Lunch with the FT: The man and the bubble
Before meeting Robert Shiller, I take a long stroll in London’s Kensington Gardens, despite the Baltic weather. This is because a) I arrived 30 minutes early at our lunch venue, Launceston Place in Kensington, and b) I have not thought up enough intelligent questions to challenge one of the world’s most famous economists.
ADVERTISEMENT
The Yale professor correctly predicted the last stock market crash five years ago in his book, Irrational Exuberance. Now he is predicting a property meltdown.
As I walk, my mind turns back six years to when I was interviewed for my first job at the FT. A senior editor had picked holes in my local newspaper cuttings. “Do you know anything about economics?” he sneered. My younger Oxfam-clad self replied that I had an A-level in the subject. “And you still wrote this!”
As I arrive at the restaurant, I wonder whether the professor will make a similar assessment.
He is already sitting in the corner of the restaurant and I offer him a chilly hand.
He looks a bit like Brian Wilson, one of the Beach Boys, with sandy hair and - for a 59-year-old - young features. He wears a blue jacket over a light blue shirt.
On his wrist he wears a VibraLITE3 watch, which he tells me “has a vibrating alarm that makes no appreciable noise” so as not to wake his wife in the mornings.
Shiller has sold truckloads of books by using plain English and eschewing more arcane economic theory. But he is not averse to more complicated words.
I ask how he would describe the homely but deserted Launceston Place - which I chose because it is accessible from Heathrow as he is lunching with me en route from New Haven to Geneva. He thinks for a while before replying: “Gemutlich.”
“It probably applies more to German restaurants,” he says. “They say it doesn’t have an exact translation into English... it refers to a warmth... although ideally there should be more people singing and drinking beer.”
What I really want to know, not least as a homeowner, is when and how the property market will crash. So I ask him.
For a man whose written predictions seem so definite - and dire - he appears loath to be nailed as an inveterate doomster. “I really don’t know what prices will do,” he says hesitantly, playing with his cutlery.
But hasn’t he predicted a huge drop in US house prices? Only in some specific cities and states, he clarifies.
The professor is no doubt aware that the history of economic forecasting is littered with the names of those who made the right forecasts at the wrong time.
He was already well respected before he became an author. Indeed, he may have been the one who lent Alan Greenspan the phrase “irrational exuberance”, having used the expression in a meeting with the chairman of the Federal Reserve in 1996, just two days before the latter famously uttered the phrase in a speech that sent stock markets into a temporary tailspin.
Yet Shiller’s life has changed since Irrational Exuberance was published in 2000. He now gives a dozen speeches a year to business audiences across the world and makes frequent media appearances.
As the starters arrive - black pudding for him, cauliflower soup for me - I ask if all the attention has affected his academic work. In the cloistered world of Yale, do fellow academics look down on him for reaching out to the public in layman’s language?
“Is there jealousy? Definitely. Not that anyone would say that to me, but there is social pressure,” he says. “It is not that people frown on it as much as they think it is not the real thing.” He even admits that he has felt obliged to set “really tough” questions for students to prove his intellectual virility.
By now the two tables behind us have filled up, creating a little more atmosphere in the restaurant.
Alan Greenspan was praised for his handling of the economy during his interminable run as head of the Fed; in particular for his rapid cuts in interest rates to keep the economy afloat after the last stock market crash.
Yet this has pumped up the housing bubble even more. I want to provoke mild-mannered Shiller into a little criticism. What, exactly, can Ben Bernanke, Greenspan’s successor, do to rescue the US economy if the property market crashes? Has the Fed already used up its one silver bullet - that of interest rate cuts?
“Bernanke thinks there is no housing bubble,” says Shiller. “According to the White House website, he said recently that the fundamentals explained house price movements except in some speculative markets.” The new chairman of the Fed is a “brilliant man”, Shiller continues, but he has not shown any interest in behavioural economics.
