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Steve Keen Hides His Shame
Steve Keen’s design for a t-shirt to wear on the march of his housing doomsday cult to the top of Mount Kosciuszko looks like a CAPTCHA challenge-response test:
As Chris Joye notes, the proposed design ‘directly dishonours the agreement he struck with Macquarie Bank’s Rory Robertson’ to wear a t-shirt that read ‘I was hopelessly wrong on house prices. Ask me how’.
posted on 13 March 2010 by skirchner in Economics, Financial Markets, House Prices
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Steve Keen’s Latest Media Stunt
In an attempt to snatch victory from the jaws of defeat in his wager with Rory Robertson, Steve Keen seeks to lead a lemming-like march of housing doomers up the slopes of Mt. Kosciuszko:
rather than accept the victory of his more bullish opponent, it appears the professor is trying to muster the biggest gathering of market bears in Australian economic history. He has already coined the event ‘'Walking Against Australia’s Property Mania.‘’
Keen will start his 224-kilometre walk from Parliament House in Canberra on April 15, and aside from a documentary crew, his girlfriend and a masseuse, he hopes to be accompanied by some of the 3000-odd members of his Debtwatch blog.
The other side of the bet is unimpressed:
“Betting the house on an economist’s forecast typically is not a smart move. Unfortunately, Dr Keen recklessly encouraged everyday Australians to sell their homes at what turned out to be the peak of the global financial crisis, and the trough in local house prices,“ Rory Robertson responded.
“That’s why he’s getting set to walk from Canberra to Mt Kosciuszko wearing a t-shirt saying, ‘I was hopelessly wrong on house prices. Ask me how!‘“
posted on 16 February 2010 by skirchner in Economics, House Prices
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Australian House Prices Post 11% Gain in 2009
The RP Data-Rismark national capital city hedonic home price index for December shows a modest fall of 0.3% for the month, but up 2.1% for the quarter and 11.1% for the calendar year. This follows modest declines of 2-3% in 2008, which was the worst performance in history on this measure.
posted on 29 January 2010 by skirchner in Economics, House Prices
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Steve Keen They Hardly Knew You: Consumer House Price Expectations
The January Westpac-Melbourne Institute Consumer Sentiment survey finds that 84% expect house prices to increase over the next 12 months, with 21% expecting gains of over 10%.
posted on 22 January 2010 by skirchner in Economics, House Prices
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More on the ‘Bubble’ Drones at The Economist Magazine
Scott Sumner responds to the ‘bubble’ drones at The Economist’s Free Exchange blog. Like Scott, we can only laugh at the evidence The Economist offers for its claim that ‘many people did correctly identify the bubble years before it imploded, including writers at The Economist’. This is what they said in 2003:
A SURVEY in The Economist in May predicted that house prices would fall by 10% in America over the next four years, and by 20-30% in Australia, Britain, Ireland, the Netherlands and Spain. Prices have since continued to rise…
It’s a bit like ‘predicting’ that tech stock prices would crash…in 1996. The article was headed ‘What goes up…’, which pretty much sums up The Economist’s model of asset price determination.
posted on 19 January 2010 by skirchner in Economics, Financial Markets, House Prices
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Bernanke on Monetary Policy and the Housing ‘Bubble’
Reporting on Fed Chair Ben Bernanke’s speech to the American Economic Association has focused on his suggestion that ‘we must remain open to using monetary policy as a supplementary tool for addressing those risks’ associated with asset price inflation. However, the rest of his speech makes clear that Bernanke views this as very much a second-best option. His speech contains a review of the evidence against the notion that monetary policy was the main cause of the housing ‘bubble’ in the US and elsewhere.
The WSJ quotes Dale Jorgenson on what was missing from Bernanke’s speech:
a Harvard professor who served as Mr Bernanke’s thesis adviser at MIT in the 1970s, said the Fed chairman made a “pretty convincing” argument that low rates were not the driving force of the housing bubble.
But he said Mr Bernanke should have laid more blame at the feet of Congress for encouraging reckless mortgage lending with its support of Fannie Mae and Freddie Mac and other policies meant to increase home ownership.
“I didn’t hear any word with regard to going back to Congress about changing housing policy,“ he said.
Leaving aside that fact that his reconfirmation is pending before Congress, one suspects that Bernanke knows a lost cause when he sees one. As the WSJ notes in another article:
In today’s Washington, we suppose, it only makes sense that the companies that did the most to cause the meltdown are being kept alive to lose even more money. The politicians have used the panic as an excuse to reform everything but themselves.
posted on 04 January 2010 by skirchner in Economics, Financial Markets, House Prices, Monetary Policy
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