The Times has a very interesting story about condo owners who got stuck with higher costs and rundown conditions because tenants in their buildings are dwindling due to foreclosures. It says the housing market may be worse than numbers show because condos, which account for one in eight homes, aren’t included in “many of the numbers.”

And here comes (more) trouble: 202,000 new condo units will come online this year, adding more than a third to the total added over the last five years, which was no slack time.

Is the Fed losing its independence?

Former Federal Reserve Chairman Paul Volcker continued to question the current regime’s policies, this time in Congressional testimony where he said its unprecedented moves threaten its political independence, the Journal reports on A3. Why does that matter? The Fed was set up to be somewhat immune from political pressures to print money. Bloomberg notes that the Fed has already been pressured by Congress this month to accept student-loan debt as collateral for loans to banks and Wall Street.

Volcker called for tighter regulation of Wall Street to bring it in line with what’s required of commercial banks—especially now that the Fed is lending to investment banks as if they were regular banks, the WSJ and Bloomberg write. He noted that regulators let off-balance-sheet entities proliferate. As quoted by the Journal:

”They were not regulated and [banks] didn’t hold an adequate amount of capital against them. Why did that happen after the experience of Enron?”

The Financial Times writes that Volcker warned of a similarity between what’s going on today and the stagflation of the 1970s, and said the Fed should step up its fight against price increases getting out of control. (It also fronts news that the German president lashed out at bankers and markets, calling for “more severe” regulation.)

‘Statistical sleight of hand’

But the consumer-price index just edged up in April by 0.2 percent from the month before, which was less than economists expected, and was perhaps evidence that the downturn is slowing inflation, say the NYT on C4 and the WSJ on A4. Still, prices from a year ago are up 3.9 percent. Volcker joined the crowd saying there’s “a lot more inflation” than government numbers are showing, Bloomberg reports in its Volcker-testimony story.

Indeed, the report was made so moderate because of the way the Labor Department calculated gas prices, which were really up 5.6 percent on the month, but for seasonally adjusted inflation purposes were down 0.2 percent (NYT) or 2 percent (WSJ) depending on who you believe. The Times quotes PNC’s head economist calling it a “statistical sleight of hand.”

Drilling down a bit into the numbers, there were some worrisome signs. The numbers picked up a big increase in the price of food, which rose 0.9 percent on the month, the most in eighteen years, which the Journal and Times bury but Bloomberg and the Los Angeles Times correctly place in their ledes. The NYT writes that food prices are up 5.1 percent from a year ago.

“This is a fine inflation report if you don’t need to eat, drive or depend on your paycheck,” said Jared Bernstein, senior economist at the labor-oriented Economic Policy Institute in Washington and author of the recently released book, “Crunch: Why Do I Feel So Squeezed?” (Berrett-Koehler).

The LAT’s, which drips with the skepticism so often absent from reporting on the government’s economic numbers, notes there are good statistical reasons for its adjustment of gas prices.

Backdating update

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.