1 Inflation is everywhere – where’s the Fed?
Inflation is everywhere, from the factory floor to the warehouse gate, the supermarket register, and the kitchen table, as evidenced by a string of inflation reports confirming the rise of commodity prices across the board.
On Tuesday morning, the U.S. Bureau of Labor Statistics (BLS) reported that the Producer Price Index (PPI) — a measure of inflation at the wholesale level — rose at an annual rate of 9.7% in January. The December number stood at a 13-year high.
The PPI number comes a few days after the BLS reported that the Consumer Price Index (CPI), a measure of inflation at the retail level, rose at an annual rate of 7.5% in January, up from 7% in the previous month. It was the highest inflation number since 1982 and ahead of market forecasts.
“We’re currently in this hypersensitive consumer environment where a large portion of the population has been going through a prolonged period of financial challenge, with 55% of U.S. consumers being financially constrained, according to NielsenIQ’s recent Consumer Outlook report,” said Carman Allison, vice president at NielsenIQ. “Additionally, in January 2022, consumers paid +9.7 percentage points more for CPG products, and we don’t foresee inflation settling any time soon. A diverse range of shoppers are looking to trim their grocery budgets amid inflationary pressures without compromising quality and given these financial sensitivities, consumers are putting careful consideration into the products going into their shopping carts in terms of price, quality and safety assurances, health and wellness claims and convenience capabilities through online delivery or in-store pickup.”
The substantial inflation numbers followed a U.S. government report early in the month showing that U.S. businesses added 467,000 jobs in January, well above the 150,000 markets had expected. In addition, unemployment increased to 4%, while the December jobs report was revised upward to 510,000.
When taken together, these reports confirm that the U.S. economy is very close to one of the Fed’s mandates, maximum employment. But it is far away from the other Fed mandate, price stability, usually defined as 2% inflation.
Conventional economics has a standard explanation for this situation. The U.S. economy is overheating thanks to unprecedented monetary and fiscal stimulus during the COVID-19 recession and robust equity and real estate markets that feed into consumer spending.
Economics has a standard solution for this problem: take liquidity out of the economy through interest-rate hikes.
Back in the old days, the Federal Reserve would have acted swiftly, raising the federal funds rate by a full basis point, following such strong numbers on both the inflation front and the employment front. But not these days, when the nation’s central bank seems to have multiple mandates, with inflation being at the bottom of the list.
Meanwhile, the Federal Reserve seems to be hiding behind the theory that inflation is transitory due to supply chain bottlenecks and labor market frictions. The Fed has yet to raise short-term interest rates and it continues to add liquidity with its emergency-era quantitative easing program.
But debt markets cannot wait for the Fed to get its act together and are beginning to do their job. They have been pushing long-term interest rates higher, as investors demand an inflation premium to lend their money out for more than a year. The 10-year U.S. Treasury bond, a benchmark for long-term rates, has crossed the threshold of 2%.
That isn’t a good development for equity markets, especially for profitless companies that trade on the NASDAQ. Thus, the sell-off in recent weeks, with the NASDAQ accounting for most of these losses.
[Source: Opinion – International Business Times – By Panos Mourdoukoutas – 15th February, 2022]
2 On the counterintuitive power of doing less
The other day, I was talking to a friend who works out a lot. He said he injured his knee and couldn’t exercise his lower body much. I asked how it happened, and he said, “I just took on too much.” He was running several times a week, going to boxing class twice a week, and he also lifted weights a few times a week. When you take on more than your body can handle, you inevitably get injured if you don’t also take care to recover like a professional athlete.
So many of us have this internal voice that says, “Do more!” Whether that’s doing more fun things on the weekend, or taking on more at work, we often have the tendency to do more because we think that’s somehow better. That’s how we end up living overly busy lives, full of “more.” More goals, tasks, projects, money, vacations, clothes, experiences, exercise, and so forth. There are many times I get excited about my work and feel good. And because I enjoy working and being active, I do a lot. I might write a lot, record podcasts, create new videos, take on more work at my family business, and also do more fun things like travel. My mindset during those times is: “Nothing is enough. I can do more of everything.”
But those moments are never long-lasting, right? It’s like you’re on this crazy sugar rush. You’re like a six-year-old who ate a bag of Skittles and only wants to go, go, go. But after some time, you crash hard. The post-sugar-high-crash is pretty bad because you feel so drained you only want to sleep. And if you keep living your life from one high to the other, you never have any real peace. Or, like my friend with the busted knee, you end up injuring yourself.
But we don’t want to live from injury to the other, with some healthy bouts in-between. You get injured, recover, get agitated because you couldn’t work out, pick things up again, go hard until you get injured again. And so the cycle repeats itself. There’s a better way of living. As the philosopher-king Marcus Aurelius once wrote: “If you seek tranquility, do less.”
