Basic Finance's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/159986/comments http://seekingalpha.com/article/114405-a-sloppy-60-minutes-segment-on-oil-prices?source=feed#comment-353807 353807
1) Oil is priced in US Dollars.......OK so the stats should have been priced in some mixed basket currency. This might smooth out the swings, but it certainly doesn't EXPLAIN them.

2)Over the same period that Oil prices were rising, the US was fighting two major wars in the Middle East, Iraq and Afghanistan......Hmmm do the prices actually move with any war related stats? Death toll? Oil fields blown up? NO. Did we stop fighting these wars at some point in the last year? Not sure how that situation could lead to skyrocketing prices and then also lead to the recent price collapse.

3) Energy prices rose during an economic expansion (fueled by low rates and cheap money)....And now that we have lower rates and cheaper money...??? Prices fall?? Not sure I get that. If what you are arguing is that PERCEPTION of future growth drives prices, then you are actually agreeing with 60 minutes. If speculation isn't driven by the expectation of future oil prices, I'm not sure what the word means.


4) Since 2001, Commodities of all sorts rose significantly: Steel, aluminum, cement, foodstuffs, precious metals, etc. Were they all driven by speculation, or was something else going on?

.....I'm pretty sure 60 minutes was arguing that all commodities were being inflated due to speculation and that oil was the most obvious example...so Yes...they were all being driven by speculation.


5) Since the 1% Fed funds rate of 2003, inflation has had a dramatic impact on ALL prices — from medical costs to insurance to education to health care to housing to food and energy. That 60 Minutes failed to even mention inflation in a piece on Oil prices is a terrible oversight on their part........Oh so inflation increased prices 3x during the bubble? Aren't you putting the cart in front of the horse? Wasn't a lot of the actual price inflation DUE to the increase in oil prices? Do oil prices track well with any measure of monetary policy? Didn't think so.

6) Throughout the 1990s and 2000s, cars were increasingly replaced with SUVs and trucks. These got appreciably worse gas mileage, as the total US miles driven rose. Hence, increased US demand for energy accompanied increasing prices....... 60 minutes cited DEMAND. If you disagree with the stats, fine, give us another source, but it doesn't really matter what people do in cars since the measure of overall demand would already account for whatever people are doing with their cars. PLEASE. 60 minutes is wrong because they didn't specifically note the Bobby Joe bought an SUV! I'ts already in the stats for God's sake.

I'm sure the last few points were equally petty...I just don't have time to go over them. ]]> Mon, 12 Jan 2009 16:50:32 -0500
1) Oil is priced in US Dollars.......OK so the stats should have been priced in some mixed basket currency. This might smooth out the swings, but it certainly doesn't EXPLAIN them.

2)Over the same period that Oil prices were rising, the US was fighting two major wars in the Middle East, Iraq and Afghanistan......Hmmm do the prices actually move with any war related stats? Death toll? Oil fields blown up? NO. Did we stop fighting these wars at some point in the last year? Not sure how that situation could lead to skyrocketing prices and then also lead to the recent price collapse.

3) Energy prices rose during an economic expansion (fueled by low rates and cheap money)....And now that we have lower rates and cheaper money...??? Prices fall?? Not sure I get that. If what you are arguing is that PERCEPTION of future growth drives prices, then you are actually agreeing with 60 minutes. If speculation isn't driven by the expectation of future oil prices, I'm not sure what the word means.


4) Since 2001, Commodities of all sorts rose significantly: Steel, aluminum, cement, foodstuffs, precious metals, etc. Were they all driven by speculation, or was something else going on?

.....I'm pretty sure 60 minutes was arguing that all commodities were being inflated due to speculation and that oil was the most obvious example...so Yes...they were all being driven by speculation.


5) Since the 1% Fed funds rate of 2003, inflation has had a dramatic impact on ALL prices — from medical costs to insurance to education to health care to housing to food and energy. That 60 Minutes failed to even mention inflation in a piece on Oil prices is a terrible oversight on their part........Oh so inflation increased prices 3x during the bubble? Aren't you putting the cart in front of the horse? Wasn't a lot of the actual price inflation DUE to the increase in oil prices? Do oil prices track well with any measure of monetary policy? Didn't think so.

6) Throughout the 1990s and 2000s, cars were increasingly replaced with SUVs and trucks. These got appreciably worse gas mileage, as the total US miles driven rose. Hence, increased US demand for energy accompanied increasing prices....... 60 minutes cited DEMAND. If you disagree with the stats, fine, give us another source, but it doesn't really matter what people do in cars since the measure of overall demand would already account for whatever people are doing with their cars. PLEASE. 60 minutes is wrong because they didn't specifically note the Bobby Joe bought an SUV! I'ts already in the stats for God's sake.

