Graph of the Day: #AfD in dystopian specter territory, #Btw17

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The paradox of how opposing AfD strengthens it

For a while now, it has been clear to many socioeconomic commentators and politicians in Germany that the political Vernunft displayed by CDU and SPD in the last years coupled with their joint efforts to occupy the middle of the political spectrum has been creating voids both left of SPD and right of CDU which provide fruitful ground for both left and right wing populism to grow.

This largely explains the growth of Die Linke but also of the AfD and it also explains why CDU/CSU have an advantage over SPD: the CSU has been trying to capture some of the right wing sentiment left untapped by CDU thus also contributing to moderating the rise of the AfD by the way.

My paper Explaining Opinion polarisation with opinion copulas explains how opposing AfD the wrong way helps it actually flair up. The best way to extinguish the AfD is to allow mild, nuanced variants of its positions to flourish across the entire political spectrum (“de-copulating” the debate) even if they are wrong. Accusing people that their views are similar to AfD creates a reservoir of suppressed people some of whom then have nowhere to go but choose AfD as their refuge.

Consequently both the SPD and the CDU need to allow euro-skepticism to exist within their ranks. The debate will still allow them to be (as they should) pro European in the end.

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Graph of the day: “short” searches in the Google Finance Category

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BUSE Index Update: Trend-Spotting in the housing market

In my paper Trend-Spotting in the Housing Market I introduced the BUSE index which for the time period it was looked upon provided a forecasting of the Case-Shiller Composite US Housing Price Index and provided what I call behavioral support to the moving of prices. The index, expressing the ratio of buy to sell Google searches in the US Real Estate category, captured the crash of 2006 as well as the subsequent turnaround of home prices circa 2012.

The update BUSE index as of this writing shows that buyers and sellers have found a flat equilibrium of sorts in which appears to be just under 5 buyers for each 2 sellers.

The Case Shiller home price index meanwhile is climbing, while new homes are growing slowly. So what we are seeing is that home prices are past their 2006 bubble burst point but that the buyers/sellers pool has an almost constant (very slowly declining) BUSE index. This might be due to the fact that prices are mainly driven by existing home owners whose mortgages are just resurfacing after a protracted period of being underwater.

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