July 21, 2022

The media is always talking about home ownership and mortgages.

Here is the breakdown:

Home prices are up high (too high), but not growing any more.

Prices for consumers are based (somewhat) on prices for producers. The rate of price increases is stabilizing. This does not mean much relief is in sight for consumers:

Canadians are all over the map when it comes to who and what to blame for inflation/price increases. It is probably to do with how they are experiencing pressure from price increases and which political party they are in.

"Supply chains" and Russia's war are Liberals. Trudeau's policies are the far-right and some NDP. Blaming "corporations" are (should be) NDP members.

What is shocking (but also not) is only 1.1% of people are able to say they don't know who to blame for inflation, even though it is the correct answer.

Blaming the government is almost correct. But, as was pointed out to me yesterday, many in labour's leadership positions think that we are still living through austerity. So, whatever they think of the government's policies and inflation, they are 100% wrong about it.

There is no austerity here. If you are in Comms and someone wants to write this on paper in a press release, remind them that "austerity" as a policy of almost any government around the world ended in 2016.

A bad graph, but it shows that "transportation" (read: oil/gas price) and "shelter" (read: property, rent, and interest rates on debt) make up a significant section of our "inflation".

The story that is missing is that actual inflation is still high at about 4-5% making the price increases from other things (like supply chain disruptions and price of food, artificially expensive debt) that much harder to deal with.

Even the big investment houses cannot keep their head's above water right now:

Calpers records first loss since 2009 The largest public pension plan in the US has blamed “tumultuous” global markets for the fund’s first annual loss since the global financial crisis in 2009. In reporting the loss, Nicole Musicco, chief investment officer, said the plan’s traditional diversification strategies had been “less effective” than expected over the reporting period. (FT)

That's a nice way of saying they are not doing very good protecting retirement savings of 2m public sector workers:

preliminary 6.1 per cent loss for the financial year to June 30. At year end, its total assets stood at $440bn, down from $469bn a year ago, with the plan’s funded status slipping to 72 per cent from 80 per cent in the previous period. (FT)

Sounds bad, but not as bad as if you invested yourself.

The take-home is you cannot do this well with your own money:

Calpers said it was able to outperform its total fund benchmark by 90 basis points. a year after the plan reported a 21.3 per cent net return.

Calpers (and other similar funds) hold a 60/40 equity to bond investment ratio—which does not result in good things during a crisis.

Concurrent heat waves are happening.

The reason? Well, global warming, of course. But, the physics are interesting.

All you need to remember is the "zonal wavenumber" is 5. Really. That's it.

The "5" pattern for the jet stream is where that stream of fast flowing air which creates the big winds in the atmosphere is not at all circular around the top of the planet. Some areas the jet stream is moving very slowly and meandering creating very hot pockets.

Yes. This is not how it has been and it is going to get worse.

Belcher says three factors contributed to the heatwave over Europe: the wavenumber 5 pattern in the jet stream; the increase in global average temperatures; and the dry soils, particularly around the Mediterranean, resulting from prolonged hot weather. (FT)

Weather scientists are pointing to these patterns as predictors of severe heat situations. It is all made worse by the warming of the polar regions.

Now, the weather scientists do not understand exactly what is happening (more than most economists understand inflation though), but they can see how it is happening.

The short answer is, continuing to do what we are doing to the planet is not going to be good for us.

The folks on the right-wing of the social democratic parties are the worst. In the UK, the Labour Party's Entitled Twits did everything they could to undermine their own party's chances to win an election all because they didn't like that Jeremy Corbyn was a socialist elected leader.

They went so far as to divert funds from winnable seats.

The recently released Forde Report on what happened inside the Labour Party is a good reminder to socialists that sometimes (all the time?) our worst political enemies are liberals pretending to be social democrats in our own parties and organizations.

The Forde Report shows that "antisemitism" (which exists in the Labour Party, but is perpetrated mostly by those against Corbyn's group) was used to broadly undermine Corbyn's extremely popular leadership as there was no other attack possible. The report also showed, without irony, that the people using this attack were the worst people around: misogynist, racist, classist, Cheshire Cat grinning losers that we usually call just "liberals and Tories".

None of this is a surprise to anyone paying attention, but it is nice to have it chronicled so the left can point to the playbook easily.

Remember, sometimes there is a conspiracy against the left. And, it is usually coming from inside our own organizations from opportunists who reject socialism, but like the easy politics of losing.