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Economists say that high gas prices triggered the housing crisis in 2007 (2012)

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Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)

#11

Post by andrew_ »

treis wrote: post #9
chrisan wrote: post #4

> "The key word is, 'triggered,'" said JunJie Wu, an OSU economist and one of the authors of the paper. "This theory recognizes the role of subprime mortgages and lax lending practices as inflating the housing bubble, but high gasoline prices provided the trigger that burst the bubble." Are we in another bubble? And if so what is the theory for why? I assume subprime and lax lending wouldn't be the cause after the le…

Not a bubble because for the most part people are buying homes that they can pay the mortgage on. High energy prices are also going to spike inflation which eventually means rates rise. If that happens owners with their 2.75% mortgages aren't going to be inclined to sell. Coupled with higher new construction costs the housing market probably continues to rise.

makes me wonder if student loan default en masse could follow this time.

Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)

#12

Post by ejb999 »

FollowingTheDao wrote: post #3

Now we have high oil prices (not yet at the high) also with general (corporate induced) inflation, combined with an even greater separation of wealth. All things that point to a a recession again. But war is the variable here.

we are not seeing 'corporate induced inflation' we are seeing government policy induced inflation - very big difference.

Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)

#14

Post by ejb999 »

api wrote: post #13

The more EVs penetrate the market the less vulnerable we are to oil price spikes. Oil has been the rate limiting reagent of our civilization. That is ending.

yea, all those poor people who can't afford to fill their cars should just run out and buy Teslas instead.

Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)

#15

Post by chinathrow »

andrew_ wrote: post #11
treis wrote: post #9

Earlier quoted context omitted.

Not a bubble because for the most part people are buying homes that they can pay the mortgage on. High energy prices are also going to spike inflation which eventually means rates rise. If that happens owners with their 2.75% mortgages aren't going to be inclined to sell. Coupled with higher new construction costs the housing market probably continues to rise.

makes me wonder if student loan default en masse could follow this time.

How would that work? I thought most US based student loan can't be defaulted on.

Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)

#17

Post by bin_bash »

alkonaut wrote: post #16

Had to read half the article before the word "gasoline" appears, indicating that the gas in the headline is vehicle fuel and not heating gas. After reading the whole thing, I'm still not 100% sure.

In the US the term "gas prices" will virtually always refer to gasoline. Heating gas we call "natural gas".

Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)

#18

Post by fireflash38 »

alkonaut wrote: post #16

Had to read half the article before the word "gasoline" appears, indicating that the gas in the headline is vehicle fuel and not heating gas. After reading the whole thing, I'm still not 100% sure.

Almost the entire article is talking about commuter distances & times. Natural gas used as a vehicle fuel is exceedingly rare in the US.

Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)

#19

Post by api »

ejb999 wrote: post #14
api wrote: post #13

The more EVs penetrate the market the less vulnerable we are to oil price spikes. Oil has been the rate limiting reagent of our civilization. That is ending.

yea, all those poor people who can't afford to fill their cars should just run out and buy Teslas instead.

It's an entire economy. When someone else buys a Tesla, oil demand is rendered less inelastic. This also primes the market so that more EVs get sold, including cheaper ones, and eventually used EVs become available at a much lower price.

You can get a used Nissan Leaf for I guess we should not do anything if it can't immediately be made affordable to everyone in the very first generation. So we should never have done ocean travel, air travel, non-emergency medicine, higher education, personal computers, ...

Everything is always expensive when it's new.

Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)

#20

Post by bochoh »

ejb999 wrote: post #14
api wrote: post #13

The more EVs penetrate the market the less vulnerable we are to oil price spikes. Oil has been the rate limiting reagent of our civilization. That is ending.

yea, all those poor people who can't afford to fill their cars should just run out and buy Teslas instead.

I know this is sarcasm but for those people with big pickup trucks (I should say vanity trucks, not real work machines), you’re looking at 26 gallon tanks @ 4.20/gallon. If they’re doing that once a week (conservatively) plus a presumably large truck payment, they could more than pay for a Tesla all other things aside. I personally lease a Kona Electric which after rebates and incentives costs me ~$350 a month
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