And this is where he has underestimated the danger posed by real estate speculation. “He is not attuned to one of the great innovations of our time, that is, bringing psychology back into economics.”
Here we come to the crux of Shiller’s theories about asset bubbles, whether tulips, shares or property: people get excited as they see the price of an asset rising, so they buy more, which pushes the prices up further until they are unsustainable. “The bubble is made by a ‘story’, by excitement and glamour,” he says. And then, once a market loses that momentum, it will experience negative feedback, where people rush to sell before things worsen further.
It is no coincidence, as Shiller readily admits, that he is married to a behavioural psychologist.
I tend to agree with his analysis, but don’t want to look like one of his more supine students.
First, I ask, is he underestimating the role of low interest rates in fuelling the global property bubble? Prices may seem ridiculously high but if the cost of servicing property debt is low, why should it matter?
Shiller’s reply seems well-rehearsed: interest rates are not so low in a historical context and in the US they are rising. An unprecedented number of variable rate mortgages (they have doubled in two years) spells danger for the American public, he says.
My second criticism is that it is not enough for an academic to point out when a market has over-heated. It’s only really useful to know when a market is so over-heated it will implode. In other words: timing. It is a point that he concedes. “If I knew the answer to that one I would be a very rich man,” he jokes.
By now we are picking our way through the main course. We have both ordered cod with rice.
I interrupt Shiller to ask what he thinks of the food. “The fish is a little bland,” he says. He is right - it tastes like an anodyne kedgeree.
One striking theme within Irrational Exuberance is Shiller’s preoccupation with greed. He writes about the 60-fold rise in gambling in the US since 1962 and suggests that this new-found appetite for risk has spilled over into how people approach investment.
The real estate bubble, he argues, has simply replaced the last stock market bubble as the focus of people’s avarice. This seems rather judgmental, I suggest. Is he a moralist? He mulls the question. “I might have a puritanical streak. I don’t gamble,” he says.
He has never been to Las Vegas. His only trip to a casino was in Monte Carlo, in the company of one of his adult sons, where - inevitably - he lost his 100 euros.
Later, as Shiller eats a poached pear with cinnamon ice cream - which he declares delicious - we discuss his own investment approach. If the professor thinks that property and shares are both overheated, then where would he invest? Under a bed in cardboard boxes?
Shiller’s advice is to diversify and to keep plenty of money in the bank or in “boring” inflation-proofed bonds.
But he does own two properties: one in New Haven and another - bought with the proceeds from the sale of a research company he founded - on Long Island Sound. There, where there is no electricity, he watches the stars by telescope.
He can name every star that is visible to the naked eye and seems disappointed by most people’s ignorance of the night sky.
“Some people don’t even know that we live in a galaxy, the Milky Way, that you can see. They say: ‘What’s that up there?’ It amazes me that people aren’t interested.”
A few days later, Shiller (”Bob”) sends a rambling e-mail to clarify some of the things he said over lunch (”relaxed conversation is one of the great blessings of human life, but in my opinion it suffers from our faulty memories and getting the facts wrong”).
Much of the e-mail dwells on gemutlich, and whether it was an appropriate description for Launceston Place. Apparently so. “It refers more to a general ambience of social warmth or tradition or something like that,” he writes.
Elsewhere, he talks of the relationship between mathematics and economics and psychology. He is keen to correct any impression that he is dismissive of the mathematical side of economics, of which he is a “huge admirer”.
It’s just that - and I paraphrase - the number crunchers have ignored the bigger picture.
“One practically has to be a renaissance man (woman) to achieve good work in economics,” he writes, “and contemporary life does not give us enough time to do that.”
Jim Pickard is the FT’s property correspondent.
