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EJ
01-29-07, 11:38 PM
In response to reader demand for more feel-good story balance on the tulip, and so no one in our community flogs themselves into a state of religious fervor by extreme practices of mortification of the brain with grim text from reading about lying central bankers and greedy Wall Street hacks, I offer the following passel of heart warmers, starting with this piece of propaganda from the Armed Forces Press Service:

http://www.itulip.com/images/iraq1.jpg
Military Police Teach Rule of Law, Tolerance to Iraqi Police (http://www.army.mil/-news/2007/01/29/1551-military-police-teach-rule-of-law-tolerance-to-iraqi-police/)

Iraqi police learn concepts of freedom and democracy in addition to policing skills, Galloucis said. Instructors discuss the importance of free speech, the value of diversity, the sanctity of human life, and the notions of tolerance, restraint and forgiveness, he said.

Iraqi police also learn "that nothing good ever comes out of hatred and murder," Galloucis said, noting Iraq's citizens acknowledge the importance of establishing a constabulary that operates according to principles of fairness and justice.

"They are making tremendous strides over here and are out there every day putting it all on the line to help turn the tide and stem the flow of violence that has been so prevalent here," the colonel said.
Encouraging except that the story is nearly identical to those published three years ago when the Iraqi police training started, leading your writer to wonder if there's been more progress on cops training than on, say, restoring electricity or telecommunications destroyed by the U.S. during the invasion or by the insurgents since. From July 2003 (http://www.findarticles.com/p/articles/mi_m0IBW/is_1_4/ai_n6124034):

The 156th Military Police Detachment (Law and Order), West Virginia Army National Guard, is not just setting a standard for the Iraqi police force--they are creating it. At the Iraqi Police Academy, Iraqi policemen are gaining knowledge and receiving proper training--training they have lacked for many decades--through interaction with their American counterparts.

Has a familiar ring to it. Still, let's not forget that the successful security of the Iraqi elections in 2005 was entirely maintained by the Iraqi police. Maybe they have come a long way from the early days and only the PR is stale. You don't hear many stories now like the one about the training session in 2003 when a U.S. MP reportedly ordered a Iraqi policeman, seasoned under Saddam's regime, to "arrest this man," the subject in the exercise. The Iraqi cop threw the man on the ground, put a boot on his neck and demanded, "Give me your wallet!" Maybe he and his friends have been effectively retrained, or maybe they got jobs with the IRS.

http://www.itulip.com/images/homosex.jpg(Click to see the whole image. (http://i.thefairest.info/funniest_thumbs/gUqQWH.jpeg)) I still feel good about freedom of expression in the U.S. Say what you want about our system, the truth does–but somehow or other–eventually get out.

Ok, enough of this. Let's get back to business. Last week I wrote a companion piece to "How Much of Your Car Should You Finance? Zero percent. (http://www.itulip.com/forums/showthread.php?t=634)" titled "How much house should you finance? Follow the 20/28/36 rule. (http://www.itulip.com/forums/showthread.php?t=846)" I got an education from the feedback. Two problems. One, the average college grad leaves college with $10,000 in debt, and many have $40,000. At this rate, infants will be born with debt in their own name, a medical bill attached to their birth certificate with an approved Visa application. Two, home prices versus wages have pushed the age for owning a home–and I do mean owning, not renting from a bank, as in no mortgage–out ten years beyond where it used to be.
Majority of under-35s can't afford own home (http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/01/29/nhomes29.xml)

People under the age of 35 who own their own home are now in the minority, because soaring prices make it impossible for young people to get on to the housing ladder.

Only 49 per cent of under-35s are home owners, compared to 59 per cent in 2001, says Propertyfinder, the estate agency website. Soaring prices have pushed the number of first-time buyers to its lowest level for 26 years, figures released by the Halifax show.

Many under-35s also overestimate their chances of ever owning a property, the website found, with 57 per cent of younger people hoping to buy their first property between the ages of 29 and 35.

"The desire to own a home remains deeply ingrained in the national psyche," said Warren Bright, the chief executive of Propertyfinder. "But many people's eyes are bigger than their wallets and they are likely to be disappointed."

Mr Bright said that millions of people who expected to retire as home owners might be destined to remain tenants all their lives because of soaring property prices.

"In future a smaller proportion of people will be home owners than presently," he said. "We estimate that around 3.1 million of today's over-30s who had expected to retire in their own homes will live out their golden years in rented accommodation."
http://www.itulip.com/images/hpi.jpgNo way. We have a solution to that problem: wage inflation (http://www.itulip.com/forums/showthread.php?t=326) plus home price depreciation (http://www.itulip.com/forums/../housingbubblecorrection.htm). What are the chances that home prices will decline in line with our 2004 prediction? As a matter of fact, home prices are already back to 2004 nationally, as the graph to the left shows. How about the likelihood that we're going to get a 100% inflation over six years? Can it happen here (http://www.boston.com/news/globe/editorial_opinion/oped/articles/2005/01/26/oh_yes_it_can_happen_here/)?

