Austrian predictions/Housing bubble: Difference between revisions
Pestergaines (talk | contribs) Formatted and completed predictions. |
Pestergaines (talk | contribs) Extended predictions. |
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==Predictions== | ==Predictions== | ||
Prediction shortlist:<br> | Prediction shortlist:<br> | ||
<small>Anderson, 2001, 2003, 2007; Armentano, 2004; Beale, 2009; Blumen, 2002, 2004, 2005; Corrigan, 2002; Crovelli, 2006; DeCoster, 2003; Duffy, 2005A, 2005B, 2005C, 2005D, 2006, 2007A, 2007B, 2007C, 2007D; Economics of contempt, 2008; Englund, 2004, 2005A, 2005B, 2005C, 2005D, 2006, 2007, 2008; French, 2005; Grant, 2001; Karlsson, 2004; Mayer, 2003; Mueller, 2004; Murphy, 2007, 2008; North, 2002, 2005; Paul, 2000, 2002; Polleit, 2006; Ptak, 2003; Rockwell, 2008; Rogers, 2005; Schiff, Undated A, Undated B, Undated C, Undated D, 2003A, 2003B, 2003C, 2004A, 2004B, 2005A, 2005B, 2005C, 2005D, 2006A, 2006B, 2006C, 2007A, 2007B; Sennholz, 2002; Shostak, 2003, 2005; Thornton, 2004A, 2004B, | <small>Anderson, 2001, 2003, 2007; Armentano, 2004; Beale, 2009; Blumen, 2002, 2004, 2005; Corrigan, 2002; Crovelli, 2006; DeCoster, 2003; Duffy, 2005A, 2005B, 2005C, 2005D, 2006, 2007A, 2007B, 2007C, 2007D; Economics of contempt, 2008; Englund, 2004, 2005A, 2005B, 2005C, 2005D, 2006, 2007, 2008; French, 2005; Grant, 2001; Karlsson, 2004; Mayer, 2003; Mueller, 2004; Murphy, 2007, 2008; North, 2002, 2005; Paul, 2000, 2002; Polleit, 2006; Ptak, 2003; Rockwell, 2008; Rogers, 2005; Schiff, Undated A, Undated B, Undated C, Undated D, 2003A, 2003B, 2003C, 2004A, 2004B, 2005A, 2005B, 2005C, 2005D, 2006A, 2006B, 2006C, 2007A, 2007B; Sennholz, 2002; Shostak, 2003, 2005; Thornton, 2004A, 2004B, 2005A, 2005B, 2005C, 2006, 2007A, 2007B, 2007C, 2007D; Trask, 2003; Wenzel, 2004; See also Woods (2009, p. 188 for further bibliography).</small> | ||
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Thornton, Mark. 2004B. "[http://mises.org/daily/1533 Housing: too good to be true.]" June 4 <!-- "It has now been three years since the U.S. stock market crash. Greenspan has indicated that interest rates could soon reverse their course, while longer-term interest rates have already moved higher. Higher interest rates should trigger a reversal in the housing market and expose the fallacies of the new paradigm, including how the housing boom has helped cover up increases in price inflation. Unfortunately, this exposure will hurt homeowners and the larger problem could hit the American taxpayer, who could be forced to bailout the banks and government-sponsored mortgage guarantors who have encouraged irresponsible lending practices." --> | Thornton, Mark. 2004B. "[http://mises.org/daily/1533 Housing: too good to be true.]" June 4 <!-- "It has now been three years since the U.S. stock market crash. Greenspan has indicated that interest rates could soon reverse their course, while longer-term interest rates have already moved higher. Higher interest rates should trigger a reversal in the housing market and expose the fallacies of the new paradigm, including how the housing boom has helped cover up increases in price inflation. Unfortunately, this exposure will hurt homeowners and the larger problem could hit the American taxpayer, who could be forced to bailout the banks and government-sponsored mortgage guarantors who have encouraged irresponsible lending practices." --> | ||
Thornton, Mark. | Thornton, Mark. 2004C. "[http://www.lewrockwell.com/thornton/thornton18.html A Bull Market in Gold — Technically Speaking]", March. <!-- "These trends are fundamentally based on the inflationary policy of the Federal Reserve, the deficit spending of the federal government, and the continued weakening of the US economy." --> | ||
Thornton, Mark. 2005A. "[http://www.lewrockwell.com/thornton/thornton27.html Is the Housing Bubble Popping?]" , August <!-- "the housing bubble might be coming to an end" --> | |||
Thornton, Mark. 2005B. "[http://www.lewrockwell.com/thornton/thornton29.html The Price of Gold: How High Can it Go?]", August <!-- what it says, predicting the rising price of gold --> | |||
Thornton, Mark. 2006. "[http://mises.org/journals/scholar/Thornton13.pdf The Economics of Housing Bubbles.]", June <!-- America’s Housing Crisis: A Case of Government Failure, Benjamin Powell and Randall Holcombe, eds., Transaction Publishers - an extensive history of the housing bubble; predictions p. 27, 29, 31: construction industry, unemployment, foreclosures, bankruptcies, bailouts of banks and GSEs, a long recession --> | Thornton, Mark. 2006. "[http://mises.org/journals/scholar/Thornton13.pdf The Economics of Housing Bubbles.]", June <!-- America’s Housing Crisis: A Case of Government Failure, Benjamin Powell and Randall Holcombe, eds., Transaction Publishers - an extensive history of the housing bubble; predictions p. 27, 29, 31: construction industry, unemployment, foreclosures, bankruptcies, bailouts of banks and GSEs, a long recession --> | ||
Thornton, Mark. 2007A. [http://www.lewrockwell.com/thornton/thornton33.html "We Told You So"], March. <!-- richly illustrates the bubble and its causes --> | |||
Thornton, Mark. 2007B. "[http://www.lewrockwell.com/thornton/thornton32.html Illegal Immigrants and the Housing Bubble]", March. <!-- Links the bubble to illegal immigration: "Of course all of this will have to be undone because all bubbles eventually burst to one extent or another and all booms are eventually followed by "corrections" that drive whole economies, regions, and industries into economic slumps. A slump in construction will lead to unemployment and bankruptcies. In terms of immigrants we will likely see many return home, or turn up on government welfare roles — another legacy of the Greenspan Fed." --> | |||
Thornton, Mark. 2007C. "[http://blog.mises.org/6948/new-record-skyscraper-and-depression-in-the-making/ New Record Skyscraper (and depression?) in the making]", August <!-- links the coming economic downturn to the Skyscraper Index --> | |||
Thornton, Mark. 2007D. "[http://www.lewrockwell.com/thornton/thornton38.html You Heard It Here First]", August <!-- Notes a few previous predictions, also says the correction will probably be longer and more painful than most people expect.--> | |||
Trask, H.A. Scott. 2003. "[http://mises.org/daily/1363 Reflation in American History.]" October 31 <!-- analyzes some bubbles in history and remarks the next one should be similar --> | Trask, H.A. Scott. 2003. "[http://mises.org/daily/1363 Reflation in American History.]" October 31 <!-- analyzes some bubbles in history and remarks the next one should be similar --> | ||
Revision as of 12:26, 12 January 2012
During and after the burst of the Dot-com bubble, numerous Austrian economists predicted the 2000s housing bubble that culminated in the Great Recession from 2008 onward.
Summary
In 2002, Robert Blumen summed up the effect of the activities of Fannie and Freddie on the housing market as shows the systemic risk and foresaw a coming bailout.[1] Sean Corrigan pointed to the blooming real estate business among all the bankruptcies, and noted that real estate bubbles tend to pop several years after stock market bubbles, and that mortgages may fare much worse compared to stocks... along with their owners.[2] Congressman Ron Paul criticized government involvement in housing, and said that like all artificially created bubbles, the boom in housing prices cannot last forever.[3]
In 2004, Mark Thornton wrote that higher interest rates (indicated by the Fed) "should trigger a reversal in the housing market and expose the fallacies of the new paradigm, including how the housing boom has helped cover up increases in price inflation. Unfortunately, this exposure will hurt homeowners and the larger problem could hit the American taxpayer, who could be forced to bailout the banks and government-sponsored mortgage guarantors who have encouraged irresponsible lending practices."[4] Later on, he spelled out the consequences for the construction industry, unemployment, foreclosures, bankruptcies, bailouts of banks and GSEs, and a long recession.[5]
Stefan Karlsson wrote that the next crisis will be more serious than the mild recession of 2001 one; as it is, in fact, that very same crisis, only postponed.[6]
In 2005, Doug French after observing the mania in Vegas, quipped "condos are the last segment of the housing market to catch fire in a boom and the first to crater in a bust.", and concluded that the bust must be close.[7] Gary North warned against the danger of ARMs (adjustable rate mortgages).[8]
Investor Peter Schiff acquired fame in a series of TV appearances (most in 2006 and 2007), where he opposed a multitude of financial experts and claimed that a bust was to come.[9] He was warning about the speculation, ARMs, houses that couldn't be sold, people walking away from them and coming bailouts for several years before in print.[10][11][12]
Predictions
Prediction shortlist:
Anderson, 2001, 2003, 2007; Armentano, 2004; Beale, 2009; Blumen, 2002, 2004, 2005; Corrigan, 2002; Crovelli, 2006; DeCoster, 2003; Duffy, 2005A, 2005B, 2005C, 2005D, 2006, 2007A, 2007B, 2007C, 2007D; Economics of contempt, 2008; Englund, 2004, 2005A, 2005B, 2005C, 2005D, 2006, 2007, 2008; French, 2005; Grant, 2001; Karlsson, 2004; Mayer, 2003; Mueller, 2004; Murphy, 2007, 2008; North, 2002, 2005; Paul, 2000, 2002; Polleit, 2006; Ptak, 2003; Rockwell, 2008; Rogers, 2005; Schiff, Undated A, Undated B, Undated C, Undated D, 2003A, 2003B, 2003C, 2004A, 2004B, 2005A, 2005B, 2005C, 2005D, 2006A, 2006B, 2006C, 2007A, 2007B; Sennholz, 2002; Shostak, 2003, 2005; Thornton, 2004A, 2004B, 2005A, 2005B, 2005C, 2006, 2007A, 2007B, 2007C, 2007D; Trask, 2003; Wenzel, 2004; See also Woods (2009, p. 188 for further bibliography).
