Bank of Canada raises interest rate to 3.25%: Read the official statement

Financial Post Staff - 4h ago


The Bank of Canada building in Ottawa.© Provided by Financial Post

Here’s the official statement from the Bank of Canada’s interest rate decision on Wednesday, Sept. 7, 2022:

The Bank of Canada today increased its target for the overnight rate to 3.25 per cent, with the Bank Rate at 3.50 per cent and the deposit rate at 3.25 per cent. The Bank is also continuing its policy of quantitative tightening.

The global and Canadian economies are evolving broadly in line with the Bank’s July projection. The effects of COVID-19 outbreaks, ongoing supply disruptions, and the war in Ukraine continue to dampen growth and boost prices.

Global inflation remains high and measures of core inflation are moving up in most countries. In response, central banks around the world continue to tighten monetary policy. Economic activity in the United States has moderated, although the U.S. labour market remains tight. China is facing ongoing challenges from COVID shutdowns. Commodity prices have been volatile: oil, wheat and lumber prices have moderated while natural gas prices have risen.

In Canada, CPI inflation eased in July to 7.6 per cent from 8.1 per cent because of a drop in gasoline prices. However, inflation excluding gasoline increased and data indicate a further broadening of price pressures, particularly in services. The Bank’s core measures of inflation continued to move up, ranging from 5 per cent to 5.5 per cent in July. Surveys suggest that short-term inflation expectations remain high. The longer this continues, the greater the risk that elevated inflation becomes entrenched.

The Canadian economy continues to operate in excess demand and labour markets remain tight. Canada’s GDP grew by 3.3 per cent in the second quarter. While this was somewhat weaker than the Bank had projected, indicators of domestic demand were very strong — consumption grew by about 9.5 per cent and business investment was up by close to 12 per cent. With higher mortgage rates, the housing market is pulling back as anticipated, following unsustainable growth during the pandemic. The Bank continues to expect the economy to moderate in the second half of this year, as global demand weakens and tighter monetary policy here in Canada begins to bring demand more in line with supply.

Given the outlook for inflation, the Governing Council still judges that the policy interest rate will need to rise further. Quantitative tightening is complementing increases in the policy rate. As the effects of tighter monetary policy work through the economy, we will be assessing how much higher interest rates need to go to return inflation to target. The Governing Council remains resolute in its commitment to price stability and will continue to take action as required to achieve the 2 per cent inflation target.

Information note

The next scheduled date for announcing the overnight rate target is Oct. 26, 2022. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.

 

Bank of Canada’s Delayed Action Means A Hard Landing Is Most Likely: Oxford Econ

SEPTEMBER 7, 2022

Canada’s central bank made its expected rate hike, but the market was still shocked. The Bank of Canada (BoC) hiked the policy rate to 3.25 points today, up 0.75 points from the previous level. Interest rates are now at the highest rate since 2008, and expected to keep climbing due to inflation. Consequently, a hard landing, or recession, is now expected and the odds are against it being a mild one.

The Neutral Policy Rate

For any of this to make sense, you need to understand the basics of policy interest rates. The central bank’s primary role is to ensure low and stable inflation. They do this with one big tool — the policy interest rate.

Central banks have an ideal target range of interest, with the BoC using between 1 and 3 points. If inflation is below 1 point, the BoC might lower rates to make credit cheaper. By doing so, they’re encouraging banks to make more loans to drive inflation, and thus prices higher. That’s where the inflation comes from.

If inflation is above 3 points, they’ll hike rates to cool down the incentive to borrow. This will lower the amount of demand, helping to bring prices down. That’s how they cool inflation — by cooling demand.

The neutral policy rate is the level where interest rates have no influence on inflation. It doesn’t drive inflation or slow it, it’s just right for the level of inflation. You’re going to miss these days, we can already tell.

Here’s the important part for today — BoC research shows it takes 18 to 24 months for policy to arrive to market. If the BoC wanted stable inflation, it was supposed to do it more than two years ago to get the ball rolling. Instead of coming down in a graceful landing, we’re slamming the shifters down, then up, then… you get it. Trying to force something is almost always worse than encouraging it, but at this point the BoC is stuck. This is a key point to understand the information below.
Canada To Face A Moderate Recession

The BoC is signaling the economy is way overheated, to the point it can be destabilizing to the public. “Today’s statement makes clear that with the economy operating in excess demand, tight labour markets and still elevated inflation, the BoC will press forward with further rate hikes despite its forecast for the economy to “moderate” in H2,” said Tony Stillo, a director of Oxford Economics that specializes in the Canadian economy.

Stillo is no longer entertaining fantasies of a mild recession, like some banks. “In our view, Canada is now likely to fall into a moderate recession by late 2022,” he adds.

The primary cause, according to the economist, is aggressive monetary policy. By trying to correct inflation in a short period, they need to apply much more pressure than usual. Canada’s highly indebted households amplify the pain in this emergency landing.

He mentions the “deepening housing correction already underway,” compounding the pain further. Add to that, a global slowdown is fast approaching as well, leading to unknown fallout.
Bank of Canada Expected To Hike Further

Stillo sees the BoC hiking even further in October, bringing the policy rate to 3.75% in just a few months. “From there, we expect mounting signs of a recession in Canada, weakening external demand and continued declines in inflation will cause the Bank of Canada to halt rate hikes,” he says.

“We now think that such rapid tightening of monetary policy given Canada’s a highly interest sensitive economy, along with a deteriorating external environment, make a recession the most likely outcome for the economy.”

Waiting too long to act on inflation put the central bank in a tough position. Canada is now witnessing some of the highest inflation ever. A whole generation hasn’t seen anything even close to this.

Had the central bank tackled inflation when it claimed it was transitory, it would be a different story. However, as the BIS pointed out, central banks repeated policy mistakes around the world. This led to synchronization, which leads to larger risk events. Now we’re starting to see why households being highly indebted in a synchronization event is a disaster waiting to happen.

Canadians vulnerable to 'payment shock' as debt, interest rates climb, experts say

Canadians are increasingly vulnerable to "payment shock" as higher household debt levels collide with oversized interest rate hikes.



