Coincidentally, I was referred to two housing bubble reports today. This one is from FDIC, and these are slides from a talk by NY Fed VP Richard Peach. The latter is remarkably sanguine  it seems to say that price to rent and price to median income indexes are off because they don't adjust for improving quality of units sold (for instance, increased median square footages, etc.  sounds to me like the "hedonic" adjustments in the CPI that Bill Gross is suspicious about). Once that adjustment is made the housing market doesn't look overpriced, at least nationally. The Fed report also claims that while many buyers are motivated by low interest rates, few are buying in anticipation of near term price increases (classic sign of a bubble).
I guess I'm skeptical, and in any case there is a big difference between a national housing bubble and one in selected markets like CA, Boston, DC, etc. You can read the reports and decide for yourself...
Subscribe to:
Post Comments (Atom)
Blog Archive

▼
2005
(253)

▼
02
(29)
 Riskadjusted return
 LTCM (and the *real* smart guys)
 Housing and Inflation
 The shadow of LTCM
 Null energy condition
 Smart money reaches $1 trillion
 First FX domino?
 "Easy Al" Greenspan
 Finance for beginners
 Out on the tail
 Summers firing
 Asperger watch
 Book recommendation
 Evolutionary timescales
 Housing revisited
 Place your bets...
 Liquidity feedback
 Fed symposium on China exchange rate
 A tale of two geeks
 Path integrals
 Carly Fiorina no longer HP CEO
 Household debt
 Science funding
 ChinaJapan relations
 Cosmic accounting
 The myth of fingerprints
 Coming soon: the $4K car from China
 Housing bubble
 Virtual meetings overdue

▼
02
(29)
Labels
 physics (344)
 genetics (276)
 finance (259)
 globalization (252)
 brainpower (244)
 technology (200)
 american society (191)
 genomics (184)
 China (171)
 psychometrics (165)
 economics (163)
 innovation (156)
 photos (156)
 science (156)
 psychology (146)
 ai (134)
 travel (131)
 universities (119)
 credit crisis (115)
 higher education (114)
 biology (109)
 human capital (109)
 machine learning (109)
 iq (103)
 startups (98)
 cognitive science (97)
 genetic engineering (94)
 careers (80)
 credit crunch (78)
 autobiographical (76)
 statistics (73)
 elitism (72)
 evolution (71)
 gilded age (71)
 income inequality (69)
 quantum mechanics (66)
 political correctness (62)
 books (61)
 genius (61)
 social science (60)
 caltech (59)
 politics (59)
 talks (58)
 mma (54)
 geopolitics (52)
 history of science (51)
 sci fi (51)
 silicon valley (50)
 academia (49)
 bounded rationality (49)
 kids (49)
 bgi (48)
 education (48)
 podcasts (47)
 harvard (46)
 mathematics (46)
 cdo (45)
 MSU (44)
 derivatives (42)
 realpolitik (40)
 behavioral economics (39)
 intellectual history (38)
 jiujitsu (38)
 history (37)
 literature (37)
 bubbles (36)
 mortgages (36)
 ufc (36)
 computing (35)
 film (35)
 physical training (35)
 neuroscience (34)
 bjj (33)
 expert prediction (32)
 google (32)
 hedge funds (32)
 foo camp (30)
 many worlds (30)
 black holes (29)
 quants (29)
 economic history (28)
 efficient markets (28)
 race relations (28)
 affirmative action (27)
 feynman (27)
 movies (27)
 sports (27)
 von Neumann (27)
 nuclear weapons (26)
