Blessed by the Potato

It looks like I am done running experiments for my PhD — just* analysis and writing up now!

To mark the occasion, we have come up with a new celebration we call “running the chocolate gauntlet“, which can be staged using items found here on the hospital campus (largely the Tim Horton’s). It involves proceeding through a series of celebratory doughnuts, each chocolatier than the last: a honey dip, a chocolate dip, a chocolate glaze, and finally: the double chocolate.

Unfortunately, we didn’t get a chance to test out the chocolate gauntlet due to concerns over the safety of the celebratants, and disagreements over whether boston creme should be included and/or allowed to exist at all outside of Boston. We are now waiting on baseline cholesterol tests from the potential test participants, and have sent the boston creme matter off to a subcommittee for a more educated final decision. Early rumour has it that one compromise option will be to leave the boston creme out, but make the final stage of the gauntlet a double chocolate doughnut with a scoop of chocolate ice cream on top. Some members of the boston creme subcommittee, including members not actively pursuing a boston creme jihad, oppose the proposed solution, warning that ice cream availability is limited at the hospital, and may lead to another round of chocolate escalation as various levels of ice cream chocolatyness are added to the gauntlet.

Nonetheless, good news. Celebrations to follow.

With chocolate.

* – this is still a many-month-long process.

My mom used to freak out when I’d go grocery shopping or something at 4 am, largely worried about the freaks that might prowl the nighttime.

For the most part, the people out and about at 4 am are like me: pasty, sun-starved geeks and shift workers, university kids stocking up on snacks, or sleep-deprived dads picking up diapers and pickle-flavoured ice cream.

But this weekend was different, aside from myself the people out prowling the streets seemed to be right out of my mom’s nightmares: a greaseball guy with a skinny twig of a girl 20 years younger than him who had a thick eastern european accent and dressed like a total ho, and a guy fresh from a goth/industrial concert wearing a leather vest, leather pants, and combat boots, and a grimace (probably because he was wearing head-to-toe leather in this heat).

Anyhow, while I have been consistently underperforming my daily exercise goals, my distance for bike riding has been going well. Unfortunately, I gained another pound this week, and now the heat is on, so the exercise is likely to suffer — and if not, I will (I’m sure the public health guys would agree that being fat is better than getting heatstroke in this nonsense).

Since I’ve now gone back up to the weight I was at when I started this plus a pound, I’ve opened the contingency envelope, which contains the nuclear response plan for just this dark scenario. I can only tell myself that muscle weighs more than fat and that all the exercise is doing the trick for so long, it’s time to take action. The diet has to be stepped up (or, technically speaking, down) a notch. I’m also going to have to become lamer and spend more of my time working, working out, and sleeping, and less blogging, having fun, and reading about non-science stuff. Sleeping 4-5 hours a day while trying to churn out papers leads to lots of late-night snacking, which is not helping.

Housing stuff:

Mr. Cheap at MS defuses the idea of your house being your “best investment”, but thinks that the overpricing in Canada will lead to a flat market for a few years until fundamentals catch up, rather than a crash/correction, like I’m calling for. I think that he’ll be proven wrong in short order, especially given that:

Prices in Toronto have already come down 5% last month [down 2.6% for the GTA as a whole]. I don’t know what the typical May -> June seasonality is, but I don’t imagine that June is traditionally all that weak [it was flat in 2008, and up slightly in 2009]. The TREB releases focus on year-over-year numbers, especially when the month-over-month looks bad for them (or year-over-two-years-ago when the year-over-year looks bad for them).

BNN had a housing bear on today, which may also be telling. He’s predicting prices to go back to where they were in 2005 (before the CMHC rules changed and “rampant speculation” began), which would be a 26% decline for Toronto, and he’s saying that will happen around mid-2012. I’m a little more pessimistic, counting on ~35% decrease for Toronto, but also more patient, figuring that the bottoming out will be in 2013-2015.

Other stuff:

Woot is being bought by Amazon, and their letter announcing the deal is a fun read. They also poke fun at the AP today for stealing from their amusing letter, poetic since the AP wants to charge others for quoting even short snippets from their stories.

First London StarCraft 2 LAN party planned for August. Unfortunately, SC2 won’t have LAN support (unless we can change Blizzard’s mind!), so we’re all going to have to connect to BNet over the host’s internet connection. If that fails, we may have to play something else…

Toronto Public Libraries has a new feature that lets patrons check out passes to some of Toronto’s museums. This lets library card holders get access to these venues for free. Best of all, you don’t need to return the passes to the library, just surrender them when you go to the art gallery or museum.

They say quantities are limited, so we’ll have to see how accessible this ends up being…

HT: Julie.

I’m disgusted by this article in the Huffington Post. I’ve been warned about that rag and the quality of their science knowledge (worse than none) before, but it became the topic of some discussion over at PriusChat, and I had to check it out for myself. Note that I have ranted on this subject before.

The author describes her experience buying a Prius, after which she experienced headaches. She took the car back to the dealer, got a Highlander instead, and the headaches went away.

If that was all there was to it, it’d be fine: a weird anomaly, who knows why it happened, but her problem is solved so good for her.

But that wasn’t all there was to it. Because the Prius is a hybrid, she immediately jumped to the conclusion that somehow, the magnetic fields were causing her headaches. She then goes on to insinuate that these same fields caused “inflammatory” issues and a brain tumour in people she knows who happen to drive hybrids.

This is not evidence, it’s not science, it’s fearmongering of the worst sort.

To try to add weight to her arguments, she got a “meter” and tried taking some measurements of the magnetic fields on her own. And you know what, the only thing the general public fears more than magnetic fields are numbers, so you can bet that went well. She obviously did not know how the meter (or magnetic fields) work, because she only gives one number in the article.

Here’s the thing about magnetic fields: they’re kind of like sound. You have a frequency, and a strength. So to say you have a sound of 70 dB, or a magnetic field of 2 mG, doesn’t fully describe it. You’d also want to know if it was a deep bass thrum, or a middle C, or so many Hz for the magnetic field. And she doesn’t say that anywhere.

That gets particularly important when she pulls out this mystery meter. I’ll bet you dollars-to-doughnuts she’s trying to use a cheap “trifield” type survey meter, that only has a little dial readout for showing field strength. These are meant to be used around power line fields where you know the frequency you’re dealing with in advance, and they give very screwy results when presented with fields of unknown frequency and transients. Unfortunately, all we can say about the fields present in a car is that they are highly unlikely to be 60 Hz powerline fields.

Often, these meters are induced-current based, so if you have a 1 mG 60 Hz field, it shows up as 1 on the meter. But, if you have a 1 mG 600 Hz field, it shows up as 10 on the meter. So when someone who is unskilled at science or numbers — or much of anything really — gives a number in an article, I have basically zero faith that that number represents what they think it represents. For example, she says that just turning on the Nav and AC system in her car increased the field almost as much as the hybrid drivetrain did, but that makes little to no sense, on many levels. First off, the nav and AC shouldn’t draw nearly as much power as what’s needed to move the car (though all of these are well-shielded in a hybrid), so the measurement shouldn’t have gone as it did. And even if that was the case, it would mean that the nav and AC should be just as much a cause of her headaches as the hybrid drivetrain if she believes magnetic fields are responsible. She shouldn’t be out on a crusade against hybrids, but against in-dash nav systems!

She justifies getting a nav system in her Highlander by saying that the slightly smaller Prius “compacts” the fields, again showing that she doesn’t understand how things work — the extra space in the SUV is wasted, the design constraint still puts the nav system at arm’s reach for the driver.

She then goes on to insinuate that hybrids pose a health danger, remarking that “I started to wonder about my clients who drive hybrids. Every one of them has an inflammatory issue that baffles me…” Her byline says that she’s “Yoga, health expert”. What do you want to bet that every one of her clients, no matter what they drive, has “an inflammatory issue”?

The conclusion though was the biggest tip-off for anyone remotely familiar with the FUD surrounding hybrids that she was not a source to be taken seriously: she repeats some of the nonsense about the batteries and Sudbury, that has been debunked many times (including here), clearly indicating that she has not done her homework.

Scientific articles have peer review systems to try to catch these kinds of glaring errors, and those occasionally do fail (recently, our group tore apart an article, providing 3 pages of corrections, and the other reviewer said simply “it’s fine”). But the mainstream media, which should be more careful since it deals with a more credulous audience, often has much more glaring mistakes present — perhaps because journalists are equally credulous when it comes to technical matters.

All that said, we return to the issue of her headaches. It’s been said that we can’t disagree with the fact that she experienced headaches that went away when she changed cars. I’d say that we could disagree with even that level of evidence (did she make it up to get a controversial article out that other people would cite, even if just to debunk her?), especially given how subjective and random headaches can be. But, let’s grant that her headaches did happen, and even that they went away with the change in cars. It could be that the headaches were unrelated to the car itself, and could have been due to the stress of buying a new car, worrying about finances, etc., and would have gone away in a few days/weeks anyway. But even if we grant that somehow, the headaches were due specifically to the car, that does not lead us to blame the hybrid transmission and/or magnetic fields. There simply is no evidence of that. She had an individual problem, and she solved it by changing cars, and that’s great for her. But it’s misleading to then go and blame one specific aspect of the car without any evidence. She could have been allergic to the ecoplastic used in the dash, or to a host of other things. My favourite theory revolves around the rearview mirror: the Prius is a great car and I love it, but the rearview mirror is horribly low. I’m constantly ducking my head to look under it to check for pedestrians as I make a right turn, and if she was doing the same that repetitive head-ducking motion could have given her a headache. Or, similarly, the rear spoiler splits the rear window, at just about the height most cars’ headlights fall. If she’s driving down even a moderately bumpy road, their lights would constantly strobe to her point of view as they disappear behind the spoiler and reappear above or below it.

