Dollars and Jens
Sunday, January 29, 2006
Ford IPO
Two weeks ago Tuesday, we missed the fiftieth anniversary of the Initial Public Offering of Ford, which was the largest company in the U.S. for a long time while remaining closely held.

Housing Market Data
At one point I was looking for housing market data and would have liked to know about this.

I'd really like something that divides up the local housing market, distinguishing between Brighton and East Cambridge. A quick look around the web hasn't turned up one of those, and I haven't yet cared enough to look seriously.

Friday, January 20, 2006
Bill Miller and Google
I hadn't heard that Bill Miller owns Google. Apparently, he thinks it's undervalued by a factor of two, though he agrees that a margin of error is necessary.

Wednesday, January 18, 2006
real income gains
Over the past year, consumer prices have climbed 3.4 percent, a slowdown from November's 3.5 percent 12-month inflation rate but still above the annual rise in average weekly earnings -- meaning consumer incomes are not keeping pace with rising prices.
Every time I see the statement that real wages haven't risen in the past couple years, I'm surprised for the amount of time it takes me to realize that "wages" include only cash paid out, and excludes benefits.

The latest payrolls release indicates that weekly income has increased from $536.74 to $551.67 in the past year, i.e. by 2.8%. Hours per week must be down slightly, because hourly income is up from $15.88 to $16.37, or 3.1%. In any case, these are similar figures, both slightly behind the 3.4% quoted above. Labor cost numbers, at least from the productivity report, are father behind — new ones should be coming out soon, and they only come out once a quarter, largely because the figures from that report that most interest people (productivity and unit labor costs) are hard to measure with enough precision to see anything month-to-month. In any case, in units of their index, employment costs per unit time worked (compare this to the hourly wage, not the weekly one) went from 158.2 to 166.0 from 3rd quarter to 3rd quarter, or an increase of 4.9%; essentially, the value of the benefits provided has increased faster than wages.

One frequent reason for this — and it's been true for quite a while, particularly in the public sector — is that the cost of health care has been rising faster than other costs; the appropriate inflation measure against which to compare wages would exclude the health care costs that aren't paid out of wages. According to this morning's release, however, inflation this past year with health care costs backed out runs very nearly the same as overall consumer inflation; the discrepancy must be coming from somewhere else this time.

(This is all on top of normal well-known problems with inflation measures that cause them to overstate actual inflation. I won't rehash those issues here.)

Friday, January 06, 2006
financial reporting
It's a new year, and this is likely to last as long as a typical New Year's resolution, but let's start a Friday feature on a particularly bad example of financial reporting, probably from What we're looking for is the construction of explanations for market moves that are explicitly, and more directly, contradicted by other market moves. For example,
NEW YORK ( - Stocks climbed Friday morning as investors welcomed a weaker-than-expected December jobs report, betting that it means the Federal Reserve can stop its rate-hiking campaign in the near future.
The most direct indicator of market expectation of Federal Reserve rate action comes from federal funds futures, which moved toward predictions of higher likelihood of rate hikes this morning on the jobs report.

Bonus points for a story containing such evidence of its own dubiousness, as in
That may have been what the Treasury market was reacting to. Prices inched lower, raising the yield on the 10-year note to 4.37 percent from around 4.35 percent late Thursday.
Longer-term rates aren't directly related to fed action, as short-term rates pretty much are, but they track it more closely than the stock market does.

N.B.The excerpts included and market observations were made at a single moment in time; money.cnn updates stories over the course of the day, and the above quotes may no longer be in the article, though I find the most material assertion is still there, buried and phrased slightly differently.

Monday, January 02, 2006
Independence Air, which won fans with its low fares, announced plans Monday to cease operations just days into the new year.

The carrier said its money troubles will force it to cancel all departures after 7 p.m. Thursday. The end came less than 19 months after the airline's first takeoff.
The company went bankrupt in November. If you have a ticket on an affected flight, go to the airline's website.

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