January 03, 2008

Yale Economics Professor Robert Shiller - "We are talking trillions of dollars worth of losses"


Unlike the jokers at Harvard and the NAR, here's someone who gets it. Thank god for bubble-busters like Shiller, Schiff, Thornberg, Roubini and Roach. I'll take the intellectual firepower and morals there any day over corrupt bubble-cheerleaders like Lereah, Yun, Bernanke and Retsinas.

American real estate values have already lost around $1 trillion [£503 billion]. That could easily increase threefold over the next few years. This is a much bigger issue than sub-prime. We are talking trillions of dollars’ worth of losses.”

“Over the next five years, the futures contracts are pointing to losses of around 35 per cent in some areas, such as Florida, California and Las Vegas. There is a good chance that this housing recession will go on for years.”

“This is a classic bubble scenario. A few years ago house prices got very high, pushed up because of investor expectations. Americans have fuelled the myth that prices would never fall, that values could only go up. People believed the story. Now there is a very real chance of a big recession.”

38 comments:

Terrell Owens said...

He is a smart guy just like peter shiff.I am just like these guys in regards to the bubble.Follow their advice.

Anonymous said...

The Reckoning.

Coming to a Hummer driving RealWhore neighborhood near you.

Storms here today in Northern California, some say terrible weather on the way, very destructive forces at work...

To them I say: "You aint seen nuthin yet".

Sheeple, they are calling YOU to slaughter. Resistance is futile.
As at Aushwitz: Work will make you Free.

DIE U PIG

SeattleMoose said...

I hope Shiller, Schiff, and all the other pundits for truth and logic never get on the same plane.

There are forces in this country who play "hardball" in the very worst way.

Anonymous said...

A trillion is a lot of money right?

Anonymous said...

I lost more in the .bomb collapse than most people will lose on their house. I survived so will they. Get a grip man.

Anonymous said...

Some guys put integrity and a clear conscience above 12 pieces of silver. However don't think you can find them at the Federal Reserve, Wall Street, the MSM and other dens of iniquity.

Anonymous said...

Of course it is going to go on for years. home ownership was at unsustainable highs. There was an inventory glut at these historical highs. We are going to see sales activity that is way below norms while this bubble fades away so it is going to take years and years to work through the inventory and build people's confidence back up.

Anonymous said...

A trillion is a lot of money right?
-----------------------------

Given uncle ben more time and it won't be.

k.w. - southern, ca. said...

People need to accept the fact that the mortgage crisis also reaches into the higher income brackets (Alt-A and Prime).

The crash has just begun.

Anonymous said...

shiller was on cnbc last week and some of them tried to belittle his findings. he had this look of consternation on his face. I mean he presents statistical evidence to back up his findings and yet some still say that it is not true and refuse to believe it.

Marky Mark said...

“This is a classic bubble scenario. A few years ago house prices got very high, pushed up because of investor expectations. Americans have fuelled the myth that prices would never fall, that values could only go up. People believed the story.”



Hmmmm...sounds like some people who talk TODAY about OIL and GOLD...

Marky Mark

Frank@Scottsdale-Sucks.com said...

I lost more in the .bomb collapse than most people will lose on their house. I survived so will they. Get a grip man.

No, because stock market speculators are a small part of the population. A housing crash involved everyone who, well, "owns" a house - which I believe is over 70% of Americans.

Anonymous said...

gold price in 2008 = housing prices in 2005

peak of the bubble for gold is 2008 and then lookout below

look at charts of gold (2004-2008) and it looks very similrar to housing (2001-2005)

I wonder if Keefer will start a goldpanic blog

Anonymous said...

marky - there's a difference between SOME people saying it and MOST people saying it (re: gold and oil), doncha think? How many people do you know who have significant gold or oil positions?

Just sayin'...

Anonymous said...

The Asians and Arabs will be buying up US assets with their trillions of US$ before Uncle Ben can inflate it all away. They want hard assets, not toilet paper. We might as well sell off California for $10 trillion to wipe out our debt. It will be taken over by the Mestizos soon anyway. We can toss in Southern Arizona as a bonus. Let the Chinese guard the border. They have the balls to build a border wall.

Anonymous said...

George W. Bush also went to Yale.