The Bank of Canada raised its key lending rate by three-quarters of a percentage point Wednesday, making it more expensive to borrow money in a time of climbing debt.

It's a situation experts say could push some to a breaking point as they rely on higher interest rate loans and credit cards to pay for the soaring cost of everyday essentials.

Wes Cowan, a licensed insolvency trustee and senior vice-president at MNP Ltd., says people are increasingly using credit cards and loans to make ends meet.

He says given growing debt levels and escalating interest rates, he expects to see more people struggle to make minimum debt servicing payments in the coming months.

Recommended video: Credit card debts hit 3-year high amid rising prices, data shows
Duration 2:40   View on Watch

2:33
Canadians turning to credit cards for financial stress relief

cbc.ca


4:46
BOC's big rate hike not the end, says economist  cbc.ca


Meridian Credit Union senior wealth advisor Paul Shelestowsky says the risk of payment shock is front and centre as people grapple with the confluence of high inflation and high interest rates.

"Anything that has a variable rate attached to it, like the lines of credit, we're going to see a huge payment shock," he says. "Everything is more expensive — buying groceries, heating your home, the basics — and now servicing your debt will cost more too."

Credit reporting agencies Equifax Canada and TransUnion Canada both released reports this week highlighting the recent growth in household debt.

Equifax said total consumer debt climbed 8.2 per cent in the second quarter of 2022 compared with the same quarter last year.

Meanwhile, TransUnion's latest credit industry report said total debt grew to an all-time high at $2.24 trillion, up 9.2 per cent from the same time in 2021 and up 16.4 per cent from pre-pandemic levels at the end of 2019.

The agency also said credit card balances and the risk of consumer delinquency on personal loans has also increased.

This report by The Canadian Press was first published Sept. 7, 2022.

Bank of Canada lifts rates to 14-year high, keeps door open on more tightening

By Julie Gordon and David Ljunggren - Yesterday 


OTTAWA (Reuters) - The Bank of Canada hiked interest rates to their highest level in 14 years on Wednesday, as expected, and signaled its most aggressive tightening campaign in decades was not yet done as it battles to tame inflation.

The central bank, in a regular rate decision, hiked its policy rate to 3.25% from 2.50%, matching analyst forecasts and hitting a level not seen since April 2008. Rates are now above the BoC's neutral range, meaning that for the first time in about two decades monetary policy is likely to restrict growth.

"Given the outlook for inflation, the Governing Council still judges the policy interest rate will need to rise further," the central bank said in a statement after delivering its fourth consecutive outsized hike. "As the effects of tighter monetary policy work through the economy, we will be assessing how much higher interest rates need to go to return inflation to target."

The Bank of Canada leads its advanced-economy peers in policy tightening, having raised its policy rate by 300 basis points since March from a record low 0.25%, and it does not yet appear to be done.

"It does feel as though the bank is preparing the market for the possibility that rates will need to keep moving higher for more than one or two more meetings," said Andrew Kelvin, chief Canada strategist at TD Securities.

"I think they are trying to keep as many options as open as possible," he added.

Recommended video: BOC's big rate hike not the end, says economist
Duration 4:46 View on Watch


4:04
Reserve Bank Of Australia Hikes Rates By 50 Bps, Bank Of Canada Expected To Raise Rates By 75 Bps

CNB/CTV18


2:22
Canada's GDP edged up 0.1% in June, below expectations  cbc.ca


The Bank of Canada, like many of its peers, faces intense criticism for downplaying hot inflation as "transitory" last year and not acting swiftly enough as price increases gathered steam.

The front-runner to lead Canada's opposition Conservatives, Pierre Poilievre, has promised to fire central bank Governor Tiff Macklem if he's elected prime minister and to replace him with someone "who will fight inflation."

Canadian Finance Minister Chrystia Freeland defended the central bank to reporters on Wednesday, saying it had the mandate, tools and experience to tackle the price gain problem.

SOARING PRICES

Inflation eased to 7.6% in July from 8.1% in June, but the decline was due to a drop in gasoline prices, with the core measures continuing to move higher, the central bank said.

"Surveys suggest that short-term (inflation) expectations remain high. The longer this continues, the greater the risk that elevated inflation becomes entrenched," the central bank said.

Money markets are betting on two more quarter-percentage-point increases this year to lift the policy rate to 3.75% in December.

Economists noted the possibility of a 50-basis-point hike in October followed by a standard 25-basis-point increase in December, opening the door to a policy rate of 4.00% by the end of the year, though much will hinge on the path of inflation and employment over the coming months.

"There's a fairly high risk that they hike rates at each of the next two meetings," said Doug Porter, chief economist at BMO Capital Markets. "We'll have to see whether those are just small hikes or larger, and I think a lot of that will depend on what happens to headline and core inflation in the next few months."

The Canadian dollar was trading 0.1% higher, at 1.3145 to the greenback, or 76.07 U.S. cents, after touching its weakest level in nearly eight weeks at 1.3208 before the BoC's policy announcement.

(Reporting by Julie Gordon and David Ljunggren in Ottawa; additional reporting by Ismail Shakil in Ottawa, Fergal Smith in Toronto and Steve Scherer in Vancouver; Editing by Andrea Ricci, Paul Simao and Leslie Adler)

UCP HEALTHCARE; $3.9-billion SURPLUS

EDMONTON

Patients lay for hours on Misericordia Hospital ER floor: ‘It was disgusting’

Karen Bartko - Yesterday 


An Edmonton woman wants to do everything possible to avoid returning to a west end hospital — not because of her medical treatment, but rather where she was forced to wait in pain.

"It was disgusting. Even if something else happens to me, I don't want to go back there," Trista Champagne said on Tuesday.

Champagne, 47, said she and other patients waited for hours on the floor inside what she called "a dirty makeshift garage" at the Misericordia Community Hospital.

Read More
‘Frustrating’ and ‘devastating’: The domino effect of family doctor, LTC shortages on ERs

Trista said she had been dealing with extreme back pain for two days over the long weekend. When she started struggling to breathe on Sunday night, her mom, Dale, convinced her to go to the hospital.

"I was fighting her all the way, saying, 'There's nothing that is going to happen, we're just going to sit there and it's going to be miserable,'" Trista said.

