The Wall Street Journal: Wednesday, July 31, 2013

Housing Rallies On, For Now (page A3): Home prices during the first half of 2013 posted their largest gain since the housing boom peaked seven years ago, but rising mortgage rates and the potential for more supply could eventually slow the run-up. Nationally, home values rose by 5.8% in June from one year ago, according to Zillow Inc., the real-estate website, the largest gain since 2006. So far this year, prices are up 2.7%, the strongest year-to-date gain in June since 2005. A separate and widely watched index released Tuesday showed that home prices in 20 major U.S. cities rose by 12.2% in May from one year earlier. The Standard & Poor’s/Case-Shiller index shows that home prices are now down from their 2006 peak by 24.4%, compared with a peak-to-trough decline of 35.1% in March 2012. Prices in two cities, Dallas and Denver, reached an all-time high, surpassing peaks set in 2007 and 2006, respectively. The speed with which prices have risen over the past year has taken many economists by surprise. Gains have been fueled by record-low mortgage rates, a slowly improving economy that has released pent-up demand and strong appetites from investors converting homes into rentals.

The Stock Market Beats GDP as an Economic Bellwether (page A13): On Wednesday, the Bureau of Economic Analysis releases its estimates of U.S. gross domestic product for the second quarter of the year. The BEA bureau cautions that its numbers are estimates and are subject to significant revision. The reality is that the numbers BEA reports, which will be, as they always are, bandied about in the nation’s news media, are not very good measures of what went on in the economy or is going on today, according to an analysis I’ve performed on U.S. economic performance from 1996 to 2012. They are even worse for forecasting the future. Instead, the stock market is a better leading economic indicator. In fact, there is no clear statistical relation of a given quarter’s GDP growth to the growth rate during the following year. A good leading indicator should at least predict whether the future will be better or worse than average. But knowing where the current quarter’s GDP growth rate is relative to its historic average predicts correctly where next year’s GDP growth rate will be relative to its historic average only 61% of the time. This is not much better than a coin toss. The longer run view is no better. Last year’s growth rate does not predict with any statistical reliability next year’s growth rate. Market indexes are better predictors of GDP growth. My analysis of 1996-2012 shows that the performance of the S&P 500 relative to its average predicts the performance of the economy in the next year relative to its average a full three-fourths of the time.

In the Euro Zone, Confidence Grows (page A14): Business and household confidence grew across most of the euro zone, while Spain’s deep recession showed signs of easing, suggesting the European Central Bank will hold interest rates unchanged and refrain from other stimulus measures when it meets Thursday. Together with other recent data, the reports, issued Tuesday, suggest that any economic recovery will be patchy. Euro-zone unemployment is at a record high, weighing on consumer spending, and fiscal-austerity measures in much of Europe will likely weaken activity this year and in 2014. With the inflation rate below its 2% target, ECB officials are likely to reiterate their intention to keep official interest rates at current record-low levels, or even reduce them further, for an extended period. ECB President Mario Draghi unveiled this “forward guidance” after the bank’s July 4 meeting, breaking with its long-standing tradition of refusing to pre-commit on rates.

Google’s Data-Trove Dance (page B1): In 2011, Google Inc. Chief Executive and co-founder Larry Page asked executives to develop a new, simplified privacy tool that would act as a kind of sliding scale, allowing users to designate whether they wanted minimal, medium or maximum collection of information about them in all of Google’s services, and how much the information would be shielded from being viewed by other users. After much wrangling and many attempts to build the “slider” tool, whose three main settings were nicknamed “kitten,” “cat” and “tiger,” the idea was abandoned last year, according to people familiar with the matter. Because Google has so many Web services that operate differently, executives found it impossible to reduce privacy controls to so few categories, these people said. Also, allowing people to select the maximum-protection setting, known as the “tin-foil-hat option,” went against Google’s newer efforts to get more people to share information about themselves on the Google+ social-networking service, they said. The breadth of Google’s information gathering about Internet users rivals that of any single entity, government or corporate. The Web search and advertising giant continues to expand its collection and analysis of data, turning its mission to index the world, its people and their interests into a roughly $50 billion-a-year advertising business. Google executives also remain closed about much of its internal data-handling practices, fearing that discussing privacy-related topics might hurt the company with consumers, according to people who have worked on privacy issues at the firm. But there are signs Google is feeling increased pressure to calibrate how much emphasis it puts on user privacy. Scarred by a small number of past user-privacy missteps that generated global controversy, and under increased regulatory scrutiny in the U.S. and Europe, executives are engaged in wide-ranging internal debates and in some cases slowing product launches to address privacy concerns, according to people familiar with the matter.