Launceston Place Restaurant, Kensington, W8, London
1 x cauliflower soup with blue cheese croutons
1 x pan-fried black pudding with apple sauce
2 x roast cod with parsnip puree and curry cream
1 x poached pear with cinnamon
1 x coffee
1 x bottle mineral water
1 x cranberry and apple juice
Total: ￡52.75
与罗伯特?希勒共进午餐
尽
管天气寒冷，但在见到罗伯特?希勒(Robert Shiller)之前，我还是在伦敦的肯辛顿公园里徘徊了许久。原因有二：第一，我到达午餐地点――肯辛顿的朗塞斯顿酒店(Launceston Place)――的时间比约定时间提前了30分钟；第二，希勒是全世界最著名的经济学家之一，而我尚未想出足够聪明的问题来向他发难。
5年前，这位耶鲁大学(Yale)教授曾在他所著的《非理性繁荣》(Irrational Exuberance)一书中准确预测了上一次的股市崩盘。现在，他预言地产业会暴跌。
散步时，我的思绪回到了6年前。当时，我正为得到我在《金融时报》的第一份工作而接受面试。一位高级编辑对我为地方报纸撰写的稿件百般挑剔。他用嘲讽的口吻问道：“你懂经济学吗？”当时年轻气盛、自尊心极强的我回答说，我曾在这一科目获得过“A”。“那你还写成这样！”
步入饭店的时候，我在想这位教授会不会也做出类似评价。
平实的教授
他已安座于饭店的一个角落。我伸出冰冷的手与他相握。
他看上去有点像美国沙滩男孩(Beach Boys)乐队里的布赖恩?威尔逊(Brian Wilson)，头发黄棕色，有着一副相对59岁的年纪而言仍很年轻的面孔。他穿了一件蓝色夹克，里头则是一件淡蓝色衬衫。
他手腕上戴了一块VibraLITE3 手表。他告诉我，这块表“有一个不产生噪音的振动闹铃”，这样就不会在早上吵醒他的妻子了。
希勒的书中用的都是通俗易懂的英语，而且尽量避免过分晦涩的经济学理论，因此，他的著作发行量可谓车载斗量。但他并不反感使用更为复杂精密的语言。
我问，他会如何描述这间居家风格但门庭冷落的朗塞斯顿酒店。（我之所以选择这里，是因为它离希思罗机场较近，而希勒是在从康涅狄格州纽黑文前往日内瓦的途中抽空与我共进午餐的。）他想了一会说：“安逸(Gemutlich)”。
“这个词或许更符合德国饭店。”他说，“他们说，这个词还没有一个准确的英文译法……它指的是一种温暖……尽管在理想情况下，应该有更多人在此高歌畅饮。”
并非末日论者
但我（尤其是作为一个私宅业主）真正想知道的，乃是地产市场将在什么时候、以何种方式崩盘。于是我向他请教。
尽管他的书面预测似乎总是那么准确，而且总是那么可怕，但他看上去不太情愿被看作一个习惯性的末日论者。他摆弄着手头的餐具，迟疑地说：“我真的不知道价格会怎样走。”
但他不是预测美国住宅价格会暴跌吗？他澄清说，那只会发生在一些特定的城市与州。
这位教授显然明白，在经济预测史上，在错误时机做出正确预测的人比比皆是。
早在希勒成为一名作家之前，他就已经备受尊敬了。事实上，美联储(Federal Reserve)前主席艾伦?格林斯潘(Alan Greenspan)可能正是从他这里借用了“非理性繁荣”一词。1996年，他在与格林斯潘的一次会谈中使用了这一表述；两天后，后者就在一次演讲中极好地提出了这个著名说法，使得股市一度大跌。
然而，自从《非理性繁荣》一书于2000年出版后，希勒的生活发生了改变。现在，他每年要向全球各地的商界听众做十几次演讲，并频频在媒体上露面。
第一道菜上来了――他的是黑香肠，我的是花椰菜汤。我问他，所有这些外界关注是否影响了他的学术工作。在耶鲁大学远离外界喧嚣的世界里，学术同行们是否因为他用外行语言接触公众而轻视他呢？
“你问有没有人妒忌？肯定有。倒不是每个人都会那样，但的确存在社会压力，”他说道。“当人们觉得不真实的时候，他们不会仅仅皱皱眉头而已。”他甚至承认，他已感觉到，必须得向学生提出一些“真正有难度的”问题来证明他的睿智。
这时候，我们后面的两张桌子已经坐满，给餐厅增添了一些气氛。
温和的批评
在执掌美联储的漫长任期内，格林斯潘因其处理经济的手法而获得赞誉；特别是在上一次股市崩盘后，他当机立断降低利率，让美国经济保持了强劲发展。
但这也使房地产泡沫更趋严重。我打算就此问些尖锐的问题，让温和的希勒发表一点批评意见。如果房地产市场崩溃，格老的继任者本?伯南克(Ben Bernanke)能够采取什么具体措施来挽救美国经济？美联储是否已用尽其一招致胜的降息法宝？
“伯南克认为，房地产泡沫并不存在，”希勒表示。“白宫的网站上说，伯南克最近表示，基本面为房价波动提供了解释，一些投机市场除外。”这位美联储新任主席是一位“才华横溢的人”，希勒继续说，但他并未对行为经济学表现出任何兴趣。
这就是他低估房地产投机所致危险的原因。“我们这个时代的伟大创新之一，就是将心理学引入了经济学研究，但他对此并不敏感。”
资产泡沫与行为心理学
接下来我们就谈到了希勒资产泡沫理论的关键内容：无论是郁金香、股市或者房地产，人们看到某类资产价格上涨，就会变得非常兴奋，于是他们购入更多此类资产，进一步将价格推高，直到市场价格难以维持。他表示：“泡沫由一个‘致富故事’、人们的兴奋和痴迷所导致。”然后，一旦市场失去这种推动力，将会出现反向趋势，即在情况进一步恶化前，人们争相抛售（此类资产）。
希勒的妻子是一位行为心理学家。他欣然承认，这并非巧合。
我倾向于同意他的分析，但我可不愿看上去跟他那些慵懒的学生一样。
我问道，首先，他是否低估了低利率对引发全球房地产泡沫的作用？房价可能看似高得离谱，但如果房贷成本很低，那又有什么关系呢？
希勒的回答似乎早有准备：就历史角度来看，目前的利率并非很低，而美国利率正在上升。对美国公众而言，数量空前的可变利率按揭贷款（两年内增长了一倍）则代表着危险。
我提出的第二个批评是，学者仅指出市场何时过热是不够的。知道市场过热而导致爆炸的时间，才是真正有用的。换言之，即时机问题。这一点他也承认。他戏言：“如果我知道这个答案，那么我会成为非常富有的人。”
现在我们正在仔细挑选主菜。我们都点了鳕鱼饭。
我打断希勒，问他觉得食物如何。他说：“鱼的味道有点淡。”他说的对，那鱼吃起来像是味同嚼蜡的烩饭。
希勒对于贪婪的关注，是《非理性繁荣》中一个引人瞩目的主题。他在书中写道，自1962年以来，美国博彩业增长了60倍。他指出，这种新发现的风险癖好已经蔓延到人们的投资方式上。
他认为，地产泡沫已经代替了上一次的股市泡沫，成为人们贪欲的焦点。我认为，这一说法似乎更像一种个人道德判断。他是个道德学家吗？他思索了一下，说道：“我可能有些清教徒色彩，我不赌博。”
他从未去过拉斯维加斯。他唯一去过一次的赌场在蒙特卡洛，是跟他的一个成年儿子一起去的，在那里，他不可避免的输掉了100欧元。
投资与建议
稍后，希勒吃了一份肉桂冰淇淋水煮梨，他认为很好吃。这时，我们谈到了他自己的投资方式。如果这位教授认为，地产和股票市场都发展过热，那么他如何投资呢？把钱放到床底下的纸箱里吗？
希勒的建议是将投资多元化，在银行多存些钱，或投资于“令人乏味”的通胀保值债券。
但他确实拥有两处地产：一处在纽黑文，另外一处在
