No. of Recommendations: 8


Just finished watching chapter 15 on bubbles and it makes a couple of very cogent points regarding the symetry of the rise and fall of prices during a bubble and the unprecedented magnitude of the current housing bubble compared to prior recent housing bubbles in 79 and 89. See the graphs around 7 minutes 41 seconds of chapter 15.

Key point #1 -- generally, it takes about as long for prices to return to historical averages as it did for them to reach the peak.

Key point #2 -- the current housing bubble began in 1998, not 2004.

That means if you think 2007 was the peak for the current housing bubble, it will be 2016 before the unwinding is complete.

That has chilling implications for the ability of the economy to provide enough growth to provide income to pay off current debts and generate tax revenue to offset future government liabilities.

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