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Yield Curve Inverts, Stocks Sink After ‘Hawkish’ Powell Comments

Yield Curve Inverts, Stocks Sink After ‘Hawkish’ Powell Comments

Update (1240ET): Powell’s prepared remarks reinforced his remarks last week,…



Yield Curve Inverts, Stocks Sink After 'Hawkish' Powell Comments

Update (1240ET): Powell's prepared remarks reinforced his remarks last week, noting that if necessary, the Fed would be open to raising rates by a more aggressive half-point at multiple meetings and to push rates into “restrictive” territory that would limit growth. The Fed hasn't increased its benchmark rate by a half-point since May 2000.

“We will take the necessary steps to ensure a return to price stability,” he said in the speech (full remarks below)

“In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than (a quarter-point) at a meeting or meetings, we will do so.”

And that sent stocks lower...

And short-end bond yields higher (2Y +17bps!)...

The short-end rip has inverted the curve further in 3s10s and 5s10s...

2s10s is below18bps (and 5s30s dropped below 20bps - its flattest since 2018)...

As the chart below shows, the more The Fed hikes, the more it will be forced to cut very shortly.

*  *  *

Fed Chair Jerome Powell is slated to speak shortly at the National Association for Business Economics annual conference in Washington, D.C.

Prepared remarks and a moderated Q&A are expected, as Powell follows Bostic and Barkin who both signaled very hawkish biases.





Goldman says following last week’s FOMC meeting, Chair Powell reinforced the Committee’s hawkish tone by stressing that hiking by 50bp was “certainly a possibility,” that the FOMC will be “attentive to the risks of further upward pressure on inflation and inflation expectations,” and that he sees the risk of recession as “not particularly elevated.”

Goldman continues to expect the Fed to hike seven times in 2022. Chair Powell also said that the FOMC could finalize and implement its plan for balance-sheet reduction “as soon as our next meeting in May.”

Goldman sees this as a strong hint and now expect the FOMC to announce the start of balance sheet reduction in May (vs. June previously).

Bear in mind the market is now pricing in 2 rate-cuts from the end of 2022 to the end of 2024...

Watch live here (due to start at a delayed 1230ET):

Full Prepared Remarks below:

Thank you for the opportunity to speak with you today.

Let me first pause to recognize the millions who are suffering the tragic consequences of Russia's invasion of Ukraine.

At the Federal Reserve, our monetary policy is guided by the dual mandate to promote maximum employment and stable prices. From that standpoint, the current picture is plain to see: The labor market is very strong, and inflation is much too high. My colleagues and I are acutely aware that high inflation imposes significant hardship, especially on those least able to meet the higher costs of essentials like food, housing, and transportation. There is an obvious need to move expeditiously to return the stance of monetary policy to a more neutral level, and then to move to more restrictive levels if that is what is required to restore price stability. We are committed to restoring price stability while preserving a strong labor market.

At our meeting that concluded last week, we took several steps in pursuit of these goals: We raised our policy interest rate for the first time since the start of the pandemic and said that we anticipate that ongoing rate increases will be appropriate to reach our objectives. We also said that we expect to begin reducing the size of our balance sheet at a coming meeting. In my press conference, I noted that action could come as soon as our next meeting in May, though that is not a decision that we have made. These actions, along with the adjustments we have made since last fall, represent a substantial firming in the stance of policy with the intention of restoring price stability. In my comments today, I will first discuss the economic conditions that warrant these actions and then address the path ahead for monetary policy.

The Labor Market Is Very Strong and Extremely Tight

To begin with employment, in the last few years of the historically long expansion that ended with the arrival of the pandemic, we saw the remarkable benefits of an extended period of strong labor market conditions. We seek to foster another long expansion in order to realize those benefits again.

The labor market has substantial momentum. Employment growth powered through the difficult Omicron wave, adding 1.75 million jobs over the past three months. The unemployment rate has fallen to 3.8 percent, near historical lows, and has reached this level much faster than anticipated by most forecasters (figure 1). While disparities in employment remain, job growth has been widespread across racial, ethnic, and demographic groups.

By many measures, the labor market is extremely tight, significantly tighter than the very strong job market just before the pandemic. There are far more job openings going unfilled today than before the pandemic, despite today's unemployment rate being higher. Indeed, there are a record 1.7 posted job openings for each person who is looking for work. Record numbers of people are quitting jobs each month, typically to take another job with higher pay. And nominal wages are rising at the fastest pace in decades, with the gains strongest for those at the lower end of the wage distribution and among production and nonsupervisory workers (figure 2).

