As a rule, the Shiller Index uses the CPI as reported for All Urban Consumers (CPIAUCNS on Fred(r)).

But the Index is only updated Quarterly, so monthly data is estimated. Which produces a very interesting difference over August, not to mention September expectations:

The annualised inflation rate between June and August is 0.39%, which just shows that the trend is volatile. But if there really is another round or two of 2.5% annual inflation, the projected 3% growth for Q3 is either going to look a lot more anemic than we think, or there is going to be a major producvtivity increase.

The odds of being paid the Marginal Product of Labor just dropped a bit more.

By Spencer,

At month end the S&P 500 PE on trailing operating earnings was around 24. In my model that is expensive, but not massively so.

Except in the irrational exuberance market of the 1990s, a PE of over 20 has never been sustained and always signaled a major bear market.


Trailing earnings does include the fourth quarter when EPS was minus $0.09 and as the low 2008 earnings roll out of the comparisons the PE could fall while the market rises as it did in 1993. But 1993 appears to be an exception to the rule that the market generally moves in the same direction as its' PE. The correlation between the change in the market and the change in earnings is essentially zero, and one of the most dangerous times in the market is when EPS growth first turns positive.

GoogleLookup, for the datasheet that gets dumped into a database and updates the model regularly.

Or just for fun.

Consider this a PSA.

While there was a lot of blather about "values voters" swinging the 2004 Presidential election to the man who had none, the real story has always been that the HENRYs went for W's policies.

That changed in 2008:

Guess who won Joe the Plumber’s vote...real people who make about $42,000 a year, the median income for plumbers and pipefitters. Barack Obama carried hard-working Americans of that income stripe by 10 points, according to exit polls.

And the only voters who were told directly that their taxes would go up under a new Democratic president? Obama took the rich as well, winning by six points that small sliver of the electorate that makes more than $200,000 [per] year.

The HENRYs can do basic probability calculations, it seems. "Saving" 5% on your taxes while losing 15% on your non-deductible investments is not a great long-term strategy, no matter what Greg Mankiw may have decided to hear from his self-selected group.

While there was a lot of blather about "values voters" swinging the 2004 Presidential election to the man who had none, the real story has always been that the HENRYs went for W's policies.

That changed in 2008:

Guess who won Joe the Plumber’s vote...real people who make about $42,000 a year, the median income for plumbers and pipefitters. Barack Obama carried hard-working Americans of that income stripe by 10 points, according to exit polls.

And the only voters who were told directly that their taxes would go up under a new Democratic president? Obama took the rich as well, winning by six points that small sliver of the electorate that makes more than $200,000 [per] year.

The HENRYs can do basic probability calculations, it seems. "Saving" 5% on your taxes while losing 15% on your non-deductible investments is not a great long-term strategy, no matter what Greg Mankiw may have decided to hear from his self-selected group.

Ms. mochi-tsuki discovers that the Washington Post has no copyeditors and cannot do math.

If this were another blog, I would be typing "Why, oh why, can't we have a better press corps" here. Instead, let's just leave it at: if you can't extract data from the census correctly, what are you doing publishing a newspaper read by government officials?

Ms. mochi-tsuki discovers that the Washington Post has no copyeditors and cannot do math.

If this were another blog, I would be typing "Why, oh why, can't we have a better press corps" here. Instead, let's just leave it at: if you can't extract data from the census correctly, what are you doing publishing a newspaper read by government officials?

EDITED TO CLARIFY APPARENT CONFUSION:

The evil* Aaron Shiff of 26econ.com [edited to clarify that he is not—to my knowledge, at least—the Aaron in Coventry] discovered Google Web History.

Being a natural follower, I checked my own breakdown. It appears I do a lot of Google searching during the two hours the children are Not Getting Ready for Bed:

I have doubts about their methods (the top Clicks lists, in particular, do not match with what I've been doing in the past two years but seem rather to map my searches to Google's search database), but it's worth checking out, and will probably produce a thesis or three in the near future.


*Sarcastic Designation of Mr. Schiff,** who posted this distraction, for this web posting only. I am not Lou Holtz.***

**No designation of aaron-in-coventry to be intended or implied, sarcastic or otherwise.

***Lou Holtz reference explained here.***

***If he isn't suspended without pay, will Gary Becker give back his Nobel Prize?

EDITED TO CLARIFY APPARENT CONFUSION:

The evil* Aaron Shiff of 26econ.com [edited to clarify that he is not—to my knowledge, at least—the Aaron in Coventry] discovered Google Web History.

