Housing Market: Temporary Relief

And just like that, everyone breathes a huge sigh as the Fed stops the long interest rate march. Here's the full statement from the Fed.

It is indeed interesting to note that this is the first governors' decision under Bernanke's reign that was not unanimous. What the hell was Jeffery Lacker thinking? Here's an example of his viewpoint from April that may shed some light:

“In the wake of the destruction caused by two hurricanes, energy prices had surged. From the end of 2004 to the peak last fall, crude oil prices rose 56 percent, wholesale natural gas prices rose 129 percent, and retail gasoline prices rose 70 percent. To some, it seemed obvious that the high energy prices would lead to a significant and persistent reduction in consumer spending, which would bring overall economic activity to the edge of recession. That didn’t happen.”

Clearly, Mr. Lacker hails from the Instantaneous Transport Economic School, where economic change is negligible if people aren't on the dole the next day. Who was his professor, I wonder, because it sure wasn't Kreskin or Karnak:

WASHINGTON - The efficiency of American workers slowed sharply in the spring while a key gauge of labor costs rose at the fastest rate since late 2004.

The Labor Department reported that productivity — the amount of output per hour of work — slowed to an annual rate of increase of 1.1 percent in the April-June quarter, down from a 4.3 percent rate of increase in the first three months of the year.

So workers are having the temerity to demand more wage gains, eh? Can't have that. Here's to opening the betting pool for how many of the Fed governors will take Lacker's side come the next meeting.

Posted at August 8, 2006 04:29 PM

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And just like that, everyone breathes a huge sigh as the Fed stops the long interest rate march. Here's the full statement from the Fed. It is indeed interesting to note that this is the first governors' decision under Bernanke's reign that was not unanimous. What the hell was Jeffery Lacker thinking? Here's an example of his viewpoint from April that may shed some light: “In the wake of the destruction caused by two hurricanes, energy prices had surged. From the end of 2004 to the peak last fall, crude oil prices rose 56 percent, wholesale natural gas prices rose 129 percent, and retail gasoline prices rose 70 percent. To some, it seemed obvious that the high energy prices would lead to a significant and persistent reduction in consumer spending, which would bring overall economic activity to the edge of recession. That didn’t happen.” Clearly, Mr. Lacker hails from the Instantaneous Transport Economic School, where economic change is negligible if people aren't on the dole the next day. Who was his professor, I wonder, because it sure wasn't Kreskin or Karnak: WASHINGTON - The efficiency of American workers slowed sharply in the spring while a key gauge of labor costs rose at the fastest rate since late 2004. The Labor Department reported that productivity — the amount of output per hour of work — slowed to an annual rate of increase of 1.1 percent in the April-June quarter, down from a 4.3 percent rate of increase in the first three months of the year. So workers are having the temerity to demand more wage gains, eh? Can't have that. Here's to opening the betting pool for how many of the Fed governors will take Lacker's side come the next meeting.