"When we actually get there, it was worse than I could have ever have imagined."

They chose the Mis because of all the hospitals in the Edmonton region, it was reporting the shortest wait time — 2.5 hours.

The family said she got triaged within about 20 minutes, but then they were told to wait in an area she describes as a concrete garage with dried blood on the floor and uncomfortable chairs.

Champagne said the pain that drove her to seek medical attention prevented her from sitting.

When she was told there were no gurneys available, she chose to join two other patients already curled up on the floor.

They ended up waiting seven hours to see a physician, during which time Dale tracked down blankets for patients on the floor to lay on.

The hospital is run by Covenant Health. No one was available for an interview on Tuesday, but a statement was sent to Global News.

It read, in part, "Throughout the pandemic, hospitals, including the Misericordia Community Hospital, have used non-traditional spaces for patients to wait after they've been triaged. As we navigate these increased volumes, we continue to use these temporarily expanded waiting areas to support our patients."

The statement went on to say the hospital is dealing with an increase of high acuity patients that require more specialized care, which adds more pressure on staff.

Read more:
Opposition NDP slams Alberta government for health centre closures

The Champagnes stressed they do not blame the front-line health-care workers for the situation.

"They were really good," Dale said.

"They did their best with what they have, it's just that they didn't have what they needed."

Champagne's experience mirrors that of a Drayton Valley family, who in July said their sick child had to lay on the floor after being put in a room with no bed.

Video: Patient laying on Drayton Valley hospital ER floor prompts call for change

The family is joining the countless other Albertans who have called on the province in recent months to increase funding and resources to better support the burnt-out system.

"The facilities are not equipped to handle the situation at hand," Trista said, adding until something changes, she'll do everything she can to avoid another trip to the emergency room.

Read more:
Doctors say health system has ‘collapsed’ as patient surges fuel ER closures

As of this story publishing on Tuesday night, the wait time at the Misericordia was 5.5 hours. Other emergency rooms in the Edmonton region reported similar wait times.



Patients lay for hours on Misericordia Hospital ER floor: ‘It was disgusting’© Provided by Global News

East Med especially at risk as world heats up, report warns
yesterday

A couple walk at the salt lake during sunset in southeast coastal city of Larnaca in southeast Mediterranean island of Cyprus, on Sept. 5, 2022. The eastern Mediterranean and Middle East are warming almost twice as fast as the global average, with temperatures projected to rise up to 5 degrees Celsius (9 degrees Fahrenheit) by the end of the century if no action is taken to reverse the trend, a new report says. 

(AP Photo/Petros Karadjias, File)


NICOSIA, Cyprus (AP) —

The eastern Mediterranean and Middle East are warming almost twice as fast as the global average, with temperatures projected to rise up to 5 degrees Celsius (9 degrees Fahrenheit) by the end of the century if no action is taken to reverse the trend, a new report says.

The region will experience “unprecedented” heat waves, more severe and longer-lasting droughts and dust storms and rainfall shortages that will “compromise water and food security” for the region’s 400 million people, according to a summary of the report released Tuesday.

The eastern Mediterranean and the Middle East are more susceptible to warming trends because of their unique natural characteristics, like large desert expanses and lower water levels, the study said.

The report was prepared by an international group of scientists overseen by The Cyprus Institute’s Climate and Atmosphere Research Center and the Max Planck Institute for Chemistry. Originally published in June in the journal Reviews of Geophysics, it aims to underscore the impact of climate change in the region ahead of the United Nations climate summit in Egypt this November.

Arid climate zones will expand northward and snow-capped mountains in more northern climes will diminish during this century, said Dr. George Zittis, who co-authored the report. Although the sea level in the region is projected to rise at a pace similar with other global estimates, many Mediterranean countries are unprepared to deal with it, he said.

“This would imply severe challenges for coastal infrastructure and agriculture and can lead to the salinization of coastal aquifers” warned Zittis. Saltier water from rising sea levels and low rainfall can severely damage crops and fisheries.

The region’s most vulnerable groups, including the elderly, children and pregnant people, will face major health challenges, said Max Planck Institute Director Jos Lelieveld, who was part of the study. Many European nations already have initiatives to aid vulnerable people in extreme weather.

The region is rapidly overtaking the European Union as a source of greenhouse gases and becoming a major emitter on a global scale, the paper suggests. China, the U.S., India and the E.U. are currently the world’s largest emitters. Several Mediterranean countries are also part of the European bloc.

If the Paris Agreement target of limiting warming to 1.5C (2.7F) is met, it would limit the temperature increase in the region to about 2C (3.6F), the study said. The report urged the region to quickly reduce its reliance on greenhouse gas emissions, especially in the energy and transportation sectors.

The study’s projections for the region are in line with other scientific studies, including a major report published by the Intergovernmental Panel on Climate Change earlier this year. The U.N.’s climate report termed the Mediterranean as a climate change “hotspot” which is vulnerable to droughts, coastal erosion and heat waves.

Hajji Wali Jan, 66, carries plastic containers for water on his way to his house during a drought in Kamar Kalagh village outside Herat, Afghanistan, Nov. 26, 2021. 

. (AP Photo/Petros Giannakouris, File)

 Fishermen navigate on the Shatt al-Arab waterway during a sandstorm in Basra, Iraq, May 23, 2022.

 (AP Photo/Nabil al-Jurani, File)

___

Follow AP’s climate and environment coverage at https://apnews.com/hub/climate-and-environment
___

Associated Press climate and environmental coverage receives support from several private foundations. See more about AP’s climate initiative here. The AP is solely responsible for all content.

In flood-stricken Pakistan, rains damage archeological site

By MUNIR AHMED

yesterday

1 of 17

Women carry belongings salvaged from their flooded home after monsoon rains, in the Qambar Shahdadkot district of Sindh Province, of Pakistan, Tuesday, Sept. 6, 2022. More than 1,300 people have been killed and millions have lost their homes in flooding caused by unusually heavy monsoon rains in Pakistan this year that many experts have blamed on climate change. 

