A friend of mine priced the apartment they are living in to help a relative who was moving into the area. Price for this exact unit is 50% more than when they signed their annual lease a number of months ago.
An acquaintance reports the price for renting a particular house went up while they were thinking about it for a day or so.
Two friends report landlords renting apartments expect six months rent in advance and some landlords renting houses are expecting a year in advance. A year.
Article mentioned above says the reports floating around in the media indicate rent hikes overall are around 10%. Yet the CPI shows only 2% increase in rent.
How can that be?
Fascinating detail of how the CPI is calculated explains the anomaly and also points towards dramatic increase in the rent component of CPI over the next year.
Seems like most industries have a tangled supply chain. The entire transportation system is sorely distressed.
The elitists in federal and state governments have a staggering level of hubris. They think waving their hands, clicking on their laptops, issuing press releases will make the entire economy bend to their will. What they accomplish is willfully causing disruption in your life and in my life.
Here are merely a few of the recent articles describing the tangled impact of Covid dictats and sundry government policies:
Lots of cargo ships are waiting to unload off the California coast.
Large port operator expects disruptions to last into 2023.
Workers in transportation sector warn of possible system collapse.
Chip shortage for carmakers will last into late 2022.
Looks like it might take another 15 or 18 months to untangle the worldwide supply chain.
A tweet I saw this morning (10/9/21) from someone flying out of Long Beach indicated the individual counted 50 ships waiting to unload.
At around 10,000 containers per ship that is somewhere around 370,000 containers waiting to be unloaded back in the middle of August and is now currently somewhere in the range of half a million containers sitting off the coast.
Article says a few months ago it was only nine. Normally it is zero.
The supply chain in most industries is tangled up somehow somewhere.
The people in federal and state governments with the staggering level of hubris to think they can wave their hands and make the entire economy do their bidding are willfully causing disruption in your life and in my life.
Multiple comments from senior federal officials indicate we are going to have inflation for a while.
Treasury Secretary Janet Yellen indicated inflation will continue into 2022.
She indicates the source of inflation is bottlenecks that have themselves generated inflation. Unstated in the article, and apparently unacknowledged by Secretary Yellen, this these bottlenecks are caused by the government shutting down the economy and in their staggering hubris thinking they can flip a switch and seamlessly open up the economy.
Article also points out Fed chairman Powell called inflation news last week “frustrating.” I suppose so. When you think you can control the economy of the world with a few keystrokes from your laptop, such news would be quite frustrating.
Most unsettling tidbits in the article are the estimates from the Federal Open Market Committee that inflation measured by the PCE will be 3.7% in 2021. THey think it will be lower next year. I hope so.
St. Louis Fed President predicts 2.8% for the full year of 2022.
The August number of 0.4% increase results in a year-over-year increase of 4.3%. Bad news is this is the highest increase in PCE since 1991, all the way back when Pres. Bush was in office. That is a 30-year high in the inflation rate as measured by PCE.
Looks like there is another flood of reporting ready to appear in print on bank secrecy and hiding wealth.
This project will be called the Pandora Papers.
If you recall, a major series of reports back in the 2016 timeframe described money laundering efforts flowing through one particular law firm in Panama. You can read my comments on the coverage.
The International Consortium of Investigative Journalists (ICIJ) brought together around 600 journalists from about 150 media outlets to analyze a data leak with 2.94 TB of info. That’s terabytes, as in thousands of gigabytes.
The Post Office is going to slow down delivery of mail.
This is good information to know for charities, CPA firms, and those few of us who still use first-class mail to pay bills.
Before 10/1/21 the goal for USPS was three-day delivery anywhere in the country. This pushed USPS into sending a large volume of mail by air, which is far more expensive than ground transportation.
The new goal is five-day delivery anywhere in the country. This will allow sending most mail by USPS-owned trucks. Reading between the lines of official statements there will also be increased use of rail.
The Personal Consumption Expenditure (PCE) inflation index again shows an increase of 0.4% in August 2021 after increasing the same in July. Since December 2020 this index has shown inflation of between 0.3% and 0.6% each month.
This indicates that inflation is continuing. Good news is that inflation is slowing, declining from 0.6% in March and April, to 0.5% in May and June, to 0.4% in July and August.
Bad news is annualizing the running three month inflation rate shows between 4% and 7% since February.
Major investigative effort by the Wall Street Journal revealed 131 federal judges who own stock in one of the firms appearing before them in 685 lawsuits.
The Journal found that about two thirds of all federal judges disclosed ownership in individual stock. Of those who made such disclosure about one fifth had a conflict of interest but did not recuse themselves.
For CPAs, this illustrates the importance of our independence rules, both independence in fact an independence in appearance.
