His latest demonstration of illiteracy is here (which I rather like to point out now and again since Ritholtz seems to think he's God's appointed corrector of innumeracy--what's so great about being able to count when you can't read or write, either?):
The Case Shiller chart showing home prices in the 1920s or 30s does not use actual sales data, but are [sic] hypothesized by Prof Shiller in his book Irrational Exuberence.
On the substantive issue, Ritholtz is right to stress that there are problems comparing the two eras since data are not complete for the past in the same way that they are today for many things.
I rather liked one commenter's response to this post, objecting to the obvious straw man argument among other things:
Mark A. Sadowski Says:
June 1st, 2011 at 10:19 am
There’s a couple of problems with this post.
1) You’re conflating the claim that residential housing has done worse with the claim that this recession is as bad as the Great Depression. These are two seperate [ah, that would be "separate"] claims and one does not imply the other.
2) The relative absence of mortgages in the Great Depression would have greatly reduced the foreclosure problem relative to our own times.
3) High end real estate in Manhattan [!] in the 1930s was not a proxy for housing nationally.
Grebler, Blank and Winnick constructed a fairly decent index of nominal housing prices nationally (Shiller uses it). It fell 30.5% from 1925 to 1933.
http://www.nber.org/books/greb56-1
In contrast the S&P/Case-Shiller index has fallen 34.0% from 2006Q2 through 2010Q4.
Moreover your claim ignores the fact that there was considerable deflation in everything during the Great Depression. Taking into account the CPI, real housing prices only fell 12.6% from 1925 through 1932. In contrast real housing prices have fallen 40.1% this time around (so far).
P.S. For comparison[']s sake on the 67% decline in housing prices in Manhatten [Manhattan] between 1929Q3 and the end of 1932, consider the city of Las Vegas today. From peak in April 2006 to present housing prices in Las Vegas have fallen 58.4%. Adjusting for CPI the decline in housing prices in Manhatten [Manhattan] in the early 1930s is 57% whereas the decline in Las Vegas today it is 62.7% (so far).
If Ritholtz is so smart, how come it's not called the Case/Ritholtz index?
Now wasn't that fun?
