The Housing Bubble

They use something called the Fisher Index (aka chain-weighted) methodology to try to properly account for substitution over time into cheaper goods of comparable quality.

But my question was on something more basic: If a good is sold on a special offer at a discount , does the discounted or the “regular” price enter the CPI calculation?

Every time I buy something at Lowe’s, I get a receipt coupon for $10 off $50 purchase, a 20% discount. Even a $10 pack of AA batteries comes with one of these. I try to accumulate purchases to make up $50. I’m seeing more of this type of offer from other stores as well. Is this a way for the store to play accounting games rather than just have extensive sales?

Maybe I’m just grump-tacular this morning, but I think the BLS just decides what it wants the statistic to indicate then back figures how to get to that result. You know, they want a CPI target of 3% and think the masses will swallow that and it will keep the old people happy. So they figure out what nonsensical yet plausible manner by which to convince enough people the number means something without too many media inquiries.

For example, the price of computers used in the index has been dropping for years because the BLS figures if you buy a computer that has twice the processing power for the same price as last years’ computers, you got it at 50% discount.

Never mind the whole reason you bought a faster computer is so you could run a bloated version of the same word processing software.

Speaking of deflation, was at Kohl’s this morning buying Mini-Chile some fall duds. Didn’t pay more than $2.00 for a single item, most were 90% off during the “Power Hour Sale”. I can’t figure out who would spend $16.00 for a pair of jeans for a 6-month old boy. But at $1.60 (and I had a 15% off coupon on top of that, making it $1.36), I figure he needs a pair of jeans. Daddy also got a mean Led Zepplin t-shirt for $3.24.

The only way I can think it would enter in (unless they have some magic formula) is if, when they check the prices of the standard items they follow, they would enter any sale price on those items as the current price. But I don’t know how they follow the prices, since different stores have the same items at different prices, and some stores will match competitor’s prices, double coupons on some days, etc ad absurdum.

Speaking of deflation ??

In classic cars also….I am at “Hot August Nights” in Reno Nevada right now…I went to the auction yesterday…Generally speaking the cars that are selling (mostly without reserve) are @ 60 cents on the dollar vs. the last couple of years…I am going again today…

Generally speaking the cars that are selling (mostly without reserve) are @ 60 cents on the dollar vs. the last couple of years…I am going again today…

I’m hoping to see that deflation in vintage guitars and basses soon. Sales are soft and prices are down somewhat, but — like housing — the discounts have in no way approached the absurd level of run-up over the past decade.

scdave,

I bought a Porsche 911 Turbo (2002) just recently for about a 40% discount over 2007 pricing. Been having a blast and don’t feel like I spent an absurd amount on a car.

“I’m hoping to see that deflation in vintage guitars and basses soon.”

Ditto on the violin / bow front. Don’t know whether you see this in the guitar arena, but one trend I have noticed in recent years, with the absurd inflation of older, highly sought fine quality violin prices, is the incursion of a new generation of high quality violin makers, filling a large product niche supplying highly capable musicians with little bank. But the next five or so years may be a good time for long-term buy-and-hold violin investors to afford an instrument of much higher quality for what the same money would have bought circa credit bubble peak (~ 2005).

… is the incursion of a new generation of high quality violin makers, filling a large product niche supplying highly capable musicians with little bank.

A similar trend occurred in the guitar world, with lots of boutique makers springing up with all sorts of high-quality products — not just instruments, but effects pedals and tube amps, too, often based on relatively rare but sought-after vintage designs. There could be a glut of these goods on the market soon, as the HELOC money for such pricey niche items has long since blown away.

I’m surprised at the quality of some of the budget violins these days. I picked up on eBay a “Stringworks” artist violin set from a guy who developed arthritis for something stupid like $350 and it’s far superior to the cheap fiddles of years gone by.

Maybe someday I’ll have the funds to take some lessons.

I took ‘cello in college but found 1) my hands are really small for a guy and 2) being left-handed my left hand is the weaker of the two. I’m probably better off with the violin.

I’m in the market for a nice guitar. I prefer the gibsons- especially the ES335 type. Don’t mind the les paul standard either. Anybody have any idea where one can get a good used ES335?

Also I’m thinking about the concours as a crossover motorcycle. Anybody hear any bad reps on this bike?

Thanks

I’m still hoping to happen upon a CF Martin acoustic at a garage sale for $50 because the seller has no idea what it is. But, being realistic, I’ll settle for a 70’s era Gibson Hummingbird at a good price. I’d also like a vintage Les Paul, though the prices are quite revolting at this time.

