May 31, 2007

The New ‘Turnaround Ohio’: Strickland Campaign Theme Hijacked, or Truth in Packaging?

This message merited an audible “Hmm…” in the BizzyBlog bunker when it arrived in the e-mail inbox (click on pic to see full text of e-mail):

POHtohSmall

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TURNAROUND OHIO?

Seems like I’ve heard that “somewhere” before….

Oops, that link didn’t work. That’s because it was changed to a generic Ted Strickland banner mere hours after this post at RAB and this one at BizzyBlog called out the governor for publicly dithering on education once safely in office (“School-funding fix need not be rushed, Strickland contends”). Only three months after his election and barely a month in office, Strickland indicated that education initiatives wouldn’t need to get into his first two-year budget, even though he had outlined over $350 million in “First Year Funding” (go to the bottom of this page that was saved from Strickland’s campaign web site before it went dark) during the gubernatorial campaign.

(Aside to Joe Hallett: Contrary to the snide assertion you made, and which you also attributed to Mrs. Sherrod Brown aka Connie “in lockstep” Schultz (“Little original reporting comes from political blogs.“), this was one of dozens of times Ohio’s center-right blogosphere has scooped the Columbus Dispatch and the rest of Ohio’s Old Media. So is this post. A longer list is available on request — that is, if you and others at your paper ever wish to stop being the mouthpiece for Ted’s ignorant economic posturing and his amateurish war-conduct second-guessing [here and here] and catch up with recent history and current events.)

Strickland’s Governor-elect site appears to have subsequently carried in the Turnaround Ohio and Learning for Life pages intact. Their conflict with what has been done since he took office remains.

Back to ProgressOhio and Turnaround Ohio — Are we to assume that they are acting with Ted’s consent by using that slogan in its campaign literature? If there is no objection by the Governor, should we then also assume that Ted really supports this economy-crippling power grab while publicly opposing it?

OFHEO: 1Q07 Home Prices Up 0.5%, 4.3% Over 12 Months Ago

Those looking for a pervasive and severe nationwide decline in home prices are going to have to keep looking.

The Office of Federal Housing Enterprise Oversight (OFHEO) just released its House Price Index (PDF) for the first quarter of 2007. This most comprehensive of home-price reports shows that nationwide prices increased 0.45% (rounded to 0.5% in the announcement) in the first quarter of this year, and went up 4.25% (rounded to 4.3% in the announcement) in the past four quarters.

Core inflation during those two time periods was 0.6% and 2.5%, respectively. OFHEO says that inflation excluding only shelter costs only rose 1.6% during the past year.

Context (from Pages 4 and 5 of the report):

  • From 1990 through 1997, reported four-quarter appreciation was less than the 4.25% just reported 28 out of 32 times.
  • During that same time period, individual-quarter appreciation was less than the 0.45% just reported 14 out of 32 times — including six nationwide quarterly declines.

I recall no discussions of pervasive real estate “bubbles” or fears of steep, widespread declines during the 1990s.

Here’s what will likely be a well-kept secret: Seven western states actually showed double-digit gains in the past 12 months (UT, ID, MT, WY, WA, NM, and OR), and 12 others had increases of over 6%.

Only seven states came in with four-quarter results below OFHEO’s 1.6% inflation minus shelter costs figure (from Page 19 — RI, CA, NH, OH, NV, MA, and MI). All are understandable without having to call out a price-collapse scenario. Cali and Nevada overheated more than most states in the three previous years, while the other states’ economies aren’t doing very well. Only MA (-0.56%) and MI (-0.86%) actually had year-over-year declines.

Looking at regions (Page 28), eight of nine came in above the 1.6% benchmark just noted; only New England (+1.11%) trailed.

As to metro areas, the search for widespread suffering was also futile. In contrast to the S&P report (Excel spreadsheet is at 5th item at bottom of linked page) that showed 13 and 17 of the 20 largest metro areas with annual and quarterly declines, respectively, OFHEO showed only three annual declines (overheated San Diego, plus declining Detroit and Boston) and 10 quarterly declines. San Diego (-1.12%) was the only top-20 metro area to show a quarterly decline of over 1%.

Apparent doomsday believer Rex Nutting of MarketWatch jumped on the S&P report (requires free registration), and appeared eager to tell us that, according to the relatively limited S&P report, “Prices have been falling for the past three quarters.”

Well, not exactly, Rex. Let’s see how he treats the OFHEO release, whose now-accurate prediction of 0.5% made by an economist was saved for the last paragraph of his report.

The Associated Press, in an unbylined report at 11:36AM, searched for a way to go negative on the OFHEO release, and settled on the idea that it “provided the latest indication of a modulated slowdown in the once-sizzling housing market.”

Cross-posted at NewsBusters.org.

Preliminary Estimate: GDP at 0.6% for 4Q07

Filed under: Economy,Taxes & Government — Tom @ 9:05 am

This is shaping up to have been a weak quarter.

This sentence from BEA’s report sticks out:

The real change in private inventories subtracted 0.98 percentage point from the first-quarter change in real GDP, after subtracting 1.16 percentage points from the fourth-quarter change.

That’s a lot. If inventories had stayed the same, 4th quarter 2006 growth would have been about 3.7%, and 1st quarter 2007 would have been about 1.6%.

That means that businesses reduced inventories for the second quarter in a row. The two-quarter reduction is a combined $29 billion (about 2.14% of a $13.5 trillion GDP, the sum of 0.98% and 1.16%), which I’m guessing most observers didn’t think could happen. Its possible, but doesn’t seem likely, that businesses have suddenly figured out a way to run even leaner and meaner and stay that way permanently. But I would think that any kind of increase in consumer or business demand, which may have already occurred since the end of the first quarter, will cause a bounce-back effect, leading to an inventory build-up that might make GDP jump sharply in future quarters.

Tomorrow’s employment and ISM manufacturing reports, and next week’s ISM non-manufacturing report, will be very important indicators of whether that bounce-back might be occurring.

A Warning Signal That Will Likely Be Ignored

Filed under: Economy,Taxes & Government — Tom @ 6:04 am

When a liberal-friendly network is screaming about earmarks and going after the current congressional and Senate majorities, as is the case in this video of a CNN report, perceptive members of those majorities should be taking it as a warning that voters won’t be happy with how they’ve done the people’s business when the next election arrives.

Odds are they won’t listen.

Positivity: Couple celebrated life despite dim prognosis

Filed under: Positivity — Tom @ 5:59 am

From Dayton, OH (a related story is here):

FAIRBORN — Nothing about their relationship was typical. They met at Dayton Children’s Medical Center, dated over the phone, and kissed through oxygen masks.

But for Douglas and Misty (Rose) Langstaff, both born with cystic fibrosis, nothing was going to keep them from enjoying their life together.

The Fairborn couple married on April 14. A month and a day later, Misty, 18, died at Dayton Children’s.

Douglas Langstaff, 20, said although the couple of two years only got to experience married life for a short time, it felt like they’d been together 50 years.

“We did everything together,” he said. “The wedding was Misty’s highlight.”

Douglas helped Misty achieve other milestones in her last few months. She attended driving school and got her license, went horseback riding on their honeymoon in Kentucky, and received her high school diploma from Graham Digital Academy May 1.

“She was a very strong person,” Douglas said of Misty. “She never complained about her disease or anything.”