tag:blogger.com,1999:blog-289976332024-03-07T04:24:13.606-05:00CARPE DIEMProfessor Mark J. Perry's Blog for Economics and FinanceMark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.comBlogger9830125tag:blogger.com,1999:blog-28997633.post-50739112498332065002015-05-13T13:28:00.000-05:002015-05-13T13:37:54.950-05:00Historic Chart of the Day<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFFh_LkTcVFsVPVa9WzJaPqD61svopyU-h9mJffiJ-kHJixerHT-NkDO1IaZPvQyGBZvci7476IikAB6EX6HEPNTBCdBekVVD8kSZFTk3whs6myW8E03d-bUhpupsYK6uIUvOB/s1600/food.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="263" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiFFh_LkTcVFsVPVa9WzJaPqD61svopyU-h9mJffiJ-kHJixerHT-NkDO1IaZPvQyGBZvci7476IikAB6EX6HEPNTBCdBekVVD8kSZFTk3whs6myW8E03d-bUhpupsYK6uIUvOB/s400/food.jpg" width="400" /></a>
</div>
<div class="separator" style="clear: both; text-align: left;">
<span style="font-family: Georgia,"Times New Roman",serif;">Based on today's <a href="http://www.census.gov/retail/marts/www/marts_current.pdf" target="_blank">Census Bureau report</a> on April retail sales, consumer spending at "<b>Food Services and Drinking Places</b>" (restaurants and bars, see red line) was greater than grocery store sales (blue line) in April for the third straight month, reversing a longstanding pattern of food spending and establishing a new US consumer milestone. As the chart above shows, the spending habits of Americans over the last three months represent the first time in US history that spending on food away from home by Americans has exceeded spending on food at home. In April consumers spent $51.25 billion on food and beverages at restaurants, which was almost $1.5 billion (and about 3%) more than $49.77 billion in grocery store sales for the month.</span></div>
Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com0tag:blogger.com,1999:blog-28997633.post-24391235828646902742012-10-05T11:18:00.002-05:002015-01-14T18:02:54.202-05:00New Carpe Diem Site<span style="font-family: Georgia, "Times New Roman", serif;">For new posts please visit Carpe Diem's new home at </span><a href="http://www.aei-ideas.org/channel/carpe-diem/" target="_blank"><span style="font-family: Georgia, "Times New Roman", serif;">The American Enterprise Institute</span></a><span style="font-family: Georgia, "Times New Roman", serif;">.</span> Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com2tag:blogger.com,1999:blog-28997633.post-89223299645650020812012-09-20T16:23:00.001-05:002012-09-21T09:18:36.533-05:00Major CD Announcement<span style="font-family: Georgia,"Times New Roman",serif;">Dear <b>Carpe Diem Regulars</b>: </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">Over the next several days, there will be some major changes taking place for the Carpe Diem blog. After six years, almost 10,000 posts, and more than 8 million visits and almost 12 million page views using the Blogger platform, Carpe Diem will become a WordPress blog at a new website. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">Starting within the next few days, Carpe Diem will be exclusively hosted by The American Enterprise Institutes's new <a href="http://www.aei-ideas.org/" target="_blank">AEIdeas website</a>, which also features <a href="http://www.aei-ideas.org/channel/pethokoukis/" target="_blank">Jimmy Pethokoukis's blog</a> as well as other AEI blog "channels" by topic (Economics, Foreign and Defense Policy, Politics and Public Opinion and Society and Culture). Many of the AEI scholars and fellows now regularly blog in the topic areas of the AEIdeas blog including Charles Murray, Andrew Biggs, Marc Thiessen, Michael Auslin, Mackenzie Eaglen, Dani Pletka, Nick Schulz, Karlyn Bowman, Alex Pollock, Ken Green and Arthur Brooks, among others. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">Here’s how the relocation of Carpe Diem will affect you: </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">1. If you have the current Carpe Diem website bookmarked, you’ll be automatically re-directed to the new website and you won’t need to do anything. (<span style="font-family: Georgia,"Times New Roman",serif;">Here's a direct link to the <a href="http://www.aei-ideas.org/channel/carpe-diem/" target="_blank">new Carpe Diem website</a>.) </span></span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">2. If you subscribe to the daily email updates of Carpe Diem posts, you should still receive those emails with a summary of posts over the last 24 hours from the new AEIdeas website. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">3. If you regularly (or occasionally) leave comments on Carpe Diem, you can still easily make comments at the new AEI website, by providing a name and email address (the email address won’t be published). The comments at the AEIdeas website are moderated before appearing on the AEI website, and I’ll do my best to help with the moderation process to be sure your comments appear as quickly as possible. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">4. All of the 9,000 posts in the Carpe Diem archives have been moved to the new AEIdeas website, so they will still be available and searchable by key word. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">5. If you follow Carpe Diem by RSS feed, here's the link to the new <a href="http://feeds.feedburner.com/aei-ideas/carpe-diem" target="_blank">Carpe Diem RSS feed</a>. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">Thanks for your loyal readership and I hope you continue to follow Carpe Diem at its new home!
</span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com21tag:blogger.com,1999:blog-28997633.post-38248759419521343962012-09-20T11:48:00.000-05:002012-09-20T11:49:07.032-05:00National Home Sales Snapshot from DQ News<div style="text-align: center;">
<i><b><span style="font-family: Georgia,"Times New Roman",serif;">Click to enlarge. </span></b></i>
</div>
<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjebzCFWY3E7u9ExtwqnjoTHahGiIU33Adw5V-dyqGewfe_OoFaMtgeb3_vDzEFJuel8NGp2an34L-JFxqmpT1eGeDTjjXSId5FFDxE5rweZ3xGqzwA7GJApTJ2kr5ngL2p4HZa/s1600/dq.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="125" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjebzCFWY3E7u9ExtwqnjoTHahGiIU33Adw5V-dyqGewfe_OoFaMtgeb3_vDzEFJuel8NGp2an34L-JFxqmpT1eGeDTjjXSId5FFDxE5rweZ3xGqzwA7GJApTJ2kr5ngL2p4HZa/s400/dq.jpg" width="400" /></a></div>
<span style="font-family: Georgia,"Times New Roman",serif;">Today's "<a href="http://www.dqnews.com/Charts/Weekly-Charts/USWeekly%20Page.aspx" target="_blank">National Home Sales Snapshot</a>" from DQ News is displayed above, which has been updated with U.S. home sales during the last 30 days in <b></b>98 of the top 100 MSAs (excludes Louisville and Wichita), and covers about two-thirds of all U.S. home sales. Compared to the same period last year, home sales over the last 30 days have increased by 9.8%, following previous increases in September of 11.3% (last week) and 10.3% (first week of the month). </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">The median home sales price increased nationally by 7.8% above a year ago in the most recent 30-days sales period, which is the highest year-over-year increase during the last six weeks of data displayed above, and reflects a pattern of gradually increasing median home price increases (from 5.3% in mid-August), even though the median price has remained flat at about $200,000. </span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com13tag:blogger.com,1999:blog-28997633.post-19516780162279884322012-09-20T08:34:00.003-05:002012-09-20T08:35:57.439-05:00Quotation of the Day: The Fallacy of Redistribution<span style="font-family: Georgia,"Times New Roman",serif;">From <a href="http://townhall.com/columnists/thomassowell/2012/09/20/the_fallacy_of_redistribution" target="_blank">Thomas Sowell's column today</a> (emphasis mine): </span><br />
<blockquote class="tr_bq">
<span style="font-family: Georgia,"Times New Roman",serif;"><b>The history of the 20th century is full of examples of countries that set
out to redistribute wealth and ended up redistributing poverty</b>. The communist
nations were a classic example, but by no means the only example.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">In theory, confiscating the wealth of the more successful people ought to
make the rest of the society more prosperous. But when the Soviet Union
confiscated the wealth of successful farmers, food became scarce. As many
people died of starvation under Stalin in the 1930s as died in Hitler's
Holocaust in the 1940s.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">How can that be? It is not complicated. <b>You can only confiscate the wealth
that exists at a given moment. You cannot confiscate future wealth -- and that
future wealth is less likely to be produced when people see that it is going to
be confiscated. </b>Farmers in the Soviet Union cut back on how much time and
effort they invested in growing their crops, when they realized that the
government was going to take a big part of the harvest. They slaughtered and
ate young farm animals that they would normally keep tending and feeding while
raising them to maturity.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">We have all heard the old saying that giving a man a fish feeds him only for
a day, while teaching him to fish feeds him for a lifetime. Redistributionists
give him a fish and leave him dependent on the government for more fish in the
future.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">If the redistributionists were serious, what they would want to distribute
is the ability to fish, or to be productive in other ways. <b>Knowledge is one of
the few things that can be distributed to people without reducing the amount held
by others. </b> That would better serve the interests of the poor, but it would not serve
the interests of politicians who want to exercise power, and to get the votes
of people who are dependent on them.</span></blockquote>
Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com372tag:blogger.com,1999:blog-28997633.post-74524318194782093592012-09-19T13:41:00.003-05:002012-09-19T13:42:55.566-05:00Wednesday Afternoon Links<span style="font-family: Georgia,"Times New Roman",serif;">1. <a href="http://www.aei-ideas.org/2012/09/markets-in-everything-wifi-enabled-multi-color-energy-efficient-led-light-bulb-that-you-control-with-your-iphone/" target="_blank">Markets in everything</a>: WiFi enabled, multi-color, energy efficient LED light bulb that you control with your iPhone.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">2.
