Current Affairs
February 27, 2023
Home Sales
US Pending Home Sales Explode Higher In January
by Tyler Durden
Monday, Feb 27, 2023 – 10:07 AM
Existing home sales plunged, new home sales surged… so today’s pending home sales print will be the decider over what level of bloodbathery is really occurring in the US housing market. After a surprise jump in December (after 6 straight declining months), analysts expected a modest 1.0% MoM jump in pending home sales in January but were blown away by an 8.1% MoM explosion in sales (though Dec was revised down from +2.5% to +1.1%)….
Source: Bloomberg
“Home sales activity looks to be bottoming out in the first quarter of this year, before incremental improvements will occur,” Lawrence Yun, NAR’s chief economist, said in a statement.
That is the biggest MoM jump since June 2020, pushing the index to its highest since August 2022…
Source: Bloomberg
“Buyers responded to better affordability from falling mortgage rates in December and January,” said NAR Chief Economist Lawrence Yun.
Sorry Larry… that’s history!
This surge in pending sales is unlikely to continue since mortgage rates have surged since the period these sales were ‘pending’ for.
We also note that while housing futures have surged in recent months, the last week or two have seen them stagnate as mortgage rates soared…
Signings rose in all four regions in the month, led by a more than 10% gain in the West.
“An extra bump occurred in the West region because of lower home prices, while gains in the South were due to stronger job growth in that region,” Yun said.
Even with the surge at the start of the year, contract signings were still down 22.4% from January 2022 on an unadjusted basis.
https://www.zerohedge.com/markets/us-pending-home-sales-explode-higher-january
February 22, 2023
Inflation Overview
Inflation a Bit Warmer, Still Stubborn
Dan North | February 2023
Inflation was a little warmer than expected in January. The headline Consumer Price Index (CPI) rose 0.5% m/m which was a bit higher than expectations of 0.4%. The y/y rate landed at 6.4, which was higher than expectations of 6.2%, and also only a slight improvement from last month’s 6.5%. The core rate, which strips out volatile food and energy prices, rose 0.4% m/m, again exceeding expectations of 0.3%, while the y/y rate came in at 5.6%, just above expectations of 5.5% and again also only a slight improvement from last month’s 5.7%. Energy prices drove the m/m increase with a 6.7% increase in utility gas and a notable 2.4% increase in gasoline prices. On a y/y basis, fuel out and utility gas have been big drivers, while gasoline has only risen 1.5%. Used cars and truck prices which were driven up in the pandemic due to scarcity, have now fallen 11.6% over the past year.
By the way, December’s report, which showed the first m/m decline in the headline CPI in the post Covid-era at -0.1%, was revised back up to +0.1% in this report.
As shown in the first chart below, the headline y/y rate has fallen for seven consecutive months, dropping a total of 2.6% from June’s peak of 9.1%. However, the core rate has been more stubborn and has only fallen for four consecutive months, from the September peak, and has only dropped 1%. That is worrisome for the Fed since it focuses on core inflation. More worrisome still is that while core goods inflation is falling rapidly, core services inflation continues to rise and is now running at a very hot 7.2% y/y rate, the highest in over 40 years. The Fed is now concentrating more on services because 1. it is far outstripping goods inflation, and 2. services are more likely to be driven by labor costs, which in theory the Fed could influence more easily than the cost of goods.
Finally, the Fed has been focusing on “super core” inflation, which is core services excluding housing. Housing accounts for about one-third of the overall index, but it does not include all rental prices, only those that are signed in the month. Since those normally take a year to renew, housing inflation in the CPI lags market prices. And since market prices are falling, so will housing in the CPI going forward. In a sense then, housing inflation is already taken care of, so it makes sense to strip it out to see what’s happening underneath. Super core inflation is now running at 4% y/y, twice the Fed’s 2% target.
So the overall report was a bit warmer than expected, the core is being stubborn, core services are very high and rising, and super core isn’t good either. This report will keep the Fed on track for another 25 bps hike in March.
https://www.allianz-trade.com/en_US/insights/inflation-a-bit-warmer.html
February 21, 2023
Next Gen Chemicals Employees
My Toughest Challenge: Jerry Lebold of BASF Geismar
By
–
December 4, 2022
THE CHALLENGE
One thing BASF’s Jerry Lebold has learned over the years is the importance of having the right team with the right skills and talents.