What shall we call judges who were trading stock of litigants who were appearing in front of them? Perhaps a reasonable label would be integrity impaired fools. Even those judges who had a trivial investment and had a mere procedural motion in front of them have a serious appearance of conflict of interest and thus impaired integrity.
It would be wise for CPAs to read this story as a caution to keep a scrupulous eye on their own independence. The same lessons can be drawn by leaders of nonprofit organization.
The story doesn’t end with the federal judges, but we start there. More discussion in a moment about stock trading by presidents of two regional Federal Reserve Banks, who are the ultimate insiders.
Failures to recuse when federal judges have financial conflicts of interest
A 1974 federal law requires federal judges to monitor their investments, maintain personal awareness of those investments, and then recuse himself of any case in which they have a financial interest, no matter how small their interest may be.
In spite of a 40-year-old law and in spite of software that checks disclosed ownership against parties to the lawsuit, 12% of federal judges completely blew off the ethical obligation. That means one out of eight judges failed to recuse themselves when they had a financial interest in a case before them.
I’m wondering if there’s any group or category of people in this country who have significant power or influence who actually bother to follow the rules
The California Board of Accountancy Update newsletter, issue #93 dated Summer 2021, has details of disciplinary actions with effective dates in the spring and early summer of 2021.
Interesting thing I noticed this time around is the timing of some of the underlying issues. The attestation failures for which a date is mentioned involve financial statements issued in the 2016 or 2017 timeframe. For one of the more splendiferous failures the firm had audit failures on 2015 and 2016 financial statements which generated a failed peer review with the report dated in early 2018, which led to an investigation by the board with disciplinary action effective in June 2021. That was the firm’s second consecutive peer review fail. Firm earned a $2,500 penalty along with reimbursement of $5,000 investigatory costs.
Every CPA that had an attest failure drew a ban on attestation services until such time as the practitioner requests and receives permission from the board to again perform attest work.
Four of the practitioners who had their license revocation stayed also had a suspension of their license in the range of 60 to 90 days. Imagine the lifetime stain of an official revocation on your public record and then on top of that being prohibited from providing any CPA services for two or three months.
Here is my recap of disciplinary actions reported in this issue:
The Personal Consumption Expenditure (PCE) inflation index shows an increase of 0.4% in July 2021. Since December 2020 this index is shown inflation of between 0.3% and 0.6% each month.
This indicates that inflation is continuing. Good news is that inflation is not accelerating. Bad news is an annualized inflation rate of about 6% is continuing.
The PCE is the inflation index preferred by the US Federal Reserve. An intriguing aspect of the PCE is the numbers are routinely revised. This means prior month’s numbers will shift, sometimes by substantial amounts.
Update: The year over year change in PCE is 3.6%. CNBC reports on 8/28/31 Key inflation gauge rises 3.6% from a year ago to tie biggest jump since the early 1990s. To be specific that matches the increase in May 1991 and is second only to the 4.2% increase in January 1991. Current policies of the White House and Congress have given us the highest inflation in 30 years. Not yet Carter era bad, but there is time to achieve Carter level performance.
The CNBC article also says some of the Fed members are starting to see the immediate inflation just might be more than just a temporary adjustment to the economic shutdown. President of the Atlanta Fed acknowledge such possibility when he said on-air that he is hearing from a many of his business contacts that they expect inflation go to beyond the immediate-term.
New claims for unemployment are down about 60,000 per week since my last post 10 weeks ago. For the week ending 8/21/21 new claims were 353K compared to 412K the week of 6/12/21.
The number of insured unemployed has dropped more substantially, from 3.53M the week ending 6/12/21 to 2.9M the week ending 8/14/21. That is a drop of 672K over nine weeks. For contrast the number of insured unemployed was averaging 1.7M in January and February 2020.
Those numbers reveal a slow improvement although the number of people losing their jobs each week is still running double the average in January and February 2020.
Purpose of these posts on economic statistics is to help all of us keep current on what is going on in the overall economy.
What I’m drawing from the data is the economy is improving one little bit at a time. Seems to me the recovery is slowing.
Revised number of weekly new claims in state programs over recent months shows following trend:
406K – 5/22/21
412K – 6/12/21
368K – 7/10/21
349K – 8/14/21
Following graphs show the devastation from the economic shutdown.
New claims for unemployment by week since the start of 2020:
The Consumer Price Index, or CPI, shows 0.5% price increases in July with a core increase of 0.3%. While that is the lowest increase since February 2021, half a percent in one month works out to about 6% in a year.
Graph at top of this post shows the monthly change in the primary index along with the core change which excludes food and energy. Graph also shows an average of the preceding 12 months.
The average was running around 0.1% a month for most of 2020 after the shock of the pandemic. You can see the rising monthly increase quite visibly, starting in January 2021. Watch the green line increase from around 0.1% up to currently 0.4%.
The trailing 12 month average is also grim. It shows: