GDP Ex Housing

Despite the weather improving in March, pending sales of
existing homes
decreased at a seasonally adjusted annual rate of 4.9%; Sales were
down 10.5% from one year ago. Economists were looking for a 0.4% increase.

While some people ignorantly insist Housing is having zero impact on the economy, I am heartened to see the business press isn’t buying into that nonsense. Bloomberg’s Caroline Baum not only punctures that absurdity, but assigns a political explanation for it as well:

"Excluding housing, the U.S. economy is doing just fine.

That’s the latest rationalization of a select group of operators who think that the Bush administration’s 4.6 percentage point cut in the top marginal tax rate and 5-point reduction in the top capital gains rate can protect the economy from any and all ills.

To say that ex-housing the economy is doing just fine is tantamount to claiming that, ex-Iraq, Bush’s Middle-East policy is a rousing success."

Caroline pulls no punches. I am partial to analogy used by Deutche  Bank’s Joe Lavorgna. We’ve been discussing how utterly untethered from reality that analytical approach is, and Joe observed:

"Backing out Housing today is like going ex-Capex in the late 1990s. Corporate Capital Spending was huge in the the nineties, and if we remove its contribution from GDP from 2000 forward, well, then there was no recession in 2001-02."

Let’s do a quick review of our favorite Ex’s:

• Back the things going up in price, there’s no inflation (Inflation ex inflation)
• Remove Housing from GP, there’s no economic deceleration (GDP ex Housing)
• Elimate the CapEx spending from the tech boom, and therewas no 2001 recession (GDP ex Capex)

Did I forget any? Feel free to use comments to suggest other analytical absurdities . . . 


Housing? What Housing? I Don’t See Any Housing
Caroline Baum
Bloomberg, April 30, 2007

Category: Data Analysis, Economy, Employment, Real Estate

The Hedonism Index

Category: Economy, Psychology

Amy Winehouse

Yet another talented UK vocalist taking her cues from the past, but with a modern twist: Amy Winehouse. Winehouse’s 2nd album, Back to Black, freshens up the classic soul albums with original songs done in the style of the 1950/60′s girl groups.

New Yorker Magazine got it just right — “a fierce English performer whose voice combines the smoky depths of a jazz chanteuse with the heated passion of a soul singer.” I hate when people compare a new performer with the greats, but you can say that stylistically, she falls between Billie Holiday and Ronnie Spector.

This is the fourth musician we’ve spotlighted, who have gone retro — delving into an older genre and freshening it up (Bitter:Sweet, James Hunter and Joss Stone were the first three). Except for Bitter:Sweet, they all seem to hail from England.

There’s a good interview here and 4 videos of acoustic versions of her songs after the jump (I cannot link to AOL’s DL as its a terribly annoying site)


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Category: Digital Media, Music

CNBC Discussion On Grantham’s Bubble Thesis

Category: Investing, Markets, Media, Psychology

CNBC Appearance: Bubbles Everywhere ?!

Category: Economy, Investing, Markets, Media, Psychology

Week in Preview

Category: Earnings, Economy, Employment, Markets

End of April Linkest (Part II)

Category: Weblogs

End of April Linkest (Part I)

Category: Weblogs

Which is Performing Better, the Dow or the S&P500 ?

Category: Data Analysis, Index/ETFs, Investing, Markets

Friday Night Jazz: Dexter Gordon

Category: Digital Media, Friday Night Jazz, Music