this post was submitted on 23 Jun 2024
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Housing Bubble 2: Return of the Ugly
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This is wrong. Home prices were replaced by rental price equivalent: https://www.fullstackeconomics.com/p/why-the-government-took-home-prices-out-of-the-consumer-price-index , for the simple reason that people usually have mortgages and changes in the mortgage rate weren't included in the old calculation.
The real bullshit is replacing products to use the alternatives people are buying due to inflation to make it seem like inflation is lower.
If I'm buying tofu instead of chicken that shouldn't be what the calculation is based on, otherwise we'll go all the way down to only have beans and rice in the basket and say "See, inflation isn't so bad!"
kind of like how the Dow Jones and the S&P500 and the Russel2000 type indexes will adjust what they contain, which makes it seem like growth is higher.
Yeah, it's kind of misrepresentation by medias that they refer to indexes so much when talking about markets health, ideally they would mostly talk about broad market ETFs' performance instead since they would be invested in everything at once.