All Things in Moderation

Vital Statistics:

Housing starts were better than expected at 685k, which more or less matches the post-recession high of 687k. Trouble is, a normal number is closer to 1500, and these “highs” are lower than the troughs in the last 8 recessions. So, yes it shows that housing is maybe, conceivably, hopefully picking itself up off the mat, but we are still in a deep freeze.

Joe Nocera is back on the revisionist history beat with an editorial claiming that Fannie and Fred didn’t have a role in the crisis. I propose that all liberal columnists who write columns defending Fannie address the American Dream Commitment, which was a $ 2 trillion piece of social engineering policy that has been thoroughly swept under the rug. Just because the media refuses to address it doesn’t mean it didn’t exist.

Filed under: Uncategorized | 39 Comments »

Somebody else is trying to do the Bad Lip Reading thing. This is their take on Rick Perry’s “Strong” Ad.

Filed under: Uncategorized | 34 Comments »

Kind of late, I think. But Jeb Bush is saying some conservative stuff in a campaign-y way. Either he’s testing the waters, or he’s trying to give the candidates currently in the running a little advice on how to try and sound.

We have to make it easier for people to do the things that allow them to rise. We have to let them compete. We need to let people fight for business. We need to let people take risks. We need to let people fail. We need to let people suffer the consequences of bad decisions. And we need to let people enjoy the fruits of good decisions, even good luck.

Filed under: Uncategorized | 25 Comments »

Still not sure how that’s accomplished, but I love the whole gastronomical engineering movement, and hope it continues to expand.

Filed under: Uncategorized | 1 Comment »

This 2006 paper claimed that American manufacturing retained its world lead and 20%+ of global manufacturing from c. 1980 to 2005.  It claimed job loss in the sector was entirely due to mechanization.


Cited within the paper is a Fed Reserve of Cleveland abstract, but its conclusions differ.

http://www.clevelandfed.org/Research/Commentary/2006/0101.pdf

I would like to see the data broken out between defense and non-defense manufacturing output.  An analysis, over time, of the portion of output generated by S&P 500 and non-S&P 500 companies might show concentrations in manufacturing, like the trend in agribusiness away from the diminishing family farm component.


Some of you have access to, and often deal with, data that would tend to confirm or deny the premise of the 2006 paper.  Your thoughts are welcome.
*****************************
NoVAH, what do you think of the passing off of the minimum standards for coverage under ACA to the states?  Upside?  Downside?

Filed under: Uncategorized | 9 Comments »

Vital Statistics:

The next two weeks are going to be slow for the markets. In spite of the improving economy, it has been a dour holiday season so far. Banks are announcing another round of job cuts, and those who are lucky enough to keep their jobs will see their bonuses cut in half. Bloomberg is reporting that Royal Bank of Scotland is contemplating exiting the equities business. This is in addition to job cuts being announced by Citi and Morgan Stanley.

Paul Krugman is discussing what will probably be the next financial headache in this morning’s NYT – the bursting of the Chinese real estate bubble. While Western banks don’t have a lot of direct exposure to Chinese banks, they do have a lot of exposure to Hong Kong banks, specifically HSBC (aka Hong Kong Shanghai Banking Corp) and Standard Chartered. Krugman’s main worry is a collapse in demand and the fact that a weakened global economy cannot take the strain of a Chinese collapse.

Kim Jong-Il has died, and his 28 year old son is taking over. Market moving? Not really, unless you are long the Won. We have a deal on the extension of the payroll tax cut. Wait, we don’t? Again, market moving? Not really. No one cares anymore. Prince Alwaleed has bought himself some Twitter.

Filed under: Uncategorized | 24 Comments »

I’m a big fan of the two shows This American Life did with Pro Publica regarding the Giant Pit of Money. Shoving interest rates down for so long meant that bond yields were nada. A historically unprecedented amount of money went looking for higher returns. Match that with poorly doc’d CDOs and you’ve got a setup for the biggest balloon since the tulips.

