Originally Posted by
Roadbldr '59
Rather, it's the ongoing (escalating?) feeding frenzy in the housing market.... that are beginning to convince me that we still have a few years left of 3T.
Looking at past bubbles in real estate I note: 1816-1818, 1834-36, 1852-54, 1867-72, 1887-90, 1922-25, 1967-69, 1975-80.
Using S&H dating between 1816 and 1980 we have 22 years of Crisis, 45 years of High, 60 years of Awakenings and 37 years of Unraveling. If bubbles occur randomly (null hypothesis), we would expect 1.1 to occur in a Crisis, 2.2 in Highs, 2.9 in Awakenings and 1.8 in Unravelings.
Observed are 0 in Crises, 2 in Highs, 4 in Awakenings and 2 in Unravelings.
A chi-squared analysis gives p < 0.669, that is, there is a 67% probability that the difference between the expected and observed frequencies were the result of random luck (statistical significance is usually considered as p < 0.05). So it would seem that real estate bubbles are not correlated with turnings and that the current one indicates nothing about whether or not a 4T has begun.