Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktThe last real estate bubble couldn’t have been bigger than the Great Depression, could it?
Actually, it was – about twice the size
The following chart compares an index of real estate prices for the 10 years leading up to the peak and then the behavior 5 years after. The Great Depression bubble ran from 1915 – 1925. The US bubble ran from 1995 – 2006.
For those wondering, the Great Depression bear market bottomed out 3 years later down 21% from the end of this chart.
Food for thought…..
Filed under: Uncategorized |
All Things in Moderation 
Yes, but the Great Depression was mostly an equities/stock bubble?
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Real estate first, then stocks second.Reverse of this one, with stocks first, real estate second.Actually if you compare the charts of the NASDAQ vs the chart of the DOW bubbles, they look very similar.
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I might be wrong but I thought I'd read that the DOW didn't return to pre '28 levels until the 50's.
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you're just full of good news today.
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NoVa, if that was for me, "I ain't. crappin' you negative."
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Every day the air conditioning works and the plumbing functions, it's a good day. Everything else is gravy.
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"Every day the air conditioning works and the plumbing functions, it's a good day. Everything else is gravy."You forgot the TV.
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You forgot the TVActually, I only miss it on weekends (football). I need to find me a boyfriend with a TV. . .Brent, why do they start with the "price" set at 100? Is it so that the chart can go negative as well as positive, or some more arcane reason?
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@Michigoose,I wish I had missed watching the last two Lions games. ugh.The reason why price starts at 100 is to make sure you are comparing apples to apples and can easily calculate percent moves. So during the Depression, the total price increase over the prior 10 years was about 52%, versus the last bubble where the increase was about 135%. The index can in theory go negative, but that would imply a property worth less than zero.
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Brent (re Lions): there is that. But thank goodness for ESPN3–did you see the MSU-Wisconsin game?!?!?!OK, your explanation makes sense. . . but wouldn't it make just as much sense to start at zero if your looking for percent moves?
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"you're"Sheesh (to quote Kevin).
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Michi, setting a base index at 100 is a fairly common practice. It certainly doesn't have to be done that way, as you point out, but it's a common practice.
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OT: Matt Taibbi's latest OWS's Beef: Wall Street Isn't Winning – It's Cheating
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Thanks, MsJS! And good to see you–sorry to hear about MrJS and hoping that your "new normal" is working out OK.And thanks for the link, jnc!
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I assume that chart means, BTW, we lost more real money in this real estate bubble than in the Great Depression.
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Sure looks that way, kevin. I keep my fingers crossed we don't have to sell our place soon.
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From jnc's link:The answer is, [class hatred] was never there. If anything, just the opposite has been true. Americans for the most part love the rich, even the obnoxious rich. And in recent years, the harder things got, the more we've obsessed over the wealth dream. As unemployment skyrocketed, people tuned in in droves to gawk at Evrémonde-heiresses like Paris Hilton, or watch bullies like Donald Trump fire people on TV.Moreover, the worse the economy got, the more being a millionaire or a billionaire somehow became a qualification for high office, as people flocked to voting booths to support politicians with names like Bloomberg and Rockefeller and Corzine, names that to voters symbolized success and expertise at a time when few people seemed to have answers. At last count, there were 245 millionaires in congress, including 66 in the Senate.And we hate the rich? Come on. Success is the national religion, and almost everyone is a believer. Americans love winners. But that's just the problem. These guys on Wall Street are not winning – they're cheating. And as much as we love the self-made success story, we hate the cheater that much more.Yeah, I'd agree with that. I don't dislike the rich, I dislike those who bend the rules in order to get rich.
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Michi, when you're too big to fail then you'll understand. 😉
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MsJS: In other words, on That Great Come-And-Get-It Day, right?
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'Goose, doesn't Utah have sports bars, with multiple games on screens, wall to wall?You wouldn't even have to buy your own drink.Brent, do you think the countercyclicals we instituted because of the Gt Dprsn are the reason we have stabilized at a recession level? Alternatively, if the banks had been "made" liquid by SecTreas and Congress in 1929 would that have resulted in a "mere" 11 year recession?
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Now, Mark, why hadn't I thought of that??Too new to the singles scene, I guess. MSU's playing Nebraska (FB–is it you who is a Husker fan?) on Saturday, so I may just give that a try. . .
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@michigoose, if you start at zero, then you would have to include negative numbers, which most people don't want to do. As far as football, I am a Wisconsin college fan, which makes me a Badger fan who hates the Packers and a Lions fan who hates the Wolverines.@ kevin, the chart means that the bubble blew up bigger during this time than during the Depression. So, I wouldn't fall out of my chair with shock if the net decline this time around was bigger too. The chart stops at 1930 and 2010. The Depression housing market bottomed in 1933, down another 20%. The chart would imply a bit more downside to our market.
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