Of course you are wrong, you assume that a population that consists of people under varying amounts of stress can just absorb extra stress. What happens in real life is the whole population moves so that the people who were previously teetering now move into the stress indicators for non performing loans. Your fantasy land has everyone finding some way to fight the extra stress which of course in a nonsense.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
Of course you are wrong, you assume that a population that consists of people under varying amounts of stress can just absorb extra stress. What happens in real life is the whole population moves so that the people who were previously teetering now move into the stress indicators for non performing loans. Your fantasy land has everyone finding some way to fight the extra stress which of course in a nonsense.
Again, the chart doesn't show mortgages in stress, it shows mortgages that haven't been paid in 90 days. It doesn't show how many mortgages banks have halved their payments on due to financial hardship, it doesn't show mortgages that have been paused due to illness or the ones that are being paid by insurance due to job loss.
More people being stressed doesn't automatically push the most stressed out the bottom.
All the chart shows, is delinquency, you can't assume that people are not having any difficulty, just because they've found ways to pay off their mortgage on time.
You're looking at the chart as if it's some giant pipe extruder thing, the more pressure that's placed on top, means more people drop out the bottom. But it would be better to see each mortgage as being in its own pipe, with its own individual pressure. The delinquency rate is the number of people who have been pushed out the bottom, but that doesn't mean all the other pipes aren't under pressure.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry
"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
Again, the chart doesn't show mortgages in stress, it shows mortgages that haven't been paid in 90 days. It doesn't show how many mortgages banks have halved their payments on due to financial hardship, it doesn't show mortgages that have been paused due to illness or the ones that are being paid by insurance due to job loss.
More people being stressed doesn't automatically push the most stressed out the bottom.
All the chart shows, is delinquency, you can't assume that people are not having any difficulty, just because they've found ways to pay off their mortgage on time.
You are just being dense. Of course all of those scenarios are represented - it is a population distribution. Some people are 10 years ahead and some are 10 days behind. If unemployment rises it will hit across the distribution and cause the whole population to move to a more stressed level, same thing will happen if wages drop or interest rates rises. You just dont get how statistics work when using large groups.
I will just leave you to your fantasy land where mana from heaven just rains down to stop people from falling foul of the measures those dastardly statisticians make.
Definition of a doom and gloomer from 1993 The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
You are just being dense. Of course all of those scenarios are represented - it is a population distribution. Some people are 10 years ahead and some are 10 days behind. If unemployment rises it will hit across the distribution and cause the whole population to move to a more stressed level, same thing will happen if wages drop or interest rates rises. You just dont get how statistics work when using large groups.
You are labouring under a false impression, the RBA Mortgage Delinquency chart comes from APRA, they don't use sample surveys to find statistics on mortgages that are 90 days overdue, they have absolute numbers.
APRA knows how many mortgages are more than 90 days overdue, they don't need to do what the ABS does to measure employment for instance.
So it isn't a population distribution, it is simply, mortgages that are more than 90 days overdue.
If unemployment rises and people start defaulting on their mortgages, you are correct, they will show up in the delinquency figures. But if they find other ways to pay off their mortgage, you would be none the wiser, does that mean they're not stressed?
Quote:
I will just leave you to your fantasy land where mana from heaven just rains down to stop people from falling foul of the measures those dastardly statisticians make.
But the measure we're talking about doesn't measure stress, it measures delinquency. As in, it measures how many mortgages are more than 90 days overdue, it doesn't measure how hard people have to work to keep their mortgage up to date.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry
"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
Unfortunately, I wasn't apologising to you, you're still wrong.
Sorry mate but Skamy is 100% correct. If stress levels were rising or people were having increased difficulty servicing their loans, then delinquencies would also be rising, not falling. Statistics 101.
Sorry mate but Skamy is 100% correct. If stress levels were rising or people were having increased difficulty servicing their loans, then delinquencies would also be rising, not falling. Statistics 101.
No she isn't.
Again, everyone is not in the same pipe. Each mortgage needs to be measured separately for stress. Just because more people are able to find enough money to pay off their mortgage on time, doesn't mean that they're not stressed.Every single one of the 99.4% of mortgage holders who are up to date could have had to take on 4 jobs (they don't, this is just a tool to show the direction of my reasoning), but the mortgage is up to date, would you say that having to take on 4 jobs is easy, and thus they're not having any difficulty paying their mortgage?
The 0.6% of mortgage holders who are more than 90 days overdue could have simply stopped paying their mortgage, for no reason other than they don't want to.
The chart doesn't show how many people are finding it difficult to pay their mortgage, it shows how many people aren't paying their mortgage.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry
"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
Again, everyone is not in the same pipe. Each mortgage needs to be measured separately for stress. Just because more people are able to find enough money to pay off their mortgage on time, doesn't mean that they're not stressed.
