ES -- DX/CL -- isee -- cboe put/call -- specialist/public short ratio -- trinq -- trin -- aaii bull ratio -- abx -- cmbx -- cdx -- vxo p&f -- SPX volatility curve -- VIX:VXO skew -- commodity screen -- cot -- conference board

Monday, June 20, 2005


closer at hand

the economist adds two more articles to the litany of housing bubble examination -- and steals my headline in the process. note that housing prices are already falling in britain and australia, two of the hottest global housing markets.

PERHAPS the best evidence that America's house prices have reached dangerous levels is the fact that house-buying mania has been plastered on the front of virtually every American newspaper and magazine over the past month. Such bubble-talk hardly comes as a surprise to our readers. We have been warning for some time that the price of housing was rising at an alarming rate all around the globe, including in America. Now that others have noticed as well, the day of reckoning is closer at hand. It is not going to be pretty. How the current housing boom ends could decide the course of the entire world economy over the next few years.
the magazine makes a rare prediction as well: that american house prices will begin falling within the year.

angry bear notes the distinct wattage increase in housing bubble talk -- people may remember this as a feature of the 1998-99 period with respect to the nasdaq market as well. if you search amazon for books referring to the terms "stock market bubble", you'll get 250-odd results. sort by date to find the first mention of an american equity bubble was in 1995, with only 20 older matches (mostly having to do with 1987, japan 1990 and 1929). robert prechter's "crest of the tidal wave" came in late 1997 -- but only beginning in 2000 did scads of nasdaq-bubble-related books start to appear. these of course had been written largely in 1999 and spent time being edited and printed.

for a more periodical look, search businessweek's archives by year, and you'll find articles with the word "bubble" went from 32 in 1992 to 72 in 1997 to 101 in 1999 -- at the very height of the mania -- and then began to tail down, falling to 18 in 2001.

constraining the search by two terms ("bubble" and "nasdaq"), one gets an even clearer picture: 1 in 1996, 2 in 1998 -- then 10 in 1999 and 30 in 2000 -- falling to 6 in 2001 and 4 in 2002.

altering the search to the constraints "bubble" and "housing", we find matching businessweek articles numbered zero in 2001, 9 in 2002, 29 in 2003 -- then jumped to 64 in 2004, and in the six months of 2005 thusfar 42.

other bits here related to housing: the adjustable rate mania, bill gross' analysis, the new era hype, why renting is better, fannie and freddie, and the dollar and interest rates.

Labels: ,

This page is powered by Blogger. Isn't yours?