Anonymous said...

anon 7:30

This is the same stupidity that was beig said in the late 80s. The Japanese were going to buy everything in sight. Yeah they bought Pebble Beach, Columbia Pictures, Paramount, Rockefeller Center. And within a few years they sold it all back to Americans (except Columbia) for pennies on the dollar.

I'll bet Kweefer was writing feverishly in 1988 about how spending $125K on a house was crazy.

keith said...

Up until 2003-2004 I thought buying a house was a brilliant move in most cases

And then the bubble ruined it all

Anonymous said...

No, because stock market speculators are a small part of the population. A housing crash involved everyone who, well, "owns" a house - which I believe is over 70% of Americans.

---

Frank you get denser and denser by the hour. Every person who has a 401k or a pension of any kind is invested in the stock market. Every teacher, every government worker, every cop, every fireman, you get the picture. They all have their retirement money invested in stocks to some degree. It is as much if not more than 70% of the population.

Dude you obviously spent way too much time in AZ, your brain was fried.

a.creampuff said...

How much of the trillions is paper loss akin to the wealth-on-paper gain? If you "bought and held" your house (with no HELOC) you'd be back where you started.

Anonymous said...


Hmmmm...sounds like some people who talk TODAY about OIL and GOLD...


We are not running out of land, but we are running out of easy oil. The only major discoveries the past 30 years have been the oil sands and extremely deep reserves miles under solid rock.

Gold is an historical inflation hedge. If a person believes that the US$ will continue to be devalued, they should buy gold. Capiche?


What is it that you don't understand? Are you that dense?

Anonymous said...

Frank you get denser and denser by the hour. Every person who has a 401k or a pension of any kind is invested in the stock market.

People can't leverage their pensions and 401k accounts. Most don't borrow from the retirement accounts with option ARMs to buy Escalades.

Anonymous said...

The bubble deniers can't discredit his analysis, so they try to discredit him

Anonymous said...

anon said...

Frank you get denser and denser by the hour. Every person who has a 401k or a pension of any kind is invested in the stock market. Every teacher, every government worker, every cop, every fireman, you get the picture. They all have their retirement money invested in stocks to some degree. It is as much if not more than 70% of the population.

Dude you obviously spent way too much time in AZ, your brain was fried.
___________________________________

Sorry, you are wrong buddy. Less than 50% of Americans have any investments in the stock market. As far as private pensions go, most of them have been converted into 401ks and are going the way of the dinosaur (unless your a top executive at a Fortune 500 company). Even government pensions are mostly funded with current taxes, not investments (although they do have investments in the stock market).

Jymkata

Anonymous said...

anon said...

gold price in 2008 = housing prices in 2005

peak of the bubble for gold is 2008 and then lookout below

look at charts of gold (2004-2008) and it looks very similrar to housing (2001-2005)

I wonder if Keefer will start a goldpanic blog
___________________________________

Go around and ask all of your friends and coworkers if they own any gold bullion.

Next time your in a cab, ask the cabbie if he's bought any gold recently.

Go to a bank and try to get a loan to go out and buy gold.

At your next coctail party or family gettogether, see if anyone is talking about their gains in gold.

Ask your financial advisor what he thinks of gold as an investment.

Sorry, no bubble here. Not yet anyway. Sure we talk alot about it on this website, but we're a small group of tin foil hat wearing chicken littles.

Jymkata

Anonymous said...

If you don't want to buy gold then buy silver. At $15 a pop, that seems pretty cheap compared to its all time high of $45.

Anonymous said...

Anonymous said...
gold price in 2008 = housing prices in 2005

peak of the bubble for gold is 2008 and then lookout below

look at charts of gold (2004-2008) and it looks very similrar to housing (2001-2005)

I wonder if Keefer will start a goldpanic blog

January 03, 2008 7:08 PM

-----------------

Gold peaked at $850 in 1980. Since then, the Fed has been diluting the currency for 28 long years. When the bubble peak in gold comes this time around, it will be much higher than $850.

What we've seen so far is just the gold price catching up from an extremely undervalued level.

polywog said...

Preemptive bailout is on the way boys and girls:

"WASHINGTON — Amid new worries about a possible recession, the housing slump and rising oil prices, President Bush is exploring an economic stimulus package to reinforce the U.S. economy.

