>The problem is that these changes don't correspond to movements in the usual suspects: interest rates, building costs, population or rents Shiller is ignoring

>The problem is that these changes don't correspond to movements in the usual suspects: interest rates, building costs, population or rents Shiller is ignoring: * Banks relaxed lending standards. * Appraisers were pressured to deliver fraudulently high appraisals (see 2005 petition delivered to Congress which was apparently studiously ignored by Shiller (Greenspan's advisor) and Greenspan who claimed "nobody saw it coming"). * The loans packaged into mystery-meat CDOs, misrepresented and sold on to investors by ratings agencies that agreed to look the other way for a fee (and declared their right to lie under the first amendment when challenged). Shiller has always been a regular apologist for bankers though, much like that other Nobel prize winner who writes regular op-eds in the New York Times, so it's not that surprising he dumbed it down and shifted the blame.