Comments on: AP’s “Contrarian Economists” on Falling Energy Prices Aren’t all Economists, and Aren’t All Contrarians http://www.bizzyblog.com/2006/09/20/aps-contrarian-economists-arent-all-economists-and-arent-all-contrarians/ The Business End of the Blogosphere Sun, 23 Nov 2008 18:24:34 +0000 http://wordpress.org/?v=2.5 By: TBlumer http://www.bizzyblog.com/2006/09/20/aps-contrarian-economists-arent-all-economists-and-arent-all-contrarians/#comment-31259 TBlumer Wed, 20 Sep 2006 21:19:12 +0000 http://www.bizzyblog.com/2006/09/20/aps-contrarian-economists-arent-all-economists-and-arent-all-contrarians/#comment-31259 #5, OK, there's no doubt where you stand. We'll just have to see. I'm not as pessimistic as you are. I think the other sectors are picking up the slack in the housing industry, and that there won't be a big drop in home values. Leveling, yes. Probably trailing inflation for a while, yes. Big drop? No. #5, OK, there’s no doubt where you stand. We’ll just have to see. I’m not as pessimistic as you are. I think the other sectors are picking up the slack in the housing industry, and that there won’t be a big drop in home values. Leveling, yes. Probably trailing inflation for a while, yes. Big drop? No.

]]> By: Peter Schiff http://www.bizzyblog.com/2006/09/20/aps-contrarian-economists-arent-all-economists-and-arent-all-contrarians/#comment-31242 Peter Schiff Wed, 20 Sep 2006 20:12:54 +0000 http://www.bizzyblog.com/2006/09/20/aps-contrarian-economists-arent-all-economists-and-arent-all-contrarians/#comment-31242 Saving $80 per month on gas will not offset paying $1,000 more per month in mortgage interest. Nor will it off-set the loss of $10,000's if not $100,000 in home equity. The U.S. economy is headed for a severe recession, and lower oil prices will do about as much good as life jackets did on the Titanic. Saving $80 per month on gas will not offset paying $1,000 more per month in mortgage interest. Nor will it off-set the loss of $10,000’s if not $100,000 in home equity. The U.S. economy is headed for a severe recession, and lower oil prices will do about as much good as life jackets did on the Titanic.

]]> By: TBlumer http://www.bizzyblog.com/2006/09/20/aps-contrarian-economists-arent-all-economists-and-arent-all-contrarians/#comment-31234 TBlumer Wed, 20 Sep 2006 19:54:16 +0000 http://www.bizzyblog.com/2006/09/20/aps-contrarian-economists-arent-all-economists-and-arent-all-contrarians/#comment-31234 Welcome, Mr. Schiff. It's the AP's fault you were called an economist. BTW, you're obviously very capable, or you wouldn't be where you are. Your worries are of course very legitimate. My focus in the post was on AP misrepresenting the credentials of who they talked to, and misrepresenting that everyone they talked to was relatively gloomy. I would think you'd be relieved not to be an economist, as they've predicted 10 out of the last 3 recessions. :--> IF gas comes to $2 and stays there, someone driving 500 miles per week and getting 25 MPG saves $80-plus a month compared to $3 gas. That's not salvation, but it probably does save a few people on the margins of the home-loan ARM mess. Welcome, Mr. Schiff. It’s the AP’s fault you were called an economist. BTW, you’re obviously very capable, or you wouldn’t be where you are.

Your worries are of course very legitimate. My focus in the post was on AP misrepresenting the credentials of who they talked to, and misrepresenting that everyone they talked to was relatively gloomy. I would think you’d be relieved not to be an economist, as they’ve predicted 10 out of the last 3 recessions. :–>

IF gas comes to $2 and stays there, someone driving 500 miles per week and getting 25 MPG saves $80-plus a month compared to $3 gas. That’s not salvation, but it probably does save a few people on the margins of the home-loan ARM mess.

]]> By: Peter Schiff http://www.bizzyblog.com/2006/09/20/aps-contrarian-economists-arent-all-economists-and-arent-all-contrarians/#comment-31232 Peter Schiff Wed, 20 Sep 2006 19:38:56 +0000 http://www.bizzyblog.com/2006/09/20/aps-contrarian-economists-arent-all-economists-and-arent-all-contrarians/#comment-31232 I do not need a degree in economics to figure out that saving a few bucks on gas will not offset the impact of rising ARM payments and vanishing home equity. Lower gas prices will be the economic equivalent diet soda in an ice cream float. It's better than regular, but do not expect to lose any weight drinking it. Of course, lower oil prices are only temporary, but higher mortgage payments and lower real estate prices will be far more lasting. I do not need a degree in economics to figure out that saving a few bucks on gas will not offset the impact of rising ARM payments and vanishing home equity.

Lower gas prices will be the economic equivalent diet soda in an ice cream float. It’s better than regular, but do not expect to lose any weight drinking it.

Of course, lower oil prices are only temporary, but higher mortgage payments and lower real estate prices will be far more lasting.

]]> By: TBlumer http://www.bizzyblog.com/2006/09/20/aps-contrarian-economists-arent-all-economists-and-arent-all-contrarians/#comment-31190 TBlumer Wed, 20 Sep 2006 15:31:43 +0000 http://www.bizzyblog.com/2006/09/20/aps-contrarian-economists-arent-all-economists-and-arent-all-contrarians/#comment-31190 #1, From the second para of the article (not posted), I think AP is assuming the higher interest rates and a "stagnating" real-estate market are already in place and doing their damage, not that the Fed would react to this by raising rates more. #1, From the second para of the article (not posted), I think AP is assuming the higher interest rates and a “stagnating” real-estate market are already in place and doing their damage, not that the Fed would react to this by raising rates more.

]]> By: Kevin Irwin http://www.bizzyblog.com/2006/09/20/aps-contrarian-economists-arent-all-economists-and-arent-all-contrarians/#comment-31183 Kevin Irwin Wed, 20 Sep 2006 14:44:07 +0000 http://www.bizzyblog.com/2006/09/20/aps-contrarian-economists-arent-all-economists-and-arent-all-contrarians/#comment-31183 What I don't like about this article is that the AP is making the wrong assumption about the effect of the price of crude on interest rates. If anything, crude price increases (ostensibly) lift the CPI and the discount rate. What I don’t like about this article is that the AP is making the wrong assumption about the effect of the price of crude on interest rates. If anything, crude price increases (ostensibly) lift the CPI and the discount rate.

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