Anderson, William L. 2001. "The Party is Over," February 20
Anderson, William L. 2003. "Recovery or Boomlet?" July 07
Anderson, William L. 2007. "The Party is Over – Again," August 30
Armentano, Dominick. 2004. "Memo to Federal Reserve: Increase Interest Rates Now!"
Beale, Theodore. 2009. "The Return of the Great Depression"
Blumen, Robert. 2002. "Fannie Mae Distorts Markets." Mises Daily, June 17
Blumen, Robert. 2004. "All Real Estate, All the Time". March 8
Blumen, Robert. 2005. "Housing Bubble: Are We There Yet?" May 8
Corrigan, Sean. 2002. "The Trouble with Debt". July 01
Crovelli, Mark R. 2006. "Gold, Inflation, And... Austria?" May 31
De Coster, Karen. 2003. "The House that Greenspan Built: Irrationally Exuberant Wall Street Welfare Parasites and Their Fed-God." September 12
Duffy, Kevin. 2005A "The Super Bowl Indicator," February 5
Duffy, Kevin. 2005B. "Honey, I Shrunk the Net Worth," March 3
Duffy, Kevin. 2005C. "Alan, We Have a Problem," August 2
Duffy, Kevin. 2005D. "Panic Now and Beat the Rush," September 24
Duffy, Kevin. 2006. "Are Mortgage Borrowers Rational?" June 24
Duffy, Kevin. 2007A. "It’s a Mad, Mad, Mad, Mad World," May 22
Duffy, Kevin. 2007B. "For Whom Do the Bells Toll?" Barron’s, June 18
Duffy, Kevin. 2007C. "Financial Markets on Crack," August 22
Duffy, Kevin. 2007D. "Mr. Mozilo Goes to Washington," September 15
Economics of contempt. 2008. "The Unofficial List of Pundits/Experts Who Were Wrong on the Housing Bubble." July 16
Englund, Eric. 2004. "Monetizing Envy and America’s Housing Bubble". July 19
Englund, Eric. 2005A. "Houses Are Consumer Durables, Not Investments," June 8
Englund, Eric. 2005B. "Diminishing Property Rights Will Lead to a Higher Rate of Mortgage Defaults." June 28
Englund, Eric. 2005C. "When the Housing Bubble Bursts, Will President Bush Practice Mugabenomics?" July, 19
Englund, Eric. 2005D. "When Will America's Housing Bubble Burst?" November 4
Englund, Eric. 2006. "The Federal Reserve and Housing: A Cluster of Errors?" April 22
Englund, Eric. 2007. "From Prime to Subprime, America's Home-Mortgage Meltdown Has Just Begun." September 24
Englund, Eric. 2008. "Countrywide Financial Corporation and the Failure of Mortgage Socialism." January 28
French, Doug. 2005. "Condo-mania." July 11
Grant, James. 2001. "Sometimes the Economy Needs a Setback." New York Times. September 9
Karlsson, Stefan. 2004. "America's Unsustainable Boom." November 8
Mayer, Chris. 2003. "The Housing Bubble." The Free Market. Volume 23, Number 8 August
Mueller, Antony P. 2004. "Mr Bailout", September 30
Murphy, Robert P. 2007 "The Fed’s Role in the Housing Bubble." December 28
Murphy, Robert P. 2008. "Did the Fed, or Asian Saving, Cause the Housing Bubble?" November 19
North, Gary. 2002. "How the FED Inflated the Real Estate Bubble by Pushing Down Mortgage Rates: Report As of 2002," Reality Check, March 4
North, Gary. 2005. "Surreal Estate on the San Andreas Fault." November 25, 2005
Paul, Ron. 2000. "A Republic, If You Can Keep It" January 31
Paul, Ron, 2002. "Testimony to U.S. House of Representatives", July 16
Polleit, Thorsten. 2006. "Sowing the Seeds of the Next Crisis." April 25
Ptak, Justin. 2003. "Government Employees, Go Home!" November 12
Rockwell, Llewellyn H, Jr. 2008. The Left, the Right, and the State. Auburn, AL: The Mises Institute, 2008
Rogers, Jim. 2005. "Interview with Jim Rogers on the housing bubble." April 22
Schiff, Peter. "Peter Schiff predictions" (video) Undated A.