I forgot to mention in my post above, but several of the Trader Joe’s brands taste better than the StarMucks, including their french roast, which is the variety of StarMucks I tried. I suspect the StarMucks brand survives because of people who are brainwashed by watching teevee commercials (I don’t watch teevee).

I am assuming you already know “Seattle’s Best” is owned by SBUX.

FYI Peet’s is qualitatively superior to just about every other coffee out there, Tully’s is a close second. Most of TJ’s beans are pretty ordinary, although some standouts are the ones from Rwanda and the South American one in a black bag with the bird on it (I forget the name).

Bill in LA, pool water is way cooler with desert temps diving to around 100. brrr. Don’t know how many miles swum, just 1 hr.

And other guys, can’t wait for vintage car prices to come down further. VW Karman Ghia. or VW bug….can work on those.

I like the old muscle cars (to try to recapture lost youth). My heart’s into them, but my mind wins out so I drive my modest Toyota economy car. It’s in great shape of course and I only drive it within a 2 mile radius in a typical day. a 2003 model and only 51,000 miles. A keeper!

My young supervisor drives a Lexus. Probably still making payments on it. There are swarms of $30k millionaires in the Los Angeles area.

“There are swarms of $30k millionaires in the Los Angeles area.”

(from another L.A.’er)
Bill, you’re not kidding. During the car leasing bubble, all my co-workers had leased luxury cars. My car has been paid off for 10 yrs. now.

FWIW, original VW Bub sedans are easier to work on than supers and convertibles.

“There are swarms of $30k millionaires”

Plenty of Lexus leasers around San Diego, too, I’d have to assume…

I’ve heard it’s considered a delicacy in certain parts of the world.

Also, Praying Mantis catches and eats hummingbirds
Not only does the insect catch the bird, but it ‘impales’ it with it’s forelegs, ripping the bird’s chest open. 359 Million years of evolution sure gets you some serious skills

- birdwatchersdigest.com

What are you laughin’ at? SanFranGirl? That’s morbid info.

I am laughing at joey’s comment. My one about the Praying Mantis showed up after the laugh due to the infamous filters.

captivating little creatures.. an aunt and uncle were really into them.. had many expensive looking hand-colored drawings, sketches and photos around the house.. feeders in the yard. I recall their two main excuses to visit China were to bird-watch and square dance on the Great Wall.

I love watching them. When I sit outside (the feeder is about 10 ft away), I will occasionally get buzzed by them. Once in awhile, one of them will hover right in front of me.

The other day, three of them were drinking from the feeder at the same time. This doesn’t happen to often.

Are there pictures of your aunt and uncle square dancing on the Great Wall? That just sounds so neat.

6 guys in a coup? You needed a wagon.

Nope, just had business so flew in and out a few times.
Such poverty is incredible.

I was in Grenada when the peoples revolutionary army took over though.. after that there were machine armed guards at the airport. skeery.
Glad you made it out okay, Lane.

“…and not even any police over the course of hundreds of driving miles.”

Yup. And when do see ‘em their not dressed for combat either.

their = they’re

“…if you can repay a debt and fail to do so, you’re a low life, unworthy of my time and consideration.”

So many lenders made countless ginormous loans compared to their borrowers’ permanent incomes. It is hard to fathom why reasonable people (especially those with training and experience in financial services) could not see where this would lead.

To solely blame ignorami borrowers with no training in finance for not realizing that banks were suddenly loaning out unrepayable sums of money seems very one sided to me. And for a banker to label such borrowers as ‘low lifes’ borders on the ridiculous. If these people are so scummy, why did bankers loan them so much money? Legally walking away from an unrepayable debt is a business decision, not a crime.

“…if you can repay a debt and fail to do so, you’re a low life, unworthy of my time and consideration. You’ve screwed someone out of what’s owed them, and are likely to try doing it to me.”

Low life status is far easier to avoid if you face no hard budget constraint.

Wall Street Journal
* AUGUST 8, 2009, 12:40 A.M. ET
Geithner Asks Congress to Increase Federal Debt Limit
By COREY BOLES and MICHAEL R. CRITTENDEN

Washington — U.S. Treasury Secretary Timothy Geithner asked Congress to increase the $12.1 trillion debt limit on Friday, saying it is “critically important” that they act in the next two months.

Mr. Geithner, in a letter to U.S. lawmakers, said that the Treasury projects that the current debt limit could be reached as early mid-October. Increasing the limit is important to instilling confidence in global investors, Mr. Geithner said.

