Apr 25 2006
Roundup: Inflation Fraud, Foreclosures , and More.
We’ve long complained about how CPI is a rigged number. It is nice to see the mainstream at MarketWatch take a look at the slight of hand with Core CPI, but it still misses the bigger point that CPI is understated by 3% or more.
To the point, gas prices are forcing folks to adjust their spending habits and consumption choices. It seems downright silly to not include gas prices in the core CPI.
With that in mind, the GOP appears ready to cave to political expedience by meddling with reducing gasoline prices — as if fiat dictates can somehow suspend the laws of economic gravity. Should Bush and the GOP — and the Democrats who are looking for any opportunity to make hay — start capping prices, expect all sorts of ancillary problems like those of the 1970s mess — the last time the government intervened in gas prices.
Meanwhile, the housing bubble continues to unwind in front of us. RealtyTrac is noting that foreclosures up up 38% nationally. [UPDATE: The Chicago Trib is reporting that those same figures are up 72% from one year ago! ]
Yet in the face of it all, consumer confidence is at its highest in four years.
Oddly enough, often times when folks are the most bullish on the economy that reality hits them squarely in the mouth. Many traders view the bullish index as a contrarian indicator because when folks are all too comfortable, they are often complacent.
We, along with our readers, hope we are not on the cusp of something more severe than the usual recession. But we remind everyone that hope is no substitute for a plan.
Oh yeah its only getting worse. In my city its seems like the foreclosures are doubling every 6 months, for the past year. The short sales are really hot right now also. I’m wondering if there would be more foreclosures if it wasnt for the short sales. I guess will see what happens in the next few years.