Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

Housing Bubble 2.0 Can Only End Badly

Recommended Posts

http://www.theguardian.com/business/2013/dec/02/housing-bubble-bust-recession

It is widely agreed that a series of collapsing housing market bubbles triggered the global financial crisis of 2008-2009, along with the severe recession that followed. While the United States is the best-known case, a combination of lax regulation and supervision of banks and low policy interest rates fueled similar bubbles in the United Kingdom, Spain, Ireland, Iceland, and Dubai.

Now, five years later, signs of frothiness, if not outright bubbles, are reappearing in housing markets in Switzerland, Sweden, Norway, Finland, France, Germany, Canada, Australia, New Zealand, and, back for an encore, the UK (well, London). In emerging markets, bubbles are appearing in Hong Kong, Singapore, China, and Israel, and in major urban centers in Turkey, India, Indonesia, and Brazil.

Signs that home prices are entering bubble territory in these economies include fast-rising home prices, high and rising price-to-income ratios, and high levels of mortgage debt as a share of household debt. In most advanced economies, bubbles are being inflated by very low short- and long-term interest rates. Given anaemic GDP growth, high unemployment, and low inflation, the wall of liquidity generated by conventional and unconventional monetary easing is driving up asset prices, starting with home prices.

What we are witnessing in many countries looks like a slow-motion replay of the last housing-market train wreck. And, like last time, the bigger the bubbles become, the nastier the collision with reality will be.

Roubini going bearish again.

For the UK the fallout will be bad as there hasn't really been any housing correction.

Share this post


Link to post
Share on other sites

I've not heard of this fella,

So when was the last time Roubini went bearish? 2003, 2004, 2005, 2006..........

Around 2004. He's one of the few vaguely mainstream economists who actually did predict the collapse - although I don't subscribe to the view that automatically makes him right in the future. A few here were also predicting the same from around 2003 - although to be fair almost no-one was expecting the systemic collapse then. But from around 2005, a few here did start turning ultra-bearish and quite a bit of what they said turned out to be right.

Share this post


Link to post
Share on other sites

Around 2004. He's one of the few vaguely mainstream economists who actually did predict the collapse - although I don't subscribe to the view that automatically makes him right in the future. A few here were also predicting the same from around 2003 - although to be fair almost no-one was expecting the systemic collapse then. But from around 2005, a few here did start turning ultra-bearish and quite a bit of what they said turned out to be right.

I guess that means we are going to see a few years of ridiculous HPI and share price rises before it all crashes down!

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   206 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.