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Thread: Interesting Trend

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    God/dess Deogol's Avatar
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    Default Interesting Trend

    It seems that CNBC has had more stories questioning the numbers. They recently profiled a Wall Street Journal story where they are calling bullshit on the CPI and Inflation numbers (The WSJ is!) The WSJ is saying the numbers are watered down and explains how.

    They are also exploring unrealistic housing prices. They just showed a 3 bedroom ranch (that should be no more than 200K) going for a million dollars. They are not bad mouthing it, but it is pretty apparent your money is just not going very far when it comes to housing these days.

    P.S. if you want a chance to win a nice car, check out .

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    Banned Melonie's Avatar
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    Default Re: Interesting Trend

    well, the 'tin foil hat' crowd maintain that the US gov't is deliberately under-reporting CPI and inflation numbers to minimize the resulting increased costs to the gov't budget for automatically adjusted social benefit program payments, to minimize interest the gov't must pay out on TIPS bonds, to minimize COLA's under civil service employee contracts etc.

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    God/dess Deogol's Avatar
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    Default Re: Interesting Trend

    Quote Originally Posted by Melonie
    well, the 'tin foil hat' crowd maintain that the US gov't is deliberately under-reporting CPI and inflation numbers to minimize the resulting increased costs to the gov't budget for automatically adjusted social benefit program payments, to minimize interest the gov't must pay out on TIPS bonds, to minimize COLA's under civil service employee contracts etc.
    I have never thought of the Wall Street Journal as the tin foil hat wearing kind. Maybe the MSM (main stream media) is starting to wake up about a few things.

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    God/dess montythegeek's Avatar
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    Default Re: Interesting Trend

    Doegol,
    Could you please provide the specific way the WSJ is finding fault with the CPI. Otherwise it is nothing but a rumor. there are also a large number of incompetent reporters working, even for the WSJ. I spent over an hour talking to one Wednesday(yes the WSJ) and he did not know his ass from a hole in the ground.

    As for the property, from the CNBC web site I surmise it is the one in Brookline called the million dollar fixer upper. Yes there are idiots who ask a lot more for property than it is worth on the market, but Brookline is a prime realestate location for any downtown worker as the first suburb outside the city limits of Boston and about 6 miles from downtown. A search of Brrokline properties at centery 21's site found 1br 1 bath properties going for 300K. Does not mean they will get it but it is not as farfetched as appearances on closer examination. Depending on things not known, the land could be worth 500K.

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    Default Re: Interesting Trend

    Quote Originally Posted by Deogol
    They are not bad mouthing it, but it is pretty apparent your money is just not going very far when it comes to housing these days.
    Housing costs depend on region. Where I am land sells for about $200,000 per acre. About 50 miles from here in a rural/woody area land sells for about $3,000 per acre. You could spend $50 - $100k for materials and labor and have a decent house.
    Last edited by dudeski; 04-09-2006 at 12:33 AM.

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    Banned Melonie's Avatar
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    Default Re: Interesting Trend

    About 50 miles from here in a rural/woody area land sells for about $3,000 per acre. You could spend $50 - $100k for materials and labor and have a decent house.
    'Affordability' of housing is one thing ... yes it's possible to build a nice house in the 'middle of nowhere' for a reasonable amount of money. However, it's another question entirely in regard to the 'investment' value or 'resale' value of such a house. This is particularly the case if there are no decent jobs to be had in the 'middle of nowhere', if gasoline prices rise from $3 to $4 to $5 per gallon vastly affecting the cost of commuting 100+ miles per day, and if rural property taxes start to rise astronomically as the 'middle of nowhere' suddenly becomes suburbanized.

    In fact, your point about 'middle of nowhere' affordable housing makes use of exactly the same 'substitution' strategy that the CPI calculation does. You freely substituted the cost of a house in the 'middle of nowhere' which is relatively cheap for the cost of a house in a very popular urban area which is very expensive, in the same manner that the CPI substitutes the price of beef for the price of chicken ... on the assumption that people will automatically make the transition from the more expensive option to the less expensive option. This of course totally disregards the real world economic impact that some people simply don't want to live in the 'middle of nowhere' and simply don't want to eat red meat !

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