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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (56401)	3/21/2006 5:32:19 PM
From: TimbaBear	Read Replies (1) \| Respond to of 110194

Mish I'm not sure whether you are purposely being dense or what. A new car is NOT a new car. IF a new car was a new car then everyone would buy the cheapest car they could get. If one bought the cheapest new Ford offered by a dealer today and bought the cheapest new Ford offered by a dealer 30 years ago and if we assume the same level of bargaining skills, what one would be getting is comparable enough to measure the change in the price of a new Ford. No hedonics, no nonsense. Keep the value of the Dollar constant and see what the comparison is. You keep trying to compare Fords to Hyundais to Jaguars and saying that buying the cheapest of those would give you the least amount of inflation OR you try to say that because the more recent new car has some bells and whistles the 30 year ago new car didn't have that somehow we have to adjust downward today's new car price so that we can compare a car we can't buy for that money today with a car we could have bought for the money 30 years ago and this makes sense to you. Hedonic adjustments are a flawed paradigm, made up by academics and used by politicians to pound sand up the posteriors of the gullible. If I buy the cheapest standardly optioned new Ford today, I still get 4 wheel motorized transportation, no hedonics can change that and I can't buy today's car using cash and hedonics. Timba

To: mishedlo who wrote (56401)	3/21/2006 6:00:26 PM
From: TimbaBear	Read Replies (1) \| Respond to of 110194

Mish Had someone vying for my time so I didn't get to address the other doozy you threw at me, so here goes: We are talking a serious rise in standard of living. My dad had an 700 sq ft house (if that) and 4 of us were raised in that. One TINY bathroom. One simply can NOT say "a house is a house" or a "car is a car" and compare prices today vs 10 years ago. You can not say that inflation represents the cost of my house vs my dad's house. That is preposterous. That is also why one can not look at average or median home prices in the belief that "a house is a house". "A car is a car" is what I was trying to refute. You were the one (not me) that said "a car is a car .... and the rest is fluff". You seem to have an awful lot of confusion on how to measure inflation for one who is supposedly well-versed in economics. Even if you don't subscribe to the same school of thought you ought to be conversant enough to argue well without looking foolish. The correct comparison in this case is not your dad's house to my house or your house. The correct comparison is your dad's house now versus what he paid for it. I'm sure there is still a market for 700 SqFt houses, albeit a smaller market now then back then. The difference in market appeal is known as functional obsolescence but the Market would account for that without any brainiac trying to add hedonic "improvement" to the equation. "A car is a car" is what I was trying to refute. A new cheapest model Ford to a new cheapest model Ford is a "car is a car". Folks who buy the cheapest model are not willing to pay for the bells and whistles, but they can't help but get some whether they have any appeal or not. If you cannot grasp that concept, then I can see why you cling to some of your beliefs. Timba