It is worth considering why the labor market is so tight, given that the unemployment rate is actually higher than it was before the pandemic. One explanation is that the natural rate of unemployment may be temporarily elevated, so wage pressure is greater for any given level of unemployment. The sheer volume of hiring may have taxed the capacity of the market to bring workers and jobs together. The Delta and Omicron variants complicated hiring, and the strong financial position of households may have allowed some to be more selective in their job search. Over time, we might expect these factors to fade, reducing pressure in the job market.

A second source of labor market tightness is that the labor force participation rate dropped sharply in the pandemic and has only partly recovered. As a result, the labor force remains below its pre-pandemic trend (figure 3). Total demand for labor, measured by total employment plus posted job openings, has substantially recovered and far exceeds the size of the workforce.

About half of the shortfall in labor force participation is attributable to retirements during the pandemic.1 History suggests that most of those retirees are unlikely to reenter the workforce. But some nonparticipation is due to factors that may fade with time, such as caregiving needs and fear of contracting COVID-19. With prime-aged participation still well below its pre-pandemic level, there is room for further progress. A more complete rebound is, however, likely to take some time. Increases in labor force participation often substantially lag declines in unemployment.

Overall, the labor market is strong but showing a clear imbalance of supply and demand. Our monetary policy tools cannot help with labor supply in the near term, but in a long expansion, the factors holding back supply will likely ease. In the meantime, we aim to use our tools to moderate demand growth, thereby facilitating continued, sustainable increases in employment and wages.

The Inflation Outlook Has Deteriorated Significantly

Turning to price stability, the inflation outlook had deteriorated significantly this year even before Russia's invasion of Ukraine.

The rise in inflation has been much greater and more persistent than forecasters generally expected. For example, at the time of our June 2021 meeting, every Federal Open Market Committee (FOMC) participant and all but one of 35 submissions in the Survey of Professional Forecasters predicted that 2021 inflation would be below 4 percent. Inflation came in at 5.5 percent.2

For a time, moderate inflation forecasts looked plausible—the one-month headline and core inflation rates declined steadily from April through September. But inflation moved up sharply in the fall, and, just since our December meeting, the median FOMC projection for year-end 2022 jumped from 2.6 percent to 4.3 percent.

Why have forecasts been so far off? In my view, an important part of the explanation is that forecasters widely underestimated the severity and persistence of supply-side frictions, which, when combined with strong demand, especially for durable goods, produced surprisingly high inflation.

The pandemic and the associated shutdown and reopening of the economy caused a serious upheaval in many parts of the economy, snarling supply chains, constraining labor supply, and creating a major boom in demand for goods and a bust in services demand. The combination of the surge in goods demand with supply chain bottlenecks led to sharply rising goods prices (figure 4). The most notable example here is motor vehicles. Prices soared across the vehicles sector as booming demand was met by a sharp decline in global production during the summer of 2021, owing to shortages of computer chips. Production remains below pre-pandemic levels, and an expected sharp decline in prices has been repeatedly postponed.

Many forecasters, including FOMC participants, had been expecting inflation to cool in the second half of last year, as the economy started going back to normal after vaccines became widely available.3 Expectations were that the supply-side damage would begin to heal. Schools would reopen—freeing parents to return to work—and labor supply would begin bouncing back, kinks in supply chains would begin resolving, and consumption would start rotating back to services, all of which could reduce price pressures. While schools are open, none of the other expectations has been fully met. Part of the reason may be that, contrary to expectations, COVID has not gone away with the arrival of vaccines. In fact, we are now headed once again into more COVID-related supply disruptions from China. It continues to seem likely that hoped-for supply-side healing will come over time as the world ultimately settles into some new normal, but the timing and scope of that relief are highly uncertain. In the meantime, as we set policy, we will be looking to actual progress on these issues and not assuming significant near-term supply-side relief.

The Policy Response

As the magnitude and persistence of the increase in inflation became increasingly clear over the second half of last year, and as the job market recovery accelerated beyond expectations, the FOMC pivoted to progressively less accommodative monetary policy. In June, the median FOMC participant projected that the federal funds rate would remain at its effective lower bound through the end of 2022, and as the news came in, the projected policy paths shifted higher (figure 5). The median projection that accompanied last week's 25 basis point rate increase shows the federal funds rate at 1.9 percent by the end of this year and rising above its estimated longer-run normal value in 2023. The latest FOMC statement also indicates that the Committee expects to begin reducing the size of our balance sheet at a coming meeting. I believe that these policy actions and those to come will help bring inflation down near 2 percent over the next 3 years.

