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There's a great history of this, The Great Beanie Baby Bubble: Mass Delusion and the Dark Side of Cute by Zac Bissonnette. It's a quick read, almost entirely or

by pushcx 5y ago

There's a great history of this, The Great Beanie Baby Bubble: Mass Delusion and the Dark Side of Cute by Zac Bissonnette. It's a quick read, almost entirely original reporting. Aside from the colorful characters, it's really compelling to see the way some individuals' and limited information combined with mass media fell together to create the bubble. It seems like it couldn't have happened at any other time because it needed cheap independent publishing (both print and web) before ubiquity eroded the perceived legitimacy.

camjohnson26 5y ago
Also Beanie Mania on HBO, not as insightful as the book but still a good documentary. The Beanie Baby bubble was essentially a textbook example of mania.
adam_arthur 5y ago
Oh, bubbles can surely happen even in the era of widespread information. Look no further than housing. A few points on housing: - real home prices have now surpassed the 2000s peak - household formation and population growth has been decelerating, while building has been accelerating. - there are 1.1 homes per household, same as the year 2000. We are not at historically low supply as some claim. Only low in terms of active listings. - mortgage rates are climbing at a historically fast pace... If inflation doesn't abate we can expect 5-6% mortgages within a few months. Rates were kept low due to the belief in transitory, but confidence in this is quickly eroding. Mortgages roughly correlate with 10y treasury which is at 2%, while inflation at 7.5%. typically these values are close together - all in affordability will reach record lows within a few months, if inflation and mortgage trends don't abate - there's clearly a mass FOMO/psychological phenomena going on right now. Buyers aren't acting rationally from a financial perspective Home prices can avoid a correction if we quickly return to 0 or negative rates, which could happen. If inflation persists, they will correct in a big way within a year or two as rates adjust to inflation Sources: https://fred.stlouisfed.org/series/QUSR628BIS https://fred.stlouisfed.org/series/QUSR628BIS https://fred.stlouisfed.org/series/UNDCONTSA https://fred.stlouisfed.org/series/UNDCONTSA https://fred.stlouisfed.org/series/SPPOPGROWUSA https://fred.stlouisfed.org/series/SPPOPGROWUSA https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fixed https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fix... EDIT: And the fervent denials that it's a bubble is surely a hallmark of bubbles too :). Please refute with actual data if you disagree
- thatfrenchguy 5y ago
  > while building has been accelerating massively Nope, we have a decade of underproduction that led us to this crisis
  - adam_arthur 5y ago
    Households to number of homes built is exactly the same as it was in year 2000. You can compute it yourself using FRED data. 1.1 homes per household (or vice versa). People who count from 2010 are cherrypicking the underbuilding decade while ignoring the overbuilding decade, 2000s. There is no "shortage" of homes, there's a shortage of homes listed currently.
    - thatguy0900 5y ago
      Couldn't there also be a shortage of homes where people want them to be? A house in the city and a house in the boonies are not exchangeable
      - adam_arthur 5y ago
        That could apply to some local markets, sure. But we are seeing massive price increases rather universally, which implies it's a more widespread phenomena than just local undersupply. But it will be true for certain markets. Most homebuilding is concentrated in the SMILE states (southern, areas where people are migrating to)
  - brimble 5y ago
    Builders have been working as fast as they can (and sometimes faster than they should) around here non-stop since maybe 2011 or 2012, and it's not enough. Tons of new neighborhoods, probably half the apartment buildings I know of were put up in the last ten years, and so on, but house prices and rent are nuts and still increasing faster than inflation anyway. We're at the end of what sure looks like about a decade-long housing construction boom, in my city, which is not trendy or growing very fast, and prices have done nothing but go up at 2-5x the rate of CPI the entire time. It's possible the under-supply was so bad that all the construction still isn't enough to catch up, but then why did prices not start higher than they did? I find it hard to believe that this city's gained new residents faster than it's gained new housing. Something else is going on.

by pushcx 5y ago

camjohnson26 5y ago

Also Beanie Mania on HBO, not as insightful as the book but still a good documentary. The Beanie Baby bubble was essentially a textbook example of mania.

adam_arthur 5y ago

Oh, bubbles can surely happen even in the era of widespread information. Look no further than housing. A few points on housing: - real home prices have now surpassed the 2000s peak - household formation and population growth has been decelerating, while building has been accelerating. - there are 1.1 homes per household, same as the year 2000. We are not at historically low supply as some claim. Only low in terms of active listings. - mortgage rates are climbing at a historically fast pace... If inflation doesn't abate we can expect 5-6% mortgages within a few months. Rates were kept low due to the belief in transitory, but confidence in this is quickly eroding. Mortgages roughly correlate with 10y treasury which is at 2%, while inflation at 7.5%. typically these values are close together - all in affordability will reach record lows within a few months, if inflation and mortgage trends don't abate - there's clearly a mass FOMO/psychological phenomena going on right now. Buyers aren't acting rationally from a financial perspective Home prices can avoid a correction if we quickly return to 0 or negative rates, which could happen. If inflation persists, they will correct in a big way within a year or two as rates adjust to inflation Sources: https://fred.stlouisfed.org/series/QUSR628BIS https://fred.stlouisfed.org/series/QUSR628BIS https://fred.stlouisfed.org/series/UNDCONTSA https://fred.stlouisfed.org/series/UNDCONTSA https://fred.stlouisfed.org/series/SPPOPGROWUSA https://fred.stlouisfed.org/series/SPPOPGROWUSA https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fixed https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fix... EDIT: And the fervent denials that it's a bubble is surely a hallmark of bubbles too :). Please refute with actual data if you disagree

thatfrenchguy 5y ago
> while building has been accelerating massively Nope, we have a decade of underproduction that led us to this crisis
- adam_arthur 5y ago
  Households to number of homes built is exactly the same as it was in year 2000. You can compute it yourself using FRED data. 1.1 homes per household (or vice versa). People who count from 2010 are cherrypicking the underbuilding decade while ignoring the overbuilding decade, 2000s. There is no "shortage" of homes, there's a shortage of homes listed currently.
  - thatguy0900 5y ago
    Couldn't there also be a shortage of homes where people want them to be? A house in the city and a house in the boonies are not exchangeable
    - adam_arthur 5y ago
      That could apply to some local markets, sure. But we are seeing massive price increases rather universally, which implies it's a more widespread phenomena than just local undersupply. But it will be true for certain markets. Most homebuilding is concentrated in the SMILE states (southern, areas where people are migrating to)
- brimble 5y ago
  Builders have been working as fast as they can (and sometimes faster than they should) around here non-stop since maybe 2011 or 2012, and it's not enough. Tons of new neighborhoods, probably half the apartment buildings I know of were put up in the last ten years, and so on, but house prices and rent are nuts and still increasing faster than inflation anyway. We're at the end of what sure looks like about a decade-long housing construction boom, in my city, which is not trendy or growing very fast, and prices have done nothing but go up at 2-5x the rate of CPI the entire time. It's possible the under-supply was so bad that all the construction still isn't enough to catch up, but then why did prices not start higher than they did? I find it hard to believe that this city's gained new residents faster than it's gained new housing. Something else is going on.