<a href="http://www.poynter.org/latest-news/everyday-ethics/188789/patchwriting-is-more-common-than-plagiarism-just-as-dishonest/" target="_blank">"Patchwriting" is more common than plagiarism</a>, and just as dishonest. I guess that's what happened to me, see <a href="http://mjperry.blogspot.com/2012/09/cd-post-re-write-for-montana-tv-station.html?showComment=1347719938237" target="_blank">recent CD post</a>. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">3. </span><span style="font-family: Georgia,"Times New Roman",serif;"><a href="http://healthblog.ncpa.org/almost-half-of-ireland-is-privately-insured-despite-free-national-health-insurance/" target="_blank">Almost half (46.3%) of Irish residents buy private health insurance</a>, despite "free" national health insurance.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">4. </span><span style="font-family: Georgia,"Times New Roman",serif;">Thanks to the commodity boom, <a href="http://www.bloomberg.com/news/2012-09-17/harvard-losing-out-to-south-dakota-in-graduate-pay-commodities.html" target="_blank">2012 graduates from the South Dakota School of Mines make more on average than Harvard grads</a>, $56.7k vs. $54.1k.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">5. <a href="http://www.aei-ideas.org/2012/09/new-website-archives-every-tv-news-program-since-2009-and-its-now-online-and-searchable/" target="_blank">New website archives every TV news program since 2009</a>, and it’s now online and searchable for free.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">6. </span><span style="font-family: Georgia,"Times New Roman",serif;"><a href="http://www.csmonitor.com/World/Global-News/2012/0917/Russia-reveals-shiny-state-secret-It-s-awash-in-diamonds" target="_blank">Russia has vast new diamond field</a> containing "trillions of carats," enough to supply global markets for next 3,000 years.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">7. <a href="http://www.cnbc.com/id/49065716" target="_blank">Airlines add service in North Dakota's oil patch</a>: Delta to add two daily Minneapolis-Williston flights, United to add three flights from Denver to Williston. </span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com29tag:blogger.com,1999:blog-28997633.post-82185210318019095982012-09-19T12:19:00.001-05:002012-09-19T12:27:43.432-05:00The Year of the "Plow Horse Housing Recovery"<span style="font-family: Georgia,"Times New Roman",serif;">Some key reports today on architecture billings, existing home sales, and new residential construction provide additional evidence that a U.S. housing recovery is underway:</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">1. <a href="http://in.reuters.com/article/2012/09/19/usa-construction-abi-idINL1E8KID3N20120919" target="_blank">Reuters</a> -- "A leading indicator of U.S.
construction activity rose last month to its best level in five
months, indicating that demand for design services is expanding,
an architects' trade group said on Wednesday. The <b>Architecture Billings Index</b> (ABI) rose 1.5 points to a
reading of 50.2 in August, according to the American Institute
of Architects. Any reading above 50 indicates an increase in
demand for architects' services. The ABI is considered a predictor of U.S. construction
activity nine to 12 months ahead. </span><span style="font-family: Georgia,"Times New Roman",serif;">A separate measure of <b>inquiries for new projects</b> rose 0.9
points to 57.2, the group said."</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>MP: </b>Both the Billing Index (ABI) and the New Projects Inquiry Index have risen in each of the last three months, and the ABI was at the highest level last month since March, while the inquiry index in August was the highest in six months.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">2. <b>Existing U.S. home sales</b> surged in August by 7.8% over July, marking the highest monthly increase in home sales in a year, according to today's <a href="http://www.realtor.org/news-releases/2012/09/august-existing-home-sales-and-prices-rise" target="_blank">National Realtors Association (NAR) report</a>. Compared to last August, home sales this year were 9.3% higher, and last month's increase was the 14th consecutive year-over-year increase in home sales. The median home sales price in August was $187,400, a slight decrease from July's median price of $187,800, but above last August's median price of $171,200 by 9.5%. According to the NAR, "The last time there were six back-to-back monthly price increases from a
year earlier was from December 2005 to May 2006. The August increase
was the strongest since January 2006 when the median price rose 10.2
percent from a year earlier."</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">Other positive signs from today's report include: a) a reduction in the share of distressed sales in August this year (22%) compared to last year (31%), b) a reduction in the median marketing time from 92 days in August 2011 to 70 days last month (almost one-third of homes sold in August were on the market for less than a month), and c) a drop to only a 6.1 month supply of homes in August at the current sales pace, which except for a 6.0 month supply in January is the lowest inventory level of existing homes for sale since April of 2006. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">3. <a href="http://finance.yahoo.com/news/us-housing-starts-rose-2-123759822.html" target="_blank">Associated Press</a> </span><span style="font-family: Georgia,"Times New Roman",serif;">-- "U.S. builders started work on more homes in
August, driven by the <b>fastest pace of single-family home construction in
more than two years</b>. The increase points to steady progress in the
housing recovery. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">The Commerce Department said Wednesday that
construction of homes and apartments rose 2.3 percent to a seasonally
adjusted annual rate of 750,000 last month. That's up from 733,000 in
July, which was revised lower from last month's initial estimate. Single-family housing starts rose 5.5 percent to an annual rate of 535,000 homes, the best pace since April 2010."</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>MP:</b> <b>Single-family home starts</b> last month were the highest for the month of August since 2008, and were 27% above last year, marking the largest year-over-year increase since April 2010. Further, the <b>number building permits issued in August</b> was 24.5% above permits in the same month last year. In both July and August, building permits were above 800,000 in each month, and it's been four years since there has been more than 1.6 million permits issued in a two-month period. </span><br />
<span style="font-family: Georgia,"Times New Roman",serif;"><br /></span>
