The Fat Lady Has Sung
It's here. Just read the headlines. Add it up. It ain't brain surgery. The bubble has burst. Someone had to officially declare it, so let HousingPanic be the first.
"Yield Curve Inverts"
"New Home Sales Fall 21% in West"
"Gold Hits Record High"
"Median US Home Value Falls 4.1 % in November"
"Fed Raises 13th Straight Time"
"Phoenix Home Listings Soar"
"Tougher rules eyed on risky mortgages"
"Investors Moving out of Housing"
"Mortgage Applications Fall to 11-Month Low"
"Housing Slowdown May Claim 800,000 Jobs"
" US new home sales dropped 11.3% in November"
" Existing US homes sales drop 1.7% in Nov"
Pop. Tilt. Game over.
HousingPanic now moves from the theoretical discussion of manias, panics and crashes, and the "are we in a housing bubble" question, to the reporting of the long march downward, the repercussions, and how to best stay above water.
And away we go.
24 comments:
Its just a trend to think it is a bubble, and because everyone believes it then uit makes it not one, right? ;) Thwwwt to them.
Good call on the Times Blog Keith. what was the logic there. If it is in blogs then the general public will know about it later.
Your still in my top 5!
I firmly believe bloggers are, for the most part, thought leaders. That's why they blog. And that's why other thought leaders read blogs. The blog audience is ahead of the general population.
Then the uninformed, lazy public definitely lags behind.
Then the media follows. They don't actually initiate anymore. They take the talking points, they do their rip-and-reads, and they read the blogs, then they write their stories.
Then the uninformed masses pick it up.
So if you ask americans 'is there a bubble' the vast majority still says no.
See my "Oh denial" post for some of that thinking
I think you may be premature in calling the bubble burst. Then again you may not be...
Anonymous,
So strong in your conviction you log in "anonymous". Totally lame! I recommend a lamo award to anyone that logs in anon.
It is NOT a Bubble. It is just "Froth". No it is NOT a BUBBLE. It can't be a bubble because the incoming fed chairman says it is not. And we MUST believe him because he is soooooooo smart and taught at an ivy league school!!!!
And according to the brilliant chief economist of the NAR (National Association of Realtors) IT IS NOT A BUBBLE. According to Condoflip.com bubbles are found only in bathtubs. IT IS NOT A BUBBLE. IT is only a situation having a slow leak, a psst, an easy landing, a return to normalcy....
Just repeat ten times, IT IS NOT A BUBBLE!.....ya sure and just click your red shoes and follow that yellow brick road to Wuthering Heights where all your leveraged profits will be realized!
Re Ivy League professors.
These days Ivy League schools really are more about talent than family connections, far more than 50 or even 25 years ago. It is very hard to get in, and most students are smart.
Now, that said, it's possible for smart people to be wrong---they come up with more clever explanations than dumb ones. But I bet fewer Ivy grads are doing the massive overleveraging personally.
There are some professors with a brain in their head---I'd say Paul Krugman is one who really does tell it like it is. I like him.
As far as the big shots in the 1920's---and today, certainly---there has always been a good job market for those willing to shill for the capitalist-financial complex. That's what we saw then, and that's what we're seeing now.
I stayed home sick today watching TV. Given that almost all TV was superpathetic, even the news, I turned to CNBC which at least discussed a few issues of importance.
But even, there it was a love fest of mostly chirpy nitwits saying how wonderful everything is going to be, and how great corporate profits are (apparently the only thing that matters to them) and how great it is that wages aren't going up, hence keeping inflation down.
There was a segment when some hosts had four guests to discuss (superficially) the import of the inverted yield curve.
There was one guy---out of four---who said in effect "Hey, all of you are trying to say that Its Different This Time and no recession is coming and everything is great. Maybe it's just like the other times instead?"
the Center for Economic and Policy Research (CEPR)has a couple of policy papers on the runup of house prices. The link below is to a paper on how it is a real bubble. it is titled "Will a Bursting Bubble Trouble Bernanke?
The Evidence for a Housing Bubble"
http://www.cepr.net/publications/housing_bubble_2005_11.pdf
U.S. Economy: Existing Home Sales Fall to Lowest in 8 Months
http://quote.bloomberg.com/apps/news?pid=10000006&sid=ap2lCzD6kJzY&refer=home
``Housing activity has peaked,'' said David Lereah, chief economist at the Realtors group, which predicts sales of previously owned homes will fall to 6.84 million in 2006 from a projected record 7.1 million this year.
The housing industry accounts for only about 5 percent of the U.S. economy and yet generated half of the growth in this year's first six months and more than half of the private jobs added since 2001, Merrill Lynch & Co. said in an August report. Price appreciation helped add $5.2 trillion to Americans' balance sheets during the current expansion, or 68 percent of all wealth creation, according to the Federal Reserve.
This lovely quote from NAR after yesterday's bad #s:
David Lereah, NAR’s chief economist, said higher mortgage interest rates were responsible for moderating sales, but noted it’s important to keep an eye on the actual level of home sales given the market surge this year. “The current pace of home sales activity remains historically strong – only eight months have had a higher sales pace,” he said. “A modest downtrend, to a sales volume that is expected to be the second-best year ever in 2006, will be good for the long-term health of the housing sector.”
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