Stilltitled

it is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.

—Adam Smith, Wealth of Nations, perhaps in distinction from Mandeville’s Fable of the Bees, which suggests that those would pursue private vice for public benefit and may be taken to a greater extreme than Smith’s view.

The city’s current recession should only last six quarters; in contrast, the 2001 recession stretched to 11 quarters and the 1989 recession dragged on for 15 quarters.

–via Reuters report on the Analysis of the Mayor’s Preliminary Budget for 2011

The report is mixed. While we continue to see improvements in the year-over-year data for all 20 cities, the rebound in housing prices seen last fall is fading. Fewer cities experienced month-to-month gains in January than in December 2009, on both a seasonally adjusted and unadjusted basis. Moreover, in four cities – Charlotte,NC, Las Vegas, Seattle and Tampa – prices reached new lows following the financial crisis. Tampa and Las Vegas experienced some of the largest gains and declines in this cycle, while Charlotte and Seattle saw much more modest price booms and relatively late peaks. On a brighter note, San Francisco and Minneapolis are 15.2% and 12.9% above their trough values. Other recent data on housing also paint a mixed picture. Housing starts continue at extremely low levels, recent reports of home sales suggest the market remains difficult, and concerns remain about further foreclosures and a large shadow inventory of unsold homes. We are in a seasonally weak part of the year, but given the S&P/Case-Shiller Home Price data reported today, we can’t say we’re out of the woods yet.

—David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s: via S&P. The 10 and 20 City composite indices have returned to the Autumn 2003 levels. The year over year change is 0% for the 10 city and -.7% for the 20 city indexes. The Conference Board consumer confidence index showed improvement and rose from 46.4 to 52.5. It’s indicative of the uneven data collected by NAR earlier this month, which Laurence Yun dubiously blamed on the weather.

It’s a temporary stabilization. Foreclosures are still going to bite the market. Given the preponderance of negative housing data, we may see another leg down.

—Joseph Brusuelas, president of Brusuelas Analytics, offering a perspective not far from an aging consensus: via Bloomberg.

There is little doubt that housing ’stabilization’ continues although the influx of four million new foreclosures, both on-the-market and shadow inventories that remain elevated, 30 year mortgage rates that are solidly through the 5.1% level and an unemployment rate that remains elevated will all likely continue to put downward pressure on demand and thus prices

–Dan Greenhaus, Miller Tabak & Co.: via WSJ

At a defining moment for journalism, this is a crucial step towards making the business of news an economically exciting proposition…This is just the start. The Times and The Sunday Times are the first of our four titles in the U.K. to move to this new approach. We will continue to develop our digital products and to invest and innovate for our customers.

—Rebekah Brooks, chief executive of News International, on the introduction of a pay-wall at News International, the British arm of News Corp, which would affect The Times and The Sunday Times of London: via NYT

Someone needs to take responsibility, and since US politicians don’t want to blame themselves, the best available scapegoat is China and its exchange rate, which has not appreciated against the dollar in 18 months….China may resume a managed float of its exchange rate, particularly if the uncertainty of the overall post-crisis economic situation diminishes. If the adjustment came abruptly, Chinese companies would suffer a sudden loss of competitiveness.

—Fan Gang, adviser to the PBOC: via China Daily. Fan offers that a rapid rise might also introduce inflation into the US “forcing the US Federal Researve to tighten monetary policy and possibly undermining the US’ recovery.”

But the U.S. cannot improve its trade balance unless the dollar falls. Measured by the dollar index, therefore, capital losses on China’s foreign exchange reserves are inevitable….As a result, China’s dollar-denominated foreign-exchange reserves, which account for the largest share of all the foreign holdings of U.S. government securities, will suffer interest-rate losses.

—Yu Yongding, framing the US attitude as follows, “the dollar is our currency, but your problem.” He would argue for granting China the ability to convert their treasury holdings to SDRs, and barring the US ability to “safeguard the value of its securities, it should compensate China in one way or another”: via Korea Times.

The U.S. has three aims in pushing yuan appreciation: to slow down China’s growth rate, to make China depend more on the U.S. and the U.S. dollars and to pluck Renminbi yuan’s position as a international currency

—Xiang Songzuo, Renmin University, opening an aggressive line of criticism against US policy: character one, via People’s Daily

The U.S. itself benefit most from the depreciation of its currency, leaving other countries and the fragile global recovery the victims

—Shi Jianxun, professor of Tongji University, articulating the implicit sense of victimization that pervades much of this discussion: character two, via People’s Daily

The U.S. government wishes to eliminate trade deficit and ease its high unemployment rate by pushing yuan appreciation. That was only its wishful thinking

—Yi Xianrong, Chinese Academy of Social Sciences, exchanging the sense of victimization of the detached criticism of the experienced elder who knows better: character three, via People’s Daily

Few economists predicted the current economic crisis, and there is little agreement among them about its ultimate causes. So, not surprisingly, economists are not in a good position to forecast how quickly it will end, either.

—Robert Shiller: via Project Syndicate

The bottom line is that we should expect less of economists

—Russ Roberts, George Mason University: via NYT

Our results indicate that this sort of journalistic fact-checking often fails to reduce misperceptions among ideological or partisan voters. In some cases, we found that corrections can even make misperceptions worse.

—Brendan Nyhan, political scientist at the University of Michigan, speaking on healthcare through a related note on cognitive biases and why it’s always inadvisable to argue with a fool: via NYT.

We are starting to see the beginnings of a recovery, which we anticipate will extend through 2010 and 2011…volumes to recover due to destocking having run its course.

—Al Stroucken, CEO Owens-Illinois, at an investor presentation on March 18: via Bloomberg

It’s very difficult to turn perceptions around once you’ve been through the proverbial economic wringer. Everything is colored by the fact that unemployment is near 10 percent. It doesn’t really matter what you ask, you’re going to get the same answer.

—Mark Zandi, chief economist for Moody’s Economy.com: via Bloomberg

The economic data was better than expected, which along with the upcoming supply has underpinned some technical moves. There has been an unwind of swap spread wideners as investors are buying swaps and selling Treasuries.

—Carl Lantz, head of interest-rate strategy in New York at Credit Suisse, a primary dealer: via Bloomberg

the problem with drinking wine with a steak is that you’re essentially putting a fruit sauce on the steak.

—Danny Meyer, observing the difficulty of pairing hot wines with steak: via Garret Oliver. Wine writer Gerry Dawes similarly observes, “High alcohol destroys the balance wine should have. You need acid, not high alcohol, to go with food. After a single glass these wines are tiresome to drink and people will leave a very expensive bottle half-empty on the table because they can’t finish it. Nobody can convince me these are good wines.”

cars have changed character. From being largely mechanical beasts they have become intensely electrical. Which leads to the second concern….To sort out its braking hesitation requires a software update. And that, in my experience, nearly always ends in a crash.

–From Babbage, the Economist’s new technology blog