Englund

 The median projection in a Bloomberg survey of economists called for a 1% increase.  The contraction was due to a jump in imports and a drop in exports, coupled with a slower buildup of businesses’ stockpiles. On a year-over-year basis, the economy grew 3.6%.  Bloomberg 28 april 2022 https://www.bloomberg.com/news/articles/2022-04-28/u-s-economy-contracted-in-first-quarter-on-surge-in-trade-gap Global Supply Chain Crisis Flares Up Again Ports are already snarled, with the $22 trillion trade in global goods facing months of severe disruption. Bloomberg 25 april 2022   https://www.bloomberg.com/news/features/2022-04-25/china-s-covid-crisis-threatens-global-supply-chain-chaos-for-summer-2022

 If one considers these excess savings alongside the persistence of low interest rates through most of 2021, a rising stock market, pent-up demand, and additional fiscal support, the magnitude of the increase in nominal GDP is not particularly surprising. Jason Furman MarketWatch 20 April 2022 https://www.marketwatch.com/story/this-inflation-is-driven-by-strong-demandnot-kinks-in-supply-chainsand-will-likely-persist-11650466483 Jason Furman, a former chair of President Barack Obama’s Council of Economic Advisers, is professor of the practice of economic policy at Harvard University’s John F. Kennedy School of Government and senior fellow at the Peterson Institute for International Economics. Inflation is, of course, unacceptably high.  Some of this reflects disruptions — supply-chain problems, surging food and energy prices from the war in Ukraine — that are likely to fade away over time.   But inflation, which used to be mainly confined to a few sectors strongly aff...

Antalet fraktfartyg som väntar på att lastas eller lossas 300 väntande fartyg var nästan en femfaldig ökning jämfört med de föregående två veckorna  SvD 5 april 2022 https://www.svd.se/a/g6e1LB/bubbla-kring-shanghais-hamn-global-logistik-hotas Ocean shipping rates are expected to stay elevated well into 2022 https://englundmacro.blogspot.com/2022/01/ocean-shipping-rates-are-expected-to.html

Every day, millions of sailors, truck drivers, longshoremen, warehouse workers and delivery drivers keep mountains of goods moving into stores and homes to meet consumers’ increasing expectations of convenience.  But this complex movement of goods is far more vulnerable than many imagined. WSJ Video March 2022 https://www.wsj.com/video/series/chain-reaction/why-global-supply-chains-may-never-be-the-same-a-wsj-documentary/4EFE56B6-8A1D-4478-9F88-8F055AFBF675 From Shenzhen to Los Angeles, storms, Covid and labour shortages are causing disruption https://englundmacro.blogspot.com/2021/10/gravitas-plus-supply-chain-crisis.html

... setting up another year of booming profits for global cargo carriers — and leaving smaller companies and their customers from Spain to Sri Lanka paying more for just about everything. The spot rate for a 40-foot container to the U.S. from Asia topped $20,000 last year, including surcharges and premiums, up from less than $2,000 a few years ago Bloomberg 18 January 2022 https://www.bloomberg.com/news/features/2022-01-18/supply-chain-crisis-helped-shipping-companies-reap-150-billion-in-2021

Even by the forgiving standards of economic forecasting, that’s a miss of epic proportions Explanations come in two schools. The demand school blames President Biden and the Federal Reserve for administering too much stimulus. The supply school blames pandemic-related bottlenecks and supply chains. This inflation was made possible only by strong demand interacting with restricted supply. Greg Ip WSJ Dec. 8, 2021 https://www.wsj.com/articles/this-inflation-defies-the-old-models-11638978991  

 MP3 the third-generation monetary policy that now prevails worldwide. MP3’s key feature is closely coordinated monetary and fiscal policy. MP3 creates demand without creating any supply. Under MP3, governments and central banks responded to COVID by sustaining incomes without sustaining supply. The result was rising demand relative to supply, and here we are. So consumers, unable to spend on services, demanded more goods—roughly 15% more than our logistical infrastructure had ever produced and delivered. Et voila, supply shortages. Throw in supply chain problems and you get inflation in goods. My friends at Denmark’s Nordea Bank keep a sharper eye on US inflation than some Americans do. Their latest outlook is more than a little concerning https://corporate.nordea.com/article/69282/us-inflation-five-charts-on-why-us-inflation-hasnt-peaked-yet?mc_cid=0b36a12788&mc_eid=2d023d1f41 But the real threat is housing prices. Shelter inflation has looked subdued in this cycle because of...

  Tthrough September, the total container volume coming into and leaving the nation has increased by nearly 22% from one year ago, and over 16% from 2019.  This amount of container traffic, as measured by twenty-foot equivalent units, or TEUs, is unprecedented. It is being propelled by the volume of imported containers coming into the United States, which have increased by 25% from 2020 and nearly 20% from two years ago.  Many of the containers are being sent back empty.   MarketWatch Nov. 18, 2021 https://www.marketwatch.com/story/this-is-how-americas-booming-demand-for-goods-shattered-the-supply-chain-11637242353 Empty shipping containers worsen stress on the US supply chain FT 18 November 2021 https://www.ft.com/content/40f667ce-b979-4171-9cd1-b935d06728c4                                                           ...

