I Have A Question About Purchasing A Car

Originally posted by Astner
Conclusively, Oliver North, you missed the point. Just because people take loans doesn't necessarily mean that they don't have the money or could eventually save up for it.

thats not what an income-to-debt ratio means though

someone who could pay off a debt, but chooses not to, would still have a positive income-to-debt ratio. You are correct, it does not factor in long term savings with the intent to pay off debt, what type of measure do you think would give a more appropriate image of what we are talking about? As, otherwise, you are suggesting your own interpretation, based on conversations with your peer group, is a more reliable and accurate assessment of people's savings behaviour than are numbers published most often by governments themselves.

my real problem was that I didn't read the chart right before posting. Any nation right of either Finland or Germany would have a positive savings average, likely. Also, why wouldn't they label 100% on the y-axis? who cares about 80 and 120?!?!

Originally posted by Astner

To summarize, I do think I have a very down-to-earth perspective.

Originally posted by Oliver North
thats not what an income-to-debt ratio means though

someone who could pay off a debt, but chooses not to, would still have a positive income-to-debt ratio. You are correct, it does not factor in long term savings with the intent to pay off debt, what type of measure do you think would give a more appropriate image of what we are talking about? As, otherwise, you are suggesting your own interpretation, based on conversations with your peer group, is a more reliable and accurate assessment of people's savings behaviour than are numbers published most often by governments themselves.

my real problem was that I didn't read the chart right before posting. Any nation right of either Finland or Germany would have a positive savings average, likely. Also, why wouldn't they label 100% on the y-axis? who cares about 80 and 120?!?!

Originally posted by Astner
Then again you're looking at the country's debt-to-income ratio, not the individuals.

ok

but in defining "normal", the average would be the most likely place to go, yes? I mean, unless you are suggesting looking at median or modal distributions, but that would still be on a national level.

these aren't aggregate numbers, so its not like individuals with more debt in absolute terms are skewing the data. its a ratio. If most people in most (maybe) Western nations have more debt than they earn, what possible definition of "normal" are you using to suggest it is normal to have meaningful savings?

also, those aren't "nations", those are the averages of consumers within a nation. Canada's debt-to-income ratio is not 150%, the average debt-to-income ratio among Canadian consumers is ~150%.

He's a physicist talking about something outside his field. Are you sure you want to have this conversation? I once had a physicist friend of mine insist that the Central Limit Theorem was "wrong" because he didn't like statistics.

Pretty sure you need a degree in an applicable field before you can call yourself a physicist.

Originally posted by Symmetric Chaos
He's a physicist talking about something outside his field. Are you sure you want to have this conversation?

to be fair, I don't think anyone on these forums is trained in economics or finance. I mean, I just totally had a reading comprehension error on a really simple chart...

Originally posted by Symmetric Chaos
I once had a physicist friend of mine insist that the Central Limit Theorem was "wrong" because he didn't like statistics.

I can only imagine that was infuriating... aren't physicists good at math though?

Originally posted by Robtard
Pretty sure you need a degree in an applicable field before you can call yourself a physicist.

Isn't Astner doing graduate level work?

Originally posted by Oliver North
ok

but in defining "normal", the average would be the most likely place to go, yes? I mean, unless you are suggesting looking at median or modal distributions, but that would still be on a national level.

Originally posted by Symmetric Chaos
He's a physicist talking about something outside his field. Are you sure you want to have this conversation?

Originally posted by Symmetric Chaos
I once had a physicist friend of mine insist that the Central Limit Theorem was "wrong" because he didn't like statistics.

Originally posted by Oliver North

Isn't Astner doing graduate level work?

Wasn't aware.

Originally posted by Oliver North
to be fair, I don't think anyone on these forums is trained in economics or finance. I mean, I just totally had a reading comprehension error on a really simple chart...

It's not a terribly clear chart anyway which is probably why Aster misread it as well.

So, looking up the term, debt-to-income is not income compare to total debt its how much you owe per month compared to how much you make per month. It's insane that can get beyond 100%. How has Denmark not collapsed?

Originally posted by Oliver North
I can only imagine that was infuriating... aren't physicists good at math though?

It was a "hard science" vs "soft science" thing. I brought up the CLT is support of being able to study things in psychology. That locked him into "physics deals in absolute certainty" which descended into "any chance of being wrong is the same as being wrong".

I ended up leaving. A lot of people I know like to argue for the sake of arguing. High speed rhetoric is not my forte.

Originally posted by Astner
So you're going to attribute the loans taken by politicians -- to build roads, schools, etc. -- to the people? If that's the case, then you're right. But it's hardly revenant to the topic.

/sigh

the title of the chart is:

Figure 8. International Comparison of Level of Household Debt, 2008

the link is here:

http://my.texterity.com/cgaresearchreports/debt2010#pg42

I cut the top off in the screen capture so I could get the sources in the image and didn't feel like cropping 2 together.

Please feel free to read this until you are satisfied your contention is, in fact, false.

household debt, not government debt.

Originally posted by Symmetric Chaos
So, looking up the term, debt-to-income is not income compare to total debt its how much you owe per month compared to how much you make per month. It's insane that can get beyond 100%. How has Denmark not collapsed?

its got to be something where it isn't the same people each month with the same level of debt, or different periods in the year have massively different ratios, because ya, constant debt like that would stop all economic activity in the nation if not entirely subsidized by the state, and I don't imagine that is being done...