<span style="font-family: Georgia,"Times New Roman",serif;"><b>Bottom Line</b>: The evidence continues to accumulate pointing to a gradual, but steady housing recovery that is underway in the U.S. As with any economic or housing recovery, it can be expected that the improvements in the U.S. housing market will be somewhat choppy at times. But the fact that most of the main housing indicators (existing-home sales, new home sales, pending sales, housing prices, asking prices, home affordability, etc.) are showing gradual, but consistently positive signs of improvement would support the growing consensus that a sustainable housing recovery is underway. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">Brian Wesbury et al. at First Trust have described the slowly improving U.S. economy as the "<a href="http://www.ftportfolios.com/Commentary/EconomicResearch/2012/5/21/the-plow-horse-rolls-on" target="_blank">plow horse economy</a>," which keeps moving gradually forward despite the pessimistic media reports of "gloom and doom." Perhaps it would also be appropriate to describe the ongoing recovery in the U.S. real estate market as the "plow horse housing recovery" - which keeps making gradual, but steady improvements month after month. </span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com7tag:blogger.com,1999:blog-28997633.post-45469520361327733622012-09-18T16:06:00.002-05:002012-09-19T10:04:54.473-05:00Year of the Recovery: August Home Sales Boom<span style="font-family: Georgia,"Times New Roman",serif;">1. <a href="https://www.wra.org/hsraugust2012/" target="_blank">Wisconsin home sales</a> increased 20.3% in August, median sales price by 2.9%.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">2. <a href="http://www.mlive.com/business/west-michigan/index.ssf/2012/09/kalamazoo_housing_market_shows_1.html" target="_blank">Kalamazoo MI housing market</a> shows highest sales volume since 2007, August home sales were up 14%, average sales price by 7.5%.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">3. <a href="http://www.courier-journal.com/article/20120917/BETTERLIFE06/309170106/Louisville-Realtors-sales-up-26-percent-August?gcheck=1&nclick_check=1%20%E2%80%A6" target="_blank">Louisville area home sales</a> up 26% in August over last year, median sales price by 3.7%.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">4. <a href="http://www.pr.com/press-release/441329" target="_blank">Chicago-area home sales</a> increased 26.5% in August above last year, and were the highest August sales total since 2007. </span><a class="twitter-timeline-link" data-expanded-url="http://www.mlive.com/business/west-michigan/index.ssf/2012/09/kalamazoo_housing_market_shows_1.html" dir="ltr" href="http://t.co/T4Tk6lyR" target="_blank" title="http://www.mlive.com/business/west-michigan/index.ssf/2012/09/kalamazoo_housing_market_shows_1.html"><span class="tco-ellipsis"></span></a><a class="twitter-timeline-link" data-expanded-url="https://www.wra.org/hsraugust2012/" dir="ltr" href="https://t.co/pzKEUWjL" target="_blank" title="https://www.wra.org/hsraugust2012/"><span class="js-display-url"></span></a>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com47tag:blogger.com,1999:blog-28997633.post-62277545008582042342012-09-18T09:54:00.000-05:002012-09-18T14:47:23.468-05:00Builder Confidence Index Rises in September to 6-Yr. High, With Largest 12-Month Gain in History<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgaA3tomL5bXXbHa077MLDoWv6hBEkiWLZlPy6kMkAVvM8XRbpF02HQOXmEoXGlBDux9gnn0KYDpEdV6DJd1KSlt5zEppFDDsbYKR_ZUBbz4mm7DmeGBPvptV_xw1TYueDSkFMp/s1600/hmi.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="293" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgaA3tomL5bXXbHa077MLDoWv6hBEkiWLZlPy6kMkAVvM8XRbpF02HQOXmEoXGlBDux9gnn0KYDpEdV6DJd1KSlt5zEppFDDsbYKR_ZUBbz4mm7DmeGBPvptV_xw1TYueDSkFMp/s400/hmi.jpg" width="400" /></a></div>
<span style="font-family: Georgia,"Times New Roman",serif;">From today’s report from the <a href="http://www.nahb.org/news_details.aspx?sectionID=134&newsID=15515" target="_blank">National Association of Home Builders</a>:</span>
<br />
<blockquote>
<span style="font-family: Georgia,"Times New Roman",serif;"><b>September 18, 2012 – </b>Builder confidence
in the market for newly built, single-family homes rose for a fifth
consecutive month in September to a level of 40 on the National
Association of Home Builders/Wells Fargo Housing Market Index (HMI).
This latest three-point gain brings the index to its highest reading
since June of 2006 (see chart above).</span>
<br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">“This fifth consecutive month of improvement in builder confidence
provides further assurance that the housing market is moving in a
positive direction, but there’s still a long way to go on the road to
recovery and several obstacles are slowing our progress,” said NAHB
Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “In
particular, unnecessarily tight credit conditions are preventing many
builders from putting crews back to work – which would create needed
jobs — and discouraging consumers from pursuing a new-home purchase.”</span>
<br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">“Builders across the country are expressing a more positive outlook
on current sales conditions, future sales prospects and the amount of
consumer traffic they are seeing through model homes than they have in
more than five years,” noted NAHB Chief Economist David Crowe. “However,
against the improving demand for new homes, concerns are now rising
about the lack of building lots in certain markets and the rising cost
of building materials. Given the fragile nature of the housing and
economic recovery, these are significant red flags.”</span></blockquote>
<span style="font-family: Georgia,"Times New Roman",serif;"><b>MP:</b> The increase in the builder confidence index in
September to a six-year high of 40 is a remarkable recovery from a
reading of only 14 a year ago. The 24-point improvement in builder
confidence over the last year is the largest 12-month gain in the
history of the HMI going back to 1985, and surpasses the previous record
of a 24-point annual gain in early 1992.</span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com13tag:blogger.com,1999:blog-28997633.post-28147481139294268812012-09-18T07:22:00.001-05:002012-09-18T07:22:19.687-05:00Fire: Environmentalist's Way to Thin the Forests<span style="font-family: Georgia,"Times New Roman",serif;">From Terry Anderson's editorial in today's WSJ "<a href="http://online.wsj.com/article/SB10000872396390443884104577647903145409924.html?mod=djemITP_h" target="_blank">Environmental Protection Up in Smoke</a>": </span><br />
<blockquote class="tr_bq">
<span style="font-family: Georgia,"Times New Roman",serif;">Environmental laws since the 1970s require public input into federal land-use decisions including logging on national forests. This has led to lawsuits challenging efforts by the U.S. Forest Service to prevent forest fires by thinning out trees (most of which are dead or diseased) and brush by machines and carefully controlled burns. This dead wood is the fuel that feeds catastrophic wildfires. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">Removing the fuel reduces the likelihood of fires, and if fires do break out, makes them easier to fight. Meanwhile, the suppression of fires costs the federal government nearly $2.5 billion annually. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">A fuels-management project to log and thin 4,800 acres in the Bozeman, Mont., watershed exemplifies the problem. This project has been held up since 2010 on grounds that the environmental-impact assessment did not adequately protect the habitat of the Canadian lynx and the grizzly bear, both listed as threatened species. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">Now a wildfire threatens the watershed, burning over 10,000 acres and costing more than $2 million to fight. As one firefighter put it, "fire is the environmentalist's way of thinning the forests."
