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One thing I've learned is America doesn't have a monopoly on dopes. It's just that in America, unlike many other places, dopes have better opportunities to do stupid things on a larger scale.

The primary reason other countries didn't have problems with people making $50k/yr borrowing $500k for a house is there aren't many people outside the US who make $50k/yr. The exception is Europe and their problems are worse than ours.

Both rent and OER reported is a 6-mo moving average, so they will be behind the curve. Also, falling utility rate will boost OER as it increases the "Economic rent", although the weight is pretty small as I understand (but I can never figure out the lag between the actual utility and the time it gets subtracted from sampling rents).

I don't think deflation is a serious threat. Companies are operating with razor thin margins. Instead of lowering prices to attract consumers, they'll instead go bankrupt or reduce costs. It makes no sense to sell at a loss. Maybe they'll sell at a loss over the short term to clear existing inventory, but they won't create new product with the intention of losing money. The end result will be less competition which is inflationary.

I find it really hard to believe that OER will stay positive and continue to boost the CPI. Furthermore, it appears vehicle prices were up YOY, a trend that is quickly reversing to get more buyers in the stores. We still have a good chance of negative CPI readings to come

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“For some reason owners' equivalent rent increased even though rents are falling in most areas

to be fair, remember that OER also lagged the outrageous price increases that occurred during bubble times...

must be the way that they figure it?

D3 COLA CPI adjustment.

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charlie: The problems in "Europe" are not predominantly because of consumer debt, but bad "investments" in foreign (substantially US) debt obligations, e.g. US MBS, and other "nonperforming" instruments.