We won't pound the tables about imminent recession until we observe fresh weakness in the equity market (even a 7 - 8 % market loss would sharply raise our probability estimates), but it's important to recognize that financial risks are already fully developed, and as
in other bubbles, one usually finds «catalysts» to blame for a collapse only well after the downturn is in full - swing.
In the other bubble we discover a group of dancers who imitate the mechanized movements of a clock's various components, following the composer's directions like sections of an orchestra.
During the real estate bust, home prices didn't fall as much in Washington D.C. as
in the other bubble markets.
Not exact matches
That has encouraged what many are calling a housing
bubble and unsustainable consumer debt loads
in Canada, among
other things.
The housing
bubbles in Vancouver and Toronto — just like the
bubbles in Sydney, Hong Kong and
others — are the result of ultra-low interest rates for longer and longer and longer.
However, if the economy is near or above its potential, as some measures indicate, it may merely cause faster - than - desired price increases, or a jump
in stock and
other asset values that raise concerns of a
bubble.
By encasing itself
in a protective
bubble made of fat, pR1SE could hop out of its host cell — maybe even looking for
other cells to occupy.
For a long time this single, unpredictable event eclipsed
other growing problems such as the popping of the technology
bubble that had been a huge job creator and wealth generator
in the Pacific Northwest, and the gradual rise of the Canadian dollar to parity that made Whistler less of a bargain compared to Aspen or Vail.
The lines on the chart are indexed to make them comparable to each
other and show that the rush into bitcoin is roughly comparable to the dot - com
bubble in 1999/2000.
The chart below from Shane Oliver, chief economist and chief investment officer at AMP Capital, puts Bitcoin
in historic perspective with
other major asset
bubbles.
I have no choice but to wait because businesses aren't built
in bubbles and I'm at the mercy of
other peoples» schedules.
Economists like Christopher Thornberg of Beacon Economics say asset
bubbles become dangerous when they lead to
other imbalances
in the economy.
He noted that the
other time we had 80 % of IPOs be unprofitable was
in 1999, prior to the burst of the tech
bubble.
According to
bubble spotter Vikram Mansharamani, the Salesforce Tower and
other skyscraper construction sites
in San Francisco are indicative that we are
in a
bubble.
In fact, if I were RS, I'd worry more about financial and
other sectoral (housing)
bubbles ending expansions more than I'd worry about full employment driving wage - push inflation.
Alas, the viability of bitcoin and
other crypto assets does not depend on whether they are
in a
bubble state or not.
[16:00] Pain + reflection = progress [16:30] Creating a meritocracy to draw the best out of everybody [18:30] How to raise your probability of being right [18:50] Why we are conditioned to need to be right [19:30] The neuroscience factor [19:50] The habitual and environmental factor [20:20] How to get to the
other side [21:20] Great collective decision - making [21:50] The 5 things you need to be successful [21:55] Create audacious goals [22:15] Why you need problems [22:25] Diagnose the problems to determine the root causes [22:50] Determine the design for what you will do about the root causes [23:00] Decide to work with people who are strong where you are weak [23:15] Push through to results [23:20] The loop of success [24:15] Ray's new instinctual approach to failure [24:40] Tony's ritual after every event [25:30] The review that changed Ray's outlook on leadership [27:30] Creating new policies based on fairness and truth [28:00] What people are missing about Ray's culture [29:30] Creating meaningful work and meaningful relationships [30:15] The importance of radical honesty [30:50] Thoughtful disagreement [32:10] Why it was the relationships that changed Ray's life [33:10] Ray's biggest weakness and how he overcame it [34:30] The jungle metaphor [36:00] The dot collector — deciding what to listen to [40:15] The wanting of meritocratic decision - making [41:40] How to see
bubbles and busts [42:40] Productivity [43:00] Where we are
in the cycle [43:40] What the Fed will do [44:05] We are late
in the long - term debt cycle [44:30] Long - term debt is going to be squeezing us [45:00] We have 2 economies [45:30] This year is very similar to 1937 [46:10] The top tenth of the top 1 % of wealth = bottom 90 % combined [46:25] How this creates populism [47:00] The economy for the bottom 60 % isn't growing [48:20] If you look at averages, the country is
in a bind [49:10] What are the overarching principles that bind us together?
Indeed, it would be a disaster for Russia to repeat the real estate
bubble experience that has plagued Japan and
other East Asian countries
in recent years.
The only
other times CAPE climbed like this was before the market crash of 1929 and the bursting of the tech
bubble in the early 2000s.
But, over time, the longer central banks create liquidity to suppress short - run volatility, the more they will feed price
bubbles in equity, bond, and
other asset markets.»
The gains have been driven by several
other factors — perhaps the most important being the irrational mentality that can take over
in speculative
bubbles.
According to (pretty outdated) CBO data on this question, that is
in fact what happened, but as I and
others (particularly Krugman) has endlessly stressed, our policy makers recently pivoted way too quickly to deficit reduction and that too has made it much harder to repair the damage from the housing
bubble.
But some
other critics have
in a sense taken the
other side of this trade, contending that if anything the formula underestimates the potential liability of long - dated options by failing to adequately account for so - called tail risk — the prospect that the markets will collapse under the weight of, say, a giant housing
bubble.
Stockmarkets
in many
other economies are overvalued too, but a bursting of the
bubble would claim many more victims
in America than
in Japan or Europe, partly because far more people own shares and partly because
in recent years American households and companies have borrowed huge sums
in the expectation that share prices will continue to climb.
