Irrational Exuberance

Cryptocurency Chaos: Bitcoin Bounces Back After Crashing As Asian Fever Re-Emerges

After crashing $500 from its intraday highs today, Bitcoin has bounced back $300 off its intraday lows extending gains into what is likely to be another frenetic Asian session. While there are numerous drivers of the recent action, 'scaling' and 'asian fever' are the greatest factors with Japanese and Korean premia exploding.

ECB Warns Of "Excessive Exuberance" In House Prices; Sees Financial Instability Due To Higher Yields

In an unexpected two-part warning from the ECB, the European Central Bank warned of “excessive exuberance” in some European housing markets, driven by offshore buyers, that could spread to other areas in a “ripple effect.” Separately, the ECB also said "debt-sustainability concerns" have risen in the past six months amid a potential increase in yields and political uncertainty in some countries.

BofA Finally Asks "Is The Tech Bubble Happening Again?"

"US growth stocks just surpassed 2000 “bubble” highs vs global value stocks; data on valuation, flows, and the relationship between equities and bond yields are all good clues that a speculative overshoot has begun; there are nascent signs we are in the very early stages of an overshoot."

Bitcoin Blasts Through $2200, Here's Why

Bitcoin is up almost 15% today, breaking through $2000, $2100, and now $2200. As we detail below, there are numerous drivers for this sudden surge in the virtual currency...

Weekend Reading: Sentient Illumination

With a continuing resolution for $1 Trillion passed this week, which will fund the government for 5-whole months, there seems to be little consideration given to the disconnect between increase debt levels and slower economic growth.

Attention Turns To Toronto's Subprime Debt Time Bomb

While Toronto and Vancouver are leading the market for risky mortgage debt, they aren’t alone. Canada has dodged the real estate commodity cycle for almost 30 years. That has produced a whole generation of people that have no idea that real estate is a cyclical market. This irrational exuberance, and the thoughts that this market will never end is placing all homeowners in a precarious situation.

Knave Dave's picture

After years of trying to create a "wealth effect", the Federal Reserve is slowly dialing down its special-effects machine. Yet, this week, the stock market provided dot-com-era proof of completely iirrational exuberance -- the kind of stupid stuff that happens when cheap money follows free money.

The End Game

"..the debt problem is so pervasive, there is only way one forward - inflate... They will do anything (and everything) to ensure the financial system doesn’t implode on itself... They will keep printing until the bond market takes the keys away."

What Happens When The Fed Warns The Market Is Overvalued

While investors hang on every dovish word bluffed from a venerable Fed speaker's mouth, the cognitive dissonance when something negative is uttered is stunning. Since Greenspan's "irrational exuberance" moment, asset-gatherers and commission-takers have advised ignoring Fedspeak on stocks... historically, that was a mistake for investors.