Many of those discussing the possibility of a housing market bubble seem to be taking
Justice Potter Stewart’s position on pornography– they haven’t defined a bubble, but they think
they know it when they see it. Maybe it’s useful to take a look at a formal characterization of
the concept of a speculative bubble, and see how well it seems to fit the facts of the current
situation.
Author Archives: econbrowser
For the love of tulips
Many folks appear to be convinced that the current housing situation is akin to any of a
number of other famous financial bubbles of history. Trouble is, those famous bubbles weren’t
very much like what most people seem to assume.
The case for more uniform fuel standards
Problems in the U.S. wholesale gasoline market have played a relatively minor role in the
gasoline price increases of the last few years. But this is one part of the problem that we
created all by ourselves and can fix all by ourselves.
Another exciting week in oil markets
Babble about a housing bubble
There’s been much discussion recently of whether the U.S. is experiencing a speculative bubble in house prices. Like previous historical bubble sightings, this one only seems to pop up in situations where the fundamentals on their own might justify significant price increases.
Ethanol clouds senators’ judgment
The urge to be seen as doing something about our energy problems is giving rise to
legislation that has the potential for more harm than good. The ethanol amendment approved by
the Senate yesterday is a case in point.
What is Saudi Arabia up to?
There is a chronic disconnect between what Saudi Arabia says it’s going to do and what
actually happens. So what’s really going on?
Worries about the yield curve
The yield curve has inverted eight times in the last half century, and in six of those
episodes, the U.S. ended up in recession. Some analysts are concerned that we may see a ninth
inversion before the end of this year.
Contango, backwardation, and all that good stuff
From some of the comments that have appeared both here and on some other blogs about my post
Oil futures and the
future of oil, it seems that some readers might appreciate a technical background
discussion of the way in which carrying costs and convenience yield influence the relation
between spot prices and futures prices. So if that describes you, by all means read on.
Time to repeal McCain-Feingold
Everybody seems to agree that this law at a minimum needs some major tweaking. I say it’s
time to throw it out altogether.