- Thousands of people thronged to the renovated Detroit Institute of Arts when it reopened on Thanksgiving weekend, offering 32 hours of free admission.
- Two new casinos opened this fall, creating thousands of jobs...
- Some of the casino's patrons include Detroit's homeless. They used to buy food with the nickels and dimes they received for collecting returnable beverage containers...
- More jobs will arrive when Quicken Loans, a mortgage company, chooses the site downtown where it will move 4,000 employees...
- "If there's a bad economy, the Book Cadillac doesn't know about it."
I live in the USA and I am concerned about the future. I created this blog to share my thoughts on the economy and anything else that might catch my attention.
Wednesday, December 19, 2007
Signs of Hope in Detriot
Amid layoffs in its lifeblood sector, signs of hope in Detroit
Stag,
ReplyDeleteI was born in Trenton, NJ. Thanks for bringing back the memories.
Pass the hemlock please.
MAB,
ReplyDeletePass the hemlock please.
I'm fairly certain I could supply you with as much hemlock as you require. Absolutely free! (You simply need to pay for shipping and a "modest" handling fee).
http://en.wikipedia.org/wiki/Tsuga
Western Hemlock Tsuga heterophylla is the largest species, reaching heights of 70 m. It is a particularly common timber tree in the Pacific Northwest of North America and is the state tree of Washington.
Think Socrates and conium.
ReplyDeleteMAB,
ReplyDeleteI cannot accept Roman currency these days. I require something backed by the full faith of the US Government.
Sorry!
*nervously playing a fiddle while watching this play out*
I have lived in SE Mich all my life.
ReplyDelete"Signs of hope in Detroit" is an annual headline.
There are still shells of buildings on Woodward from the 1967 riots.
The more things change............
Triple Play,
ReplyDeleteSame thing in Trenton. First they called it gentrificatiion. Then re-gentrification.
I call it the "magic buzz word syndrome."
I am a marketer's worst nightmare though. To me "certified pre-owned" is still a "used car".
Stag,
ReplyDeleteWrong hemlock. Conium maculatum aka poison hemlock. Native to Europe and Mediterranean.
Poisonous plant used by the Greeks to commit suicide and murder. SO TRAGIC.
Socrates bought the farm with this stuff.
MAB:
ReplyDeleteIt is sad about Detroit since I grew up there. The single mother birth rate in the city is currently 80%.
However, there is a lot of old money here. I live in Oakland county which is the 5th or 6th richest county in the nation. It is also a nice area weatherwise for about 8 months.
Airplanes and warm condo's are available the remainder of the year.
Tripleplay,
ReplyDelete"Signs of hope in Detroit" is an annual headline.
I figured as much while reading the article. The article read more like gallows humor than a reason to be optimistic.
MAB,
I call it the "magic buzz word syndrome."
Web Economy Bullshit Generator
http://dack.com/web/bullshit.html
monetize mission-critical markets
Re: inflation graph - which inflation number are you using? "Core C.P.I." or "CPI-U"?
ReplyDeleteIn 1980 spike, food and energy were still included. These items were deleted from the "core" index during the Clinton administration. Furthermore, all income taxes are specifically excluded. Property taxes are included only as they affect rate of change in total housing expense (excluding energy).
Apples to apples, and all that.
Smart money says we are actually running at 10% inflation and rising. We're being fed this 4% pap because the gub'mint wants us sheeples happy for the election.
Don't believe the numbers if they disagree with your gut.
zapoteca,
ReplyDeleteThanks for your comment.
I'm using the CPI-U. Food and energy are included.
In 1980 spike, food and energy were still included. These items were deleted from the "core" index during the Clinton administration.
http://www.newyorkfed.org/research/staff_reports/sr236.pdf
The more familiar core inflation measure as aggregate price growth excluding food and energy appears to have first been analyzed in a systematic fashion in a 1975 paper by Robert Gordon (Gordon, 1975b). Gordon was investigating the relative importance of demand and cost factors in U.S. inflation. His aggregate (p. 620) “‘core’ price equation” was estimated for final sales prices excluding food and energy.5 Given that movements in food and energy prices, especially in the early 1970s, often reflected developments outside of the evolution of domestic U.S. demand and supply factors, this measure was useful for his analysis. The name “core inflation” began to be attached to price measures excluding food and energy, perhaps reflecting its rough similarity to Eckstein’s measure, as well as Gordon’s usage of the word. In 1978, the Bureau of Labor Statistics began to report monthly growth of both the Consumer Price Index (CPI) and the Producer Price Index (PPI) excluding food and energy.