I was out purchasing in 2005 and deeply frustrated by competing in that market. I feel sorry for many, but I also got screwed in a different way. All that easy money meant that I had to pay a lot more for a house than in a reasonable market. We put down a bit over 10% and have a 15 year fixed mortgage. Even given a decline in values (we’re probably down about 10% in Alexandria, VA), we have solid equity in our home.

Personally, I’m in favor of terminating the mortgage interest deduction. I doubt that it’s done much for its purported aim, increasing home ownership. If you look at ownership rates internationally (I’m not on the SCOTUS, so I’m allowed to do this), you’ll some interesting results.

Australia – 69%
UK – 69%
US – 68%
Canada – 67%
NZ – 65%

Take a look at my not so random selection. Home ownership rates are comparable in the UK and English speaking former colonies. The desire for home ownership is a cultural matter, independent of a mortgage interest deduction.

But wait! One argues that it makes home ownership more affordable. No it doesn’t. Historically, the calculation has been based on income. If the government subsidizes mortgage payments, then housing prices will simply rise to compensate.

As an interim measure, I would suggest a housing tax credit of up to 20% with a limit of the median price of a home multiplied by the average interest rate . No second homes either. Sunset it by 1% per year until the damn thing disappears around 2030.

BB

Filed under: Uncategorized | 60 Comments »

Gotta a migraine. This is gonna be short.

Dec. 3rd was the 19th Anniversary of the first cell phone text message.

The floor is yours.

— KW

Filed under: Uncategorized | 10 Comments »

Christopher Hitchens is dead. Hitch was a very smart man, a great writer, and a bit of an enigma. He will be missed on all parts of the political spectrum, I suspect.

Back in 2005 I had my own brief “brush with greatness” with him. I was living in England, and had started my own blog, The American Expatriate, which was dedicated largely to critiquing the British media’s coverage of America. I had written a brief post about a debate on Iraq that Hitchens had with George Galloway (a truly loathsome MP who had had his own run-in with the US Congress over the oil-for-food program.) Anyway, unbeknownst to me, a radio personality in the UK named Charlie Wolf had become a bit of a fan of my blog, and when he saw my blog post he contacted me to appear on his radio show to comment on the debate, which I did. Unfortunately, my appearance was cut short when Wolf’s producer managed to get Hitchens himself on the phone in the middle of my comments.

So Hitchens managed to pre-empt my first and only radio appearance. At least he was kind enough not to remark about the bumbling, stuttering clown who preceded him on the show, for which I have forever been grateful.
————————————————————
QB referenced a New Yorker piece on Hitchens in a more recent thread and while I’m not sure if I found what he was referencing, here are a couple of pieces on Hitchens from The New Yorker:

A 2006 piece on Hitchens’ support for the Iraq War.

A Postscript by Christopher Buckley that I really enjoyed.

And for those who, like myself, aren’t particularly familiar with Hitchens, here is a list (with descriptions) of some of his work.

–Ashot—

Filed under: Uncategorized | 6 Comments »

Vital Statistics:

It is Triple Witching Day, and the folks on business TV are excited. I have never understood why – I don’t think options expiry days are any more volatile than non-option expiry days. As an aside, am I the only one irritated by the CNBC / Bloomberg TV insistence on calling it Quadruple Witching Day (to include the expiry of single stock futures)? Does anybody trade single stock futures? Quadruple Witching just sounds more dramatic than Triple Witching.

The consumer price index was released this morning, and it shows that inflation is still behaving. The low inflation numbers were primarily attributed to a drop in the price of energy, as gasoline bounces around close to support and natural gas cannot get out of its own way.

As we close in on the holidays, the markets are only going to become more boring. Zynga priced last night at the top of its range at $10 a share. It is set to begin trading around 11:00 am.

Filed under: Uncategorized | 57 Comments »