Not defensive at all. If you refer to the article, you will notice that the author refers to regression in predictive models. Whenever that is mentioned here, yo get the equivalent of blank stares.
As for P2P, it has evolved out of the appetite for leverage. People are tapped out and need all the opportunities they can get.
Most people may not understand what you mean by regression or predictive models, but that doesn't mean they don't understand how the market may correct in the future. Anyone can bedazzle others with a little jargon, but that doesn't mean they are any smarter.
P2P is quite new and untried. As an ancillary short term debt it will tend to destabilise the market. People who only have their home loan to pay generally get through OK but people with these types of loans as well are in a precarious position, often taking out one loan to pay off the last one. That can't last forever. They often lie when they complete an application form by not disclosing all debts, especially debts to mates or family. Mates and family will only remain forgiving for so long.
Your tactic of targeting home owners is a good one, even though the irony of that seems lost on you, however small creditors usually don't force a sale of the family home to recover a small debt. I've seen hundreds of cases of bankrupts keeping their family home and bank home loan, it's just too costly to spend many thousands to collect a small debt via a forced home sale, and when a "Mortgagee in Possession" sign is placed in the advertised auction brochure we all know that a "market price" won't be achieved. Distressed sales don't reach the stratosphere. If a forced sale doesn't cover a bank debt then they won't allow the sale to proceed. Why would the first mortgagee accept a financial loss when they have a secured loan that is going along OK?
Perhaps you need to rework your own predictive model and allow for some write downs of your own. Your current one looks a bit Goldilocks to me.
Most people may not understand what you mean by regression or predictive models, but that doesn't mean they don't understand how the market may correct in the future. Anyone can bedazzle others with a little jargon, but that doesn't mean they are any smarter.
P2P is quite new and untried. As an ancillary short term debt it will tend to destabilise the market. People who only have their home loan to pay generally get through OK but people with these types of loans as well are in a precarious position, often taking out one loan to pay off the last one. That can't last forever. They often lie when they complete an application form by not disclosing all debts, especially debts to mates or family. Mates and family will only remain forgiving for so long.
Your tactic of targeting home owners is a good one, even though the irony of that seems lost on you, however small creditors usually don't force a sale of the family home to recover a small debt. I've seen hundreds of cases of bankrupts keeping their family home and bank home loan, it's just too costly to spend many thousands to collect a small debt via a forced home sale, and when a "Mortgagee in Possession" sign is placed in the advertised auction brochure we all know that a "market price" won't be achieved. Distressed sales don't reach the stratosphere. If a forced sale doesn't cover a bank debt then they won't allow the sale to proceed. Why would the first mortgagee accept a financial loss when they have a secured loan that is going along OK?
Perhaps you need to rework your own predictive model and allow for some write downs of your own. Your current one looks a bit Goldilocks to me.
Quote:
They often lie when they complete an application form by not disclosing all debts, especially debts to mates or family. Mates and family will only remain forgiving for so long.
Mates and family either tend to just give up on debts, or become a lot harsher in recovering debts than banks. They just turn up with a truck and take anything of value (including blood). Creditors take ages to do that and can't just help themselves to anything.
Quote:
"Mortgagee in Possession" sign is placed in the advertised auction brochure we all know that a "market price" won't be achieved. Distressed sales don't reach the stratosphere.
From my experience, I disagree. Every MIP auction I've been to achieves market, or higher price. People get so excited at a 'bargain' they pay over odds. If I was auctioning a property I'd market it as MIP of deceased, divorced estate, no reserve.
Not defensive at all. If you refer to the article, you will notice that the author refers to regression in predictive models. Whenever that is mentioned here, yo get the equivalent of blank stares.
You've clearly just read something about correlation and regression and areaow trying to show off. A little bit of knowledge is a dangerous thing. I don't see why it's relevant to house prices. Please explain.
Collecting desperation. Ex-Bp Golly April 2 2015. "I see with a slight overshoot -70% [fall in Sydney house prices] as being well within possibility"
You've clearly just read something about correlation and regression and areaow trying to show off.
I remember he read Taleb a few years ago, and then spent the next two years trying to convince us he was an an expert in randomness, probability and uncertainty.
You've clearly just read something about correlation and regression and areaow trying to show off. A little bit of knowledge is a dangerous thing. I don't see why it's relevant to house prices. Please explain.
