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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Jon Koplik who wrote (7374)	6/14/2006 11:49:50 PM
From: Jon Koplik	Read Replies (1) \| Respond to of 33421

Answer to this idiotic "owners' equivalent rent" (OER) stuff -- I talked to a very friendly and informative person at High Frequency Economics today. The Bureau of Labor Statistics (BLS) takes some rent figure, and then subtracts out of it their guess at utilities costs. If utilities costs have plunged in price (as they have for the past four months, apparently) then it is a mathematical tautology that owners' equivalent rent will go up sharply (if the rent charged by the landlord was more or less unchanged). The rise in OER that was reported today was the biggest increase in 16 years, and has totally distorted the May core C.P.I. number. The previous three C.P.I. reports also all had higher (and erroneous) "core" inflation numbers, for the same reason. --------------------------------------------------------------- All of this was obvious to Ian Shepherdson of High Frequency Economics (and discussed quite clearly in his "Daily Data Analysis" dated 6/15/06). I have to assume that at least someone at the Federal Reserve understands math, and all of this OER silliness. Maybe Ian Shepherdson's piece will be the "talk of the day" tomorrow ... Jon.