Comments on: Deceptive Decline in Interest Rates http://peltiertech.com/WordPress/deceptive-decline-in-interest-rates/ Peltier Tech Excel Charts and Programming Blog Tue, 22 May 2012 11:00:35 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: Ben http://peltiertech.com/WordPress/deceptive-decline-in-interest-rates/comment-page-1/#comment-6831 Ben Mon, 15 Dec 2008 04:52:44 +0000 http://peltiertech.com/WordPress/?p=1161#comment-6831 Hi Jon, As an Australian there is one glaring fault with the chart presented by the Wall Street Journal. The start date given for the rates data is 31st August 2007. On that date the Cash Target Rate, as set by the RBA (Reserve Bank of Australia), was 6.5%. On the following dates, the RBA increased interest rates 7 Nov 2007, 6 Feb 2008 & 5 Mar 2008. Each rate increase was 0.25% leading to a Cash Target rate of 7.25%. Since 5 Mar 2008, there have been four interest rate cuts, totalling 3%, leaving the current cash rate at 4.25%. If the start date of the chart was 31st March 2008, then the Australian interest rate would show a bigger decline. The chart as presented by the WSJ doesn't accurately reflect what has happened to interest rates in Australia since 13 Aug 2007. I know that having the inital interest rate values on the left hand side might be messy on the bump charts, but IMHO it would allow the reader to mentally calculate the value decrease i.e having 6.25% as the intial Australian value and 4.25% would allow the reader to recognise that the total decrease is 2%. Cheers, Ben Hi Jon,

As an Australian there is one glaring fault with the chart presented by the Wall Street Journal. The start date given for the rates data is 31st August 2007. On that date the Cash Target Rate, as set by the RBA (Reserve Bank of Australia), was 6.5%. On the following dates, the RBA increased interest rates 7 Nov 2007, 6 Feb 2008 & 5 Mar 2008. Each rate increase was 0.25% leading to a Cash Target rate of 7.25%. Since 5 Mar 2008, there have been four interest rate cuts, totalling 3%, leaving the current cash rate at 4.25%.

If the start date of the chart was 31st March 2008, then the Australian interest rate would show a bigger decline.

The chart as presented by the WSJ doesn’t accurately reflect what has happened to interest rates in Australia since 13 Aug 2007.

I know that having the inital interest rate values on the left hand side might be messy on the bump charts, but IMHO it would allow the reader to mentally calculate the value decrease i.e having 6.25% as the intial Australian value and 4.25% would allow the reader to recognise that the total decrease is 2%.

Cheers,

Ben

]]> By: Jon Peltier http://peltiertech.com/WordPress/deceptive-decline-in-interest-rates/comment-page-1/#comment-6665 Jon Peltier Tue, 09 Dec 2008 19:28:02 +0000 http://peltiertech.com/WordPress/?p=1161#comment-6665 I saw Robert's post, and I wanted to comment. But I couldn't think of anything smart to add. I saw Robert’s post, and I wanted to comment. But I couldn’t think of anything smart to add.

]]> By: derek http://peltiertech.com/WordPress/deceptive-decline-in-interest-rates/comment-page-1/#comment-6664 derek Tue, 09 Dec 2008 16:29:25 +0000 http://peltiertech.com/WordPress/?p=1161#comment-6664 (re-typed) I agree with you and Kaiser that the two-category line chart is so sweet it deserves its own name. One of its nice properties is that because there are only two categories, each one has a plot edge to itself, allowing the series label and one value to be plotted next to the line on either side, provided you're reasonably lucky and it's not too crowded. But what name? Robert Kosara at <a href="http://eagereyes.org" rel="nofollow">EagerEyes.org</a> has a post up now on a similar subject, pointing out how many charts have the names of food, and wondering why. I though you might call this a "dry spaghetti chart" for the straight lines, but that feels a bit too forced. Straw chart? Yarrow stalk chart? :-) (re-typed) I agree with you and Kaiser that the two-category line chart is so sweet it deserves its own name. One of its nice properties is that because there are only two categories, each one has a plot edge to itself, allowing the series label and one value to be plotted next to the line on either side, provided you’re reasonably lucky and it’s not too crowded. But what name?

Robert Kosara at EagerEyes.org has a post up now on a similar subject, pointing out how many charts have the names of food, and wondering why. I though you might call this a “dry spaghetti chart” for the straight lines, but that feels a bit too forced. Straw chart? Yarrow stalk chart? :-)

]]> By: Jon Peltier http://peltiertech.com/WordPress/deceptive-decline-in-interest-rates/comment-page-1/#comment-6663 Jon Peltier Tue, 09 Dec 2008 16:11:45 +0000 http://peltiertech.com/WordPress/?p=1161#comment-6663 I find that FireFox is pretty good about remembering what was in a form on a page you navigated away from. I find that FireFox is pretty good about remembering what was in a form on a page you navigated away from.

]]> By: derek http://peltiertech.com/WordPress/deceptive-decline-in-interest-rates/comment-page-1/#comment-6662 derek Tue, 09 Dec 2008 15:57:46 +0000 http://peltiertech.com/WordPress/?p=1161#comment-6662 Argh, user interface fail. I composed a message, then missed the light "Submit" button and clicked on the gray "Subscribe" button instead, which wiped my message and rejected the subscribe request due to no email given. If I was using Opera I would not have lost my message, but old versions of Internet Explorer are less forgiving. Argh, user interface fail. I composed a message, then missed the light “Submit” button and clicked on the gray “Subscribe” button instead, which wiped my message and rejected the subscribe request due to no email given. If I was using Opera I would not have lost my message, but old versions of Internet Explorer are less forgiving.

]]> By: Jon Peltier http://peltiertech.com/WordPress/deceptive-decline-in-interest-rates/comment-page-1/#comment-6659 Jon Peltier Tue, 09 Dec 2008 12:44:10 +0000 http://peltiertech.com/WordPress/?p=1161#comment-6659 Alistair - To address the distance traveled/distance to zero issue, you could plot the rates on a log scale, which produces a slope proportional to change in value/initial value. I initially made this chart, but excluded it to keep the post reasonably short. This isn't too bad a chart other than the congenstion in the top left. <p align="center"><img src="http://peltiertech.com/images/2008-12/RacingTowardZeroPTS7.png" alt="Interest Rates Racing Down"></p> Regarding your second point, to keep my investment of time down, I rejected the thought of trying to locate all of the individual interest rate histories. I'm a programmer, not an economist. Your post helps to bridge the gap, and shows what the two-point line chart leaves out. Alistair -

To address the distance traveled/distance to zero issue, you could plot the rates on a log scale, which produces a slope proportional to change in value/initial value. I initially made this chart, but excluded it to keep the post reasonably short. This isn’t too bad a chart other than the congenstion in the top left.

Interest Rates Racing Down

Regarding your second point, to keep my investment of time down, I rejected the thought of trying to locate all of the individual interest rate histories. I’m a programmer, not an economist. Your post helps to bridge the gap, and shows what the two-point line chart leaves out.

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