</span></blockquote>
Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com28tag:blogger.com,1999:blog-28997633.post-13585276019750095352012-09-17T15:17:00.002-05:002012-09-17T15:19:19.722-05:00Top 10 Most Expensive College Football Tix 2012<span style="font-family: Georgia,"Times New Roman",serif;"><a data-mce-href=" http://www.cnbc.com/id/48991522?slide=1" href="http://www.cnbc.com/id/48991522?slide=11" target="_blank">From CNBC</a>, based on tickets being sold in the secondary market on StubHub, Ticket Network, eBay, etc. and aggregated by <a data-mce-href=" http://www.tiqiq.com/" href="http://www.tiqiq.com/" target="_blank">TiqIQ</a>.</span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com7tag:blogger.com,1999:blog-28997633.post-72040269252116429652012-09-17T14:55:00.002-05:002012-09-17T15:22:59.342-05:00Housing Affordability is Historically Very High<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLOisLwGA3X7jV9PYO0PSO995bGkDfvACw3UJwtfkUvUVjYm_m8Yb1xwy4mRTYZSIDMmEgDzfn2efeQRvE8SNgHb4M1s5fNpe9TOckp7s2Rqp2G9HwMWsTnT6FZdD_9Y7Ye2Dn/s1600/hai.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="316" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLOisLwGA3X7jV9PYO0PSO995bGkDfvACw3UJwtfkUvUVjYm_m8Yb1xwy4mRTYZSIDMmEgDzfn2efeQRvE8SNgHb4M1s5fNpe9TOckp7s2Rqp2G9HwMWsTnT6FZdD_9Y7Ye2Dn/s400/hai.jpg" width="400" /></a></div>
<span style="font-family: Georgia,"Times New Roman",serif;">A recent analysis by Trulia concluded that buying a home today is 45% cheaper on average compared to renting a comparable home, see <a href="http://mjperry.blogspot.com/2012/09/buying-home-is-now-45-cheaper-than.html" target="_blank">CD post here</a>. That post generated a lively discussion with about 100 comments, and some questioned some of Trulia's assumptions and analysis (or lack of some key assumptions), although I think the general conclusion is valid that buying a home is relatively affordable today compared to renting a similar home -whether it's 10%, 20%, 30% or 45% cheaper.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">Another measure of housing affordability is to compare the median household income in the U.S. (or regions) to the qualifying income needed to purchase a median-priced home, and that analysis is reported monthly by the National Association of Realtors based on its Housing Affordability Index (HAI), see chart above. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: georgia;">In July, the <a href="http://www.realtor.org/sites/default/files/reports/2012/hai-2012-07-housing-affordability-index-09-07-2012.pdf" target="_blank">Housing Affordability Index</a> increased to 182.0 from 179.7 in June, but is down from historical highs for the HAI above 200 in the first three months of 2012. Looking back over the last thirty years, the July HAI of 182 is still very high by historical standards (see chart). </span></span><br />
<div>
<span style="font-family: georgia;"></span></div>
<div>
</div>
<div>
<br />
<span style="font-family: georgia;">An <span class="blsp-spelling-error" id="SPELLING_ERROR_5">HAI</span>
of 182.0 means that the typical American household earning the median
annual family income of $61,080 in July would actually have 182% of the
standard qualifying income level of $33,552 required to purchase a
median-priced existing single-family house ($181,000) with a 20% down
payment, financing the remaining 80% of the sales price with a 30-year
fixed rate mortgage at the July average of 3.78% (monthly payment of
$699 for principal and interest). For the Midwest region of the country, the HAI in July of 219 means that the typical Midwest household income of $60,657 is more than twice the qualifying income ($27,696) necessary to purchase the median price home at $155,400. </span></div>
<span style="font-family: Georgia,"Times New Roman",serif;"> </span><br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>Bottom Line</b>: Whether comparing buying to renting a home, or comparing the median household income to the qualifying income necessary to purchase a home, homeownerhip today is extremely affordable. And that historically high affordability is one of the factors that will continue to support the housing recovery taking hold across the country right now. </span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com46tag:blogger.com,1999:blog-28997633.post-71420304483913841332012-09-17T14:09:00.003-05:002012-09-17T14:13:18.486-05:002012: The Year of the Housing Recovery, Update<span style="font-family: Georgia,"Times New Roman",serif;"><a href="http://www.dqnews.com/Articles/2012/News/California/RRCA120914.aspx" target="_blank">DataQuick</a> -- "An estimated 41,280 new and resale houses and condos sold in California last
month, making it the <b>strongest August since 2006</b>. Last month's sales
total was up 4.5% from 39,507 in July, and up <b>9.4% from
37,734 sales in August 2011</b>." </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">"The median price paid for a home in California last month was $281,000,
the same as the month before and <b>up 12.9% from $249,000 in August
2011</b>. The July and August median was the highest since September 2008,
when it was $283,000. August marked the sixth consecutive month in which
the state's median sale price rose year-over-year." </span><br />
<span style="font-family: Georgia,"Times New Roman",serif;"><br /></span>
<span style="font-family: Georgia,"Times New Roman",serif;">"Of the existing homes sold in August, 20% were properties that
had been foreclosed on during the past year. That was down from a
revised 21.7% in July and down from 34.3% a year earlier.
<b>Last month's figure was the lowest for any month since foreclosure
resales made up 18.3% of the resale market in November 2007</b>."</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>MP:</b> Isn't this exactly what a housing recovery looks like? </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">California home sales were the highest in six years for the month of August and up almost 10% from a year ago, the median sales price was the highest in almost four years and up almost 13% from last year, median prices have increased year-over-year for the last six months, and the share of foreclosure sales in August was the lowest in almost five years. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">If this isn't a real housing recovery in California, how would a real recovery be different? </span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com5tag:blogger.com,1999:blog-28997633.post-78257205736882714742012-09-17T13:52:00.000-05:002012-09-17T13:57:15.312-05:00Classic 1978 Milton Friedman Lecture on Trade<iframe allowfullscreen="allowfullscreen" frameborder="0" height="350" src="http://www.youtube.com/embed/QXkX4POxA0g?feature=player_detailpage" width="425"></iframe>
<span style="font-family: Georgia,"Times New Roman",serif;"> </span><br />
<span style="font-family: Georgia,"Times New Roman",serif;">In the above 1978 lecture at Kansas State University, Milton Friedman
discusses free trade, and explains why trade protection and interference
in international trade are so widespread, despite the almost universal
condemnation of such measures by the economics profession.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">Professor Friedman also addresses the political obsessions with: a) increasing exports (e.g. <a href="http://www.nytimes.com/2010/01/29/business/29trade.html?_r=1" target="_blank">President Obama’s goal to double exports by 2015</a>)
and b) achieving a “favorable balance of trade.” </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">Here’s a quote from
Friedman’s lecture, demonstrating the timeless nature of his economic
wisdom, which is as relevant today as it was in 1978:</span><br />
<blockquote class="tr_bq">
<span style="font-family: Georgia,"Times New Roman",serif;">In the international trade area, the language is almost always about how we must export, and what’s really good is an industry that produces exports. And if we buy from abroad and import, that’s bad. But surely that’s upside-down. What we send abroad we can’t eat, we can’t wear, we can’t use for our houses. The goods and services we send abroad, are goods and services not available to us. On the other hand, the goods and services we import, they provide us with TV sets we can watch, automobiles we can drive, with all sorts of nice things for us to use. The gain from foreign trade is what we import. What we export is the cost of getting those imports. And the proper objective for a nation as Adam Smith put it, is to arrange things, so we get as large a volume of imports as possible, for as small a volume of exports as possible. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">This carries over to the terminology we use. When people talk about a favorable balance of trade, what is that term taken to mean? It’s taken to mean that we export more than we import. But from the point of view of our well-being, that’s an unfavorable balance. That means we’re sending out more goods and getting fewer in. Each of you in your private household would know better than that. You don’t regard it as a favorable balance when you have to send out more goods to get less coming in. It’s favorable when you can get more by sending out less. </span></blockquote>