(AP Photo/Fareed Khan)


ISLAMABAD (AP) — In flood-stricken Pakistan where an unprecedented monsoon season has killed hundreds of people, the rains now threaten a famed archeological site dating back 4,500 years, the site’s chief official said Tuesday.

The ruins of Mohenjo Daro — located in southern Sindh province near the Indus River and a UNESCO World Heritage Site — are considered among the best preserved urban settlements in South Asia. They were discovered in 1922 and to this day, mystery surrounds the disappearance of its civilization, which coincided with those of ancient Egypt and Mesopotamia.

The swelling waters of the Indus, a major river in this part of the world, have wreaked havoc as heavy rains and massive flooding unleashed devastation across much of Pakistan. At least 1,343 people have been killed and millions have lost their homes in the surging waters, with many experts blaming the unusually heavy monsoon rains on climate change.

U.N. Secretary-General Antonio Guterres said he is flying to Pakistan on Wednesday to express solidarity with its people and “to appeal for the massive support of the international community to the Pakistanis, in this hour of need after the devastating floods that we are witnessing.” He said the floods are a result of climate change that is “supercharging the destruction of our planet,” warning: “Today it is Pakistan. Tomorrow it can be anywhere else.”

The flooding has not directly hit Mohenjo Daro but the record-breaking rains have inflicted damage on the ruins of the ancient city, said Ahsan Abbasi, the site’s curator.

“Several big walls, which were built nearly 5,000 years ago, have collapsed because of the monsoon rains,” Abbasi told The Associated Press.

He said dozens of construction workers under the supervision of archaeologists have started the repair work. Abbasi did not give an estimated cost of the damages at Mohenjo Daro.

The site’s landmark “Buddhist stupa” — a large hemispherical structure associated with worship, meditation and burial — remains intact, Abbasi said. But the downpour has damaged some outer walls and also some larger walls separating individual rooms or chambers.

Abbasi said the civilization at Mohenjo Daro, also known as “Mound of the Dead” in the local Sindhi language, built an elaborate drainage system, which has been critical in flooding in the past.

Though the floods have touched all of Pakistan, the Sindh province has been among the worst hit.

On Monday, army engineers made a second cut into an embankment at Lake Manchar, Pakistan’s largest freshwater lake, to release rising waters in hopes of saving the nearby city of Sehwan from major flooding.

The water from the lake has already inundated dozens of nearby villages, forcing hundreds of families to leave their mudbrick homes in a hurry, many fleeing in panic.

Meanwhile, rescue operations continued Tuesday with troops and volunteers using helicopters and boats to get those stranded out of the flooded areas and to nearest relief camps. Tens of thousands of people are already living in such camps, and thousands more have taken shelter on roadsides on higher ground.

Ghulam Sabir, 52, from the outskirts of Sehwan, said Tuesday that he left his home three days ago after authorities told them to evacuate.

“I took my family members with me and came to this ... safer place,” said Sabir, staying by the roadside where he has set up camp. He echoed complaints of several other villagers — that no government help had reached them yet.

Sabir said he did not know whether his home had collapsed or not.

Prime Minister Shahbaz Sharif urged Pakistanis in televised remarks Tuesday to generously donate to flood victims, most of whom are relying on government help to survive. Sharif has also repeatedly asked the international community to send more aid to the flood victims. He insisted that Pakistan is facing a climate-change-induced tragedy.

In a statement Tuesday, the U.N. refugee agency said it handed over thousands of tents and other emergency items to the Sindh government, meant for those affected by the flooded areas in the province.

Multiple experts say that since 1959, Pakistan has emitted about 0.4% of heat-trapping carbon dioxide, compared to 21.5% by the United States and 16.4% by China. Last week, U.N. Secretary-General Antonio Guterres also called on the world to stop “sleepwalking” through the crisis. He plans to visit flood-hit areas on Sept. 9.

According to Pakistani officials, Guterres will travel to Sindh but it’s unclear whether he will visit the archaeological site.

Typhoon batters S. Korea, preparations minimize casualties

By KIM TONG-HYUNG

yesterday

1 of 17

Waves crash over the breakwater in Busan, South Korea, Tuesday, Sept. 6, 2022. Thousands of people were forced to evacuate in South Korea as Typhoon Hinnamnor made landfall in the country's southern regions on Tuesday, unleashing fierce rains and winds that destroyed trees and roads, and left more than 20,000 homes without power. (Sohn Hyung-joo/Yonhap via AP)


SEOUL, South Korea (AP) — The most powerful typhoon to hit South Korea in years killed at least six people, dumped a meter (3 feet) of rain, destroyed roads and felled power lines on Tuesday. The death toll could have been higher if not for proactive evacuations and school closures, officials said.

There was also greater public awareness about the storm and its risks. Typhoon Hinnamnor made impact just weeks after heavy rain around the capital, Seoul, caused flooding that killed at least 14 people.

Government officials put the nation on high alert for days as Hinnamnor approached, warning of potentially historic destruction and putting in motion life-saving measures.

After grazing the resort island of Jeju and hitting the mainland near the port city of Busan, Hinnamnor weakened as it blew into waters between the Korean Peninsula and Japan.

South Korea’s weather agency said Hinnamnor was over the open sea 400 kilometers (248 miles) northwest of the northern Japanese city of Sapporo as of 9 p.m. and had weakened to a tropical storm.

However, the damage was still severe in the southern city of Pohang, where five people were found dead and at least five others were missing after the storm submerged roads and buildings, triggered landslides and flooded a shopping mall.

Cars with smashed windows and trunks open lay scattered on roads like garbage. An entire two-story pool villa was uprooted from the ground and swept away by flash floods. Troops were deployed to assist with rescue and restoration efforts, moving in armored vehicles through streets turned into chocolate-colored rivers.

Firefighters navigated flooded neighborhoods in rubber boats, rescuing people and their pets. Merchants scrambled to salvage furniture and other belongings at the famous Guryongpo outdoor market, where workers deployed excavators to clear huge piles of debris.

The rain and flooding eroded the foundations of bridges and motorways, which were often broken in chunks or blocked by fallen trees and electricity poles. Factory buildings were tilted, while a shipping container blew away and landed above cars in a parking lot.

