One More Bubble to Pop

By on April 3, 2010

The Economist’s Buttonwood comments on the last bubble left standing; housing prices in England. Having chatted with Jeremy Grantham:

He [Grantham] has 34 examples of historical bubbles, defined as occasions when valuations got 2-3 standard deviations above trend; the UK housing market is the only one (so far) that has done so and not fallen back to trend.

Absent rapid inflation or rapid economic growth, UK house prices cannot be justified; Grantham thinks they will eventually fall 40%.

Source: The Economist
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