A Bubble Within A Bubble
Pop! is one of those contrarian efforts that tries to cut conventional wisdom off at the knees. We have been taught that bubbles are bad as many of us have experienced the pain personally in other asset classes like stocks. Daniel gets us to look long term in the bubble cycle, which strikes me as a bit ironic, since as a transaction, it rumbles along much more slowly than stocks do.
During the housing boom of the past 7 years, depending on one's definition, I was particularly struck by the notion of timing. The word "bubble", when it gain popularity as the label for the entire market, seemed inappropriate as a description because it implied imminent catastrophic collapse almost overnight (at least to me it did). Yet it would have been better to describe the market some other way. Housing prices tend to be more "sticky" on the downside and the bubble term was probably closely aligned with Prof. Robert Shiller's book Irrational Exuberance where he correctly called the NASDAQ market correction and subsequently wrote a new chapter to predict the bursting of the housing bubble.
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