Inflation Rises Most Since September 2008

Summary

Inflation as measured by the “core” Consumer Price Index, which removes the volatile food and energy segments, jumped in August at the highest rate in 11 years, by 2.39%, a smidgen above the prior peaks of July 2018 (2.35%), February 2016 (2.33%), and April 2012 (2.32%).

The US is currently undergoing the second oil-and-gas bust since mid-2014, or same oil-and-gas bust, with two parts separated by a sucker rally. And so energy prices, which have a weight of 7.8% in the overall CPI, dropped 4.4% from a year ago, with gasoline and diesel prices falling 7.0%.

In August, the CPI for services rose by 2.70% compared to a year ago.

In terms of percent change, the CPI for durable goods in August ticked up 0.6% – the fastest increase since May 2012.

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Asylum Lockdown Turns up Heat on Tiny Mexican Migrant Agency

Mexico’s tiny asylum agency is already overwhelmed with applicants who are abandoning the American dream because of U.S. President Donald Trump’s hardline immigration measures.

Now, the agency fears the burden on employees already working up to 15 hours a day will increase after the U.S. Supreme Court decided to restore a Trump administration policy banning most asylum applications at the U.S.-Mexico border.

Like many others in Tapachula, a gateway city between Guatemala and Mexico, Danny Perez, a 29-year-old Honduran taxi driver who said he fled to escape extortion by gangs, dreamed of reaching the United States. But as the reality of Trump’s immigration policies sets in, he is trying to settle in Mexico.

Jose Torres/Reuters

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Why are Bonds Going for Broke?

One argument for last week’s extraordinary plunge in bond prices, which I explored as something that might happen this time of year in one of my earlier Premium Posts, was that bond prices could get crushed by the supersized US treasury auctions planned for September and October as the government makes up for its inability to issue new debt during the debt-ceiling standoff.

While pointing out the concern to patrons, I decided in the end for my own investment purposes that the Fed’s termination of quantitative tightening and its return to reducing interest rates would likely offset the impact of the government’s sudden debt expansion. Evidence is solid so far that the ballooning treasury auctions have not been the cause of the sudden collapse in bond prices (rise in yields).

(I also got out before the carnage of last week.)

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Bidding Wars For US Homes Collapse To Eight-Year Low

[Their graph shows 4 cities on the west coast, NYC, and Chicago as the places where home prices are down (all the others are up). I have to scratch my head and ask, “Why would anybody with a choice want to buy a home there anyway?”]

From Zero Hedge – Re-Blogged From Silver Doctors

Is a downturn in the housing market imminent?

Bidding wars for homes in Seattle, San Jose, and San Francisco have crashed in the past year, reflecting an alarming national trend, according to a new report from Redfin.

The report found that the national bidding-war rate in August was 10.4%, down from 42% a year earlier. The rate printed at the lowest level since 2011.

At the start of 2018, the national bidding-war rate was 59%, then plunged as homebuyers became uncomfortable with sky-high housing prices, increasing mortgage rates, and economic uncertainty surrounding the trade war. The housing market started to cool in late 2018, as the competition among homebuyers collapsed by 4Q18, this is an ominous sign for the national housing market that could soon face a steep correction in price.

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Goodbye, America

How is America to be defined? By its failures or its triumphs? Today, there seems to be an obsession with the former and a dismissal of the latter. Is this dark vision of the freest and most prosperous nation on earth an accurate narrative or a cynical distortion? James Robbins, columnist for USA Today and author of “Erasing America,” considers that question in this video. How we view America’s past will very much shape America’s future.

Please view the VIDEO.

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