So this is a figure from the book you have, Irrational Exuberance Third Edition that I came out with in 2015. And what it shows is, well first of all that's just the same home price series but since 2003, the same home price series you just saw. Doesn't look as dramatic since it's a short flip of the longer series. But you can see the home prices peaked in 2006 and they started falling after that. But the other thing shown is the percent of new home buyers who agreed with a following statement. Real estate is the best investment for long-term holders who can buy and sell through the ups and downs of the market. That's a cliche. I mean it's usually done with stocks. But I thought why don't I ask the same thing of real estate. Now these people just bought a home, it's called wishful thinking bias. Their likely to think that their home was a great investment since they just made it. It would cognitive dissonance if they answered otherwise. But you can see how these are always new home buyers in every year that I did this survey, and you can see that it kind of moves with home prices. When home prices have been going up, so has their agreement with this, and when home prices start going down, they start losing their agreement. So this is evidence of a bubble, okay? We had initial price increases on homes in the 1970s. They were doing really well as investments. People just don't look far back and part of the reason they don't look far back is nobody shows the data. I find it absolutely flooring to think that nobody had ever constructed a hundred year price series. Newspapers don't publish hundred year long time series. They're not interested. It's not what people seem to think they want. So you only see a few years, and you see it's just going up like crazy and so, you make the mistake of thinking it always will. Now, the housing sector has a big impact on the economy. Through residential investment. Residential investment in the GDP accounts, consists of building of new houses, new apartment buildings and improvements. Like additions to houses and apartment buildings. So the red line is housing starts in thousands of units. It's a monthly series. SAAR means seasonally adjusted annual rates. So you can see how variable it is through time. Also shown on this chart is the my real home price series. Which the SNPK Schiller series starting in 1975. And for the region before that, it's an old of labor statistic home price series that they've discontinued. But I've got it for that period. So have I have a home price series. And you can see that the housing starts are very, very variable, and they have something to do with home prices. Not surprisingly when home prices are, you're a builder, right? You want to know what can I sell this house for? When home prices are high my profits margins are high, so I'm going to dump houses on the market when home prices are high. And I'll stop doing it when they fall. Well, it doesn't explain starts that well, but somewhat well, right? You can see there was a big housing boom in the early 70s, and there was a price increase as well. These are prices of existing houses, not new houses, so it's not necessarily the exact best price series. But most dramatically the biggest boom ever is this one in the 1990s until 2006 in home prices new starts went up to almost a record level. And then suddenly the home prices collapsed. Dramatically and look what happened to housing starts. Housing stats went down by 80% and then they recovered dramatically. And so did home prices. So there's something what, this is animal spirits driving the economy. I'm calling it animal spirits. It's some idea that people got that home prices always go up. >> How would you decide whether a housing market dipped in an area, or country or continent as rational or not rational? >> [COUGH] Yeah, that's difficult. It's judging people. And it's very hard to predict turning points when will a bubble burst. So a lot of people would like to give up and not try to do that at all but I think that's a mistake too. It's about humans make big mistakes. If you look at history, there are horrible mistakes that people have made. Often on mass where millions of people are all thinking the same thing. And it turns out, how can millions of people be wrong? Well, history shows they've done it again, and again.