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Tag Archives: Housing Bubble
The Great Financial Crisis: Bernanke and the Bubble
The Great Financial Crisis: Bernanke and the Bubble Ben Bernanke responded to Paul Krugman’s post last week, which agreed with my argument that the main cause of the Great Recession was the collapse of the housing bubble rather than the financial crisis. Essentially, Bernanke repeats his argument in the earlier paper that the collapse of […]
There’s a New Crash Coming
There’s a New Crash Coming Donald Trump is the epitome of irrational exuberance. You might remember that phrase from the 1990s. Alan Greenspan, the head of the Federal Reserve at the time, was describing how the tech boom was creating a bubble by generating enthusiasm way out of proportion to the actual value of the […]
Even Mortgage Lenders Are Repeating Their 2006 Mistakes
Even Mortgage Lenders Are Repeating Their 2006 Mistakes You’d think the previous decade’s housing bust would still be fresh in the minds of mortgage lenders, if no one else. But apparently not. One of the drivers of that bubble was the emergence of private label mortgage “originators” who, as the name implies, simply created mortgages […]
Housing Bubble Pops in Sydney & Melbourne, Australia
Housing Bubble Pops in Sydney & Melbourne, Australia And with impeccable timing, an immense flood of new construction. In Sydney, breeding ground for one of the world’s biggest housing bubbles, prices of single-family houses dropped 7.3% in August, compared to a year earlier. Prices of “units” — condos in US lingo — fell 2.2% year-over-year. […]
More Evidence The Economy Is Deteriorating
More Evidence The Economy Is Deteriorating “Financial-market and economic prospects remain far shy of the hype and headlines, amidst tanking consumer optimism and negative revisions to recent reporting.” – John Williams, Shadowstats.com The economy may seem like it’s doing well if you are part of the upper 10% demographic. Though, in reality, for most of […]
Toxic Mix in Canada: Spiking Inflation, Variable-Rate Mortgages, and a Housing Bubble
Toxic Mix in Canada: Spiking Inflation, Variable-Rate Mortgages, and a Housing Bubble What will the Bank of Canada do? The Bank of Canada has nudged up its target rate four times, starting July a year ago, from 0.5% to 1.5%. It last hiked on July 11. But now it is facing inflation that suddenly and […]
Housing Bubbles Are Dangerous, That’s Why Canada is Finally Trying to Tamp Down on Them. And the US?
Housing Bubbles Are Dangerous, That’s Why Canada is Finally Trying to Tamp Down on Them. And the US? Wolf Richter with Jim Goddard on This Week in Money: The underlying dynamics are similar, but the approach is different. Home prices experience a historic spike in Seattle, and sharp increases in other metros, but prices of condos […]
Global Housing Bubble Is Popping. Here Comes The “Reverse Wealth Effect”
Global Housing Bubble Is Popping. Here Comes The “Reverse Wealth Effect” Just a few months ago, real estate was on fire. Prices were blowing past records set during the previous decade’s housing bubble as desperate buyers bought whatever was available at above the asking price while homeowners, confident that prices would keep rising, held out […]
A Housing Bubble Pops: Update on Australia
A Housing Bubble Pops: Update on Australia It is rare that a housing market makes such a beautifully defined U-turn, after a long hard surge. In Sydney, Australia’s largest housing market and one of the world’s biggest housing bubbles, prices of homes of all types fell 5.4% in July compared to a year ago, and […]
The greedy little nation that sold its soul for house prices
The greedy little nation that sold its soul for house prices There was a time when Australia’s housing bubble was not much more than a curiosity. Contained mostly to Sydney it seemed it would pass with a little pop and be forgotten. Then there was a time when the bubble went national. And suddenly the […]
Housing Bubble and Everything Bubble in One Simple Picture
Housing Bubble and Everything Bubble in One Simple Picture To understand the magnitude of the housing bubbles simply compare the index of wages to the index of prices. How Did We Get Here? That’s easy. Average Wages vs CPI Note the correct CPU comparison for this chart is CPI-W not CPI-U, not that […]
Here We Go Again: Our Double-Bubble Economy
Here We Go Again: Our Double-Bubble Economy The bubbles in assets are supported by the invisible bubble in greed, euphoria and credulity. Well, folks, here we go again: we have a double-bubble economy in housing and stocks, and a third difficult-to-chart bubble in greed, euphoria and credulity. Feast your eyes on Housing Bubble #2, a.k.a. […]
The 3 Stage Housing Bubble Collapse
The 3 Stage Housing Bubble Collapse Most Americans don’t know, but the housing market is heading toward another epic bubble. However, the bubble forming today is much different than the subprime housing meltdown in 2007. Back in 2007, there was an oversupply of homes, whereas today there is a shortage. With more buyers than sellers […]
Toronto’s Splendid Housing Bubble Turns to Bust
Toronto’s Splendid Housing Bubble Turns to Bust Market freezes up at the top. Average price of detached house plunges C$175,000 in 12 months. Home sales in the Greater Toronto Area (GTA), Canada’s largest housing market, and among the most inflated in the world, plunged 32% in April, compared to a year ago, to 7,792 homes, […]