That’s particularly important now, given the wave of retirements impacting the industry. “There’s a lot of knowledge that gets lost when someone who has worked for 30 or 40 years retires,” Lebold says. “Our challenge is knowledge retention and getting new team members to learn from that.”
Another hurdle—a cultural preference for four-year college degrees over manufacturing careers. “Students today want to work for Google or Microsoft or Tesla,” Lebold says. “Many of them don’t recognize the opportunities that manufacturing provides in their own backyard. It’s simply a failure to get the word out, and that’s unfortunate given the urgent need for skilled, capable team members and the proliferation of manufacturing jobs.”
THE RESOLUTION
Lebold has learned that the best way to change that perception is through a system of constant engagement. BASF starts early by grooming its future workforce while they’re still in elementary school.
“When I came here three years ago, I began to notice a real value in engaging our local schools,” he adds. “In Ascension Parish, we start very early with kids in the 4th grade. We sponsor the BASF Kids’ Lab at the Louisiana Arts & Science Museum, and we get them excited about the possibilities of a future in STEM.”
It doesn’t stop there. The company targets rising juniors and seniors through its BASF Tech Academy, whereby students visit the Geismar site for a week and are exposed to a variety of jobs in manufacturing, such as process technician, engineering or the skilled trades.
“Later, we offer them mentorships, internships and scholarships, while also guiding the curriculum at local community colleges and universities through advisory panels. That way, we ensure that the programs they’re offering put students in the best position to get hired.”
Lebold’s hope is that BASF will keep students in the local communities “constantly engaged” throughout their education. “In doing so, we’re creating a local pipeline,” he adds. “We hope to see those students who first came to BASF Kids Day in 4th grade also go through the TECH Academy as high schoolers, then eventually land a summer internship and even a full-time job.”
Upon attracting top talent, BASF shifts its focus to retainage through its learning and development program and learning coordinators. In the process, they promote the continuous development of those skillsets.
THE TAKEAWAY
Over the last three years, Lebold has broadened his diversification efforts by focusing more on local minority communities, as well as attracting more women to the manufacturing sector. “I think there’s a great opportunity to work with local underserved communities so that they’re aware of the jobs and opportunities, then put them in a position so that they can successfully be a part of this industry up and down the river,” he adds.
BASF has begun working with advocacy groups in the region such as the Greater Baton Rouge Industry Alliance, Louisiana Chemical Association and Louisiana Association of Business and Industry to make it happen. “We’re in the early stages of trying to figure out what that looks like, but I think it gets solved collaboratively and with the industry as a whole,” he adds.
“We have to look at those hurdles that are preventing these kids from advancing. We’re going to need operators, millwrights and technicians … so we need to work right here in this region to make sure we provide those opportunities.”
February 14, 2023
Media Reach
Turns Out, Video Didn’t Kill The Radio Star…
by Tyler Durden
Monday, Feb 13, 2023 – 06:55 PM
More than 40 years after The Buggles released “Video Killed the Radio Star”, radio is still alive and well.
As Statista’s Felix Richter notes, with all the chatter about about streaming and other digital media, it’s easy to forget how powerful traditional media such as radio and television still are. Radio in particular rarely gets credited for what it still is: a true mass medium.
According to MRI-Simmons, radio even trumps TV in terms of its weekly reach among U.S. adults.
You will find more infographics at Statista
According to MRI-Simmons, 91 percent of U.S. adults listen to the radio at least once a week, far exceeding the reach of live and time-shifted TV at 76 percent, social media at 70 percent an online video at 67 percent.
While radio does win in terms of sheer reach, TV remains unparalleled with respect to average daily usage.
According to Nielsen, U.S. adults spent an average of 3 hours and 41 minutes watching live and time-shifted TV in Q3 2020, which is roughly 2.5 times the amount of time they spent listening to the radio (1 hour and 31 minutes).
https://www.zerohedge.com/technology/turns-out-video-didnt-kill-radio-star
February 4, 2023
Wisdom About Big Company Downsizing
Headlines about layoffs don’t mean you’re going to lose your job
Rebecca Knight
Feb 4, 2023, 02:23 IST
What does the future hold?Hidesy/Shutterstock
- The US labor market looks strong, and yet news about mass layoffs dominates the headlines.