“I woke up at 5 a.m. at because of the explosive rain, and I got really concerned because the water rose right up to my doorway,” Kim Seong-chang, a Pohang resident, said in an interview with JTBC. “The water was still thigh-high at 7 a.m. and those who parked their cars in the streets were in panic because their vehicles were submerged. … Other residents were bucketing out water from their homes.”

The storm dumped more than 105 centimeters (41 inches) of rain in central Jeju since Sunday, where winds peaked at 155 kph (96 mph). Southern and eastern mainland regions also had damage — knocked-off signboards and roofing, toppled trees and traffic signs, and destroyed roads.

In Pohang, a woman in her 70s died after being swept away in flash floods, while four others were found dead in a submerged basement parking lot, where the search was continuing for five people.

Wading in the parking lot’s neck-high waters with ropes tied to their bodies, emergency workers on Tuesday night managed to pull out two people who had been trapped. President Yoon Suk Yeol issued a congratulatory message after the first survivor’s rescue, calling it a “miracle.”

In the neighboring city of Gyeongju, a woman in her 80s died after her home was buried in a landslide. In Ulsan, another southern city, a 25-year-old man was unaccounted for after falling into a rain-swollen stream, according to the Ministry of the Interior and Safety.




Waves hit a shore in Ulsan, South Korea, Tuesday, Sept. 6, 2022. The most powerful typhoon to hit South Korea in years battered its southern region Tuesday, dumping almost a meter (3 feet) of rain, destroying roads and felling power lines, leaving 20,000 homes without electricity as thousands of people fled to safer ground.

 (Kim Yong-tai/Yonhap via AP)


Also in Pohang, firefighters extinguished flames that damaged at least three facilities at a major steel plant operated by POSCO. A presidential official, who spoke on condition of anonymity in a background briefing, said officials were investigating the cause of the fires.

Local fire officials said the flames destroyed a building housing electricity equipment and damaged a separate office building and a coking factory before being put out.

The Safety Ministry said about 3,700 of 4,700 people who had been forced to evacuate returned home Tuesday afternoon. Thousands of homes, buildings and factories were flooded or destroyed, and hundreds of roads, bridges and facilities were damaged.

More than 600 schools were closed or converted to online classes. Workers had managed to restore electricity to most of the 89,203 households that had lost power.

In North Korea, state media reported “all-out efforts” to minimize damage from flooding and landslides. The state Korean Central News Agency reported that leader Kim Jong Un had issued “detailed tasks” at government meetings to improve the country’s disaster response capacity but didn’t elaborate on the plans.

North Korea sustained serious damage from heavy rains and floods in 2020 that destroyed buildings, roads and crops, hurting the country’s already-crippled economy.

UNREGULATED INDUSTRY

World’s second-tallest roller coaster is permanently closing
yesterday

Riders on the Top Thrill Dragster speed along on May 1, 2003, at Cedar Point Amusement Park, in Sandusky, Ohio. The amusement park in Ohio is permanently closing the world’s second-tallest roller coaster. The decision announced Tuesday, Sept. 6, 2022, by Cedar Point comes a year after a small metal object flew off the 420-foot (128-meter) tall Top Thrill Dragster coaster and struck a woman in the head at the park in Sandusky. (AP Photo/Paul M. Walsh, File)


SANDUSKY, Ohio (AP) — An amusement park in Ohio announced Tuesday it would be permanently closing the world’s second-tallest roller coaster.

The decision by Cedar Point comes a year after a small metal object flew off the 420-foot (128-meter) tall Top Thrill Dragster coaster and struck a woman in the head at the park in Sandusky. A state investigation found no evidence that the park acted illegally or had reason to believe the ride was unsafe.

The ride has remained closed since the Aug. 15, 2021 accident. Park officials did not say if the accident influenced their decision to permanently close the coaster, which has operated for 19 years and drawn 18 million riders.

In a statement announcing the closure, the park noted it “legacy of ride innovation continues. Our team is hard at work, creating a new and reimagined ride experience.” It said more details about its plans would be disclosed in the future.

The Kingda Ka roller coaster at Six Flags Great Adventure in Jackson Township, New Jersey, is considered the world’s tallest with a 456-foot (139-meter) elevation.

THAT WILL REDUCE INFLATION
Rents are starting to come down, but the trend may not hold
By ADRIANA MORGA

yesterday

 A 'Now Leasing' sign hangs off an apartment building staircase in southeast Portland, Ore., on Wednesday, Dec. 9, 2021. Rents are starting to come down after spiking to record levels this past summer, but experts are uncertain if the slowdown will continue. The national median asking rent was up 14% in July 2022 over July the previous year. That's the smallest annual increase since November 2021. Experts say the market could slow further toward the end of the year, but there’s still a lot of uncertainty. 

(AP Photo/Sara Cline, File)


NEW YORK (AP) — Rents are starting to come down after spiking to record levels this past summer, but experts are uncertain if the slowdown will continue.

Christopher Mayer, professor of real estate at Columbia Business School, said people looking for an apartment now might have a better experience than they did in May or June.

“We’re not seeing rents go up as quickly, the rental market is softening a little bit,” he said.

The national median asking rent was up 14% in July over July the previous year, the smallest annual increase since November 2021, according to a new report from Redfin. While that percentage is still high, it has decreased from 15% in June and 16% in May.

Experts say the market could slow further toward the end of the year, but there’s still a lot of uncertainty.

“I would not be surprised if we get to 2023 before things really get back to normal,” said Brian Carberry, senior managing editor of Rent.com, an apartment search website owned by Redfin.

Much depends on where you live. Cities in Florida such as Boca Raton and West Palm Beach have seen rents decrease -0.1% and -0.5% respectively compared to last month. But according to Apartment List, rents in California coastal cities such as San Diego have continued to increase over the past year.

In Rochester, New York, rent was up 15.3% in August over the same month the previous year, according to data from Apartment List. An average two-bedroom apartment in the Rochester area was $1,318 in August, compared with $1,116 a year ago.

Bank of America CEO Brian Moynihan said high rents are a concern because they can account for a big chunk of a household’s take-home pay.

“Gas prices are coming back down, but rents are going up 10, 12, 15%. And rent can end up taking 40% of these households’ income,” Moynihan said in a recent Associated Press interview.

