Posted originally on the conservative tree house on July 15, 2022 | Sundance
This shouldn’t come as a surprise. Most banks and financial institutions are being very careful right now as they prepare for the consequences of consumers running out of money. All banks are securing reserve accounts in anticipation of defaults increasing.
July 15 (Reuters) – Wells Fargo & Co said on Friday its second-quarter profit nearly halved as the bank set aside more funds to cover potential loan losses, while its mortgage lending business came under pressure from higher interest rates.
The fourth-largest U.S. bank reported profit of $3.1 billion, or 74 cents per share, compared with $6 billion, or $1.38 per share, a year earlier. Its total loan loss provisions were $580 million in the quarter, including a $235 million increase due to loan growth.
Under an accounting standard that took effect in 2020, banks must factor the economic outlook into loan loss reserves. Last year, the bank had released $1.6 billion from its reserves for loan losses as the economy rebounded from the pandemic.
Wells Fargo Chief Financial Officer Mike Santomassimo told reporters that retail and business customers remain strong, but the bank is prepared for a potential economic downturn. “Things will probably get worse, but that’s already included in the overall scenario analysis and the allowance level we have for the quarter,” Santomassimo said.
[…] Big bank executives have sounded cautious so far this earnings season, with JPMorgan Chase & Co’s Chief Executive Jamie Dimon likening the macroeconomic environment to a coming “storm.” (read more)
Posted originally on the conservative tree house on July 15, 2022 | Sundance
Joe Manchin didn’t completely torpedo the $500 billion in Green New Deal climate change spending, but he did stall it for a month saying he would not support the climate change spending until he sees July’s inflation numbers in August, which should be a warning.
If you think carefully about it, it’s a classic Manchin head-fake. The July and August inflation numbers, to be released in August and September respectively, are almost guaranteed to be lower than June.
July/Aug are the two months we are in right now where inflation is hitting a plateau. Gasoline prices are dropping due to a drop in demand. This is the period before prices start rising again in September and October when the energy farming costs start to roll out with the next harvest.
Senator Manchin isn’t stupid; in fact, he is quite Machiavellian, he knows this… thus, his position.
Manchin can give the illusion of prudence, but he knows the July inflation rate will show a decrease for two reasons.
First, in the month-to-month comparison, July will not carry the same scale of gasoline and energy increases as June. Second, in the year-over-year comparison, July ’22 will be comparing to July 2021 when prices already started skyrocketing. Bottom line, July inflation will give the illusion of dropping, which gives Manchin a shield to support the spending…. and he will.
WASHINGTON DC – Joe Manchin is forcing Democrats into a brutal choice: Take a deal now to lower the costs of health care premiums and prescription drugs, or try to negotiate a larger bill in September that includes climate and tax reform with no guarantee it will pass.
The West Virginia Democrat said Friday that he wants to see another month of inflation numbers before considering legislation that might increase taxes on some higher-income Americans and plow hundreds of billionsof dollars into the energy sector. On Thursday Manchin “unequivocally” rejected July or August approval of Democrats’ proposed energy investments and tax increases in a meeting with Senate Majority Leader Chuck Schumer, according to a person briefed on the meeting.
[…] Democrats are reeling after Manchin’s communication to Schumer indicated that climate change and tax provisions are unworkable for any party-line bill considered this summer. Fury is building within the party, with Sen. Martin Heinrich (D-N.M.) questioning whether Manchin should continue to chair the Senate’s Energy committee.
[…] Manchin had sought to shave down an energy package originally set at more than $500 billion to $300 billion or less. He balked privately at sending money to the EV industry and the Direct Payment program. (Read More)
While you won’t see a single MSM analyst, financial pundit or mainstream political commentator point out what Manchin is doing, his strategy is cunning.
Right now, conservatives are calling Manchin a hero for blocking the GND spending while progressives attack him. This gives the impression that he is a centrist, above the fray, and wise in his outlooks toward the economy and budgeting. However, it’s a ruse. Joe Manchin knows, just like you do, that the next inflation report will be much lower. He is positioning to support the climate change spending in September.
