I remain amazed that in 2015 the universal ignorance on how house
price bubbles form and why they form is something only 75 year old retired REALTORS seem to understand.
«Nationally, we don't see evidence of
a price bubble forming again.
Not exact matches
These
bubbles provide a classic contrast between the real wealth of nations and what the business press these days calls «wealth creation» that simply takes the
form of rising asset
prices — «capital gains,» most of which are land -
price gains.
All of these
bubbles and crashes have one thing in common: If you tracked them on a line graph, the sharp
price gains people made day after day on the investment would
form what's called a «parabolic curve» — one of the most reliable warning signs that an investment may be overheating amid hype and euphoria.
«'' One variation I heard is that Paulson's buddies will
form new companies and have G - Sax leverage loans and convert debt into equity that way as a way to keep up shareholder equity — then they will sell at the artificially high
price back to others like them in a mini —
bubble.
Greenspan's suggestion that stock markets were
forming a
pricing bubble shook investors around the globe.
How to Spot a Market
Bubble The bursting of two major asset
bubbles — in home
prices in recent years and Internet stocks at the turn of the century — has trained investors to scan the horizon for signs of where the next one might
form.
From there, a euphoric
bubble could
form, driving the
price far higher beyond all calculated technical objectives and could potentially reach as high as $ 1,500 (which is still short of some investors» predictions).
Economic
bubbles are
formed when assets are being traded at
prices that are significantly more than their intrinsic values.
And the more
prices are overvalued, the greater the chance that a
bubble might be
forming.