Cupcakes and Other Notable Bubbles

Whether looking at 1637 or 2000, markets and financial bubbles always seem to find each other. As a surge in demand pushes prices up, the result resembles a bubble because it is full of air rather than value.

The Top of the Housing Market

During the past decade the housing market has undergone a popped bubble and a recovery that could be heading toward a Minsky Moment once again.

Some Federal Reserve (Gallows) Humor

In the 2009 transcripts, Federal Reserve humor brings smiles and memories of the dire condition of finance, housing and the GDP.

The Cupcake Bubble

Just like technology stocks in 2000 and housing in 2005, the cupcake bubble has burst. In 2004 or so, many of us started buying the most amazing cupcakes. 4 inches tall, topped with sprinkles or a cookie, the cupcake might have been pistachio or strawberry…

Economic Ideas: The Blame Frames

Analyzing the housing bubble, we can all agree with some basic facts. If you look at the Case-Shiller Index, you would see that a typical home in a major US city was worth 26% less during April 2013 than November…

The US Real Estate Bubble: Was This Time Different?

Our recent housing bubble has been called a unique phenomenon by economist Robert Shiller. With its national impact, a connection to houses rather than land, and a demand side surge fueled by “investor-induced speculation,” the rise and subsequent fall in…

Market Bubbles: “Pricing” Scrabble Letters

Just like technology stocks during the late 1990s or housing in 2006, the Scrabble letter Z might reflect a market bubble. The “price” of a Z is 10 points. However, one (Scrabble) researcher suggests it is really worth 6. Here…

Irrational Expectations

Let’s say that you purchased the house in which you now live during 1997 for the average national price, $171,900. With housing prices steadily rising, by 2006, a neighbor’s house would have sold for as much as $317,000. In the…

Housing Prices in the U.S. and Abroad

We have a double dip in U.S. housing prices. But, is it happening everywhere? A Goldman Sachs research report from mid-May provided an OECD (Organization for Economic Cooperation and Development) summary. The most troubled: Struggling euro zone countries remain the…

Paying Less For a House

In an interesting Politico opinion column, journalist Michael Kinsley wonders why everyone seems to assume that climbing home prices are good. He points out that most people are happy when the prices of essentials like gas go down. So why…