Archive for January, 2008

The Stupidest Thing I’ve Seen Today

and brother, in my world, thats saying something. Remember I deal with underwriters all day.

The sky is falling again, as homeownership takes the biggest drop in history. Here’s the story, complete with the most absurdly negatively biased graph since the invention of statistics. I suppose you can set up a bar graph with the zero point as 66.5% and the end of the x-axis as 69.2%, then calibrate it in .1% increments, but if you do that you’re rather obviously trying to show something that isn’t true. Of course it appears that home ownership is declining catastrophically, given the huge drop the graph shows. Of course this also is simply hilariously false, since homeownership until 2002 never once reached the current level, and we’re off the all-time, amazing high, the greatest percentage of homeownership since the invention of land title by…..1.5%.

Please, please remain calm.

I’m really tired of repeating this, but you can elicit panic by using statistics as body blows on an already skittish public, because most people won’t take a second to realize what the statistics actually mean. It’s not really true that statistics lie; that’s like saying that blood lies. It’s just a thing. It can be used to heal, like in a transfusion, or it can be used to terrify, like in the Texas Chainsaw Massacre. Neither of those things is absolutely good or evil either. What IS evil is pretending that a massacre is really a transfusion, or vice versa, and using the blood to indicate something dishonest. THAT’S what this chart does, and it’s what this article does.

Put another way, the only method of determining that home ownership has changed at all is to use very powerful computers and guess. There simply is no way – NO WAY – to have an accurate count of this stuff, and there’s no way a human being could possibly tell the difference between 67.8% and 69.2% by simple observation. Try it. Pour 69 pennies out on your desk and then make another pile of 68, and invite someone to tell you which is larger.

I learned once that the difference between a .250 hitter and a .300 hitter is one hit every four games. In other words, the average person couldn’t tell the difference, just by watching, between a guy struggling to stay in the majors and an all-star. Similarly, no way could anyone without a fleet of accountants tell the difference between the all-time high for home ownership and what we have today.

Yes, there are people who used to own houses that now don’t. I don’t like that any more than you do, and I’m sure those that have lost them like it even less. I spend all day every day trying to fix that problem, believe me. But the problem isn’t nearly as bad as it’s purported to be.

Ignore the blood spatter. In this case, all we have is a nosebleed.