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Daily Archives: April 15, 2022

Chart: China Local Governments’ Land Sales Revenue Down in 2022

Source : Bloomberg

Chart: Singapore’s Residential Market Is Slowing

Source : Bloomberg

Chuckles of the Day

The Smart Pig?

A travelling salesman came upon an old farmer sitting on his porch, next to the farmer was a pig with only one leg. The salesman was about to give his sales pitch when his curiosity got the best of him.

“Excuse me sir, but why does your pig only have one leg?” asked the salesman.

“Well sonny, I’ll tell ya. One day I was out plowing the back 40 when my tractor overturned, pinning me underneath. I was losing blood and thought I would die when that pig came running. He dug and rooted around with his nose till he got me out and he dragged me back to the house. Saved my life that pig did.”

“Wow, that’s really amazing,” said the salesman, “but I still don’t know why the pig only has one leg.”

“Well I’ll tell ya,” said the farmer. “One night me and the wife were asleep at about 3 a.m. when a fire broke out in the kitchen. Well that pig broke down the door, came into our bedroom waking us up and getting us out before the fire could get us, saved our lives that pig did!”

“Well that’s really great but why does the pig only have one leg?”

“Well sonny, when you get a pig that smart, you don’t want to eat him all at once.”

* * * * * * *

Married Four Times

The local news station was interviewing an 80 year old lady, because she had just gotten married for the fourth time.
The interviewer asked her questions about her life, about what it felt like to be marrying again at 80 and then about her new husband’s occupation!

“He’s a funeral director,” she answered.

“Interesting,” the newsman thought. He then asked her if she wouldn’t mind telling him a little about her first three husbands and what they did for a living.

She paused for a few moments, needing time to reflect on all those years. After a short time, a smile came to her face and she answered proudly, explaining that she had first married a banker when she was in her early 20s, then a circus ringmaster when in her 40s, and a preacher when in her 60s, and now in her 80s, a funeral director.

Astonished, the interviewer looked at her and asked, “Why did you marry four men with such diverse careers?”

She smiled and explained, “I married one for the money, two for the show, three to get ready and four to go.”

COVID Cases Reach 500 Million Worldwide

As the number of known coronavirus cases worldwide hit 500 million on Tuesday, health experts called for increased testing, vaccination and contact tracing.

There’s been a sharp rise in known cases so far this year, from 300 million in early January to 400 million in early February and half a billion now, The New York Times reported.

But many nations have scaled back official testing, so the actual number of infections is almost certainly far higher.

The reduction in formal testing is “dangerous” because if “you don’t test, then you don’t know what variants you have,” Ali Mokdad, an epidemiologist at the University of Washington, in Seattle, told the Times.

World Health Organization officials recently urged African nations to boost testing and contact tracing, and said some countries in the Americas need to increase vaccination and testing.

Such warnings have not stopped many nations from dropping their pandemic precautions almost completely in the two months since the global case count surpassed 400 million. In the United States, the U.S. Centers for Disease Control and Prevention issued new guidelines in late February suggesting that most Americans could stop wearing masks in indoor spaces.

But any return to normalcy is threatened by the swift spread of the Omicron subvariant known as BA.2, the most transmissible version of the virus spotted so far. BA.2 now accounts for 85.9% of new cases in the United States.

There is good news in that the number of new cases reported worldwide each day is about 32% lower than two weeks ago, with an average of about 1.1 million a day over the past week, the Times reported. And the number of coronavirus deaths is 23% lower than two weeks ago, with an average of 3,800 a day globally over the past week.

Source: HealthDay

U.S. Inflation Jumped 8.5% in Past Year, Highest Since 1981

Paul Wiseman, Anne D’Innocenzio and Mae Anderson wrote . . . . . . . . .

Inflation soared over the past year at its fastest pace in more than 40 years, with costs for food, gasoline, housing and other necessities squeezing American consumers and wiping out the pay raises that many people have received.

The Labor Department said Tuesday that its consumer price index jumped 8.5% in March from 12 months earlier, the sharpest year-over-year increase since 1981. Prices have been driven up by bottlenecked supply chains, robust consumer demand and disruptions to global food and energy markets worsened by Russia’s war against Ukraine. From February to March, inflation rose 1.2%, the biggest month-to-month jump since 2005. Gasoline prices drove more than half that increase.

Across the economy, the year-over-year price spikes were widespread. Gasoline prices rocketed 48% in the past 12 months. Used car prices have soared 35%, though they actually fell in February and March. Bedroom furniture is up 14.7%, men’s suits and coats 14.5%. Grocery prices have jumped 10%, including 18% increases for both bacon and oranges.

Investors focused on a bright spot in the report and sent stock prices up: So-called core inflation, which excludes volatile food and energy prices, rose just 0.3% from February to March, the smallest monthly rise since September. Over the past year, though, core prices are up 6.5%, the most since 1982.

“The inflation fire is still out of control,″ said Christopher Rupkey, chief economist at the research firm FWDBONDS LLC.

