Norway Gets Ready to Relive the Past

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.

Matt Yglesias points out today that Norway is in the middle of a gigantic housing bubble, and as I recall, Denmark is too. (I’m not sure about Sweden.) You can say all the usual things about this, but what’s most interesting from the “this time is different” perspective is that Norway has already had a gigantic housing bubble. Not the one a century ago in 1890, but the one a mere 20 years ago that led to a banking crisis starting in 1988. It’s the red oval in the chart on the right, and even though it looks like a blip compared to the current bubble, it was anything but. It led to the collapse of Norway’s banking sector, an all but total collapse of the housing market in Oslo, a taxpayer-led bailout, and Norway’s exit from the ECU (the precursor to the euro).

But despite this near-death experience, within a mere two decades Norway is in the midst of a housing bubble that makes the last one look like a pipsqueak. The good news is that they’re no longer in a fixed-rate exchange area, which gives them more flexibility, but it’s still a bubble, and even with a krone that floats it’s a pretty dangerous place to be. We really never learn, do we?

Interested in more? The definitive report on the 1988-92 crisis is here, and it’s recommended reading for anyone who wants to understand banking collapses and how they can be dealt with. Also, read this John Hempton post from 2008, which explains what happened and suggests that Spain might be next. The new report from which the chart above is taken is from the San Francisco Fed.

TIME IS RUNNING OUT!

We have an ambitious $350,000 online fundraising goal this month and it's truly crunch time: About 15 percent of our yearly online giving usually comes in during the final week of the year, and in "No Cute Headlines or Manipulative BS," we explain why we simply can't afford to come up short right now.

The bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. And advertising or profit-driven ownership groups will never make time-intensive, in-depth reporting viable.

That's why donations big and small make up 74 percent of our budget this year. There is no backup to keep us going, no alternate revenue source, no secret benefactor. If readers don’t donate, we won’t be here. It's that simple.

And if you can help us out with a donation right now, all online gifts will be matched thanks to an incredibly generous matching gift pledge.

payment methods

TIME IS RUNNING OUT!

We have an ambitious $350,000 online fundraising goal this month and it's truly crunch time: About 15 percent of our yearly online giving usually comes in during the final week of the year, and in "No Cute Headlines or Manipulative BS," we explain why we simply can't afford to come up short right now.

The bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. And advertising or profit-driven ownership groups will never make time-intensive, in-depth reporting viable.

That's why donations big and small make up 74 percent of our budget this year. There is no backup to keep us going, no alternate revenue source, no secret benefactor. If readers don’t donate, we won’t be here. It's that simple.

And if you can help us out with a donation right now, all online gifts will be matched thanks to an incredibly generous matching gift pledge.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate