economicsofcontempt.blogspot.com/2008/07/official-list-of-punditsexperts-who.html
They were the enablers, and deserve to be held accountable. People also need to know (or be reminded of) which pundits/experts should never be listened to again. But most importantly, I have time to do this kind of thing now. That means the list doesn't include policymakers such as Alan Greenspan and Ben Bernanke, because however wrong they may have been, policymakers--and especially Fed chairmen--are undeniably constrained in what they can say publicly. I strongly suspect that both Greenspan and Bernanke honestly believed that there was no housing bubble, but alas, we'll never know for sure. The list also doesn't include pundits/experts who were wrong only about the fallout of the collapse of the housing bubble--that is, the extent to which the collapse of the housing bubble would harm the economy. Many of the names on the list won't shock anyone, I'm sure.
argued that there was a housing bubble, and they absolutely hate Krugman. Unfortunately (for our economy), Krugman was right--again. The list is a work in progress (though I've been reasonably thorough in my research), so feel free to suggest other people who should go on the list.
"No Housing Bubble Trouble,"Washington Times (January 8, 2005): "In short, we are asked to worry about something that has never happened for reasons still to be coherently explained. It would have been financially foolhardy to listen to them in 2002.
"Recession Fairy Tales," Townhall (October 5, 2006): "When it comes to homes . many people have spent the last four years fretting that the 'housing bubble' might end. That is, they worried that overpriced homes might become more affordable. This is not quite as nonsensical as worrying the price of oil might fall too much, but it's close."
New York Times (July 25, 2004): "Another bubble-skeptic is Kevin Hassett, director of economic policy studies at the American Enterprise Institute and co-author of the fabled 'Dow 36,000,' which was published in 1999 when the Dow Jones index was around 11,000. Mr Hassett says there is an ideological component to the belief in bubbles. Liberals, who tend to believe that government must step in to protect people from market imperfections, will likely see more of them. Conservatives, who like their markets unfettered, will see less. Liberals win again, conservatives lose again--same old, same old. "Mr Hassett of the conservative American Enterprise Institute thinks housing prices will be pretty much OK He acknowledges there might be some bubble dynamics at play in some regions. But he argues that for the most part people are paying more for homes because their incomes are higher and interest rates are lower, reducing the cost to own a home. "Mr Hassett expects that rising interest rates would raise this cost and home prices would then decline proportionately.
hile such signs of speculation are troubling, there is little solid evidence that a real estate bubble is puffing up. "Even in places where prices are soaring, worries of a bubble could be overblown because higher prices appear grounded in good old fundamentals."
ased on what we know and see in terms of employment and interest rates, it is extremely difficult to see how five years from now we could be looking back and observing a historical 5-year growth rate of, say, less than 5%. That should be more than adequate to support the continued good credit performance of sub-prime mortgage pools. "It is important to understand -- we can contemplate home price growth rates declining, albeit modestly, but we do NOT envision home prices declining!"
Our strong housing market is a function of myriad factors with real economic underpinnings: low interest rates, local job growth, the emotional attachment one has for one's home, one's view of one's future earning- power, and parental contributions, all have done their part to contribute to rising home prices. "What we do have is a serious housing shortage and housing affordability crisis."
Not Likely," Wall Street Journal (September 19, 2005): "For the past several years, Chicken Littles have squawked that the sky -- or the ceiling -- is about to fall on the housing market. "Yet basic economic logic suggests that this apparent evidence of a bubble is anything but. Even in the highest-price cities, housing is, at most, slightly more expensive than average."
"A close analysis of the US housing market in recent years, however, finds little basis for such concerns. The marked upturn in home prices is largely attributable to strong market fundamentals: Home prices have essentially moved in line with increases in family income and declines in nominal mortgage interest rates."
"Mr Greenspan's Cappuccino," Wall Street Journal (May 31, 2005): "These nattering nabobs expect a housing collapse to take down the US economy. But excessive pessimism is unwarranted: Fears of a housing bubble are overblown."
"The Housing Bubble Myth," Economist's Corner (July 2005): "When you strip away all of the white noise around a housing bubble, what you find is a robust market for housing that is undergoing several profound changes all of which manifest themselves in higher home price indexes, none of which adds up to a housing price bubble."
he housing markets will cool as interest rates rise and as affordability declines, but they won't crash. Most markets will flatten for a while or increase at lower, more historical, rates.
"Assessing High House Prices: Bubbles, Fundamentals, and Misperceptions," Federal Reserve Bank of New York Staff Reports (September 2005): "As of the end of 2004, our analysis reveals little evidence of a housing bubble. In high appreciation markets like San Francisco, Boston, and New York, current housing prices are not cheap, but our calculations do not reveal large price increases in excess of fundamentals."
Why There is No Housing Bubble," MSN Money (June 10, 2005): "Housing bubble? With the 10-year US Treasury bond yielding below 4% and 30-year mortgages available at 51%, there isn't a housing bubble."
"There is No Housing Bubble in the USA: Housing Activity Will Remain At High Levels in 2005 and Beyond," Business Economics (April 2005): "There is no evidence of a housing 'bubble' in the United States and housing demand should stay strong for years to come."
The Market Won't Pop, Experts Predict," Wall Street Journal (April 12, 2006): "We don't see a bubble. Historically, home prices just don't go down nationwide unless we are in a significant recession. The underlying fundamentals of real estate are still very positive.
If I wanted to say there is a housing bubble, I'd have Time and Money magazine camped on my door. "There is absolutely nothing in any market in the country to indicate there'd be any kind of collapse in housing prices,' he said."
While the headline would suggest that Ritholtz denied the existence of the housing bubble, it appears to have been more hyperbole than anything. The substance of his argument was that housing values wouldn't fall in value as much as tech stocks did when the dot-com bubble popped (80%). In fact, he outright predicted a significant correction in house prices: "As the rate cycle plays out, prices will slide. I'm looking at a slow asset depreciation of 10%-30% over the next several years as a realistic possibility." Since that's more or less what has happened, it would be difficult to say that Ritholtz was "wrong about the housing bubble." Let me know if you know of someone else who deserves to be on the list.
My view has been that we had a much mroe dangerous Credit bubble than a national housing bubble. In terms of true Housing bubbles, there can be no doubt that (since 2005), S Florida, Southern California, and Las Vegas have all been true bubbles -- at least two standard deviations from the norm, prices doubling, etc. The rest of the country was not quite as bubblicious -- and in terms of that 25-35% pullback I forecast in prices, we are now about halfway there.
This is a list of people whom nobody would have taken seriously in the first place. Alan Reynolds, James Glassman, and Kevin Hasset are paid to produce opinions which conform to their think tanks' ideologies. Jude Wanniski is a no...
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