Watch.
Bookmark this.
The scheming strategery of Joe Manchin is as predictable as the scheming strategery of Mitch McConnell.
The two wings of the UniParty duck seem still on the surface. This type of ploy is exactly how DC is able to operate, paddling forward furiously, just below the surface; and almost no one can see what is happening.
Once you see the strings on the political marionettes, you can never return to that moment in the performance when you did not see them. However, because too few people see them, almost everyone congregates in the lobby during the mid-term intermission asking, “hey, when did Texas become dependent on windmills?”
Posted originally on the conservative tree house on July 14, 2022 | sundance
The “Producer Price Index” (PPI) is essentially the tracking of wholesale prices at three stages: Origination (commodity), Intermediate (processing), and then Final (to wholesale). Today, the Bureau of Labor and Statistics (BLS) released June price data [Available Here] showing another 11.3% increase year-over-year in Final Demand products at the wholesale level.
Overall, the wholesale inflation rate is being driven by energy prices. The June calculation shows exactly that problem with energy prices embedded in goods driving 10% of the price increase. However, there is some good news in the short-term for July and August, as the intermediate and raw material costs are leveling off temporarily. Unfortunately, that raw material price plateau is almost certainly the result of a drop in demand.
The June inflation rate for final demand goods (2.4%) is driven mostly by higher energy prices (10%). Energy costs are passed along through every stage of the supply chain contributing to an overall wholesale price increase of 2.4% in June, 11.3% year-over-year.
Notice the slight drop in final demand services; that is important. What we are seeing is a contraction in the service economy overall, as the service sector -which includes restaurants- cannot pass along the scale of energy price increase to customers. People are changing their spending habits – service demand overall is dropping.
Additionally, the producer price index gathers data from inside the supply chain, backwards from the final stage (wholesale) into the intermediate stage (various processing) and also raw material prices. Here is where things are getting interesting, and now I can make some direct forward predictions.
I modified Table-B so you can see how the supply chain for goods is responding to both: (A) energy prices, and (B) consumer spending. You can click on the graphic to expand the image and spend some time on it if needed.
You can see from the left side of modified Table-B that both levels of intermediate goods were heavily impacted by energy prices. “Intermediate” processed goods rising 2.3% in June, 22.2% year-over-year. Intermediate unprocessed goods (raw materials) rose 9.5% in June, 58.0% year-over-year.
However, if you subtract the massive June energy costs, you will note the intermediate price of nonfood processed goods significantly dropped to 0.2% in June. And if you subtract the energy costs, you will notice the raw material prices for nonfood durable goods actually declined 2.2% in June.
Here’s what is going on…
The inflationary impact of Joe Biden’s Green New Deal energy program is running into the inability of consumers to pay for the price increases it creates. That is what is causing the demand side drops in retail economic activity on Main Street. We all know this.
As a result of these high prices, there is less internal demand within the supply chain for both goods and services. Inventories are climbing and the demand for raw materials to produce durable goods is now declining. Subtract the energy costs and nonfood prices are dropping. The decline is a raw material demand outcome.
June energy prices were extremely high. That’s driving the current PPI price outcome at all stages; but behind that issue is low manufacturing activity.
Remember, two months ago we said food prices would plateau in July and August. This PPI report shows the entry into that plateau. However, there is a problem on the horizon that is not measured in this data.
The high energy costs to farmers (fertilizer, diesel, oil, energy, etc.), a cost already seeded (forgive the pun) is right now in the fields…. waiting…. sitting somewhat dormant and ignored by the statisticians… but that higher origination price is growing and lurking….
When the farming harvests take place, those higher field costs will enter the supply chain again and end up finding their way, via wholesalers and supermarkets, to your fork. Big Ag is going to maximize this opportunity.
Farmers will not be the ones benefitting.
