{"id":23798,"date":"2017-04-30T20:03:16","date_gmt":"2017-05-01T01:03:16","guid":{"rendered":"http:\/\/olduvai.ca\/?p=23798"},"modified":"2017-04-30T20:03:16","modified_gmt":"2017-05-01T01:03:16","slug":"bubbles-schiller-pe-ratio-nears-roaring-20s-bubble-high-as-home-prices-increased-43-6-since-feb-16","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=23798","title":{"rendered":"Bubbles? Schiller P\/E Ratio Nears Roaring ’20s Bubble High as Home Prices Increased 43.6% Since Feb ’16"},"content":{"rendered":"
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BUBBLES? SHILLER P\/E RATIO NEARS ROARING \u201920S BUBBLE HIGH AS HOME PRICES INCREASED 43.6% SINCE FEB\u00a0\u201916<\/a><\/h3>\n<\/header>\n
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Supreme Court Justice Potter Steward said in 1964 in\u00a0the Jacobellis v. Ohio <\/em>case,\u00a0 \u201cI shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description [hard-core pornography]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it<\/strong>, and the motion picture involved in this case is not that.\u201d<\/p>\n

Asset bubbles too are difficult to define, but I know it when I see it.<\/strong><\/p>\n

Take Robert Shiller\u2019s P\/E Ratio measure for stocks. There was a Roaring \u201920s bubble which burst in 1929 (Black Tuesday), there was the infamous Dot.com bubble. On March 10, 2000, the NASDAQ Composite peaked at 5,132.52, but fell 78% in the following 30 months.<\/p>\n

Now we are seemingly in yet another stock market bubble and almost at the P\/E Ratio level of the Roaring \u201920s bubble (but not near the dizzying heights of the Dot.com bubble \u2026 yet).<\/p>\n

\"\"<\/p>\n

Stocks do seem awfully \u201cfrothy.\u201d But what about home prices? The Case-Shiller 20 composite home price index has grown 43.6% since February 2012. \u00a0While home prices are not growing as fast as they did during the home price bubble of the last decade, they are going at a rate that is twice as fast as earnings (wage) growth.<\/p>\n

\"\"<\/p>\n

These certainly look like asset bubbles. If it looks like a bubble and acts like a bubble, it probablyis a bubble.<\/p>\n

\u201cShhh. Don\u2019t say the word \u201cbubble!\u201d<\/em><\/p>\n

\"\"<\/p>\n

<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

BUBBLES? SHILLER P\/E RATIO NEARS ROARING \u201920S BUBBLE HIGH AS HOME PRICES INCREASED 43.6% SINCE FEB\u00a0\u201916 Supreme Court Justice Potter Steward said in 1964 in\u00a0the Jacobellis v. Ohio case,\u00a0 \u201cI shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description [hard-core pornography]; and perhaps I […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1806,4899,15222,15221],"class_list":["post-23798","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bubble","tag-economic-bubble","tag-home-prices-housing-bubble","tag-shiller-pe-ratio"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23798","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23798"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23798\/revisions"}],"predecessor-version":[{"id":23799,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/23798\/revisions\/23799"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23798"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23798"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23798"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}