Author Archive
House Prices: It’s Always Darkest Before Dawn?
Housing prices have just set another record year-over-year decline: They fell 15.9 percent from June 2007 to June 2008. Ah, but never fear! The monthly fall (from May to June) was only 0.5 percent, which is the lowest monthly drop since July 2007. Because of this last fact, the headlines read, “House Prices Show Signs […]
Read moreFisher Says 50-50 Chance of High Inflation
Perhaps the most sensible voting member, Dallas Fed President Fisher thinks there is a 50-50 chance our recent inflation spike is a “one-off” event: “The real concern I have as a central banker is whether or not [inflation] begins to affect the mentality of spending patterns by consumers [and] pricing patterns by producers,” Fisher told […]
Read moreDavid Friedman on House Prices
My previous post on oil and stock prices naturally leads to the in-between case of houses, which provide immediate services and are a durable asset. Thus, when house prices go down, it’s not as obvious whether this is a good or a bad thing (as opposed to the cases of oil and shares of stock). […]
Read moreWhy Do We Want Low Oil But High Stock Prices?
The short answer is that (usually) oil is quickly consumed while corporate stocks are pure assets. When the price of oil drops, it allows people to consume more oil and get more benefits from it–they can drive more, produce more oil-based products, etc. In contrast, if the price of Fannie Mae drops 10%, nobody says, […]
Read moreNobel Laureates Endorse Marxism
My title is a bit of an exaggeration. (Isn’t it?) Monday’s WSJ has an article, “Nobel Laureates Say Globalization’s Winners Should Aid Poor” (sub req’d). The more I read of this article, the more grateful I became that I was never awarded the (pseudo-)Nobel Prize in economics. The entire premise of the article is that […]
Read moreI Have a T-Bone to Pick…
Over at Crash Landing (the “2nd best blog in the world,” according to one noted economist) I criticized the Pickens Plan for its awful economic analysis. (Note that I am heeding the conservationists’ pleas and have thus recycled my incredibly cheesy post title.) Pickens says: As imports grow and world prices rise, the amount of […]
Read moreA Classical Mechanics Question to Break Up the Monotony
A quick puzzle before plunging back into the dreary financial news… So I’m sitting in the left turn lane, the first car in line waiting on the turn signal. A school bus is turning left, coming from my right; i.e. it is making its turn in front of me. At first the driver is cutting […]
Read moreAnonymous Surveys Worse than Free Advice
“The U.S. economy may have avoided a recession but will grow below trend for some time as firms face higher prices for a range of goods that will cut into profits, according to a panel of economists surveyed,” we learn in a CNBC article this morning. As Nassim Taleb demonstrates in his book The Black […]
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