The latest data from New Zealand, the UK and Canada highlights how embedded higher food prices are, something which also came through in recent ABS figures.
Even if petrol prices slide a little (and OPEC+ is trying to reverse that), many households will be wilting under the pressure from everyday costs of living.
And it’s worth noting there are various adjustments to inflation metrics which seem to drive them lower – I wonder why?
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
Food Inflation Still Haunts The Halls... [Podcast]
The ABS data today was a bit of a shock, compared with expectations, as the data indicated a slowing of the employment market. Some of this could be just a Numberwang though.
My latest Friday afternoon chat with Journalist Tarric Brooker. So much to kick around, with the help of some powerful slides which are available at https://avidcom.substack.com/p/charts-that-matter-14th-october-2022
Latest from the markets continue to show weakness, and the latest came from the IMF which will down forecast growth – and recession is a rising risk. We are ships in choppy waters… We are in a world of more fragility.
And more from Fed member saying rates must continue to rise.
Markets still need to digest this downside news.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
I discuss the latest rate moves with Steve from Canstar. Steve Mickenbecker is in Canstar’s Group Executive Team, bringing more than 30 years of experience in the Australian financial services industry. As a financial commentator for Canstar, Steve enjoys sharing his expertise across topics such as home loans, superannuation, insurance, mortgages, banking, credit cards, investment, budgeting, money management and more. https://www.canstar.com.au/team-members/steve-mickenbecker/ Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
Wither Rates Now? With Steve Mickenbecker [Podcast]
After the rout of September, sorry to break this to you, but stock markets historically have experienced well-above-average volatility in October. It’s often a spooky month for stocks and several of the greatest crashes in stock market history have occurred during the month, including ‘Black Tuesday’ and ‘Black Thursday’ in 1929, as well as ‘Black Monday’ in 1987 and the worst of the 2008 financial crisis meltdown. Some have dubbed this the ‘October Effect’.
Guggenheim Securities Chief Investment Officer Scott Minerd said that he expects stocks to fall another 20% by mid-October, citing a connection between price-to-earnings ratios and inflation. “We should see stocks fall another 20% by mid-October…if historical seasonals mean anything,” Minerd said in a tweet.
The Fed has already raised its benchmark interest rate by 300 basis points this year as it fights to bring inflation back under control. And more hikes are expected. We will get more data of course, during the month, but one to watch is the feedback loop between U.S. stocks and bonds.
With the S&P 500 is down more than 20% on the year and showing no signs of hitting a floor, remember the valuation for the index remains elevated, and earnings estimates have only started to turn lower and may fall further as earnings season nears. Additionally, high yield spreads are widening, and volatility measures show that investors’ mood is complacent.
Go to the Walk The World Universe at https://walktheworld.com.au/
My latest Friday afternoon yarn with Journalist Tarric Brooker (@AvidCommentator on Twitter). We look at the latest ructions in the markets and ask what is going to happen next – what is below the waterline, with the help if Tarrric’s slides.
Copies of the slides can be found at: https://avidcom.substack.com/p/charts-that-matter-30th-september
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
But Its Just The Tip Of The Iceberg: With Tarric Brooker [Podcast]
Dale Webster from The Regional And Robbie Barwick from the Citizens Party discuss the war on cash with me , and specifically the removal of branch and cash infrastructure, especially in regional areas.
The Regional is an independent news service for 37 per cent of Australia’s population (and growing)!
Dale has been tracking regional bank closures, despite the amount of cash still in use (and rising). Banks are casting a dangerous shadow.
But now there is a Petition EN4244 – Moratorium on regional bank closures and new inquiry in front of Parliament, and we have about 10 days to send a formal message to the Australian Parliament Petition. It closes on 6th October 2022.
Private research shows regional Australia has lost 62 per cent of its banks since 1975, leaving just 1062 located mainly in clusters in larger centres. The number of towns and cities with a bank has shrunk from 1226 to 386: 575 towns that once had one or more major banks now have no form of bank at all. Another 146 towns are on the brink of complete loss of banking services, with just one major bank open. Last year, regional Australia lost 113 “big four” bank branches. Locations included 45 towns that were stripped of their last/only bank. Of these, 23 did not have a minor corporate, mutual or franchise bank to fall back on. If a similar 10 per cent cut to the branch network is made this year, 100 more branches will be lost in the next seven months: 50 towns will lose their last bank. This issue has not been looked at properly for 17 years. The Morrison Government set up a “taskforce into regional banking” as a pre-election stunt but only put representatives of the banking industry and its own politicians on it. Just one public meeting was held. Findings have not yet been delivered.
Petition Request
We therefore ask the House to impose an immediate moratorium on regional bank closures, launch a new inquiry to pick up from where Money too Far Away (1999) and Money Matters in the Bush (2004) left matters and pulp any reports that come from the coalition’s taskforce.
Go to the Walk The World Universe at https://walktheworld.com.au/
Digital Finance Analytics (DFA) Blog
The Banks Are The Aggressors In The War On Cash! [Podcast]
The RBA was interrogated by Parliament today regarding its monetary policy stance and interest rates. But it was all a bit pointless as really the Federal Reserve sets interest rates in the US, but effectively also for the entire world, given the fact that the US dollar behaves as the reserve currency.
Persistently high inflation in the United States and elsewhere has forced the Federal Reserve to aggressively raise interest rates, giving the dollar a significant yield advantage that has triggered a rampaging rally against its major global peers. That will put pressure on the RBA.
Eventually, the Fed’s actions will come back to bite it and the US. By then all the many trillions of dollars of stimulus work done during the pandemic will have been unwound. What a phenomenal waste of time, money and effort.
The fallout on the FED’s myopia will be felt more in other countries, including Australia, which means we are on the end of the see-saw driven by the US. This is soft power at its worse, transmitted to a monetary system which is built to favour one nation over the rest.
The question is of course whether this will change. Without major reform it will not, not least in recognition of fact that many international institutions such as the IMF, WEF and BIS are strongly aligned to the interests of the US. So The Monetary Arms Race Is Here.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