<span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: Georgia,"Times New Roman",serif;"><b>MP:</b> Here’s a formula summarizing Milton Friedman’s insights:</span></span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">1. The stuff we import</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">MINUS</span><br />
<span style="font-family: Georgia,"Times New Roman",serif;"><span style="text-decoration: underline;"><br /></span></span>
<span style="font-family: Georgia,"Times New Roman",serif;"><span style="text-decoration: underline;">2. The stuff we export =</span></span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>3. Our standard of living</b></span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">In other words, in economic terms, our standard of living is highest
when we maximize imports and minimize exports, which is exactly the
opposite of the political thinking and policies, which generally seek to
maximize exports and minimize imports.</span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com77tag:blogger.com,1999:blog-28997633.post-72371200385149556322012-09-17T09:35:00.000-05:002012-09-17T09:36:17.672-05:00Occupational Licensing Gone Wild <div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg9kD6R1k5_iBMt6Xh2E3F4-FDuKY-S9C3q0titDm1ZYxxv0wqJcZkhHdsz51eiE_NM7mei3WV77j55D-yqaCeXfNiTjJLkoFdHjWu3pPatwERXja3pkIcSTrd7nv5-yOPGUDJ6/s1600/grillinglicense.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="230" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg9kD6R1k5_iBMt6Xh2E3F4-FDuKY-S9C3q0titDm1ZYxxv0wqJcZkhHdsz51eiE_NM7mei3WV77j55D-yqaCeXfNiTjJLkoFdHjWu3pPatwERXja3pkIcSTrd7nv5-yOPGUDJ6/s400/grillinglicense.jpg" width="400" /></a></div>
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">From the Bloomberg article "Why Is It So Hard to Become a Cosmetologist in America?"</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">"The average cosmetologist in the
U.S. trains for 372 days before earning a license. The average
emergency medical technician spends 33 days in training. From
this, one might conclude that Americans are obsessed with
primping but tragically unprepared for emergencies." </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">"Actually, the disparity merely confirms what a muddle the
process of occupational licensing is. In 1952, fewer than 5
percent of U.S. workers required a state license. By 2006,
according to a <a href="http://dataspace.princeton.edu/jspui/handle/88435/dsp015d86p022b" rel="external" title="Open Web Site">survey</a> that year by the Gallup Organization, 29
percent of workers said they needed a government-issued license
to do their job."</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">"A <a href="http://www.ij.org/licensetowork" rel="external" title="Open Web Site">study</a> released in May by the libertarian Institute for
Justice makes a compelling case that occupational licensing
requirements in many states have run amok. Some licensees,
including EMTs, have life-or-death responsibility. Others handle
hazardous chemicals. Too many, however, are in occupations for
which a natural inclination and a short apprenticeship should
provide more than sufficient preparation. Why, for example, do
florists, funeral attendants or shampooers need a license to
work?" </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><a href="http://www.bloomberg.com/news/2012-09-16/why-is-it-so-hard-to-become-a-cosmetologist-in-america-.html" target="_blank">Read more here</a>. </span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com16tag:blogger.com,1999:blog-28997633.post-86448608807509101072012-09-17T07:21:00.000-05:002012-09-17T07:29:30.398-05:00Quotation of the Day: A Duty Is a TAX on Imports<span style="font-family: Georgia,"Times New Roman",serif;">From <a href="http://cafehayek.com/2012/09/open-letter-to-mitt-romney-2.html" target="_blank">Don Boudreaux's open letter to Mitt Romney</a>: </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">Your wish to “label China a currency manipulator” means that you seek a pretext to impose (<a href="http://www.mittromney.com/issues/trade" target="_blank">as your website says</a>) “countervailing duties” on imports from China – which is to say, you seek a pretext for raising taxes on Americans who buy goods and services from China. Yet in other episodes of your campaign you promise (as you did <a href="http://www.youtube.com/watch?v=O3_cK2lQUwg" target="_blank">here*</a> last month) “I will not raise taxes on the American people. I will not raise taxes on middle-income Americans.” </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">If you keep your promise to impose countervailing duties on imports from China you will thereby break your promise to not raise taxes on the American people. (Americans who buy imports from China are, after all, American people.) But if you keep your promise to not raise taxes on the American people, you must – as I hope you will – break your promise to punitively tax those many Americans who buy imports from China. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>MP:</b> It's a simple, but often neglected point that a tariff or duty on imports is just another word for a sales-type tax on imported goods, and those tariffs/taxes/duties are not imposed on China or other U.S. trade partners, they are imposed on, and paid for by, Americans (consumers and businesses) who purchase foreign-produced goods. </span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com46tag:blogger.com,1999:blog-28997633.post-82925731225538866252012-09-16T16:54:00.001-05:002012-09-17T07:39:22.740-05:00Grisly Drug War Fact of the Day<span style="font-family: Georgia,"Times New Roman",serif;">"The American news media continues to report the body count in Mexico’s “War on Drugs” at more than 50,000 dead. But <a href="http://www.phoenixnewtimes.com/related/to/Molly+Molloy/" title="Molly Molloy">Molly Molloy</a>,
a researcher at New Mexico State University, <i><b>tallies more than 100,000
Mexicans killed</b></i> <i><b>to wage a war financed and mandated by American
authorities</b></i> and led by Mexican president Felipe Calderón."</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">From the article "<a href="http://www.phoenixnewtimes.com/2012-07-26/news/mexicans-pay-in-blood-for-america-s-war-on-drugs/" target="_blank">Mexicans Pay in Blood for America's War on Drugs</a>." </span><br />
<span style="font-family: Georgia,"Times New Roman",serif;"><br /></span>
<span style="font-family: Georgia,"Times New Roman",serif;"><b>Note:</b> That would be a casualty count that approaches the U.S. body count during WWI (116,500 deaths) and more than the combined American casualties during the Korean War (36,500 deaths) and the Vietnam War (58,000 deaths). </span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com67tag:blogger.com,1999:blog-28997633.post-10432905304636647102012-09-15T11:38:00.000-05:002012-09-15T14:03:39.804-05:00Buying a Home Is Now 45% Cheaper Than Renting<span style="font-family: Georgia,"Times New Roman",serif;">Here's another reason that the U.S. housing recovery is real and sustainable - buying a home is now 45% cheaper than renting, according to an analysis done by Trulia and <a href="http://trends.truliablog.com/2012/09/rent-vs-buy-summer-2012/" target="_blank">reported here by its chief economist Jed Kalko</a>: </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>Methodology</b>: Trulia looks at homes listed for sale and for rent on its website, and compares the </span><span style="font-family: Georgia,"Times New Roman",serif;"><b>average rent and asking price for an identical set of properties in a metro area</b>, for a direct apples-to-apples comparison. Then,
Trulia factors in the total costs of homeownership (e.g., closing costs,
maintenance, insurance, taxes, etc) and total cost of renting (e.g.,
renter’s insurance and security deposit). </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">The starting assumptions are
that a prospective homebuyer can get a low mortgage rate of 3.5 percent,
itemizes their federal tax deductions, is in the 25 percent tax
bracket, and will stay in their home for seven years. To account for the opportunity costs, Trulia calculates the net present