My Life, and Past, as Seen Through Google’s Dashboard (page B4): What is Google Dashboard? In short, it is a one-stop shop that links to all the different buckets of your stored data collected by Google Inc.’s services. From your first Gmail account onward, Google has been collecting an amazing amount of information from you, and Dashboard is where you go to find it. Strangely enough, the easiest way to find your Google Dashboard is to go to and search for “Google Dashboard.” There might be a link to it from somewhere in Gmail, but I have never seen it, and it doesn’t seem to make itself obvious anywhere. Google created the Dashboard in 2009 so its users could manage all their privacy setting in our place. Once you find your Google Dashboard, you’re not going to look away. That’s because the reality of how much history you share with Google can be unnerving to confront, especially for heavy Web users.

House Party: Working and Living at the Office (page B6): It’s past midnight, but many staffers at Enplug, an advertising-technology company, are milling about the office in their T-shirts and boxers, writing code and talking strategy. Others are already in bed, sound asleep. Enplug’s office is a six-bedroom, three-bathroom Ranch-style home in the ritzy Bel Air neighborhood of Los Angeles. Twelve of the company’s 37 employees, including the chief executive, live and work there. The idea is to live and breathe work—24 hours a day, seven days a week—without the commute and few outside distractions. Employees and managers meet, work, eat, clean, exercise and sleep in the same space. And while there are occasional uncomfortable moments, such as nudging your boss to do the dishes, companies like Enplug say it is good for professional relationships, saves on rent and travel costs and is often just plain fun. Employees who choose to live in such arrangements are generally single 20-somethings who have recently left dorm life. “We don’t try to separate work life from our personal life,” says Nanxi Liu, the 23-year-old co-founder and CEO of Enplug, which creates digital billboards, incorporating tweets and other social-media streams. “It’s a little bit cultish,” she says. “It is also extremely efficient.” There are no data available on the number of companies where employees live together on-site, but Nancy Rothbard, a management professor at the University of Pennsylvania’s Wharton School who has studied boundaries among employees, says that these closely tied firms face many of the same challenges as family businesses. “The boundaries become very blurred,” says Dr. Rothbard. “If you have a bad day at work, the good news is you can talk about it with someone who can understand. The bad news is you can’t just detach.” Meanwhile, commercial ventures are cropping up to provide co-housing spaces for startup employees.

Workplace Bullies Target the Unattractive (page B7): More evidence that there is little difference between the office and a high school cafeteria: workplace bullies tend to pick on colleagues who are considered unattractive, according to a new study. Researchers Timothy Judge of the University of Notre Dame in Indiana and Brent Scott of Michigan State University surveyed 114 workers at a health-care facility to find out how often co-workers bullied them. Bullying was defined as acting rudely, teasing or saying hurtful statements. Separately, other participants viewed digital photos of the health-care workers, grading their attractiveness. Workers whose photos were graded as unattractive tended to be more likely to have reported being subjected to rude or even cruel treatment by co-workers, said Dr. Judge.