Doesn't matter, in a population as big as oz, if the number of people in stress was rising then you'd expect delinquencies to rise too, as those who were already close to delinquency get pushed over the edge. When we see a fall in delinquencies, which is what we're seeing, the only logical conclusion is that aggregate mortgage stress is falling and people are having less difficulty servicing their loans. This is not rocket science.
Doesn't matter, in a population as big as oz, if the number of people in stress was rising then you'd expect delinquencies to rise too, as those who were already close to delinquency get pushed over the edge. When we see a fall in delinquencies, which is what we're seeing, the only logical conclusion is that aggregate mortgage stress is falling and people are having less difficulty servicing their loans. This is not rocket science.
Population size doesn't matter in this instance.
The people who are already close to delinquency aren't being pressured by other mortgage holders, they are being pressured by their own life circumstances.
More people being stressed financially doesn't automatically make the ones who are most stressed, even more stressed.
It's not like a dam, with the pressure from other mortgages building behind the most stressed mortgages and the most stressed flow over the edge, each mortgage is its own dam.
Kulganis
12 Oct 2014, 06:22 PM
Population size doesn't matter in this instance.
For example...
There are 8 people in the country.
1 person (person A) is more than 90 days overdue for their mortgage. This person is delinquent.
1 person (person B) lost their job, but to pay the mortgage, they went and took on 3 part time jobs. This person is stressed.
So the delinquency rate is 12.5%.
6 months later...
2 further people (persons C & D) lose their jobs, they also get 3 jobs each to pay the mortgage, they are now also stressed.
This entire time, only person A is counted in the chart. Even though 3 people have become stressed. Persons C & D didn't cause person B to default. The last 4 people in the country could lose their jobs, and find other ways to pay their mortgage, it still wouldn't cause person B to default, because person B has their own circumstances.
The delinquency rate is still only 12.5%, even though there are 2 more stressed mortgages than there was 6 months earlier.
The only thing that I can fathom causing a problem across the board, would be rising interest rates, and that's unlikely to happen any time soon.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry
"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
The people who are already close to delinquency aren't being pressured by other mortgage holders, they are being pressured by their own life circumstances.
No, they're being pressured by the same things that pressure many others.
Quote:
More people being stressed financially doesn't automatically make the ones who are most stressed, even more stressed.
Things that make people stressed affect people right across the spectrum of borrowers.
Quote:
It's not like a dam, with the pressure from other mortgages building behind the most stressed mortgages and the most stressed flow over the edge, each mortgage is its own dam.
It's like thousands of dams in the same catchment area. When it rains, the water level will rise in all dams, and the ones that were close to overflowing will overflow.
At the end of the day, if borrowers on aggregate were becoming more stressed, and having more difficulty servicing their loans, then delinquencies would rise. Skamy is spot on.
No, they're being pressured by the same things that pressure many others.
Yes, but the RBA chart on mortgage delinquency doesn't show any of that, all it shows is the rate of delinquency.
Quote:
Things that make people stressed affect people right across the spectrum of borrowers.
Completely agree, but the chart doesn't show these factors, only delinquency rates.
Quote:
It's like thousands of dams in the same catchment area. When it rains, the water level will rise in all dams, and the ones that were close to overflowing will overflow.
No, it isn't. Some dams will fill up more, some less, some none at all, because it doesn't rain evenly over the entire catchment.
Quote:
At the end of the day, if borrowers on aggregate were becoming more stressed, and having more difficulty servicing their loans, then delinquencies would rise. Skamy is spot on.
Perhaps they would, but only if more people stop paying their mortgages, that's what the chart is measuring, how many people have stopped paying their mortgage, not how difficult it is for them to keep it up to date. Neither of you are spot on, both of you are arguing that more people becoming stressed cause the most stressed to become delinquent, which is patently absurd.
99% of the people who are up to date with their mortgages could be as stressed as the most stressed mortgage holders, but we don't know from that chart, only that 99.4% of mortgages are up to date. That is all it says, it doesn't tell us how stressed, or how difficult they find paying their mortgage, all it says is, 99.4% of mortgages are up to date.
If other charts/statistics were used in the argument, I wouldn't have a problem. And I've never said that these 99.4% of mortgages are stressed, just that the single chart, doesn't say either way. And Shadow crowing about how people aren't finding it difficult to pay their mortgages, from one chart, is still the worst bit of spin I've ever seen on these forums.
"If man is to survive, he will have learned to take a delight in the essential differences between men and between cultures. He will learn that differences in ideas and attitudes are a delight, part of life's exciting variety, not something to fear." - Gene Roddenberry
"Balloon animals are a great way to teach children that the things they love dearly, may spontaneously explode" -- Lee Camp
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