Being a natural follower, I checked my own breakdown. It appears I do a lot of Google searching during the two hours the children are Not Getting Ready for Bed:

I have doubts about their methods (the top Clicks lists, in particular, do not match with what I've been doing in the past two years but seem rather to map my searches to Google's search database), but it's worth checking out, and will probably produce a thesis or three in the near future.


*Sarcastic Designation of Mr. Schiff,** who posted this distraction, for this web posting only. I am not Lou Holtz.***

**No designation of aaron-in-coventry to be intended or implied, sarcastic or otherwise.

***Lou Holtz reference explained here.***

***If he isn't suspended without pay, will Gary Becker give back his Nobel Prize?

Via Kathryn (who previously pointed us to a similar exercise for the U.S. election), Theo Gray expands on the work of Tommy McCall (as published in the NYT under the title "Bulls, Bears, Donkeys, and Elephants," which was glibly dismissed by Greg Mankiw*).

While his conclusion will be heartening to Brad DeLong:

And one more thing, notice the little gray figure labeled "Current value under Both". That’s the figure if you had just left your money in the market the whole time regardless of party affiliation. Notice that it’s much bigger than either the Republican or the Democratic figure. Not a bit bigger, much bigger, so much bigger that if you check the box to graph the "both" curve (basically the index value itself) we have to let it go right off the scale in order to make the other two lines visible at all.

Play with the policy delay slider and you can see the Democratic and the Republican curves fighting it out in the noise at the bottom of the graph while the steady-as-she-goes full-time investment curve towers over them laughing at their silly antics. It doesn’t matter who is in charge, the market is saying, in the long run it’s going to be OK.

the whole thing is worth reading, especially as Mr. Gray has sent the model up so that you can "playing with it" yourself.**

*We might justly ask Mr. Mankiw to then justify several of his Very Public Statements about the value to the market provided by the Current Administration when he worked for them. But that is for another time.

**I hope to do the playing maybe this weekend, by which time I might expand the details of this post. Meanwhile, I note that The Skinny Brown Man has made an interesting start by putting it into a much larger context.

Via Kathryn (who previously pointed us to a similar exercise for the U.S. election), Theo Gray expands on the work of Tommy McCall (as published in the NYT under the title "Bulls, Bears, Donkeys, and Elephants," which was glibly dismissed by Greg Mankiw*).

While his conclusion will be heartening to Brad DeLong:

And one more thing, notice the little gray figure labeled "Current value under Both". That’s the figure if you had just left your money in the market the whole time regardless of party affiliation. Notice that it’s much bigger than either the Republican or the Democratic figure. Not a bit bigger, much bigger, so much bigger that if you check the box to graph the "both" curve (basically the index value itself) we have to let it go right off the scale in order to make the other two lines visible at all.

Play with the policy delay slider and you can see the Democratic and the Republican curves fighting it out in the noise at the bottom of the graph while the steady-as-she-goes full-time investment curve towers over them laughing at their silly antics. It doesn’t matter who is in charge, the market is saying, in the long run it’s going to be OK.

the whole thing is worth reading, especially as Mr. Gray has sent the model up so that you can "playing with it" yourself.**

*We might justly ask Mr. Mankiw to then justify several of his Very Public Statements about the value to the market provided by the Current Administration when he worked for them. But that is for another time.

**I hope to do the playing maybe this weekend, by which time I might expand the details of this post. Meanwhile, I note that The Skinny Brown Man has made an interesting start by putting it into a much larger context.

Here's what Happens When I Click a Link by Accident:

1. Does anyone believe the market rate for taxi drivers in Maryland is $11.41 an hour?
   
2. The base salary for an Assistant Professor of Economics is $115-120K for elite schools (well, Harvard and Stanford, but you get the idea).*
   
3. Morgan Stanley offered $85,000 for an Analyst in 2006. No indication whether it was a bonus-payingeligible position (though presumably the answer would have been "yes").

Have fun with the database. Sure to stun and amaze.

*Columbia offered far less for next year: an Assistant Professor at the Medical Center campus for $90,000 in 2006, an Associate Professor at the main campus for $95,000 in 2007. But not certain what the specialties are.

Here's what Happens When I Click a Link by Accident:

1. Does anyone believe the market rate for taxi drivers in Maryland is $11.41 an hour?
   
2. The base salary for an Assistant Professor of Economics is $115-120K for elite schools (well, Harvard and Stanford, but you get the idea).*
   
3. Morgan Stanley offered $85,000 for an Analyst in 2006. No indication whether it was a bonus-payingeligible position (though presumably the answer would have been "yes").

Have fun with the database. Sure to stun and amaze.

