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Lexicon posted:I guess by bearish I meant 'consistent with reality and sanity', as to me they are essentially equivalent. I've yet to see an intellectually honest, salient bull argument at this point. I read the first page of dunning's report on the shitter just now. 6/10 might try to read the whole thing when I get home.
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# ? Mar 12, 2014 20:36 |
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# ? May 9, 2024 22:47 |
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Lexicon posted:That'll be a short list, post-filter. You will not be able to get an undergraduate degree in economics from a reputable university without covering a reasonable amount of higher mathematics. For what it's worth, the mandatory mathematical courses for a BSc in economics at LSE are mathematical methods, stats, and econometrics; you can also take a number of more advanced mathematical topics in later years if you so desire.
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# ? Mar 13, 2014 01:19 |
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It is less the amount of math they have to do (which is actually quite a bit) in their education. It is just the averaging of those two metrics seems pretty junior high on the face of it. Price-to-Rent is probably a reasonable benchmark. Price-to-Income is probably a reasonable benchmark. Are they equivalent benchmarks, and should you average them to find something worthwhile? Pretty debatable. Should you then issue a press release stating "Prices are 60% too high" based on it? Maybe not. If this is the level of analysis the economists are putting into it, it isn't a surprise that the general populace is relying on folk wisdoms for it.
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# ? Mar 13, 2014 01:43 |
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More generally, whenever you find yourself averaging percentage quantities, especially when those percentage quantities measure different ratios, you have most likely made an extreme error in judgement, taste, and good sense. By all means, create a hybrid weighted metric of some sort, but averaging P:I and P:R and calling it a result is the height of schoolboy analysis.
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# ? Mar 13, 2014 01:51 |
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LemonDrizzle posted:You will not be able to get an undergraduate degree in economics from a reputable university without covering a reasonable amount of higher mathematics. For what it's worth, the mandatory mathematical courses for a BSc in economics at LSE are mathematical methods, stats, and econometrics; you can also take a number of more advanced mathematical topics in later years if you so desire. Stats and econometrics at the undergrad level typically won't go into the higher math, or at least are definitely passable without a mastery of those subjects. Stochastic processes for economics is typically in grad school though, along with time series analysis which will use those concepts.
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# ? Mar 13, 2014 02:21 |
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bro, stochastic processes is hardly higher math. The same goes for diff EQ. I think it says a lot when your average comp sci or engineering undergrad has to take more math courses than a loving economist. namaste friends fucked around with this message at 03:05 on Mar 13, 2014 |
# ? Mar 13, 2014 03:03 |
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LemonDrizzle posted:You will not be able to get an undergraduate degree in economics from a reputable university without covering a reasonable amount of higher mathematics. For what it's worth, the mandatory mathematical courses for a BSc in economics at LSE are mathematical methods, stats, and econometrics; you can also take a number of more advanced mathematical topics in later years if you so desire. That may be true, but the undergrad and masters economics graduates I've met (mostly from UBC, UVic, and SFU admittedly) have always given off a decidedly strong "I'm not a math guy" vibe. I retract my original comment; clearly it was myopic and anecdotal.
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# ? Mar 13, 2014 03:05 |
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Cultural Imperial posted:bro, stochastic processes is hardly higher math. The same goes for diff EQ. Idle curiosity: where does higher math start in your estimation? I don't know if there's a strict definition, but I'd venture somewhere around PDEs. Certainly anything real analysis and above.
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# ? Mar 13, 2014 03:07 |
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Lexicon posted:Idle curiosity: where does higher math start in your estimation? PDE for sure. Definitely analysis. Anything where you see a ton of loving 'i's. Maybe discrete math. Logic beyond what they take for philosophy.
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# ? Mar 13, 2014 03:16 |
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Cultural Imperial posted:PDE for sure. Definitely analysis. Anything where you see a ton of loving 'i's. Maybe discrete math. Logic beyond what they take for philosophy. I found discrete 2 difficult compared to other 2nd year math courses, computability/complexity theory was mind-boggling but I got through it.
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# ? Mar 13, 2014 03:21 |
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Lexicon posted:That'll be a short list, post-filter. Most decent Ph.D programs in economics require a course in real analysis. Of course your average BA graduate in economics is a very different matter. That being said, I've interviewed a lot of econ Ph.Ds recently and most of them tend to be fairly weak in math. Especially the ones who didn't go to top schools.
