Member Briefing July 21, 2022
U.S. Home Sales Fell Again in June, But Prices Kept Rising
U.S. existing home sales fell for a fifth straight month in June to the lowest level in two years, as fast-rising interest rates and record-high selling prices make buying a home too expensive for a growing share of American households. In June, sales of previously owned homes fell 5.4% to a seasonally adjusted annual rate of 5.12 million units, the lowest level since June 2020. Sales have now fallen each month since January.
The median existing house price climbed 13.4% from a year earlier to an all-time high of $416,000 in June. It was the 23rd straight month of double-digit annual price gains, the longest such run since the late 1970s. Sales gains remained concentrated in the upper-price end of the market. Sales of homes priced below $500,000 were down by double-digit margins, led by a 31% year-over-year drop in the $100,000 to $250,000 range, while sales of houses selling for $500,000 and up eked out modest gains.
War in Ukraine Headlines
- Ukraine and Russia: the Latest News – The Guardian
- Ukrainian First Lady Zelenska Addresses Congress: ‘Russia is Destroying Our People’ – Yahoo
- Ukraine Targets Key Bridge as It Prepares Counteroffensive in South – WSJ
- Russia Pounds Ukraine as Putin gets Iran’s Backing – AP
- Russia’s Lavrov Says Ready to Expand War Aims – BBC
- Ukraine Graft Concerns Resurface as Russia War Goes On – AP
- Russia Plans to Annex Ukrainian Land – BBC
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Biden Announces New Climate Change Programs, But no Emergency Declaration
President Biden announced new executive steps to combat climate change on Wednesday, but fell short of issuing a climate emergency declaration as some Democrats had called for amid stalled negotiations over major environmental legislation in Washington.
The initiatives include providing $2.3 billion in funding for a program that helps communities prepare for disasters by expanding flood control and retrofitting buildings, as well as leveraging funding to help low-income families cover heating and cooling costs. The president is also directing the Department of the Interior to propose new offshore wind areas in the Gulf of Mexico, a plan that could help the administration reach its goal to deploy 30 gigawatts of offshore wind by 2030, the White House said. Biden is ordering the Interior Secretary to advance wind energy development in the waters off the mid and southern Atlantic Coast and Florida’s Gulf Coast.
The Housing Market Enters Into Recession—Here’s What to Expect Next
Soon after mortgage rates spiked this spring, the housing market slipped into a “housing correction.” It’s easy to see how those higher rates priced out many would-be buyers. If a borrower in December took out a $500,000 mortgage at a 3.1% rate, they’d owe a monthly principal and interest payment of $2,135. If a borrower took out a $500,000 mortgage at today’s average 30-year fixed mortgage rate (5.51%), they’d get a $2,839 payment.
Over the coming year, Moody’s Analytics expects significantly “overvalued” housing markets like Boise and Austin to see home prices fall 5% to 10%. Nationally, Moody’s Analytics expects year-over-year home price growth to be at 0%. However, if a recession hits, Moody’s Analytics predicts significantly “overvalued” housing markets could see home prices drop by 15% to 20% while national home prices would fall by around 5%.
U.S. COVID – The Hunt for Drugs for Mild COVID
A shift is afoot in the search for COVID-19 therapies: some researchers are turning their attention towards drugs that could be used to treat mild illness, even in people who are not at high risk of severe disease. Treating sore throats and sniffles might sound indulgent, but drugs for mild disease could mark a turning point in the pandemic. Such a treatment not only would get people back to their lives sooner, but could also limit disease spread. Fewer infections mean fewer opportunities for the virus to mutate, so drugs for mild disease could stem the rise of new variants.
Such drugs could fill a yawning gap, says infectious-disease expert Oriol Mitjà at Germans Trias i Pujol University Hospital in Barcelona, Spain. High-risk people have treatment options, he says, but moderate-risk people who don’t quite qualify for existing treatments are left fearing for their safety. “There is a need there,” he says. Such treatments could reduce the disruption that even mild cases can inflict on people’s jobs and family lives.
