A NEW RECORD! MORE THAN 44 YEARS OLD

Americans love to win; we love to break records. A broken record is a two sided event. It is a win and a loss.

Thursday night, Tyler Hansbrough is likely to break the UNC basketball all time scoring record. This record was last broken by Phil Ford, 30 years ago. Phil broke the record set by Lennie Rosenbluth in 1957, 51 years ago. Tyler, Lennie and Phil are among the greatest college basketball players to ever play the game. When the press does a news reel of Phil, they typically show him running the 4 corners offense. When Carolina had the lead late in the game, Phil could put the game on ice like none other. It took at least a double team to take the ball away from him, which meant a Carolina player was open. Phil could take any other player one on one and he could find the open man for a layup if he was double teamed. But, I praise the Lord for allowing me to be present many times when Phil raced down the court on a "transition fast break". It was a sight to see.


A dream competition would be a fast break competition between Kenny Smith, Ty Lawson and Phil Ford all at their prime. Kenny Smith might barely beat Ty down the court, Ty might barely beat Kenny at taking the ball to the rim, but neither could "stop and pop" like Phil. Phil would get two steps in before Kenny and Ty got to motoring but they would be waiting for Phil at the basket; never-the-less, Phil would score. He would switch from a full speed run, stop on a dime and shoot a dead on 10 footer. It would be a fun contest to see.

ANOTHER RECORD BROKEN

The real average hourly earnings of American citizens jumped by 2.5% in November, the biggest jump on records that go back to 1964. In the past three months, real average earnings have grown at the annualized rate of 18.8%! The consumer price index fell by 1.7%. (Numbers by way of Brian Wesbury).

When the media reports such figures, they love to say, "the biggest decline since the 1930's". They are "selling the news". Their idea is to suggest that we are in another great depression without going on record with a prediction. They either know better and are trying to increase market share or they are they are caught in a mind set where they cannot see the other side of the issue.

Yesterday, I wrote about how the bond markets are suggesting an average inflation rate of zero over the near term. The government numbers for November show a core inflation rate of zero. A zero inflation rate is about as good as it gets. Last month, the bond markets and the "news stories" suggested that deflation was here. Other "news stories" suggest that a period of hyper inflation is coming. By next summer, a bounce in things like gasoline prices will cause these folk to go ballistic.

Yes, Thursday will be a sad day for Phil Ford and fans. The good news is that Phil Ford and his fans, the Tar Heel Faithful, are also Tyler Hansbrough fans. We will celebrate the achievement of Tyler and we will honor the achievement of Phil.

By the same token, we should not read the headline, CPI, Biggest Fall Since the 30's, without appreciating that the year over year annual gain is real hourly wages of 3.1% is the largest on records that going back to 1972. The one month gain of 2.5% is not even the icing on the cake as we already know that the price of gasoline and other goods fell considerably more during the first half of December.

NO MORE TAXES!

The sad thing about getting a 3.1% raise is that a third or more might go to paying more taxes. The neat thing about a decline in prices is that one gets a raise without owing more in taxes.

Sure, we all have abundant evidence that times are tough, individuals are hurting. However, the composite numbers keep showing significant strength. The increase in the average real hourly wage just set a 44 year record and most people hardly noticed. They will.

The cumulative effect is what is ultimately felt. A $100 per month savings on gasoline is only $100 the first month it is saved. And two months later, when the monthly savings have grown to $200 per month, there is still no great celebration. However, when that $200 per month is used to solve a growing families need for an additional $42,000 worth of house, there are a lot of people made happy. Let's not forget that leverage is often a good thing.

Housing starts have hit a record low. The market is taking action to quickly correct an over supply of houses. Fast rising real incomes and reduced construction will resort in a faster than expected absorption of houses. A healthy housing market will cure a lot of problems. The stock market is starting to price in a recovery that will begin 6 to 12 months (an average of 9) from now. Will new recovery records be set?