Opinion

Felix Salmon

Counterparties

By Felix Salmon
May 10, 2010

The best price-to-rent ratios yet — Dept of Numbers

Things Lady Gaga Wants — Twitpic

Adventures in anonymous sourcing: do you believe “art experts who have heard details of the transaction”, or do you believe “most of the players with a keen need to know the prices”? — Art Market Monitor

My op-ed on Hollywood box-office futures — NYT

A fantastic anti-Facebook rant from Ryan Singel — Wired

Comments
6 comments so far | RSS Comments RSS

In re: price-rent, scaling rents by household size is a start, but this still mixes apples (rental stock), oranges (housing stock) and Dungeons and Dragons (NAR median sales price, which measures sales mix as much as it does price level). You need to measure price versus BLS-style equivalent rent on the same units, or not do it at all.

To take two data points about which I have direct knowledge, South Bend (here 11x) and San Francisco (here 33x), both still seem high. Off the top of my head, I’d say your proxy measure for P/R for these two cities needs to be closer to 8x in South Bend (ah, the rust belt) and 23x here in SF (still insane, but not oops-I-just-pooped-my-pants insane like 33x).

FD: we rent.

Posted by wcw | Report as abusive
 

Re your OP-Ed on Hollywood futures. The studios are right, it is an insanely bad ideas. Unlike onions, a simple commodity, Hollywood Box Office numbers could be more easily manipulated for gain. The ingredients that make for box office are concentrated in the hands of a few people, and the potential for disruptive side deals is there. A studio exec could change the release date of a film, or a distributor could add or trim the number of screens they will open with. Now, instead of making these decisions solely based on business reasons, these futures can create disruptive motives.

Posted by whooizit | Report as abusive
 

Here’s an interesting piece:

Goldman went 63-0 on 63 trading, earning at least 25 million every single day.
http://www.bloomberg.com/apps/news?pid=2 0601103&sid=aHRgsfzJINXw

As Mish noted, this seems to indicate front-running. I agree.

Posted by DanHess | Report as abusive
 

Re: Onions. Are these Hollywood futures a simple bet? Can an infinite amount of money be bet on a single film? If so, this is not at all like onion futures, where someone accepts delivery of actual onions at some point in the process.

Posted by Morphy-Godchaux | Report as abusive
 

wcw: I totally agree with you. There are definitely mix (and seasonality) issues with the NAR home prices. It’s just really hard to get absolute pricing data that doesn’t have some kind of shortcoming. We could use Case Shiller or First American HPI, but then we’d lose the meaning of the absolute ratio and be stuck with an index. RE needs better price data for sure.

Posted by BenE | Report as abusive
 

BenE, the data are out there, I just don’t know if you can get them. What you want are the BLS’s owner’s-equivalent rent numbers versus the market values of the same properties. I just don’t think the BLS publishes a useable dataset.

Since they don’t, I would (and will, if I ever find myself with a spare hour or two in the evening) simply match rental and owner housing stocks off the 2008 ACS. That is, take characteristics we know are important — location, size, age, income/age/race of householder — and create two matched sets (see Gelman’s many posts for an idea where I am going). Then you can stratify by geography and have something roughly equivalent, without actually having the BLS numbers you need.

Posted by wcw | Report as abusive
 

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