Will You Need to Get COVID-19 Boosters Again and Again
Several highly effective vaccines were developed at an unprecedented speed to combat the COVID-19 pandemic. During the phase 3 clinical trials, mRNA vaccines had vaccine efficacy of 94–95% in preventing symptomatic infections. After the rollout, real-world evidence showed that the mRNA vaccines provided ~90% effectiveness against infection. Then came the variants.
The effectiveness of a primary series of mRNA vaccines (two doses) to prevent hospitalization and death is also being chipped away by these highly immune-evasive variants. Vaccine-mediated protection became shorter-lived, especially with the emergence of Omicron variants. People look at these data and wonder, what is the point of getting the vaccines if they will not prevent symptomatic infections, and the protection does not last? Well, to expect robust protection from just the primary series of any vaccines is unreasonable—and was always likely to be. Instead, we need to understand that we’re going to be getting boosters in the foreseeable future, and to appreciate their benefits.
U.K. Inflation Hits 9.4%, a New 40-Year High
The U.K.’s Office for National Statistics Wednesday said consumer prices were 9.4% higher in June than a year earlier, the highest rate of inflation since 1982 and a pickup from 9.1% in May. The figure marks the fastest rise in prices for a Group of Seven economy since the global surge began at the start of last year.
Economists expect the annual rate of consumer-price inflation to increase further. The Bank of England has said it should top out at around 11% in the final months of the year. The U.K. sets a ceiling on home energy prices twice yearly, and the next adjustment is due in October, when a further rise of 50% is expected. “The inflation outlook remains grim,” said Sanjay Raja, an economist at Deutsche Bank. “Our updated projections now show CPI peaking at 11.3%.”
Read more at the WSJ
Rishi Sunak and Liz Truss are final candidates in race to succeed Boris Johnson as UK Prime Minister
Boris Johnson will be succeeded as prime minister of the United Kingdom by either Rishi Sunak or Liz Truss after the Conservative Party leadership race was on Wednesday narrowed down to the final two candidates. Ten Conservatives stood in the contest to replace him, and over five rounds of voting, members of parliament whittled those down to two. Sunak won 137 votes and Truss got 113 votes in the final round, while Penny Mordaunt with 105 votes lost out.
Sunak has been considered the frontrunner for a long time. He served as Johnson’s Chancellor of the Exchequer (finance minister) from 2020 to 2022, and gained a largely positive public profile after introducing popular measures during the coronavirus pandemic, such as the furlough scheme and discounts on eating in restaurants. Since Johnson has taken office, Truss has been his trade secretary and his foreign secretary.
Putin Signals Russian Gas Will Resume in a Key Pipeline But at a Reduced Level
President Vladimir V. Putin of Russia suggested late Tuesday that natural gas would resume flowing to Europe after the Nord Stream 1 pipeline’s maintenance shutdown, but warned that supplies may be severely curtailed. Mr. Putin said that shipments via Nord Stream 1 had been hampered by repairs necessary for turbines made by the German company Siemens.
Even before the pipeline was shut down on July 11 for annual maintenance, flows from Gazprom, Russia’s energy giant, had been reduced to only 40 percent capacity. Since then the German government has secured the return of the Siemens turbine from Canada, but Mr. Putin said that another one was now in need of refurbishing. “If one more comes, then it’s good, two will work. And if it does not come, there will be one, it will be only 30 million cubic meters per day,” he told reporters. That’s less than 20 percent of the pipeline’s capacity of 160 million cubic meters of gas per day.
EU Asks Countries to Cut Gas Demand by 15% Until Spring
The European Union set out emergency plans on Wednesday for countries to cut their gas use by 15% until March, warning them that without deep cuts now they could struggle for fuel during winter if Russia cuts off supply. The EU plan will identify measures to reduce gas demand and identify critical sectors where reducing gas demand could disrupt supply chains, Simson said.
Europe is racing to fill its gas storage ahead of winter and build a buffer in case Moscow further restricts supplies in retaliation for European support for Ukraine following Russia’s invasion. A dozen EU countries are already facing reduced Russian deliveries, and EU officials say a full Russian gas halt is likely.