While things are looking a bit better for renters than a few months ago, it’s still a landlords’ market, Mayer said.

If your lease is up, staying put and negotiating with your landlord might be a better option than trying to move, at least until the rental market slows down further, said Paula Munger, assistant vice president for industry research and analysis at the National Apartment Association.

“When you renew your lease, you’re definitely not paying the same as someone new moving in,” Munger said. “If you can, stay in your apartment.”

A major reason for rent spikes has been increasing demand from people priced out of a booming housing market. That market is starting to slow, which could mean more people can afford to buy and won’t need to rent, but with interest rates rising, some may not want to take on mortgages.

“With inflation now all throughout the market, there’s not enough supply so the prices are going up,” Munger said. “That’s the downside for people, just not having enough options and choices for what they would like in a housing unit.”

That was the experience of Erika Tascon, a 22-year-old Los Angeles resident who was living with roommates but wanted to find an apartment with her boyfriend.

After visiting more than 10 units, the couple picked a 500-square-foot one-bedroom apartment in Beverly Hills where they pay $2,750 per month. The median rent for a one-bedroom in the area is $2,773, up 14% from last year, according to data from Zumper.

“I think landlords are taking advantage of tenants right now,” said Tascon, who is paying $200 more per month than for her previous apartment.

In Britni Eseller’s case, the high demand meant that she had to rush to fill out her application to beat the other 10 people who toured the apartment she wanted.

“Because everyone is in scarcity mode, you’re willing to find a place that might be somewhat affordable and you’re unfortunately okay with overlooking chipped floors or a broken appliance,” said Eseller, who lives in North Park, a neighborhood of San Diego.

Developers have ramped up construction of apartment buildings this year, which could eventually help to ease the crunch. But it’s likely to take a while before that’s reflected in the market.

Meanwhile, high rents are disproportionately hurting low-income residents across the country, said Ben Martin, research director of Texas Housers, a non-profit organization that works on housing justice.

In May, rental prices in Dallas and Fort Worth were up 21.6% from last year, according to Redfin data. In Austin they were up 48.4%. One major reason is that high-income people from coastal areas like California and New York moved to Texas during the coronavirus pandemic, when they realized they could work remotely and live more cheaply. In December of last year, for example, Tesla moved its headquarters from Silicon Valley to Austin.

“People who make the lowest incomes are paying more of their total pie of money,” Martin said. “Which means that they don’t have money for anything else: school supplies, groceries, gas, clothing, all of the essential stuff that you need to live.”

In addition to cutting basic expenses, renters are also cramming more people into apartments, Martin said.

Increasingly, people can’t afford their homes at all and are now facing eviction. Governments have ended eviction moratoriums and rental assistance programs that allowed people to stay in their homes during the pandemic.

The Eviction Lab, a research organization at Princeton University, is seeing record numbers of evictions that have surpassed pre-pandemic levels.

In Houston, where the eviction moratorium ended in July 2021, there were 7,242 eviction filings in July of this year, 51% above average, according to The Eviction Lab. Other cities such as Los Angeles have extended eviction moratoriums until the end of this year.

Tenants who can’t afford rent increases but also can’t afford to move are often forced to choose between paying rent and covering basic necessities. An eviction stays on a renter’s record, making it harder to find housing in the future.

“The threat of eviction is the looming problem,” said Nick Graetz, a postdoctoral research associate at The Eviction Lab. “Part of the reason renters sacrifice so many other things to try to pay unreasonable high rents every month is because of the constant threat of being evicted from their home.”

___

The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.

Candy, cash, gifts: How rewards help recovery from addiction

By CARLA K. JOHNSON

today


1 of 12

Harold Lewis, a recovering drug user, looks at a pair of sunglasses he won by picking paper slips with prizes written on them out of a fishbowl, Monday, July 18, 2022 at Liberation Programs in Bridgeport, Conn. “Recovery is just not all balled-up fists and clutched teeth, you know what I mean?" Lewis says. “It can be fun, where you can exhale and you can breathe and get excited — because you don’t know what you’re going to win today.” (AP Photo/Julia Nikhinson)


Harold Lewis has been fighting drug addiction for years, but only recently started thinking recovery could be fun.

The 59-year-old former cook earned small prizes — candy, gum, gift cards, sunglasses and headphones — for attending meetings and staying in treatment for opioid addiction during a 12-week program in Bridgeport, Connecticut.

“Recovery should be fun because you’re getting your life back,” Lewis said.

For an increasing number of Americans, addiction treatment involves not only hard work, but also earning rewards — sometimes totaling $500 — for negative drug tests or showing up for counseling or group meetings.

There’s brain science behind the method, which is known as contingency management. And barriers to wider adoption of reward programs, such as government concerns about fraud, are starting to crumble.

“We’re in a state of desperation where we need to pull out all the stops and this is something that works,” said Dr. James Berry, who directs addiction medicine at West Virginia University.

U.S. overdose deaths climbed to a record high during the pandemic. While opioids are mostly to blame, deaths involving stimulants such as methamphetamines also are climbing. Often, people die with multiple drugs in their system.

Medication can help people quit abusing opioids, but stimulant addiction has no effective medicine. Rewards programs — especially when the dollar value increases with consistent performance — are widely recognized as the most effective treatment for people addicted to stimulants.

Since 2011, the U.S. Department of Veterans Affairs has used the method with 5,700 veterans. Rewards are vouchers the vets redeem at their local canteen. Over the years, 92% of the urine tests done on these veterans have been negative for drugs, said Dominick DePhilippis of the VA’s substance use disorders program.

When done right, reward programs can be a bridge from the difficult days of early recovery to a better life, said Carla Rash, associate professor of medicine at UConn Health, who studies the method. It helps people make better decisions in the moment, tipping the scale when the immediate rewards of using drugs are difficult to resist.

(AP Video/Emma H. Tobin)

The rewards can “provide a little bit of recognition for people’s efforts,” Rash said.

For Casey Thompson, 41, of Colville, Washington, the first month after quitting meth was the worst. Without stimulants, he felt burned out and exhausted.

“Even standing up, you could fall asleep,” Thompson said.