♦ For the next two months the Consumer Price Index and Producer Price Index will show inflation stability and possibly even price declines.
Those reports will come out in August (for July) and September (for August) and will give the impression that inflation has moderated, and the Fed has been successful. However, in/around Sept and October the harvest cost will hit the stores. At that point, energy prices -already high- will take a backseat to the rate of inflation driven by massive increases in food prices.
Oct, Nov and December, all the way through the winter, will be painful at the grocery stores and supermarkets. Also, restaurants this fall and winter, are going to get hit hard as their suppliers start to deliver food at much higher prices. Those people in the food service industry need to prepare now for what is looming.
Everything I just described above is happening at the same time as consumer demand for durable goods and non-essential services is dropping. The current economic activity on Main Street is tepid at best. Housing values have peaked along with rents.
Every element of the U.S. economy is now entering a phase where success or failure in a Main Street business is directly connected to the customer being able to afford the product or service.
Two-thirds of our Gross Domestic Product (GDP) is driven by consumer spending. Our borders are open, our wages are flat, our prices are high, our discretionary spending is contracting. Our manufacturing and service driven economy will contract, and we are two months away from food stability, prices, affordability and potentially scarcity, being the primary focus of everyone.
Posted originally on the conservative tree house on July 13, 2022 | Sundance
Officials in the state of Texas are worried the emergency measures taken Wednesday to avoid blackouts may not be enough. The utility operators urgently need the wind to start operating the windmills or things might get worse. Reuters News has more:
(Reuters) – Texas’s power grid operator on Wednesday took emergency measures to avoid rolling blackouts as soaring electricity demand threatened to outpace available supplies amid a stifling heatwave.
The Electric Reliability Council of Texas (ERCOT), which operates the grid that serves more than 26 million customers, initiated a rarely used emergency program that is triggered when supplies fall below a critical safety margin.
Earlier, ERCOT had urged residents to cut power use during the hottest hours of the day and warned of a risk for rolling blackouts. Residents were asked to turn up thermostats, defer the use of high-power appliances and turn off swimming pool pumps.
The emergency notice came after ERCOT began paying suppliers an average of $5,000 per magawatt hour to keep generators running. That price is the highest the grid operator pays. “They were pulling a lot of levers to avoid going into emergency operations and rolling blackouts,” said Doug Lewin, president of consultants Stoic Energy LLC. (read more)
Call me Captain Obvious, but in addition to the population migration, it looks like Texas imported California’s energy policies. The sustainable energy isn’t sustainable. However, on a positive note, their state ESG score is improving.
Posted originally on the conservative tree house on July 13, 2022 | Sundance
Gasoline in Mexico is $3.12/gal. Gasoline in the United States is $4.78/gal
The media did not give this much attention; however, Mexican President Andres Manuel Lopez-Obrador thoroughly, albeit diplomatically, dressed down Joe Biden over his economic and energy policy during a Tuesday visit to the White House.
You might remember that together with a host of south and central American leaders, Mexican President Lopez-Obrador refused to attend Joe Biden’s Latin-America summit last month {Go Deep}. With that in mind Obrador’s media remarks in the oval office are quite remarkable in their pointedness.
The video and audio are tenuous, and the delay for interpretation makes following the flow of AMLO’s comments a little challenging. However, if you read the transcript you can clearly see how AMLO is diplomatically undressing Biden over the economic issue of U.S. energy policy. It would appear that AMLO is not part of the great western reset and has no intention on inflicting the pain that is deliberately being created by other western leaders. [Video at 23:30, Transcript Below] WATCH:
Now keep in mind that socially AMLO is a soft-socialist (immigration). However, he is also a strong economic nationalist who has previously expressed a strong dislike for the influence of multinational corporations in Mexico. AMLO is not a World Economic Forum acolyte. AMLO is on team BRICS.
In these remarks, AMLO is very pointedly telling Joe Biden that his U.S. energy policy is seriously flawed. It is really quite remarkable.
