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Meeja Clowns Now Saying No One Spotted Housing Bubble

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Even the experts missed the housing bubble

By Robert J. Shiller

Ohio.com

Published on Wednesday, Mar 05, 2008

NEW HAVEN, Conn.: One great puzzle about the recent housing bubble is why even most experts didn't recognize the bubble as it was forming.

Alan Greenspan, a very serious student of the markets, didn't see it, and, moreover, he didn't see the stock market bubble of the 1990s, either. In his 2007 autobiography, The Age of Turbulence: Adventures in a New World, he talks at some length about his suspicions in the 1990s that there was irrational exuberance in the stock market. But in the end, he says, he just couldn't figure it out: ''I'd come to realize that we'd never be able to identify irrational exuberance with certainty, much less act on it, until after the fact.''

With the housing bubble, Greenspan didn't seem to have any doubt: ''I would tell audiences that we were facing not a bubble but a froth — lots of small local bubbles that never grew to a scale that could threaten the health of the overall economy.''

The failure to recognize the housing bubble is the core reason for the collapsing house of cards we are seeing in financial markets in the United States and around the world. If people do not see any risk, and see only the prospect of outsized investment returns, they will pursue those returns with disregard for the risks.

Can you believe the temerity of this "man"? How long before the meeja VIs in the UK jump on the same rickety bandwagon?

The meeja, although not responsible for Gordo's policy of debt creation and the banks' willingness to lend money to anyone, failed solely in their responsibility to report the credit bubble we've been engulfed in during the past few years.

The meeja egged on the housing bubble by re-inforcing the belief that HPI is a constant certainty, while at the same time taking money for adverts from the VIs. Of course, the Beeb didn't do this, but saw a great opportunity to fill their schedules with property porn.

Remember all those apologies and regrets expressed by the meeja for simply parroting PR releases and propoganda leading up to Gulf War Episode II? It's happening again.

The meeja have no shame - you can't ramp up a false premise by constant publicity and a lack of critical oversight and then say "sorry - we didn't do our job properly."

If HPC can spot a bubble, so can they.

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So called "experts" are always the last people to recognise anything. "Expert" is a dirty word in my lexicon - I immediately switch off and assume that the speaker knows eff all. I've had a lot of dealings with so-called experts in the field of special needs education. I could and did run rings around the lot of them to achieve the outcome I knew was needed. But I did it IN SPITE of the experts, not BECAUSE of them. The average bloke in the pub knows more than most experts. They're usually wet-behind-the-ears, just-graduated regurgitators of yesterday's thinking, anyway. Not one of them that I met was capable of forming an independent argument to counter mine - they could only blab received thinking and current guidelines. "Experts?" You have to be joking!

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If HPC can spot a bubble, so can they.

They don't dare --- because they're all in it [bTL etc] up to their necks.

That's why they're not joining up the dots and - constantly just saying "Credit Crunch" --- and NOT telling the truth --- That the so-called "Credit Crunch" is just the end result of the most massive fraud ever comitted -- a HUGE CASINO GAME - LIAR LOANS backed up by CDOs and SIVs -- all those "dealers" [be they "Finance" people or EAs/Mortgage "Brokers" etc] - all of them paid commission - bugger the consequences --- net result -- MELTDOWN and utter misery for countless millions.....

Edited by eric pebble

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So called "experts" are always the last people to recognise anything. "Expert" is a dirty word in my lexicon - I immediately switch off and assume that the speaker knows eff all.

according to my arl fella (funnily enough he also works in special needs education) an expert is 'someone who knows more and more about less and less until they eventually know everything about nothing'

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Experts?

If it wasn't so pathetic it would be funny.

If these "experts" are unaware that the economy is cyclical they ought to go back to school and learn some basics about boom and bust.

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So called "experts" are always the last people to recognise anything. "

British So Called Experts quotations

"Property Only Ever Goes Up"

"Its Different This Time"

"Soft Landing"

"Sound Economy"

"No Sub-Prime In The Uk, its a USA problem"

"The Poles will never leave"

"Huge Demand Little Supply"

"Low Interest Rates Forever"

"Cheap Credit Forever"

"We have learnt from the Last Crash and won't make the same mistakes"

"BTL are in it for the Long Term"

Not that they have their own vested interests at heart.