That's the $100 trillion bonar (http://www.itulip.com/glossary.htm#Bonar) question. Rick Ackerman and I are working out an audio debate, with Rick on the deflation side and yours truly on the inflation side. For those of us who have been tracking this question for, oh, eight years or so, it's becoming its own special kind of extreme practice of mortification of the brain flesh. Maybe Rick and I can erect some sign posts so at least we know where we are in either process.

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jk
01-30-07, 06:59 AM
As a matter of fact, home prices are already back to 2004 nationally, as the graph to the left shows.

the graph shows no such thing. it says appreciation has slowed back to 2004 levels.

FRED
01-30-07, 11:22 AM
the graph shows no such thing. it says appreciation has slowed back to 2004 levels.

I think you're right.

WDCRob
01-30-07, 01:17 PM
Not sure if that's the same data I was looking at the other day at OFHEO, but if you look at same unit resales YoY there's never been a quarter where they were negative. At least not since the data series started in 1990.

+.26% YoY in Q4 1990 is the worst annual same unit resale appreciation to date. Wonder if that will change in 2008?

akrowne
01-30-07, 05:31 PM
You can add me to the under-35 "compulsory renter" category.

I tried about 2 years ago to buy a modest condo near work and was simply unable to make it happen within reasonable bounds (that includes taking on a roommate). I was 25, with a Master's level education, and well over the median level of earnings.

But I had nothing. Less than nothing, in fact: I left college with almost $20k in debt, despite the fact that I went to a state school, worked part-time and summers, was paid during grad school (the final two years of six), lived like a hermit for the duration (didn't even have a car, let alone a sh*tbox), and had a little help from family.

You can add to that another $6-7k I borrowed "out of the gates", which I needed in order to buy a modest car (I tried for a few months to go without, but it just isn't possible here in Atlanta).

Even today, having redoubled my austere living and extensive investment efforts, I wouldn't be able to afford a 20% downpayment on the same sort of place (I won't even get into the topic of a single-family home).

Of course, I no longer buy the jingoist line that home-ownership is somehow automatically smart, or necessary to be a "real American", but I think the situation is a sad commentary on our society. As with college education, much of it is because society as a whole is straining too far to make something into a universal privilege which really isn't, compromising prudence and ethics in the process.

JamesP
01-30-07, 05:55 PM
If you were to only consider new home prices, and subtract out the huge incentives used to move homes today, then prices might be back to 2004 levels....

DemonD
01-30-07, 07:16 PM
Put another check mark in the "under 30 with masters degree can't afford a house" thing. Although realistically living in Los Angeles I wasn't expecting to buy (despite the fact that everyone tells me I'm an idiot for not buying... I guess that 50% return I had over 3 years doing pretty much nothing but putting my money in vanguard S&P 500 fund was idiotic).

I fully expect though I will be able to afford a house sooner than I would otherwise due to the impending RE crash.

But for right now I'm not spending 500k for a 1000 square foot condo in LA.

Rajiv
01-30-07, 07:53 PM
EJ,

Two additional things you should try and factor into your modelling.

First, <a href="http://angrybear.blogspot.com/2007/01/spending-as-share-of-budget-some.html"> Spending as a Share of the Budget - Some Correlations.</a>

Quote:
<i>
Defense spending is negatively correlated with education and HHS and positively correlated with veteran’s affairs. All these correlations are very strong.
</i>
Second, <a href="http://www.ichblog.eu/content/view/189/1/">Inflation and War Finance</a> by Ron Paul

Quote:

<i>Congress and the Federal Reserve Bank have a cozy, unspoken arrangement that makes war easier to finance. Congress has an insatiable appetite for new spending, but raising taxes is politically unpopular. The Federal Reserve, however, is happy to accommodate deficit spending by creating new money through the Treasury Department. In exchange, Congress leaves the Fed alone to operate free of pesky oversight and free of political scrutiny. Monetary policy is utterly ignored in Washington, even though the Federal Reserve system is a creation of Congress.

