patrick.net

I have always valued your input, Randy, and consider you to be one of the smartest, most articulate and logical people here.

But Randy is our Caesar. He gives us wisdom and salad.

Hey, X,

It's getting close to the 4th. What do you think --have the BBQ on the weekend or the 4th itself?

Btw, just got Mrs. HARM's glasses from Mr. Schmoe --thanks.

El HARM-o how about the 3rd? I have to work on Wednesday, well if you call doing nothing all day, ok, so maybe I surf the net a bit.

Sir Randall is Viceroy of the Fat Stacks.

Global warming is not just about CO2 emissions. The reason the atmospheric concentrations are increasing so much is due to the massive deforestation over the past centuries as much as rising emissions. Urbanisation also creates hot spots - all that concrete etc.

Again, please show that the effects are:

1. global, and
2. mostly attributed to human activities

So far I have only heard attempted explanation of some warming effects as being attributed to human activities. Also, I have heard that many glaciers are shrinking, although the fact that some glaciers are growing is conveniently omitted.

X,

The 3rd is out for me --operating on a skeleton crew already, which means I'm "it" at the office. Sunday's spoken for, so that just leaves Sat & the 4th itself.

El HARM-O, yeah this weekend booked up amazingly well. How's about mid july or labor day?

How’s about mid July or Labor Day?

Either's ok for me --whatever fits into your plans better. We'll talk offline.

Surfer X,

You know I think a lot of those shows are already losing steam. The other night I couldn't get to sleep (9:30pm is late for us) and was flipping through the channels and couldn't find but ONE! Normally there are at least 4 or 5 going 24/7!

Is there a way to just send Patrick a check for the year? Setting up a Pay Pal acct. is probably beyond my technical expertise. Just wondering.

Is there a way to just send Patrick a check for the year? Setting up a Pay Pal acct. is probably beyond my technical expertise. Just wondering.

Sure, just drop him a line, p at patrick.net

So, if the Greenland ice is melting doesn't that disprove they "aren't making land" anymore? How about trailers that float?

If humans are not responsible - what major natural events are you positing as responsible?

Yes, us humans are so great that everything big is caused by us.

Global warming is about global MEAN temperatures increasing. The fact that they drop in some geographical locales simply means that they increase more in others. Like here.

Of course, median price is not going down, there is no bubble.

doesn’t that disprove they “aren’t making land” anymore

Anyone watched the new Superman movie yet?

While a few scientists speak of global warming as a fact, many more—especially those who are directly involved in climate science—say the data do not support it. To date, 19,700 scientists, including 2,660 physicists, geophysicists, climatologists, meteorologists, oceanographers, and environmental scientists, have signed a petition sponsored by the Oregon Institute of Science and Medicine that discounts global warming. Its accompanying report concludes:

A competing, pro-global-warming petition circulated by the Union of Concerned Scientists in 1997 garnered only 1,559 signatures of scientists.

http://bibletools.org/index.cfm/fuseaction/Library.show/CT/PW/k/737

Just to be clear, what do you favor? Free market? Let builders do as they please. Or something else?

I would favor free market. Just let the builders do as they please and our children will have a good environment. Otherwise, they will only have an environment that we thought they would like.

Ok Peter, so they know more at bibletools than at the UK Met Office

Lets agree to disagree and leave it at that…

Sure. Just keep in mind that "global warming" is a powerful political tool, especially in foreign affairs.

Glad I didn’t do any shorting. The market roaring today.

Same. I have almost finished entering the ticket. Glad I did not execute the trade.

Will this rally peter out to give us some shorting opportunities or is this the start of a new upward trend?

Something does not smell right. Expect a surprise soon.

As long as that is to septic/well code to protect water, building code to protect inhabitants, and some sort of zoning code I am for it.

Of course we need these guidelines. :)

And why did the Japanese leader with the cool hairdo seem way smarter than Bush today?

One word: sushi.

I'm at a loss to explain this as well. So had the Fed raised 50 bps we would have had twice the rally?

@Returning to Bay Area,

To clarify, I am a socially moderate-to-liberal, fiscally conservative Libertarian (with a small "l", I suppose). Meaning that I support limited government and maxmimum personal freedoms, and this includes free enterprise.

I do believe that a "level playing field" (maxmizing opportunity for everyone) is a good thing, but NOT imposing "equality" by dictat. I do see a benefit to a reasonable level of government regulations and public oversight to protect consumers from fraud/theft, the environment from excessive pollution, small businesses from being stomped on by large ones, etc.

As Randy H often points out, "free market" does not equal "zero regulation", and completely unregulated markets tend to evolve over time into monopolies and cartels, which is hardly a desirable outcome for consumer choice. But I do NOT see centrally planned economies as the "solution" to the tragedy of the commons. Unfortunately, many of the so-called "cures" to problems observed in capitalist markets, no matter how well intentioned, often end up being worse than the disease. This is what economists term "moral hazards", aka negative unintended consequences.

