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The high cost of snake oil
Topic Started: 7 Jan 2017, 10:18 AM (10,297 Views)
Rufus
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Chris
9 Jan 2017, 11:21 AM
What is with your obsession for Steve Keen, it puts question marks over who you say you are and your reasons for posting. Keen is hated by vested interests, people who have a significant reliance on his personal message being drowned out and ridiculed.

There was a concerted campaign from banks, economists employed in property related businesses and RE groups. He stood up in a public arena and had a go which was silly because he made himself an easy target and mobilised governments and banks to counteract and stimulate the market.

Your fixation aside I think you put a stupid amount of credibility to Keen, his following and influence when it comes to renters and 'Doomers'. He is one of many voices, he certainly didn't have any real impact on my situation as I couldn't afford to buy the even if I wanted to. The only influence I can see he had was mobilising banks and governments to introduce policies to force the market upwards.

He got his 5 mins of fame as a genius which now heads towards a decade of ridicule because of an extremely personal vendetta by significant vested interests.
What concerns me about Keen is his shallow approach to his craft. He really uses the single metric of private debt, which is certainly an indicator that should be watched, but by itself is only that, an indicator.

He used that metric to predict the crash in the USA, but what he fails to take into account is that he got lucky because the lending quality took a nose dive which then meant that the high private debt was a problem for people without the capacity to repay, and as it turns out in the USA there were a substantial number of them.

I had an exchange with Keen very recently where I questioned him on this issue, and asked him if he had a chapter on debt quality in his next book which is soon to be released. He replied NO and was a bit on the rude side when I suggested that disregarding debt quality was a weak point in his argument.

Out of a group of people you could pick a number of them and lend them $1M and never experience a problem with the loans, but if you pick the wrong people they may all turn bad.

He's like a taxi driver with his eyes closed.

I accept that banks are a bit like a black box if you're on the outside. They release non-performing loan data and information on default rates etc, but that is also influenced by market conditions, not just the quality of the loan book. I get it that it's difficult to drill down into a loan book and examine quality, however he makes no attempt whatsoever, whilst on the other hand he accepts without question data from people like Lindsay David who claims that loan quality is poor based on the claims of Denise Brailey, who frankly is a dipstick.

He will continue to fail until he either gets lucky and banks choose to lend loosely (highly unlikely with APRA watching them) or we receive an economic shock which lifts interest rates above the point that households can meet, or we have high unemployment. We would also need the RBA and government to sit on their hands and do nothing. I just don't see those things happening, so Keen will continue to piss into the wind IMHO.

Edited by Rufus, 9 Jan 2017, 12:21 PM.
Take risks - if you win you will become wealthy, if you lose you will become wise
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stinkbug
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Simon_S
9 Jan 2017, 09:53 AM
Wow......

He must be the messiah.



Given the way bears worship him, that is a good description.

Shame he's been consistently wrong about Australian house prices.

What we need to remember is that people like Keen make for great TV. They tell stories that are shocking, create fear and draw people in to hear the story. This sells advertising, which is the real reason for-profit media exists. That they include enough information to fool the unwashed masses is an added feature.
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Terry
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Rufus
9 Jan 2017, 12:19 PM
What concerns me about Keen is his shallow approach to his craft. He really uses the single metric of private debt, which is certainly an indicator that should be watched, but by itself is only that, an indicator.

He used that metric to predict the crash in the USA, but what he fails to take into account is that he got lucky because the lending quality took a nose dive which then meant that the high private debt was a problem for people without the capacity to repay, and as it turns out in the USA there were a substantial number of them.

I had an exchange with Keen very recently where I questioned him on this issue, and asked him if he had a chapter on debt quality in his next book which is soon to be released. He replied NO and was a bit on the rude side when I suggested that disregarding debt quality was a weak point in his argument.

Out of a group of people you could pick a number of them and lend them $1M and never experience a problem with the loans, but if you pick the wrong people they may all turn bad.

He's like a taxi driver with his eyes closed.

I accept that banks are a bit like a black box if you're on the outside. They release non-performing loan data and information on default rates etc, but that is also influenced by market conditions, not just the quality of the loan book. I get it that it's difficult to drill down into a loan book and examine quality, however he makes no attempt whatsoever, whilst on the other hand he accepts without question data from people like Lindsay David who claims that loan quality is poor based on the claims of Denise Brailey, who frankly is a dipstick.

He will continue to fail until he either gets lucky and banks choose to lend loosely (highly unlikely with APRA watching them) or we receive an economic shock which lifts interest rates above the point that households can meet, or we have high unemployment. We would also need the RBA and government to sit on their hands and do nothing. I just don't see those things happening, so Keen will continue to piss into the wind IMHO.
OK, here's a chance to put your armchair-ness to work. How do you measure the quality of debt? Furthermore, how does debt quality impact risk?
stinkbug
9 Jan 2017, 12:58 PM
Given the way bears worship him, that is a good description.

