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Dr. Paul Price
Dr. Paul Price
Articles (511)  | Author's Website |

Viewpoints Matter

Be mindful of time frames and agendas.


30-year fixed rate mortgages shot up from about 3.4% to 3.88% over the past month. That rightly appeared as a major move when viewed on a one-year chart. The 3.88% figure set a new yearly peak.


Put into perspective, on a longer-term chart, the past year’s action barely moved the needle from recently set all-time record low mortgage rates. Thirty-year housing loans have been higher about 99% of the time during most of our lifetimes.


Similarly, the reported peak in consumer confidence (since the depressing days of late 2008 through early 2009) looks a lot less exciting when viewed over the long term. It is still tethered at an absolute value more reflective of recession than recovery.


Have real estate prices really improved as dramatically as we hear about regularly in the media? Home-price authority Zillow says otherwise. Even devastated areas like South Florida and Las Vegas are now fetching housing values similar to decade-ago levels. Plug your own zip code into Zillow and get the deflating truth about your own home or local area.


America’s Bureau of Labor Statistics is about to start recalculating GDP to include lots of things never counted as domestic goods and services before. A prime example is the coming inclusion of research and development (R&D) expenses. A tap of the BLS’s magic wand will transform costs which may, or may not, lead to future products, into higher reported GDP numbers. The press will be ecstatic in delivering the (phony) great news that economic growth has surged and that the debt /GDP level has dropped dramatically.

Before drawing conclusions always question the viewpoint. Much of what we see, hear and read is delivered to us by those with political agendas.

See my model portfolios here... [marketshadows.com]

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Dr. Paul Price


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