The Rhine Is Inches From Being Too Shallow for Shipments
The River Rhine, one of Europe’s most important rivers which is used to transport cargo including chemicals, grains, and coal across the continent, is drying up amid record-breaking summer heatwaves. Germany’s Federal Institute of Hydrology has warned that rivers in Central Europe are at “unusually low” levels and are continuing to fall.
Low water levels on the Rhine having an economic impact has not been uncommon in recent years, with a lack of water in the river attributed in 2019 to causing a short-lived recession in Germany at the tail end of 2018. Pantheon Macroeconomics said in January 2019 that low river levels effectively amount to a “supply shock in German manufacturing,” by lowering the availability of key goods needed for the sector.
France Outlines Plans for Buyout of EDF to Relaunch Country’s Nuclear Industry
The offer to minority shareholders will be priced at 12 euros per share, meaning the operation to fully nationalise the group will cost 9.7 billion euros ($9.9 billion), the finance ministry said. The electricity provider is currently 84-percent owned by the state, with institutional and retail investors holding 15 percent and staff one percent.
The state’s complete takeover of EDF, first announced on July 6, “will give EDF the means to implement the new nuclear power plant programme the president has asked for and the roll out of renewable energy in France”, Finance Minister Bruno Le Maire said. President Emmanuel Macron’s government set aside funds for the cost in a mini-budget in the autumn. The supplementary budget will, however, be subject to approval by parliament, where Macron’s party and its allies lost their majority in parliamentary elections last month.
World Bank, FAO, Others Call for Urgent Action to Address Global Food Security Crisis
The World Bank Group, the Food and Agriculture Organisation, (FAO), International Monetary Fund (IMF), World Food Programme, (WFP) and World Trade Organisation (WTO), have called for urgent actions to address the global food security crisis. The Director General of the WTO, Dr. Ngozi Okonjo-Iweala, said that the COVID-19 pandemic’s interruption in international supply chains, and the war in Ukraine have severely disrupted food, fuel, and fertilizer markets, which are interlinked.
The WTO boss advocated that in the short term, releasing stocks as appropriate and consistent with WTO rules, and finding a diplomatic solution to evacuate the grains and fertilizers currently blocked in Ukraine, would help to address availability and affordability of food supplies.
Reducing Health and Safety Risks in Machine Shops
Machine shops are filled with skilled individuals working at the top of their games, but that doesn’t make these spaces free from risks to health or safety. What are the most common risks that machine shop employees face – and what are the best ways to reduce health risks?
Depending on its output, a machine shop’s loadout details will vary from one operation to the next. Still, many of the health risks are universal, appearing in every shop. Here are the most common health risks in machine shops.
At UK Airshow, Defense Execs Warn of Inflation, Supply Chains, and Worker Shortages
While there was a general sense of excitement and optimism among those returning to the first major air show in Europe in three years—the virus canceled the 2020 event here and Paris Air Show in 2021—there was resounding consensus that several hurdles lie ahead, especially toward filling job vacancies across the blue- and white-collar workforces.
The “Great Resignation” hit defense firms hard, about 6 percent above the national average, according to a new McKinsey study. The consulting firm estimates that about 46 percent of aerospace and defense workers were somewhat likely to leave their job in the next three to six months. Supply-chain hiccups still remain throughout the sector; executives mentioned difficulty sourcing microchips, rocket motors, structural titanium castings, and even some raw materials. Raytheon, for example, has 350 people solely working on alleviating supply-chain issues.
Albany Amazon Workers Launch Campaign to Unionize
Amazon workers at a warehouse in Albany, N.Y., have launched a bid to unionize after another warehouse on Staten Island successfully unionized back in April. The group announced this week they were organizing a union, saying in a Twitter post they would have a rally on July 17. Organizers for the union said they are waiting until they get 70 percent to 80 percent of workers to sign union authorization cards before giving them to the National Labor Relations Board (NLRB) to start the official union process. The NLRB only requires 30 percent of workers to sign the cards.
“Our employees have the choice of whether or not to join a union. They always have. As a company, we don’t think unions are the best answer for our employees. Our focus remains on working directly with our team to continue making Amazon a great place to work,” Kelly Nantel, an Amazon spokesperson, said in a statement.