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Mortgage Market Reopens to Risky Borrowers

wsj.com

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Re: Mortgage Market Reopens to Risky Borrowers

#101

Post by xenocyon »

fuzz4lyfe wrote: post #28
xenocyon wrote: post #11

Earlier quoted context omitted.

Calling the absolute numbers re subprime loans a "garnish" is subjective at best and wrong at worst. Even if the subprime-to-prime ratio hasn't changed much, a large increase in the ballooning subprime total may still be newsworthy in its own right.

>Even if the subprime-to-prime ratio hasn't changed much, a large increase in the ballooning subprime total may still be newsworthy in its own right. Wouldn't the news there be that the total number of mortgages have grown dramatically? Unless you have a narrative to push that is.

The question is how large the dollar risk of default is.

Re: Mortgage Market Reopens to Risky Borrowers

#102

Post by esoterica »

kurtisc wrote: post #55
rayiner wrote: post #6

Earlier quoted context omitted.

The problem is that most journalists are innumerate. As Matt Yglesias notes, "many reporters and editors don't really understand what they're doing. Reputable colleges hand out degrees to people who have almost no understanding of quantitative methods." [1] These journalists see the numbers as garnishes on a narrative point. They're not trying to put the numbers in some sort of mathematical context to draw sound conc…

I've noticed a trend on BBC news. '[X market/stock] slumps as [thing related to X] [does something]' Yet when you go and look at the long-term graph, it's well within normal variance. There's no evidence they're connected at all. I'm sure it happens with other media providers too. Why? Because they didn't have the numbers right, or just didn't check at all. Well, if I'd written a statement like that in an essay durin…

> Yet when you go and look at the long-term graph, it's well within normal variance. There's no evidence they're connected at all.

What a completely mathematically and financially illiterate thing to say. Whether or not a market move is within “normal” variance has nothing to do with whether or not it is clearly attributable to a particular economic event. If Jerome Powell says something about rates or Trump tweets something about tariffs and the market moves 1% in the exact minute that happens you can pinpoint the cause of the move with pretty high confidence even if 1% is not significant relative to the long term variance.

I’ve seen this bizarre sentiment propagated on HN before. A lot of people seem to think it’s never possible to identify the causes of market movements (even when obvious market moving news is released).

Re: Mortgage Market Reopens to Risky Borrowers

#103

Post by jayyeh »

Coincidentally chatted with an expert in this space recently and he talked about the feast and famine cycles for the mortgage lending business. The sentiment was that we are definitely feasting and there wasn't much indication of a near term change to famine.

Somewhat tangential comment but feels like it is in line with OP article...

Re: Mortgage Market Reopens to Risky Borrowers

#104

Post by chiefalchemist »

paulcole wrote: post #97
chiefalchemist wrote: post #83

Earlier quoted context omitted.

A start would be that the rest of us stop considering these type journalists. Call them reporters. Call them writers. But journalism is a verb. And if you're not going to act appropriately then you're not worthy of being labeled with the title. Words matter. They shape worlds. Ironic, huh.

Journalism is a noun.

Metaphorically it's a verb. It is the things you do or not. For example, fact check. The problem is, the belief that it's a noun and a noun one can assign to themselves; that has no formal definition.

If we want to user the word journalism / journalist properly and fairly then the easy way to do is to think of it as being a verb - like leadership. Leader isn't a title. It's actions you take. Just like journalism.

Re: Mortgage Market Reopens to Risky Borrowers

#105

Post by yellowapple »

kurtisc wrote: post #55
rayiner wrote: post #6

Earlier quoted context omitted.

The problem is that most journalists are innumerate. As Matt Yglesias notes, "many reporters and editors don't really understand what they're doing. Reputable colleges hand out degrees to people who have almost no understanding of quantitative methods." [1] These journalists see the numbers as garnishes on a narrative point. They're not trying to put the numbers in some sort of mathematical context to draw sound conc…

I've noticed a trend on BBC news. '[X market/stock] slumps as [thing related to X] [does something]' Yet when you go and look at the long-term graph, it's well within normal variance. There's no evidence they're connected at all. I'm sure it happens with other media providers too. Why? Because they didn't have the numbers right, or just didn't check at all. Well, if I'd written a statement like that in an essay durin…

I think you're conflating whether or not there's correlation/causation with whether or not the result is significant. If a stock appreciates or depreciates at the same time that something related to that stock happens, a relationship between the two is not an unreasonable hypothesis.

