25 August 2010

Even more charts: Investing in division and housing shell games. (Also: screw you, gerontocrats.)

Not so much commentary on the usefulness or misleadingness of charts this time, just three plots from Coyote Blog I thought I'd post since I'm apparently in graph mode.
Coyote Blog | Warren Meyere | In Praise of Divided Government

I must say that I am not much of a fan of trying to find spurious relationships between long-term economic trends and the political parties who hold office at various times. But I must say I kind of liked this one from Mark Perry:

Somewhere around here I've got a prospectus for a fund which stays in money-market-mode most of the time, and moves into equities whenever congress goes out of session. They claim some pretty impressive results.

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Coyote Blog | Warren Meyere | I Sense a Pattern Here

Here is a chart I ran a while back on auto sales, showing how the cash for clunkers “stimulus” program simply spent a bunch of money to pull forward car sales by a month or two

Here are housing sales — I don’t have time this morning to annotate the chart but the housing stimulus program expired in May

This is the multi-billion dollar equivalent of a kid pusshing his peas all around the plate so it looks like he ate more of them.

By the way:
EconLog | Arnold Kling | A Consensus to Question

Old consensus: we need Freddie and Fannie in order to make housing "affordable."

New consensus: we need them in order to "prevent further house price declines," in other words, to make housing less affordable.
For every house buyer there's a house seller. Pretty much everyone will be both at different times; in fact most people are both at the very same time, give or take a few weeks. Lower prices scare people when they're in their "I'm a seller" mode, but they forget that it's good news for them in their "I'm a buyer" mode. There is nothing inherently better about home prices being considered high, unless you place more value on older generation than younger ones.  That sounds silly, but that's the way a lot of other policies in this country are set, so I find it pretty convincing.

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Addendum — Daniel Invoglio, creator of the housing chart above, also posted a copy with the vertical axis set to zero, as I prefer.  You can find that here.  Here is a version with data going back to 1999.  The extra context makes the extremity of July's numbers even clearer.

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