As always, our policy projections are not a Committee decision or fixed plan. Instead, they are a summary of what the FOMC participants see as the most likely case going forward. The events of the past four weeks remind us that, in tumultuous times, what seems like the most likely scenario may change quite quickly: Each Summary of Economic Projections reflects a point in time and can become outdated quickly at times like these, when events are developing rapidly.

Thus, my main message today is that, as the outlook evolves, we will adjust policy as needed in order to ensure a return to price stability with a strong job market. Let me now turn to three questions about the likely evolution of policy.

How will fallout from the invasion of Ukraine affect the economy and monetary policy? Russia's invasion of Ukraine may have significant effects on the world economy and the U.S. economy. The magnitude and persistence of these effects remain highly uncertain and depend on events yet to come.

Russia is one of the world's largest producers of commodities, and Ukraine is a key producer of several commodities as well, including wheat and neon, which is used in the production of computer chips. There is no recent experience with significant market disruption across such a broad range of commodities. In addition to the direct effects from higher global oil and commodity prices, the invasion and related events are likely to restrain economic activity abroad and further disrupt supply chains, which would create spillovers to the U.S. economy.

We might look to the historical experience with oil price shocks in the 1970s—not a happy story. Fortunately, the United States is now much better situated to weather oil price shocks.4 We are now the world's largest producer of oil, and our economy is significantly less oil intensive than in the 1970s. Today a rise in oil prices has mixed effects on the economy, lowering real household incomes and thus demand, but raising investment in drilling over time and benefiting oil-producing areas more generally. On net, oil shocks tend to weigh on output in the U.S. economy, but by far less than in the 1970s.

Second, how likely is it that monetary policy can lower inflation without causing a recession? Our goal is to restore price stability while fostering another long expansion and sustaining a strong labor market. In the FOMC participant projections I just described, the economy achieves a soft landing, with inflation coming down and unemployment holding steady. Growth slows as the very fast growth from the early stages of reopening fades, the effects of fiscal support wane, and monetary policy accommodation is removed.

Some have argued that history stacks the odds against achieving a soft landing, and point to the 1994 episode as the only successful soft landing in the postwar period. I believe that the historical record provides some grounds for optimism: Soft, or at least soft-ish, landings have been relatively common in U.S. monetary history.5 In three episodes—in 1965, 1984, and 1994—the Fed raised the federal funds rate significantly in response to perceived overheating without precipitating a recession (figure 6).6 In other cases, recessions chronologically followed the conclusion of a tightening cycle, but the recessions were not apparently due to excessive tightening of monetary policy. For example, the tightening from 2015 to 2019 was followed by the pandemic-induced recession.7

I hasten to add that no one expects that bringing about a soft landing will be straightforward in the current context—very little is straightforward in the current context. And monetary policy is often said to be a blunt instrument, not capable of surgical precision. My colleagues and I will do our very best to succeed in this challenging task. It is worth noting that today the economy is very strong and is well positioned to handle tighter monetary policy.

Finally, what will it take to restore price stability? The ultimate responsibility for price stability rests with the Federal Reserve. Price stability is essential if we are going to have another sustained period of strong labor market conditions. I believe that the policy approach that I have laid out is well suited to achieving this outcome. We will take the necessary steps to ensure a return to price stability. In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so. And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.

Our monetary policy framework, as embodied in our Statement on Longer-Run Goals and Monetary Policy Strategy, emphasizes that having longer-term inflation expectations anchored at our longer-run objective of 2 percent helps us achieve both our dual-mandate objectives. While we cannot measure longer-term expectations directly, we monitor a variety of survey- and market-based indicators. In the recent period, short-term inflation expectations have, of course, risen with inflation, but longer-run expectations remain well anchored in their historical ranges (figure 7).

The added near-term upward pressure from the invasion of Ukraine on inflation from energy, food, and other commodities comes at a time of already too high inflation. In normal times, when employment and inflation are close to our objectives, monetary policy would look through a brief burst of inflation associated with commodity price shocks. However, the risk is rising that an extended period of high inflation could push longer-term expectations uncomfortably higher, which underscores the need for the Committee to move expeditiously as I have described.