 entrepreneurs (25)
 housing (25)
 music (25)
 obama (25)
 security (25)
 singularity (25)
 subprime (25)
 taiwan (24)
 video (24)
 biotech (23)
 berkeley (22)
 meritocracy (22)
 ultimate fighting (22)
 athletics (21)
 conferences (21)
 wall street (21)
 cds (20)
 scifoo (20)
 internet (19)
 quantum field theory (19)
 venture capital (19)
 gender (18)
 goldman sachs (18)
 blogging (17)
 treasury bailout (17)
 university of oregon (17)
 cryptography (16)
 freeman dyson (16)
 new yorker (16)
 smpy (16)
 algorithms (15)
 autism (15)
 cosmology (15)
 japan (15)
 oppenheimer (15)
 personality (15)
 happiness (14)
 height (14)
 chess (13)
 fitness (13)
 hedonic treadmill (13)
 probability (13)
 wwii (13)
 aspergers (12)
 christmas (12)
 india (12)
 les grandes ecoles (12)
 malcolm gladwell (12)
 net worth (12)
 nobel prize (12)
 social networks (12)
 television (12)
 blade runner (11)
 dna (11)
 entropy (11)
 geeks (11)
 neanderthals (11)
 privacy (11)
 string theory (11)
 ability (10)
 football (10)
 government (10)
 italy (10)
 mutants (10)
 nerds (10)
 nsa (10)
 olympics (10)
 philosophy of mind (10)
 pseudoscience (10)
 Einstein (9)
 Go (9)
 complexity (9)
 dating (9)
 encryption (9)
 eugene (9)
 flynn effect (9)
 art (8)
 crossfit (8)
 data mining (8)
 determinism (8)
 harvard society of fellows (8)
 james salter (8)
 keynes (8)
 manhattan (8)
 pca (8)
 philip k. dick (8)
 pop culture (8)
 real estate (8)
 research (8)
 robot genius (8)
 turing test (8)
 usain bolt (8)
 war (8)
 aig (7)
 alan turing (7)
 alpha (7)
 ashkenazim (7)
 basketball (7)
 energy (7)
 france (7)
 free will (7)
 game theory (7)
 games (7)
 hugh everett (7)
 poker (7)
 qcd (7)
 russia (7)
 success (7)
 Fermi problems (6)
 anthropic principle (6)
 bayes (6)
 class (6)
 climate change (6)
 democracy (6)
 environmentalism (6)
 fx (6)
 nassim taleb (6)
 noam chomsky (6)
 patents (6)
 prostitution (6)
 quantum computers (6)
 tail risk (6)
 teaching (6)
 volatility (6)
 academia sinica (5)
 bobby fischer (5)
 cold war (5)
 econtalk (5)
 godel (5)
 information theory (5)
 iraq war (5)
 kasparov (5)
 luck (5)
 nonlinearity (5)
 paris (5)
 perimeter institute (5)
 renaissance technologies (5)
 sad but true (5)
 software development (5)
 vietnam war (5)
 warren buffet (5)
 100m (4)
 Iran (4)
 Poincare (4)
 bill gates (4)
 borges (4)
 cambridge uk (4)
 charles darwin (4)
 creativity (4)
 drones (4)
 fake alpha (4)
 feminism (4)
 global warming (4)
 hormones (4)
 humor (4)
 inequality (4)
 intellectual property (4)
 judo (4)
 kerviel (4)
 markets (4)
 microsoft (4)
 mixed martial arts (4)
 monsters (4)
 moore's law (4)
 new york times (4)
 rationality (4)
 solar energy (4)
 soros (4)
 trento (4)
 200m (3)
 babies (3)
 brain drain (3)
 censorship (3)
 charlie munger (3)
 chet baker (3)
 correlation (3)
 demographics (3)
 ecosystems (3)
 equity risk premium (3)
 facebook (3)
 fannie (3)
 fst (3)
 intellectual ventures (3)
 jim simons (3)
 language (3)
 lee kwan yew (3)
 lewontin fallacy (3)
 lhc (3)
 magic (3)
 michael lewis (3)
 nathan myhrvold (3)
 neal stephenson (3)
 olympiads (3)
 path integrals (3)
 risk preference (3)
 search (3)
 sec (3)
 simulation (3)
 sivs (3)
 society generale (3)
 supercomputers (3)
 thailand (3)
 alibaba (2)
