• More good news on the housing market. This morning, the S&P/Case-Shiller Home Price index posted its biggest annual increase since 2006—just before the housing market crash.

    Home prices in all 20 metro areas included in the index rose for the second month running. Phoenix led, with a 23% annual increase followed by San Francisco (18.9%), Las Vegas (17.6%) and Atlanta (16.5%).

    Still, Robert Shiller, co-creator of the index, is cautious. “There’s a lot of excitement in the housing market now but it might be just short term,” he tells The Daily Ticker.

    Related: The Recovery in Housing is Behind Us: David Rosenberg

    Shiller says the housing market is operating in an “abnormal economy” where the Federal Reserve is buying $40 billion worth of mortgage securities and $45 billion worth of Treasury notes each month. This has driven mortgage rates to record lows.

    According to Freddie Mac’s weekly survey out last Thursday, the average rate for a 30-year fixed rate mortgage is a record low 3;4%;

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  • Best Buy (BBY) shares were strong in early trading on Tuesday driven by the company's decision to pull the plug on European expansion plans. The embattled Minnesota-based electronics retailer said it is selling out to joint venture partner Carphone Warehouse for roughly $775 million in cash and stock.

    Best Buy CEO Hubert Joly says the retreat shouldn't be taken as a sign that the company is pulling back from all foreign markets; only the ones that don't make financial or strategic sense.

    Joly's move illustrates the advantage of bringing a fresh set of eyes to the corner office. An entrenched CEO would likely have given more rope to a partnership generating more than $5.5 billion in revenues and is less than 5 years old. To Wall Street the European excursion was just a distraction from rotting operations in the US. Killing such legacy operations are exactly what turnaround CEOs are supposed to do.

    As Joly chips away the dysfunction at Best Buy, investors are left to wonder if there will be anything left when he's done. Lee Munson of Portfolio LLC thinks Best Buy is going to have to keep shrinking in order to stay alive.

    "Best Buy used to be a place where you could go and get great information about the products and I think that's slipped over the years," Munson says in the attached video. "To get your profit margins up you've got to provide a value added experience for people."

    Read More »

  • Niall Ferguson has two words for Paul Krugman: you’re wrong.

    The Harvard University history professor and author of “Civilization: The West and the Rest” says Krugman’s pro-government spending thesis not only fails to address the core problems facing the U.S. and Europe today but also has dire consequences for individuals living in these economies.

    “You can’t borrow trillions of dollars a year for the rest of time,” Ferguson says in an interview with The Daily Ticker at the Milken Institute Global Conference 2013. “Once a government gets to a very very high level of debt, the risk is very small increases in borrowing costs which create a vast ocean of red ink. So that risk is not negligible. Very large debts do not simply disappear by magic.”

    Related: The Economic Argument Is Over — And Paul Krugman Won

    Ferguson argues that Carmen Reinhart’s and Ken Rogoff’s conclusions about the relationship between high debt and low growth are still true. The two Harvard economists had to defend

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  • Wednesday afternoon the Federal Open Market Committee will release its latest monetary policy statement. For comparison, the March statement is posted on FederalReserve.gov. If you must engage in the act of combing through each word, it's always best to have the prior release in front of you when the new one hits the wires.

    Hugh Johnson, chairman and CIO at HJ Advisors, says investors are safe in assuming that there aren't going to be any seismic shifts in policy. "It's going to be pretty much the same statement," Johnson says in the attached video.

    Ticking through the old favorites, Johnson says he's looking for commentary on low rates, unemployment, slow growth, etc. "You can parse all you want but basically that's what it's going to tell you," he states.

    The exception is whether or not the list of dissenters to current policy expands beyond Esther George. It's the behind the scenes debate regarding the timing of tapering the quantitative easing programs that Johnson is paying

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