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Five Decades Of Asset Bubbles: Which One Is Next?
Or maybe this is a trick question, and the answer for the "New Normal", when all central banks are coordinating on reflating the biggest asset bubble of all time, is "all of them"...
And some thoughts on the chart above from Obermeyer Asset Management:
The above chart shows that once every ten years or so, some investment theme becomes dominant and takes on bubbly proportions. What these dominant themes seem to have in common are roots in economic factors that morph into “truths” that take on a life of their own. These “truths” have self-reinforcing properties where market prices validate the “truth” and vice versa. This creates a virtuous cycle until market prices become unsustainably high, reverse themselves, and essentially purge the beliefs that created the risky condition. This is often a lengthy process.
The purpose of this commentary is not to explore the well-covered ground of how manias form and unwind. Rather, it is to highlight the role of psychology within investment markets and advise caution when conventional beliefs or “truths” begin to take shape. The reality is that there is no single truth that can be relied upon to make money in financial markets. If there were, everybody would be rich. Markets are driven by people, so psychology plays a big role in driving returns on any given day. But a recognition of some of the “truths” evolving within markets can help identify the causes of price trends, which can reveal risks and long-term opportunities.
One of the “truths” that seems to be evolving – as evidenced by how investors are allocating their capital – is that interest rates will stay low for a very long period of time. If this is true, what we’ve seen in markets is rational; if it’s not, many will be disappointed. One of the recurring themes that I heard at the Value Investor Conference earlier this month is that today’s environment is challenging for bargain-oriented investors. Many in attendance saw the Fed as a too-powerful force driving most stock prices out of bargain territory. While this may indeed be the case, there are almost always good investments to be made, especially in areas that are overlooked. The universe of stocks that are popular, that have obvious appeal and are easily understood is rarely fertile ground for bargains.
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well at this point, with the miners selling for pennies of their cash out value.....they are the uber bargain of a lifetime.
"debt monetizations are the best path to prosperity"? Worked great for Japan. Even better for Europe right? Hmmm. "Maybe we should try something different"? I will not call a top here either nor should any of you and I love getting the "feel" of what is a truly profound run of mad money...(boy I wish I had a position in that oil trade too though...been bullish on that for five years as well) but this is no Teddy Bear rally and will keep playing it as such.
"Bubbles beget bubbles."---Jonathan B. Ubblemath
The next bubble is rental properties.
Next bubble... GOVERNMENTS and BANKERS.
I'd advise checking cash and burn rate. The ones with good situations and no need to look for cash will make it through this. Though I might add some juniors have been doing private, non-bankster financing and there may be more of that available.
Easy, just look at which one can be "printed up out of thin air" compared to which "asset" requires some real work to produce.
And this;
tick tock motherfuckers --> http://www.marketwatch.com/investing/bond/10_year
printed out of thin air = fiat dollars
takes real work to produce = bitcoins
With the spectre of hyper-inflation - Japan is a strong contender for the next equity bubble.
http://nipponmarketblog.wordpress.com/
Only in nominal terms. Japan is fucked in real terms.
I understand what you mean, but..."real terms?" How quaint.
It gets real when it takes 100 Trillion dollars to buy a hamburger
I'll pay for it with my Tuesbubble profits
Which one is next? Whoever knows the answer to that question will be stinkin' rich. Yea, stinkin' rich! Here's to stinkin rich! Yea, stinkin' rich. Here's to bubbles! Yea, stinkin' bubbles!
Too much coffee...
It's already late afternoon here - so, you're definitely right :)
Politician life insurance policies.
gold bubble popped in september 12
So gold is a bubble when it went up slowly for 12 years..
What about the 35 year bull market in US debt ?
that's not a bubble.
everyone knows that bubbles in equities and bonds just don't exist.
that's practically keynesian 101.
Slowly in 12 years?
600% in 12 years - that is not slowly. ZH is presenting the charts in a certain way. Indeed, I believe ZH is just selling the book. Just look at the bitcoin coverage. Who is paying their ads, what do you think?
UST in 30yrs.....
Just saying.
The dollar is the bubble.
UST in 30yrs.....
Just saying.
The dollar is the bubble.
