On second thought, maybe housing was in a bubble after all

Plus: Reading Putin's mind. [Bloomberg]( Follow Us [Get the newsletter]( This is Bloomberg Opinion Today, a fixer-upper of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - Housing is [looking a little bubbly](. - Don’t think [Putin won’t use nukes](. - The [US dollar is crushing]( the rest of the world. - [Inflation-fighting and poverty-fighting]( should not be at odds. The bad old days. The Case for a Housing Bubble Bubble identification isn’t easy, requiring careful analysis of both data and vibes. You must also beware of personal biases; Bitcoin at $70,000 was clearly a bubble to most of us, but blockchain hypebeasts had incentive to insist that no, it was the [children]( who were wrong. Then there’s the housing market. There was certainly a bubbly vibe around bidding wars earlier this year for shacks that hadn’t been updated since the Carter administration. But the data suggested maybe that fixer-upper really was worth $800,000, if you squinted at it the right way. And us homeowners — especially those proud new proprietors of $800,000 shacks — had a strong bias to squint. Unfortunately, [both the vibes and the data have moved against us lately](, warns Aaron Brown. Up until fairly recently, home prices, ludicrous as they were, had not come too untethered from fundamentals. Interest rates, in particular, were working in their favor, as this rather unattractive chart demonstrates: The gray dots there show housing was pretty expensive up until the pandemic but still nestled comfortably inside its long-term relationship with interest rates, Aaron writes. The yellow dots show what has happened lately: Prices have soared beyond bubble-era heights and, more worryingly, kept on soaring even as interest rates rise. This is classic bubble behavior, Aaron writes. Prices in some markets have [started]( to fall lately as mortgage rates [soar](. But our best hope — if that’s the right word — is that rents keep ballooning too, supporting demand for houses. Maybe the Fed jacking up rates will discourage new homebuilding and make that happen. Of course, then we’ll have a whole other mess of problems. But no burst bubble, maybe? Yay? Read the [whole thing](.  Putin Won’t Use Nukes, Right? Right? Time for a quick Armageddon check: As of 4 p.m. New York time, Vladimir Putin hadn’t nuked anything yet. And there are a lot of good reasons to think he never will. Then again, there were also a lot of good reasons to think he’d never be so reckless as to invade Ukraine, writes Hal Brands, and yet here we are. Hal suggests [we’d be naive to ignore the risk](. Fortunately, as we wrote yesterday, Andreas Kluth has some [advice]( for how the rest of the world can handle Putin and avert nuclear hellfire. Clive Crook doesn’t seem to think this advice will work. He suggests the West hurry up and [give Putin a participation trophy]( (and also a lot of new land in Ukraine) to soothe his hurt little fee-fees, and maybe then he’ll stop doing war crimes. Whatever you think of that idea, we’ve got to figure something out, because Putin’s “[partial mobilization” scheme isn’t going to work](, James Stavridis writes. Russia’s “reserves” are nothing like, say, the US’s well-trained and organized force. Many of them are [scrambling]( for the border as we speak. Others are being rounded up in buses in the dead of night. Still others are being turned into [draftees]( by being arrested at anti-war protests. Hardly the stuff of an effective fighting force. Those nukes will look increasingly tempting. Further Ukraine War Reading: An oil-price cap may have holes, but it’s a [good start to squeezing Russian revenue](. — Bloomberg’s editorial board Begun, the Currency Wars Have Most wars start intentionally, like Putin’s Ukraine war. Some start accidentally, like the war between me and my neighbor Steve. I can’t get into it on the advice of counsel, but let’s just say my backyard fireworks extravaganza is canceled next year. The Fed, by raising rates earlier and uglier than most, has also started an accidental [currency war between the US]( and every other nation on Earth, as Richard Cookson notes: Richard has little sympathy for these nations, noting they dragged their feet on raising rates more than even the Fed did. He also doubts the US will get together with the world in a Plaza-style accord to hurt the dollar and end the punishment. But it’s an economic headache for many of these countries. Japan had to boost the yen for the first time since 1998, thanks to the [Bank of Japan refusing to join]( the inflation-fighting party, Dan Moss notes. Such intervention is a luxury not available to everybody. Despite the pounding of the pound, the [Bank of England is raising rates only gingerly](, Marcus Ashworth writes. It has far too many economic landmines to dance around at the moment. Currency war is hell. Bonus Economic-Pain Reading: Commodities are floating on supply issues for now, but the [global economy may crush them yet](. — Javier Blas Telltale Charts Pandemic-era stimulus may have contributed to inflation, but it also helped bring about [a dramatic reduction in poverty](, writes Eduardo Porter. We shouldn’t have to make such trade-offs, but America’s dysfunctional politics demand it. Further Reading Even [mainstream Republicans are pretty extreme]( these days, if the House vote on Electoral Count Act reform is a guide. — Jonathan Bernstein All the [real action in regulating Big Tech]( is happening at the state level. — Parmy Olson Fosun’s fate could tell us how much [Beijing is still meddling]( in China’s economy. — Shuli Ren Liz [Truss wants more fracking](, but don’t expect a British shale revolution. — Therese Raphael Here’s how [family businesses can thrive](. — Adrian Wooldridge ICYMI Elizabeth Warren [does not care for Zelle](. South Korea’s president [made a hot-mic goof](. Japan is [restoring visa-free travel](. Kickers Your [single friends may be struggling](. Tired: Guitar Hero. Wired: [Trombone Champ](. (h/t Jessica Karl for the first two kickers) The [worst weight-loss plan]( ever. We still don’t know if [Neanderthals made art](. Notes:  Please send Neanderthal art and feedback to Mark Gongloff at mgongloff1@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Opinion Today newsletter. 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