On Friday, Bush will receive an update from a working group on financial markets, an interagency panel that meets regularly to discuss market conditions and regulatory policy. Treasury Secretary Henry Paulson is chairman of the group. The other members are: Federal Reserve Chairman Ben Bernanke; Chris Cox, chairman of the Securities and Exchange Commission; and Walt Lukken, acting director of the Commodity Futures Trading Commission."


Here come the capital controls and probably one more coordinated attempt by the central banks to hammer gold prices. My business lives off the crumbs that fall from Uncle Sam's table, and if this is anything like previous reflation moves, federal spending will be off the charts and 2008 will be a good year!

Anonymous said...

I have two buckets of pre-'65 silver quarters in my basement. They cost me $7200 in 2002, and today they're worth about $21K. My annual return from this "barbarous relic" is around 20%, and each bucket can never be worth less than $1000, even if the price of silver drops to zero.

Yeah, silver is a terrible investment, stay away from it.

Mammoth said...

Gold MAY be a bubble, but this bubble still appears to have more room to inflate before it pops.

Consider all the investment money that was going into real estate - where will investors put it?

Yes it's a crapshoot, but that's life, isn't it?

-Mammoth

Anonymous said...

anon said...

Frank you get denser and denser by the hour. Every person who has a 401k or a pension of any kind is invested in the stock market. Every teacher, every government worker, every cop, every fireman, you get the picture. They all have their retirement money invested in stocks to some degree. It is as much if not more than 70% of the population.

Dude you obviously spent way too much time in AZ, your brain was fried.

___________________________
UMMM...anon, wake up and smell the coffee. One minute of research tells me that the median 401k balance in 2006 was @$18k after growing at a rate between 6% and 8% over the last 6 years meaning the median balance was closer to $12,000 when the stock bubble took a poop. The stock market drop of around 30% means the median person lost around $4,000.

Wall Street Journal yesterday says housing will need to fall 15% more to be in line with rents for a total fall of 20%. That's a loss of more than $40k from the peak making it 10X worse not to mention the job losses related will make things that much worse for many.

Besides, your comment about losing more out of the .com bubble than most will lose in housing shows you are clearly out of touch with what the average person is/will be dealing with.

Anonymous said...

"Now there is a very real chance of a big recession"

Isn't there a name for a BIG RECESSION? I forget what they call it? I think it starts with a D?

Anonymous said...

I'm about 1/2 through Schiff's book.

F'ing amazing. It's like reading a treasure map.

Anonymous said...

Many people have been using their houses as ATMs, withdrawing equity and getting HELOCs to prop up the economy. The only people doing that with the stock market back in 2000 were retirees. Many people now have negative equity due to the housing bust. How many people owed money on their retirement or even regular brokerage accounts?

Is it the end of the world? No, but things will be much worse this time around. The consumer is 75% of the economy and easy credit has been cut off for many of them. I'm hoping many of them pick up 2nd or part-time jobs and keep paying their bills or else all hell will break loose.

Alex3191 said...

Prediction for 2008 : The government - Fed - Congress- Wall Street will keep on cooking up schemes to squeeze the middle class/employees/small investors harder and harder.
How the hell would they make a living by not doing any real work?!
Gotta love this guys. From behind.

dougr100 said...

It's about time we started mentioning the gold bubble. The only thing more worthless than housing, you can't live in your pile of gold and it's only worth what someone else will pay you.
Oil has intrinsic value as energy and as a building block for our entire polymer/organic economy.
Peak oil is here, eventually we'll find other sources of energy, but oil will always have some value-the price will drop some, then it'll be back above $100 a barrel in another decade, never to be this low again...

Anonymous said...

dougr100 said...
It's about time we started mentioning the gold bubble. The only thing more worthless than housing, you can't live in your pile of gold and it's only worth what someone else will pay you.
Oil has intrinsic value as energy and as a building block for our entire polymer/organic economy.
Peak oil is here, eventually we'll find other sources of energy, but oil will always have some value-the price will drop some, then it'll be back above $100 a barrel in another decade, never to be this low again...

January 07, 2008 8:04 AM

-------------------

Gold has much more intrinsic value than green pieces of paper with numbers and pictures on them, and it's a much better form of MONEY since it can't be produced in arbitrarily large amounts.

Anonymous said...

To answer anons question a Trillion is a lot.
Consider USA consumers spend 9 Trillion per year on consumption.
The whole of the people in China spend 1.2 Trillion.
A few hundred billion wont bring the house down but a one off Trillion dollar loss will.