A Global View of the Housing Bubble (CHART)


A Global View of the Housing Bubble

Interesting chart from (of all places) McKinsey, circa October 2009:

“From 2000 through 2007, a remarkable run-up in global home prices occurred (see chart). But that trend has reversed abruptly. In 2008, the value of US residential real estate fell 10 percent; the global average fared only somewhat better, declining by almost 4 percent. We estimate that falling home prices erased more than $3.4 trillion of household wealth in 2008.”

Question: How did Europe and Asia and Canada all have a simultaneous housing boom as big if not bigger than that of the US?

Were the Australians compelled to follow the CRA? Did Barney Frank influence the Belgians? Were the US GSEs effecting policy in the UK?

Or might some other factors — like ultra-low rates, excess leverage, demand for junk AAA-rated paper, misaligned incentives, and/or derivatives have been at play?

Source: McKinsey Quarterly


The McKinsey authors added this huge understatement: “And because home prices are slow to correct, the current slide may persist for some time, which could depress global consumption.”



5 Responses to “A Global View of the Housing Bubble (CHART)”
  1. Equity Free says:

    Everyone who played a part from origination to securitization to investor made money . The incentive was the more they did the more they made . Scary thing is nothing has changed .
    The common denominator is Wall Street , they packaged and sold the product .

  2. Ron Moss says:

    Mitt says let them twist in the wind of the bankers honest efforts to subside the demand

  3. Ron Moss says:

    Greedy homeowners trying to satisfy ir greedy appetites!

  4. CaitlinO says:

    Those are exactly the questions that make sense. This whole “The CRA and Barney Frank made me do it” meme is so ridiculous it’s hard to understand how any thinking person can utter it with a straight face. Barney Frank would LOVE to be that powerful, I’m sure.

    There’s another chart out there (Calculated Risk, maybe?) that puts a wooden stake through the heart of these dunderheaded lying pond scum. It showed the market share of sub-prime loans held by Fannie/Freddie in the decade leading up to their formal nationalization and the subsequent use of these two agencies as a dumping ground for TBTF toxic waste.

    GUESS WHAT? Fannie/Freddie were prohibited by charter from holding these loans and their market share was miniscule! The government didn’t make bad loans and didn’t force ANY lenders to make bad loans. It was all about greed, that old old human vice.

  5. lvent says:

    There are traitor politicians from with in everynation….This was a NWO plan for world domination and Global tyranny whose main goal was nations full of debt slaves….. The POLITICIANS around the globe were TRAITORS…either NWO members or associates or bought..they thought they could conquer the world via the weakest link……the NWO thought they bought or owned everyone that they needed to accomplish their evil plan for Global tyranny..wait a minute….not so fast all of you evil dirty bastards…..!

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