and the transit of migrants glowing across the southern border. If you disagree you are transphobic.


I could be Karmala Harris's speech writer.

 

[divs4ever]

Transitory inflation transitions from one value to another value that is higher than the previous value it transited from as it transits in translation therefore it is transitory like the passage of time and the transit of migrants glowing across the southern border. If you disagree you are transphobic.


I could be Karmala Harris's speech writer.

nope not enough gaps for giggles , save your talent for Albo at least he is lucid ( if a little boring )

but yes transitory was used in the original speech to be deceptive ( without lying blatantly )

 

[3 hound]

nope not enough gaps for giggles , save your talent for Albo at least he is lucid ( if a little boring )

but yes transitory was used in the original speech to be deceptive ( without lying blatantly )

Albo gave a nice speech about growing up in government housing to a single mother (can't remember if on disability pension or not) to much applause because he became a career politician and now prime minister.

Nothing in that story is anything I find as inspirational other than Australia is a very, very generous country.

I wonder if he will keep stoking the home owner incentive programs that effectively just keep making house prices inflate further and keep home ownership increasingly unaffordable or do something even worse just give people "free" homes.

 

[divs4ever]

at least he studied economics , i am just so over ALP ( former ) lawyers

from memory he had a 'Commo ' label from inside the ALP ( too left-wing to be electable )

well we have elected him now ( well i didn't , but somebody did ) , i guess we will have to wait and see ( if he is just another politician or an ultra-rare statesman ) for example ,
will he keep the Greens reasonably sensible ( unlike the German Chancellor ) ,
so far Australia is earning export dollars , so he has some room to move

a big chunk of the world is heading for a hard landing , but will our landing be softer than some ( similar to the GFC , perhaps )

 

[Mohammed Hazabig'un]

Fed may pause I.R. rises if Inflation "moderates" - Bostic.

 

[over9k]

Fed may pause I.R. rises if Inflation "moderates" - Bostic.

Bonds have seen a nice little dip over the past couple of weeks but it hasn't been because inflation has been moderating - there's just been nowhere else for the cash to go.

 

[waterbottle]

View attachment 142146

Bonds have seen a nice little dip over the past couple of weeks but it hasn't been because inflation has been moderating - there's just been nowhere else for the cash to go.

Risk is back on lads.

Get rich or go broke trying.

 

[Mohammed Hazabig'un]

Looking at the U.S. numbers there's the obvious negative effects of Inflation/Interest Rates on the Building and Housing sector, the Consumer and Business confidence levels etc. But defying this is the strong manufacturing, capacity utilisation, lessening inventories, strong employment and Wages and thus spending which could be attributed to Inflation's tendency to encourage Consumers to buy now.

This week's PMI numbers were down. Any chance this is the turning point and all those good numbers associated with Production/Wages/Spending are going to start to turn South starting with the Durable Goods Orders numbers out tonight due to Inflation's tendency to promote spending has run its race?

 

[over9k]

Aaaaaand another one bites the dust:

 

[over9k]

Looking at the U.S. numbers there's the obvious negative effects of Inflation/Interest Rates on the Building and Housing sector, the Consumer and Business confidence levels etc. But defying this is the strong manufacturing, capacity utilisation, lessening inventories, strong employment and Wages and thus spending which could be attributed to Inflation's tendency to encourage Consumers to buy now.

This week's PMI numbers were down. Any chance this is the turning point and all those good numbers associated with Production/Wages/Spending are going to start to turn South starting with the Durable Goods Orders numbers out tonight due to Inflation's tendency to promote spending has run its race?

Most of the reports I've seen have shown significant upticks in COGS, not downticks in consumer spending. Obviously there's some of the one time type purchases (furniture, whitegoods etc) that we see plummet (peloton being a good example) but the more consumable stuff like electronics and services like travel and so forth should continue to enjoy robust demand. Problem is, businesses can't raise wages if they aren't making money (on account of their margins being eroded by inflation) can they?

So, as I mentioned in a post a couple pages back, something's gotta give.

The question for some markets becomes not whether the demand exists (for some of it we've had two years' of it pent up) but whether these things simply become prohibitively expensive. A very simple case of the supply curve moving upwards as the price floor becomes ever higher. Hence the memes of "Yay I can go places again" and then the person looking at fuel prices and going "oh, no I can't".