 The research quantifies what’s apparent to the naked eye across much of the planet — in supermarkets with empty shelves, ports where ships are backed up far offshore, or car plants where output is held back by a lack of microchips. Looming over all of these: rising price tags on almost everything. It’s not just a problem of moving stuff around. The world is still struggling to make enough stuff too. That doesn’t mean the world is in for a re-run of 1970s-style Still, the current environment — call it stagflation-lite — is a challenging one for central bankers. Bloomberg 2 November 2021 https://www.bloomberg.com/news/features/2021-11-02/supply-chain-crisis-has-central-banks-facing-stagflation-lite Nice pics.

He speculates a meltdown could resemble the tech bubble. It took 14 years for the Nasdaq 100 to break even if you invested in it on Dec. 31, 1999, he noted. Bernstein warned rising home prices were starting to make the mid-2000s housing bubble seem rather mild. https://www.cnbc.com/2021/10/28/bitcoin-housing-and-parts-of-tech-to-crash-investor-rich-bernstein-.html U.S. Prices, Wages Rise at Fastest Pace in Decades WSJ 29 October 2021 https://www.wsj.com/articles/consumer-spending-personal-income-inflation-september-2021-11635449959 Nice, sort of, video about supply problems.

https://www.marketwatch.com/story/apple-and-amazon-are-struggling-so-investors-may-want-to-look-to-these-tech-stocks-instead-11635469850 https://englundmacro.blogspot.com/2021/10/us-trade-dream.html

 City  Prepping Youtube 25 October 2021 https://www.youtube.com/watch?v=QR3UFV_LhWI   America’s woefully inefficient ports. Ships idling off the coast, waiting to offload goods, have become an icon of paralysis. Unions representing longshoremen have been remarkably effective in advancing their members’ interests — the average wage is $182,000 a year for dockworkers at West Coast ports Bloomberg Editorial 26 October 2021 https://www.bloomberg.com/opinion/articles/2021-10-26/automated-ports-could-help-ease-supply-chain-woes

Last week I wrote about the growing Logistical Sandpiles problem. It shows no sign of improvement. That’s not good, but I think this situation is also a clue to our deeper problems.  But if the problem is the supply chain is at capacity now, expanding will be hard/impossible over the next several months. My friend Jim Bianco explained what is happening in a magnificent Twitter thread you should read. I’ll excerpt his key points and charts. John Mauldin 22 October 2021 https://www.mauldineconomics.com/frontlinethoughts/when-tools-stop-working Shortages throughout the supply chains on which corporate America depends are translating into widespread inflationary pressure   FT 23 October 2021 https://www.ft.com/content/36f0b102-b9a0-4f52-96b3-fc3a51729375

https://theconservativetreehouse.com/blog/2021/10/14/the-california-version-of-the-green-new-deal-and-an-october-16-2020-epa-settlement-with-transportation-is-whats-creating-the-container-shipping-backlog-working-ca-ports-24-7-will-not-help-here/ Supply chain chaos is already hitting global growth. And it’s about to get worse CNBC OCT 18 2021 https://www.cnbc.com/2021/10/18/supply-chain-chaos-is-hitting-global-growth-and-could-get-worse.html

 The ongoing, intensifying supply chain... The problem is complex systems are inherently fragile.  The optimization that makes them cost-effective also removes the redundancies that make them resilient. Things can fall apart quickly when some unforeseen event occurs. Or an unforeseen sequence of events, which is what’s happened. Everything works until suddenly it doesn’t John Maulding 15 October 2021 https://www.mauldineconomics.com/frontlinethoughts/logistical-sandpiles

 Gravitas Plus: The Supply chain crisis 10 okt. 2021 https://www.youtube.com/watch?v=a45gA1tdtmA From Shenzhen to Los Angeles, storms, Covid and labour shortages are causing disruption https://www.ft.com/content/24583d1b-7c65-40ec-8516-711c54495163

 with shortages of components and surging prices of critical raw materials squeezing manufacturers around the world. The supply shocks are already showing signs of choking off the recovery in some regions. Meanwhile, global labor shortages, often the result of people leaving the workforce during the pandemic, are throwing further obstacles in the way of producers. WSJ 8 October 2021 https://www.wsj.com/articles/supply-chain-issues-car-chip-shortage-covid-manufacturing-global-economy-11633713877 “Hiking  will reduce demand a little bit and strengthen the currency. But it will have no impact on supply chain issues [ . . .] it won’t bring back lorry drivers.” FT 30 September 2021 https://englundmacro.blogspot.com/2021/10/stagflation-fears-intensify.html Nice pic of shipping containers and container ships are seen at the ports of Long Beach and Los Angeles last week. MarketWatch 29 September 2021 https://englundmacro.blogspot.com/2021/09/more-persistent-inflation-than.html Nearly ...