Shame he's been consistently wrong about Australian house prices.

What we need to remember is that people like Keen make for great TV. They tell stories that are shocking, create fear and draw people in to hear the story. This sells advertising, which is the real reason for-profit media exists. That they include enough information to fool the unwashed masses is an added feature.
Like Darth Vader and Osama Bin Laden
Edited by Terry, 9 Jan 2017, 01:09 PM.
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Simon_S
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Khaderbhai
9 Jan 2017, 11:44 AM
Yes, and the other problem is that after tax and inflation, money in the bank is mostly going backwards.
Yes 10 million Dollars in a Bank is a very big problem to have.

Funny how you pay tax on Real earnings.........Not imaginary ones.....

I guess you don't have that problem.


stinkbug
9 Jan 2017, 12:58 PM

What we need to remember is that people like Keen make for great TV. They tell stories that are shocking, create fear and draw people in to hear the story. This sells advertising, which is the real reason for-profit media exists.
What does his Doom and Gloom message sell to the Masses?


Chris
9 Jan 2017, 11:21 AM
What is with your obsession for Steve Keen, it puts question marks over who you say you are and your reasons for posting. Keen is hated by vested interests, people who have a significant reliance on his personal message being drowned out and ridiculed.

What do you think Rufus is?

Rufus rubbishes anyone why doesn't share his view.

Edited by Simon_S, 9 Jan 2017, 01:25 PM.
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b_b
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Simon_S
9 Jan 2017, 01:17 PM
What do you think Rufus is?

Rufus rubbishes anyone why doesn't share his view.
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(S – I) + (T - G) + (M - X) = 0
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Simon_S
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b_b
9 Jan 2017, 01:28 PM
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LOL......

Are you still sore after I called you out on your assertion the Govt never has to pay back its Bonds? Did you think you could Bullshit your way out of reality?

Maybe I should pull out the Thread where Dufus called Ross Garnaut a Rabid Bear because he wrote all these Doomer and Gloomer Books.....

Turns out after investigation Dufus was full of shit as usual......


Edited by Simon_S, 9 Jan 2017, 01:48 PM.
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Rufus
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Terry
9 Jan 2017, 01:09 PM
Furthermore, how does debt quality impact risk?
If you need to ask that question, then I would be wasting my time explaining it to you.
Simon_S
9 Jan 2017, 01:47 PM
LOL......

Are you still sore after I called you out on your assertion the Govt never has to pay back its Bonds? Did you think you could Bullshit your way out of reality?

Maybe I should pull out the Thread where Dufus called Ross Garnaut a Rabid Bear because he wrote all these Doomer and Gloomer Books.....

Turns out after investigation Dufus was full of shit as usual......

His books on the economy are negative. Naturally I wasn't including his book or papers on the environment in that statement.

Is your IQ larger than your shoe size yet? Maybe your feet are too big. Are they 145 cm long?
Perhaps not.
Edited by Rufus, 9 Jan 2017, 01:59 PM.
Take risks - if you win you will become wealthy, if you lose you will become wise
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b_b
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Simon_S
9 Jan 2017, 01:47 PM
LOL......

Are you still sore after I called you out on your assertion the Govt never has to pay back its Bonds? Did you think you could Bullshit your way out of reality?
Called out? You really are a fool.

I said there is a legal obligation to repay bonds and interest (or words to that effect). You chose to ignore this.

I separately stated that bonds (in aggregate) to not need to be repaid unless the private sector dis-saves.

Both statements are consistent with each other and factually correct. (Maturing Bonds repaid with proceeds from new Bonds).

My biggest mistake was to try and explain a simple concept to the galactically stupid. A mistake I plan not to repeat.
Edited by b_b, 9 Jan 2017, 02:13 PM.
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Khaderbhai
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Wealthy Suburbanite

Simon_S
9 Jan 2017, 01:17 PM
10 million Dollars in a Bank is a very big problem to have.
In what way?

Quote:
 
Funny how you pay tax on Real earnings.........Not imaginary ones.
Why is that funny?

Quote:
 
I guess you don't have that problem.
You haven't explained why it's a problem.
Banks can't repossess your home simply because the market value falls. Australia's Consumer Credit Code says consumers aren't liable for things ordinarily outside their control and can't be held to obligations that could only be met by selling their home. Click for details.

"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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Trollie
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Simon_S
8 Jan 2017, 08:36 PM
Oh is that why you spend 30 years paying it off..........

Its wealth after 30 years of sacrifice.....

AHAHAHAHAHAHHAHAHAHAHAHAHHAHAHHAHA
So you don't get it, thanks for confirmation.
Simon_S
9 Jan 2017, 01:17 PM
Yes 10 million Dollars in a Bank is a very big problem to have.

Funny how you pay tax on Real earnings.........Not imaginary ones.....
You'd have to be a complete idiot to leave 10 mil in the bank.
Edited by Trollie, 9 Jan 2017, 02:35 PM.
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