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August 30, 2006

Bubbles Pop Economy

People tend to have short memories. Since inflation-adjusted housing prices have sky-rocketed for nearly a decade, people think housing always goes up, when the recent situation has actually been an off-the-charts anomaly. NYT (click image for larger version):

Historically, housing has been a good hedge against inflation. What it hasn't been is a way to get rich quick. All those people holding adjustable-rate interest-only mortgages they can't afford who are counting on turning their house over in a few years for a nifty profit, might want to look at that chart. It's a bubble. Bubbles pop. When they do, a lot of people get hurt.

Posted by Jonathan at August 30, 2006 01:09 PM  del.icio.us digg NewsVine Reddit YahooMyWeb

Comments

Unrelated, but it might be of interest to you to know that the Bush administration is closing down 26 EPA regional libraries. Links here:
http://www.peer.org/news/news_id.php?row_id=735
http://www.opednews.com/articles/opedne_frank_j__060829_bush_nixes_public_ac.htm

Posted by: Farva at August 30, 2006 01:56 PM