Paul Krugman Has Housing Bubble News That Will Scare the Crap Out of You

Paul Krugman recently talked to Google regarding the housing bubble, bad loans, and where this all may go. The video runs 71 minutes -- and it will scare the crap out of you.

Have been trying to educate myself on economic issues by reading Calculated Risk, the WSJ, and other publications. It makes my eyes glaze over, but Krugman pulls this together into a more coherent construct.

Suddenly, things that looked bad individually look even worse in the aggregate. Reps. Brad Miller and Linda Sanchez are discussing this on DKos today -- worth dropping in to chat.

-- Via Krugman's blog:

According to the OFHEO data, prices in Houston rose only 26% over the last five years. But prices in Miami rose 115%. That is, the bubbles in the most bubbleicious areas were bigger than anything we've ever seen -- and there's every reason to think that the required fall in prices in those areas will be much bigger than anything we've seen since the Great Depression.
This reads like Enron for housing markets, doesn't it?

-- Energy prices are still high. Meaning ugly household budgets. Take home heating oil: the recent increase in aid to the poor for winter heating can't keep pace with increased costs.

-- There is a growing consensus that a recession is coming. Folks who are already being squeezed will have to tighten their belts even more -- some with no give left.

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