The recent string of housing data shows that housing supply is tight, new home sales are surging, and pending home sales are up. And this, analysts say, bodes well for home prices.
In an interview with The Wall Street Journal, however, Robert Shiller says he is more “worried” than most about the rise in home prices, because he isn’t certain that the recovery in prices will be sustained.
Read more: http://www.businessinsider.com/shiller-more-worried-about-housing-2013-2#ixzz2M7hzr6Mu
Inequality Is Bad For the Economy
A who’s-who’s of prominent economists in government and academia have all said that runaway inequality can cause financial crises:
Andrew Berg (IMF economist)
Jonathan Ostry (IMF economist)
John Kenneth Galbraith
Marriner S. Eccles (Federal Reserve chairman from 1934 to 1948)
Indeed, extreme inequality helped cause the Great Depression, the current financial crisis … and the fall of the Roman Empire.
It’s not just liberal economists [...]
From housing starts to home prices, renowned economist Robert Shiller acknowledged “there are a lot of positive signs” for the U.S. housing market right now, but told CNBC Wednesday it’s still unclear if a recovery is actually in place.
After all, Shiller noted the housing futures market for single-family homes was only “mildly optimistic” before superstorm Sandy struck the U.S.’s East Coast with expectations for just 3 percent growth per year over the next four [...]
As I wrote in the Weekend Investor cover story, “Is the Real-Estate Rebound for Real?,” this weekend, many indicators are pointing to a bottom forming in the housing market. New-home inventories are at historic lows. Home-builder sentiment has finally turned the corner. And finally, home prices have ticked upfor four months in a row on a seasonally-adjusted basis.
All that might make it tempting to call the “all clear” once and for all. But one [...]
by George Washington
People Are Losing Trust In All Institutions
The signs are everywhere: Americans have lost trust in our institutions.
The Chicago Booth/Kellogg School Financial Trust Index published yesterday shows that only 22% of Americans trust the nation’s financial system.
Robert Shiller said Monday:
Our whole economy has been affected by variations in confidence. Central banks are sort of trusted, but the actions they have often affect people’s confidence by appearance rather than substance. We’re not in the most [...]
Class Warfare Is Being Used To Divide America – And It Is Working
by The Economic Collapse
April 30th, 2012
At a time when America desperately needs to come together, we are becoming more divided than ever. The mainstream media and most of our politicians love to pit us against one another in dozens of different ways, and right now class warfare has become one of their favorite tools for getting us to hate [...]
The Housing market is likely to remain weak and may take a generation or more to rebound, Yale economics professor Robert Shiller told Reuters Insider on Tuesday.
Shiller, the co-creator of the Standard & Poor’s/Case-Shiller home price index, said a weak labor market, high gas prices and a general sense of unease among consumers was outweighing low mortgage rates and would likely keep a lid on prices for the foreseeable future.
Yale economist Robert Shiller says another housing boom could spell trouble.
“Thinking that large home price increases would be a good thing seems very widespread,” Shiller writes in the Financial Times. “But the effects of any such future price boom would not be so clearly beneficial, and would depend on the causes of the price increase and the…
Read full article…
By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. — “America’s investors have been ripped off as massively as a bank being held up by a guy with a gun and a mask,” former Securities and Exchange Commission Chairman Arthur Levitt warned in an article in Fortune magazine a decade ago. That same year in his classic “Take On The Street,” Levitt lambasted the fund industry as “a culture that [...]
by Mark Motive
Published : March 12th, 2012
Gold is once again above $1,700 and eyeing its all-time high. Yet, the same two camps are saying the same things they have since the yellow metal was at $600: either this is a bubble, or it’s headed much higher. While the gold bulls have clearly been right for over ten years, that doesn’t mean they will always be right. There are many ways to [...]
From Investment Postcards from Cape Town:
The interim solving of the debt crisis in Greece has restored calm in the markets, with the CBOE S&P 500 Volatility Index (VIX) settling at 17.3 compared to its long-term average of 20. The big question now is whether the VIX will return to the low levels of 1991-1996 and 2004-2006.
But why is it important? The two periods mentioned coincided with sustained, strong rising equity [...]
by Sam Ro
Robert Shiller has a novel idea for America.
He writes in the Harvard Business Review:
Here’s an audacious alternative: Countries should replace much of their existing national debt with shares of the “earnings” of their economies. This would allow them to better manage their financial obligations and could help prevent future financial crises. It might even lower countries’ borrowing costs in the long run.
Basically, Shiller thinks that America could be better managed if [...]
From The Big Picture:
I have been very unequivocal about my view of Housing market — its not anywhere people should be expecting ordinary year over year price appreciation.
As the recent Case Shiller data shows, this is still a market where despite record low mortgage interest rates, prices are falling. A normalized market is probably many years away still.
So I find it encouraging when Robert Shiller states a similar view…
Read full [...]
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. — Fasten your seat belts: The stock market is unlikely to calm down any time soon.
On the contrary, we’re likely to see more of the same kind of volatility that has characterized the markets in recent months — such as seen this week by Monday’s loss of $268 billion in the collective value of all U.S. stocks, followed by a $271 billion gain on [...]
(MONEY Magazine) — There’s no denying that these are scary times for you and your money. The economy is teetering on the edge of another recession.
Housing prices remain stuck in the basement. Newly downgraded U.S. Treasury bonds are paying so little in interest that you’re likely to lose ground against inflation. And stocks have been sinking for months. So what’s to love, you ask?