The March inflation numbers were the first to fully capture the surge in gasoline prices that followed Russia’s invasion of Ukraine on Feb. 24. Moscow’s attacks have triggered far-reaching Western sanctions against the Russian economy and disrupted food and energy markets. According to AAA, the average price of a gallon of gasoline — $4.10 — is up 43% from a year ago, though it’s dipped in the past couple of weeks.

The acceleration of inflation has occurred against the backdrop of a booming job market and a solid overall economy. In March, employers adding a robust 431,000 jobs — the 11th straight month in which they’ve added at least 400,000. For 2021, they added 6.7 million jobs, the most in any year on record. In addition, job openings are near record highs, layoffs are at their lowest point since 1968 and the unemployment rate is just above a half-century low.

The escalation of energy prices, a potential threat to the economy’s long-term durability, has led to higher transportation costs for the shipment of goods across the economy, which, in turn, has contributed to higher prices for consumers. The squeeze is being felt particularly hard at the gas pump.

“That’s an extra dollar per gallon that I’m paying to get into the city to work,” Jason Emerson of Oakland, California, said as he loaded groceries into his car. “And then, you know, we have the tolls that just went up this past year a dollar. My eggs are a dollar more as well. So everything’s going up at least a dollar, which, you know, adds up.”

The latest inflation numbers solidify expectations that the Federal Reserve will raise interest rates aggressively in the coming months to try to slow borrowing and spending and tame inflation.

Kathy Bostjancic, an economist at Oxford Economics, said she expects year-over-year inflation to hit 9% in May and then begin “a slow descent.” Some other economists, too, suggest that inflation is at or near its peak. With federal stimulus aid having expired, consumer demand could flag as wages fall behind inflation, households drain more of their savings and the Fed sharply raises rates, all of which could combine to slow inflation.

But that could take time. Robust spending, steady pay raises and chronic supply shortages are still fueling inflation. In addition, housing costs, which make up about a third of the consumer price index, have escalated, a trend that seems unlikely to reverse anytime soon.

Economists note that as the economy has emerged from the depths of the pandemic, consumers have been gradually broadening their spending beyond goods to include more services. A result is that high inflation, which at first had reflected mainly a shortage of goods — from cars and furniture to electronics and sports equipment — has been emerging in services, too, like travel, health care and entertainment. Airline fares, for instance, have soared an average of nearly 24% in the past 12 months. The average cost of a hotel room is up 29%

The expected fast pace of the Fed’s rate increases will make loans sharply more expensive for consumers and businesses. Mortgage rates, in particular, though not directly influenced by the Fed, have rocketed higher in recent weeks, making home buying costlier. Many economists say they worry that the Fed has waited too long to begin raising rates and might end up acting so aggressively as to trigger a recession.

The American public’s expectation for inflation over the next 12 months has reached its highest point — 6.6% — in a survey the Federal Reserve Bank of New York has conducted since 2013. Once public expectations for inflation rise, they can be self-fulfilling: Workers typically demand higher pay to offset their expectations for price increases. Businesses, in turn, raise prices to cover their higher labor costs. This can set off a wage-price spiral, something the nation last endured in the late 1960s and 1970s.

Inflation, which had been largely under control for four decades, began to accelerate last spring as the U.S. and global economies rebounded with unexpected speed and strength from the brief but devastating coronavirus recession that began in the spring of 2020.

Many Americans have been receiving pay increases, but inflation has more than wiped out those gains for most people. In February, after accounting for inflation, average hourly wages fell 2.7% from a year earlier. It was the 12th straight monthly drop in inflation-adjusted wages.

Still, for now, with the job market healthy, inflation has yet to dampen overall consumer spending. Levi Strauss & Co., for example, says its price increases don’t seem to have fazed its customers.

That said, Adrian Mitchell, chief financial officer at Macy’s, cautions that chronically high inflation will likely lead consumers to be choosier: They may spend less on department store goods and more on services like travel and dinners out.

“We do believe that the consumer is going to be spending,” Mitchell said. “But are they going to be spending on discretionary items that we sell, or are they going to be spending on an airline ticket to Florida or air travel or going out to restaurants more?”

In Atlanta, Shirley Hughes has had to raise prices at her bakery, Sweet Cheats, because of soaring costs for items like eggs and milk. Two years ago, a 36-pound container of butter cost $75. Now, it’s $145. Thirty dozen eggs were $50. Now, they’re $75 — and even that price is possible only if Hughes picks them up herself, instead of having them delivered. She’s raised the price of her six-inch cake by $5 to $50.

So far, she said, people have generally accepted her higher prices. But there are limits. One customer wanted a six-inch cake delivered to her boyfriend — an hour’s drive away. Hughes told her the price of making the cake and delivering it would come to nearly $200.

The customer canceled.

Source : AP

Chart: Where the Super Rich Reside

Source : Statista

The Way Chinese Think About COVID-19 is Changing

Reading the news backwards has long been a useful skill in China, where officials often obfuscate. Recently it has seemed like a matter of survival for some. Take the residents of Beijing, the capital, who are girding themselves for a covid-19 lockdown and all the hardship that might entail. When the city’s officials announced on April 11th that there was more than enough food for everyone, people assumed the opposite. “Understood, hurry and go shopping now,” a cynic wrote online.

