Oh, and a couple of stats to keep our bubble in perspective vis-a-vis the Japanese.

At its peak in 1990, the sum of the Japanese property market (commercial and residential) and the stock market were 7.7x Japan’s GDP.

The same calculation for the US in 2007 was 2.6x GDP.

So the Japanese asset bubble was almost 3x as large as our asset bubble relative to GDP. 95% of the debt that financed Japan’s asset bubble resided in Japan. Only 74% of the debt that financed our asset bubble resides here in the US.

So, again, we’re in bad shape. But Japan’s bubble was in a whole different stratosphere. And their total debt-to-GDP was almost 290%. While our relative debt level is higher, our bubble was a fraction of theirs.

Just something to keep in mind when comparing our respective asset bubbles.