“So what is it with the Norwegians? Well, they have a kind of superiority complex.” Nobel Laureate Robert Shiller (explaining his psychological theory for what appears to be a current Norwegian housing bubble)

“I encourage you to read the two articles below on the current, worldwide housing bubbles. Shiller says Norway’s may be caused by their ‘superiority complex’ and Roubini says they are fed by low rates/easy money and the need to  hedge against inflation. In my opinion, these new bubbles are strong empirical evidence that the pre-2008 crisis housing bubbles in the U.S., UK, Spain, Ireland, Iceland, and Dubai were not primarily caused by imprudent lenders, but other macroeconomic forces; who knows, maybe even a national ‘superiority complex’ or two!!!” Mike Perry, former Chairman and CEO, IndyMac Bank

Jeff Gundlach: “Take a look at Norway if you want to see a country that really looks out of whack. The housing market has been so strong, and the debt ratios are so high….the Norway housing index has risen 77% from year-end 2004, an all-time high. The U.S. home-price index, by contrast, sat at a 3% loss, compared with its level at year-end 2004.”

Robert Shiller: “So what is it with these Norwegians? Well, they have a kind of superiority complex. First of all, they were smart enough not to join the European Union, and they don’t bear any of the burden of the Southern EU countries. And they have North Sea oil, and their economy looks good. So they just think they are immune from all the problems of the world, and people are coming to Norway for jobs. So it just sound to them that their real estate ought to be booming…”

Nouriel Roubini: “Now, five years later, signs of frothiness, if not outright bubbles, are reappearing in housing markets in Switzerland, Sweden, Norway, Finland, France, Germany, Canada, Australia, New Zealand, and back for an encore, the UK (well, London). In emerging markets, bubbles are appearing in Hong Kong, Singapore, China, and Israel, and in major urban centers in Turkey, India, Indonesia, and Brazil.”

“But the global economy’s new housing bubbles may not be about to burst just yet, because the forces feeding them….especially easy money and the need to hedge against inflation….are still fully operative…But the higher home prices rise, the further they will fall…and the greater the collateral economic and financial damage will be…when the bubble deflates.”

“What we are witnessing in many countries looks like a slow-motion replay of the last housing-market train wreck. And, like last time, the bigger the bubbles become, the nastier the collision with reality will be.”

December 3, 2013- “Jeff Gundlach, Robert Shiller, And Nouriel Roubini All Agree That One Housing Market Looks Like a Total Bubble”, Business Insider

November 29, 2013- “Back to Housing Bubbles”, Project Syndicate, Nouriel Roubini

Posted on December 4, 2013, in Postings. Bookmark the permalink. Leave a comment.

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