Beijing has fewer than 100 cases of the virus. There are no clear indications of a growing outbreak or of an impending lockdown. But residents recall the experience of Shanghai, where local officials insisted there would not be a citywide lockdown right up to the moment they imposed one. First they tried to lock down half of the city at a time. Then they closed the whole place. Residents who had trusted the authorities quickly ran out of food. Now people in other Chinese cities are stockpiling supplies, determined not to make the same mistake.

China shows no signs of loosening its zero-covid approach, which uses mass testing and strict lockdowns to crush outbreaks. If anything, the government is tightening its controls. A report by Gavekal Dragonomics, a research firm, found that all but 13 of China’s top 100 cities (by GDP) were implementing covid restrictions. Ten cities are in “severe lockdown”, meaning more than half of residents are confined to their homes. Changchun, Xuzhou and Shanghai were recently in full lockdown. Shanghai has announced that areas with no cases for two weeks will see restrictions lifted.

For much of the pandemic the Chinese public has joined officials in hailing the zero-covid strategy as a success. Over the past two years China has had a lower mortality rate from the virus and stronger economic growth than any other big country. During a recent speech celebrating China’s hosting of the Winter Olympics in February, President Xi Jinping claimed that some foreign athletes said China deserved “a gold medal for responding to the pandemic”. Earlier Mr Xi said the country’s anti-covid efforts “demonstrate the advantages” of the Communist Party’s leadership.

But the current wave is changing the way people think about the virus—and about the government’s strategy. No one wants mainland China to end up like Hong Kong, which was overwhelmed by the highly transmissible Omicron variant, leading to a spike in deaths among unvaccinated old people. The mainland’s elderly population is similarly vulnerable, so a complete lifting of controls is out of the question. At the moment, though, anecdotal evidence suggests that more people are dying because of the Chinese government’s restrictions than from the virus. The state needs to adapt, say critics.

The 98-year-old mother of Lang Xianping is one such victim. In a post on Weibo, China’s version of Twitter, Mr Lang wrote that she died of kidney failure after waiting for hours at the entrance of an emergency room, unable to enter without a negative covid test. Mr Lang, meanwhile, argued with local officials until they let him out of his sealed compound. When he was finally released, there were no cars on the street to take him to the hospital. “I did not get to see my mother one last time,” he wrote. “This tragedy could have been avoided.”

These types of stories—tragic, troubling and widely shared—are growing more common. And they are causing some people to fear covid restrictions as much as they do the virus. As provincial governments roll out pre-emptive measures to combat covid, citizens are sharing guides on how to freeze vegetables, as well as old film clips in which party officials are criticised for caring more about political correctness than starving commoners.

People are frustrated with the government’s failure to adjust its covid policy by, for example, letting patients with mild symptoms quarantine at home, instead of at isolation centres where they use scarce resources. Experts believe covid rules are causing avoidable deaths. They point to a study published last year by a team affiliated with China’s Centre for Disease Control and Prevention. It found that during an early lockdown in the city of Wuhan, deaths from chronic illnesses exceeded expected rates by 21%. Deaths from diabetes exceeded expected rates by 85% and suicides by 66%. Two years later, some ask, has the government learned anything?

Trust issues

Other countries that have moved away from strict covid policies now allow people with infections to self-isolate. That requires governments to trust that people will act responsibly. But the Chinese government, obsessed with control, does not. Instead, it tells citizens to trust the party. A recent editorial in the People’s Daily, an official newspaper, called for Shanghai’s residents to “grit their teeth” and hold tight to the party’s leadership. “In fighting the pandemic, trust is more important than gold,” it said. Residents of Shanghai are unmoved. “All the policies this month have been incomprehensible,” says one. “They say one thing but implement another. We don’t trust these policies any more.”

Instead the people of Shanghai are relying on each other. They use the term zijiu (self-salvation), as they fill the gaps left by an overwhelmed party apparatus. Kelly Wang, a volunteer in the district of Xuhui, describes how younger residents care for their elderly neighbours and organise bulk orders of food. The state, meanwhile, has censored the hashtag “buying groceries in Shanghai” on Weibo. “We know that we can’t count on the government any more,” says Ms Wang. But, she adds, “The people here are capable and brilliant.”

Shanghai, home to the rich and powerful, gets a lot of attention. But other parts of China, such as Yunnan and Xinjiang, have gone through longer, more restrictive lockdowns. The city of Jilin has been closed for over a month. Residents there have shared videos of police publicly shaming residents for criticising covid restrictions in a private online chat group. In Shenzhen a shop owner filmed state-media reporters who refused to interview him because he complained about not receiving lockdown subsidies. “We’re only here to report on the people being helped,” says one reporter. But as China’s strict covid controls ensnare more people, it is becoming harder to convince them that all is well.

Source : The Economist