I am running a housing bubble contest. The first prize is a copy of this ebook kindly provided to this blogger by its author (here is a "review" of some of the arguments made in the ebook). There are no second or third prizes; it's winner takes all.The task: Make an argument for why "it is different this time; there is no housing bubble".
The rules:
- Only people who still truly believe that there is no housing bubble can participate.
- You must have an open mind and promise to read the ebook.
- Your answers must be submitted to me by email and your email must contain in the subject line only the word "ebook". Submissions left in the comments section will be ignored.
- The judges will be myself and RESkeptic if he wants. The winner will be the person who best explains why it is different this time and there is no housing bubble.
- The winning answer may be published on this blog (anonymously or not at the winner's discretion).
9 comments:
The joke is that you just can't find someone who denies the bubble AND can make a rational argument.
There's no joke.
I have a free copy of this book and I will give it to the person who needs it the most -- the person who can provide the best argument against the existence of a housing bubble.
It's also an opportunity for me to reconsider the argument in favor of a bubble.
If there is no such argument against the bubble, then on the one hand we learn something and on the other hand I will have to figure out some other way to unload the book.
well if you have no takers offering an open argument against the bubble... I know someone who has one... and I shall give you his address and you can send it to him. ;-)
I tend to agree with the "bubble" premise, but I do doubt myself at times. The things that give me pause (as to the existence of a real-estate bubble) are:
- The fact that US property prices are still much lower than in many other countries. Even most US metropolitan areas still have housing prices that are considerably lower than places like London, Tokyo, Hong Kong, etc.
- If the government decides to hyper-inflate it's way out of trouble as the economy goes south, maybe we could see real-estate prices explode even further (although drop in terms of gold, etc). Thus, holding real-estate might be a hedge against inflation.
- Perhaps the economy is far less vulnerable to shocks than I suppose. The extraordinary growth in hedging, and exotic financial instruments (credit derivatives, and now even real-estate) might truly be reducing economic/investment risk.
Only people who still truly believe that there is no housing bubble can participate.
Can my altered ego participate?
The more altered the better.
I'm sure I could come up with a rational, believeable, and totally correct way of determining that there is no bubble; it all lies in fundamental economic designs. It all depends on what you consider "real". Unfortunately, I already believe that there is a bubble. I am disqualified.
John
I,too, believe there is a major real estate bubble about to pop in the U.S. However, I think Marin is a little more resistant to the hugh declines I anticipate in the more speculative markets. I give Marin a 20% maximum decline in overall values...
The contest has ended and the prize was distributed.
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