Urban Growth Boundaries (such as the one Portland has adopted) are a good example of this principle. UBLs tend to be exclusively supply-centric (focusing entirely on restricting new housing stock), while completely ignoring demand (population growth). As a result, they inevitably fail to produce the utopian results desired ("Urban Renewal", "Smart growth", etc.) but DO result in the price of housing going up significantly long-term --even in the absence of other factors, such as the Fed's recent liquidity bubble.

I think that a reasonable thought process into expansion would be to curtail growth unless it is population driven.

What "growth" isn't population-driven?

Essentially, we study current cities ratios of population size to geographical size, then place limits for the future that force similar patterns. I believe this is what Portland has been doing.

And who determines what constitutes the "correct" population density in a given region? And how are Portland City planners better at determining this than the free market (consumers)?

As the population rises, they move zoning restrictions outward by an amount determined by the amount of new land required to keep the population density the same.

Again, if higher population density is so great, why does government have to use UBLs for "force" this on consumers? Why shouldn't consumers get to choose whether they want high, medium or low density housing?

alien,

I agree, what's up with the dollar falling? Oh well, I'll be taking a few days off for the 4th and tomorrow IS Friday!

"And why did the Japanese leader with the cool hairdo seem way smarter than Bush today?"

Maybe sushi, yes. Sushi is a magical thing. It could also be because he shares a birthday with Elvis.

Sushi is a magical thing.

Sushi is just a tiny part of Japanese cuisine. My mind is now filled with the mental picture of Japanese food, all kinds of Japanese food, whole room filled with Japanese food. So colorful!

Of course, limiting outside growth might encourage that. Right?

If we take away all NIMBYist restricts, one natural consequence is that urban centers will start to build up and far-away suburbs will disappear. People do want to live closer to urban centers if NIMBYism is not denying the right kind of urban-renewal.

As to Japanese food, I only know SukiYaki

I can cook Sukiyaki. Good beef is the key. Vary the portion of sake, mirin, soy sauce, sugar, and water as you please.

Very important: use beef lard to caramelize leek or white onion

Peter P,

I was in the bookstore the other day and they had "Building the Traditional Japanese House Today". The level of craftsmanship that goes into making a simple wood joint is just amazing (especially considering one in an area that will likely never be seen!) It gives us some insight as to their level of dedication and attention to detail that seems at odds with today's construction techniques. Evidently this dedication transfers to their cooking skills as well.

*No Black and Decker tools were harmed in the making of this book!

>>I’m at a loss to explain this as well. So had the Fed raised 50 bps we would have had twice the rally?

Hehe. Funny. :->

No, I think the way it worked was that fear of a 50 was keeping the market down. When it was 25, relief swept in.

Regardless, I am just against suburbs as far as the eye can see. If I am not doing a good job describing a method that would prevent that, then I apologize. I think it is nice to have urban, suburban, and rural environments. I grew up in an area where the city center was about 20 minutes across, then the suburbs on each side were about 20 minutes across, then the farmland began. I always thought those were nice ratios and worthy of maintaining.

I understand where you're coming from and, as a life-long CA native, can even sympathize. However, I'm hoping you can keep an open mind and see where I'm coming from.

You may feel that having X% urban/high-density, Y% suburban-exurban/medium density and Z% rural/low-density and a 20-minute "radius" per band as an optimum allocation of housing resources and population density. However, this is a purely subjective and personal value judgment. Others probably feel differently, and for various reasons (not all of them entirely selfish). Some may prefer to live in Manhattan-style urban-only environments, while some prefer to live far away from any urban areas.

My point is, we all have our own varying (and equally valid) idea of what constitutes "ideal" housing and population distribution. I would much rather empower individual consumers the power to choose what type of housing they want than have this decision forced upon them by supposedly more "enlightened" politicians and bureaucrats. In the end, consumer choices will be constrained by practical realities and trade-offs anyhow (short commute time vs. bigger yard, lower land costs vs. close to shopping, etc.), so the end result is always a compromise among people's competing priorites.

"Ideal" is always in the eye of the beholder, regardless of the education level or intelligence of the person doing the choosing.

Daggnabit with those italics. Re-posted. (Moderator, if you would like, please delete the previous post)...

DinOR Says:

June 29th, 2006 at 12:25 pm
I’m at a loss to explain this as well. So had the Fed raised 50 bps we would have had twice the rally?

This is making me very disappointed in the Fed. If you read the statement:

http://tinyurl.com/rqth6

it’s wishy-washy and sets themselves up for moving up, down, or staying put at the next round in August. Now I’m convinced they are only TRYING to appear hard on inflation, but they want to keep the liquidity flowing along as long as possible. Maybe through the elections in November??? Of course the market rallied. It wasn’t a 50bp hike, and the statement leaves room for a pause or worse next time around. What a bunch of asswipes.

