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luni, 8 iunie 2015
This week's top Pins
Seth's Blog : High resolution is not the same as accurate
High resolution is not the same as accurate
Should you visit a college before you decide to go there?
Well, a one-hour personal visit is certainly visceral and emotional and it feels real. But it's also based on the weather, on the route you took to school, on the few people you met or the one class you visited.
None of this is correlated to what the four-year experience is actually like, or what the degree or experience is worth over the lifetime of a career.
By analogy, everything from how angry that last customer was on the phone to precisely how many degrees it is outside right now are not nearly as accurate indicators as we make them out to be.
You don't need an electron microscope to figure out if a ball is round. (In fact, it will almost certainly tell you something less than useful.)*
Too much resolution stops giving you information and becomes merely noise, which actually gets in the way of the accuracy you seek.
*[If you were able to shrink the Earth to the size of a billiard ball, it would be the roundest sphere ever created. Hard to believe this if you live near the edge of the Grand Canyon.]
More Recent Articles
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duminică, 7 iunie 2015
Mish's Global Economic Trend Analysis
Mish's Global Economic Trend Analysis |
| New Housing Crisis in the Making? If So, What's the Solution? Posted: 07 Jun 2015 12:59 PM PDT Home ownership rates are sinking and demographics are part of the reason. But does that constitute a new housing crisis?  The Wall Street Journal writer Nick Timiraos makes the case in New Housing Crisis Looms as Fewer Renters Can Afford to Own. Last decade's housing crisis has given way to a new one in which many families lack the incomes or savings needed to buy homes, creating a surge of renters and a shortage of affordable housing.Breaks for Apartment Builders Given that Terwilliger spent two decades as one of the nation's largest apartment developers the answer should be easy to figure out. He wants to end tax breaks for home ownership to subsidize new home owners and "free up funds for the rental side". His complaint: 75% of the housing tax breaks go to the top 20% of individuals. That is hardly shocking given the top 20% buy the most expensive homes and therefore pay the most in interest. Timiraos, buys all Terwilliger's nonsense hook line and sinker, finishing the WSJ article with "Politically, none of this will be easy . Some will say it's a zero-sum game—helping renters at the expense of owners. Not so, says Mr. Terwilliger. If renters can't ever become homeowners, who will buy those homes when today's homeowners need to sell?" Housing Crisis Past and Present The 2015 housing crisis was caused the same way as the one in 2007: Interference by the Fed, by Congress, by local officials wanting to create affordable housing. Terwilliger wants a combination of affordable housing and affordable renting. Lovely. Driving up home ownership rates is guaranteed to do one thing: drive up prices. Fannie Mae, Freddie Mac, and hundreds of other government programs culminating with president Bush's "Ownership Society" all contributed to make housing unaffordable. The government has no business promoting one form of living over another. Self-Correcting Problem Terwilliger ends with the question "If renters can't ever become homeowners, who will buy those homes when today's homeowners need to sell?" The answer should be obvious: Prices will fall until there is a pool of buyers! In the wake of the great financial crisis, home prices actually fell to the point of being affordable. Few seemed happy with the result. The Fed wanted to prevent deflation and in the greatest financial experiment in history unleashed round after round of QE. Asset prices recovered, but wages didn't. As a result, homes are once again unaffordable. Does Terwilliger want affordable housing or not? If government and the Fed got out of the way, there would be no problem. Instead, Terwilliger wants the government to "do something". I suggest the government and the Fed have done far too much already. Solution is Undoing Instead of promoting something, a process that has failed every time, how about undoing everything that contributed to the mess. My proposal
That's the real solution to the problem, not more self-serving affordable housing nonsense from people with a vested interest in promoting something for their own benefit. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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