Tuesday, January 11, 2011

How many economists does it take to see an $8tn housing bubble?

America's housing bubble still deflating

"As they failed to spot the bubble, most economists seem oblivious of the threat of further market falls to come" They didn't fail to spot it, they chose to ignore it, too busy with their snowts in the troughs with the EAs, brokers & politicians, each one complicit in a crime of pure greed. "House prices in the United States are again declining and most of the economics profession remains clueless."

Posted by doomwatch @ 10:44 PM (972 views)
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7 thoughts on “How many economists does it take to see an $8tn housing bubble?

  • America will be a no go zone when they try and grab the guns.

    Property in the states is a pointless subject. Now if there were a successful revolution I would be the first to pack my bags and go visit

    the prisons that would house some historical names.

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  • yep very true deflating fast, i am still over in states and things are bad, really bad

    how right i was about barclays bank though lollipop for me

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  • Mark Wadsworth says:

    They didn’t fail to spot it

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  • mark wadsworth says:

    “They didn’t fail to spot it, they chose to ignore it,”

    They didn’t ignore it at all. The entire Home-Owner-Ist elite (bankers, politicians, landowners, DIY chainstores, NIMBYs) spent ten years loving slaving over and blowing that bubble and inventing propaganda to explain why it wasn’t a bubble this time.

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  • Economists are just cheerleaders for the (state) Capitalist system. Just like 95% of journalists, having been through elite educations, they have a proven track record of obedience to power.

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  • mark w – right, it certainly wasn’t ignored. Add economists to your list of bubble blowers. Nobel Prize winning economist Paul Krugman wrote in 2001: See http://www.pkarchive.org/column/81401.html

    “The driving force behind the current slowdown is a plunge in business investment. It now seems clear that over the last few years businesses spent too much on equipment and software, and that they will be cautious about further spending until their excess capacity has been worked off…..How might demand increase? Consumers, who already have low savings and high debt, probably can’t contribute much. But housing, which is highly sensitive to interest rates, could help lead a recovery……mortgage rates and the dollar will come way down, and the conditions for a recovery led by housing and exports will be in place”.

    A year later he wrote: http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html

    “To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble”.

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  • Mealy-mouthed or what? Earlier this year Krugman wrote: (google ‘Paul Krugman, the Fed, and the housing bubble’)

    “others are using that out-of-context remark about the Fed “needing” to create a housing bubble.(…)

    “So did I call for a bubble? The quote comes from this 2002 piece, in which I was pessimistic about the Fed’s ability to generate a sustained economy. If you read it in context, you’ll see that I wasn’t calling for a bubble — I was talking about the limits to the Fed’s powers, saying that the only way Greenspan could achieve recovery would be if he were able to create a new bubble, which is NOT the same thing as saying that this was a good idea.”

    His 2002 piece which he’s here ‘denying’ is my latter URL @3. Judge for yourself.

    ‘Success has many fathers, failure is an orphan’.

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