value of the payment streams for renting and owning.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>Conclusion</b>: </span><span style="font-family: Georgia,"Times New Roman",serif;">With a 20% down payment, a 30-year fixed mortgage rate at 3.5% and at the 25% federal tax bracket, Trulia finds that <b>homeownership
is cheaper than renting in all of the 100 largest metros by a wide
margin.</b> There is no market where the financial decision is even close,
so long as you plan to stay in the home for at least seven years, finance with a
3.5% mortgage, and itemize your tax deductions. <span style="font-family: Georgia,"Times New Roman",serif;"> </span></span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: Georgia,"Times New Roman",serif;">Based on asking prices and rents during the summer of 2012, buying is
now <b>45% cheaper than renting in the 100 largest U.S. metros, on average</b> –
that’s a monthly savings of $771. If you plan to stay in a home for 7
years, <i>which is the average time that Americans traditionally live in a home before moving again,</i> it is <b>more affordable to buy than to rent in ALL of the 100 largest metros in the U.S.</b></span></span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: Georgia,"Times New Roman",serif;"><b>MP: </b>Trulia's analysis would indicate that the incredible affordability of buying a home today compared to renting will provide some support to the ongoing housing recovery over the next few years. Of course, rising home prices and mortgage rates could eventually reduce some the current huge advantage of buying versus renting, depending on how fast rents rise compared to home prices. And as Trulia's economist points out, many would-be homebuyers don't have the 20% down payment assumed in this analysis, and might not be able to save up that amount in the short run to take advantage of the historical affordability of homeownership. But on the other hand, FHA is providing mortgages with only a 3-5% down payment, so the lack of a 20% down payment might not be much of a constraint. </span></span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: Georgia,"Times New Roman",serif;">Also, the 45% advantage for homeownership versus renting is the average. In metro areas like Oklahoma City, the monthly cost of owning a home ($590) is as much as 63% lower than renting a comparable home ($1,576). It make sense that such a huge cost difference would have to start translating into increased demand for home purchases, and that's probably one of the factors contributing to increased home sales around the country. Another example is Minneapolis - the monthly cost of buying a home there ($751) is 52% cheaper than renting ($1,558), which translates into monthly savings of $807 for homebuyers compared to renters (of a comparable house), and that huge savings is likely what is driving home sales higher in the Twin Cities (see <a href="http://mjperry.blogspot.com/2012/09/2012-year-of-housing-recovery-exhibit.html" target="_blank">CD post below</a>). <b> </b></span></span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com158tag:blogger.com,1999:blog-28997633.post-24254980129899940212012-09-15T10:40:00.000-05:002012-09-15T11:15:18.884-05:002012: The Year of the Housing Recovery; Exhibit A: The Minneapolis-St. Paul Housing Market is HOT<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjs3eLwPfIMsGWZz5i08TO8F5S70McTOgM4mfy5RTOg7eafCQuBkeFMcuU6oFHQMxI5GpHVK6496vK5PMJRU5Pm8YxGJkGikrAT9NZP9I_LW8xakguG-l2khzXg8RY8_MiD-GEV/s1600/msp.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="162" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjs3eLwPfIMsGWZz5i08TO8F5S70McTOgM4mfy5RTOg7eafCQuBkeFMcuU6oFHQMxI5GpHVK6496vK5PMJRU5Pm8YxGJkGikrAT9NZP9I_LW8xakguG-l2khzXg8RY8_MiD-GEV/s400/msp.jpg" width="400" /></a></div>
<span style="font-family: georgia;">The chart above provides evidence of the significant recovery going on in the </span><a href="http://www.mplsrealtor.com/downloads/market/MMI/mmi.pdf" target="_blank"><span style="font-family: georgia;">Minneapolis Area real estate market</span></a><span style="font-family: georgia;">, </span><span style="font-family: georgia;">based on new data for market activity there in August:<br /><br />1.
Closed home sales during the month of August in the Twin Cities increased by 12.3% above last year, and by 45.6% above two years ago. On a year-to-date basis, the 27,413 homes sold
so far this year is the <i><b>highest for any January-August period since 2006</b></i>. </span><br />
<br />
<span style="font-family: georgia;">2. Pending home sales in August (4,877) were 19.5% higher than the same month last year, and 36.3% higher than August 2010. </span><br />
<br />
<span style="font-family: georgia;">3. The average marketing time for
houses sold in August was 107 days, down from 141 days last year and 131
days in 2010, and was the shortest average marketing time since at least
2006 (except for the 106 days in July of this year). </span><br />
<br />
<span style="font-family: georgia;">4. The median sales price in July was $179,000, a 15.5% increase over last year and a five-year high for the month of August. </span><span style="font-family: georgia;">
The median price increase in August was the largest year-over-year gain
since January 2004 and the sixth straight month of year-over-year increases.</span><br />
<br />
<span style="font-family: georgia;">5. The average sale price as a
percent of list price in the Minneapolis area was 95.1% in August, the highest percentage for an August
since 2007, and above the 91.2% average for the months of August in 2010 and 2011. </span><br />
<br />
<span style="font-family: georgia;">6. The "months supply of inventory" in August was down to only 4.1 months, the lowest level in almost 7 years,
since the fall of 2005. </span><br />
<br />
<span style="font-family: georgia;">7. The inventory of Twin Cities homes for sale in August was only 16,806, the lowest inventory level since December 2003. </span><br />
<br />
<span style="font-family: georgia;"><b>MP:</b> By every
relevant measure
(double-digit increases in median sales price, closed sales and pending sales; ongoing decreases in average marketing time and increases in the percent of list price received, etc.), the real estate market in the
Minneapolis-St. Paul Area is experiencing a strong
and robust recovery this
year, and the housing market conditions there are reflected very closely
in many other metro areas around the country. <span style="font-family: georgia;">To quote Brian Wesbury et al. at First Trust, "<b>This is what a housing recovery looks like</b>." </span></span><br />
<br />
<span style="font-family: georgia;">In fact, with the home inventory
level in the Twin Cities currently at a nine-year low and the months supply of homes at a seven-year low, the biggest challenge for the Minneapolis-area real estate
market is now a shortage of homes for sale relative to the increasing
demand as rents rise and interest rates remain near historically low levels. With the tight supply of homes listed for sale and more buyers
coming into the market, we can expect multiple offers and further
increases in home prices going forward in the Minneapolis area. Continued increases in home prices will eventually result in more homes being put on the market for sale, which will boost inventory levels and contribute to a sustainable cycle of recovery for the Twin Cities housing market. </span><br />
<br />
<span style="font-family: georgia;">Here's how the Minneapolis Area Association of Realtors concludes its comments on the August sales report:</span><br />
<br />
<span style="font-family: georgia;">"There's reason for optimism going into the last third of 2012 and even into 2013, and housing is actually playing a large role in that positive outlook."</span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com7tag:blogger.com,1999:blog-28997633.post-27146111181186310712012-09-15T09:14:00.001-05:002012-09-15T09:57:57.497-05:00CD Post Re-Written by a Montana TV Station? <span style="font-family: Georgia,"Times New Roman",serif;">Read this <a href="http://mjperry.blogspot.com/2012/09/exponential-growth-north-dakota-oil.html" target="_blank">CD post</a> from last Wednesday on North Dakota oil output in July, and then read this <a href="http://www.ktvq.com/news/bakken-oil-boom-sets-north-dakota-records/" target="_blank">news report posted yesterday</a> by TV station KTVQ in Billings, Montana, and notice these similarities (especially the last comparison):</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>CD:</b> North Dakota pumped another record amount
of crude oil during the month of July at a rate of more than 674,000
barrels per day.</span><br />
<span style="font-family: Georgia,"Times New Roman",serif;"><br /></span>
<span style="font-family: Georgia,"Times New Roman",serif;"><b>KTVQ:</b> In July, North Dakota pumped a record amount of crude, at a rate of more than 674,000 barrels a day.</span><br />