The past two years have been extraordinarily challenging for many Americans. Two years ago, more than 20 million people were losing their jobs, millions were falling ill, and lives were being disrupted. We have made enormous strides since then. Today, as I have discussed, the labor market is very strong. But, to end where I began, inflation is much too high. We have the necessary tools, and we will use them to restore price stability.

Tyler Durden Mon, 03/21/2022 - 12:27

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How a junior gold company navigates capital markets pressure

Long considered a safe haven asset, the gold market has been under scrutiny in recent years as Goldshore Resources (TSXV:GSHR) can attest.
The post How…



Although gold has long been considered a safe haven asset, the gold market itself has been under scrutiny over the past several years because of access to capital, environmental and climate change pressure and social and geopolitical risks – which Goldshore Resources (TSXV:GSHR) CEO Brett Richards says has been particularly concerning to junior mining companies.  

In an interview with The Market Herald Canada, Richards said a deteriorating capital market environment has materialized over the past 18 to 24 months as a result of global geopolitical events and hostilities, including the war between Russia and Ukraine as well as the geopolitical conflict between China and Taiwan, and now Israel and Palestine. 

“This has made a lot of investors quite apprehensive to put money into play and put money in the market for fear of a larger event that has a catastrophic impact on the capital markets,” Richards told The Market Herald Canada.  

He also explained that inflation and rising interest rates are having an impact on the capital markets. Richards said the retail scene has played such an important part in the capital markets by providing liquidity when institutions have more outflows than inflows. 

“These two factors are compounding the ability for junior mining companies, with non-cash flow producing entities, to seek development capital to continue their progress,” he explained, adding that the only strategy is to find where there are pools of capital, which are mostly in private equity firms, mid-tier and senior producers that have balance sheets that can assist the junior mining sector and advance the development in tough times.  Richards said the next catalyst will come when mid-tier mining companies start to participate in the junior mining space through joint ventures, earn-ins and partnerships, adding that these are the only kinds of capital available to the junior mining sector at the moment. 

How Goldshore Resources is navigating the market 

So where does this position a company like Goldshore Resources? Richards said the company is not unlike hundreds of other companies in the junior gold space that have faced challenges in that its share price has dropped more than 50 per cent since the start of the year, but it is working to put together enough capital to complete its short-term objectives. 

Notably, the company completed a summer field program and is working towards a preliminary economic assessment (PEA) study, which is a study that includes an economic analysis of the potential viability of mineral resources done at an early stage of a project before completing a preliminary feasibility study.  

Richards said the company has adequate cash to get through that period, but that Goldshore Resources is looking at alternative sources of capital so it can continue to advance its work on the ground. 

However, Richards explained he doesn’t foresee advancing its Moss Gold project until sometime in 2024 because of current market constraints.  

“For us, this is all about managing our cash; continuing to look for a strategic partner; and making smart decisions in difficult markets,” he said. “That’s the reality of what everybody is facing.”

Richards said the company also needs to keep the development process going but not at the expense of blowing up the cap structure. 

Goldshore Resources‘ Moss Gold Project 

Located in Northwest Ontario, the Moss Gold Project is 100 per cent owned by Goldshore Resources and has a global inferred resource estimate of 6 million ounces at 1.02 gpt.  

The project is ideally located with year-round exploration in a highly prospective area and has 30 high-priority targets identified in its 2022 program. Notably, the strike length for the Moss-type targets has expanded from 2.5 kilometres to 11 kilometres.   To date, less than 10 per cent of drilling has tested high-priority targets with significant upside potential for cobalt and copper at select targets. 

In September 2023, the company released results from its summer field program, which identified five new gold trends as well as two high-grade copper gold trends.  

Richards told The Market Herald Canada in a previous interview that the company has expanded its trend of known mineralization to more than 35 km up from just 11 km. 

“This system is much larger than we originally identified,” he said. “The trend and the parallel structures along strike are extremely encouraging.” 

Richards explained to The Market Herald Canada that the project is “quite large” and deserves capital to be developed and said the company hopes to be able to find a partner so the project can realize its full potential. 

Notably, an updated mineral resource and maiden resource estimate was completed back in May, growing the inferred resource by 44 per cent. The maiden resource estimate also grew with 24 per cent more contained gold ounces and 32 per cent more tons to 5.42 million ounces of gold at 1.03 grams per ton (g/t) gold within 163.6 million tons open pit and underground. 