 assortative mating (2)
 bear stearns (2)
 bruce springsteen (2)
 charles babbage (2)
 cheng ting hsu (2)
 cloning (2)
 david mamet (2)
 digital books (2)
 donald mackenzie (2)
 eliot spitzer (2)
 empire (2)
 exchange rates (2)
 frauds (2)
 freddie (2)
 gaussian copula (2)
 heinlein (2)
 industrial revolution (2)
 james watson (2)
 ltcm (2)
 mating (2)
 mba (2)
 mccain (2)
 monkeys (2)
 national character (2)
 nicholas metropolis (2)
 no holds barred (2)
 offices (2)
 oligarchs (2)
 palin (2)
 population structure (2)
 prisoner's dilemma (2)
 skidelsky (2)
 socgen (2)
 sprints (2)
 systemic risk (2)
 twitter (2)
 ussr (2)
 variance (2)
 virtual reality (2)
 abx (1)
 anathem (1)
 andrew lo (1)
 antikythera mechanism (1)
 athens (1)
 atlas shrugged (1)
 ayn rand (1)
 bay area (1)
 beats (1)
 book search (1)
 bunnie huang (1)
 car dealers (1)
 carlos slim (1)
 catastrophe bonds (1)
 cdos (1)
 ces 2008 (1)
 chance (1)
 children (1)
 cochranharpending (1)
 computers (1)
 cpi (1)
 david x. li (1)
 dick cavett (1)
 dolomites (1)
 drugs (1)
 dune (1)
 eharmony (1)
 epidemics (1)
 escorts (1)
 faces (1)
 fads (1)
 favorite posts (1)
 fiber optic cable (1)
 francis crick (1)
 gary brecher (1)
 gizmos (1)
 greece (1)
 greenspan (1)
 hypocrisy (1)
 igon value (1)
 iit (1)
 inflation (1)
 information asymmetry (1)
 iphone (1)
 jack kerouac (1)
 jaynes (1)
 jfk (1)
 john dolan (1)
 john kerry (1)
 john paulson (1)
 john searle (1)
 john tierney (1)
 jonathan littell (1)
 las vegas (1)
 lawyers (1)
 lehman auction (1)
 les bienveillantes (1)
 lowell wood (1)
 lse (1)
 mcgeorge bundy (1)
 mexico (1)
 michael jackson (1)
 mickey rourke (1)
 migration (1)
 mit (1)
 money:tech (1)
 myron scholes (1)
 netwon institute (1)
 networks (1)
 newton institute (1)
 nfl (1)
 oliver stone (1)
 phil gramm (1)
 philanthropy (1)
 philip greenspun (1)
 portfolio theory (1)
 power laws (1)
 pyschology (1)
 randomness (1)
 recession (1)
 sales (1)
 singapore (1)
 skype (1)
 standard deviation (1)
 star wars (1)
 starship troopers (1)
 students today (1)
 teleportation (1)
 tierney lab blog (1)
 tomonaga (1)
 tyler cowen (1)
 venice (1)
 violence (1)
 virtual meetings (1)
 war nerd (1)
 wealth effect (1)
7 comments:
Steve,
Soory, Offtopic, but I have been meaning to ask you about this for quite some time.
Do you have any recommendations for the any good books/online materials that would be like an ' Applied Economics for physicists/scientists?' applicable in the realworld, such as different kinds of markets, their sizes, impact on economies etc...
I have seen two kinds of books:
* The freshman economics texts: well, they spend 50 pages explaining derivatives, plotting/interpreting graphs....
*Advanced texts (like Romer's Advanced Macroeconomics). Has good stuff, but not much information about markets.
One book I learnt quite a bit from was Krugman's Peddling Prosperity, particularly Keynes' subtle idea (recession is hoarding of cash; money supply is neutral in the long term, but not in the short term). But I would like something which gives information about the various kinds of financial instruments and their sizes and impacts. (For example, I did not know till recently that the bond market is much larger than the stock market.)
