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Monday, October 17, 2016

New Deal Demoncrat is being a bit of a pussy


NDD - DOOOOOM. Far as I'm concerned, he's being a bit of a pussy.

1. There are a lot of micro reasons why housing starts are horizontal. Partly, they lost a lot of their workforce and can't replace them. Also, I've read land is a bit scarce nowadays. Third, I've read the existing stock that was bought distressed for rental post-crisis is coming back on market. This time is not like last time.

2. LWV and housing starts may also be horizontal because we've finally filled in the slack in the economy that was caused by the crisis in 2008. Again, this time is not like last time.

3. Also, what little stimulus there was in 2009-2010 would have brought demand forward. Again, this time is not like last time.

4. When you say "housing starts did make just barely a new high several months ago", what you're doing is ignoring the error bars in that metric. I suspect the data is not precise enough for you to ever know when it made "just barely" a new high.

5. Next time Leamer talks about the housing cycle, ask him to clarify whether his mechanism is asset-price-like, or whether it's herp de derpity derp. Because I haven't read anything about housing prices dropping anywhere.

6. M2 is still growing. Why?

7. Wages are finally rising. Is that the prelude to a recession?

8. Blah blah something something demographics. Go ask Bill McBride.


Now sure, the US economy is still fragile enough to be easily tippable by an external shock.

But it is also fragile enough in the upward direction: if, say, Clinton wins the election and also takes the House & Senate, and swings the Supreme Court to her side, and maybe brings in some badly-needed infrastructure spending, while minimum wage hikes continue across the country, improving demand.

Your horizontal lines only prove that the hole has been filled in.

And if you want to reason by analogy, which is what you do when you use a time series, then FFS you can't pick worse than 2008. Compare your graphs to the 1990s, and yes I know the data series ain't always there.


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