*Columbia offered far less for next year: an Assistant Professor at the Medical Center campus for $90,000 in 2006, an Associate Professor at the main campus for $95,000 in 2007. But not certain what the specialties are.

There is a strange meme in the blogsphere—most recently made in comments here by Movie Guy—that Obama "should have a double-digit lead over McCain at this stage as has been the case with previous presidential primaries." So I went searching for double-digit leads among two-person Presidential races in the past several elections.

August 2004 (Bush [I] v Kerry):



Not a double-digit lead among them. How about 2000?

Bush v Gore, per Gallup:



A severe outlier early, and another slight outlier (almost ten points, but not quite) later on, but still no sustained double-digit leads. Maybe 1996?

Clinton [I] v Dole, Gallup Poll Trends:



A-HA! There is it; the source of the belief that one should have "double-digit" leads. A popular, incumbent president ("longest peace-time economic expansion in history") running for re-election against a man who doesn't even seem to be trying hard. (Ask "Hideo Nomo of the Brooklyn Dodgers.")

But, oops. It's also not the whole story. The whole story for 1996 runs more like Clinton (I) v Dole and Perot:



Again, Clinton is a popular, incumbent President (all things Obama is not) running against a man who is increasingly making it clear he doesn't want the job (and a man whose candidacy was widely seen as equivalent to a "protest vote" against, e.g., NAFTA). So it seems reasonable to assume that many of the "undecideds" were not going to break his way and were deciding which protest vote was more reasonable.

But MG may suggest that I am politically naive to suggest that all of the Undecideds would break away from Clinton, and he's probably correct. But it similarly seems reasonable to assume that a notable majority would break that way—say, 75% of the undecideds.



So even a popular incumbent cannot sustain a double-digit lead (though the negatives would still, of course, leave him winning with a large plurality of the vote—which is what happened). And the only times we see a convincing double-digit lead is when a substantial third-party candidate is excluded from the polling, and one of the candidates is a popular Incumbent.

Don't get me wrong; I agree with Paul Krugman (contra lerxst) that Obama's campaign isn't so appealing as it could and should be. But in a two-party race* with neither candidate being the Incumbent,** expectations of a sustained double-digit lead, even over a short period of time, are absurd.

*Pending evidence of a large groundswell for Bob Barr and One of Obama's Classmates on the Libertarian line or a rally amongst pro-Prohibition forces in the face of the Amethyst Initiative.
**In name, at least.

There is a strange meme in the blogsphere—most recently made in comments here by Movie Guy—that Obama "should have a double-digit lead over McCain at this stage as has been the case with previous presidential primaries." So I went searching for double-digit leads among two-person Presidential races in the past several elections.

August 2004 (Bush [I] v Kerry):



Not a double-digit lead among them. How about 2000?

Bush v Gore, per Gallup:



A severe outlier early, and another slight outlier (almost ten points, but not quite) later on, but still no sustained double-digit leads. Maybe 1996?

Clinton [I] v Dole, Gallup Poll Trends:



A-HA! There is it; the source of the belief that one should have "double-digit" leads. A popular, incumbent president ("longest peace-time economic expansion in history") running for re-election against a man who doesn't even seem to be trying hard. (Ask "Hideo Nomo of the Brooklyn Dodgers.")

But, oops. It's also not the whole story. The whole story for 1996 runs more like Clinton (I) v Dole and Perot:



Again, Clinton is a popular, incumbent President (all things Obama is not) running against a man who is increasingly making it clear he doesn't want the job (and a man whose candidacy was widely seen as equivalent to a "protest vote" against, e.g., NAFTA). So it seems reasonable to assume that many of the "undecideds" were not going to break his way and were deciding which protest vote was more reasonable.

But MG may suggest that I am politically naive to suggest that all of the Undecideds would break away from Clinton, and he's probably correct. But it similarly seems reasonable to assume that a notable majority would break that way—say, 75% of the undecideds.



So even a popular incumbent cannot sustain a double-digit lead (though the negatives would still, of course, leave him winning with a large plurality of the vote—which is what happened). And the only times we see a convincing double-digit lead is when a substantial third-party candidate is excluded from the polling, and one of the candidates is a popular Incumbent.

Don't get me wrong; I agree with Paul Krugman (contra lerxst) that Obama's campaign isn't so appealing as it could and should be. But in a two-party race* with neither candidate being the Incumbent,** expectations of a sustained double-digit lead, even over a short period of time, are absurd.

*Pending evidence of a large groundswell for Bob Barr and One of Obama's Classmates on the Libertarian line or a rally amongst pro-Prohibition forces in the face of the Amethyst Initiative.
**In name, at least.