MFA
The FDIC housing report is very informative. It is mostly an historical review of busts and booms ... but I was intrigued with the analysis of the current situation.
As an example: "Subprime mortgage loan originations surged by a whopping 25 percent per year between 1994 and 2003, resulting in a nearly tenfold increase in the volume of these loans in just nine years. Subprime mortgages currently account for just over 10 percent of all mortgage debt outstanding."
my emphasis addedAlso, the discussion of leverage by many current homebuyers is alarming.
Best Regards!
Aside, but there is building here :)
http://www.nytimes.com/2005/02/15/science/15origami.html?pagewanted=all&position=
Origami as the Shape of Things to Come
By MARGARET WERTHEIM
CAMBRIDGE, Mass.  "Some people don't even think this exists," says Dr. Erik Demaine, turning in his hands an elaborately folded paper structure. The intricately pleated saillike form swooshes gracefully in a compound curve and certainly looks real enough  if decidedly tricky to make.
Dr. Demaine, an assistant professor of computer science at the Massachusetts Institute of Technology, is the leading theoretician in the emerging field of origami mathematics, the formal study of what can be done with a folded sheet of paper. He believes the form he is holding is a hyperbolic parabaloid, a shape well known to mathematicians  or something very close to that  but he wants to be able to prove this conjecture. "It's not easy to do," he says.
Dr. Demaine is not a man to be easily defeated by a piece of paper. Over the past few years he has published a series of landmark results about the theory of folded structures, including solutions to the longstanding "singlecut" problem and the "carpenter's rule" problem. These days he is applying insights he has gleaned from his studies of wrinkling and crinkling and hinging to questions in architecture, robotics and molecular biology.
Origami may seem an unusual route to a prestigious university job, but most things about Dr. Demaine defy academic norms.
As a child, he and his father, Martin, a goldsmith and glass artist who homeschooled his son as a single parent, traveled around the United States, settling somewhere new every 6 to 12 months.
At 12 years old, after Erik had become intensely interested first in computer games, then in computer programming, and finally in mathematics, he persuaded the administrators of Dalhousie University in Halifax, Nova Scotia, to let him take classes in math and computer science. His father sat in as an auditor. Erik Demaine received his doctorate at 20 and at the same age became the youngest professor ever at M.I.T. In 2003 he was granted a MacArthur "genius" fellowship.
Today, at 23, he has published over 100 academic papers in fields as diverse as computational geometry, combinatorial game theory, data stuctures and graph theory. Along with his interest in folding, Dr. Demaine is also an expert in algorithms. He is also one of the computing world's major collaborators, with more than 140 coauthors so far.
"He loves working with other people," says Dr. Joseph O'Rourke, a mathematician and computer scientist at Smith College who has been collaborating with Erik Demaine since he was 16. "He has a very broad understanding of a whole range of topics and he often brings in ideas that at first seem off the wall but really help to enrich what you are doing."
Yet for all Dr. Demaine's smarts, the pleated form in front of him is not giving up its secrets easily. The perplexing question is whether its concertinalike structure can be derived by purely mathematical transformations of a flat sheet, or whether the sheet must be stretched in places to take on this complex shape.
As Dr. Demaine explains, stretching would warp the intrinsic flatness thereby destroying the underlying geometry. If that were the case then, mathematically speaking, it would not exist. "But if it doesn't exist mathematically then something else is going on and it would be nice to know what that is," he says, setting the model down on his desk....
...various kinds of financial instruments and their sizes and impacts. (For example, I did not know till recently that the bond market is much larger than the stock market.)MFA, this information is not readily available in any single source that I know of. The closest thing I can recommend is to read the Economist!
If something occurs to me I will let you know!
Burton Malkiel "A Random Walk Down Wall Street" is excellent.
Anne
We are in a global bull market: stocks, bonds, commodities, and real estate. But, except for real estate there is all sorts of worry. Except for real estate, judging by the breadth of the boom internationally.
Anne
Anne and Steve thanks for the advice!
MFA
Post a Comment