[lbo-talk] "Save subprime borrowers, not bloated bankers" by Dean Baker

Jordan Hayes jmhayes at j-o-r-d-a-n.com
Tue Aug 21 12:24:08 PDT 2007



> I'm not sure why shortening the time period gives you more reliable
> results.

Because the world has changed? Hell, let's look at real estate prices over the last 5000 years. That ought to be the same, right? It's the same reason you can't look at combat casualties over the last 100 years: everything has changed.


> The last 10 years really stick out, eh?

Sure, but there are structural changes in the last 10 years that probably account for at least some of it that probably won't go away anytime soon -- like the use of more objective (than before) credit scoring, and the likely sustainable sub-10% prime rate. And in certain places -- Manhattan and the Bay Area in particular -- it's a lot longer than 10 years that it's been going straight up: the current froth in California still isn't as much as it was in the 70s. Even the negative growth in the early 90s has been completely erased.


> There's that 1% long-term trend followed by a really anomalous period
> again.

I don't get why you keep saying that a house beats inflation by 1% over the long term and then come to the conclusion that it's no way to "get rich" ... Give me 1% over inflation any old day!

/jordan



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