Posts Tagged ‘Case Shiller CPI’

What’s the Real CPI?

What’s the Real CPI?

Courtesy of Mish

Inquiring minds are asking "What is the Real CPI?" It’s a good question, too. However, you can find many widely differing opinions. For example, you will get one answer from the government, a different answer from sites like Shadowstats, and a third opinion from me.

First let’s look at John Williams’ Shadowstats .

alternative CPI measures

That’s an interesting chart, especially given the hyperinflationary bent of John Williams. He pegs the CPI at 2% as of May 2009 and had it at 9% mid-2008 and right around 5% in 2007. In contrast, the official CPI was 5.5% in mid-2008 and 2+% in 2007.

The problem with all of those numbers is they fail to properly take housing into consideration. And housing has been falling like a rock.

what is the real cpi?Should housing be in the CPI? How?

Bear in mind the government considers housing a capital good not a consumption item. Based on the idea that one would be renting a house if one did not own it, the government uses Owners Equivalent Rent (OER) and not housing prices in the CPI. OER is the largest component in the CPI.

By the same measure one might argue that lawn mowers and automobiles are capital goods. Lawn mowers are durable, not immediately consumed, and if one owns buildings and uses lawn mowers to maintain their properties (or if one hired someone to cut their lawns for them), the mowers would indeed be depreciated over time as a capital expense. The same logic also applies to auto leases.

Let’s explore this from a practical standpoint starting with theory.

Consumer Price Theory and Practice

Here are a few excerpts of note from the Consumer Price Index Manual, Theory and Practice By Ralph Turvey.

Page 47: The treatment of owner occupied housing is difficult and somewhat controversial. There may be no consensus on what is the best practice. The distinctive feature is that it requires the use of an extremely large fixed asset in the form of the dwelling itself.

Page 147: The treatment of owner-occupied housing is arguably the most difficult issue faced by CPI-compilers. Equally important it may be difficult to identify a single principal purpose for the CPI.

In particular, the dual use of CPIs as both macroeconomic indicators and also for indexation purposes can lead to


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Phil's Favorites

Utilities are starting to invest in big batteries instead of building new power plants

 

Utilities are starting to invest in big batteries instead of building new power plants

This is what a 5-megawatt, lithium-ion energy storage system looks like. Pacific Northwest National Laboratory

Coutesy of Jeremiah Johnson, North Carolina State University and Joseph F. DeCarolis, North Carolina State University

Due to their decreasing costs, ...



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Zero Hedge

Elon Musk Takes Out $50 Million in New Loans, Mortgaging Five Homes

Courtesy of Zero Hedge

We were one of the very first to speculate that Elon Musk had mortgaged 5 of his homes in late January, when we highlighted research by an internet sleuth on Musk's personal financial situation. According to public records cited by Tesla skeptic EVent Horizon and laid out in a timeline on Sutori in late January, Elon Musk looked as though he had leveraged some of his personal real estate.

A follow up report from Bloomberg ha...



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ValueWalk

KHC To Be Bought Out By Berkshire: Here Is Why Its A Possibility

By Jacob Wolinsky. Originally published at ValueWalk.

Whitney Tilson’s email to investors discussing buyer beware of consumer staples sellers; Stamps.com Inc. (NASDAQ:STMP) and The Kraft Heinz Company (NASDAQ:KHC) blowups; Will Buffett buy KHC?; Is the #3G model flawed?; Asia Wealth Summit; Theranos.

I’m sending out today’s email early because there’s so much juicy/timely stuff…

Q4 hedge fund letters, conference, scoops etc...



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Kimble Charting Solutions

Giant Topping Pattern Could Be Forming, Says Joe Friday

Courtesy of Chris Kimble.

The first fact of the day; The long-term trend for tech remains up and the decline into the lows on Christmas Eve DID NOT break this trend!

This chart looks at NDX 100 ETF (QQQ) on a weekly basis over the past 14-years. For the past decade, since the lows in late 2009, QQQ has remained inside of rising channel (1). As you can see the decline into the end of the year lows, did nothing more than test support, which held and a strong rally has followed!

Over the past few months, QQQ could be forming a “Head & Shoulders&...



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Insider Scoop

Salesforce.com's Q4 Report Should Trigger Higher Valuation, Says Bullish Oppenheimer

Courtesy of Benzinga.

Related CRM Oppenheimer Praises HubSpot's Execution, Downgrades On Valuation Benzinga's Top Upgrade...

http://www.insidercow.com/ more from Insider

Chart School

RTT browsing latest..

Courtesy of Read the Ticker.

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Thursday, 02 August 2018, 07:48:20 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: $600 BN interest payments for US gov, print baby print



Date Found: Sunday, 05 August 2018, 09:22:26 PM

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Comment: Hire FED interest rates always brings double trouble



Date Found: Monday, 06 August ...

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Digital Currencies

Cryptos Are Surging: Bitcoin, Ethereum Hit One-Month Highs As Institutions Dip Toes

Courtesy of Zero Hedge

Cryptocurrencies are surging while the US equity markets take the day off. Ethereum is up over 18% from Friday's 'close' and the rest of the crypto space is a sea of green. While no immediate catalyst (headline or technical level) is clear, increasing chatter over institutional investors dipping their toes in the space have prompted an extension of the positive trend.

A sea of green...

Source: Coin360

Ethereum is leading the charge follow...



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Biotech

Cancer: new DNA sequencing technique analyses tumours cell by cell to fight disease

Reminder: We are available to chat with Members, comments are found below each post.

 

Cancer: new DNA sequencing technique analyses tumours cell by cell to fight disease

Illustration of acute lymphoblastic leukaemia, showing lymphoblasts in blood. Kateryna Kon/Shutterstock

Courtesy of Alba Rodriguez-Meira, University of Oxford and Adam Mead, University of Oxford

...

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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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