The result of this arrangement is inflation. And inflation finances war.
Economist Lawrence Parks has explained how the creation of the Federal Reserve Bank in 1913 made possible our involvement in World War I. Without the ability to create new money, the federal government never could have afforded the enormous mobilization of men and material. Prior to that, American wars were financed through taxes and borrowing, both of which have limits. But government printing presses, at least in theory, have no limits. That's why the money supply has nearly tripled just since 1990.</i>

Jim Nickerson
01-30-07, 07:55 PM
Put another check mark in the "under 30 with masters degree can't afford a house" thing. Although realistically living in Los Angeles I wasn't expecting to buy (despite the fact that everyone tells me I'm an idiot for not buying... I guess that 50% return I had over 3 years doing pretty much nothing but putting my money in vanguard S&P 500 fund was idiotic).

I fully expect though I will be able to afford a house sooner than I would otherwise due to the impending RE crash.

But for right now I'm not spending 500k for a 1000 square foot condo in LA.

DemonD,

I do not know what apartments rents might run in LA--give us some numbers for what you think are decent units.

I think you are correct not for a moment to consider paying B500K for 1000 sq.ft.

jk
01-30-07, 08:43 PM
you need to move up the coast to santa barbara. they're doing a subsidized low-income housing project called "los portales" for families earning less than $160,000.


Besides the inclusionary programs, the city’s Housing Authority, which until now has specialized exclusively in affordable rentals, is also branching into affordable homeownership. Its first such project, still in the planning stages, consists of two- and three-bedroom condos, targeted for employees of the community’s nonprofits and other “below market” income workers making up to 240 percent of the median — that’s $160,000 for two people .

http://independent.com/archives/2006/08/how_to_buy_a_home_in_santa_bar.html

Rajiv
01-30-07, 09:24 PM
Read <a href="http://dissidentvoice.org/Jan07/Ventura30.htm">A Good Enough House</a>

Quote:
<i>Living on a very low income in the San Francisco Bay Area, where the average house price is a cool $616,000 this week, and landlords routinely refuse to rent to people with kids, I had to get creative when we suffered a bogus eviction.</i>

DemonD
01-31-07, 09:37 PM
DemonD,

I do not know what apartments rents might run in LA--give us some numbers for what you think are decent units.

I think you are correct not for a moment to consider paying B500K for 1000 sq.ft.

Jim, I have a relatively good deal I pay 1049/month for a 1/1 apt with a full kitchen and my total square footage is a little less than 1000. (somewhere in the low to mid 900 sq foot range). For comparison, let me see here...

Okay, this is an apartment/condo that is about 1.0 miles from me. It's a 1/1 876 sq. feet build in 1963. Here is the sale history:

01/11/2007: $390,000
12/05/2003: $317,000
05/30/2003: $275,000

Here is another 1/1, 757 sq. ft., this one about 1/2 mile from me.
Sale History
01/12/2007: $571,500

I will grant that both these homes are closer to the "nicer" part of LA (more west of me), but not worth what they are being paid for. 390k home has a home payment of 2200/month, 571k home is 3300/month, and that does not include condo fees, taxes, upkeep, insurance, bills, etc. Also I used simple mortgage interest calculators online using a 6.5% fixed interest rate (which is probably low), and these numbers seem a bit low to me.

So basically I'm saving at least 1000/month renting versus buying, and to be honestly the "what you can afford" sites are way too optimistic in terms of what I can afford, if you stick to the 20/28/36 rule.

I'm just hurrying up and waiting for this freakin RE bust to go supernova already so I can buy a house. I'm really not interested in buying a condo (maybe that's my own hubris). I just feel like if I'm going to spend money to buy a property, I don't want to share a wall with anyone because if I buy something, I'm going to put some loud ****ing speakers and blast some music and movies like I've been wanting to for years. (See the only problem with my current apartment is the old hag upstairs who bangs on my ceiling if it's 11:00 pm on a friday night and i'm blasting music. It's hollywood lady, if you don't want loud then move to quiet-ass santa clarita or thousand oaks or somewhere where there aren't loud city sounds 24/7.)

Jim Nickerson
02-02-07, 01:52 AM
Jim, I have a relatively good deal I pay 1049/month for a 1/1 apt with a full kitchen and my total square footage is a little less than 1000. (somewhere in the low to mid 900 sq foot range). For comparison, let me see here...

Okay, this is an apartment/condo that is about 1.0 miles from me. It's a 1/1 876 sq. feet build in 1963. Here is the sale history:

01/11/2007: $390,000
12/05/2003: $317,000
05/30/2003: $275,000

To me the above borders on insanity, 40 years old, less than 900 sq. ft.



Here is another 1/1, 757 sq. ft., this one about 1/2 mile from me.
Sale History
01/12/2007: $571,500


This is insanity for someone starting out as a house buyer and perhaps anyone short of being a zillionaire buying a place for his honey.



