One of the enduring mysteries about humans is their often startling ability to fail to learn from experience.
This is especially obvious when people are operating in groups; and never more certain than when we are talking about a bureaucratic, sclerotic institution.
Which brings us to the Bank of England and its recent declaration that it sees no housing bubble in the UK:
Bank of England sees 'no housing bubble'
May 15, 2014
Bank of England policymaker Ben Broadbent moved to play down fears of a housing bubble, insisting there were no signs of a dangerous boom in credit.
Broadbent, soon to become a deputy governor at the Bank, said: “Bubbles are things that are far easier to identify after the event than at the time. What really matters for financial stability is not so much house prices per se, but whether they are accompanied by rapid growth in credit — particularly high loan-to-value credit. That’s not happening at the moment but it is something that the Bank, and the Financial Policy Committee in particular, will want to keep an eye on.”
(Source)
Here we find Mr. Broadbent making two claims that rather interestingly conflict each other:
- You cannot spot bubbles except in retrospect
- One of the things that allow you spot a bubble is not in the data
So which is it?
by kugscheese 