Remember, it's the most superior goods which are on the chopping block first and then working down accordingly.


And this is before we even start on the supply issues we're undoubtedly going to see come winter.

 

[over9k]

Risk is back on lads.

Get rich or go broke trying.

Nah you're off the mark here waterbottle - there was actually a bounce in crypto, precious metals (gold) AND a huge spike in the fed's reverse repo facility at the same time as well as the bond moves which tells us that bonds ran because stocks were plummeting and there simply wasn't anywhere else for the cash to go.

Money goes to any port in a storm and stocks have so far been the storm.

 

[Mohammed Hazabig'un]

The COGS is just the burden of Inflation that the business is absorbing as shown by Walmart, Target etc.

The Manufacturing numbers are now turning South with both the PMI and Durable Goods Orders turning South.

Which follows manufacturing next, the Employment and Wages numbers, then the Retail numbers further next? BOOM Recession eventually if no turn around.

 

[mullokintyre]

New Zealand is where all the action is.
From Murdoch press

If Australia wants to know what runaway inflation looks like, forget the US. It just has to look across the ditch.
The New Zealand central bank sees inflation peaking at 7 per cent in the June quarter and on Wednesday it put up the official cash rate another 50 basis points to 2 per cent with the expectation of much more to come. Australia’s cash rate currently sits at 0.35 per cent.

“I would say what the New Zealand government has is the early stages of a wages price spiral,” says HSBC chief economist Paul Bloxham
Bloxham is the man who in 2014 dubbed the country the rock star economy. But New Zealand’s rock star status is long gone.

Australia is a little behind in monetary tightening but will it go the same way? It makes New Zealand a compelling watch on central bank strategy, wages policy and housing.

In his May newsletter New Zealand economist Tony Alexander had a sobering revelation. Four out of 10 families selling their house and surveyed by real estate agents in the last month said they were selling to move to Australia.

Mick

 

[qldfrog]

New Zealand is where all the action is.
From Murdoch press

Mick

The paradox fleeing socialism to fall in it again..

 

[Smurf1976]

Electricity prices up with today's long awaited announcement:

AER sets energy price cap to protect consumers

[no-lexicon]The Australian Energy Regulator (AER) has released its final determination for the 2022–23 Default Market Offer (DMO). The DMO is the safety-net price cap that ensures consumers are protected from unjustifiably high prices. From 1 July 2022, the DMO prices in New South Wales...

www.aer.gov.au

Residential up 7.2% to 14.1%

Small business up 5.7% to 19.7%

With the range reflecting location noting that this announcement applies to consumers in SA, NSW and south-east Qld only.

Further to that, note that this is the Default Market Offer, also known as a reference price, and that in practice most retailers have in the past offered substantial discounts in order to attract customers. It varies but as an order of magnitude such discounts are circa ~20% commonly.

Trouble is, due to rather extreme cost pressures on the wholesale side, retailers are reducing those discounts substantially. So overall it's a higher default price + a reduced discount from that default = the % increase to consumers is considerably greater than the figures above.

Also as I've posted in another thread we've also seen two energy retailers financially collapse this week, caught between soaring wholesale prices and fixed price retail contracts they've entered. Meanwhile there's at least two others very actively trying to shrink their customer base, having gone as far as urging customers to switch to a competitor by the end of this month at the latest.

https://www.aussiestockforums.com/threads/the-future-of-energy-generation-and-storage.29842/page-292

So overall some pretty serious price pressure there.

 

[divs4ever]

New Zealand is where all the action is.
From Murdoch press

Mick

the place is too small to hide it from the masses ( they can't sell the story 'it is only bad in places ' )

look closely and see how closely it parallels Australia ( they have milk and wool , we have holes in the ground )

 

[divs4ever]

one notable difference ( between NZ and Australia ) is the NZ government owns more than half ( of each company ) of most of the NZ power companies , the main exception is CEN

whereas to opposite is in Australia ( they have no or tiny share of the major power companies )

 

[3 hound]

Are we in stagflation yet?

 

[Mohammed Hazabig'un]

Are we in stagflation yet?

Nope. Employment & Wages still strong and Demand hanging in there. Love a little Battler!