by Calculated Risk on 5/19/2005 05:16:00 PM

The May edition of Fortune has the following cover "Real Estate Gold Rush":



UPDATE: Better photo from The Big Picture. The lead article is "Real Estate Frenzy: Riding the Boom".

(a pay article, but the lead paragraphs are free).

Speculation is the key to recognizing any financial bubble. Although the housing market remains incredibly strong, speculation is reaching a fevered pace. Articles (and covers) like this frequently appear at or near the top.



Hat tip to my friend Mish for the cover!

by Calculated Risk on 5/18/2005 11:16:00 PM

Here is a great local story on housing in the D.C. area. From "Real Estate Roulette" by Hillary Howard:

"It's expensive to buy a house. Around the Beltway it's not just expensive -- it's hard. Buyers are routinely offering 10 to 15 percent over the seller’s asking price and they're still not getting the deal. Many buyers are even putting escalation clauses in their offers. And, some of those escalation clauses promise to outbid the highest offer. This is what it's come down to."

Check out some of the audios too - in "How Many Contracts Come In?" one house had 41 contracts!

Part 1: How Hot Is The Market?

Part 2: How Competitive Is It For Buyers?

Part 3: How Many Contracts Come In?

There are six more segments at the WTOPNews site.

by Calculated Risk on 5/18/2005 12:10:00 PM

Edward M. Gramlich resigned today from the Federal Reserve Board of Governors according to a FED press release this morning.

Edward M. Gramlich submitted his resignation Wednesday as a member of the Board of Governors of the Federal Reserve System, effective August 31, 2005. Gramlich, who has been a member of the Board since November 5, 1997, submitted his letter of resignation to President Bush. In view of his impending departure and in keeping with Federal Open Market Committee practice, he will not attend the August 9 meeting of the FOMC.

"Ned has contributed powerfully to the work of the Board and of the FOMC for nearly eight years," said Federal Reserve Board Chairman Alan Greenspan. "Our deliberations have been enriched by his keen insights, his good humor and his lively mind."

Meanwhile, the WaPo is reporting that "Administration Considers Delaying Fed Chief's Exit".

Bush administration officials are mulling whether to encourage Greenspan, 79, to continue as Fed chairman for at least a few months beyond the Jan. 31 expiration of his term, according to sources told of the possibility.

That would give the White House more time to broaden the search for possible successors, looking beyond the academic and policy worlds to the corporate world, as they have been urged to do by some financial analysts.

"More time to broaden the search"? The White House wasn't aware that Greenspan was retiring in January?

UPDATE: New MUST READ Fed Watch by Dr. Tim Duy: Steady as She Goes – In More Ways Than One

by Calculated Risk on 5/17/2005 08:32:00 PM

Here is Mr. Luskin's apology:

I apologize for not properly crediting the original error. Unlike DeLong, I will make an honest correction acknowledging this error. Since you posted to DeLong’s comments board pseudonymously, I had no idea how to find your blog. I Googled the quote and got the one I got. It happens.

Assuming that your post as currently formatted is the same as it was originally, and has not itself been corrected without annotation, then DeLong’s misconstrual of what is Buffett and what is you is all the more egregious. The indentation makes it terribly obvious, and your apologies on DeLong’s message boards seem out of order. It is he who should apologize to you for some combination of misquotation and plagiarism.

-=-=-=-=-
Donald L. Luskin
Chief Investment Officer
Trend Macrolytics

First, give Mr. Luskin credit, he did apologize. Of course, I was only upset at his assertion that "... [CalculatedRisk] added to Buffett's quote, himself making it seem that the words were Buffett's, not his own". I did no such thing, and my immediate attempts to correct Dr. DeLong's blog are evidence of my intention. (NOTE: Luskin got the wrong blogger, I've inserted my blog name)

I appreciate Luskin's caveat concerning whether I changed the format; I didn't. But I can understand how Dr. DeLong misread the post (see it for yourself here) and I intend to change the formatting soon to make a better distinction between quotes and my text.

I left Dr. DeLong two messages (here) See Comment #2. (DeLong sometimes get swamped with comments, so I can understand how he overlooked this one):

Edit: Buffett's comments ended with "I mean the idea that this terrible specter looms over us 20 years out which is a small fraction of the deficit we happily run now seems kind of interesting to me."

The next sentence was my comment. I didn't mean to imply that was from Warren Buffett.

Best Regards!
Posted by: CalculatedRisk | May 6, 2005 07:43 PM

And here (comment #4):

Error correction: Dr. DeLong, a portion of the quote you attribute to Buffett is actually from me.

The Buffett quote should read: "Well, it's an interesting idea that a deficit of $100 billion a year, something, 20 years out, seems to terrify the administration. But the $400 plus billion dollars deficit currently does nothing but draw yawns. I mean the idea that this terrible specter looms over us 20 years out which is a small fraction of the deficit we happily run now seems kind of interesting to me."

SOURCE: http://transcripts.cnn.com/TRANSCRIPTS/0505/04/ldt.01.html


The following sentences were my commentary. I am sorry that my blog wasn't clear.

Excellent letter!
Best Regards.
Posted by: CalculatedRisk | May 12, 2005 10:30 AM

I don't see anything "out of order" with these attempts at correcting an error. Maybe I'm overly polite at times, but maybe others should be more polite and treat simple errors as, well, simple errors.

I disagree with Mr. Luskin's final sentence: "It is he who should apologize to you for some combination of misquotation and plagiarism." First, Luskin made errors in his post; an incorrect link that somehow goes to EBay, and referencing the wrong blogger are two errors. In his apology he states "It happens." I agree - no problem. And the same goes for Dr. DeLong. These are simple mistakes.

If Luskin hadn't claimed I was attempting to pass off my own words as Buffett's, I wouldn't have even asked for an apology.

Further, DeLong didn't misquote me, he accidentally misquoted Buffett after reading my blog. And Luskin's plagiarism comment is absurd: DeLong did not try to pass off my text as his own (the criteria for plagiarism), he accidentally misquoted Buffett.

This is a true tempest in a teapot.

UPDATE: Here is my email response to Mr. Luskin:

Mr. Luskin,

I've posted your response (as promised in my previous post). I appreciate your taking the time to respond.

The errors in your posts didn't bother me. I was only concerned with this comment: "... [CalculatedRisk] added to Buffett's quote, himself making it seem that the words were Buffett's, not his own". (I've corrected the blogger name)

I had no intention of passing off my commentary as Buffett's, and that is why I tried to correct Dr. DeLong's posts. I understand your concern that my formatting might have changed - it hasn't.

Even more important, as a lifelong Republican I'm baffled that our party has abandoned fiscal prudence. Senator Hagel said it well in a 2003 Op-Ed: "I gave my first speech on the Senate floor in February 1997 in support of the balanced-budget amendment. Republicans used to believe in balanced budgets. Republicans used to believe in fiscal responsibility, limited international entanglements and limited government. We have lost our way."

Clearly the General Fund deficit dwarfs any problem with Social Security. Why don't you join with me and help redirect our party to this more serious issue?

Good luck to you.
CR

by Calculated Risk on 5/17/2005 07:17:00 PM

Chris directed me to this site for FDIC owned real estate.

Bargain Properties
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There are no sales announcements at this time. Please check back soon.

I wonder what they mean by "soon"?