|By Leonard Steinberg|
I awoke this morning in my cozy warm bed and for a moment imagined the absolute dread and fear so many are experiencing right now around the globe, but especially today in the Ukraine. A week ago life was so different for so many and then, seemingly overnight, their world was turned upside down. They are not alone as so many around the globe experience the similar effects of war daily. I just cannot imagine what that must feel like, although I vaguely recall feeling fractionally similarly when New York City was attacked on 9/11.
One thing I remember most about 9/11 was the urgent need for food and …..shelter. My immediate, first instinct was to nest. I headed home. The power of ‘home’ as our safe haven, a sanctuary to be with those you care about most is truly astounding. During those scary and uncertain times where we were not certain whether further attacks were imminent and the stench of smoke filled the air with the odor of war, I will never forget just how much being ‘home’ helped soothe those fears and anxieties.
Yesterday, Ukraine’s practical horrors hit home directly when we heard from one of our vendors who is located in the Ukraine. They had to shut down their business. Their lives were in tumult. They had no idea what their future might deliver and you could sense their palpable fear. At that moment it all became more real to me after seeing images on the TV that often give you a less real impression of what the practical aspects war truly delivers to the people with the least say and power in the matter.
I recall my parents stories of living in war times in Europe and simply could not relate fully to their experience. I lived in war times in South Africa to know a little bit better, although as a kid you simply don’t have the same awareness that you gain in adulthood.
So today, let’s pause for a moment to acknowledge our extraordinary fortune. Maybe not Elon-Musk-style fortune, but the fortune that truly matters most: a roof over our heads, food, safety, lights, heating, freedom, good health, etc. We are indeed the lucky ones.
All of us woke up to a new reality this week as the Ukraine was invaded by Russia and the impact is being felt around the world. The prospect of being someone living in the Ukraine right now is unimaginable to me. In this uncertain time, COMPASS Cares is moving fast to identify a few ways you can help the people of Ukraine right now:
Ukrainian Red Cross Society is collecting donations to help those in need affected by armed conflict, blood collection, mobilization of volunteers and resources and more – Donate Here
United Help Ukraine is receiving and distributing donations, food, and medical supplies to internally displaced Ukrainians and families – Donate Here
Nova Ukraine is bringing humanitarian aid to vulnerable populations in Ukraine – Donate Here
Save the Children is delivering lifesaving aid to vulnerable children in Ukraine and around the world – Donate Here
Our COMPASS community spans many backgrounds and nationalities and I know there are members of our family who are be personally affected by these horrible developments. It’s times like this where community matters even most, but together we can show how much #COMPASSCares.
It is possible that soaring energy costs could trigger a recession. Some believe oil prices could soar as high as $150/barrel. Alienating Russian global supplies is helping drive the price of oil and gas at rather alarming rates, rapidly. Oil and gas impact the price of almost everything and will certainly impact the average consumer’s ability to spend on other things.
The US average consumer consumes over 560 gallons of gas per year. The average U.S. home uses 196 cubic feet of natural gas. Plastics are produced from natural gas, feedstocks derived from natural gas processing, and feedstocks derived from crude oil refining. Almost everything we buy is transported, sometimes long distances, in entities that use gasoline and oil. The US is almost energy independent but pricing of commodities in a global market with OPEC’s baffling control over oil production – imagine if we as a profession formed a cartel to control how much inventory we release into the markets – but it is Europe that is reliant on so much commodity imports that will probably suffer most….thankfully Winter is coming to an end soon requiring less heating.
So is the US heading into a recession? I don’t know. No-one knows for certain. However, its important to note that house prices declined significantly during the 2008-9 Great Recession, but in other modern recessions, house price appreciation hardly shifted, and year-over-year existing-home sales growth barely declined. Home prices and existing home sales don’t necessarily decline just because of a recession. Sometimes the housing market actually benefits by a recession as monetary policy is usually eased to boost the economy, often leading to falling mortgage rates, which increases consumer home buying power that can make homes more affordable.
From July 1981 to November 1982, during the Reagan years, an economic downturn was triggered by tight monetary policy in an effort to fight mounting inflation. It worked, ending a surge of inflation that had started in 1972 and hit a high in the teens in 1980. By 1986 it was under 2%.
A recession may also cool the excessive demand we are currently experiencing – as well as some of the price gouging – which have been one of the prime drivers of supply chain disruptions and rising inflation. Allowing industry to catch up after under-estimating this extreme demand could prepare us for the next surge. Getting the monetary supply balance right will be the key: we want inflation to come down, but we DON’T want tens of thousands of job losses.