Canuckleheads are overpaid and have crap mortgages

[garbon]

Everybody predicted it.  Everybody was talking about it.

That's not true at all, unless you're talking about 2008, when it already happened.  I recall a lot of arguments being made that there was a pent-up demand for real estate, or that real estate can never go down in price, or some other bullshit theories.

Ok anybody with a grasp for the obvious were predicting it.  It was a big topic of conversation from 2004 onwards...probably even before then.

Yeah, people might not have known when but most people(?) knew that prices rise and fall.

[DGuller]

Yeah, people might not have known when but most people(?) knew that prices rise and fall.

I think these recollections are a little colored, just like the recollections from all those people who were never misled before the Iraq War. 

Even as late as 2005, when I started the big debate about the bubble on Languish, I was still in a minority.  The majority either subscribed to one theory or another about how real estate is a special kind of asset that's not subject to price adjustments, or subscribed to the theory that real estate price correction can't really result in any catastrophic effects on the economy at large.

[Valmy]

I think these recollections are a little colored.  Even as late as 2005, when I started the big debate about the bubble on Languish, I was still in a minority.  The majority either subscribed to one theory or another about how real estate is a special kind of asset that's not subject to price adjustments, or subscribed to the theory that real estate price correction can't really result in any catastrophic effects on the economy at large.

Maybe you just left a big impression on me.

[Syt]

From NYT:

[garbon]

Yeah, people might not have known when but most people(?) knew that prices rise and fall.

I think these recollections are a little colored, just like the recollections from all those people who were never misled before the Iraq War. 

Even as late as 2005, when I started the big debate about the bubble on Languish, I was still in a minority.  The majority either subscribed to one theory or another about how real estate is a special kind of asset that's not subject to price adjustments, or subscribed to the theory that real estate price correction can't really result in any catastrophic effects on the economy at large.

That was hardly the first time we've seen declines in housing prices, no?

[DGuller]

That was hardly the first time we've seen declines in housing prices, no?

I'm not re-arguing these points now.  Obviously those points were idiotically wrong even back then, and couldn't stand up to scrutiny.  You didn't need the hindsight to demolish them.  However, bubble mentality doesn't persist because people get the rational arguments wrong:  bubble mentality persists because people make emotional conclusions and rationalize them after the fact.

[Admiral Yi]

I'm a little surprised by the 1980 column in Syt's graph.

[garbon]

That was hardly the first time we've seen declines in housing prices, no?

I'm not re-arguing these points now.  Obviously those points were idiotically wrong even back then, and couldn't stand up to scrutiny.  You didn't need the hindsight to demolish them.  However, bubble mentality doesn't persist because people get the rational arguments wrong:  bubble mentality persists because people make emotional conclusions and rationalize them after the fact.

Well perhaps said individuals are falling to some sort of thinking that it won't affect them.

At any rate, I don't remember anyone I know of who told me that housing prices could never decline dramatically and painfully. My aunt spent a good portion of my life in a house underwater...so wasn't a leap to see that happening on a widespread scale.

[garbon]

I'm a little surprised by the 1980 column in Syt's graph.

What was Austria doing right in '88?

[alfred russel]

From NYT:

Comparing after tax income is a bit flawed too. Other countries pay more taxes, and for that get more benefits.

[DGuller]

I'm a little surprised by the 1980 column in Syt's graph.

I'm not surprised at all.  The income inequality really started taking off from right around that point, and high inflation is a pretty good equalizer.

[Admiral Yi]

high inflation is a pretty good equalizer.

How so?

[Valmy]

I'm a little surprised by the 1980 column in Syt's graph.

What was Austria doing right in '88?

Are you better off than you were 8 years ago?  Or has Reagan made you worse off than Austria?

See Dukakis could have won with that slogan.

[alfred russel]

high inflation is a pretty good equalizer.

How so?

High inflation effectively acts as a tax on accumulated wealth.

[Admiral Yi]

High inflation effectively acts as a tax on accumulated wealth.

The graph is measuring income, not wealth.

As an aside, not all forms of wealth get depreciated by inflation.