Earning gift cards for passing drug tests helped, he said. During his 12-week program, he received about $500 in Walmart gift cards he spent on food, shirts, socks and shampoo. He’s a trained welder and is looking for work after a recent layoff.

“I’m a totally different person than I was,” said Thompson. ”I was already planning on being clean, so it was just extra.”

More than 150 studies over 30 years have shown rewards work better than counseling alone for addictions including cocaine, alcohol, tobacco and, when used alongside medications, opioids.

The method is grounded in brain science. Psychologists have known for years that people who prefer small, immediate rewards over larger, delayed ones are vulnerable to addiction. They may vow to quit each morning and start using again by afternoon.

And neuroscientists have learned from imaging studies how addiction takes over the brain’s reward center, hijacking dopamine pathways and robbing people of the ability to enjoy simple pleasures.

“It’s very much using that same dopamine reward system that’s the basis for addictions to promote healthy behavior change,” said psychologist Stephen Higgins of the University of Vermont, who pioneered the method in 1991. His recent research shows it helps pregnant women quit smoking and improves the health of their newborns.

“Biologically, the use of substances lights up the same part of the brain that is lit up when a person wins the lottery, falls in love or experiences something really positive and exciting,” said psychologist Sara Becker of Northwestern University.

The same pathway is lit up if someone wins a reward.

“That’s part of what’s powerful about these programs,” Becker said.

Support has never been stronger. The Biden administration backs the method in its National Drug Control Strategy. This fall, California will launch a pilot program designed to reward $10 gift cards passing drug tests for stimulants. Oregon will use tax revenue from the state’s legal marijuana industry to pay for similar incentives. Montana launched a program in March using a federal grant.

The U.S. Department of Health and Human Services is working to revise its guidance on how much government grant money can be spent on prizes, rewards and cash cards. Researchers say the current $75 limit per patient is arbitrary and ineffective and should be raised to $599.

The method “is a widely studied and proven intervention that has been successful in treating people with a variety of substance use disorders,” said Dr. Yngvild K. Olsen, who directs the U.S. government’s Center for Substance Abuse Treatment.

Reward programs can be low tech — slips of paper drawn from a fish bowl — or high tech — using “smart” debit cards programmed so they cannot be spent at liquor stores or converted to cash at an ATM.

Maureen Walsh is a 54-year-old Philadelphia flower shop owner who stays off opioids with help from a smartphone app called DynamiCare. When she passes a saliva test, she earns cash on a smart card. She uses the money to treat herself to a new pair of shoes or make a donation to a favorite cause.

“The reward to me was knowing that I was clean and the test showed it,” Walsh said.

For Lewis, the Connecticut man in recovery from opioids, a weekly prize drawing became a way for him to bring home gifts for his mother.

“The prizes make me feel good,” he said. “But the prizes make my mother feel great. I’m talking Tony the Tiger GREAT!”

On a recent summer day, Lewis had earned the chance to pull 10 slips — 10 chances to win prizes, including a tablet computer. The big prize eluded him, but he won six small prizes and $20 in grocery gift cards.

“Recovery is just not all balled-up fists and clutched teeth, you know what I mean?” Lewis said later. “It can be fun, where you can exhale and you can breathe and get excited — because you don’t know what you’re going to win today.”

___

AP videojournalist Emma H. Tobin contributed to this report.

___

The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

China earthquake deaths rise to 74 as lockdown anger grows
today

In this photo released by Xinhua News Agency, soldiers clear debris to search for survivors at an earthquake hit Moxi Town of Luding County, southwest China's Sichuan Province Tuesday, Sept. 6, 2022. Authorities in southwestern China's Chengdu have maintained strict COVID-19 lockdown measures on the city of 21 million despite a major earthquake that killed more than dozens people in outlying areas. (Ran Peizong/Xinhua via AP)


BEIJING (AP) — The death toll in this week’s earthquake in western China has jumped to 74 with another 26 people still missing, the government reported Wednesday, as frustration rose with uncompromising COVID-19 lockdown measures that prevented residents from leaving their buildings after the shaking.

The 6.8 magnitude quake that struct just after noon Monday in Sichuan province caused extensive damage to homes in the Ganze Tibetan Autonomous Region and shook buildings in the provincial capital of Chengdu, whose 21 million citizens are under a strict COVID-19 lockdown.

Following the quake, police and health workers refused to allow anxious residents of apartment buildings out, adding to anger over the government’s strict “zero-COVID policy” mandating lockdowns, quarantines and other restrictions, even while the rest of the world has largely reopened.

Footage circulating online showed residents of the central city of Wuhan, where the pandemic is believed to have originated in late 2019, chanting “lift the lockdown, refuse to be tested” at police.

The restrictions have prompted protests online and in person, rare in China’s tightly controlled society where the all-powerful Communist Party can easily sentence people to months or years in prison on loosely defined charges such as “picking quarrels and provoking trouble.”

 

In this photo released by Xinhua News Agency, soldiers help villagers to evacuate from a damaged mountain road following an earthquake in Detuo Town of Luding County, southwest China's Sichuan Province on Sept. 6, 2022. 

 

In this photo released by Xinhua News Agency, rescuers transfer an injured resident through a damaged road following an earthquake in Ziyachang Village of Luding County, southwest China's Sichuan Province Tuesday, Sept. 6, 2022. \

In this photo released by Xinhua News Agency, rescuers transfer an injured resident through a damaged road following an earthquake in Ziyachang Village of Luding County, southwest China's Sichuan Province Tuesday, Sept. 6, 2022.

PHOTOS Wei Hong/Xinhua via AP

In all, 65 million Chinese in 33 cities, including seven provincial capitals, are currently under varying levels of lockdown. The government is also discouraging domestic travel during the Mid-Autumn Festival on Saturday and the weeklong National Holiday at the start of October.

Outbreaks have been reported in 103 cities, the highest since the early days of the pandemic in early 2020.

Monday’s quake was centered in a mountainous area of Luding county, which sits on the edge of the Tibetan Plateau roughly 200 kilometers (125 miles) from Chengdu, where tectonic plates grind up against each other.