By Roland Jones
Five years after U.S. home prices peaked, overall expectations for the nation’s housing market are still dimming, according to a survey of economists, real estate experts and investment strategists.
Although some local real estate markets are stable or strong, more broadly, fundamentals in the U.S. housing market remain very weak, despite record-low interest rates, according to the results of the September 2011 home price expectations [...]
The DOW dropped 512 points today.
And that’s on top of the several hundred points it dropped last week.
The S&P 500, a broader market measure, is now down more than 12% off its recent peak.
So what does that mean?
Is it a “buying opportunity”?
Over the short-term, who knows? If this carnage keeps up, a panicked Ben Bernanke will probably rush to announce some huge new quantitative easing program. Or Congress will [...]
Preface: While conservatives are against redistribution of wealth and liberals want to tax the affluent, conservatives and liberals, the affluent and the less well-heeled should all agree that we have to stop the surge in inequality from rising further:
As Robert Shiller said in 2009:
And it’s not like we want to level income. I’m [...]
If you watch financial television, you’ll hear frequently that “stocks are cheap.”
The S&P 500, analyst after analyst will tell you, is trading at about 15 times this year’s earnings (and even less on projected earnings), which is just below the long-term average.
So you may think that if you buy stocks today, you are getting a bargain.
But be careful!
Professor Robert Shiller of Yale University, who wrote the book [...]
Falling home prices have shrunk the equity Americans have in their homes to nearly the lowest percentage since World War II.
Average home equity plunged from more than 61% at the start of 2001 to 38% in the January-March quarter this year, the Federal Reserve said in a report Thursday. That drop comes as home prices in big metro areas have reached their lowest level since 2002.
Prices fell 33% in 20 [...]
The latest soundbite that should certainly add a few extra points to the S&P now that trading has reverted back to the bizarro zone is the most recent warning from Robert “Case-Shiller” Shiller who said that another 10-25% drop in real home prices would not surprise him at all… or anyone else for that matter except for all those who saw the “official” housing bottom [...]
More than 28 percent of U.S. homeowners owed more than their properties were worth in the first quarter as values fell the most since 2008, Zillow Inc. said today.
Homeowners with negative equity increased from 22 percent a year earlier as home prices slumped 8.2 percent over the past 12 months, the Seattle-based company said. About 27 percent of homes with mortgages were “underwater” in the fourth quarter, according to Zillow, which [...]
Sowing bubbles http://www.economist.com/node/18586884
FINANCIAL regulators in America were criticised for doing too little about the country’s housing bubble. Now they face an early test of whether lessons have been learned: a farmland boom. The stakes are lower. America’s farms were collectively valued at just under $2 trillion last year, compared with $16 trillion for housing. But a bust would still be painful: more than 1,500 of [...]
By David Berman
When you think of Robert Shiller, the professor of economics at Yale University, you probably think of bubbles. That’s because Mr. Shiller is the author of Irrational Exuberance, which identified in the first edition the 1990s dot-com stock market bubble just months before it burst. The second edition, released in 2005, identified the housing bubble just one year before [...]
by Aqua Buddha
The time has come for every American to demand the sacrifice of all the big banks and the total liquidiation of the FED and all IT”S DEBT!
The following day the US Treasury will have a 5 trillion dollar surplus and all the Bankerster and thier supports will have NO income.
HOUSE PRICES ARE GOING TO FALL FOREVER!!! THEY WILL NEVER GO UP AGAIN!!!!!
This is an interview conducted by Business [...]
by Alexander Cloy of Lighthouse Investment Management
US house prices â€“ Roll out the welcome mat for a double-dip
Letâ€™s take a look at the situation after the October data from the Case-Shiller home price index has come in:
You see all major metropolitan areas peaking between March and May 2010 (the end of the first-time home-buyer tax credit). After only 8 months in positive territory, the overall index comprising 20 [...]
Underneath the Happy Talk, Is This As Bad as the Great Depression?
The following experts have – at some point during the last 2 years – said that the economic crisis could be worse than the Great Depression:
Fed Chairman Ben Bernanke
Former Fed Chairman Alan Greenspan (and see this and this)
Former Fed Chairman Paul Volcker
Economics scholar and former Federal Reserve Governor Frederic Mishkin
The head of the Bank of England Mervyn King
by Henry Blodget
As shown in Professor Shiller’s chart below, the average CAPE for the past 130 years or so has been about 16X. Now, with the S&P 500 at 1200, it’s about 22X.Â This suggests the S&P 500 is about 35% overvalued.
Blue line = cyclically adjusted PE; Red line = interest rates
Image: Robert Shiller
Now, before you go shouting that stocks have been overvalued for much [...]
Warning: Thatâ€™s a set-up. They will eventually destroy capitalism, democracy, and the dollarâ€™s global reserve-currency status. They will self-destruct before 2035 â€¦ maybe as early as 2012 â€¦ most likely by 2020.
Last week we cheered the Tea Party for starting the countdown to the Second American Revolution. Our timeline is crucial to understanding the historic implications of Talebâ€™s prediction that the Fed is dying, that [...]
In the Prag Cap video Schiller made the following points:
1) Consumer confidence is being eroded by the oil spill, suggesting Obama is incompetent, ineffective or both.
2) After the widely reported successes of the stress test, the recovery act and heralded fields of second derivative green shoots, we have a seriously faltering economy. It may have been a political miscalculation to overplay the former as citizens now see a faltering economy [...]