- Nearly 40% of US workers said they “are nervous about being laid off,” per a LinkedIn survey.
The US labor market looks stunningly strong, and yet it’s hard to scan the headlines without feeling a tinge of worry about your job security.
Big Tech companies including Amazon, Google, Microsoft, and Meta have collectively shed tens of thousands of workers amid a slowing economy. And the cuts keep coming — even in industries outside of tech. The chemical company Dow, for instance, laid off 2,000 employees; 3M, the maker of Post-it notes and Scotch tape, slashed 2,500 jobs; and Impossible Foods, which produces plant-based meat, trimmed 700.
To be clear: Labor Department data shows that layoffs overall remain historically low and the latest jobs report shows growth is rock solid.
But if the fear of losing your job hovers over you like a dark cloud, you’re not alone. Nearly 40% of US workers said they “are nervous about being laid off,” a LinkedIn survey of more than 2,000 US employees conducted in December found.
What are the real chances of that happening? To find out, Insider spoke with three experts: Nick Bunker, the head of economic research at Indeed Hiring Lab; Wayne Cascio, an industrial-organizational psychologist at the University of Colorado; and Andrew Flowers, a labor economist at Appcast, the recruitment-advertising technology company. Highlights of what they had to say might help you sleep a little more soundly.
How worried should we be about layoff contagion?
Flowers: Recessions are psychological phenomena. They’re about a loss of confidence in the future.
In the tech sector, there was a collective awareness that companies were operating with a different outlook than they had been previously. Before, growth was the priority and there was lots of optimism — let’s take advantage of low interest rates and hire a bunch of people. That sentiment flipped as the unit economics came under more pressure, along with higher interest rates and more consumer spending on services.
As for whether these layoffs spread into other sectors, the risk is not that business leaders will see what’s happening in tech, get spooked, and say, “We need to batten down the hatches and lay off our people, too!” That’s not the channel through which layoff contagion happens.
The risk is if consumers get spooked.
You’re scaring me a little. What happens when consumers get jittery?
Flowers: Over the last year, we’ve seen a disconnect between hard and soft data. The hard data, including GDP, has been relatively strong. But the soft data, including consumer sentiment, which is based on surveys, has been weaker. The fundamentals are good, but the vibes feel off.
That’s why some talk about a “vibe-session?”
Flowers: There’s potential for a recession to become a self-fulfilling prophecy. That could happen if consumers get nervous about the layoffs news. They’ll think, “Maybe I won’t go out to eat. Maybe I won’t buy a new refrigerator.” If their spending falls, the effect on the economy could cause contagion.
Why is there such a disconnect between what the data says about the economy and how we feel about it?
Bunker: I get why people are voicing discontent — inflation is a lot higher than it’s been in the recent past.
But there’s what people say and what they do. They say it’s not great and they complain about it. But they’re still quitting their jobs and going out to dinner. What people are doing is indicative of a strong economy.
And by “people,” do you mean CEOs, too? Are they operating in a way that’s indicative of a strong economy?
Bunker: Unfortunately, I can’t read the mind of the CEOs. Economic growth is slowing down, but there’s still growth.
We could see a rise in layoffs if that takes a hit moving forward. But that would be based on economic growth, not based on what other CEOs are doing.
That’s encouraging. As long as fundamentals stay solid, we’re not all in danger of getting pink slips, right?
Cascio: You don’t need to hit the panic button. In this tight labor market, the demand for talent is high and supply is limited. The last thing enlightened CEOs want to do is cut people when things look like they’re turning south.
So I guess we all should hope we work for an enlightened CEO then?
Cascio: One of the things you want to look at is what your employer did in past downturns. Did they turn to layoffs during the financial crisis? What about in the tech wreck of 2001? Research shows that’s the best predictor of future behavior. If they’ve done it once, they’re going to do it again.
I’ve been doing research on downsizing since the ’90s and one thing is clear: Companies that move quickly to lay off their workers never outperform their competitors in the same field. If companies are doing layoffs to cut costs, there are better ways than cutting people.
Everchem Updates Archive 
Sign Up for Email Updates