AMLO tells Biden that Mexico will continue investing in expanded refining of gasoline, and he is willing to sell that gasoline to American companies because Joe Biden will not issue permits to expand gasoline refining capacity in the United States. Additionally, AMLO affirms his position on further oil development in Mexico and then, here comes the kicker,…. offers to expand electricity sales to the United States, including supplying Texas with electricity because both the Biden administration and Texas are not developing their own energy resources.
AMLO is telling Biden that Mexico will increase energy subsidies to the United States if Biden asks him to. Think about that.
[Transcript] – PRESIDENT LÓPEZ OBRADOR: (As interpreted.) Yes, I fully coincide with what you have proposed, President Biden. And I could summarize everything we’ve been saying in five basic items of cooperation.
Number one, since the energy crisis started, Mexico has used 72 percent of its crude and fuel oil exports to United States refineries — 800,000 barrels a day.
Therefore, we decided that while we’re waiting for prices of gasoline to go down in the United States — and I hope that Congress approves or passes your proposal, Mr. President —
PRESIDENT BIDEN: It has gone down for 30 days in a row. (Laughs.)
PRESIDENT LÓPEZ OBRADOR: (As interpreted.) — of lowering — lowering prices, yes. That’s it.
In the meantime, while we’re waiting for prices to go down, we have decided that it was necessary for us to allow Americans who live close to the borderline so that they could go and get their gasoline on the Mexican side at lower prices.
And right now, a lot of the drivers — a lot of the Americans — are going to Mexico, to the Mexican border, to get their gasoline.
However, we could increase our inventories immediately. We are committed to guaranteeing twice as much supply of fuel. That would be considerable support.
Right now, a gallon of regular costs $4.78 average on this side of the border. And in our territory, $3.12.
Let me clarify something, and I also want to take advantage of this opportunity to thank you, Mr. President. Most of this gasoline, we are producing it in the Pemex refinery that you allowed us to buy in Deer Park, Texas.
Two, we are putting at the disposal — or sending at the disposal of your administration over 1,000 kilometers of gas pipelines throughout the southern border with Mexico to transport gas from Texas to New Mexico, Arizona, and California for a volume that can generate up to 750 megawatts of electric energy and supply about 3 million people.
Three, even though the USMCA has made progress for the elimination of tariffs, there are still some others that could be immediately suspended. And we could do the same with some regulations, regulatory measures, and tedious procedures or red tape in terms of trade related to foodstuffs and other products so that we can lower prices for consumers in both our countries, always being very careful in the protection of health and the environment.
Four, starting a private-public investment plan between our two countries to produce all those goods that will be strengthening our markets so that we can avoid having importations from other regions or continents.
In our country, we shall continue producing oil throughout the energy transition. With the U.S. investors, we are going to be establishing gas-liquefying plants, fertilizer plants, and we shall continue promoting the creation of solar energy parks in the state of Sonora and other border states as well.
And we’re going to accomplish this with the support of thermal electric plants and also through transmission lines to produce energy in the domestic market, as well as for exports, to neighboring states in the American union, as for instance, Texas, New Mexico, Arizona, and California.
It’s also important to mention that, two months ago, we took the sovereign decision of nationalizing lithium in Mexico. This is a fundamental mineral, a fundamental input to advance in our purpose not to depend on fossil fuels. And this will be available for the technological modernization of the automotive industry among our great countries — the countries of the USMCA.
Five, orderly migration flow and allowing arrival in the United States of workers, technicians, and professionals of different disciplines. I’m talking about Mexicans and Central Americans with temporary work visas to ensure not paralyzing the economy because of the lack of labor force.
The purpose of this plan would be to support and to have the right labor force that will be demanded by the plan you proposed and that was passed by Congress of using $1 trillion for the construction of infrastructure works. (read more)
Mexican President Lopez-Obrador is offering to bail out the United States energy crisis.