Sure, regression is incredibly dangerous. That's why looking at a relationship between house prices and incomes is stupid, particularly if you cannot determine what the dependent variable is.
Sure, regression is incredibly dangerous. That's why looking at a relationship between house prices and incomes is stupid, particularly if you cannot determine what the dependent variable is.
Great! So I look forward to you pointing this out every time some bear posts an income/house price ratio chart that shows a rise, and claims it must "return to mean" or something.....
For Aussie property bears, "denial", is not just a long river in North Africa.....
I remember he read Taleb a few years ago, and then spent the next two years trying to convince us he was an an expert in randomness, probability and uncertainty.
Well it's some comfort that he's forgotten about the word "Epistemological"
For some time it was here an epistemological, there an epistemological, everywhere an epistemological.
Any expressed market opinion is my own and is not to be taken as financial advice
Most people may not understand what you mean by regression or predictive models, but that doesn't mean they don't understand how the market may correct in the future. Anyone can bedazzle others with a little jargon, but that doesn't mean they are any smarter.
P2P is quite new and untried. As an ancillary short term debt it will tend to destabilise the market. People who only have their home loan to pay generally get through OK but people with these types of loans as well are in a precarious position, often taking out one loan to pay off the last one. That can't last forever. They often lie when they complete an application form by not disclosing all debts, especially debts to mates or family. Mates and family will only remain forgiving for so long.
Your tactic of targeting home owners is a good one, even though the irony of that seems lost on you, however small creditors usually don't force a sale of the family home to recover a small debt. I've seen hundreds of cases of bankrupts keeping their family home and bank home loan, it's just too costly to spend many thousands to collect a small debt via a forced home sale, and when a "Mortgagee in Possession" sign is placed in the advertised auction brochure we all know that a "market price" won't be achieved. Distressed sales don't reach the stratosphere. If a forced sale doesn't cover a bank debt then they won't allow the sale to proceed. Why would the first mortgagee accept a financial loss when they have a secured loan that is going along OK?
Perhaps you need to rework your own predictive model and allow for some write downs of your own. Your current one looks a bit Goldilocks to me.
Regression is a straightforward description of a statistical tool used in predicting many kinds of things. It's used in banking, fiance, consumer behavior, constriction, demand forecasting, etc. It's taught in high schools and universities. It's not some obscure religion.
We can't have a world based on "gut feelings." That might work in your world, but you are neglecting the great things that mathematical analysis gives us. For example, the Framingham Heart Study in the U.S. has been happening since the 50s and is based on regression techniques to identify cancer risks. It is probably the single most important study ever for cancer prevention. We don't write off because a bunch of clowns on a property forum have no idea about regression.
We are in an age where big data and data science is critical. Ignore at your peril. I know many in Generation Y who get it and these people have no issue with education. We can't all be REAs who dismiss anything "technical." And yes, regression is an important tool for big data analysis.
As for P2P, yet another area where regression and cluster analysis is important for measuring risk among borrowers. In fact, many P2P platforms are technically superior to banks in how they can manage and use data effectively.
Sydneyite
4 Jun 2015, 07:19 PM
Great! So I look forward to you pointing this out every time some bear posts an income/house price ratio chart that shows a rise, and claims it must "return to mean" or something.....
Not quite Rupert. The relationship between house prices and incomes is fascinating and I suspect that in most bubbles, house prices have a strong impact on incomes. In the case where house prices have a greater impact on driving income than other sectors of the economy, then you have the potential for a "masked bubble", where you don't understand the magnitude to which the bubble actually drives your economy. And in the case of many commentators in Australia, it's all about how incomes drive or "track" house prices. They take it as a fundamental truth without the actual ability to quantitatively prove it.
Sure, regression is incredibly dangerous. That's why looking at a relationship between house prices and incomes is stupid, particularly if you cannot determine what the dependent variable is.
Of course, but the test is to understand the impact of house prices on income. Any analyst in their right mind has the frame the research correctly. Before you even start looking at how the punter behaves, you need to accurately understand the extent to which house prices influence income. It's a complicated research design and would take a researcher extraordinaire. I thought it was a relatively common research source to measure income multipliers across different sectors of an economy.
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