There are numerous reasons why this car in particular could be giving her headaches, and unless she’s willing to get back in it for some experimentation, we can’t say what factor could be responsible (if any). It brings us back to the issue of placebos: for an individual person, a placebo may work to solve their problem, such as a headache. They may be willing to pay money for a placebo (e.g., a homeopathic tincture). On the individual level, that’s fine: do what you need to do to solve your individual problem. But on a societal level, we don’t want to ascribe efficacy to what we know are really just placebos and have them for sale in our pharmacies, because it’s not good science, and it’s not good policy. Likewise, we don’t want to go around banning things like cell phones and wifi and hybrids without evidence that they are indeed causing harm (and if she’s afraid of hybrids, man, wait till she sees some of the controversy over cell phones!).

Finally, a quick repeat of my note on risk vs benefits. We know that hybrid cars have demonstrable environmental and financial benefits. We know that they can reduce our individual exposure to known carcinogens (e.g.: diesel), and our societal exposure to other pollutants. We don’t have good evidence that they even do have increased magnetic fields inside of the passenger compartment, and if they did, whether those fields would be harmful. The risk-benefit right now is highly likely skewed towards there being a worthwhile benefit, but because people are so afraid of the unknown, the unknown risks are large in their minds, and lead to articles like this one.

It’s been a rough few years to be a young adult in Canada and not own real estate. The media keeps firing off article after article about how it’s different here, how real estate always goes up, and how the systems and perverse incentives that lead to the bubble blowing up in the US totally don’t apply here.

Here’s a few recent ones to pick apart.

First up, CNBC asked around after the G20 in Toronto why our housing market didn’t crash. Amongst the silly answers given:

there are just six big Canadian banks that own the bulk of the mortgage market, and they don’t securitize and sell off loans at nearly the rate U.S. lenders do. They hold nearly three quarters of their loans on the books, and 80 percent of Canadian loans carry mortgage insurance.

In the same sentence they undermine their point. It doesn’t matter if the loans are securitized and sold to someone else, or insured, the effect is the same: for 80% of the loans made by Canadian banks, the risk has been offloaded (in our case, to the taxpayer, rather than AIG). The effect on behaviour is the same: sell sell sell full steam ahead, and damn the torpedoes. How many times have we heard of banks “helping” people find ways to borrow way more than they should qualify for, looking the other way on “creative” downpayments (that aren’t downpayments at all, but often other loans, sometimes even credit card cash advances). When they don’t bear the risk for making a bad loan, they make more bad loans.

Or this gem of misinformation and lawyering up the definitions:

Canadian banks also had and have no such thing as the Alt-A, or low-doc, no doc loans that fueled bad borrowing and consequent defaults. At the height of the Canadian housing boom barely 5 percent of loans were considered “subprime,” while a full third of U.S. loans were either subprime or Alt-A.

The CMHC will insure a person with a credit score of somewhere down in the 610-620 range, which is below Alt-A and into subprime in the states, but here AFAIK it doesn’t get a different name. It’s all good, baby. Not only that, but high loan-to-value mortgages (i.e.: CMHC insured) are rampant here. According to GT, the average downpayment on a new mortgage is now 6% (and since the minimum is 5%, that means a lot of people are not putting much equity in their homes). Small downpayments are almost as big a predictor of default as bad credit; combine the two risk factors and defaults rise exponentially. The difference in US and Canadian lending is not a difference of kind, just of degree (plus, our taxpayer bailout is built-in). Yes, there were fewer subprime mortgages issued, and the very worst dreck (negative amortization/interest only) was avoided, but just barely (40-year 0-down is not all that different).

Then this especially terrible article from the Toronto Sun was forwarded to me. In it, the author (a condo marketer and saleslady) recommends first-time buyers buy preconstruction condos because the builders aren’t as strict as the banks, and will let you create a payment plan for your downpayment, so you don’t need anything saved up. Spoiler alert: I’m going to recommend that people don’t buy condos (or pledge to buy condos at some unknown future date) when they don’t have any savings!