Schiff, Peter. "Peter Schiff Was Right" (video). Undated B.
Schiff, Peter. "Peter Schiff was right 2006-2007 - CNBC edition" (video). Undated C.
Schiff, Peter. "Peter Schiff Was Right Again " (video). Undated D.
Schiff, Peter. 2003A. Commentary, March
Schiff, Peter. 2003B. Commentary, April
Schiff, Peter. 2003C. Commentary, June
Schiff, Peter. 2004A. Commentary, May
Schiff, Peter. 2004B. Commentary, June
Schiff, Peter. 2005A. Commentary, April
Schiff, Peter. 2005B. Commentary, July
Schiff, Peter. 2005C. Commentary, August
Schiff, Peter. 2005D. Commentary, October
Schiff, Peter. 2006A. Appearance on CNBC, January (video)
Schiff, Peter. 2006B. Speech to the Money Show Conference, February (video)
Schiff, Peter. 2006C. Speech to the Western Regional Mortgage Bankers Conference in Las Vegas November (video, transcript)
Schiff, Peter. 2007A. Crash Proof: How to Profit From the Coming Economic Collapse (1st edition) New York, N.Y.: Wiley, February 2007
Schiff, Peter. 2007B. Appearance on Fox News – January 12 (video)
Sennholz, Hans F. 2002. "The Fed is Culpable." November 11
Shostak, Frank. 2003. "Housing Bubble: Myth or Reality?" March 4
Shostak, Frank. 2005 "Is There a Glut of Saving?" August 4
Thornton, Mark. 2004A. "'Bull' Market?" February 9.
Thornton, Mark. 2004B. "Housing: too good to be true." June 4
Thornton, Mark. 2004C. "A Bull Market in Gold — Technically Speaking", March.
Thornton, Mark. 2005A. "Is the Housing Bubble Popping?" , August
Thornton, Mark. 2005B. "The Price of Gold: How High Can it Go?", August
Thornton, Mark. 2006. "The Economics of Housing Bubbles.", June
Thornton, Mark. 2007A. "We Told You So", March.
Thornton, Mark. 2007B. "Illegal Immigrants and the Housing Bubble", March.
Thornton, Mark. 2007C. "New Record Skyscraper (and depression?) in the making", August
Thornton, Mark. 2007D. "You Heard It Here First", August
Trask, H.A. Scott. 2003. "Reflation in American History." October 31
Wenzel, Robert. 2004. "Government Isn't God: FDIC Sticks Banks With Bad Loans and Sticks Borrowers With Subprime Junk."
Woods, Thomas E. Jr. 2009. Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse. Washington D.C.: Regnery Publishing [13]
References
- ↑ Blumen, Robert. "Fannie Mae Distorts Markets", Mises Daily, June 17, 2002. Referenced 2011-01-10.
- ↑ Corrigan, Sean. "The Trouble with Debt", Mises Daily, July 01, 2002. Referenced 2011-01-10.
- ↑ Paul, Ron. "Testimony to U.S. House of Representatives", July 16, 2002. Referenced 2011-01-10.
- ↑ Thornton, Mark. "Housing: too good to be true." June 4, 2004. Referenced 2011-01-10.
- ↑ Thornton, Mark. "The Economics of Housing Bubbles", June 2006, p. 27, 29, 31. Referenced 2011-01-10.
- ↑ Karlsson, Stefan. "America's Unsustainable Boom", Mises Daily, November 8, 2004. Referenced 2011-01-10.
- ↑ French, Doug. "Condo-mania.", Mises Daily, July 11, 2005. Referenced 2011-01-10.
- ↑ North, Gary. "Surreal Estate on the San Andreas Fault.", November 25, 2005. Referenced 2011-01-10.
- ↑ Schiff, Peter. "Peter Schiff Was Right" (video). Referenced 2011-01-10.
- ↑ Schiff, Peter. "Fed official admits the emperor has no clothes!", Commentary, March 10, 2003. Referenced 2011-01-10.
- ↑ Schiff, Peter. "In Arm's Way: The Tender Trap of Adjustable Rate Mortgages.", Commentary, May 7, 2004. Referenced 2011-01-10.
- ↑ Schiff, Peter. "Housing Speculation is More Rampant Than You Think.", Commentary, July 5, 2005. Referenced 2011-01-10.
- ↑ Walter Block. Austrian Thymologists Who Predicted the Housing Bubble, LRC.com, December 22, 2010. Referenced 2011-11-29.