A number of years ago I found myself, in collaboration with Constantin Gurdgiev, in the back of a taxi, in Dublin, with a US journalist. We were spending the afternoon taking taxis at random, with the journalist asking the taxi his or her views and knowledge on various financial and economic concepts. A piece subsequently appeared which noted that so bad was the financial mess we’re in that Irish taxis were capable of discussing credit default swap pricing and the arcane of ratings agencies, which was seen to be in some way better than the usual fare of weather and football
We need banks to be conservative, especially in the present situation. But do we want that? What would that mean? i have expressed some concern about house prices in a few place… See here, here and here as examples.
so…. another CSO release of house price statistics. Recall that a bubble is where prices deviate fundamentally from their warranted levels. We know that there are massive supply constraints in the dublin region so we should see house price appreciation. But this much? The largest ever year on year percentage rise ? We are back to the madness it seems.
Here is my old friend SupADF…. Remember when Mr SADf crosses Mr 95% from below, its BUBBLETIME. So technically not a bubble but give it time… these figures should be a very large bucket of cold water in the face of government insouciance about back to the future…