In June 2023, Goldshore filed an updated technical report for the project and is advancing towards a preliminary economic assessment. High-grade shears were visible in low-grade altered wall rock, three viable process routes and varying mining scales and rates.   This makes the project a likely optimum project that will be staged hybrid rather than a simple mine-to-mill operation. 

Next catalysts for Goldshore Resources 

With the company’s primary focus now shifted to 2024, Richards told The Market Herald Canada that Goldshore Resources will be balancing dilution with what the company sees as “value-adding activities.”  

He said that although he doesn’t anticipate the company to be drilling during the winter months, Goldshore Resources will look to prepare and look to prioritize what will create the most value for the company into next year.  

“[Goldshore Resources is] actively looking for a partner that can help support this project,” Richards said. “I think we have the right strategy to weather the storm.” 

Moving into next year, the company also anticipates having its PEA ready, depending on the markets.  

Goldshore Resources management team  

Brett Richards, CEO  

Brett Richards has more than 34 years of experience in mining and metals, including mine financing and mine development. He also has experience in senior-level operations and mergers and acquisitions.  

Richards also led Banro Corp. through an operational transition as a private company through to divesting certain assets. He has also served as the former transition CEO of Roxgold (TSX:ROXG), a former senior executive of Katanga Mining (TSX:KAT) and has held former senior executive positions with Kinross Gold (TSX:K) and Co-Steel (TSX:CEI). 

Peter Flindell, vice president of exploration 

Peter Flindell has 35 years of experience in mineral exploration and feasibility studies. Notably, Flindell has led teams to discover, develop and expand several gold and copper mines across Southeast Asia, Central Asia, West Africa, Central Africa, Europe and Central America.  

Flindell also has experience in base metal and iron ore projects and spent 12 years with Newmont Mining, 11 years with Avocet Mining and eight years with Signal Delta. 

Marlis Yassin, CFO

Marlis Yassin has more than 15 years of experience working with companies in various sectors such as mining, technology and industrial products.  

Additionally, Yassin has held senior finance management positions with various public companies, such as at a large industrial products company and at mid-tier mining companies. Yassin has extensive experience at Deloitte, providing reporting, advisory and assurance services to publicly traded companies, mostly in natural resources. 

Yassin holds a bachelor of commerce degree from the University of British Columbia. 

The investment opportunity 

As it currently stands, Goldshore Resources has a share price of $0.10, which is down 84.17 per cent from its initial public offering when it began trading on the TSXV in June 2021.

That being said, however, Richards told The Market Herald Canada that the company has one of the lowest discovery costs in the sector at C$10 per ounce, including acquisition costs, which he said is below the $20-to-$25 average in the sector for finding ounces. 

“There isn’t anyone trading lower (on a per ounce basis) than we are, and I think we have one of the most prospective projects in our sector in Canada,” he said.  

Richards explained that Goldshore Resources has the potential to grow the resource “exponentially,” to 15 million to 20 million ounces with 60,000 or 70,000 metres of drilling. 

“The prize, at the end of the day, is not only [the company’s] starting point, but where we can potentially get to. The Moss Gold deposit will host a mine one day, our role is defining and shaping what the resource looks like that takes us there,” he said. 

When it comes to its goals for 2024, Richards said the company will be “preparing the company” for when the market eventually turns around, adding that investors will get the largest and best return from a company like Goldshore Resources. 

In line with this, he explained that the company’s peers are trading at five or six times of what the company is on a per-ounce basis. 

“When this market turns – and it will – and when the U.S. dollar starts to weaken – and it will – we are going to see a higher gold price environment, and we are going to see activity in our space to invest with companies who can deliver the best return, and that’s Goldshore,” he said. 

Despite challenges in the market, and as Goldshore Resources looks to carefully execute its goals into 2024 and beyond, investors will be keen to watch how this undervalued company will impact the gold sector. 

Join the discussion: Find out what everybody’s saying about this stock on the Goldshore Resources Bullboard, and check out the rest of Stockhouse’s stock forums and message boards.

The material provided in this article is for information only and should not be treated as investment advice. For full disclaimer information, please click here.

The post How a junior gold company navigates capital markets pressure appeared first on The Market Herald Canada.

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End Of Free Money Plunges German Construction Industry Into Crisis

End Of Free Money Plunges German Construction Industry Into Crisis

Authored by Wolf Richter via,

A black swan of sorts no…



End Of Free Money Plunges German Construction Industry Into Crisis

Authored by Wolf Richter via,

A black swan of sorts no one was ready for: Negative interest rates turned positive, and all heck broke loose in the property development sector.

We just got back from vacation in Franconia, Germany, where we wanted to taste the local culinary specialties and different beers, do some hiking, and do a lot of walking around the charming historic towns with their half-timbered buildings, some of them 500-plus years old, sandstone castles, and magnificent cathedrals.

In Germany, consumers, though still spending on experiences, have cut back on spending on some goods, and are no longer able to single-handedly make up for the downturn of some of the export industries that are losing business in China and the widespread crisis of the construction sector.

Unlike in the US, the German economy is not being fired up by gigantic deficit spending by the government. Deficits are relatively muted, by US standards. So Germany is now contemplating another quarter of mildly declining GDP. In Q2, GDP had 0% growth, following Q1 of -0.1%, Q4 2022 of -0.4%, and Q3 2022 of +0.4%.

End of Free Money plunges German construction industry into “crisis.”

The impossible happened in Germany, a black swan of sorts that no one was ready for: Negative interest rates turned positive.

It now actually costs money to borrow money. Which apparently came as a shock in an economy where negative interest rates were perceived to be the new normal. This is topped off by a massive bout of inflation – including construction cost inflation. And all prior assumptions went out the window.

There are innumerable construction projects all over the place –– medium- and high-rise office and multifamily buildings, industrial buildings, large-scale renovation projects of historic buildings, expressway expansion and interchange projects, other road construction, etc. They’re visible from the train, from the car, and on foot.

In Nuremberg – where I spent some time in the Old City, in some of the neighborhoods surrounding the Old City, and in the outlying residential area of Langwasser – there were construction projects everywhere, from fill-in projects in the Old City, to huge complexes of multifamily medium-rise buildings in other areas. This is far more construction than I’d seen during my last visit a dozen years ago and in my prior visits over the decades.

The German government – after opening the floodgates to immigration – has exhorted the construction industry to create 400,000 new apartments a year. That’s the government’s official target to deal with the surging rents that have turned into a housing affordability crisis, and that are further fueling inflation.

Actual construction is falling way short of the government’s target of 400,000 apartments; the current rate is about 300,000 units per year. And this is likely to get worse over the next two years, given the construction crisis.

Rental apartments are hugely important in Germany. Over half the households rent, and rents have become unaffordable.

But home prices – both single-family and condos – are now in steep decline, due to a different dynamic: Much higher mortgage rates, triggered by the ECB’s QT and rate hikes, following the multi-year price spike powered by the ECB’s QE and negative rates. I discussed this phenomenon here: QE Giveth, QT Taketh Away: German Home Prices vs. ECB Balance Sheet.

“Construction industry crisis” was term that kept cropping up in conversation and in the local news media.

The higher interest rates, when negative interest rates had been assumed to be the new normal, surging construction cost inflation, labor cost inflation, lower property prices, and difficulties in getting financing at all have caused widespread, let’s say, complications in the German construction industry. And due to the lower prices, the cost increases cannot be passed on to buyers.

Under these conditions – falling prices, surging construction costs, higher rates, and difficulties in getting financing – property developers are holding large tracts of land that cannot be economically developed, and that can be sold only at much lower prices, if buyers can be found at all. And they’re working on construction projects whose economic assumptions got wiped out by higher interest rates and falling property prices. All of these factors are leading to liquidity and insolvency issues.

Since July, there have been a series of insolvency and bankruptcy filings by major property developers, including:

  • Gerch Group, a Duesseldorf-based property developer with €4 billion in construction projects;

  • Development Partner, a Duesseldorf-based property developer, which specializes in office construction;

  • Euroboden, a Munich-based property developer, with big projects around the country, after emergency property sales had fallen through;

  • Project Immobilien Group, with about 60 big projects around Germany;

  • Centrum Group, which blamed a “toxic triangle” of higher interest rates, cost increases, and stalled investment.

The largest German residential property firm, Vonovia, wrote down its properties by €6.4 billion, blaming the drop in value on surging building costs, higher interest rates, difficulties in getting financing, and the widening gap between buyers’ and sellers’ price expectations, all of which are causing transaction activity to plunge. It warned that new construction developments are “barely viable.” In January, it had announced that it would not start any new projects in 2023, blaming inflation in construction costs and interest rates.

Given the crisis, building permits have plunged by 35% from the levels in late 2021, to the lowest level since 2012, on a seasonally adjusted basis, according to the German statistical agency Destatis, a harbinger of industry activity to come.

No one needs more office towers, with working-from-home at least on a hybrid basis having gotten entrenched in Germany, same as in the US. And no one needs more retail spaces, with ecommerce taking over brick-and-mortar retail except in some segments, such as groceries, gasoline, and services such as restaurants, hair salons, nail salons, etc., same as in the US. And that’s the price to be paid for structural changes in the economy.

But multifamily construction is crucial in Germany to deal with surging rents and the affordability crisis. And the conditions to develop residential properties have become very difficult.

*  *  *

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. 

Tyler Durden Wed, 10/18/2023 - 05:00

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Newcastle Airport continues digitalisation journey with cloud-based SITA Flex solution “to innovate and improve CX”

The following article was published by Future Travel Experience
SITA (a Platinum Sponsor of FTE APEX Asia Expo, 8-9 November 2023, Singapore) is helping…



The following article was published by Future Travel Experience

SITA (a Platinum Sponsor of FTE APEX Asia Expo, 8-9 November 2023, Singapore) is helping Australia’s Newcastle Airport to reduce IT costs, rapidly scale up passenger processing capability, and improve CX.

SITA (a Platinum Sponsor of FTE APEX Asia Expo, 8-9 November 2023, Singapore) is helping Australia’s Newcastle Airport to reduce IT costs, rapidly scale up passenger processing capability, and improve CX.

SITA (a Platinum Sponsor of FTE APEX Asia Expo, 8-9 November 2023, Singapore) is helping Australia’s Newcastle Airport to reduce IT costs and rapidly scale up its passenger processing capability.

Using SITA’s cloud-based solution, SITA Flex, Newcastle Airport has cut costs and the associated complexity of operations by leveraging SITA’s common use solution across their preferred devices, removing the need for more expensive certified equipment and giving control and cost savings on hardware choices.

Newcastle is the first regional airport in the world to adopt the new customised solution designed for smaller airports with fewer touchpoints. The solution standardises the hardware and support to simplify the infrastructure and improve ease of operation. SITA Flex makes the most of limited physical space, enabling airports and airlines to switch effortlessly between dedicated and shared check-in and boarding gate counters. With plug-and-play functionality, Flex eliminates the need for onsite infrastructure while ensuring complete security.

The solution’s benefits include reducing airport costs, enabled by the simplification of infrastructure. It also allows the airport to operate in a common use environment at significantly lower expenses without sacrificing functionality.

“We’re excited to partner with Newcastle Airport and support their ambitious growth plans,” said Sumesh Patel, President, SITA, Asia Pacific. “From our experience in digitising the industry – before, during, and post-pandemic – we see common issues facing highly cost-conscious regional airports, with a desire to be able to fund the types of smart digital ways of working found in larger airports.”

Cloud technology makes the digital journey and cutting-edge IT affordable and accessible for regional airports. With leading passenger processing capabilities accessible via the cloud, airports can enable shared common use approaches cost-effectively, saving on infrastructure, space, and maintenance. They are also well-placed to embrace additional capabilities as they choose, such as self-boarding, self-bag drop, off-airport processing, and more.

“Newcastle Airport is undergoing a massive transformation to optimise the passenger experience, increase efficiency and sustainability, and support tourism,” said Dr Peter Cock, Chief Executive Officer, Newcastle Airport. “As we work to deliver the airport our Hunter Region deserves, we will soon be offering direct international flights to key trading and tourism destinations. We will build on our position as one of the region’s economic and employment hubs, driving innovation, job growth, and commercial opportunities. Today, we’re excited to be leading the way in digitalising airport operations with the help of SITA and look forward to continuing to innovate and improve the passenger experience.”

Hear more from SITA at FTE APEX Asia Expo, taking place in Singapore on 8-9 November 2023. Sumesh Patel, President, Asia Pacific, SITA, is speaking in the Premium Conference in the Opening Keynote Panel – “Leadership perspectives on the biggest opportunities and challenges for the aviation industry across Asia and beyond”.

Register for the free-to-attend FTE APEX Asia Expo 2023 >>

Article originally published here:
Newcastle Airport continues digitalisation journey with cloud-based SITA Flex solution “to innovate and improve CX”

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