He was one of the main architects of the financial de-regulation that contributed to
the asset price boom and the profligate lending (in his first stint as Treasurer) because of his purely ideological opposition to government and regulation.
In particular, are there macro prudential tools that the Federal Reserve and other regulators can use to limit leverage and speculation and thus prevent the type of
asset price booms and busts that have proved so troublesome?
Asset price booms and busts and credit - related booms have occurred under many different monetary regimes, including in highly regulated financial systems.
As discussed above, in the past when credit and
asset price booms have ended, they have often resulted in financial and economic instability, with banks suffering losses and the business and household sectors cutting back spending as they repair their balance sheets.
Forecasting
Asset Price Booms bit.ly / tOwuNN The fool does at the end of the boom what the wise man does at the beginning $ $
Not exact matches
The converse applies in down turns, cut production to maintain
price value and cut costs and improve efficiencies, Additionally use low cost debt to buy
assets for future development with debt to be repaid in
booms.
It would be easy to exaggerate the importance of this effect, because there were very large swings in the housing sector before deregulation, and
asset -
price booms and busts occurred even in the regulated world.
From my experiences over the last 25 years as an adviser, most investors seem to be able to identify just the final phase of a
boom, which occurs immediately before the inevitable crash and have their fingers «burnt» with over
priced buying of
assets.
Speculative bubble dynamics are actually not required for a painful
boom - bust cycle in
asset prices.
The operative question was, how much was mortgage credit and stock market credit fueling a financial
boom that increased the
prices at which
assets were being transferred above what it would cost someone to simply create these
assets afresh.
Meanwhile, the Bank for International Settlements (BIS) expressed concern about the next recession, stating that «recessions triggered by financial crises are typically preceded by sustained episodes of bubbly
asset prices and debt - financed spending
booms.»
We have often written about the
boom in non-income producing
assets — such as collectibles — and the associated world record
prices, as being a sign of the very late stages of a credit cycle.
It's true that the latest housing
boom started with QE, but it's absolutely false to say that the current administration's policies have nothing to do with rising
asset prices across all
asset classes to include housing since the election of the 45th president.
Therefore, curve flattener reflects the consensus bearish volatility view where
asset prices continue to
boom under policy accommodation, while curve steepener expresses a bullish volatility thesis where higher term premium (as a result of «quantitative tightening») would reverse policy - induced private capital displacement and «financial adventurism.»
In addition, and partly as a result of financial liberalisation, the 1980s saw an unsustainable
boom in business credit associated with rapid increases in
asset prices, particularly commercial property.
There is increasing
asset and wealth inequality, partly because of the property
price boom, partly also because of the way increased income inequality in the 1980s has an impact over time.
· Obama's Debt
Boom http://t.co/OsPykK3q $ $ borrowed & misspent produces no growth; same 4 QE which inflates goods and Hi - Qual
asset prices $ $ Jun 06, 2012
Alternative
asset prices get bid up along with the
boom in conventional
assets.
Alternative
Asset Opportunities, baby
boomers, consumer spending, cost advantage, discount shopping, economic moats, high - end, low - end, luxury goods, middle class, Millennials,
pricing power, Yuppies
Third, in all of the afflicted countries there was a
boom - bust cycle in the
asset markets that preceded the currency crisis: stock and land
prices soared, then plunged (although after the crisis they plunged even more).
Sell - off of
assets to fund the later years may occur at discounted
prices because of volume of baby
boomer sellers.
At the risk of oversimplifying a complex analysis, Siegel's bottom line is that while there are not enough younger generation Americans to absorb the
Boomers stock and bond
assets at current
prices, investors in emerging countries, like China and India, will more than make up for that and will end up buying the Baby
Boomer's paper
assets as the
Boomers sell them off to fund their retirements.
A comfortable climate and reasonable real - estate
prices lured the Vanderbilts in the 1890s; now those same
assets are luring
boomer retirees.
I very much doubt that in September 2008, had financial
assets been funded predominately by equity instead of debt, that the deflation of
asset prices would have fostered a default contagion much beyond that of the dotcom
boom.
Now, thanks to skyrocketing bitcoin
prices and a broader cryptocurrency
boom, crypto hedge funds specializing in blockchain - based digital
assets are sprouting up all over.