Stiglitz: Capitalism is Characterized by Big Bubbles and more

Stiglitz is one of the few (liberal) economists who is not suffering from a massive bought of cognitive dissonance owing to the GFC. This hour long interview with Joseph Stiglitz is well worth watching. Don’t have an hour? Then watch the first fifteen minutes.

Canadian House Prices: Mind the Gap

Now I am no housing market specialist but when I see a graph where real disposable income, real rent, the CPI and house prices all danced on the same floor until 2001and then suddenly the music stopped; or rather house prices started dancing to a new song, I cannot help but think that our housing specialists might be a little too sanguine.  If one takes a look at the regional data (only the national data is graphed below,  for the regional data see the CMHC web site) the basic picture at the beginning of 2008 looked something like a Bubble in the West, tapering to Hype in Ontario and looking somewhat reasonable in the East.   And prices seem to have moved accordingly.  Click here for a graph of regional house prices.