<br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>CD:</b> The state’s oil production in July was 59% above a year ago.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>KTVQ:</b> Compared to a year ago, July's production level was up 59%.</span><br />
<br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>CD: </b> North
Dakota produced 62% more oil than Alaska in July, marking the fifth
consecutive month that North Dakota has out-produced Alaska. The Peace
Garden State surpassed Alaska’s oil production for the first time in
March to become the country’s new No. 2 oil state, behind only Texas
now. </span><br />
<span style="font-family: Georgia,"Times New Roman",serif;"><br /></span>
<span style="font-family: Georgia,"Times New Roman",serif;"><b>KTVQ:</b> July marked the fifth month in a row that the state of North Dakota produced more oil than Alaska. It was back in March that North Dakota surpassed Alaska's in oil
production for the first time to become America's second biggest oil
state.</span><br />
<br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>CD:</b> North
Dakota continues to lead the nation with the lowest state unemployment
rate at 3 percent in July, and more than five percentage points below the
national average. </span><br />
<span style="font-family: Georgia,"Times New Roman",serif;"><br /></span>
<span style="font-family: Georgia,"Times New Roman",serif;"><b>KTVQ:</b> North Dakota also continues to lead the nation with the lowest
unemployment rate at just 3 percent - more than five percentage points
below the national average.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">Coincidence? </span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com19tag:blogger.com,1999:blog-28997633.post-17066310690105710422012-09-15T08:52:00.001-05:002012-09-15T08:54:37.046-05:00Great Moments in Government Regulation: Massage a Horse in Nebraska, Go to Jail for Up to 20 Years<span style="font-family: Georgia,"Times New Roman",serif;">The <a href="http://www.ij.org/" target="_blank">Institute for Justice</a> is reporting that a woman in Nebraska could
face up to 20 years in prison for massaging horses without a license.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">“That’s the absurd fate Karen Hough could face if she wants to
continue her business in Nebraska. A certified instructor, Karen has
been massaging horses for years. Massaging a horse is believed to
deliver many health benefits, including relieving tension, improving
circulation, and alleviating muscle fatigue.”</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">“Earlier this year, she applied for a license in equine massage but
was told only veterinarians can become licensed. A 2007 memo from
Nebraska’s Board of Veterinary Medicine and Surgery asserted that “no
health professional other than licensed veterinarians and licensed
veterinary technicians may perform services/therapies on animals.” This
means Karen would need to spend thousands of dollars and seven years of
her life just to acquire a government permission slip to do what she’s
been doing for years.”</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><a href="http://ij.org/woman-could-face-20-years-in-prison-for-massaging-horses-without-a-license" target="_blank">Read more here</a>.</span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com18tag:blogger.com,1999:blog-28997633.post-87648352905476339222012-09-14T17:09:00.001-05:002012-09-15T07:58:09.534-05:00Market, Real Estates Updates<span style="font-family: Georgia,"Times New Roman",serif;">1. <a href="http://www.dqnews.com/Articles/2012/News/California/Southern-CA/RRSCA120913.aspx" target="_blank">DQ News</a> -- "Southern California home sales rose to the highest level for the month
of August in six years, fueled by low mortgage rates, a healthier
move-up market and near-record levels of investor and cash buying. The
median price paid for a home rose to a four-year high, lifted partly by
the ongoing shift toward fewer foreclosure resales and more mid- to
high-end deals." </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>MP:</b> August home sales in Southern California <b>increased 14.2%</b> compared to last year, and the <b>median sales price increased by 10.8%</b> to the highest level since August 2008. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"></span>
<span style="font-family: Georgia,"Times New Roman",serif;">2. <a href="http://www.dqnews.com/Articles/2012/News/California/Bay-Area/RRBay120914.aspx" target="_blank">DQ News</a> -- "The Bay Area posted its strongest home sales for the month of August in
six years, the result of low mortgage interest rates, an improving
economy and increasing demand in mid- to move-up market segments. The
median price paid for a home eased back a notch from June and July, but
was well ahead of last year for the fifth consecutive month." </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>MP:</b> Sales in the Bay Area increased <b>14.2% above last year, and median prices by 10.8%</b>. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">3. The <a href="http://www.bloomberg.com/quote/BFCIUS:IND/chart" target="_blank">Bloomberg U.S. Financial Conditions Index</a> closed today at t<b>he highest level since early July 2007, more than five years ago</b>. The index is<span style="font-family: georgia;"> updated daily by <span class="blsp-spelling-error" id="SPELLING_ERROR_1">Bloomberg</span>, and <span class="blsp-spelling-error" id="SPELLING_ERROR_2">assesses</span>
the relative strength/weakness of the U.S. money market, bond market
and equity market, and is considered a useful gauge of bank lending
conditions and the overall availability of credit in the economy. </span></span><br />
<span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: georgia;"><br /></span></span>
<span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: georgia;">4. The <a href="http://finance.yahoo.com/echarts?s=RSP+Interactive#symbol=rsp;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;" target="_blank">S&P 500 Equal Weighted Index</a> closed today at <b>the highest level in the index's history</b>, which goes back to 2003. </span></span><br />
<span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: georgia;"><br /></span></span>
<span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: georgia;">5. According to yesterday's <a href="http://www.corelogic.com/about-us/news/corelogic-releases-september-marketpulse-report.aspx" target="_blank">September MarketPulse Report</a> from CoreLogic, "the housing market is accelerating in all areas, sales are up, mortgage
performance is improving, and prices are rapidly improving."</span></span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-family: georgia;">6. The <a href="http://finance.yahoo.com/q?s=XHB" target="_blank">S&P 500 Homebuilders Index</a> closed today at <b>the highest level since early August 2007, more than five years ago.</b> </span></span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com9tag:blogger.com,1999:blog-28997633.post-73647859909082181502012-09-13T20:03:00.000-05:002012-09-13T20:05:25.953-05:00Upcoming Documentary on America's Longest War: The War on Drugs, "A Holocaust in Slow Motion"<iframe allowfullscreen="allowfullscreen" frameborder="0" height="350" src="http://www.youtube.com/embed/a0atL1HSwi8" width="425"></iframe>
<span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;"> </span></span><br />
<span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;">The soon-to-be-released documentary "The House I Live In" is an inside look at America's longest war, The War on Drugs, from e<span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;">xecutive producers Danny Glover, John Legend, Russell Simons. From the <a href="http://www.thehouseilivein.org/" target="_blank">film's website</a>:</span></span></span></span><br />
<br />
<span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;">"Filmed in more than twenty states, <b>THE HOUSE I LIVE IN</b> tells the stories
of individuals at all levels of America’s War on Drugs. From the dealer
to the narcotics officer, the inmate to the federal judge, the film
offers a penetrating look inside America’s criminal justice system,
revealing the profound human rights implications of U.S. drug policy."</span></span></span></span><br />
<span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;"> </span></span></span></span><br />
<span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;"><span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;">Here are some quotes from the trailer above:
</span></span></span></span><br />
<br />
<span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;">"The Drug War is a holocaust in slow motion." </span></span><br />
<br />