Any More ????

Edited by joey

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Experts?

If it wasn't so pathetic it would be funny.

If these "experts" are unaware that the economy is cyclical they ought to go back to school and learn some basics about boom and bust.

I know where you are coming from RB, but increasingly global capitalism is "bust" and needs fixing. Its ok saying leave it to the "markets," but increasingly the markets are rigged.

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Guest Skint Academic

My attitude is, unless it's really bloody obvious why the price is going up, assume it's a bubble.

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You have to wonder why they're called experts if they're so consistently wrong!

Nah, you don't really; they're no better qualified to discuss asset bubbles than Joe Bloggs, the only difference is they look good on TV and that's it.

Penultimate scene from Raiders of the Lost Ark:

MUSGROVE

You've done your country a great

service.

EATON

--And we trust you found the settle-

ment satisfactory?

MARION

Quite.

EATON

Good, good.

(glances around at the others)

Then I guess that about does it.

BRODY

When can we have the Ark?

Eaton's glance flicks over to the mysterious Bureaucrat,

then back to Brody.

EATON

I thought we answered that. It's

someplace very safe--

INDY

(heated)

That's a powerful force. Research

should be done--

EATON

Oh, it will be, Dr. Jones, I assure

you. We have top men working on it

right now.

INDY

Who?

EATON

Top . . . men.

Edited by nmarks

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I remember reading an article in about 2004 (I *think* it might have been by Charlie Brooker) regarding how the houseprice boom would continue, and that you'd know it was over as soon as Location Location was replaced by Repossession Repossession.

Only once there was some zeitgeist for the media numpties to reflect in crass tea-time programming would there be enough momentum to carry through the crash. Now we're getting more of shows like 'Beat the Bailiff' and all that C4 documentary stuff, it can't be far off.

Of all the journalists and media producers I know (quite a few on the Guardian, some at the Mirror, a couple in telly), they're the most self-absorbed f-wits ever to misuse power, and I dread to think what their readers/viewers are like. On a personal level they're alright though.

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Guest An Bearin Bui
British So Called Experts quotations

"Property Only Ever Goes Up"

"Its Different This Time"

"Soft Landing"

"Sound Economy"

"No Sub-Prime In The Uk, its a USA problem"

"The Poles will never leave"

"Huge Demand Little Supply"

"Low Interest Rates Forever"

"Cheap Credit Forever"

"We have learnt from the Last Crash and won't make the same mistakes"

"BTL are in it for the Long Term"

Not that they have their own vested interests at heart.

Any More ????

Don't forget the classic: "Britain Is A Densely-Populated Island" - Japan on the other hand is a thinly populated, semi-desert region stretching across two continents which explains why it had a huge HPC in the early 90s.... oh no, hold on that's Mongolia, Japan's a densely-populated island too... hmm... :rolleyes:

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Don't forget the classic: "Britain Is A Densely-Populated Island" - Japan on the other hand is a thinly populated, semi-desert region stretching across two continents which explains why it had a huge HPC in the early 90s.... oh no, hold on that's Mongolia, Japan's a densely-populated island too... hmm... :rolleyes:

And don't forget the classic, "It's me pension, innit".

:lol:

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because they're all in it [bTL etc] up to their necks.

I think this is a little too straight forward. If you're really interested Stuart Hall's "The rediscovery of ideology: the return of the repressed in media studies" gives an excellent analysis of the media's involvement in how we think of about and speak about things that are reported to us like the housing market. Seriously; its a good read and he writes well enough that you dont need a Phd and dictionary to get through. Its very probably in your local library or they can definately get it for you.

I can't really summarise convincingly for you here but it is much better than the "information cascade" rubbish the economists cited in the article came up with. The thrust of his argument is, very roughly, along these lines: we are all, to a certain extent, exposed to the same culture and internalise it as a set of statements about the world. Some of these satements about the housing market are listed above "prices only ever go up" etc. When a journalist comes to report a new event he uses these same internalised statements we all share to attach a meaning, or 'spin' if you like, to it. It is the case, once a particular statement has been made, such as rising house prices being good, that that then becomes the default position for further reports, and the statement is reinforced with each repitition. The author of that article really missed the point: plenty of experts foresaw the crash; but because thier view did not match the consensus it was not reported, or not reported positively- only those experts who agreed were aloud to speak as experts, and in the case of VI's given expert status they do not deserve.

