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https://en.wikipedia.org/wiki/Economy_of_the_United_States

A 2012 International Monetary Fund study concluded that the US financial sector has grown so large that it is slowing economic growth. New York University economist Thomas Philippon supported those findings, estimating that the US spends $300 billion too much on financial services per year, and that the sector needs to shrink by 20%. Harvard University and University of Chicago economists agreed, calculating in 2014 that workers in research and development add $5 to the GDP for each dollar they earn, but finance industry workers cause the GDP to shrink by $0.60 for every dollar they are paid.  A study by the Bank for International Settlements reached similar conclusions, saying the finance industry impedes economic growth and research and development based industries.

 

 

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Taken from here: https://www.ukvalueinvestor.com/2016/11/uk-house-price-forecast.html/

Here’s a quick description of what that chart shows:

  • The black line – The average house price in each year
  • The red zone – Where the average house price would have been if houses were historically expensive, i.e. if the PE ratio had been between 5.5 and 6
  • The yellow zone – Where the average house price would have been if houses were at historically average valuations, i.e. if the PE ratio was between 3.8 and 4.5
  • The green zone – Where the average house price would have been if houses were cheap, i.e. if the PE ratio had been between 3 and 3.3

UK-house-price-chart-2016-11.png

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On 11/26/2016 at 5:53 PM, RickyD said:

Taken from here: https://www.ukvalueinvestor.com/2016/11/uk-house-price-forecast.html/

Here’s a quick description of what that chart shows:

  • The black line – The average house price in each year
  • The red zone – Where the average house price would have been if houses were historically expensive, i.e. if the PE ratio had been between 5.5 and 6
  • The yellow zone – Where the average house price would have been if houses were at historically average valuations, i.e. if the PE ratio was between 3.8 and 4.5
  • The green zone – Where the average house price would have been if houses were cheap, i.e. if the PE ratio had been between 3 and 3.3

UK-house-price-chart-2016-11.png

 

Assumes an immutable 'constant' PE houses fixed in 1980s. 

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