(10-17-2010, 03:05 AM)kandrathe Wrote: Real-estate tends to be prone to malinvestment. According to David Wheelock (St. Louis Fed) the same reckless bubble in real-estate precipitated the crash in 1929.
I'm glad my policy is always to check, because once again, that article doesn't say what you claim it says. The article examines the effects of a housing bailout program. The only thing it says about housing prices and the cause of the Great Depression is:
Quote:Some authors contend that the decline in housing investment in 1928-29 contributed to the onset of the Great Depression, though that view is not widely held today.
That would be coming pretty close to the opposite of your point, although strictly the author is only describing the state of the literature.
Quote: Prices become ludicrous (just as I explained about Google before they had an income strategy).
As I already pointed out, the price for Google at the top of the bubble was less than half the price it currently trades at ten years later. Buying Google then was a sound investment, whatever you believe or believed.
-Jester