Given yesterday’s eye-popping Producer Prices — the 12 months ending in February, overall wholesale prices rose 2.5%, the highest reading since August 2006 — there was some concern about today’s Consumer Prices.
And with good cause: the headline number was plus 0.4%, higher than expected (0.3%). We are told there is "nothing to worry about here," though: Once we remove everything that has gone up in price, inflation remains contained. Core prices, excluding food and energy, increased only 0.2% in February.
Consider that February prices for "crude
foodstuffs and feedstuffs" were up 18.8% above year-ago levels, its no surprise that food
companies are passing those higher costs to consumers. Wholesale
consumer food prices are 6.8% above year-ago levels. The WSJ noted that Energy prices increased by 0.9% in February, while Gasoline prices rose 0.3%. Natural gas prices swelled 5%. Those begging the Fed for a rate cut can forget about the next 2 FOMC meetings; Barring a full-blown market meltdown, cuts at those gatherings simply aint gonna happen.
Ahhh, inflation ex-inflation. Where would we be without you?
UPDATE: March 16, 2007 12:21pm
Note that the big drop in 2006 in PPI and CPI followed the change in GSCI energy exposure, when Oil dropped from $78 towards $50. It is now back near $60 . . .
CONSUMER PRICE INDEX: FEBRUARY 2007
News Release text
BLS, MARCH 16, 2007
Producer Price Indexes — February 2007
News Release text
BLS, MARCH 15, 2007
U.S. Consumer Prices Rise 0.4% Amid Higher Food, Energy Costs
WSJ, March 16, 2007 8:53 a.m.
U.S. Wholesale Prices Rise 1.3% As Food, Energy Costs Jump
WSJ, March 15, 2007 9:35 p.m.
We sold our house last year — priced it reasonably, and at our first open house (Thanksgiving weekend!), got a reasonable bid. We ended up selling the house to that couple.
Whenever you hear talk of a Real Estate bubble, remember that it matters much less if you own (versus rent). In effect, we rolled out of one over-priced property and into the next over-priced property. When you are a homeowner, actual prices matter less than the spread between properties.
We closed yesterday.
In the process, we dealt with a lot of different agents on our buy and the sell. Some were terrific (who we would not hesitate to recommend and/or use again), a few were jackals, and one or two were deeply disturbed psychopaths who were obviously off their meds, likely violating a condition of their parole.
Along the way, we developed somes Do’s and Don’ts. (I’m sure readers have their own suggestions; use comments and let fly!)
This is a free lesson for the smarter, blog reading agents out there. Its a tough residential housing market, and if you want to earn your living selling real estate, pay attention and heed this advice:
1. Don’t waste our time.
I know some people do not know what they want, and you should feel free to schlep those poor bastards all over creation, burning valuable weekend time in the process.
However, when someone
gives you a very specific list of attributes and a broad price range, don’t drag
them around town(s) showing them everything but.
This is rule #1 for a reason: If you waste my time, I won’t do business with you PERIOD. If I tell you I DO NOT want a house with X and Y characteristics, and you drag me to 3 X & Y houses in a row, you are toast. Next agent, please.
2. Don’t lie to us
In nearly every real estate transaction, the truth will eventually reveal itself. If a prior deal fell thru due to an engineer’s report, I will find that out. If the prior owner paid 1/10 of the selling price 25 years ago, that will be discovered also (not that it matters).
Some of the lies were so transparent as to be laughable. Others were more skillfully concealed. If I ask you a direct question, and you lie directly back, and I discover this lie via an expensive engineer’s report (which would have been unneccessary had you told the truth when asked), I will present the bill to you — and your corporate HQ. (Then collect in small claims court on a theory of fraudulent misrepresentation).
Stop bullshitting, start adding value, and you might get a sales commission out of it.
3. Don’t tell us what is right before our eyes.
This is one of those nervous R/E habits: chattering on and on about the obvious. If you want to point out small details we might miss — for example, the kitchen drawers pull out all-the-way, or there is a built-in water filter in the kitchen sink, that’s fine. Even telling me the floors under the wall to wall are all hardwood adds something.
But seriously, I have two good eyes and so does my wife. I can see that THIS IS A BATHROOM; I can tell that THIS IS A WALK IN CLOSET. We actually had one agent solemnly intone: THIS IS THE KITCHEN. Really, how can you tell? Were the fridge, stove and dishwasher clues?
Its not helpful and is actually very annoying. STF up occasionally.
Category: Real Estate