[quote=SK in CV]
What do any of those links have to do with a bubble? And what assets do you think are in a bubble?[/quote]
the “bubble” (as I read the tea leaves) isn’t a specific asset class (like dutch tulips)
rather the “bubble” (I fear) is a result of a compounding effect, so its not an apparent or easy to pin down concept
basically I’ve pondered the interactions of:
1st) “issues” w/ the class of RE used for “investment” purposes (like producing yield >1%), in a global economy where TRILLION$ are on the side lines kept in accounts w/ zero or slightly negative interest rates
2nd) too much emphasis on the LUX RE market
try driving around downtown SD and note all the “new” upper end housing being built BUT if you look around (w/ eyes wide open) note there are lots of “undesirable elements” (this pattern is repeated in down town LA, SF, NYC, London, etc.)
3rd) various “dark matter” financial instruments like derivatives and swaps which are ways to “hedge” (*cough* “speculate” and hopefully financially engineer a big pay off)
4th) the various “limits” and “demands” on the system
these elements mixed together will eventually become a volatile cocktail that will inevitably end in no good (for most) because the economic effects (i.e. a low or negative interest rate “normal” like japan has experienced for awhile) will greatly impact the insurance industry and pensions funds which need to make money to meet their obligations
because the demands are greater than the ability of the economic system to deliver, the “bubble” of which I speak of will act more akin to a “black hole” and suck in and obliterate people/institutions that can’t adapt
the black hole analogy of how I see the economy, is more apt IMHO because as time marches as I see things the effects are going to be “accelerated”