The Treasury didn’t request a specific increase in the letter.

“It is critically important that Congress act before the limit is reached so that citizens and investors here and around the world can remain confident that the United States will always meet its obligations,” Mr. Geithner said in a letter to lawmakers.

Mr. Geithner said the that it is “clearly a moment in our history” that requires support from both Democrats and Republicans for the increase.

“Congress has never failed to raise the debt limit when necessary,” Mr. Geithner said.
…

Does that count the excessive interest that is impounded second by second by banks and credit card corps?
The continual miscalculation of real charges, the late crediting of payments?

Seriously, not everything is black and white. But the corps would want to devastate any and all folks. JMHO.

Professor:

You really have to take this seriously….they hired the dumbest most clueless kids to process the loans….their critical thinking ability was ZERO…

AND THEN THEY GOT PROMOTED AND PROMOTED

How on earth did so many make $100K+/yr. and then whine about being underwater on their 6 investments in floooriddaH?

We never saw it coming…..actually PB that is a very true statement if you are an airhead!

——————————————
It is hard to fathom why reasonable people (especially those with training and experience in financial services) could not see where this would lead.

The government’s been deregulating the banking industry for eons now. So, Obama thinks a little meeting is going to make them start acting honorably? Yeah, that’ll work.

All seriousness aside though, if there’s going to be any benefit to “taking things to the streets”, someone needs to come up with a plan of what happens next. Tarring and feathering isn’t going to solve anything if the system remains as before.

Free Xbox? Not if you want the one that was autographed by Sarah Palin and listed on E-bay.

http://politics.theatlantic.com/2009/08/sarah_palin_xbox_the_replica.php

Meet the new boss. Same as the old boss. - we’ve been through this when we realized the new Prez is just more of the same as the old prez, but by a factor of five times more of the same.

I experimented once by drinking coffee a half hour before swimming. Indeed, it’s like the sports docs say. You do improve your performance. I was doing interval sprints of 24 repetitions of 100 yards on a countdown timer and I noticed I had more time left over at the wall at the end of each sprint.

“You do improve your performance.”

I’ve heard that even smoking bongs is not that bad for a swimmer’s performance.

baking ingredient in heaven, beverage in hell

(Kind of like Mark Twain’s quote, ‘heaven for the climate, hell for the company’.)

I found that Louisiana dark roast coffee just didn’t have the kick that I needed. Yes, I used RTM, Union, Community (before they messed with the formula), CDM, etc. They just didn’t quite set the vibrate level where I like it.

Now, as for buttermilk, I recommend a tall glass filled with cornbread and buttermilk poured over it until brimming full.

THAT’s hedonist heaven.

Roidy
P.S. And yes, you are correct. I AM a wild eyed Southern Boy.

this southern boy takes his cornbread with pinto beans

grits and butter, anyone?

y’allways gotta butter up them G.R.I.T.S.- but they’re suckers for it;)

ROFLMAO!

Yes, they do like it.

Roidy

Meh. Typical thing to expect. Hard to imagine the government finding itself able to increase taxes. It will further decrease velocity of money at this point.

Just expect lots of stimuli, rewards for friends of DNP and continual bulls*%$ while we work this off. It will probably take 25yrs. Hopefully the thing that keeps this from being a revolution is the people will remember the good in this system.

Eventually we will back away from all of this.

So they will apply VAT to the sales of houses to stimulate the housing market?

apply VAT to the sales of houses ??

It will apply it to everything at all levels in the chain of delivery including services…Probably
going to make Craigslist & Ebay that much more popular…

So they will apply VAT to the sales of houses to stimulate the housing market?

Is attaching some of these buyers to a house really value added?

Just expect lots of stimuli ??
while we work this off ??

Is it really that easy…Just print money ??

much easier to inflate than to create a whole new tax

Hopefully the thing that keeps this from being a revolution is the people will remember the good in this system.

.. which is what again?

much easier to inflate than to create a whole new tax ??

I understand that but doesn’t the bill come “due & payable” at some point or do we just default ??

Mebbe for once the federal government will do the right thing and make subtantial cuts in the unconstitutional programs and bureaucracies. There are hundreds of government organizations with lots of waste. Just cut! They waste trillions of dollars.

Citizens Against Government Waste publishes information about all the wasteful spending that can just be eliminated. If Arnold can do it in the state of California, it can be done at the federal level.

Scdave,

I expect the stimulis to die off eventually but the lingering debt will be with us for a long long time.
A lifetime and a half.