Core inflation is/was simply used for predictive purposes. It is/was intended to remove temporary supply shocks as a basis for setting monetary policy. I would argue that the "temporary" supply shocks are not so temporary these days. The Fed acknowledges as much in that very same paper.
However, no core measure does an outstanding job forecasting CPI inflation.
While you fear present inflation it seems, I fear future inflation for the most part.
For example, I track every single penny I spend. My personal inflation rate is far lower than 10% or I'd have been broke a long time ago. It is not the current rate of inflation that concerns me much.
For the most part the current inflation numbers do agree with my gut. Many items are inflating but there are also many items that are not inflating, at least as it relates to my own personal finances (the situtation could clearly be different for those who drive a lot and/or are renters looking to buy their first home).
Don't ask me how QFC does it, but we just bought 60 cans of Coca Cola products for $10 on sale. That's 16.6 cents per can. That's the same price I paid (on sale) when I first moved to the Seattle area 20 years ago. I know because each dollar back then really meant a lot to me. Six cans for a dollar was the cheapest it ever got and that price is permanently etched into my brain. I was driving a Hyundai at the time and looking for my first semi-permanent job (career).
That being said, I do think you are wise to fear inflation long-term. The following has become my favorite quote (which describes both of us perhaps).
Paranoia will get you through times of no enemies better than enemies will get you through times of no paranoia. - Pete Granger
Inflation is our enemy and has been lying dormant for several decades. I do not believe that inflation is dead though and fear that it will someday rise again (as it has been doing, slowly, steadily, stubbornly, and seemingly relentlessly). If we are wrong to fear it, we shall get through a time of no enemies just fine. If we are right to be paranoid, then heaven help those who aren't paranoid. The inflation monster will eat its fill.
Stag,
ReplyDeleteThe past is history. (yogi bera i believe)
An asymetrical fiscal and monetary response to the housing & credit busts is what makes me worry about future inflation.
The notion that asset prices must never decrease is what will do us in. To me, if the fed can't accept falling asset prices then they should attempt to slow irrational rises.
But how do you know the rise is irrational asks Greenspan?? Historical trends are a good start. Ability to pay principal and interest would be another. Plus, this logic should apply to falling assets as well.
I wonder if the fed was trying to keep the "nifty fifty" elevated in the early 1970's.
I wonder if the fed was trying to keep the "nifty fifty" elevated in the early 1970's.
ReplyDeleteI've often had a very similar thought about the 1970s. For the love of all that is holy, just keep the market flat for a decade and pray things get better.
By comparison, one might argue we've only recently managed to get back to flat after the dotcom bust, depending on what index you look at.
http://finance.yahoo.com/q/bc?s=%5EGSPC&t=my&l=on&z=m&q=l&c=
Of course, flat is actually a decline when adjusted for inflation. Should you compare to oil, that flat chart starts looking a bit more like a cliff (just like the 1970s of course). The worst inflation of the 1970s happened at the end. Since we don't yet have a Volcker ready to squeeze the life out of inflation, I'm not confident we are near the end yet. Just having a seriously nasty housing bust isn't good enough to squash rising inflation, if 1974 is any indicator.
The Housing Bubble
http://www.mises.org/freemarket_detail.aspx?control=450
No one mentions 1973–1975 or 1989–1993, even though housing prices took a beating over these periods. Many may find it hard to believe that one’s home could take a 25-percent hit in value.
I also think that many find it hard to believe that a 25-percent hit in home price value could (operative word being could, not will be) be followed up with much higher than normal inflation.
Temporary deflation/disinflation perhaps. Temporary investments aren't going to pay my bills in five years though if I don't start thinking about long-term inflation before the next guy does (assuming I am right to be thinking in long-term stagflationary terms that is).