“Recent indicators suggest that economic growth is moderating from its quite strong pace earlier this year, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices.”

I couldn't resist that Tucson thread. I posted as Subcranium.

As far as city planners doing better? Well, city planners would consider the benefit of everyone (including future participants). Consumers, on the other hand, don’t even know what is in their own best interest. They are not educated on most matters.

This is a rather insulting and paternalistic (and might I say, un-democratic) thing to say. Government does not always know "what's best for us" nor always act in ways that are beneficial to the general public. Obviously, some planning is needed (to ensure that adequate public infrastructure is built --schools, roads, sewer/power, etc.-- but I'll take the end result of competing "dumb" consumer choices any day over Central Planning.

No, I think the way it worked was that fear of a 50 was keeping the market down. When it was 25, relief swept in.

You may be onto something here.

Michael Anderson/skibum,

Best explanations I've heard yet! I think this is where so much of the (my) bitterness comes from. During the whole "dog and pony" show of the last 16 hikes is that they were coming UP from 1% and was like beating DL and cartel with a WET NOODLE! Was there ever any real fear that the hikes would be meaningful? That they would actually have an impact on mortgage rates? Noooooooo. So here we are stuck again in limbo with another "pity rally". Great..........

HARM,

No worries. I'm still here; just very busy lately.

I'll agree that in theory what you describe -- a world without modern Central Banks, but instead just functioning Treasuries -- could well be more efficient and fair.

Instead of arguing about the relative merits of the Fed (or the BoJ, ECB, etc), perhaps looking at it like this will clarify my position. Note, I don't take Fed criticism personally; I wish Feldberg had gotten the job:

We must have a Central Bank because everyone else has one. It's basic game theory. We have to actively manage our nominal rates because everyone else does. Even if we could get everyone to agree to get rid of their Central Banks, someone would cheat and everyone would have to bring them back or mimic the functions somewhere else.

Someone theorized that if we eliminated the Fed then the USD would just be set at "market", and "what's wrong with that?" Here's what's wrong with that. The "market" wouldn't be a free market, but a market manipulated by Korea, Japan, China, etc. to maximize their economic benefit even where to the detriment of other, "Fed Free" countries. So yes, a market would set your interest rates and the value of the dollar, but it wouldn't be a free market, just a much worse market than we have today.

Someone theorized that if we eliminated the Fed then the USD would just be set at “market”, and “what’s wrong with that?” Here’s what’s wrong with that. The “market” wouldn’t be a free market, but a market manipulated by Korea, Japan, China, etc. to maximize their economic benefit even where to the detriment of other, “Fed Free” countries. So yes, a market would set your interest rates and the value of the dollar, but it wouldn’t be a free market, just a much worse market than we have today.

Not only that, but what this theory fails to account for is that the USD enjoys the status of world standard for all things financial. Despite the gradual decline over the past several decades, we as a country still get a ton of benefit from that advantage. Lose that, and we're REALLY screwed.

Randy H,

I DO hear your arguments. I understand as well as appreciate your position that if it wasn't the FED it would be something very much "like" the FED but today is another case in point to "de-politicize" that office. By FURTHER delaying a much needed correction in housing prices we can all go to the polls feeling warm and fuzzy. This should be about what the economy needs, not what the administration needs?

DinOR,

I agree 100% on the need to keep politics and Monetary Policy separate. The recent politicization of the Fed is just part of a wider politicization of everything, from Courts to Schools to Central Banks. All this perversion of every system in existence for short-term political gain won't end well, I'm afraid.

Randy H,

True enough. I've heard it said that it will be difficult to get "the genie back in the bottle" where the FED is concerned but try we must.

Further thoughts on the reason we must have a "Fed Function" (that is Central Bank).

Keep in mind that nominal rates are linked directly and unbreakably from currency exchange rates. This is called interest-rate-parity. Covered IRP must always be true or else the currency will be arbitraged. And foreign exchange is the one area where there is certainly enough arbitrage power to force an efficient market pricing.

It works like this (simplified and stylized): If 1USD = 1EUR, and each country had a 5% nominal rate, then everything is great. Let's pretend that's the natural, no-fed equilibrium. But then the EU cheats and somehow forces all their banks to pay 6%. The EUR must appreciate or else everyone will just take loans in USDs and buy EURs because they can get more EURs for their USD by taking a loan at 5% and opening a savings account at 6%.

The result of a world where the US had no CB but China did would be a world where China dictated US interest rates, which would be extraordinarily high. To the US consumer then, they would be in a situation where the only products they could afford would come from China and other similar countries. Basically, the same may be true today buy only if China, Korea, etc. all "agree" to keep buying our dollars to manipulate their currency rate.