Originally posted by Symmetric Chaos
It was a "hard science" vs "soft science" thing. I brought up the CLT is support of being able to study things in psychology. That locked him into "physics deals in absolute certainty" which descended into "any chance of being wrong is the same as being wrong".

I've been lucky enough to avoid most of that stuff, as it is very rare you will come across people in cognitive or neuro science that think they are doing anything other than science. And any time I have, it is painfully obvious that psychologists themselves, even in social or other "softer" areas, are much more capable of describing the limitations of psychology than are people outside it. I've never met a psychologist who expected that their results would represent the one absolute truth, the way it seems the "harder" sciences expect.

My only sort of retort to that type of thinking is that, if science is only applicable to things stripped of any complexity or context, at their most basic and fundamental parts, where we can model the behaviour of said parts to a level of accuracy that makes outcomes an almost certainty, what the **** is the use of science then?

Originally posted by Symmetric Chaos
I ended up leaving. A lot of people I know like to argue for the sake of arguing. High speed rhetoric is not my forte.

I've got a couple of friends on facebook like that, where commenting and leaving for an hour just ends up having them post massive rants and thoughts to the point that it isn't even worth trying to continue.

I do like the pace of forum debate. It can be quick, but there is no expectation about it.

Originally posted by Oliver North
its got to be something where it isn't the same people each month with the same level of debt, or different periods in the year have massively different ratios, because ya, constant debt like that would stop all economic activity in the nation if not entirely subsidized by the state, and I don't imagine that is being done...

Actually looking at the top countries it does seem possible. Denmark, Netherlands, Norway, Switzerland, Sweden. All nations which have some of the world's most extensive social support systems.

In reality I believe that what people typically do is simply fail to pay part of what they owe each month. Credit cards have minimum payments for just that reason.

Originally posted by Symmetric Chaos
Actually looking at the top countries it does seem possible. Denmark, Netherlands, Norway, Switzerland, Sweden. All nations which have some of the world's most extensive social support systems.

its almost like, the existence of a social safety net allows people to take more debt, knowing they wont have emergency sickness or that they are secure in their home if they miss a rent payment, than in less socially progressive nations.

lol, I'm sure I have no idea what I'm talking about... Even just thinking about it, this would all rely on things like national regulations on loans or credit, overall national wealth, etc... probably not as easy to compare across nations, I mean.

Originally posted by Symmetric Chaos
In reality I believe that what people typically do is simply fail to pay part of what they owe each month. Credit cards have minimum payments for just that reason.

It gets really weird when you start looking at household savings by nation. Not that I feel I understand a whole lot of the issue, but a lot of these nations also have individuals with large amounts saved.

clearly the 300% debt-to-income rating isn't as devastating as it would sound to a layman, but, idk, it sounds so ridiculous... even if it is people just making minimum payments.

Originally posted by Oliver North
/sigh

the title of the chart is:

Figure 8. International Comparison of Level of Household Debt, 2008

the link is here:

http://my.texterity.com/cgaresearchreports/debt2010#pg42

I cut the top off in the screen capture so I could get the sources in the image and didn't feel like cropping 2 together.

Please feel free to read this until you are satisfied your contention is, in fact, false.

[b]household debt, not government debt. [/B]

Originally posted by Symmetric Chaos
It was a "hard science" vs "soft science" thing. I brought up the CLT is support of being able to study things in psychology. That locked him into "physics deals in absolute certainty" which descended into "any chance of being wrong is the same as being wrong".

Sarcasm aside, I'm calling bullshit on this one.

Originally posted by Astner
Well, it turns out that you were right.

inimalist - 1
Astner - 0

😄😄

😉

Originally posted by Oliver North
inimalist - 1
Astner - 0

😄😄

😉

I don't imagine I've ever made that claim 😛

but no, it is strange. Like, the idea of not living above your means seems so logical, and saving for the future as well (I can personally only say I have 0% debt, my savings are non-existent), but it seems, time and again, when we look at how people make decisions, these logical sort of "it would be a good idea if..." don't hold up. It is the fundamental flaw with game theory, and unfortunately, game theory still dominates the realm of economics. I have a dream that, someday, economics will just be a sub-field of psychology 😉.

It isn't all bad though. So, imagine an experiment, where two people do some task. After the task is over, you tell only one of them that there is a monetary reimbursement for completing the task. Further, you tell the person that the other individual who ran in the experiment with them has no idea about the money. Basically, you put the person in a position where they believe only they know that people get money in this experiment, then you ask them to give the other participant some amount for participating. It can be 0-100%. Game theory, and the more "logic based" ideas of economics, would suggest that people would give no money, and keep it for themselves, as they would lose no money, and nobody feels as though they have been slighted, because the other participant was never told about the money.

This is almost never the case. People tend to give between 30-50% of the money, which flies in the face of current economic theory. Basically, it just says, people use much more than cold, calculated logic when making financial decisions. The unfortunate side to this is that, when tested, few people are even capable of making a functional budget, but it isn't all terrible.

If you have the cash, then you better pay it on cash. You won't worry anymore about the payments every month.