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# ? Mar 13, 2014 07:07 |
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For better or worse the rep at my school was that economists were lovely business students who couldn't meet the usually stricter b-school requirements for admission. I'd like to think the ones that go for a phd are a bit less lovely.
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# ? Mar 13, 2014 14:13 |
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Lexicon posted:Isn't Tara Perkins typically more associated with the bearish side of the aisle? I guess she probably didn't write the headline - the article is far more nuanced than the headline suggests. I read the article and like you said, there's some nuance to it. The main points seem to be that: - Using a matched sample, or even only choosing homes that have sold at least twice, is not sufficient to remove changes in quality of the home, because even though the home never moves, it could be renovated between sales. Fine then, but I'm not sure what you can do about this bias. Presumably homes anywhere are being renovated, so this should only be a problem if homes with multiple sales are renovated more often than others, which sounds plausible. But I'm not sure how much this matters, because the rate or quality of renovations to homes that are off the market is irrelevant to anyone looking to buy. - Not all of the rental pricing indices take into account absurdly inflated condo rents. Okay, fine. Presumably that Dunning fellow had a crack at correcting this bias. However, it seems fair to only use existing rental units in a matched sample. I would guess that most new condo units coming onto the rental market are in downtown Toronto, or at the very least distributed differently from existing rental buildings. Otherwise, why the hell are people paying a $500/month premium for condo rentals over apartments? The other question is - are they really? The vacancy rate in Toronto is tiny, especially downtown, but is that true of condo rentals as well? Anecdotally, I know a few people who rented out condos temporarily, but they were not being gouged to the extent that the article suggests. Why would you pay an extra 30-40% to rent a condo instead of an apartment unless you're really desperate and can't wait for a vacancy to pop up in a decent apartment building? - I'm not sure what the right way to deal with this is, but it seems like a matched sample of houses and apartments is a better method than including new condos, considering that there are basically no new (semi)-detached homes being built in Toronto and only a few apartments, whereas condos are coming up like weeds. But then I guess the housing price index includes the price to buy condo units as well, so maybe I'm wrong. Besides those points, the conclusion is still that housing overpriced, just not as much as one thought. Okay then. Can't we still compare to other countries' price-to-rent or -to-income ratios, assuming they're using similar methodology with perhaps the same flaws? I guess the issue is that Vancouver and Toronto are building insane quantities of condos compared to almost anywhere else in the world, and there's no neat and easy way to deal with that.
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# ? Mar 13, 2014 21:51 |
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Speculation, but I would put money on condo rents being higher because all else equal, condo developments tend to be in higher rent neighbourhoods, and also come with more amenities than apartments (ensuite laundry, concierge, extensive gym or entertainment complexes, etc).
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# ? Mar 13, 2014 23:04 |
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Yeah, when we were looking for a new apartment we wanted in-suite laundry but the only ones that had that were rented out newer condos and the rents were crazy high. I'm paying on the higher-end for my very nice 2br apartment steps from downtown Victoria, but if I wanted in-suite laundry it was an extra $200 a month minimum for the same size. Plus you have a random condo owner for a landlord that could kick you out any year when they finally flip their unit and make crazy money.
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# ? Mar 13, 2014 23:08 |
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From the aforesaid Dunning: http://m.huffpost.com/ca/entry/4948890?utm_hp_ref=canada-business
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# ? Mar 14, 2014 00:33 |
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Lexicon posted:From the aforesaid Dunning: http://m.huffpost.com/ca/entry/4948890?utm_hp_ref=canada-business If a mortgage lobbyist is whining over reducing to the max mortgage term to 25 year then at least something is being done right.
