As a nation we are all standing around the RE bomb that just exploded, gawking
at the flash. The deafening noise, shrapnel, and blood will come later.
Anon
Monday, May 15, 2006 10:02:14 PM
May 16, 2006
A brilliant post by an anon HP'er yesterday
Anon
Monday, May 15, 2006 10:02:14 PM
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8 comments:
Yeah.... the shrapnel,blood and pain will come later but most of the people who frequent this site will catch a lot less of it if they've been paying attention over the last 18 months! I like to think of myself as an outer ring kind of guy!
Core producer prices tame, Housing Starts Drop
By Tim Ahmann
53 minutes ago
WASHINGTON (Reuters) - U.S. producer prices, outside of energy costs, barely budged last month while housing starts dropped, according to government reports on Tuesday that helped soothe worries over inflation.
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The Labor Department said overall producer prices rose a steep 0.9 percent in April, but that prices outside of the volatile food and energy areas rose just 0.1 percent for the second consecutive month.
Separately, the Commerce Department said housing starts fell 7.4 percent in April to a 1.849 million unit annual pace. It was the third straight monthly drop and took starts to their lowest level since November 2004.
Financial markets had expected the closely watched core producer price index, which excludes food and energy, to rise a steeper 0.2 percent and had expected housing starts to slow to just a 1.95 million unit rate.
Prices for U.S. government bonds rose, as did stock futures, while the dollar slipped as traders saw the report as diminishing the odds of further interest-rate hikes from the Federal Reserve.
"Both these numbers reinforce the view that the Federal Reserve can take a conditional pause in June," said Alex Beuzelin, a foreign exchange market analyst at Ruesch International in Washington.
The April gain in the overall producer price index, a gauge of prices received by farms, factories and refineries, was the largest since September.
It reflected a steep 4 percent rise in energy prices, the biggest rise since October and one that underscored the persistent price pressures stemming from lofty oil prices.
However, the mild gain in the so-called core index -- the second consecutive monthly rise of just 0.1 percent -- should allay inflation concerns and will be seen as welcome news at the Federal Reserve.
Over the past 12 months, energy prices at the producer level have soared 18 percent, a large factor behind the relatively steep 4 percent rise in overall producer prices.
But core prices are up just 1.5 percent over that period, marking a deceleration from the 1.7 percent gain posted in the 12 months through March -- welcome salve for financial markets that had become jittery about inflation.
"The big story is that people can relax a bit," said Christopher Low, chief economist at FTN Financial in New York.
HOUSING COOLING
In its report on housing starts -- the latest sign of a cooling in the long U.S. housing boom -- the Commerce Department said groundbreaking for both single-family and multifamily homes fell.
Construction of single-family homes fell 5.6 percent to a 1.54 million unit pace, the third straight monthly decline. Groundbreaking on multifamily units tumbled 15.1 percent, reversing course after March's 15.6 percent jump.
Permits for future groundbreaking, an indicator of builder confidence, dropped 5.4 percent in April to a 1.98 million unit pace. That was the biggest decline in nearly two years and brought permits to their lowest since February 2004.
Housing starts fell 16 percent in the U.S. South and 9.7 percent in the West, but climbed 16.3 percent in the Midwest and 9.1 percent in the Northeast.
Economists and Fed officials say a cooler housing market is needed to ensure the U.S. economy does not overheat.
The U.S. central bank raised benchmark overnight interest rates by a quarter-percentage point last week for the 16th straight time, taking them to 5 percent, and said it may need to push rates even higher to address inflation risks.
In a separate report, the International Council of Shopping Centers and UBS Securities LLC said U.S. chain store sales were unchanged in the week ended May 13 as spending ahead of Mother's Day offset cool, wet weather and rising gasoline prices
0.9 percent in April, but that prices outside of the volatile food and energy areas rose just 0.1
More bullshit from a bullshit administration. food is off the wall, as well as just about everthing else. But they say life is grand!! REFI ENJOY THE FRUITS OF LIFE !!!
After you strip all the life needing necessities such as food and energy, why have a CPI at all. Never mind housing we all know that is dead in the water.
The CPI was rigged, er changed by the Clinton Admin during the 90's. CPI pre-Clinton has been around 5-6%.
hey, instead of Fox news, they should calll it Faux news.
This "outside of food and energy prices" business has to stop.
The original theory was that food and energy fluctuations had a much higher *variance* than the other core inflation components and therefore taking them out got a better statistical read on the underlying state.
But now, the fact is that food and energy (they are both energy, either for humans or machines!) increases have a much higher MEAN. Over a whole year the difference is large, and increasing.
So, in reality energy and food are getting more expensive because of inflation (monetary) and peak oil (physical reality), and they will become ever larger parts of people's costs.
I predict that in 30-40 years younger people will be surprised to learn that "back in the 2000's" housing costs were 50% of people's monthly budget, instead of energy costs.
We can see this in plenty of places already, mostly slums and throughout Africa. Housing (though it may be barely a shack) is cheap, but just basic food and cooking fuel---whether wood or gas---and motor fuel---are stupendously expensive for their incomes.
That's the future. People will be packed into large, unheated and uncooled, and newly subdivided McMansions. The 20 or 30 residents will marvel at the faded luxury, and the children will ask, "Mommy, is it true that back then just one family lived in the whole place?"
The same thing happened in Russia after the revolution. They packed many into the beautiful and large apartments of the upper middle class and aristocracy.
Another thing to consider: the lifestyle then of the upper-middle class in terms of quality and size of apartements in a city is much better than the equivalent today. Their apartment sizes and quality are what the really rich today can afford.
I was just reading a fact that in zimbabwe inflation is up to %1000 and they pay 100,000 zimbabwe dollars for a roll of toilet paper. no bull shit
that would be $125 U$
Everybody sing along (the orifional song was "ten cents")
Shave and a haircut, ten bucks...
oops, that is already too cheap!
But inflation is sooooo looooow.
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