And printing money has been going on for a long time. Its more of psychological/contractual game to handle how fast it happens.

That along with being on the wrong side of where the money is handed out. If you are first in line, aka big banks, its not as bad. For us, probably a bit more difficult. Thing is, the rich guys own so much and control so much at this point.

So, you are bombarded by MSM paid hitmen all day. Then you get frivlous suits against bloggers to keep disent from being allowed.

A large number of the people are too stupid to understand and another group are too absorbed in day to day to handle anything else.

This is a lot like the nightmare world imagined by Orwell.

The public health insurance sounds like another disaster waiting to happen. One more person tells me health care is a right is getting a good upper cut.

“Who are those guys?” - Butch, to Sundance

Bill, you missed the sarcasm. There are a group of californians here that want only violent offenders imprisoned..or was that anyone that doesn’t agree with them imprisoned? I forget. Oh I remember, drug users and dealers should be on the streets and any one who arrests or prosecutes them should be in jail. And, of course, all RE agents and bank officials should have their heads cut off. In a perfect world I guess.

Maximum security costs more than $30k per year.

Conditional release for MINOR non-violent offenders. Stealing millions, even for somebody else, ain’t minor. It’s not that complicated, unless you want it to be.

Comment by skroodle
2009-08-08 17:49:54
Maximum security costs more than $30k per year.
———————

But what are the costs of their crimes? IMHO, if it costs $50K to keep someone in prison, but they cost society $55K when they are out, then we are better served to have them locked up, no?

“but I repeat myself…”

Choose wisely!

What if the teacher and student don’t get along? Are the stuck with each other for four years?

Good question, oxide. In an ideal world, the teacher should be able to stay ojective, but you make a good point. I also thought of slow starters, like myself.

I didn’t realize my potential until I went to a JC, and got some confidence. I was abused. 2 yrs later, I found myself at the doors of a university.

Maybe that is why a childhood neighbor, HR for UC isn’t too down about the impending -8% and 21day furlough. Which hasn’t been enacted yet. Maybe the position she has is KACHING.

“as a college administrator…”

How many of your school’s professors recently bought Porsche 911 Turbos?

I don’t know. Of course, many have $45,000 cars, which is what I paid in cash after saving 3 years for it. You assume too much.

Don’t get me STARTED on that one. I taught in a small liberal arts college from 1992-2005, and that assessment nonsense cropped up around 2001. We had to come up with “rubrics” to determine whether students were learning the material, and if they weren’t, then the material had to be adjusted to produce better “outcomes” (meaning results, of course, but BS jargon sounds so much more elevated). The dean was really into this cr@p, because it relieved her of actually having to think (gee, professor Fuddyduddy, your assesment numbers weren’t very good last semester), but most of the faculty hated it. Add to this nonsense the fact that students are now “customers” and entitled to at least a B for showing up, and you have a toxic mix that has significantly dumbed down higher education. The fact that the whole assessment mechanism is ridiculously easy to game seemed to escape all of those who were touting it. If I’m devising the rubric and the means of assessment, I can skew the results any way I want (in much the same way that anybody with a brain can figure out how to pander to students to get stellar evaluations). I finally just got fed up with it, and left. People thought I was insane to give up a tenured position, but it was getting to the point where it just wasn’t worth the frustration.

“Add to this nonsense the fact that students are now customers”

LOL! That’s basically my thesis (using a quality mgt. approach to reduce truancy). I get what you’re saying, especially for the college level, but I think there is a case to be made for helping students with what they need, rather than telling them “how it is” at the high school level.

Did you know Hispanics give POLICE better service ratings than school!?

Speaking of that, COPS just started. Sweeeeet.

assessment nonsense cropped up around 2001.

We can all thank the previous administration for the “nochildleftbehind” bs.

I thought NCLB was for k-12? The commenters were talking college level.

Like CALPERS, who went all in on real estate.

…and really piled on the RE investments right at the bubble peak.

I have to watch that about once a month to stay balanced.

Thank you, and I just added it to my favs!

Be a good job for four layabouts, just to hang out down there, dressed and looking like the Beatles did on the album, and charge people to walk across the street with them for photos. I’d pay 20$ for the photo opp, if i’d already traveled that far. (It’d be an easy look for a bum to pull off, too, no offense to the fab four;)

always the entrepenuer, ain’t ya, alpha?

P.S. Oly, how do you spell, entrypannour???

Take care Ate-Up

Awake still smile for you, always…

“How, do spell audition?”

I can handle that one: audition

unless he means ‘addition’