Recent statistics from BILD report that the typical high-rise condo suite price was up $25,108 in April, or 6.3% compared with April 2009. Where else can you get that kind of return-on-investment in this day and age?

Ouch, bad choice of timeframe. The TSX was up 28% in that period, not including dividends. And, it won’t cost you 10% in transaction fees to realize your profit. Of course, there is a logical reason for pre-construction to go up: your capital is locked up for 3+ years while your unit is built. And through all that despite real estate being an “investment you can touch/live in”, you can’t touch or live in or preview your pre-construction unit. How (and when!) it actually turns out can be a nasty deviation from what you were lead to believe in the sales pitch, and this is another risk pre-construction speculators are rewarded for. That this premium has now dropped to only ~5% is a statement on just how distorted the market has become.

Even if we weren’t tipping over the edge of our own housing crash, I’d almost always advise a first-time buyer to avoid pre-construction. A Tarion warranty is next to worthless, and as a first time buyer you’re probably keen to get out of whatever situation you’re in now (rental, parents’ basement) and don’t want to wait several years before your purchase is completed. Not to mention that you may not have the stability to effectively plan that far in advance plus a few years to know for sure that the imagined condo is where you’ll want to be living 10 years from now. No, leave pre-construction to the speculators and retirees, even if you do have to scrounge up a bit more for something you can inspect right now.

Then, on the same day in the Sun, “No bubble trouble to report here“:

We experienced a true bubble in the late 1980s and early 1990s, when mortgage rates skyrocketed and speculators flooded the market. Despite the fact that conditions are very different today, people continue to compare our current success in home sales to that time. I don’t understand why.

Look, no. Rates did not skyrocket in the late 80’s. Rates do not have to go up to pop a housing bubble — you just have to run out of buyers. In the early 80’s, there was a brewing bubble that was smashed by high rates (the 20% rates your parents still wake up in the middle of the night in a cold sweat thinking about). But the bubble that popped in ’89 was not fuelled by low rates or killed by high ones. Look them up yourself. Rates spiked all of maybe 2% (starting from ~12%, the equivalent of going up about 0.6% today) over the course of about 8 months in 1990, after the housing boom had already started to die. The late 80’s housing bubble can’t be laid at the feet of interest rates. Plus, we’re at rock-bottom interest rates now, so if conditions are different, it’s in a way that makes the current times look even more bubbly!

Speculation though, that’s a good measure of when things are getting bubbly. How much speculation was going on back then? Unfortunately, I don’t know of any good measures of that, but there is a heck of a lot going on now.

Then, after acknowledging that bubbles happen, this guy goes on to say:

Prices are only going to go up…

Unless, as they’ve done many times before, they go down. The Toronto Life article said that up to 40% of new condos are held by speculators. That’s a lot of future demand pulled forward, so we can easily keep putting roofs over the heads of families even as prices crash…

And again, in what must be the Sun’s G20 silly real estate report section:

Pricing is affordable, while construction-related job creation is averaging around 170,000 per year over the last five years in the GTA alone.

Do the math on that one. Average of 170k per year over 5 years. 850k. There is no way, absolutely no way that 850,000 new construction-related jobs were created in the GTA alone. That would mean that, of the ~5.6 million residents of the GTA, roughly 1 in 6 works in construction, and just started doing so in the last 5 years. If it is true, it’s terrifying, as a city of nothing but people building homes to sell to each other sounds like a frightening ponzi scheme to me, and will mean that when a downturn does come, there will be incredible positive feedback loops (where here, “positive” means “bad”).

And it’s not just the Sun, widely recognized as the paper with let’s say the least amount of journalistic prestige of the big 4 papers in Toronto. Even the Globe is making these goofs, such as “the little matter of affordability” which actually recognized that condos sold today can’t be rented for a profit. Rather than coming to the logical conclusion that a bubble exists and prices would come down, the author instead warns that rents are due to jump ~40-60% in the next few years. (And repeats the figure that up to half of all new condos are bought by speculators). Rents, of course, are constrained by wages to a much larger degree than owned housing prices, and can’t be leveraged up by low rates; we simply will not see rents jump ~50% just because that’s what’s needed to make the speculators’ numbers work. Not with an already healthy vacancy rate.

Kids, time to tune this shit out. The denials will continue to get stronger and more frequent as the wheels come off the market, and it won’t be until well after the decline has finally started before the majority of the stories turn into tales of woe and despair and talk of bubbles bursting.

Anyway, nobody listens to me these days because — despite the fact that I do research and am right — I’m not a “journalist” at a “respectable” paper. They can’t print this out and plunk it down in front of their parents to explain why they aren’t “building equity” like other kids their age.

Except for Julia, who is therefore awesome.