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# ? Mar 14, 2014 00:37 |
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etalian posted:If a mortgage lobbyist is whining over reducing to the max mortgage term to 25 year then at least something is being done right. The part I'm amazed they get away with, without getting challenged on is; 1) There is no bubble. Stop talking about a bubble you rube. 2) It is dangerous meddling to put things back to how they were 6-7 years ago. In the absence of a bubble what could possibly be the danger? ocrumsprug fucked around with this message at 06:35 on Mar 14, 2014 |
# ? Mar 14, 2014 01:42 |
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If your interest in the Canadian economy/housing is remotely beyond fleeting, do yourself a favour: grab a beer or a tea and sit down and read this: http://www.bankofcanada.ca/2014/03/stepping-outside-analyzing-canadian-economy/
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# ? Mar 14, 2014 02:39 |
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http://www.theglobeandmail.com/repo...hboard/follows/quote:My nomination for the understatement of the year goes to Finance Minister Jim Flaherty, who in early December observed that “regrettably, CMHC became something rather more grand I think than it was intended to be.” I didn't even know the CMHC had a second home program. gently caress that loving bullshit.
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# ? Mar 14, 2014 03:00 |
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quote:The Bank’s base-case projection sees household debt, housing prices and housing starts levelling off and then gradually declining (in real terms, in the case of housing prices): in other words, achieving a soft landing. Recent data, such as decelerating monthly price increases for existing homes, a declining number of housing starts and historically low rates of household credit growth, all support this view and indicate that the situation is stabilizing, although the risks remain elevated. oh for gently caress's sake
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# ? Mar 14, 2014 03:42 |
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Cultural Imperial posted:oh for gently caress's sake Ah yes a soft landing *exits aircraft at 30k feet*
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# ? Mar 14, 2014 06:31 |
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Cultural Imperial posted:oh for gently caress's sake It's the old dream that the downside of the bubble won't be painful for everyone, while in reality bubbles tends to blow up in catastrophic ways.
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# ? Mar 14, 2014 06:47 |
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Hay guys Australia just had a soft landing so we're next lol
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# ? Mar 14, 2014 14:13 |
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quote:The Bank’s base-case projection sees household debt, housing prices and housing starts levelling off and then gradually declining (in real terms, in the case of housing prices): in other words, achieving a soft landing. Recent data, such as decelerating monthly price increases for existing homes, a declining number of housing starts and historically low rates of household credit growth, all support this view and indicate that the situation is stabilizing, although the risks remain elevated. One could argue we already soft landed. VVVV Sorry the quote didn't go through when i posted. i was being sarcastic about the whole "one could argue" BS in your quote. The things they note as "stabilizing" are precisely what i think will case the implosion, "decelerating monthly price increases for existing homes, a declining number of housing starts and historically low rates of household credit growth, all support this view and indicate that the situation is stabilizing". there's a very small amount of "deceleration" that i guess could be considered stabilizing but any other amount of deceleration and you got yourself a bubble bursting. Mexplosivo fucked around with this message at 16:44 on Mar 14, 2014 |
# ? Mar 14, 2014 16:27 |
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http://www.macleans.ca/economy/realestateeconomy/a-canadian-housing-chart-that-puts-the-bubble-in-perspective/ Mcleans asks Robert Schiller what he thinks.
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# ? Mar 14, 2014 16:28 |
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Mexplosivo posted:One could argue we already soft landed. How would that work?
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# ? Mar 14, 2014 16:34 |
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Lexicon posted:How would that work? twisty logic and bad graphs
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# ? Mar 14, 2014 16:55 |
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JawKnee posted:twisty logic and bad graphs REALTOR® Math™
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# ? Mar 14, 2014 16:59 |
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Gonna quote this:WHERE MY HAT IS AT posted:I have a real estate law question, located in Ontario, Canada if that helps.
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# ? Mar 14, 2014 18:37 |
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FrozenVent posted:Gonna quote this: Edit: Ooops. Wrong thread. Rhobot Mk. II fucked around with this message at 18:47 on Mar 14, 2014 |
# ? Mar 14, 2014 18:45 |
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So we're talking a soft landing at an airport whose runway ends at a cliff, I suppose?
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# ? Mar 14, 2014 21:46 |
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French Canadian posted:So we're talking a soft landing at an airport whose runway ends at a cliff, I suppose? Video example of the soft landing: https://www.youtube.com/watch?v=BN3waJIc574
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# ? Mar 14, 2014 23:48 |
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Another soft landing http://youtu.be/FUEhNKBi4DY
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# ? Mar 15, 2014 00:52 |
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You know it's been about a year since prices stopped rising IIRC. That doesn't mean things won't collapse at the first sign of trouble (like a major euro collapse or Russia doing something insane), but until that happens it's not exactly crazy to describe what is currently happening as a "soft landing". I really don't think a sudden violent crash is nearly that imminent. It's a precarious position yes but prices don't actually have a reason to come down until something actually begins to destabilize people's overstretched debt situations. Trudging along like this for another 2 decades or so is an entirely possible outcome for all this, and could be described as a "soft landing". What's notable about that is that people are still getting hosed, just slowly over a much longer timespan.