It’s counterintuitive because so often our innate drive is to do more, and because more so often seems to signify “better.” But when we do less, we can be more consistent. We can pay attention to the things that really matter to us. Aurelius continued: “do what’s essential — what the logos of a social being requires, and in the requisite way. Which brings a double satisfaction: to do less, better. Because most of what we say and do is not essential. If you can eliminate it, you’ll have more time, and more tranquility. Ask yourself at every moment, ‘Is this necessary?’ But we need to eliminate unnecessary assumptions as well. To eliminate the unnecessary actions that follow.”
I’d like to think about that question often. In fact, you can do it with me. Ask: “What’s something I’m doing that I can easily do without?” Maybe it’s a side project that is only making you frustrated. Maybe it’s going out with co-workers every single Friday. It could be anything. Say no, at least for now. You can always decide to pick something up again. The goal is to clear your mind of any excess clutter. Focus on what’s important. Do that, but better than you have been doing. All the best.
[Source: The Blog of Darius Foroux – 18th February, 2022 – medium.com/darius-foroux/on-the-counterintuitive-power-of-doing-less-74dddc13a474]
II. BUSINESS
3 Stellantis, LG Partner to build EV batteries in Canada
US-European automaker Stellantis is partnering with LG Energy Solution to make batteries for electric vehicles at a massive new plant in Canada, the largest ever investment in the country’s auto sector, officials said Wednesday.
The joint venture commits Can $ 5 billion (US$ 4.1 billion) to build the facility in Windsor, Ontario that will supply batteries for a “significant portion” of Stellantis’ electric vehicle production in North America, according to a statement from the companies.
South Korea-based LGES announced separately that it would spend another US $ 1.4 billion to build a factory in the US state of Arizona to make batteries for electric vehicle and tool makers in North America.
The decision was driven by growing demand in the region for rechargeable batteries for vehicles and wireless power tools, LGES said.
Construction of the Arizona plant is expected to begin in the coming months, with a goal of mass producing batteries there by the second half of 2024.
The partnership with Stellantis fits into Canada’s EV strategy to nurture local manufacturing of advanced lithium-ion batteries for the North American market.
Industry Minister Francois-Philippe Champagne, who was in Windsor for the announcement, called the venture “the largest investment ever in the auto sector in our nation’s history.”
He noted that Canada is “the only nation in the Western Hemisphere with the capacity and the materials to transform cobalt, graphite, lithium and nickel into the next generation of batteries which will be needed to power electric cars.”
In a nod to that effort, the two companies said they expect the plant “to serve as a catalyst for the establishment of a strong battery supply chain in the region.”
The facility, which will have an annual production capacity in excess of 45 gigawatt hours (GWh) and employ 2,500 workers, is scheduled to begin operation in 2024.
Stellantis, which was formed in January last year when Fiat-Chrysler and Peugeot merged, is aiming to shift towards battery-electric vehicles as tightening pollution regulations mean internal combustion engines will need to be phased out.
Carlos Tavares, the company’s chief executive, said Wednesday Stellantis is aiming to sell five million electric vehicles or “50 percent of battery electric vehicle sales by the end of the decade” in Canada and the United States.
In Europe, where Stellantis also announced battery manufacturing plants in France, Germany and Italy, the company is planning for all of its vehicles — including Jeep, Peugeot, Citroen, Opel, Fiat and Alfa Romeo — to be electric by 2030.
“In total, we will rely on five gigafactories, together with additional supply contracts, to meet our planned battery capacity of 400 GWh by 2030,” Tavares said.
[Source: International Business Times – By AFP News – 23rd March, 2022]
– Season 2
– educating them on how to think using science. This helped them differentiate between chinta and chintan 
i.e.going to root cause, understanding real problem and find appropriate resolution.
– The Seven pillars:
– The King – Leader
– The Minister
– The Country – Your Market / Client / Customer
– Fortified City – The Head Office
-The Treasury
– The Army – Your Team
– The Ally – Mentor / Friend / Consultant
Highly motivated by it, we let ourselves go unrestrained in deciding our goals. The idea was to set the task tall and then give blood and soul to achieve it no matter whether we succeed or not. As they say in Gujarati, 
… From that standpoint, I am happy to say that in this one year, we have tried to give best to ensure that those wishes — some of them indeed wild — translate into reality.
Facebook 
BCAS is the institution where you make friends for life. These are the real friends who will stand by you come whatever it may. The opportunity to network that BCAS provides across platforms is amazing and has definitely contributed to my personal progress, even without seeking the same.
Meaning – one must accept good thoughts even from children. It is important to note not only what children think and talk but also how they act. There is a well-known story that many kids participated in a running race. One of them fell. That time, others tried to lift him and helped him to reach the destination. This story was in the context of physically/ mentally challenged children. That is the reason why such children are called ‘differently-abled’. If we are contented and have no greed, the whole world, including we ourselves would be so happy!
