Interesting Historical Perspective - Nerds Only

Hi Token Funder,

Very interesting reading indeed. Many thanks for posting. I particularly liked the analysis of the Baby Boomers and the impact of their shifting spending pattern from wealth generation to wealth consumption and the likely impact this will have on the percentage of income directed to housing assets. This is something that has been on the radar for some time, but its difficult to source well built empirical analysis of this.

I like how he called a bubble in 2002. I'm not sure I agree with his ideas of limiting house prices to a multiple of rental incomes. Sounds a bit too socialist to me, but he does come across as someone who wants to intervene in the market to minimise the potential repeat of this in the US and the wealth destruction that accompanies a bubble bursting of this magnitude.

Cheers,
Michael
 
Thanks Token Funder
This is what he said in 2005: The Housing Bubble Fact Sheet.
1. The unprecedented rise in house prices has dangerous
implications for the economy.

2. The housing bubble has created more than $5 trillion in
bubble wealth, the equivalent of $70,000 per average family of
four.

3. The increase in house prices is not being driven by
fundamental factors in the housing market, such as income
and population growth.

4. The housing bubble regions are large enough to have a
major impact on the national economy.

5. The collapse of the housing bubble will throw the
economy into a recession, and quite likely a severe recession.

6. The collapse of the housing bubble is likely to put major
strains on the financial system and require a federal bailout
of the mortgage market.

7. The sooner house prices drop, the less economic damage
there will be.

8. The housing bubble could pop from higher interest rates,
but it could also deflate even if interest rates stay low.
 
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