In other words, they're going to keep a ponzi scheme going much like the real estate
bubble.
The cyclically adjusted price - to - earnings ratio, which is a favorite metric of Nobel Prize - winning economist Robert Shiller, suggests stock prices are higher than any
other time
in history
other than the dot - com
bubble of 2000.
As the report inter alia notes, while the 2017 run - up
in BTC had all the hallmarks of a major
bubble and big setbacks have to be expected,
in many
other ways we are witnessing an experiment that is only at its very beginning and will offer a great many opportunities.
Starting
in the 1950s and accelerating during Japan's
bubble, keiretsu corporations purchased each
other's shares to form an extensive network of cross-holdings, a practice that was seen as important for guaranteeing long - term stability and developing lasting business relationships.
The investing public eventually became caught up
in a contagious euphoria that was similar to that of any
other historic
bubble and market crash.
The new report starts out with a summary of recent events (the topics addressed are:
bubble & crash, hacks & scams, reaction & regulation and adoption & trends), an
in - depth discussion of whether bitcoin's surge actually deserves to be called a
bubble (which we found particularly interesting), and a section that deals extensively with the schism
in the bitcoin community that led to the fork that created Bitcoin Cash (BCH) and
other offshoots.
But yet,
others are concerned that bitcoin has become too speculative, and a pop
in the
bubble could be damaging.
In other words, they climbed back to where they were at the height of the
bubble.
While
other Northern and Western European countries have seen their housing
bubbles inflate since 2009 due to «safe haven» investment inflows, Iceland's Housing
Bubble is unique because it has inflated (or reinflated) primarily due to currency controls that were enacted after its epic financial collapse
in 2008.
Norwegian property prices have tripled since the mid-1990s, up nearly 30 % since the Great Recession as the oil - rich nation rode the coattails of the commodities
bubble and has benefited from the same «flight to safety» capital flows that have benefited (and inflated
bubbles in)
other Nordic countries.
In Attack of the 50 Foot Blockchain, David Gerard covers the origins and history of Bitcoin to the present day, the
other cryptocurrencies it spawned including Ethereum, the ICO craze and the 2017 crypto
bubble, and the attempts to apply blockchains and smart contracts to business.
In its Q1 report, the financial institution centered on
bubbles throughout the monetary markets; for Q2 it's alerting buyers to the truth that we're nearing the «end of a cycle like no
other.»
The move comes just days after the chancellor admitted
in his Mansion House speech that more UK housing needed to be built, as well a shake - up
in planning rules, plus
other measures to help prevent a housing
bubble developing.
While analysts have been calling Bitcoin a
bubble, a topic as old as the cryptocurrency itself,
others are blaming price fluctuations on uncertainty
in regulations.
Though I haven't written any
bubble - related reports lately because I've been busy with
other projects, I hope to get back to writing them
in the near future.
In July of this year, the United States Securities and Exchange Commission (SEC) took a critical first step to rein in the growingly speculative bubble surrounding these start - ups when it issued a report concluding that such coin offerings should be predominantly classified as securities offerings, and hence mandated to fall under registration, disclosure and other requirements that apply to securities, regardless of whether those securities are purchased with virtual currencies or distributed with blockchain technolog
In July of this year, the United States Securities and Exchange Commission (SEC) took a critical first step to rein
in the growingly speculative bubble surrounding these start - ups when it issued a report concluding that such coin offerings should be predominantly classified as securities offerings, and hence mandated to fall under registration, disclosure and other requirements that apply to securities, regardless of whether those securities are purchased with virtual currencies or distributed with blockchain technolog
in the growingly speculative
bubble surrounding these start - ups when it issued a report concluding that such coin offerings should be predominantly classified as securities offerings, and hence mandated to fall under registration, disclosure and
other requirements that apply to securities, regardless of whether those securities are purchased with virtual currencies or distributed with blockchain technology.
While some believe that the
bubble in Bitcoin has burst,
others believe that the current fall is only a correction, which will lead to higher prices later
in the year.
Therefore, the investment proposition for low - yielding sovereign and
other fixed - income securities is highly dubious
in our opinion, another
bubble waiting to implode.
For now, the SEC has left the door open somewhat by not opting for something hyper - aggressive and tantamount to a blanket ban, which leaves some room for plausible deniability among SV bigwigs and
others when this
bubble pops and the SHTF (if not
in the eyes of the law, then at least for the sake of face - saving
in two years» time).
That quick recovery came courtesy of a new
bubble in stocks, which
in 2007 were more expensive by some measures than they had been at any
other point save the bull markets of the 1920s or 1990s.
When I think about the fundamental reasons to invest
in gold today, I see a stock market that is
in bubble territory, serious issues
in the bond market, and many
other asset
bubbles (bitcoins, artwork, cannabis, real estate
in many places, supercars...).
«There's been a prevailing idea that we can put a
bubble around a national economy for goods, to control what goes
in or out, and provide incentives or affect prices
in other ways,» Dawson argued.
The United States economy experienced two such
bubbles in recent years — one
in stocks, the
other in real estate — and both helped the rich become richer.
Historically speaking, there are obviously some periods when you could have made a killing
in gold if you timed it just right by getting
in before the
bubble and then getting out at the top, but like any
other investment or investment sector, you would almost have to be a psychic to achieve that.
I don't know of any
other time, not even the dot.com
bubble (how may of us could get
in on the IPO's anyway) where
in only a 3 year time span, you could have turned so little money into so much wealth.
Thus, asset
bubbles in stocks and RE are also a reflection of inflation that has not penetrated
other assets, yet.