I will grant that both these homes are closer to the "nicer" part of LA (more west of me), but not worth what they are being paid for. 390k home has a home payment of 2200/month, 571k home is 3300/month, and that does not include condo fees, taxes, upkeep, insurance, bills, etc. Also I used simple mortgage interest calculators online using a 6.5% fixed interest rate (which is probably low), and these numbers seem a bit low to me.

So basically I'm saving at least 1000/month renting versus buying, and to be honestly the "what you can afford" sites are way too optimistic in terms of what I can afford, if you stick to the 20/28/36 rule.

Yes, you are correct, owning a home or condo costs a lot more than the mortgage, and condo fees and taxes in my experiences only went up.

Are you actually saving a $1000/month, or are you not spending a $1000 a month by not having a mortgage, and then spending it on something else? I never bought a house on the 20/28/36 rule, I didn't know of it, but it seems reasonable as do the other things EJ mentioned in that article.



I'm just hurrying up and waiting for this freakin RE bust to go supernova already so I can buy a house.

Perhaps you need some tranquilizers to slow down. Things don't happen economically in short terms.


I'm really not interested in buying a condo (maybe that's my own hubris). I just feel like if I'm going to spend money to buy a property, I don't want to share a wall with anyone because if I buy something, I'm going to put some loud ****ing speakers and blast some music and movies like I've been wanting to for years. (See the only problem with my current apartment is the old hag upstairs who bangs on my ceiling if it's 11:00 pm on a friday night and i'm blasting music. It's hollywood lady, if you don't want loud then move to quiet-ass santa clarita or thousand oaks or somewhere where there aren't loud city sounds 24/7.)

At some point in your life, loud freaking speakers probably are not even going to be on your list of things that are important, but then who knows some people seem to stay young forever.

DemonD, I think you should be ashamed of yourself for disregard of your neighbors. Who knows, perhaps you will never be able to afford a house and will always be stuck living closely to someone else. Whatever happened to "do unto others...."? It is a good rule for anyone.

DemonD, be patient, save your money, be nice to your neighbors--someday you may need a friend, and one of them could be it. When blood is running in the streets if you have saved your money, booked your profits, it may be that you can buy two houses or even more.

grapejelly
02-02-07, 08:18 AM
There is a compulsion to own a home. It comes from genetics, the desire for security, and also social validation.

So at this time, the under 35 cohort is prevented from ruin, despite their best efforts to get into enormous debt.

What a blessing, to not be able to afford a house right now.

We sold our house to escape the Great Asset Inflation and bought precious metals, short term treasuries and related things with the proceeds. We rent and they pay us a subsidy equivalent of thousands per month in exchange for not having the headaches of homeownership.

No problem for the under 35 crowd. Wait a few years and take your pick of homes at prices that have alas collapsed in real terms.

The nice thing is that these homes can be purchased by buying them subject to existing financing with little or no money down and little or no financial risk.

Unlike the sellers, the buyers who know a thing or two and have enormous leverage in the buyers' market not seen in decades will be in a fine position to be homeowners if they really want to, without the downsides of people who bought at the top.

DemonD
02-02-07, 04:41 PM
To me the above borders on insanity, 40 years old, less than 900 sq. ft.

This is insanity for someone starting out as a house buyer and perhaps anyone short of being a zillionaire buying a place for his honey.

Exactly my thoughts Jim. And yes, while there are a lot of rich people in LA, there are not THAT many rich people. A former friend of mine who is a college professor bought a condo in Santa Monica (1.5 miles from the beach) for about 450ish. Interest-only for 5 years. Bought in June of 2005 (how's that for buying at the market top?)

Her place will probably maintain more value than most, but in my neighborhood... doubtful.




Are you actually saving a $1000/month, or are you not spending a $1000 a month by not having a mortgage, and then spending it on something else? I never bought a house on the 20/28/36 rule, I didn't know of it, but it seems reasonable as do the other things EJ mentioned in that article.


I save about 600-700 bucks a month from my paycheck that goes about 450 into my 401k and the rest into a savings account and taxable mutual funds - low cost index funds through vanguard. Plus beyond that I can have a little bit of fun spending money (I never go overboard though... always pay my credit cards on time). I could conceivably make a 2k/month mortgage payment, but I pretty much wouldn't be able to anything fun and would be tied down to whatever home I'm in, I wouldn't be able to save anything in my 401k, and I pretty much wouldn't be able to save anything at all for a rainy day. Now, I could do a 2k/month mortgage payment if I had a 2 bedroom and rented out the other room for 600 or so a month, which is what I'll probably end up doing for a few years if/when I'll buy a house here.



Perhaps you need some tranquilizers to slow down. Things don't happen economically in short terms.


