http://www.economist.com/blogs/buttonwood/2009/03/more_us_and_uk_houses.cfm

One would be less likely to sneer at such a redoubtable publication as the Economist

If you consider the finance industry as a slightly complementary type of retail (selling the possibility of buying a product, rather than selling actual products) then GDP/Debt is essentially just “stock turns” for the finance industry (also in units of 1/year).

Although some disagreement exists in the retail industry over what is the ideal stock turns value for various products and how tightly the value should be controlled, it is very widely accepted that this value should at least be monitored and that it is a valid indicator.

See also, Wikipedia (and many books on retail inventory management):

http://en.wikipedia.org/wiki/Inventory_turns

By the way, patents are designed to disclose inventions, not hide them. So the idea of having a patented secret is an oxymoron (at least in theory, with some patents it’s impossible to know what they are about, but that’s not the intention of the system).

I found the problem… and it’s a silly one.

The GDP number I gave there was the inflation-adjusted number, but debt outstanding is in nominal terms. GDP for 2008.4 was 14200 in nominal terms, which gives a ratio of debt to GDP of 283% – much closer to your number.

And there appears to be a lag at the http://www.econstats.com website. When I downloaded the Fed’s latest release, and took the debt outstanding numbers for 2008.4 I get a debt to GDP ratio of …. wait for it … 297%.

I hope you see this before you catch the error yourself. It’s less embarrassing when you find your own mistakes.

I download my data direct from the Fed’s Flow of Funds, and the aggregates shown there are a lot lower than this. I will check to see where they are getting theirs from.

Houshold debt according to the Fed is 96% of GDP–or was in the previous release. Here it’s about 120%. Will definitely check, but not till the weekend given other commitments.

1. Household sector: $13960
2. Business sector: $10328
3. Financial sector: $15946

Total: $40234

GDP for 2008.4: $11525.

Total Debt as a percentage of GDP: 350%

Can you tell me where the numbers that are behind your number of 297% come from?

Perhaps these guys wholesaling houses are getting into trouble themselves, or simply are just making money on selling volume – as you can see, if you buy in lots of 1,000 for $1,600, you can make good money selling them for $5,000.

Another thing this wholesaler said on CNBC was that 18 months ago people would contact him to buy parcels of houses in some areas, but there were no parcels available (ie. there weren’t large number of foreclosed houses). But he said that had changed – there were foreclosed houses throughout the country.

Yes. Not very impressive for the saviour of humanity. A ringpull. It reminds me of when Deep Thought announced that the answer to the question of the life the universe and everything was 42.

By the way, have you seen this stuff from a company called Black Light Power? http://www.blacklightpower.com/
I can’t make out if it’s a hoax. There is an independent study conducted by some university and they say that only 1% of the energy can be explained in terms of classic chemistry. The rest is ‘unexplained’, though the founder claims that Casimir cavities are tapping the quantum vacuum. In any case, it seems its producing a damn sight more energy than it should, or the whole thing is a scam.

Any takers?