Specufestors run for your lives. From MB’s favourite contrarian indicator today, the Madometer:
For nearly seven years now, many commentators — Steve Keen and his disciples — have been predicting a housing bust and, if not an outright bust, have taken a very negative slant on property in their commentary for seven years at least. That prices haven’t collapsed over that period, and have grown strongly in some places, is apparently of no consequence.
Ordinarily that kind of performance would lead to a re-evaluation of the tools and metrics that property doomsters are using, because clearly they’re not working. Price-to-income ratios would be one example. It gets a lot of air time, yet as a valuation tool is quite useless, showing a steadily rising trend. There is no sense of what is normal in those ratios. The truth of the matter is, many economists in the market were warning of the same problem 15 years ago.
How much credence you put the mechanism depends upon your time frames but I put it to you that it operates pretty well (at least recently) over a quarter:
