The Big Picture

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• Using Data on Seller Behavior to Forecast Short-run House Price Changes
• Basic Wine Guide
• Succinct Summation of Week’s Ending (3.21.2014)
• Media Appearance: Bloomberg TV with Trish Regan (3:00 – 4:00 pm)
• Tweets of the Week: The Fed, Some Charts and a Dinosaur
• 10 Friday AM Reads
• The Counter-Factual & the Fed’s QE

Using Data on Seller Behavior to Forecast Short-run House Price Changes Posted: 22 Mar 2014 02:30 AM PDT

Basic Wine Guide Posted: 21 Mar 2014 04:30 PM PDT Source: Visually

Succinct Summation of Week’s Ending (3.21.2014) Posted: 21 Mar 2014 12:30 PM PDT Succinct Summations week ending March 21st, 2014 Positives: 1. S&P 500 made new all-time highs, despite Taper and  tuning out noise continues to work. 2. U.S. factory output rose 0.8% in February, the biggest gain since August. 3. Energy prices fell for the first time in 3 months. 4. Building permits jumped 7.7% to 1.01M vs 960k expected. 5. European car sales rose 7.6% in February, up for the sixth straight month. 6. CPI rose 0.1% in February, in line with expectations, up just 1.1% y/o/y. Good for consumers. 7. Fed stress test shows 29 of 30 banks meet or top capital target, banks go wild 8. Philly fed had a huge beat, coming in at 9 v expectations of 3.2 9. Initial jobless claims came in at 320k, the 4-week moving average slid to 327k, from 330.5k. 10. The FOMC tapered by another $10B indicating continued optimism in the economy. Negatives: 1. Fears that rate hikes might happen as soon as 2015 through the bond market into a frenzy. 2. Existing home sales were down 0.4 for February to an annualized pace of 4.6m units, the lowest pace of sales since July 2012. 3. Housing starts sunk 0.2% to an annualized pace of 907k v 910k expected. 4. NAHB homebuilder sentiment came in at 47, below expectations of 50. 5. The fed dropped its numerical thresholds and opted for qualitative guidance, gave markets indigestion. 5. Empire State manufacturing came in at 5.61 v expectations of 7.   Thanks Batman!

Media Appearance: Bloomberg TV with Trish Regan (3:00 – 4:00 pm) Posted: 21 Mar 2014 12:15 PM PDT I will be swinging by this afternoon to talk with her about the taper and market tops Guest hosting with the lovely Trish Regan at Bloomberg TV from 3:00 pm to 4:00 pm on Street Smart.We will talk Bull market rallies, Fed Tapering, Market Tops, etc. Should be lots of fun — Check it out at their live streamer on TV.

Tweets of the Week: The Fed, Some Charts and a Dinosaur Posted: 21 Mar 2014 10:30 AM PDT Here are some of my favorite tweets from the week:   The Fed: Hawkish? Hardly! Spelled with an "I." What would a FOMC meeting be without a limerick? My own contribution to the FOMC noise. Markets Reasons to sell since March 2009. Spot what’s wrong with this chart.     Continues here

10 Friday AM Reads Posted: 21 Mar 2014 06:30 AM PDT The work week endeth! • Here's How 18 Categories Of Equity Funds Measure Up Against Their Respective Indices (Business Insider) • Russia 'planned Wall Street bear raid' (BBC) • Tesla Can Topple the Car-Dealer Monopoly (BV) see also Tesla Versus the Rent Seekers (Marginal Revolution) • You Can't Avoid Asset Allocation… Even If You Try (The Capital Spectator) Continues here

The Counter-Factual & the Fed’s QE Posted: 21 Mar 2014 05:30 AM PDT     "The weak recovery is proof that the Federal Reserve's program of quantitative easement does not work."   You do not understand the Counter-Factual. That is the only conclusion I can draw from what the very common criticism of the Federal Reserve policies of ZIRP and QE (above), and its inherent analytical error. The most common version goes something like this: If you do X, and there is no measurable change subsequently, X is therefore ineffective. The problem with this "non-result result" is what would have occurred otherwise. Might "no change" be an improvement from what otherwise would have happened? Flat, last I checked is better than freefall. If you are testing a new medication to reduce tumors, you want to see what happened to the group that did not get the tested therapy. Perhaps the control group saw tumors grew; maybe they were metastasizing throughout the body. Hence, a result where there is no increase in tumor mass or spreading would be considered a very positive outcome. We run into the same issue with QE. In the absence of a functional congress or traditional post-recession Keynesian stimulus, the Fed is the only fgame in town. Neither you nor I truly know what the impact of QE has been. continues here

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