Chart of the Week

As you read this I’ll be moving house, upgrading from 2nd class rental scum to 1st class mortgage slave, whilst battling the flu and unskilled Queensland drivers meandering down the Bruce Highway.

This weekly post will actually contain several charts, and to start with, a curious observation of GDP per capita correlated to a belief in evolution. No surprises that the USA is a member of Extremistan (or Fundamentalistan), as an outlier.

A reason why our “godless Communist” Chinese cousins are doing so well?

Next, an interesting correlation between the quoted share price of Sotheby’s, the auction house, and economic crises. (I love how the NYSE code for Sotheby’s is “BID”. Another ironic code is Australian-based online travel quoter Wotif – WTF!)

And finally, as the developed world wrings its hands about contagious sovereign/public debt crises, what’s going on in the land of “its different here” OZ?

22% doesn’t seem much does it? So why the fuss over going back to surplus as quick as possible? Let’s put that in context, with the excellent (if plodding to read) research by Reinhart and Rogoff on sovereign debt:

Note that federal public debt broke its entire uptrend from the 1950’s onwards, culminating in the economic “stewardship” (sic) of Howard/Costello, whereby public debt was effectively transferred to private debt. Theoretically a good proposition, to paraphrase Kerry Packer, have you seen how government spends money, but has the record build up of private debt set the country up for a transfer back to the public book, or is this time different?

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  1. I wonder where Australia would fit in that graph of evolution vs national wealth?
    I’m guessing it would be somewhere close to the curve.
    Its interesting how the MSM focuses on govt debt in Oz when it’s private debt which is the elephant in the room.
    Thanks Prince and good luck with your new status..

  2. Was the reference to our “godless Communist” Chinese cousins tongue in cheek? They’re dirt poor and theoretically overwhelming supporters of evolution, so would seriously weaken the correlation. (Dirt poor in this case being less than half the per capita GDP of Turkey). Incidentally, one might want to consider these variables prior to the Soviet Empire’s collapse, I believe they’d exhibit an inverse relationship, especially if the US wasn’t conveniently omitted.

    • Bought at the Sunshine Coast – one of the most depressed markets in Oz – and it was a distressed sale – mortgagee repossession, so got if for a “bargain” (only 15% overvalued according to imputed rent). Been watching that market for 3 years with a big wad of cash ready to pounce.

      Given the discounted price the probability of losing money over 10 years is low (but still there), but the servicing cost of the mortgage was at/below renting a similar property.

      The Princess and I are expanding our Kingdom and I was sick of being treated like scum by landlords, RE Agents etc, even though renting is superior in many ways.

      Thanks for the non-question Don!

  3. lol @ selective correlation as causation

    And when i consider that a nation’s GDP is also a strong function of debt growth, i would, also realise that the same survey responses would correlate stronly with growth in indebtedness – and the implied result would “look” quite different.

    Goodness me.

    Statistics really is anyone’s slave.

    Poor logic all around.

    (Sorry the Logician in me got annoyed at such intellectual abuse!) 😉

    /end logic rant