Justin Lahart posted a story today on the WSJ Real Time Economics blog documenting how widely recognized was the U.S. housing bubble. He ran a Factiva search on "housing bubble" or "real estate bubble" of the top 50 U.S. newspapers. The chart below shows the number of news stories, by month, that referred to the bubble.
Combine this with Jason's post in which he displayed the Shiller existing home price index below, and it is very clear that the U.S. housing bubble was widely recognized.
As I discussed in a post a month ago, we saw the housing bubble, and we saw the problems with the GSEs. But the collective wisdom of the "global market" did not see the international effects of the mortgage backed securites that were based on the housing bubble and the implicit backing of the GSEs. How this step was missed will be a question we will wrestle with for a long time.
As I discussed in a post a month ago, we saw the housing bubble, and we saw the problems with the GSEs. But the collective wisdom of the "global market" did not see the international effects of the mortgage backed securites that were based on the housing bubble and the implicit backing of the GSEs. How this step was missed will be a question we will wrestle with for a long time.