I'm sure the last few points were equally petty...I just don't have time to go over them. ]]> http://seekingalpha.com/article/113970-30-year-frm-rates-who-says-lower-rates-won-t-do-much-good?source=feed#comment-351127 351127 Fri, 09 Jan 2009 15:19:23 -0500 http://seekingalpha.com/article/112936-are-home-prices-still-too-high?source=feed#comment-344583 344583
So what are replacement costs in the Bay Area and why do you think we are below them now? Are you factoring in the plummeting value of land in your equation? Just because Toll Brothers and others spent 3x what they should have for land in 2004-2005, doesn't mean the land is actually worth that. ]]> Fri, 02 Jan 2009 18:52:58 -0500
So what are replacement costs in the Bay Area and why do you think we are below them now? Are you factoring in the plummeting value of land in your equation? Just because Toll Brothers and others spent 3x what they should have for land in 2004-2005, doesn't mean the land is actually worth that. ]]> http://seekingalpha.com/article/98565-the-next-bull-market-could-be-rentals?source=feed#comment-274317 274317 Sun, 05 Oct 2008 21:35:38 -0400 http://seekingalpha.com/article/92045-home-prices-have-stopped-falling-the-statistics-are-skewed?source=feed#comment-236162 236162 Fri, 22 Aug 2008 01:32:16 -0400 http://seekingalpha.com/article/88818-it-s-still-about-affordability-stupid-housing-tracker?source=feed#comment-222485 222485
If what you mean are people who are buying foreclosed properties with the intention of flipping them in a year....OK...but I'm not sure I would call those people "SMART greedy".]]> Mon, 04 Aug 2008 13:39:14 -0400
If what you mean are people who are buying foreclosed properties with the intention of flipping them in a year....OK...but I'm not sure I would call those people "SMART greedy".]]> http://seekingalpha.com/article/87390-housing-no-bottom-yet-in-sight?source=feed#comment-216712 216712 Mon, 28 Jul 2008 14:39:16 -0400 http://seekingalpha.com/article/79479-different-views-on-housing-supply?source=feed#comment-176631 176631
Why in the world do you think REOs are going to run out any time soon? I guess I don't take seriously any article that cuts and pastes "significant pent up demand" directly from Lawrence Yun, the master of calling false bottoms. ]]> Fri, 30 May 2008 09:39:57 -0400
Why in the world do you think REOs are going to run out any time soon? I guess I don't take seriously any article that cuts and pastes "significant pent up demand" directly from Lawrence Yun, the master of calling false bottoms. ]]> http://seekingalpha.com/article/72471-the-housing-crisis-personal-responsibility-and-wishful-thinking?source=feed#comment-151636 151636
I also question how someone like Greenspan pretended not to recognize the bubble. You CAN recognize a bubble before it bursts. When an asset no longer can be related to the rent it can/will generate, it is overvalued. In some ways, the .com bubble was a bit harder to spot because the underlying assumptions for future revenue were so hard to pin down. Maybe people will buy everything online...maybe they won't. Who knew? With housing, no such upside argument could ever be made. Why would rents increase to the level needed to make the 2005 prices reasonable? No convincing argument was ever given.

]]> Wed, 16 Apr 2008 11:03:56 -0400
I also question how someone like Greenspan pretended not to recognize the bubble. You CAN recognize a bubble before it bursts. When an asset no longer can be related to the rent it can/will generate, it is overvalued. In some ways, the .com bubble was a bit harder to spot because the underlying assumptions for future revenue were so hard to pin down. Maybe people will buy everything online...maybe they won't. Who knew? With housing, no such upside argument could ever be made. Why would rents increase to the level needed to make the 2005 prices reasonable? No convincing argument was ever given.

]]> http://seekingalpha.com/article/72151-housing-credit-economy-at-an-inflection-point?source=feed#comment-150763 150763 Mon, 14 Apr 2008 21:07:44 -0400 http://seekingalpha.com/article/71940-the-folly-in-calling-a-housing-market-bottom?source=feed#comment-149232 149232
Evergreen16: Why do you think the boom started in 2004? Most graphs I have seen show a disconnect from fundamentals back in 2000. Hell, the PEAK of the boom was 2005. Was there really just a one year boom?]]> Fri, 11 Apr 2008 17:23:41 -0400
Evergreen16: Why do you think the boom started in 2004? Most graphs I have seen show a disconnect from fundamentals back in 2000. Hell, the PEAK of the boom was 2005. Was there really just a one year boom?]]> http://seekingalpha.com/article/70323-how-ivory-tower-economists-created-the-housing-bubble?source=feed#comment-133237 133237 Fri, 28 Mar 2008 18:44:12 -0400 http://seekingalpha.com/article/69420-housing-when-magazine-covers-indicate-a-clash?source=feed#comment-129326 129326 Thu, 20 Mar 2008 11:23:42 -0400 http://seekingalpha.com/article/67541-pending-home-sales-down-19-6?source=feed#comment-123689 123689 Fri, 07 Mar 2008 14:52:59 -0500 http://seekingalpha.com/article/67197-foreclosure-proof-homeowners?source=feed#comment-122471 122471 Wed, 05 Mar 2008 12:01:30 -0500 http://seekingalpha.com/article/67019-a-note-to-the-bubble-phobes?source=feed#comment-121938 121938 Tue, 04 Mar 2008 10:53:36 -0500