Cash-strapped homeowners overpaying mortgages left with less

[NegativeEquity]

Cash-strapped homeowners overpaying mortgages left with less to spend - Central Bank

I mean ffs - how much was wasted on preparing this report?

independent.ie/business/pers … 82687.html

[Scratcher]

Sack these clowns already!

[ex-Patrick]

uncyclopedia.wikia.com/wiki/Captain_Obvious

[jake76]

Is overpaying your debts not saving?

[Eschatologist]

Is overpaying your debts not saving?

Yes, as is repaying your principal on the normal schedule.

[slasher]

so none of you actually read the report?

centralbank.ie/publications/ … 05RT14.pdf

is it that hard to push beyond Charlie Weston and his “summary”

Average income appears higher among the deleveraging sample; median income in this case is e65,000
relative to e55,000 in the case of the non-deleveraging group. Average consumption is also higher for those
who deleverage, their current house value is greater and, notably, a higher proportion of the deleveraging
group report saving on a regular basis. Specifically, approximately 45 per cent of the deleveraging group
saves regularly compared to 32 per cent of the non-deleveraging group. These results suggest that income
and wealth may play a role in the deleveraging story. In the next section, we assess the importance of such
factors in a multivariate setting.

[NegativeEquity]

so none of you actually read the report?

centralbank.ie/publications/ … 05RT14.pdf

is it that hard to push beyond Charlie Weston and his “summary”

Average income appears higher among the deleveraging sample; median income in this case is e65,000
relative to e55,000 in the case of the non-deleveraging group. Average consumption is also higher for those
who deleverage, their current house value is greater and, notably, a higher proportion of the deleveraging
group report saving on a regular basis. Specifically, approximately 45 per cent of the deleveraging group
saves regularly compared to 32 per cent of the non-deleveraging group. These results suggest that income
and wealth may play a role in the deleveraging story. In the next section, we assess the importance of such
factors in a multivariate setting.

Eh most of this is still pretty obvious - those with higher incomes can afford to spend more paying off their mortgages, consume more, save more and generally have more expensive houses. Do we really need a report to tell us this?

[slasher]

Eh most of this is still pretty obvious - those with higher incomes can afford to spend more paying off their mortgages, consume more, save more and generally have more expensive houses. Do we really need a report to tell us this?

It’s not earth shattering for sure
however

1. there’s data there - were you aware of the percentages? Do you use data in your job or just “common sense”?

2. High earners were fairly keen to leverage up in the boom - supposedly those who earned the most borrowed the most - the pin has plenty of assertions about hoardes high earning professionals and business owners who are up to their oxters in BTLs are are going to be declaring bankruptcy any day now

[ex-Patrick]

Eh most of this is still pretty obvious - those with higher incomes can afford to spend more paying off their mortgages, consume more, save more and generally have more expensive houses. Do we really need a report to tell us this?

It’s not earth shattering for sure
however

1. there’s data there - were you aware of the percentages? Do you use data in your job or just “common sense”?

2. High earners were fairly keen to leverage up in the boom - supposedly those who earned the most borrowed the most - the pin has plenty of assertions about hoardes high earning professionals and business owners who are up to their oxters in BTLs are are going to be declaring bankruptcy any day now

What central bank policy can the findings influence?

[AWAAF]

irisheconomy.ie/index.php/2014/03/11/fmc-seminar/

Wonktastic!

[NegativeEquity]

Eh most of this is still pretty obvious - those with higher incomes can afford to spend more paying off their mortgages, consume more, save more and generally have more expensive houses. Do we really need a report to tell us this?

It’s not earth shattering for sure
however

1. there’s data there - were you aware of the percentages? Do you use data in your job or just “common sense”?

In my job if something is pretty obvious I don’t usually need to go looking for data. Never mentioned “common sense” anywhere in my post. My main point is that what use is this report to the Central Bank and general public (aside from the percentages which I wasn’t aware of) that justifies the cost of producing it?

[slasher]

Eh most of this is still pretty obvious - those with higher incomes can afford to spend more paying off their mortgages, consume more, save more and generally have more expensive houses. Do we really need a report to tell us this?

It’s not earth shattering for sure
however

1. there’s data there - were you aware of the percentages? Do you use data in your job or just “common sense”?

In my job if something is pretty obvious I don’t usually need to go looking for data. Never mentioned “common sense” anywhere in my post. My main point is that what use is this report to the Central Bank and general public (aside from the percentages which I wasn’t aware of) that justifies the cost of producing it?

So if a report produces a conclusion that conforms to what is “pretty obvious” it’s useless??

part of the point of sampling data/people/products/medicines is to look for anomalies - for instance if the report suggested that a load of high earning people were living high on the hog it might be worth considering if there was a cohort of people running up debts with the intention of abusing the bankruptcy regime.

As regards the cost, do you have any figures of what it did cost? You seem to be implying that it was significant. My understanding is that it mostly uses existing data - see page 3 - and the staff are already on the payroll of the CBI - in fact they work for the “Financial Stability Department” - so presumably part of their job would be to see the rates at which people are paying down debt.

I’m not here to defend the CBI - it just grinds my gears that you link to an article written by Charlie Weston of all people without even bothering to read/link to the underlying paper

[Eschatologist]

I’m not sure the issues are obvious at all.

As I understand banking (not much) banks normally aim to keep a certain loan to deposit ratio. Assuming deposits are stable, outstanding loans should also be stable. If one cohort of households are paying off debt, another cohort should be taking on new debt (mortgages). Those mortgages represent one side of a set of property sales, on the other end is a counterparty who receives a wodge of cash, which goes on deposit (and is re-lent), spent or otherwise circulated through the economy.

The upshot is that in the aggregate accelerated mortgage repayments should be balanced by fresh cash in the economy coming out the other end of sales. Even if the sellers are themselves deleveraging, banks should issue fresh debt to compensate.

Consequently, the only deleveraging that matters w.r.t. cash in the economy is that of the banks. Which are…reducing loan to deposit ratios in order to pass forthcoming stress tests, at the behest of…the Central Bank.

Happy for my flimsy analysis to be torn apart now

[NegativeEquity]

it just grinds my gears that you link to an article written by Charlie Weston of all people without even bothering to read/link to the underlying paper

Sorry to upset you - I had a quick glance at the report but didn’t have time to read it fully yet.

[NegativeEquity]

As regards the cost, do you have any figures of what it did cost? You seem to be implying that it was significant. My understanding is that it mostly uses existing data - see page 3 - and the staff are already on the payroll of the CBI - in fact they work for the “Financial Stability Department” - so presumably part of their job would be to see the rates at which people are paying down debt.

I never implied anywhere the costs were significant.