Of course, there's still the matter of actually validating that hypothesis, and examining whether said hypothesis actually holds true or the coincident timing really is just coincidence and nothing more (or, indeed, if the timing really was coincident between the two events, e.g. whether or not the stock move happened before the event that allegedly "caused" it).

And of course, even if the event did cause the stock move, that's still a separate concern from the long term impact of that stock move. It could very well just be a temporary blip, or it could be a harbinger of some more significant change.

Re: Mortgage Market Reopens to Risky Borrowers

#106

Post by chiefalchemist »

topmonk wrote: post #96
chiefalchemist wrote: post #83

Earlier quoted context omitted.

A start would be that the rest of us stop considering these type journalists. Call them reporters. Call them writers. But journalism is a verb. And if you're not going to act appropriately then you're not worthy of being labeled with the title. Words matter. They shape worlds. Ironic, huh.

Great idea, maybe you could write a report on it. Seriously, what is it going to matter what a few semi-anonymous comments on the internet are going to say? The news media has all the exposure and presumption of telling the truth, whereas people writing blogs and posting comments do not.

Having a stethoscope doesn't make you a doctor. Having an index finger doesn't make you a photographer. If you want better and more complete news we'd be wise to stop calling sloppy lazy hacks journalists.

Words matter. If we're going to misuse words then we deserve the (intellectual) abuse we get from those we are allowing to run wild.

The Orwellian use of the word journalist / journalists is one of the most ironic quirks of the 21st century.

Re: Mortgage Market Reopens to Risky Borrowers

#107

Post by paulcole »

chiefalchemist wrote: post #104
paulcole wrote: post #97

Earlier quoted context omitted.

Journalism is a noun.

Metaphorically it's a verb. It is the things you do or not. For example, fact check. The problem is, the belief that it's a noun and a noun one can assign to themselves; that has no formal definition. If we want to user the word journalism / journalist properly and fairly then the easy way to do is to think of it as being a verb - like leadership. Leader isn't a title. It's actions you take. Just like journalism.

Words matter. They shape worlds. Ironic, huh.

Re: Mortgage Market Reopens to Risky Borrowers

#109

Post by OrgNet »

qes wrote: post #73
Finnucane wrote: post #61

Earlier quoted context omitted.

We bought our own house in 2009, during the crash. It was risky, because I was working a temp job and there was no telling when the recession would start to get better. IN the long run, the gamble paid off for us. (There's no way we could afford it now!) But we lived in a crummy apartment for years and saved as much as we could for a downpayment. We'd been following the Great Bubble as it inflated and became clear th…

We bought in 2010 and we're up 40%, but now we want to upgrade in the next 1-3 years. While we'd lose value on our current house in a downturn, I assume we'd come out better with a larger value drop on more expensive properties (we're looking to spend 2-3x what we did in 2010).

> I assume we'd come out better with a larger value drop on more expensive properties

So in other words, you think that more expensive homes value changes at the same rate as a basic home? Did you look at any data to make that claim or just an educated guess? I'm thinking about getting data from the local property appraiser to check that out.

Re: Mortgage Market Reopens to Risky Borrowers

#110

Post by gnopgnip »

opportune wrote: post #22

Is anybody else making the supposedly foolish decision to time the housing market? I am financially ready to purchase my first home, currently living in the bay area, but I think right now just looks like a bad time. - A lot of housing price growth is seemingly "priced in" since rents for condos/apartments significantly lower than total monthly ownerships costs (mortgage+hoa+insurance+taxes+etc.), even with 20% down.…

Would you have come to the same conclusion to wait 2 years ago, or 4 years ago, or 6 years ago? At what point will you decide to stop waiting and buy?
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