Posted originally on the conservative tree house on July 13, 2022 | Sundance
Democrats are historically known for the optics of their politics. With that in mind, is it coincidental that California Governor Gavin Newsom, one of the leading people that leftists want to see run in 2024, shows up to tour the White House the day after Joe Biden leaves town?
Considering the recent article from the New York Times outlining how most democrats do not want to see Joe Biden run for reelection, the timing seems rather conspicuous. {Direct Rumble Link} WATCH:
.
Gavin Newsom is turning California into Somalia, so it would make sense for him to be the next one in line to continue the chaos.
Posted originally on the Conservative tree House on July 13, 2022 | Sundance
Folks, the Build Back Better western alliance are fully vested in the pretending game. It is just one big insufferable game of pretending, and the citizens of the western government powers, You and Me, are the victims.
Seriously, it’s stunning, yet oddly not surprising, that the same multinational forces who created the global inflation crisis as a result of following the World Economic Forum spending agenda, are now claiming the global economy is simply too hot, too successful, there is just too much demand, and that justifies their raising of interest rates:
OTTAWA, July 13 (Reuters)– The Bank of Canada surprised on Wednesday with a full-percentage-point increase to its policy rate, a super-sized hike last seen in 1998, citing “higher and more persistent” inflation and the increased risk of those price gains becoming entrenched.
The central bank, in a regular rate decision, raised its policy rate to 2.5% from 1.5%, and said more hikes would be needed. The move was more forceful than the 75-basis point increase economists and money markets had forecast.
….”With the economy clearly in excess demand, inflation high and broadening, and more businesses and consumers expecting high inflation to persist for longer, the Governing Council decided to front-load the path to higher interest rates,” the bank said. [LINK]
This is the actual justification from the Bank of Canada.
Read it carefully: “With the economy clearly in excess demand.”
Yes folks, I have always said that in order to retain their ideological positions, the leftists in control of policy have to pretend not to know things. That right there is the Bank of Canada pretending not to know the Canadian economy is contracting. Exactly the same as Treasury Secretary Yellen and Fed Chairman Powell pretending not to know the U.S. economy is contracting.
Do you see what happened, and what they are doing?
The Build Back Better energy policy of the collective western governments’ is driving supply side inflation. It’s the new climate change energy policy, all being implemented by the same institutional elements, that is creating the massive increases in overall prices.
It’s the energy policy driving inflation, NOT consumer DEMAND.
The western multinationals, government and multinational/central banks, all carry the same ideological mindset. All of them are collectively supporting the Build Back Better agenda from execution of infrastructure shifts to their direct control over ESG investment in only “sustainable energy” projects.
The fascist assembly of western government and western banks working together to create this great international game of pretending. All of it so they do not have to admit their ideological climate agenda is destroying economies. Thus, to keep up the pretense, they raise interest rates into a contracting economy. This is why I keep saying the pretense is what’s going to end up starving people, creating desperation and ultimately killing people.
Energy demand is no different today than it was pre-pandemic 2018 and 2019. It’s the energy supply, and all of the downstream industrial energy processes that are being blocked, that has created the supply-side issue.
The post-pandemic Build Back Better agenda has shifted the entire energy sector and created all of these inflationary outcomes.
The World Economic Forum, the Bank of Canada, central banks in Europe and Secretary Janet Yellen and Chairman Jerome Powell are all pretending not to know these issues are outcomes of energy policy. The collective western nations all took the same path. All of the outcomes are identical, and now all of their denials and pretenses are being maintained in a collective justification filled with bullshit.
Posted originally on the conservative tree house on July 13, 2022 | Sundance
The Bureau of Labor Statistics (BLS) has released the June Consumer Price Index (CPI) [DATA HERE] showing yet another “surprising” increase in overall inflation. For the month of June overall inflation increased 1.3% bringing the annual rate of inflation to 9.1% as calculated.
Economists and financial pundits are “shocked”, “surprised” and the proverbial “unexpected” is running amok again amid the typeset. The reality of Joe Biden energy policy being the origin of our current inflation crisis is being avoided at all costs by the pretenders. The federal reserve raising interest rates can only impact the demand side, but it’s the supply side (total energy policy) creating the problem. Table-A shows the overview.
