August 25, 2005
Housing boom is an imbalance: Greenspan
He has been consistent in his judgment that there is no national housing bubble.
October 25, 2005
Bernanke: There's No Housing Bubble to Go Bust
Fed Nominee Has Said 'Cooling' Won't Hurt
June 24, 2008
US home prices tumble in April at record rate
"I think that's the most disturbing part of the report," said Mark Zandi, chief economist for Moody's Economy.com. "It shows the declines are now across all markets, that this is a nationwide housing collapse rather than one in a few markets."
Okay, maybe you can fight the Fed. They don't quite seem to know what to do or say. They have clearly lost some credibility on both the slowing growth front and the inflation expectations front.
About one in four homes sales are distressed sales, Zandi estimated, with that number rising sharply in the once red-hot housing market like Las Vegas, Phoenix and Southern California.
The Fed is trapped within the wet paper helicopter Piñata and there you are holding a baseball bat. Take another swing. Candy (stimulus money) keeps falling out every time you do. Hurray!
An industry group Tuesday said U.S. consumer confidence plummeted more sharply than expected in June to it lowest level in more than 16 years. The Conference Board's reading of consumers' expectations hit an all-time low.
Seriously. The Fed doesn't even seem to have a dull butter knife to cut its way out of the bag it's in.
I'm just as nervous about all the for sale/rent signs I see popping-up in the light-industrial "neighborhoods" around the concrete tilt-up office space where I work. All that formerly occupied commercial space means quite a few somebodies lost their jobs. But all I hear on the MSM goes something like the cop at crime scene "nothing to see here, move along, move along".
ReplyDeleteI don't know why consumer confidence should be so low,--don't they believe what the government numbers are telling them? Don't they believe that the 2nd half rebound is almost here?
ReplyDeleteMaybe we should let 'em take a few more whacks at the pinata--that'll cheer them up.
kwark,
ReplyDeleteAll that formerly occupied commercial space means quite a few somebodies lost their jobs.
Please disperse!
But all I hear on the MSM goes something like the cop at crime scene "nothing to see here, move along, move along".
Your analogy sure works for me.
David,
ReplyDeleteMaybe we should let 'em take a few more whacks at the pinata--that'll cheer them up.
If the pinata whacking doesn't work the circus has plenty of other games to be played.
Pin the blame on the _______!
(donkeys, speculators, China, Congress, Bush, Greenspan, Bernanke, banks, greed, "sure things", ...)
Bobbing for apple returns!
Farmers' high returns won't last, expert says
http://wenatcheeworld.com/apps/pbcs.dll/article?AID=/20080620/NEWS04/633291315
WENATCHEE — Growers of tree fruit, grains and other plant crops probably will enjoy high prices for another year but prices eventually will fall and costs probably won't, warns an agricultural economist.
This could very well happen. In the short-term, I'm actually not all that much of a stagflationist these days. It is the long-term that concerns me most.
The situation is very similar to the U.S-Russian grain deal of the 1970s that caused prices to boom and then bust, he said.
There's that 1970s word again. Part of me wants to hoard essentials since there is little harm in doing so. The other part of me doesn't want to buy gold and silver at the current prices though.
I'm looking at the grocery store flyers. Safeway is selling lean ground beef for $1.29 a pound this week even as oil hits $130+. Albertsons is is selling Oscar Meyer beef franks for $1.87 and a variety of other things we'll be stocking up on yet again.
Something seems seriously wrong in the pricing power game.
That being said, an Albertsons in nearby Issaquah closed fairly recently. It seems the local Fred Meyer won that economic war.
Maybe you've heard this, and I don't know if it really is the cause, but one explanation for low meat prices has been that high feed prices is causing ranchers to cull their herds, creating a bit of short-term surplus in the market.
ReplyDeleteI guess that consumers are not snapping up and hoarding meat shows inflation expectations are still contained.
Or it could be consumers are worried they'll soon be losing their house and have no freezer to store 50lbs of ground chuck and hot dogs.
ReplyDeleteAllanF,
ReplyDeleteMaybe you've heard this, and I don't know if it really is the cause, but one explanation for low meat prices has been that high feed prices is causing ranchers to cull their herds, creating a bit of short-term surplus in the market.
Yeah, I've read that as well. It seems likely. Look at sugar though. You'd think with $130+ oil people might be tempted to hoard sugar. The U.S. raw sugar price as seen in Table 10 of the following USDA report shows that does not appear to be the case.
http://usda.mannlib.cornell.edu/usda/current/SSS/SSS-05-27-2008.pdf
There was a parabolic spike in 2006 but has since backed off. It does not scream hyperinflation to me, at least using the rear view mirror.
Here's a chart of that data.
http://futures.tradingcharts.com/chart/SU/M
I think this is reflected in the sale price of Jello at Albertsons. Had you bought sugar in 2000 as a hedge against future inflation you wouldn't be doing all that well right now. Things sure are complicated.
Sugar prices an example of commodity gone sour
http://www.iht.com/articles/2006/09/17/bloomberg/bxsugar.php
Sugar more than doubled in the eight months leading to March, when Andreas Meyer, who helps run Merit Alternative Investments in Vienna, and Michael Coleman, a hedge fund manager in Singapore, predicted the rally would accelerate.
Instead prices dropped 24 percent after Brazil and India produced bumper crops and demand for sugar's use in alternative fuels decreased.
Meyer, who said then sugar would beat stocks and bonds, now says the declines may extend through the rest of the year. Coleman says his assumptions "have proved wrong."
I think sugar will do well in the future but it certainly has me questioning my stagflationary assumptions. Nothing is easy.
Stag,
ReplyDeletehttp://finance.yahoo.com/echarts?s=XLF#symbol=XLF;range=my
Are these banks worth more today than they were ten years ago?
I think reality is fighting the fed.
MAB,
ReplyDeleteOne of my teachers did me a huge favor in high school. We played the stock market on paper.
Are these banks worth more today than they were ten years ago?
That's exactly what I was thinking in 1982! I did invest in the credit card banks (chase and citigroup) several times later in life and they did very well for me. I never forgot the lost decade of the 1970s though.
Most of my immediate family was involved in the banking industry. In the late 1990s I remember telling my sister that I'd rather invest in the bank than put my money in the bank. Lately (as of 2004), I'm doing neither. For right or wrong, I've cut out the middle man and gone directly with government TIPS.