Irish shadow stats?

eamonnm79

Dont know how this will float but here goes.

I believe that many of the economic indicators we have are politisised. There are some american websites where you can post and let people know if there is a stat that is misleading or just plain untrue.
I will start us off with an American example I found today but its Irish ones that would be of most interest.

"Interesting discussion on negative equity in this week’s Barron’s. Citing Stephanie Pomboy’s recent missive, Alan Abelson takes a closer look at some of the negative details around corporate profitability and homeowner equity.

When it comes to Homeowners Equity, the official data is misleading. Why? Pomboy notes the Fed data is accurate but misleading. It includes both the homes with mortgages and those owned free and clear.

Why is this significant? About a third of homes have no mortgages whatsoever. The unencumbered properties improve the homeowners equity data from the Fed’s Flow of Funds report. Add in 33% of homes with 100% equity and it skews the data. The total looks better.

before you say “So What?” co the following: We know that those homeowners that do not have mortgages — i.e., 100% equity — cannot default. So if we want to understand the potential further mischief real estate land can cause, it is the mortgaged properties we should be watching. Back out the third of home owners that have no mortgage — the 33% of homes with 100% equity — and the Fed’s measure of 43% net equity drops precipitously.

Thus, Pomboy’s assertion that it would be more informative to say that those homes with a mortgage have homeonwers equity of less than 15%.

Here’s the Barron’s excerpt:

“The complacent reaction among the investment cognoscenti is that the credit markets are wildly oversold. More likely, she sniffs, it has something to do with the fact that “an overwhelming portion of some $8 trillion in mortgage debt (or 80% of the total) is teetering on the edge of, or in some state of, negative equity.”

As to the Fed’s claim that the equity of homeowners as a group stands at 43%, she points out that what the Fed neglects to tell you is that roughly a third of them have their houses free and clear. Lo and behold, some basic arithmetic reveals that 67% of homeowners with mortgages have equity of less than 15%. That, Stephanie comments drily, suggests the “destruction priced into the credit markets hardly seems out of whack with potential reality.”

And while, thanks to “the transfer of toxic assets to taxpayers” and the magic of accounting legerdemain, the scarred financials to some significant extent may be spared further pain, the same, alas, can’t be said for the nonfinancial sector. Little recognized, she insists, is how much the extraordinary gains in domestic nonfinancial profits from the low in 2001 to the peak in 2006 — a stunning rise of 388% — owed to the housing bubble.”

Saabdub

Colm McCarthy has done some work on Owner-occupied housing costs and bias in the Irish Consumer Price Index http://irserver.ucd.ie/dspace/bitstream/10197/42/1/mccarthyc_workpap_001.pdf . He argues that the CSO is overstating inflation by using the Payments Approach which is only used by one other country in the OECD (the UK).

eamonnm79

The amount of Extra new people claiming jobless aid in america is 5% less last week than the week before and this is how it is presented.

Up until a few months ago they would report the increase in unemployed had gone up 600,000

http://www.irishtimes.com/newspaper/breaking/2009/0507/breaking60.html

This suger coated reporting is nuts.