Do not mix up the dollar and treasuries. Dollar is going higher because of poor world economic situation which is a bit contraction like. Yields are going higher because of local domestic situation. If dollar gets too strong it would bring a contraction domestically and the Treasuries would go up again temporarily. However long term treasuries and dollar are screwed, we agree on that.
The ads you see are from your browser click history. My ads on ZH are to buy silver eagles or things from amazon.
About the same time as your cherry?
Only five decades of bubbles ? Try doubling that.
I am thinking securitized student loan tranches...education is the new asset scam ponzi
The number of students attending college will be dropping if they don't watch what they post in social media with this Orwellean police state we have become. http://www.eagletribune.com/latestnews/x701042777/Debate-ensues-after-Methuen-students-arrest
Read this the other day and had a good laugh...thought I'd share (paraphrasing):
"In a complete surveillance state, sarcasm becomes plausible deniability."
The douche bag deserved to be arrested just for having a facedouche account.
That's easy! Debt bubble
Debt is the bubble.
Government is the bubble.
humanity is the bubble.
J Lo
She got a big o'l bubble butt.
Not compared to Kard-ass-hian...jeebus the size of that thing.
I'll try...'morals' are in a bubble.
.
Until they turn us into flies/zombies/borg -minded, the great plan is not done.
.
You thought Elvis Presley shaking his hips or Jim Morrison saying 'couldnt get much higher' - on the Ed Sullivan Show back in the (mom's) day was hardcore...holy shit - look at 2013. And here i thought we are suppose to be all sophisticated and advanced in '2013' as a species...what a joke.
Unmoral behavior is gaining speed like computer processors/technology in that it doesnt stop until it cant go any faster...or in 'morals' concern - any more perverted.
Tell me differently?
.
As above,
so below...
Contradict yourself much? Did you mean to say that immoral behavior is in a bubble? Because all I see are paper-pushers behaving badly without suffering any fucking consequences. If moral behavior was in a bubble (or all time high) wouldn't some of these fuckers (a.k.a. John corzine) be in fucking prison? Pull your head out of your ass please your message is getting garbled.
Unmoral, immoral; potatoe, potato...you know what i mean.
Im baked most of the time...therefore, im doing quit well under the circumstances on this prison planet.
.
And i meant generally speaking - immoral behaviour, not about 'just a few individuals'...it would be easy if we could pick and choose which fucker goes to jail...but, we dont have that luxury - they do howeveer.
.
But dont worry LofP...evil is dysfunctional...that will eventually lead to their downfall and the bubble popping...just might not happen in our lifetime.
debt bubble
bedt dubble
So for the 2000-2010 decade they picked:
- Oil
- Chinese stocks
as the the big asset bubbles?
Call me crazy, but I'm thinking they missed something....
One bubble to rule them all...
next bubble could be any of a number - Nikkei, Spanish bonds, NasDaq,
The last one to go will be the US Dollar - once all the sheep have filed in (will be like Great White at the Station club).
Bah, never fear! The S&P is tracking earnings perfectly, perfectly I tell you!
paper/electronic money?
bubble bubble toil and trouble
it's about time the experiment with central-banking came to an end ...
Oh the lure of wealth without work. If you only got in on the ground floor, you could have turned thousands into millions. That Porsche you always had your eyes on, pocket change. Your wife getting a little fat, hell think of the A grade hookers you can have.
Instead of complaining about the rich, you can join them. BUT YOU GOT TO INVEST, play the game. Get in at the bottom, sell at the top. It's so easy.
There is no true value in any bubble. The value is the belief there will always be someone else willing to pay more. As long as that belief exists, it doesn't matter how much it costs, you will buy. No matter how irrational the purchase seems. $400k for a $100k home six months ago. Just fine if it sells for $500k next month.
There are too many people that believe the story Wall Street sells. The same who flood the Casino because today is the day they pull that lever and win $1 million.
+1
The value is the belief there will always be someone else willing to pay more. Like baseball card "enthusiasts."
The same who flood the Casino because today is the day they pull that lever and win $1 million. Ever hear those traveling carnival slimeballs scream out "there goes another big winner" as someone carts off a ginormous stuffed pokemon or something? Wonder if the sheep take notice that the never scream out "there goes another LOSER"...
