RP Data Gets it Wrong On Housing Demand Logic? Or, is Deliberately Misleading…

Hello all…

…Yes, it has been a while since I  have blogged….

Honestly, with family and other demands increasing since I started this blog, I have had little time at all to do anything much with Angles on Economics.

However, when I read this blog article by Tim Lawless at RP Data, the logician in me was somewhat frustrated. The article is entitled, “Housing demand is rising at the fastest rate since December 2009”, so approaching it I expected to see an article on actual housing demand, referring to metrics such as – according to my own biases and persuasions – rental vacancies, mortgage figures, property sales volumes, consumer sentiment indices, household densities, etc.

However, what I got was an article on population flows. Sure, population flows affect “housing demand”, but they are only one metric of a number more that are important when dealing with “housing demand”, and relative changes. And since the article heading cites “housing demand is rising“, this indicates a relative change, and one would expect a decently-structured logical case within the article. However, only population flows is referred to, with the implied assumption that changes in population flows will, as if on their own, necessitate corresponding changes in housing demand.

Regardless of your opinions of inter-state economics, population flows, the affordability of housing, etc, this logic is demonstrably unsound: population flows alone do not necessitate changes in housing demand. And, even Tim, would admit this was obvious, yes? In fact, he says:

Stronger population growth is a significant factor for the housing market because it creates demand for housing.

Great! Fine.

But, then, why write an article about population flows and then entitle it with explicit reference rising housing demand, with only a weak inference to housing demand? In fact, given the current economic climate, trends in household density and other “strong” factors, one should question whether NET housing demand would indeed necessarily “rise”, as the article content and title combination imply.

Perhaps it’s just the skeptic in me, but an article on population flows that is titled according to housing demand but with weak explicit logical connection, robustness and context, written by someone working for a company that benefits most when property prices are rising, just wreaks a little of spruiking.

Sure, just write an interesting article on population flows, trends, growth, etc, but please do not entitle it with reference to housing demand, as if “changes” (implied increase in this article) in population flows will necessitate a net change (“rising“, in this article) in relative housing demand – implying “rises prices” in the traditional sense, whether you are an economist or a pleb/sheeple.

Alternatively, if you want to make a case for “rising” housing demand, please provide a better case, else you may mislead the “herds” with a logically weak and potentially incorrect impression: that such population flows will necessitate a rising  price (or conversely, a falling price, as appropriate).

It also serves RP Data better, does it not? For a logically weak, poorly titled blog piece (which is the real issue, in my honest opinion) is not something that a data provider wants to be seen producing, is it? That is, spruiking.

I’m sure Tim could do better, and I look forward to an improvement – more context, more explicitly qualified logic, and perhaps a little more humility (that is, logical awareness, of assumptions, valid deduction/induction/abduction/etc) in making inferences – such as titles not reflecting content well, from a logical and credibility point of view.

Now, admittedly, Tim’s blog is a “soft target”, probably written more as a piece of interest ? Heck, the poor guy probably wrote hos article almost as quickly as I have this one. But mine, too, is a soft blog, so “apples for apples”, I say!

And, heck, I wanted to write something.





People, Morality, Credit and Economics – A Reflection

Again, I’ve been bothering poor people on economics forums with my points of view…

…so, dear reader, I now, again, get to bother you too!

I recently posted responses to a very good article by a blogger “Sell On News”, here.

His post is duplicated here, for your convenience:

Gold Bubbles and Fiat Money – It’s All About Faith

I posted this recently as a long-winded, sefl-indulgent comment at the Bullion Baron’s blog site: http://www.bullionbaron.com/2011/12/goldsilver-on-verge-of-bubble-phase.html


My 2c…

I think we will see some more movements down in USD terms, possibly to around $1500.

But, honestly, I think that there will be far too many people (even including “evil” speculators!) that would think $1500 is too cheap for, given the amount of actual and potential fiat/govt carnage in the works, such that $1500 would see the bottom for quite some time.

Personally, i think slow-ish rallies with sharper but less substantial “corrections” will occur after the next substantial phase of selling in PMs – ie. maybe gold to $1500 and silver to $25 USD/ounce…but steps and and down from there, gathering parabolic pace over the next few years.

The truth is, this is currently about Faith – the fundamentals.

But, like many bubbles, it will morph into a fundamentally-based frenzy that will build upon itself until the relative price is significantly divorced from its justifiable basis.

The way it “gets there”, though, is what is confusing many people at the moment, IMHO.

For the “gold is a bubble” crowd, they are confused why such a liquid asset has “bubbled” for so long, has had major corrections, and still keeps going up; for the “gold has fundamentals” crowd, too many of them are too simplistic in their thinking – if it’s supposed to “go up” because of the fundamentals, why does it keep coming down so far and fast, so often?

For both, they underestimate just how significant speculative financialisation is, and just how far it can drag a price in either direction, on a fundamental base or not. For the former, they do not quite realise that it is not REALLY about fiat dilution (printing, etc), but about fiat FAITH…

…where the USD and Gold (PMs) do not actually represent two commodities competing as “money”, but, instead, two stores of mutually-opposed FAITH: the USD as a store of faith in fiat/govt decree; and Gold (PMs) as a store of “non-fiat” or “un-dollar” FAITH.

ie. they are opposite sides of the same coin, so to speak (excuse the pun!).

Thanks again,

Me Resuming…Again…

Following on from the last post, I get a little more philosophical, even theological (were that possible!?!?)


For what it’s worth, here’s my take, in summary:

Government: will screw things up, eventually if not immediately, when it tries to affect certain outcomes (ie. control people, in effect) – rather than simply establishing laws for the land that insist that people treat eachother “well”, and enforce those laws for people that do not treat eachother well.

The Market (ie. people interacting normally with one another) – will screw things up when they don’t treat eachother well, either eventually or immediately. This can happen even within the bounds of very good and reasonable govt laws. Read more of this post

History Resumes…But what is it that is resuming, exactly?

A great blogger, “Sell on News“, at one of my favourite economic and finance blogs, Macrobusiness, wrote an article recently called “History Resumes“.

It was a good article, but I did have some philosophical objections, which I expressed in some comments to the post…and I’ll admit that since it’s been so long since I posted anything here, then it was about time to write something! 🙂

I’ll replicate the article, below, and then follow on with my comments.

Enjoy. Read more of this post

The Necessarily Moral and Psychological Basis of Money Systems

Posted this over at the MacroBusiness SuperBlog site, in response to this article (comments section, of course!): Overruled

My thoughts:

1) Money is firstly a moral phenomenon; and then it is a psychological one (built on the chosen moral foundation – trust, etc). ie. the value of said money only exists because of perception, belief, trust, etc…else it will fail as money, as a medium of exchange.

2) Secondly, we look to govts too much – they can only “make” things happen monetarily as much as the people who use the currency/money every day ACCEPT (read: believe, trust) the money to have moral and psychological value; else, again, it will fail as money. Hence, their abilities to “fix” (read, regulate, etc) are limited by the points of Point (1), which they cannot, largely, control. Read more of this post

Peter Schiff on the Institutional Gold Rush – And my Thoughts on Implications for the Coming Gold and Silver Bubbles

I tend to think these days in terms of bubbles: where is funny money going these days to create a bubble? Hence, where are the “bangs” going to come from?

So, i was quite intrigued with this article of Peter Schiff’s at the Daily Bell, particularly in light of one of my current favourite charts, and the article’s implications for Gold, and its “soon-to-be” (IMHO) bubble (though i am still, for the time being, a gold bug with Austrian sympathies!)

Read more of this post