Reading for the Weekend

"The people asked him, “What should we do?”

He replied, “If you have two shirts, give one to the poor. If you have food, share with those who are hungry.”

Even public officials came to be forgiven and asked, “Teacher, what should we do?”

He replied, “Collect no more than the law requires, do not engage in graft and corruption.'

And What should we do?” asked some soldiers and peacekeepers.

John replied, “Do not extort money or make false accusations. Be content with your just wages.”

Luke 3:10-14

The Trend in the Freddie Mac US Housing Price Index

I suspect that the US Treasury and the Fed will continue to monetize the decline in housing prices and the mortgage market. We may see an inflation so that this trend is never realized in nominal values. Ultimately, the government may bury most of the losses in a currency devaluation.

US Housing: Four More Years to Fall - Michael White

"The exhaustive Freddie Mac price index fell 2% nationwide in the 3rd quarter and analysis of its data predicts prices will continue to fall for the next four years.

While Freddie announced Tuesday that its purchase-only index has gained for the past two quarters, the “Classic Series” of the Conventional Mortgage Home Price Index, which includes refinance appraisals as well as purchase values, has fallen 9% from the high in June 2007 and 3.8% for this year.

The projections say homeowners have lost only $1 for every $3 they can expect to lose in the end.

The trends show values will fall for four years through September 2013. Readers should take this estimate as an educated guess. The estimate may have greater relevance than forecasts described in mainstream-media headlines which typically fail to place new data within a long-term trend..."

About Those Strong November US Retail Sales Numbers

Gasoline Purchases.

Early deep discounts on electronics to spur Christmas buying and 'green rebates' on new appliances.

Higher prices. Subsidized purchases. Let's party!

The Correlation Between Gold and US Equities

The relationship between US equities and gold obviously changed around the middle of 2008.

But how has it changed? Has the correlation really reversed so dramatically?

Is this the result of the Fed's reflationary efforts? But has not the Fed does this many times in the past? What is the relationship with both of these markets with the US dollar, and that with the money supply?

Perhaps there is not a direct correlation but a relationship to other things that relate in common.

All good questions. Explanations will be coming, but we have not seen many that are any good. Most are simplistic and self-referential to the person's biases. So we will have to do it ourselves.