Short TREASURIES BITCHEZ!!!!
Did I say that before, how many times?
It's more like 10 decades (since 1913) of bubbles and this guy left out the Granddaddy of them all - US stock market 1922-1929.
"Gold" a bubble, when is has not even come close to the nominal inflation adjusted high of $2300 in 1980. Sure, you might be a fucking idiot too. Any one who thinks gold IS in a bubble is more than a few fries short of a happy meal.
The short bus is on the way to pick you up.
1. US Treasurys
2. The USD
Investment strategies for the Zimbabwe Ben era:
1) Buy any asset class that is not in a bubble, because it soon will be.
BTFB
There are no bubbles. There is only a very very low interest rate that can never rise again. You all want to see the system crash and to see our dear leaders get what they deserve, but it will not happen. They will continue to inflate until -and long after- Congress has rewritten the tax code and the US Social Security system begins pumping your weekly wages into their most favored and state sanctioned ETF's.
Gold, Silver, Oil and Euro are already over the hump - and sliding.
But those US indexes - new all time records every day.
Say goodbye to the Dow and S&P.
The Fed is taking class warfare to the extreme. How does their promoting "inflation" help the 90% of the public who have little to no equity? De we really WANT surging home prices and rent levels (to go along with higher food and energy costs and health care costs and tuition costs and insurance costs etc.) when we all know unemployment is much higher than advertised and wage growth has long been stagnant.
Chairsatan EATS the middle class and the poor for breakfast, lunch and dinner as Wall Street cheers him on...
I wish William Banzai would make an image of that. One of Chairsatan's hands can be grabbing a poor person and shoving it into Chairsatan's toothy mouth as another hand hits CTRL-P while the savage Roman mob (Wall Street banksters etc.) cheer him on as they have their orgy while bathing in free money. I smell a Pulitzer nomination coming for a well-drawn image of that scene...
Please do it Banzai, too perfect!
http://www.art-prints-on-demand.com/kunst/peter_paul_rubens/saturn_devou...
That photo in your link looks like a good start. I wish William Banzai could make an image of Chairsatan eating a citizen whilst printing cash as the Roman horde (i.e. Wall Street) cheers him on. He is welcome to full rights to the idea if he chooses to do it. I can't draw worth a damn or I would take a shot at it.
Oil was never in a bubble...
Heavily overbought but never a bubble...
Everything is going down.
EVERYTHING
BUY LAND
" WE DIDN'T SEE THAT ONE COMING"
oh well... :/
U.S. farmland is bubbling.
Rare earth miners bubbled awhile ago.
Here's a guess.....rice. China has a bit of a cadmium problem in a major rice producing region. If one assumes that they do not radically change their dietary preferences, then they will need to begin importing far more.
Maybe in central Illinois and Iowa, but I can get 200 acres of contiguous tillable row cropland close to highways with decent soil for $4,000 an acre. Now, if only I had some of those cheap $$$$$ to buy it with.
And they already are changing their diets in China - buying lots of soy and corn to feed their pigs and chickens. Migrating up the protein chain, leaving rice behind. Corn production, this year's surplus notwhithstanding, is where I would bet on increasing production needs.
Bubble Bernanke and the Fed members are creating one huge bubble disconnected from the fundamentals.
The markets will continue their daily climb for as long as it takes for Bernanke, the FEDs and the NWO to bail out Oboma and Holder from their crimes.
Anything that fractures the tenuous layer of water molecules can cause a bubble to burst. For example, a gust of wind or an object (like your finger) will easily cause a bubble to burst.
If you put short-VIX-and-roll 2009 to now its way off the scale already..
Well centralized big government may be a bubble that is about to pop. Consumer faith in it is dropping. We may all be trying to live on system D for a while.
http://www.strategypage.com/on_point/20130521234256.aspx
Zulauf: Bubble Will Burst In Two Years
Felix Zulauf:
Full Text:
http://homment.com/Zulauf-bubble
I have a "Save the Whales" bumper sticker on my SUV that makes me carbon neutral.
Because 'I care'.
I have "Nuke the Whales" on mine. Because I care... AND I'm ironic.