Avert recession or control inflation?

NEW -> Contingent Buyer Assistance Program
Apartment Rents:





Los Angeles 5.4%


Orange 5.1%


San Diego 5%


Source: RealFacts/LA timeshttp://www.latimes.com/media/graphic/2007-10/33313158.gif





Top 2 markets in Realfacts:


Santa Clara County: 12.2%


Seattle 12.4%





Manhattan: Studio 4.8% 1BR 4.4% 2BR 5.6% 3BR 0.7%


Source:http://www.citi-habitats.com/media/pdf/rentals3quarter2007.pdf





Owner's equivalent rent is a large component of the CPI that's why I did a double take when you said rents rose 10% (I'm 99% sure that hasn't happened on a national level). This component of CPI should start increasing if there is inflationary pressure in the rental housing market.
 
<p>Trading in November fed funds futures show a 25-basis- point cut in the benchmark rate to 4.5 percent is fully priced in, with only a small chance that there will be a bigger cut to 4.25 percent. </p>
 
An interesting piece in the <a href="http://www.ft.com/cms/s/0/91c38df2-858a-11dc-8170-0000779fd2ac.html?nclick_check=1">Financial Times today</a>, indicates that the Fed is concerned that an impending cut will be interpreted as signaling a sustained easing cycle. The article suggests that the Fed is thinking in terms of rebasing the Fed funds rate to, "just below what might be considered a new neutral rate given tighter credit conditions." They don't want investors to get too excited...
 
<a href="http://www.bloomberg.com/apps/news?pid=20601109&sid=al_D6U0txzVg&refer=home">Caterpiller says yes for recession but other CEOs say no recession</a>.
 
The Federal Open Market Committee lowered its target for overnight interest rates by a quarter percentage point to 4.5% Wednesday. This is the lowest federal funds rate in the tenure of Fed chairman Ben Bernanke. The quarter-point drop in the rate was expected by traders and economists on Wall Street. <strong>However, the vote was not unanimous. Kansas City Fed President Thomas Hoenig favored holding rates steady.</strong> The committee said the risks of inflation and growth were balanced. The Fed also cut the discount rate by a quarter point to 5%. The Fed said growth would slow in the near term and the rate cut would forestall some weakness.
 
<a href="http://www.federalreserve.gov/newsevents/press/monetary/20071031a.htm">Link to the press release</a>. It's running slow so <a href="http://calculatedrisk.blogspot.com/2007/10/fed-cuts-rates-says-economy-to-slow.html">check CR</a> for most of it.
 
<p>Interesting. . .no giant bump on wall street like last time. Oil and the dollar is reacting as expected though.</p>

<p><a href="http://biz.yahoo.com/ap/071031/wall_street.html">biz.yahoo.com/ap/071031/wall_street.html</a></p>

<p> </p>
 
<p>According to the Fed:</p>

<p>"Economic growth was solid in the third quarter, and strains in financial markets have eased somewhat on balance...However, the pace of economic expansion will likely slow in the near term, partly reflecting the intensification of the housing correction. </p>

<p class="textBodyBlack">"Today's action, combined with the policy action taken in September, should help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and promote moderate growth over time."</p>

<p class="textBodyBlack"> <a href="http://www.cnbc.com/id/21556949">www.cnbc.com/id/21556949</a></p>

<p class="textBodyBlack"> </p>

<p class="textBodyBlack"> </p>
 
<em>"partly reflecting the intensification of the housing correction."</em>





What housing correction. Aren't we at the bottom? Isn't it a good time to buy?





How can the NAR possibly spin that one?
 
<p>IR, that was so 11:15 a.m., it is the bottom now. . .it is a good time to buy. </p>

<p>What?!!! What?!!!! Come on Suzanne researched it!!!!!</p>

<p><a href="http://www.youtube.com/watch?v=Ubsd-tWYmZw">www.youtube.com/watch</a></p>
 
<a href="http://cagle.com/caglecards/main.asp?image=/news/HousingMarket07/images/cagle.jpg"><img height="375" width="600" align="bottom" border="0" naturalsizeflag="3" alt="" src="http://cagle.com/news/HousingMarket07/images/cagle.jpg" /></a>
 
<p>Alas, recession (depression) will not be averted, and inflation will worsen, creating the worst of all posslble worlds.</p>

<p>Love the bull eating house.</p>

<p>That there are starting to be so many cartoons shows that the cartoonists get it at least.</p>

<p>Next, there will be a sad country and western song.</p>
 
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