April 20th, 2003 - Open Knowledge
Apr. 20th, 2003
05:35 pm - Happy Easter
08:44 pm - Scary Movies
As a kid, I couldn't watch scary movies--I still remember getting freaked out by a scene from Outland, in which an alien tentacle crushes a man's leg. *Shudder*
( Caution, may contain spoilers for Psycho, The Ring, The ShiningCollapse )
10:03 pm - Yes. It's a housing bubble.
Yes. It's a housing bubble.
Debate rages today about whether or not a housing bubble exists in the U.S. The fact that there is even any controversy about the bubble's existence testifies to the power of the forces of misinformation and proves that the long habit of wishful thinking among the millions of victims of the so-called New Economy has yet to start to dissipate. But we're used to that. We recall the debate that we endured in the late 1990s on the existence of a bubble in stocks when iTulip.com first opened shop. In those days, nearly everyone was in on the game of justifying the bubble. Alan Greenspan said in testimony before the U.S. Congress Joint Economic Committee June 1999, "But bubbles generally are perceptible only after the fact. To spot a bubble in advance requires a judgment that hundreds of thousands of informed investors have it all wrong." At the time, we dug up a similarly evasive statement by Professor Lawrence of Princeton University in September 1929 when he said, "[T]he consensus of judgment of millions whose valuations function on that admirable market... is that stocks are not at present over-valued. Where is that group of men with the all-embracing wisdom which will entitle them to veto the judgment of this intelligent multitude?" Today, Greenspan is in the no-bubble camp again, this time defending historically anomalous housing price appreciation with statements that are reminiscent of his defenses of stock valuations during the stock market bubble. Who is the Fed to say that prices are too high? Markets know best.
( Read more...Collapse )
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