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Asymmetrical Bubbles

Tyler Durden's picture





 

Submitted by Lance Roberts of STA Wealth Management,

 

 


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Thu, 12/05/2013 - 21:21 | Link to Comment Pareto
Pareto's picture

As bubbles increase as a result of fiat expansion and other counterfeiting measures, the bubble will burst not because of "sentiment" changing, but, because 1.2% GDP growth has not contributed the collateral that ought to be commensurate with the bubble.  The available collateral - pyramided in so many ways through derivatives - is diluted.  As both debt and M rise, the value of real collateral available goes to zero.  There is no collateral to cover!  That, imho is the essence of a "bubble".

Thu, 12/05/2013 - 22:53 | Link to Comment markmotive
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The biggest bubble of them all is China.

"China is a massive asset bubble"

http://www.planbeconomics.com/2013/05/muddy-waters-research-china-is-mas...

Thu, 12/05/2013 - 23:55 | Link to Comment Stuck on Zero
Stuck on Zero's picture

Ask yourself why bubbles are always marked with exponential rises.  An exponential (as a transcendental function) is non-polynomial.  It has an infinite number of positive derivatives.  That means that every market play based upon derivatives increases.  This attracts leverage such as futures, options, leveraged options, margined options, etc.  The longer it goes the happier and more confident everyone gets ... until some action kills the whole thing.

 

Thu, 12/05/2013 - 21:42 | Link to Comment CheapBastard
CheapBastard's picture

Wait until the next Housing Bubble bursts.

In addition. I'm seeing so much crappy construction it's crazy.

2x4's and 2x6's that's been sitting out in the rain and not dried out then stuck into walls, bubbly/scaly/flakey concrete from rain damage when pouring it, poor drainage around the home sites ...you name it and it's out there.

Why? Building too fast, hiring cheap/inexperienced workers, extreme cost-cutting, and so on.

Makes me wonder how long this batch of houses will last before they begin falling apart.

Best advice; hire a top-notch home inspector BEFORE you buy if you decide to take the plunge into that Housing Abyss.

 

Thu, 12/05/2013 - 22:12 | Link to Comment petolo
petolo's picture

You're no cheap bastard but a wise one. I have built my own house numerous times from trees i felled , skidded out with horses, seasoned in the shade and erected piecemeal. They never cost me much but have a value, if not a price. Building a house , like everything worthwhile takes a lifetime. Build it well and incorporate your mistakes.Fuck the bankers, mortgagers, insurers , building inspectors and tax assessors.

Thu, 12/05/2013 - 22:11 | Link to Comment petolo
petolo's picture

You're no cheap bastard but a wise one. I have built my own house numerous times from trees i felled , skidded out with horses, seasoned in the shade and erected piecemeal. They never cost me much but have a value, if not a price. Building a house , like everything worthwhile takes a lifetime. Build it well and incorporate your mistakes.Fuck the bankers, mortgagers, insurers , building inspectors and tax assessors.

Fri, 12/06/2013 - 05:12 | Link to Comment ebworthen
ebworthen's picture

I saw the same thing in the housing boom of the 80's, what a mess.

One sub-contractor had the 4X4's for decks on townhouses eight inches into the dirt, no concrete base/footing.

I told the head foreman over the development and showed him - you know - 20 people on the deck five years later and it collapses and kills someone(s)?

One thing to have a cracked wall, another altogether to have a deck collapse.

He said "Hmmm..."; he was pissed off but not sure he ever fixed it.

Thu, 12/05/2013 - 21:44 | Link to Comment DOGGONE
DOGGONE's picture

The MAIN ENABLER of sizable asset price bubbles is keeping the real asset price histories out of sight. For example:
http://www.showrealhist.com/RHandRD.html
These histories show "topping out & falling far down" examples, that dominate. "The sky's the limit" imagining for a future is NOT exampled!
Conpersons-in-control agree with me, which is why these histories are NEARLY NEVER seen.

Thu, 12/05/2013 - 22:39 | Link to Comment DOGGONE
DOGGONE's picture

Here's another big reason that these histories are nearly never seen -- they strongly suggest the dominance of the coming & going of irrationality. This is BAD advertising for the financial sector, so NO! Journalism is a four letter word ...

Thu, 12/05/2013 - 21:46 | Link to Comment max2205
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Throw in PTT intervention and if the govt wants it up....it hard to see the real break point

Thu, 12/05/2013 - 21:54 | Link to Comment q99x2
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There is only so much wealth in the world. Eventually it will have to be shared even among those that have most of it. Unless wealth is created anew I would expect an end to the existing system. But I would expect the stimulus for the end to come from an authoritative action, such as war, before a total breakdown in the system. But today since the existing wealth is concentrated and most have a pretty good idea of who is holding it the old standby of nation against nation might not hold because all nations will go after those holding the wealth amd control over their lives. Those that are using war as a means to retain their control.

Side effects of globalism. We are all one and the elite are our enemies.

Thu, 12/05/2013 - 21:59 | Link to Comment Hughing
Hughing's picture

This not a bubble but the expression of the primary affect of unlimited debt: asset inflation. It will be confiscated in some way but not allowed to randomly burst.

Thu, 12/05/2013 - 22:07 | Link to Comment The Invisible Foot
The Invisible Foot's picture

The printings shall continue until moral improves.

Thu, 12/05/2013 - 22:39 | Link to Comment Wahooo
Wahooo's picture

ZH is a bubble of negativity concerning the markets, so I guess the printing will continue for a long, long time.

Thu, 12/05/2013 - 22:28 | Link to Comment TheRideNeverEnds
TheRideNeverEnds's picture

Sample size is too small to prove anything, this time it will be different.

 

 Watch what happens tomorrow, three possible outcomes.  

1-Taper- Bullish because we recovery now! ES shoots up over 1800 in a nanosecond; closes year over 1850.

2-No Taper- Super Bullish because QEternity!! ES shoots up over 1800 in a nanosecond; closes year over 1900.

3-Increase QE- Super Mega bullish 9000!!!!1 ES shoots up over 1800 in a nanosecond; closes year over 1950, possibly 2000.

 

Either way the market will be up sharply tomorrow.  The chance of us closing the year below 1800 is basically zero.  

 

 

 

Thu, 12/05/2013 - 22:35 | Link to Comment Dre4dwolf
Dre4dwolf's picture

kinda starting to look like bitcoins chart.

Fri, 12/06/2013 - 09:22 | Link to Comment jerry_theking_lawler
jerry_theking_lawler's picture

All of these examples are Pre-QE America.....it may have a different trend in Post-QE America.....

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