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# ? Mar 15, 2014 18:15 |
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I don't know about you guys but the only financial news that I'm completely focused on is the impending collapse of China's shadow banking system. It's been about a week since haixin steel defaulted and no one in western press is covering this except the FT. Yes, a loving steel mill became a defacto bank. That's how hosed up China is.
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# ? Mar 15, 2014 18:59 |
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Cultural Imperial posted:I don't know about you guys but the only financial news that I'm completely focused on is the impending collapse of China's shadow banking system. It's been about a week since haixin steel defaulted and no one in western press is covering this except the FT. It's deeply frustrating to me that I'm still relying on Zero Hedge for quick updates on this stuff.
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# ? Mar 15, 2014 21:44 |
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Cultural Imperial posted:I don't know about you guys but the only financial news that I'm completely focused on is the impending collapse of China's shadow banking system. It's been about a week since haixin steel defaulted and no one in western press is covering this except the FT. Don't ignore that this has happened in other countries. GM started offering financing for their cars, and eventually they became a financing company that happened to make cars. They grew into other types of lending, got huge, and then imploded (and got bailed out). This type of thing happens when buying power drops below the capital cost of a good or service (industry or consumer). Nominally, banks are supposed to step in here and use their financial expertise to turn future revenue into current credit, allowing the transaction to proceed. Banks eventually became unable to overcome their own risk model, as they could no longer muster the internal expertise needed to evaluate a given purchase correctly. As a response, manufacturers borrowed from the banks against their own output, and lent that to their own purchasers based on the information their had about their business relationship. The only risk in this model is the supplier 'pumping up' prices and loans to try to make more money, or financial diversification outside their core market where they are unable to properly asses risk. Other risks, such as payment defaults and industry downturn, exist in pretty much any model, and are accounted for. Haixin seems to have gone for financial diversification strategy. This lead to a bunch of poorly evaluated decisions, and the end result is they are no longer able to pay back their underwriters. The only thing unique is that the government has chosen to let them implode rather than recapitalizing them. I actually doubt this will have the desired effect. Instead, investment is going to concentrate in larger firms that have 'too big to fail' status, and the economy is going to slow while the financial sector consolidates its wealth. Rich will get richer, and whatever existed of the middle class will vanish. EoRaptor fucked around with this message at 21:55 on Mar 15, 2014 |
# ? Mar 15, 2014 21:53 |
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EoRaptor posted:Don't ignore that this has happened in other countries. GM started offering financing for their cars, and eventually they became a financing company that happened to make cars. They grew into other types of lending, got huge, and then imploded (and got bailed out). A good post, but where your analysis breaks down (in my opinion) is in assuming that Chinese banks a) control a sufficient portion of lending activity in the economy to exert influence over the quality of loans, and b) assuming that Chinese banks aren't just as bone stupid as other lending vehicles. The Chinese credit bubble is so well-documented and so huge at this point that it is pretty safe to say that some large portion of all loans/economic activity in that country will end up being near-100% writeoffs, either through corruption, misallocation of resources, or unproductive assets. Banks have a lesser proportion of that, sure, but it's definitely not zero, and their exposure to the shadow banking sector is huge.
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# ? Mar 15, 2014 22:01 |
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# ? May 9, 2024 22:47 |
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Mr. Wynand posted:You know it's been about a year since prices stopped rising IIRC. That doesn't mean things won't collapse at the first sign of trouble (like a major euro collapse or Russia doing something insane), but until that happens it's not exactly crazy to describe what is currently happening as a "soft landing". Great, now all it has to do is continue flatlining for another 15-25 years to remain a "soft landing." That's totally possible, right? edit: It's possible for that timeline to be shorter, but there would have to be a lot of inflation outside the housing sector for that to be the case. tagesschau fucked around with this message at 22:06 on Mar 15, 2014 |
# ? Mar 15, 2014 22:02 |