<span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;">"The Drug War is a war on all Americans." </span></span><br />
<br />
<span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;">"You have to understand that the War on Drugs has never been about drugs."</span></span><br />
<br />
<span style="font-size: small;"><span style="font-family: Georgia,"Times New Roman",serif;">From a <a href="http://www.usnews.com/news/blogs/washington-whispers/2012/09/13/new-documentary-lambasts-drug-war-and-obamas-failure-to-stop-it" target="_blank">review by US News</a>: </span></span><br />
<span style="font-family: Georgia,"Times New Roman",serif;"></span><br />
<blockquote class="tr_bq">
<span style="font-family: Georgia,"Times New Roman",serif;">Two years after he was elected president in 1969, Richard Nixon
first used the phrase "war on drugs," in a tough speech on drug policy. Four decades and more than 40 million drug-related crimes later, the war on drugs is still simmering.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">And now, just months before the presidential election, a new documentary "The House I Live In" explores the ways in which that war could be rethought. The film also implicates President Barack Obama, who promised a
compassionate drug policy while running for president but requested
$25.6 billion for drug enforcement in 2013—the highest yearly total
ever.</span></blockquote>
<span style="font-family: Georgia,"Times New Roman",serif;"></span><br />
<span style="font-family: Georgia,"Times New Roman",serif;">A reviewer from The Boston Globe says "I'd hate to imply that it's your civic duty to see "The House I Live In" but guess what - it is." </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">The movie will be in theaters on October 5. </span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com131tag:blogger.com,1999:blog-28997633.post-50848653196537335222012-09-13T15:06:00.001-05:002012-09-13T20:32:12.179-05:00Photo of the Day: Ben Bernanke As a Child Preparing for His Future Role as Fed Chair<div style="text-align: center;">
<span style="font-family: Georgia,"Times New Roman",serif;"><i><b>QE Forever
</b></i></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhE_WPfMbAE2VBylnT-cX6IIHcQY4DzNv4TSz1LbTcaHJMQaJfyF7hDo9tNP49SshyphenhyphenSrAE1eYcZyUGnjpVVjx8uKyz-gbFzX3w_3tUn4ee2xuPO5A_4bC_VEK8GioEJ8qSKC9gy/s1600/throwing-money.gif" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="297" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhE_WPfMbAE2VBylnT-cX6IIHcQY4DzNv4TSz1LbTcaHJMQaJfyF7hDo9tNP49SshyphenhyphenSrAE1eYcZyUGnjpVVjx8uKyz-gbFzX3w_3tUn4ee2xuPO5A_4bC_VEK8GioEJ8qSKC9gy/s400/throwing-money.gif" width="400" /></a></div>
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">HT: Moe</span>Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com37tag:blogger.com,1999:blog-28997633.post-10467286225907810452012-09-13T03:00:00.000-05:002012-09-13T07:26:23.343-05:002012: The Year of the Housing Recovery, Updated<span style="font-family: Georgia,"Times New Roman",serif;">1. "The number of improving housing markets across the country rose to 99 in
September, according to the <a href="http://www.nahb.org/news_details.aspx?sectionID=2223&newsID=15506" target="_blank">National Association of Home Builders/First American Improving Markets Index (IMI)</a>, released this week. This is up from
80 metros that were listed as improving in August and includes
representatives from 33 states as well as the District of Columbia. The IMI identifies metropolitan areas that have shown improvement from
their respective troughs in housing permits, employment and house
prices for at least six consecutive months."</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">Barry Rutenberg, chairman of the National Association of Home
Builders (NAHB) and a home builder from Gainesville, Fla. said, “This solid
growth is an encouraging sign that housing continues on a slow but
steady recovery path that is gradually advancing from one local market
to the next.”</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">“More metros across the country are experiencing a
sustained uptick in house prices, employment and new building activity
as rising consumer confidence in local market conditions pushes more
people to consider a new-home purchase,” observed NAHB Chief Economist
David Crowe. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">“Combined
with recent positive reports on builder confidence, housing starts and
new-home sales, the September IMI adds to the growing consensus that
housing is finally moving in the right direction, which in turn is
spurring more potential buyers to get off the fence,” added Kurt
Pfotenhauer, vice chairman at First American Title Insurance Company.</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">2. "</span><span style="font-family: Georgia,"Times New Roman",serif;"><a href="http://blogs.desmoinesregister.com/dmr/index.php/2012/09/12/august-home-sales-spike-27-percent-over-a-year-earlier-in-des-moines-metro-area/" target="_blank">Des Moines area home sales spiked 27% in August</a> over a
year earlier and climbed nearly 11% over July, a report from the
Des Moines Association of Realtors today shows. The average sale price pushed 3.3% higher to $172,839 in August over a year earlier. Pending sales climbed 13.1% to 897 in August over a year ago. In August, homes were on the market an average of 98 days, 14 days fewer
than 112 days in August 2011. Homes were on the market five days fewer than in
July."</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">3. The S&P Homebuilders ETF (<a href="http://finance.yahoo.com/q/hl?s=XHB+Holdings" target="_blank">XHB</a>) tracks the "S&P Homebuilders Select Industry Index" and includes holdings of Pulte Homes, Standard Pacific, Toll Brothers, MDC Holdings, USG and other homebuilders, construction companies, and companies that supply products to homebuilders or home buyers. The XHB closed Wednesday at 24.87, the highest level since August 2007 more than five years ago. Over the last year the XHB is up by 74%, or more than three times the 23.3% increase in the S&P 500 Index. </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>Update 1</b>: </span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">4. "<a href="http://www.corelogic.com/about-us/news/asset_upload_file516_16435.pdf" target="_blank">CoreLogic today released a new analysis</a> showing
that 10.8 million, or 22.3%, of all residential properties with a
mortgage were in negative equity
at the end of the second quarter of 2012. This is down from 11.4
million properties, or 23.7%, at the end of the first quarter of
2012. Approximately 600,000 borrowers reached a state of positive equity at
the end of the second quarter of 2012, adding to the more than 700,000
borrowers that moved into positive equity in the first quarter of this
year."</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">"Most borrowers in negative equity are continuing to pay their
mortgages. The share of borrowers that were underwater and current on
their payments was 84.9% at the end of the second quarter in
2012. This is up from 84.8% at the end of the first quarter in
2012."</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">“The level of negative equity continues to improve with more than 1.3
million households regaining a positive equity position since the
beginning of the year,” said Mark Fleming, chief economist for
CoreLogic. “<b>Surging home prices this spring and summer, lower levels of
inventory, and declining REO sale shares are all contributing to the
nascent housing recovery and declining negative equity</b>.”</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">“Nearly 2 million more borrowers in negative equity would be above
water if house prices nationally increased by 5 percent,” said Anand
Nallathambi, president and CEO of CoreLogic. “We currently expect home
prices to continue to trend up in August. Were this trend to be
sustained, we could see significant reductions in the number of
borrowers in negative equity by next year.”</span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;"><b>Update 2: </b></span><br />
<br />
<span style="font-family: Georgia,"Times New Roman",serif;">5. DQNews updated its <a href="http://www.dqnews.com/Charts/Weekly-Charts/USWeekly%20Page.aspx" target="_blank">National Home Sales Snapshot</a> today and reports that national homes sales for the most recent 30 days of home sales increased 11.3% compared to the comparable period last year, and the median sales price increased by 7.5%. </span><span style="font-family: Georgia,"Times New Roman",serif;">DQNews' home sales snapshot is based on 98 of the Top 100 U.S. metro areas, and covers about two-thirds of the nation's home sales. </span>
Mark J. Perryhttp://www.blogger.com/profile/04320124434231197938noreply@blogger.com54