Tuesday’s Markets: Dow Industrials Tip Lower (page C4): The Dow industrials edged down in a seesaw session, as investors balanced data showing a strong rise in home prices against a slip in consumer confidence and mixed corporate earnings. Trading activity remain muted on Tuesday as investors looked ahead to the Federal Reserve’s policy statement and economic data releases later in the week. The Dow Jones Industrial Average ticked down 1.38 points, or less than 0.1%, to 15520.59. The Dow was up as much as 72 points at its intraday high and down 43 points at its low. The S&P 500-stock index inched up 0.63 point, or less than 0.1%, to 1685.96, and the Nasdaq Composite Index advanced 17.33 points, or 0.5%, to 3616.47.

Walter Mossberg: Chromecast: Easy Beaming from Devices to TV (Page D1): Google is trying to change television watching again, after the tepid response to its Google TV product a few years back. This time, instead of building a complex system to bring apps and Internet video to the TV, the search giant is taking a simpler approach. It has built a small, inexpensive device called Chromecast that wirelessly streams to the TV screen the video and music from tablets, smartphones and laptops you already own and know how to use. Chromecast is a small fob, about the size and shape of a USB flash drive, that plugs into a standard HDMI port, the kind found on almost every HDTV. It costs just $35. It connects to your Wi-Fi network and can stream video and audio from tablets and smartphones running Google’s own Android operating system, as well as Apple’s iPhones and iPads. It can also stream Web pages to the TV from Google’s Chrome browser running on Apple’s Mac laptops, Windows laptops, and Google’s top-of-the-line Pixel Chromebook laptop. I’ve been testing Chromecast for about a week, and I like it and can recommend it, despite some drawbacks. The biggest: It only works so far with a handful of mobile apps, most notably Netflix and Google’s own YouTube. Google is promising there’ll be more Chromecast-compatible apps soon, including the Pandora music app, and, for Android devices, its own Gallery photos app.

Mom, Stop Calling, I’ll Text You All Day (page D1): On computer and cellphone screens in workplaces across the country, many young employees keep up daylong conversations with their parents, sharing what the weather is like, what they ate for lunch or what the boss just said about their work. The running chatter with Mom or Dad is possible for young adults in their 20s and early 30s because they are the first generation to hit the workforce with tech-savvy parents. Most baby boomers are using the same smartphones, tablets and laptops as their children, making daily communication with Mom easier and more open-ended than ever.

Don’t Sweat the Summer Office Picnic (page D3): Dreading your annual company picnic? For many people, the prospect of making small talk with colleagues on a scorching weekend is far from appealing, and rife with potentially uncomfortable encounters. Regardless, experts say a summer outing can lead to prime networking opportunities unlikely to occur in the office. Here are some survival tips, focused on Attitude, Alcohol Attire, Guests, Networking, Exiting.

Djokovic Opens the Refrigerator (page D6): As Novak Djokovic climbed from a distant No. 3 to a convincing No. 1 in men’s tennis over the past few years, he gave a lot of credit to a new gluten-free diet. He was also famously outed by this newspaper during the 2011 U.S. Open for his devotion to the benefits of sitting inside a pressurized egg-shaped contraption called a CVAC. But in a new book that will be released next month, Djokovic reveals much more about the diet and regimen he follows—details he has, until now, kept quiet. It offers a rare look into the mind of an elite athlete who has climbed to the top of a brutally competitive sport during one of its most competitive eras. It also confirms something many tennis fans have long suspected: Novak Djokovic is a decidedly unusual fellow. Want to roll like the world’s top men’s tennis player? Start by drinking loads of warm water all day long, as well as shakes made with pea protein concentrate. Avoid dairy and stay away from alcohol during tournaments. Eat lots of avocados, cashew butter and very little sugar. Banish caffeine, other than the occasional energy gel bar before matches. Be sure to get seven to eight hours of sleep a night, meditate, do plenty of yoga and tai chi, take melatonin supplements, hook yourself up to a biofeedback machine that measures your stress level and, when you have a free moment or two, keep a diary. Feel free to unwind with a cup of warm licorice tea.