Mission Accomplished?

Three of these articles are about high home prices, and, more generally, the “housing bubble.” Notice that the fifth article talks about a decrease in prices in an area that is 36% overvalued.

I just had the privilege of buying a condo at a 50% premium, according to the same article I just linked here in San Luis Obispo. Sigh.

So, I guess I’m wondering two things (1) does this mean last week’s rate hike did what they wanted and are they over, and (2) how do I play this?


Lou once and again.

Claude Lemieux… Stephane Richer… Tommy Albelin… Vlad Malakhov… and now Alexander Mogilny. Once a Devil, likely a Devil again.

(There’s gotta be quite a few others here I’m forgetting.)

OK, I went OCD and came up with a few more:

Corey Schwab.
Pascal Rheaume
John Vanbiesracist (kind of)
Ken Sutton (why!?)
Chris Terreri
Kryzfxzdfsdf Oliwa

Larry Robinson (Coach)

I was a week early.

So, it took until today for the markets to take a shit. Wal-Mart says it’s not going to be able to meet its projection for Q3 because the cost of oil is reaching into people’s wallets, finally. And for some reason, the Fed went on a rate-hike rampage. The rumor is that it’s over, for now. But I doubt it, and here’s why.

Doug Henwood:

Long rates probably have more influence over the real economy than short rates; this is certainly true of the housing market. But lately Greenspan has been making it clear that he and his colleagues intend to keep tightening. Normal economic indicators wouldn’t normally support this policy bias; there’s plenty of slack in the job market, wages are flat, and aside from oil prices, inflation is quiescent. But it may be, public pronouncements to the contrary, that the Fed has finally decided to prick the housing bubble, tighten the belts of American consumers, and stop relying so heavily on borrowing abroad. If that’s their real intention, then Americans are in for a big surprise.

It’s a good of an excuse for this tightening as any I’ve read. It also makes a somewhat good policy choice in some ways. The means chosen to do it, though, are recession-inducing.

Once upon a time, in the immediate aftermath of the dot-com bubble, I advocated a brutal rate increase of >5%, because I felt the time had come to simply kill off all of the bad business models that had developped during that time; but once that happened, a stimulus-inducing, drastic drop should have occurred.

Instead, it tooks years for all of the hangover to shake out (and it’s not entirely out), including all of the Arthur Andersons, Enrons, Worldcoms, et al. And when the loosening came, it came just in time to spark off a massive increase in housing prices, which causes tons of its own policy challenges. Combine that with our Iraq-war induced spike in oil prices (why doesn’t the media admit this?)

NYMEX Light, sweet crude traded at just over $25/barrell in March of 2003, crossed the $30 line around the turn of 2004, flirted with $50 in fall ’04, dropped to $40, then never looked back on its way to god knows where.

Oil supply shocks. Devalued currency. Massive federal deficits. This is Republican economic policy.

UPDATE: Check out this AP piece.

Merrill-Lynch economists estimate that every penny-per-gallon increase at the pump drains about $1.5 billion out of consumers’ pockets. That means the increase in gasoline costs this year has reduced the amount consumers have to spend on other items by about $90 billion.

However, in a lucky break, that drag on consumer spending has been offset by continued low long-term interest rates, which have spurred homeowners to refinance their mortgages and use the savings to boost their consumption.

Officials at mortgage giant Freddie Mac estimate that the amount of cash homeowners will take out of their refinancings this year will total $162 billion, almost double the expected drain from higher energy costs.

“People are able to pull money out of their homes and put it into their gas tanks,” said Mark Zandi, chief economist at Economy.com. “So the overall effects on consumer spending have been small.”

That is critical since consumer spending accounts for two-thirds of total economic activity. Any serious cutback in spending because of the higher gasoline prices could quickly crimp overall economic growth.

I’m not sure this is supposed to be encouraging. 3.50% is still, I think, below the historical average (it’s harder that I expected to find data on that).

NHL Free Agency Update

I don’t think any of the recent signings will have big impacts in the W-L column for the teams involved. I don’t think John Leclair is going to do much–but he will age slower there than in Philly–and I don’t think Roman Hamrlik or Eric Lindros are going to be big difference makers for their respective teams. Some of these signings will impact ticket sales at least. If Pittsburg fans weren’t ready for a comeback, they should be now. Toronto probably won’t have any issues with selling tickets, but a Lindros cult won’t hurt.

I will be very interested to see some pre-season play, more than any other year. The reason? Simple. With so much time off, it will matter a lot for the first half of the season who’s in shape, who’s remained sharp and who hasn’t. Getting a glimpse at that will be more telling than usual.

I’m still curious about where Peter Bondra is headed.

US Sinks To 7-2-1 In Major Wars

When asked about the most recent defeat during a timeout with less than two minutes left in the third period with the score 5-0 Insugents, General Manager Bush said “It’s not over yet!” Assistant General Manager Cheney said from far above in the skybox that the other team was “in their last throes” perhaps thinking that they were tired near the end of the game from wars over the previous three millenia.

The US team has gone 1-1-0 in major wars since it decided to acquire all of its talent through free agency and foresake the draft used by the rest of the league. But free agency taketh away as it giveth–recently Colin Powell signed a deal with the Lecture Circuit All-Stars after he left the US team in disgust when it abandoned his patented offensive system.

The head coaches of the US team have been mired in a torture abuse scandal worse than any Mike Keenan meets rookie camp yarn spun in the last two decades. It has undermined their authority with the players, who have been put on the ice for shifts far in excess of the normal.

“The team doesn’t even provide the padding” one US player complained, “my mother had to send it to me–with as many shots as I face in a period, I simply cannot go without.” The US team was unable to meet its supply needs after it was gouged by sports apparel maker Halliburton in a recent contract.

“Sometimes,” one player who wished to remain anonymous said, “I don’t think this team is about winning the Cup anymore, I think it’s about making the management rich.”

Despite the dropping record, the season ticket holders have refused to clamour for a new front office team.

UPDATE: The U.S. is 1-2-1 in the last 60 years. The US is 4-0-1 under Democrats and 2-2-0 under Republicans. “Republican GMs are great for exhibitions,” one scout said, “but only Democrats have had the ability to win in the playoffs.”

What Hockey Can Learn From Karl Rove

No, I don’t mean to go sit in the penalty box. What I mean is how did Bush win two elections? Simple. He made his people (though there were less) care so much more that they were a de facto majority. He made his base care about politics more than the other side.

If hockey wants to comeback strong, it needs to mobilize its base. That means it needs to play its strengths as a fast, physical exciting game, not as a substitute for other sports. Get the people who remain interested everything else notwithstanding to open their wallets first. Then we can work on growing.