Marketplace Scratch Pad

Morning Reading

Scott Jagow Jun 16, 2009

I would swear that the same housing story is being republished every single month. Here’s what the wires said this morning: “Construction of new homes jumped in May by the largest amount in three months, providing an encouraging sign that the nation’s deep housing recession may be bottoming.” And here’s what was written on March 17:

“The struggling U.S. housing market got some good news Tuesday as housing starts came well ahead of expectations, suggesting that the market may finally be nearing a bottom.”

Good grief. More importantly, I still don’t understand who’s going to buy whatever new houses are being built.

Elsewhere, If you’re a skeptic of climate change, Bloomberg columnist Eric Pooley is ready to pick a fight:

A cap on carbon emissions is coming whether you like it or not. The science has made it clear that the planet is heating up and we are to blame. And now that people who trust science run the show in Washington, they’re trying to do something about it. It won’t be easy. They even could use your help.

Yet here you are, feeling the bile rise as you read this because you agree with what California Congressman Dana Rohrabacher was yelling the other day at a climate skeptics’ conference. (“Al Gore has been wrong all along! This is outrageous! All of this is wrong!”)

On the other hand, in the Weekly Standard, former assistant Secretary of State Jeff Bergner makes a case against cap and trade. He specifically takes aim at that old argument that we need to reduce our dependence on foreign oil because of national security concerns:

The United States imports a large share of its automobiles from Japan, its consumer goods from China, and certain specialty metals required for defense from African nations. Is there something peculiarly dangerous about importing a large share of oil? Is oil somehow different from other products or commodities?

Here is a thought experiment: Suppose the United States imported no oil from the Middle East. None. Further suppose that even if nations like Japan, China, and India continued to import Middle East oil, American energy independence so reduced world oil demand as to mitigate whatever leverage Middle East oil-exporting nations are thought to have. How would American interests, capabilities, and options differ from what they are today?

Good question.

My friend, Allan Sloan, writes in the Washington Post, about how last year was the time to buy 30-year Treasuries. Not anymore, thanks to our growing deficits:

What makes a lot of money one year can lose a lot the following year. Within the past decade, we’ve seen various red-hot investments turn ice cold almost overnight: tech stocks, telecom stocks, commodities and, of course, houses. Now, long-term Treasurys.

The moral: Don’t invest by looking through the rear-view mirror, because past performance is no guarantee of future performance.

Speaking of the rear-view mirror, Investor’s Business Daily takes the Vice President to task for comments he made about the stimulus package:

“Everyone guessed wrong,” Vice President Joe Biden said Sunday, on the impact of stimulus legislation. Not exactly. In fact, there was no shortage of people who knew the stimulus wouldn’t work…

On Feb. 18, we said: “The (stimulus) bill Congress hurried to pass late last week without anyone having read the entire 1,434 pages will in fact not stimulate much of anything.”

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