(CNBC) – […] The consumer price index, a broad measure of everyday goods and services related to the cost of living, soared 9.1% from a year ago, above the 8.8% Dow Jones estimate. That marked the fastest pace for inflation going back to November 1981.
[…] “U.S. inflation is above 9%, but it is the breadth of the price pressures that is really concerning for the Federal Reserve.” said James Knightley, ING’s chief international economist. “With supply conditions showing little sign of improvement the onus is the on the Fed to hit the brakes via higher rates to allow demand to better match supply conditions. The recession threat is rising.” (read more)
If you dig into the details, the inflation picture shows just how deep the energy policy is hitting. Everything is impacted by Joe Biden’s radical energy policy. Table-1 breaks down the data a bit more specifically. However, even this data is skewed by the BLS putting a weighting factor on the importance.
♦ The rate of annualized inflation for natural gas is now running at almost 100%. Meaning if things continue, the current price will double again by this time next year.
♦ The rate of annualized inflation for gasoline is running at 134%.
♦ The annualized rate of energy inflation overall is running at 90%.
These are the results of the people behind Joe Biden implementing the Green New Deal program by executive fiat.
Also, keep in mind the current increases in farming costs at the field have yet to reach wholesale and retail. The fertilizer, oil, diesel, packaging, transportation and energy costs at the field will not arrive to the fork until later this fall. That is when food inflation will surpass energy inflation.
Current cattlemen and ranchers are finding it more cost-effective, due to drought and high feed costs, to take their cattle to slaughter. There is a temporary drop in beef prices for the next several weeks before the supply roller coaster sets up a scenario for massive increases in beef costs this winter. Consider buying and freezing now for use later this year and into the winter. Try to buy directly from cattle ranchers.
Later this year the next wave (#3) of food inflation will surpass the last two waves. Things will get ugly because there are also predictably shortages of food coming. Higher farm costs and global food supply shortages equals much, much higher U.S. prices. Prepare.
The World Economic Forum is praising Denmark for implementing the world’s strictest carbon tax laws. Companies will soon be forced to pay $159 for every tonne of CO2 emitted, marking an additional $53 per tonne. The government claims this will cut CO2 levels by 3.7 million tonnes in just one year.
“This incentivizes companies to clean up for themselves,” the WEF reported. In the midst of an extreme energy crisis, punishing energy suppliers will undoubtedly backfire. These costs will be passed along to the already struggling consumer. Even the World Bank admitted that the poor will suffer from the carbon tax.
The World Bank stated on its blog:
“There are good reasons why governments may not want to use carbon taxes, and one of them relates to their welfare impacts. For example, a carbon tax on fossil fuels is often regressive in its impact- hurting poorer people relatively more than richer ones. Even when it might be progressive, poorer people still suffer a welfare loss when prices rise, making their consumption basket more expensive.”
Furthermore, they admitted that the carbon tax “aims to restructure economies by raising the cost of a critical resource – the juice that makes it run.” Precisely. We NEED fossil fuels right now, there is no other viable alternative available to provide energy to the world. Since nations have succumbed to the climate change agenda, they have lost their energy-independent status. Europe shot itself in the foot by eliminating any diplomatic relations with their number one supplier of gas for a country that they did not acknowledge prior to February 2022.
Other nations with the ability will drill and sell oil to those under WEF leadership at a premium. India is already buying Russian oil at a discount, refining it, and selling it to the US for a premium. This is more than just bad business as it is a clear attempt to cut off a “critical resource” to “restructure economies” as seen fit by the WEF.
I have created this site to help people have fun in the kitchen. I write about enjoying life both in and out of my kitchen. Life is short! Make the most of it and enjoy!
This is a library of News Events not reported by the Main Stream Media documenting & connecting the dots on How the Obama Marxist Liberal agenda is destroying America
Centinel2012 