I’d like to point out a new feature in the usually astute WSJ: Printing erroneous information on the front page.
Last month, in a front page, 3rd paragraph snafu, the Journal reported a 2.9% month-to-month change in existing home sales — a seasonal factor that has been consistent over the prior four years. In an inexplicable oversight, they failed to include the year-over-year data: Down a whopping 23.8% vs February 2007. My guess is this data point inconveniently undercut the article’s main thesis: The recent surge in Foreclosures had driven prices down so low that a wave of buyers came into the market in February 2008, causing the uptick in sales. Unexplained was what caused the same seasonal pattern of improvement from January to February in 2007, 2006, and 2005.
Whether this new, error laden approach is due to some Murdoch directive,
trying to tart up the reporting of otherwise mundane information, or merely sloppy reporting, is as of yet undetermined. However, it was the first major front page foul up I could recall. The second one in as
many months came today. The third one will lead to the cancellation of my print
Which leads us to today’s problem. Instead of waiting until the third paragraph, the article’s first paragraph is tarted up:
"Inflation is back.
After several years of relative stability, a wave of rising prices is washing over the world economy.
It comes at a most inconvenient time. The Federal Reserve is sharply cutting U.S interest rates — the opposite of the usual response to rising inflation — to prevent the housing bust and credit crisis from causing a deep, prolonged recession. That’s making the global response to inflation more complicated.
Consumer prices in the U.S., Europe and other rich countries are projected to rise 2.6% this year, the highest inflation rate since 1995, the International Monetary Fund said Wednesday. In the U.S., consumer prices in February were 4% above year-ago levels. The 15 countries that share the euro currently see inflation of 3.5%, a decade high and well above the European Central Bank’s preferred range. Even Japan, long plagued by flat or falling prices, is seeing modest inflation." (emphasis added)
After those few paragraphs, the rest of the article settles in to the usual WSJ style: accurate, dispassionate reporting. It provides some context for the current wave of food-price driven discontent in many third world countries. But the Page 1 errata is front and center: first paragraph, first sentence, first word.
WTF ?: "Several years of relative stability?" Perhaps on Mars, where the market for red dust has remained stable for eons. On this planet, however, prices have been steadily rising quite robustly for the better part of this past decade. This is not a new phenomena: It has been ongoing, regularly denied by the powers that be for years (recall the absurd focus on Core Inflation).
To review: Over the past 7 years, Oil has risen from about ~$25 to $112; The CRB Commodity index has more than doubled; Gold has quadrupled; Many industrial metals are up 50, to 150%; Foodstuffs have recently doubled; the Goldman Sachs Agricultural Price index has almost tripled over the past three years alone. Oh, and the follar has fallen 40% over the same period.
And just now, inflation is back? Puh-leeze!
Existing Home Sales, Non Seasonally Adjusted, Explained http://bigpicture.typepad.com/comments/2008/03/existing-home-s.html
How Counter-Productive is Realtor Association Spin? http://bigpicture.typepad.com/comments/2008/03/how-counter-pro.html
Inflation, Spanning Globe, Is Set to Reach Decade High
WSJ, April 10, 2008; Page A1
Wave of Foreclosures Drives Prices Lower, Lures Buyers
Oversupply Triggers Lenders’ Fast Sales; Mr. English Bids
JAMES R. HAGERTY and KRIS HUDSON
WSJ March 25, 2008; Page A1