I know. I've accomplished a lot of things in life I just hate waiting for things sometimes. It would be nicer to have my own home with a hot tub right now instead of 5 years from now, and I don't think that waiting 5 years will make me appreciate it or love it anymore.



At some point in your life, loud freaking speakers probably are not even going to be on your list of things that are important, but then who knows some people seem to stay young forever.


Loud speakers will always be on my "important" list Jim. I'm the guy that wants to have a home theater so loud that you need to wear earplugs to watch a movie (and I will wear earplugs, I always do). There is a difference between hearing the bass and feeling the bass. You don't think I make fire flowers in silence do you?


DemonD, I think you should be ashamed of yourself for disregard of your neighbors. Who knows, perhaps you will never be able to afford a house and will always be stuck living closely to someone else. Whatever happened to "do unto others...."? It is a good rule for anyone.

Well I plan on getting sound proofing material for my walls. But I live in Hollywood. Hollywood. Not the hills, Hollywood itself. Right off of Sunset Strip. We get sirens all the time. Loud cars. Loud music. It's FREAKIN HOLLYWOOD!!! There are so many "quiet" places around LA, Hollywood is not meant to be one of them. I would understand if I was in Santa Clarita or Thousand Oaks and my neighbors had 3 kids and stuff, but we're in Hollywood for chrissakes.



DemonD, be patient, save your money, be nice to your neighbors--someday you may need a friend, and one of them could be it. When blood is running in the streets if you have saved your money, booked your profits, it may be that you can buy two houses or even more.

There is no such thing as a good neighbor in LA. You should try living here for a year. I do my best to say hi to people but it's like... I remember people telling me stories about the quake in 94. Lots of people all the sudden came together and made sure their neighbors were alright. Some people had lived next to each other for 10 years or more and never even knew each other's names. That's just the way it is; I try to keep an east coast/midwest friendliness about me, but it's pretty hard when everyone around you is selfish, narcissistic, and almost sociopathic.

But the weather is real nice. :)

WDCRob
02-02-07, 05:23 PM
I just looked at all this again last week. I've got a ridiculous deal ($1000) on a small older stock apartment in the most bubbilicious part of Arlington, VA, but was trying to decide on moving into a nicer apt ($1700-1800) or buy.

Including all expenses, savings and tax deductions, renting the nicer place was still a better deal than owning a similar ($425k) condo unless you held it for ~6 years. And that's assuming you get out for what you paid when you want to sell. With no real upside reward potential.

Since I can't afford something I'd be comfortable living in for at least ten years, I decided to furnish the house I'm not buying yet with the money I'm saving by sitting tight in a smaller apartment.

Jim Nickerson
02-05-07, 11:44 AM
That's the $100 trillion bonar (http://www.itulip.com/glossary.htm#Bonar) question. Rick Ackerman and I are working out an audio debate, with Rick on the deflation side and yours truly on the inflation side. For those of us who have been tracking this question for, oh, eight years or so, it's becoming its own special kind of extreme practice of mortification of the brain flesh. Maybe Rick and I can erect some sign posts so at least we know where we are in either process.

Hey, EJ, are you making any progress with working out the audio debate with Rick Ackerman? I do not know who Rick is, but if you think his notions on deflation are worth "deflating," I would like to hear the "deflate." What are the prospects of its coming to fruition?

I think it was the notion of erecting "some sign posts so at least we know where we are in either process" that stuck in my mind as something I need to know or need to know how you guys see it.

EJ
02-05-07, 02:25 PM
Rick and I are still in email foreplay. Ball's in his court as to when we get down to business.

bart
02-05-07, 02:49 PM
If you were to only consider new home prices, and subtract out the huge incentives used to move homes today, then prices might be back to 2004 levels....

Very possibly... and the raw OFHEO data just corrected by the heinously understated CPI shows median housing is now back to close to 2004 levels.

http://www.nowandfutures.com/images/median_us_home1963-current.png

DemonD
02-05-07, 10:51 PM
Bart... what do those numbers in the blue on the right signify?

bart
02-06-07, 01:30 AM
Bart... what do those numbers in the blue on the right signify?

That's the scale on which both the blue and green lines should be read. In other words, the (Base 1963=100) starting price was about $17,500 and the 3rd quarter 2006 CPI adjusted price is about $35,000 (the 2006 CPI+lies adjusted price is about $21,000). The CPI correction/lies factors come from John Williams at shadowstats.com.

The "rhs" in the legend stands for right hand scale. Would it have helped if I'd spelled right hand scale out?

DemonD
02-06-07, 09:38 PM
The "rhs" in the legend stands for right hand scale. Would it have helped if I'd spelled right hand scale out?

Thanks, and the answer to your question is yes (not sure if that is sarcastic or not but I'm giving you a non-sarcastic real answer).