Terry Pratchett summed it up best for me: his character Lord Vetinari advises a Newspaper editor "Man bites dog is not a story people want to hear. Dog bites man makes much more sense, people do not want news; they want olds".

like I said, this only an outline of a piece of work that I found convincing and if anyones interested in this issue I highly recommend reading it.

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British So Called Experts quotations

"Property Only Ever Goes Up"

"Its Different This Time"

"Soft Landing"

"Sound Economy"

"No Sub-Prime In The Uk, its a USA problem"

"The Poles will never leave"

"Huge Demand Little Supply"

"Low Interest Rates Forever"

"Cheap Credit Forever"

"We have learnt from the Last Crash and won't make the same mistakes"

"BTL are in it for the Long Term"

Not that they have their own vested interests at heart.

Any More ????

The latest Spin Expression. "Property Is Fundamentally Strong"

LONDON (Reuters) - The housing market is cooling and will slow further this year but is fundamentally strong, Chancellor Alistair Darling said on Thursday.

Don't worry Property is falling in price but the Fundamentals are ok ??????? :lol:

Forgot to add rather than saying Property Prices are Falling/Dropping/Crashing the correct expression so as not to panic people is Cooling or Slowing . I never heard of property is warming :lol::lol:

Edited by joey

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The latest Spin Expression. "Property Is Fundamentally Strong"

It is. I've just popped outside and given the kitchen wall a bloody good kick. My foot hurts now, and the house just kinda sat there like a big money losing thing.

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It's one thing to spot the bubble, but another to know when it's going to burst!

True, but I reckon it's burst now alright.

The property bubble should be one of the easiest to spot though, the last one only finished 12 years ago. <_<

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I am an expert, I value houses etc for a living. There are many others like me and we have been saying that the UK housing market was madness for years. It was very difficult to get anyone to listen to that view in 2004. The people pontificating in the media are experts in saying whatever keeps them in employment. It doesn't need to make sence.

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I am an expert, I value houses etc for a living. There are many others like me and we have been saying that the UK housing market was madness for years. It was very difficult to get anyone to listen to that view in 2004. The people pontificating in the media are experts in saying whatever keeps them in employment. It doesn't need to make sence.

Freeholder - When you are valueing a house at the present time, what sort of attitudes to your suggested price are you getting from vendors? Is there a marked gap between their expectations and your price? Can you and your colleagues discern a 'standoff' situation right now? And if so, how long so you think vendors will hold out?

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Guest grumpy-old-man

greed rules, always has done, always will do. <_<

The difference this time, is they are not being subtle about it & that's why this time it's going to be economic chaos.

So many stats have been & are being fudged, you will spit your cornflakes out every morning, when you see the huge jumps in all the bad stats & a huge drop in all the good stats on the news. They won't be able to hide it soon.

Mark my Words. :ph34r:

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Guy's filofax is full of spivs, that's why he had no heads up I have to assume (that and an utter lack of foresight). Guess the author is the same type that would have spent longer deciding on what colour car to buy than making a decision on getting a mortgage. Dumb and brazenly so.

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Freeholder - When you are valueing a house at the present time, what sort of attitudes to your suggested price are you getting from vendors? Is there a marked gap between their expectations and your price? Can you and your colleagues discern a 'standoff' situation right now? And if so, how long so you think vendors will hold out?

There is a widespread blindness to reality. People cant or wont understand that the market has contracted and is falling. Even those who appreciate at an intellectual level that times are now hard still have an emotional desire to 'get on the ladder'. I have met sevral would be first time buyers in recent weeks and wanted to scream dont do it. Some of them were not stupid. I am at a loss to explain their behaviour.

As a valuer I am in the awkard position of knowing what I think is happening to values but not having sales evidence to back it up. Soon I am sure I will be having the conversation that goes,

Them ''So you think values have fallen 10%. Wheres your evidence.

Me err I'm sure it will be along shortly.

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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