Warnings of a Housing Crisis (in Real Time)

September 25, 2007 9:15am by

Great Housing chart, from an article in the Sunday NYT:

0923bajaj7821000

courtesy of the NYT
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Incidentally, not everyone was crying wolf. Some of us were adducing significant data proving the point.

Such is the life of a skeptic . . .

>

Source:
They Cried Wolf. They Were Right.
VIKAS BAJAJ
NYT, September 23, 2007
http://www.nytimes.com/2007/09/23/weekinreview/23bajaj.html

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What's been said:

Discussions found on the web:
  1. Royce commented on Sep 25

    This looks like Shiller’s work. He put out a similar chart a year or two ago.

  2. michael schumacher commented on Sep 25

    OT

    Can someone explain why the QID (Proshares Ultrashort) is down almost 1% and the dow is off about 45???

    Seen some weird shit before but that takes the cake…

    Ciao
    MS

  3. KP commented on Sep 25

    I wonder what a plot of M3 on top of that would look like?

  4. rudy_d commented on Sep 25

    MS,
    Isn’t the QID based on the Nasdaq?

  5. michael schumacher commented on Sep 25

    yes it is however the NAS was’nt up either and that(QID) was down almost 1% with the NAS being down about .25%. The relationship is not 1:1…

    Ciao
    MS

  6. michael schumacher commented on Sep 25

    and yes I know it’s a double short however with the action it had it should have been up by almost 1% with the NAS down….not the way it was….

    Ciao
    MS

  7. David Graves commented on Sep 25

    Am I wrong in thinking the chart is somewaht misleading, in that what looks like zero (i.e. the bottom of the chart) isn’t really? My pre-coffee West Coast eye sees that the index now is 160, but the peak is not just 60% over the dotted “100” line? Great Lereah quotes–is the publication of books like his a great sell signal?

  8. Estragon commented on Sep 25

    MS,

    QID appears to be x-dividend today, which may explain some of the apparent wierdness in price relative to the underlying.

    FWIW.

  9. michael schumacher commented on Sep 25

    something ‘aint right with it but that makes sense..sort of…LOL

    Ciao
    MS

  10. KnotRP commented on Sep 25

    Awful chart. Bottom to 100 is nearly no chart height at all, and 100 to 160 is a huge vertical space….but of course the big problem is the claim that prices have ONLY gone from somewhere around 85-90 in 1994-1995 to 160 today….that’s not quite a double since 1994-1995, but out here in Calihomia I’ve personally seen more than a double double on housing prices since 1994 – one would think this chart (in Ca at least) should be well over 320. Realty meet Reality.

  11. Bob A commented on Sep 25

    The chart would be more useful if it showed the longer term trendline

  12. Eddie commented on Sep 25

    Perhaps the chart, which is based on inflation adjustment, is skewed due to ‘underreporting’ of inflation. Assume 6% instead of 3%, and that peak of 171 would be much lower.

  13. limejuice commented on Sep 25

    When they say “adjusted for inflation” are they talking about real inflation measure or that flat line called the CPI?

    I think if you adjusted it for real inflation in commodities and food, energy, health care, etc. you might find the big rise is not as steep.

  14. Francois Theberge commented on Sep 26

    “Real Inflation”?

    In a spin-dominated world?

    Not a chance!

    Francois

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