Admittedly I have a really hard time making heads or tails out of a lot of your charts, but this one I could read and understand.

bart
02-06-07, 10:25 PM
Thanks, and the answer to your question is yes (not sure if that is sarcastic or not but I'm giving you a non-sarcastic real answer).

Admittedly I have a really hard time making heads or tails out of a lot of your charts, but this one I could read and understand.

Thanks, and yes it was an honest question - sorry for being unclear on that. I've never had any training in charting and I've known for a while that it does show with many of my charts.

Now that I've created the majority of the ones I originally wanted to, the next major step is to make them a lot less complex and/or intimidating. That includes better labels, more explanation on the chart itself and sometimes splitting up a single chart into multiple ones.

Given that there are hundreds of them, it'll take a while and I'm testing some of the concepts (like colored scales when there's more than one scale) to see what will make them communicate better.

Here's the same chart except it's been enhanced with more descriptive data, etc. and is also only showing the U.S. West region. Does it communicate clearly and cleanly now?

http://www.nowandfutures.com/images/median_us_west_home1970-current.png

Jim Nickerson
02-07-07, 01:03 AM
Bart, that is a better chart, and I continue to appreciate your hard work and time to share it.



Now that I've created the majority of the ones I originally wanted to, the next major step is to make them a lot less complex and/or intimidating. That includes better labels, more explanation on the chart itself and sometimes splitting up a single chart into multiple ones.


If you were running for office and your platform was that underlined above, you would have my vote enduringly. Those all worthy goals and will make things easier for a lot of us.

bart
02-07-07, 01:25 AM
Bart, that is a better chart, and I continue to appreciate your hard work and time to share it.

My pleasure Jim, and thanks very much for your kind words.



If you were running for office and your platform was that underlined above, you would have my vote enduringly. Those all worthy goals and will make things easier for a lot of us.

Well, at least I didn't get called Sinister... ;)

Seriously though, if I would have known 18 months ago that my site would be getting the many millions of hits it has been getting, I would have done my charting very differently. I almost dropped my research and concentrated on clean up and clarity last year but decided that stuff like TIOs and the majority of central banks and even the ECB gold manipulation data was better to get out there, even though many or most would not find them very useful.

It actually takes longer to clean one up than it took to build it in the first place.

Is there any particular chart that you'd like to see broken up into multiples first?

Any other suggestions?
http://www.nowandfutures.com/grins/bueller.wav ... ;)

jk
02-07-07, 09:31 AM
bart, have you ever seen tufte's visual display of quantitative information? some of his charts are really amazing, the book is fun and might give you some ideas.

http://www.amazon.com/Visual-Display-Quantitative-Information/dp/0961392142/sr=8-1/qid=1170858551/ref=sr_1_1/103-8573699-1121419?ie=UTF8&s=books

Jim Nickerson
02-07-07, 11:01 AM
My pleasure Jim, and thanks very much for your kind words.
Well, at least I didn't get called Sinister... ;)

Seriously though, if I would have known 18 months ago that my site would be getting the many millions of hits it has been getting, I would have done my charting very differently. I almost dropped my research and concentrated on clean up and clarity last year but decided that stuff like TIOs and the majority of central banks and even the ECB gold manipulation data was better to get out there, even though many or most would not find them very useful.

It actually takes longer to clean one up than it took to build it in the first place.

Is there any particular chart that you'd like to see broken up into multiples first?

Any other suggestions?
http://www.nowandfutures.com/grins/bueller.wav ... ;)

Well, Finster really isn't Sinister, but I like Sinister because it has meaning, and sometimes for me the meanings put forth by Finster are hard to grasp, and that isn't a serious criticism. By the way, what ever happened to Finster, he's seemingly disappeared. Do you think I offended him? I didn't mean to do so. I apologize if I did. "Come back, come back, Finster."

It's easy to critcise others especially when it is they who must do the work to remedy criticism. Bart, I am not buttering your breed here, but I was and continue to be flabbergasted at the extent of your web-site. How anyone could do anything else in life while at the same time assembling all you have is beyond me, but you have done it.

After three lines in most charts, I think they can fail to be a picture worth a thousand words. Three lines are good if possible. I personally have difficulty with very thin, light-colored lines and moreso when they are broken. What I think is important is secondary to what you think, you know that, it is your time and your work that is at play. I always am looking forward to your next creation and the often esoteric nature of what you track.

DemonD
02-07-07, 11:48 PM
Thanks, and yes it was an honest question - sorry for being unclear on that. I've never had any training in charting and I've known for a while that it does show with many of my charts.

