Ryan Avent is my hero:
Let’s diagram this sentence. First, circle the parts that are hilarious. Second, underline the portions that are nonsense. Third, draw a square around the parts that while true, should cause a real economist to explain that perhaps the party might not go on forever (see also: Phoenix). Fourth, draw squiggles indicating concern that this person is a part of the policy-making process. Finally, make stabbing motions at the paper, indicating that this piece of information, deemed important by Times editors, likely made the average reader substantially dumber.
Dear reader, I snarfed.
"deemed important by Times editors, likely made the average reader substantially dumber."
so much of our programming does this to us..
we gained IQ points, merely reading the effect of his cogent mind.
Critical Thinking is not that which is found on E!
Megan, I'm lost. I googled snarf. Under the title "disambiguation", I found this, but I think it made me dumber:
Snarf or SNARF can refer to:
A character in the cartoon ThunderCats.
Snarf, a character from the animated television series Trollz.
The main character from SnarfQuest, a comic that ran in Dragon magazine.
SNARF-1 - a fluorescent dye that changes colour with pH
Social Network and Relationship Finder developed by Microsoft Research, published December 16, 2005
snarfing, a strategy for maintaining cache coherency in a computer system.
snarf is listed in the Jargon File with meanings mostly similar to "grab"
snarf - a command-line download program
Except that Ryan completely misunderstood the economist's quote in question. Of course, so might the average reader.
Texas house prices have been stable– completely unlike Phoenix. They didn’t go up in the bubble either. The economist’s point is that in Texas, unlike in other places, supply increased rapidly with demand, keeping prices about the same. Since they didn’t go up much, they shouldn’t go down much either. Restricted supply causes enormous price sensitivity and changes from small amounts of demand change– see oil.
Exactly right, John Thacker!
The average reader of Ryan Avent's blog might be a lot less dumb if he used a lot less mockery and actually explained to the reader why he thinks the "economist at the Dallas Fed" was wrong. Avent might want to use words like balance, supply and demand.
Someone should apply Ryan's post to Ryan's post for the reasons set forth by John Thacker.
Just want to jump on the John Thacker bandwagon. The Dallas Fed economist's point is completely sensible.
http://www.butlerrealtygroup.com/
"John Thacker" might be more correct if he understood that RE "foreclosures" are happening in Dallas, as well.
More 'homes were sold' in Dallas, as well as Phoenix, regardless the price, due to the previously lax 'lending' in that Economy, as well.
Also, if History is longer than 10 seconds, The Telecom 'retrenchment', c.2000, gave the area a ready-made supply of houses to soak up..
The point is somewhat complicated. On his blog, Ryan rejoined that housing was also growing quickly in Phoenix and Las Vegas. Which is true, judged by housing starts per 1,000 current residents. That's highly misleading, though, because the population growth rate in Nevada and Arizona has been higher than in Texas. For example in 2002, Texas grew by 1.9% compared to 2.8% in Arizona and 3.6% in Nevada.
Nevada's housing starts needed to be roughly double those of Texas in order to simply keep pace with the faster population growth, and Arizona's needed to be 50% greater. They weren't, so even though the raw growth numbers per current population looked similar, they still weren't building nearly as much housing.
MEH, you really put a lot of quotes around things that don't deserve them.
Of course there are foreclosures in Dallas. At the same time some areas certainly are different than others.
Lax lending certainly did affect Texas as well. Lax lending can affect foreclosures without necessarily affecting home prices to such an extent. However, since many fewer people had to get jumbo loans in Texas, the impact of the lax lending was somewhat reduced. In addition, since many more people could afford a down payment on a single family home, again the impact was lessened. The nature of the Texas market meant that much of the inappropriate lending went towards building too many homes (in addition to some larger and too nice homes), which does mean people in homes that they can not afford, and all the attendant problems. However, it does not mean that homes increased over construction costs so rapidly.
I never claimed that Texas would not see foreclosures, or that the lax lending would not affect it. That doesn't mean that the home prices were not affecting by the pace of building.
"However, I was hoping for a bit more time spent on explaining the statistical problems with such surveys, in the same readable-to-nonexperts fashion that you presented them in some of your past blog posts. Is there any chance this article will have a "part 2"?" a_m_ on nearby thread
Economy by numbers, Economics without the exhaust fumes, leaves you Long some nice CDOs that you swore were AAA-rated..
The Wall Street Journal reported ($) recently on the S&P/Case-Shiller Home Price index for various metropolitan areas.
Between January 2000 and February 2008 home prices in Dallas rose 18% including a 3.3% fall in the last year. A back-of-the-envelope calculation suggests that home prices in Dallas have risen pretty closely in line with RPI.
Between January 2000 and February 2008 home prices in Phoenix rose 180% including an 18.2% fall in the last year. A back-of-the-envelope calculation suggests that home prices in Phoenix have risen far faster than median family income.
The "economist at the Dallas Fed" might have been on to something that escapes Ryan Avent when she said: "We have lots of available land and fewer regulations, so we have a homebuilding boom sufficient to keep home prices at bay."
Each time I read the blog by Ryan Avent I come away thinking that he is somewhat dumber than the average reader of the New York Times - and he isn't smart enough to know it.
A side note. The two metropolitan areas that really hurt are Cleveland and Detroit. Between January 2000 and February 2008 home prices in Clevelamd rose 8.5% including an 8.5% fall in the last year. Over the same period home prices in Detroit rose 0.17% including a 15.1% fall in the last year.
"Differin opines, make'em run the Equuines"
e·quine (kwn, kwn)
adj.
1. Of, relating to, or characteristic of a horse.
2. Of or belonging to the family Equidae, which includes the horses, asses, and zebras.
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[Latin equnus, from equus, horse; see ekwo- in Indo-European roots.]
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equine n.
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equine (kwn, kwn)
Characteristic of or resembling horses or related animals, such as donkeys.
http://www.thefreedictionary.com/equine
JT,
you're Right, this use of 'quotes': "...that RE "foreclosures"..", is an error.
Mark, forget the exhaust fumes, and while you're at it, also forget the paint fumes. My post was about the statistical problems of morbidity surveys in a war zone. Problems in the housing market leave us with plenty of empirical data to examine.
a_m_
I took you to mean that you wanted more discussion of Econometrics/Statistical theory, broadly.
"morbidity surveys in a war zone", no doubt, would be problematical, even with a Telepresence app that would make Orwell blush..
You wanna really snarf?
Funny on so many levels.
The point that sentence appears to be trying to make was entirely sensible, but the writing was godawful. And that's just the opposite of what I've come to expect from the NYT, so I can't blame anyone for not putting in the effort to make sense out of that sentence.