China’s deadliest earthquake in recent years was a 7.9 magnitude quake in 2008 that killed nearly 90,000 people in Sichuan. The temblor devastated towns, schools and rural communities outside Chengdu, leading to a years-long effort to rebuild with more resistant materials.

In this photo released by Xinhua News Agency, rescuers using helicopter to transfer injured villagers following an earthquake in Detuo Town of Luding County, southwest China's Sichuan Province Tuesday, Sept. 6, 2022.

NATO FAILED NATION STATE BUILDING

Video of child refugee in Libya sheds light on rampant abuse
By SAMY MAGDY

today

Migrants line up outside a facility operated by the United Nation’s refugee agency, UNHCR, in Tripoli, Libya on Sept. 6, 2022. It’s one of the few safe places for migrants in the war-torn country. For years, powerful militias and traffickers have taken advantage of the desperation of migrants fleeing war and poverty and trying to reach Europe from Libya’s shores. (AP Photo)


CAIRO (AP) — Cowering in a bare corner, the 15-year-old boy begs for mercy and holds up his arms, trying to fend off the rifle pointed at his face. “Where is the money? Where is the money?” the holder of the rifle barks, over and over.

The unseen man pulls the trigger. “Click-click-click!” The magazine is empty, it seems. The man wants to scare him, and it works. The boy flinches with each click.

“Where is the money? Where is the money?” the man keeps shouting, swatting the boy on the head with the rifle muzzle. “I swear, I don’t have,” the boy cries.

The boy, Mazen Adam, a refugee in Libya from Sudan’s conflict-torn Darfur region, was kidnapped last week by unknown gunmen demanding ransom. Hours after the video depicting this scene spread on social media, the boy’s father was taken by gunmen from his home in western Libya.

Their saga is all too common in the chaotic, war-torn Mediterranean country, where powerful militias and traffickers have for years taken advantage of the desperation of migrants fleeing wars and poverty and trying to reach Europe. But the abuse is rarely caught on-camera, and the story of the boy and his father has raised concerns among regular Libyans and rights workers.

The video has underscored how abuses, torture, sexual violence and killings of migrants are rampant in Libya, where the European Union is using fragments of the broken-down state as an out-sourced policeman to block migrants from reaching its shores, trapping them there.

Libya has been in chaos since a NATO-backed uprising toppled and killed longtime dictator Moammar Gadhafi in 2011. The country has split into many factions, each supported by rogue militias and foreign governments.

Without a functioning government for most of the past decade, the country became a hub for migrants, with thousands coming in every year from Arab nations or sub-Saharan Africa, aiming to cross the Mediterranean to Europe.

A lucrative trafficking business has flourished and militias, most of which are on the government payroll, are involved at every stage. They sometimes receive payments from the smugglers who arrange the migrants’ journeys. Militias often kidnap migrants and torture them to extort money from them.

Militias are part of the official state forces tasked with intercepting migrants at sea, including in the coast guard. They also run state detention centers, where abuses of migrants are common. As a result, militias — some of them led by warlords the U.N. has sanctioned for abuses — benefit from millions in funds the European Union gives to Libya to stop the migrant flow to Europe.

U.N.-commissioned investigators said last year such practices may amount to crimes against humanity. The U.N.’s refugee agency has warned that Libya “isn’t a country of asylum, nor a place of safety.”

Fleeing Sudan’s Darfur, Mohamed Adam arrived in Libya with his four children in December 2017. A few months earlier, his wife died when their house was set on fire during a bout of tribal violence in Darfur.

Adam settled in Tripoli, waiting for the opportunity to reach Europe. He and his children were registered with the U.N. refugee agency, UNHCR, as asylum-seekers, according to a registration document shared with The Associated Press. Adam found work as a day laborer.

The AP spoke to Adam by phone. A few hours later, he was abducted by armed men in uniform, according to his 20-year-old daughter, Rehab Adam.

He described how in January, despite their recognized asylum-seeker status, the whole family was rounded up in a crackdown on migrants by Libyan authorities. They were held for over three months in a detention center in the town of Ain Zara, where guards abused them and burned their few belongings, he said.

They were released on April 25 after intervention by the UNHCR, he said. They then moved to Warshefana, a town on Tripoli’s southwestern outskirts where living expenses were cheaper.

The town is also home to militias that have been implicated in human trafficking, said Tarik Lamloum, a Libyan activist working with the Belaady Organization for Human Rights.

Mazen, the second oldest of the four siblings, worked also as a day laborer in farms and workshops to help the family survive. On Aug. 30, he left home in the morning for work as usual. But he did not return.

That afternoon, Adam received a call from another Sudanese woman in Libya, telling him that his son was likely kidnapped. The woman sent him the video of Mazen being abused, which she had seen on a WhatsApp group of Sudanese migrants. How the video made it there is unclear, but it’s highly likely that Mazen’s captors wanted it to reach his family to pressure them to send money. Migrants are regularly held for ransom inside Libya’s formal and informal detention centers, although they are usually told to contact family in a phone call.

In the video, Mazen’s captor demands 5,000 Libyan dinars, around $1,000, and tells the boy to call friends or family to get it.

“Is he still alive or dead?” his father, Adam said, speaking hours after the video emerged. “I don’t have the money to free him.”

In response to a request for comment, UNHCR said it was aware of the “distressing video … and is following up on it and in direct contact with the family.”

Lamloum, the activist, says the U.N. agency should have been able to do more to protect the family, whether providing them shelter or hurrying their resettlement abroad, arguing that Libyan authorities in practice don’t recognize the agency’s papers for asylum seekers.

The video was shared on social media by activists in Sudan and by other Libyans worried for the boy’s safety. A day after it appeared, three vehicles pulled in front of Adam’s house in Warshefana. Rehab said armed men got out and took her father away.

No group claimed responsibility for the child’s abduction nor his father’s detention. A spokesman for the Tripoli-based government did not answer phone calls or a message seeking comment.

Now Rehab and her younger sister and brother, 11-year-old Manasek and 9-year-old Mustafa, are at a U.N. refugee agency facility in Tripoli, waiting for news.

“We don’t know where our father and brother are,” she said. “God willing, we will reunite soon,” she said.