Now that I've created the majority of the ones I originally wanted to, the next major step is to make them a lot less complex and/or intimidating. That includes better labels, more explanation on the chart itself and sometimes splitting up a single chart into multiple ones.

Given that there are hundreds of them, it'll take a while and I'm testing some of the concepts (like colored scales when there's more than one scale) to see what will make them communicate better.

Here's the same chart except it's been enhanced with more descriptive data, etc. and is also only showing the U.S. West region. Does it communicate clearly and cleanly now?


Bart, it does, but it's not totally 100% clear what everything means to me. Let me give some (hopefully) constructive criticism from my viewpoint

1. You start with base = 100. But there is no "100" on the chart. Also that starts in 1963. There is no 1963 on there. I understand you are describing that in words what base means, but base = 100 should mean that your measurements are all starting at a literal value of 100. If you had started the chart in 1963, with all the lines starting there, you would likely not need to specify base = 100, but could say "base year of 1963."

A good example of this chart that I can clearly understand is the chart EJ brings up regarding inflation, with lines for health care, college tuition, and televisions (among other items). All numbers start at literally 100 on that chart. But the numbers aren't raw numbers, they are percentages. Usually if you are using a base = 100 you are working with percentage (remember, "per cent" means "portion of 100" in latin).

2. The label on the left hand y-axis would be best put on top of that axis, not in the middle of the chart.

3. There is no label for the right hand side y-axis. Yes it's in blue, but what is it referring to? Median salary? Mean salary? Home equity? Some kind of tangible measure must be used to show inflation... there is no label to indicate what that axis is. Or is it an aggregate of all CPI measures? I'm just not sure what it is referring to.

The good:

The color schemes and better labeling on the second chart make it definitely clearer and easier to see. The use of right and left hand scales are done well. The labeling of the second chart (outside of the above criticisms) are placed and described well.

Just an FYI, I wrote this post for constructive criticism purposes; I think you do a great job creating the charts, so hopefully these suggestions can help you improve what you've got going for you.

jk
02-08-07, 10:14 AM
bart, i think the chart is readable and the labelling ok just as it is. i've got a different problem with it: the median house in 2006 is likely a very different house than that of 1963- square footage, amenities, lot size, appliances, are all likely quite different. looking at the chart, specifically the price deflated by cpi+lies, i think " housing hasn't moved in price at all since about 1980." but if the house itself is really different, then i can't conclude that. that's not your fault, of course. the median price is the median price, and it would take another whole layer of analysis to try to tease out, e.g., whether there has in fact been deflation because the 2006 house is more house than the 1980 house was.

bart
02-10-07, 02:34 PM
bart, have you ever seen tufte's visual display of quantitative information? some of his charts are really amazing, the book is fun and might give you some ideas.

http://www.amazon.com/Visual-Display-Quantitative-Information/dp/0961392142/sr=8-1/qid=1170858551/ref=sr_1_1/103-8573699-1121419?ie=UTF8&s=books


Thanks jk, I just read the reviews and ordered it. It sure should help my efforts. :)

WDCRob
02-10-07, 02:44 PM
Some group associated with Tufte also offers seminars on visual presentation of data. I've not been, but have heard great things about them.

bart
02-10-07, 02:51 PM
Well, Finster really isn't Sinister, but I like Sinister because it has meaning, and sometimes for me the meanings put forth by Finster are hard to grasp, and that isn't a serious criticism. By the way, what ever happened to Finster, he's seemingly disappeared. Do you think I offended him? I didn't mean to do so. I apologize if I did. "Come back, come back, Finster."

It's easy to critcise others especially when it is they who must do the work to remedy criticism. Bart, I am not buttering your breed here, but I was and continue to be flabbergasted at the extent of your web-site. How anyone could do anything else in life while at the same time assembling all you have is beyond me, but you have done it.

After three lines in most charts, I think they can fail to be a picture worth a thousand words. Three lines are good if possible. I personally have difficulty with very thin, light-colored lines and moreso when they are broken. What I think is important is secondary to what you think, you know that, it is your time and your work that is at play. I always am looking forward to your next creation and the often esoteric nature of what you track.


Very true on Finster, I just got a huge kick out of you "picking on" him too... not that he deserves it or anything. ;)
I also had trouble years ago when I first ran into his thoughts and views on DR. His approach is quite non mainstream, much as my own is, and we've learned from each other quite a bit. I also consider him a good friend and thoroughly enjoy all the bantering and real exchanges.

Thanks again for your kind words about my efforts. Only recently and since I've picked up the tracking of so many major central bank info has it become a fairly large time effort. Most of the charts are pretty well automated, but it's not unusual for me to update 4-500 charts during my weekly update.
It's funny in an odd way that with all the criticism I direct at the Fed that they are by far the easiest to monitor.

Thanks too for your input on chart design, especially about three lines maximum and light colored and dashed lines. I'm looking forward to seeing that book that jk recommended so that I can whip my charts into better shape so that they communicate much better.

A few of them, just by virtue of their very esoteric nature as you noted, will be very difficult to make fully understandable without a significant economics background. I also have some nebulous plans for a site redesign that will include an "advanced" section for them.

bart
02-10-07, 02:53 PM
Some group associated with Tufte also offers seminars on visual presentation of data. I've not been, but have heard great things about them.

Thanks WDCRob - once the book arrives I get through it, I may very well attend one of those. It couldn't hurt to meet some real pros too.

bart
02-10-07, 03:09 PM
Bart, it does, but it's not totally 100% clear what everything means to me. Let me give some (hopefully) constructive criticism from my viewpoint

1. You start with base = 100. But there is no "100" on the chart. Also that starts in 1963. There is no 1963 on there. I understand you are describing that in words what base means, but base = 100 should mean that your measurements are all starting at a literal value of 100. If you had started the chart in 1963, with all the lines starting there, you would likely not need to specify base = 100, but could say "base year of 1963."

A good example of this chart that I can clearly understand is the chart EJ brings up regarding inflation, with lines for health care, college tuition, and televisions (among other items). All numbers start at literally 100 on that chart. But the numbers aren't raw numbers, they are percentages. Usually if you are using a base = 100 you are working with percentage (remember, "per cent" means "portion of 100" in latin).

2. The label on the left hand y-axis would be best put on top of that axis, not in the middle of the chart.

3. There is no label for the right hand side y-axis. Yes it's in blue, but what is it referring to? Median salary? Mean salary? Home equity? Some kind of tangible measure must be used to show inflation... there is no label to indicate what that axis is. Or is it an aggregate of all CPI measures? I'm just not sure what it is referring to.

The good:

The color schemes and better labeling on the second chart make it definitely clearer and easier to see. The use of right and left hand scales are done well. The labeling of the second chart (outside of the above criticisms) are placed and described well.

Just an FYI, I wrote this post for constructive criticism purposes; I think you do a great job creating the charts, so hopefully these suggestions can help you improve what you've got going for you.

Not a problem in the world on your critique - it's exactly what I was hoping for. I may know quite a bit about the Fed and money flows, but communicating it well via charts is not my strong suit for sure.

1. Excellent point on the "Base = 100", I just changed it to drop the "=100" and substituted 1970 so it isn't so misleading. Definitely agreed on that inflation chart of EJ's too - it's very clear and well done.

2. & 3. This is one on which personal preference was the determinant. Maybe I'm the only one, or one of few, but I dislike having to read vertically or tilt my head... and that assumes that I'm tracking with what you're trying to say. I'd be interested if anyone else has input on putting vertical labels on the scale, instead of having them in a grouped box at the bottom.

To answer your question on what's on the right hand y axis though, it's both of the colored lines - CPI and CPI+lies actual home prices. I could have put all three values on the one left hand axis, but then the two adjusted ones (green & blue) would almost be level. I chose not to do it that way since it seemed to me that it communicates better by using another scale... and could easily be wrong too due to my lack of training, etc.

Thanks (truly) on your input too. I can read all the books in the world but the real test is whether the charts I do create actually deliver the message and data that I intend.

bart
02-10-07, 03:18 PM
bart, i think the chart is readable and the labelling ok just as it is. i've got a different problem with it: the median house in 2006 is likely a very different house than that of 1963- square footage, amenities, lot size, appliances, are all likely quite different. looking at the chart, specifically the price deflated by cpi+lies, i think " housing hasn't moved in price at all since about 1980." but if the house itself is really different, then i can't conclude that. that's not your fault, of course. the median price is the median price, and it would take another whole layer of analysis to try to tease out, e.g., whether there has in fact been deflation because the 2006 house is more house than the 1980 house was.


Thanks jk... and interesting how the exact same chart is coming across to different folk.

Your point about the validity of the comparison is well taken too. There's little question that the houses of 1970 or 1980 are not the same ones as the ones of today. As you correctly observe, it may not be a great comparison but at least it's something... and if they are overall "better" today, it even makes the comparisons look worse - they should be up much more.

Just to counterpoint your other specifics too... ;) ... the materials in the houses of today are generally of lesser quality than those of 20+ years ago too (the last time a 2x4 was really 2" x 4" was in the early '60s as I recall for example, and same with the thickness of wood floors too).

The key difference though, and one I never hear mentioned when the comparison issue is brought up, is that the average land size is down quite a bit over the decades.