The Next Bubble To Burst

God, bubble economies.....imagine my shock to go to the CNBC website and see this story:

The next economic bubble is on its way—if it's not already here, analysts believe. The problem is, there's no clear consensus on what it will be or when it will hit. But there is a feeling that another crisis is about to burst.

Pop, pop, pop. Or should we say waves of a gigantic economic tsunami. Indeed, now George Soros has jumped on the economic meltdown bandwagon, saying the we are a long way from a bottom and witnessing the end of the free market model.

Here are the areas experts are looking at for the next bubble pop:

  • Treasury bonds
  • Commercial Real Estate
  • Health Care Technology
  • Student Loans/credit cards

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Looking under the lamp?

One of the early concepts in the global meltdown was that emerging market economies would decouple from the G7 economies, and be spared much of the pain. Didn't happen. The bottom line is that the global economy is, in fact, global, the banks are interconnected and the shadow banking system is still operational. Those looking for the next shock with national blinders in place could be in for a surprise.

The European banking system is a festering pool of decay ready to erupt like a diseased pustule. Yves Smith has been following this closely. Eastern Europe economies are collapsing under the weight of currency shocks and a number of European banks have a substantial portfolio of loans in these countries. The Austrians and the Swiss are particularly vulnerable. Add on the fact that they have all the same problems with a housing bubble and collapsing RMBS asset values and significant exposure to credit default swaps (perhaps some of the AIG money is going over there?), and the magnitude of the potential for disaster is apparent.

Seems to me like emerging economies

Would do well to go isolationist at this point- kill the foreigners, nationalize the assets, tell the European Banks to go hang, and mine the borders.

Moral hazards would not exist in a system designed to eliminate fraud.

Maximum jobs, not maximum profits.


delete this post or edit it. Somehow I do not believe genocide is good economic policy!

Where did I say genocide?

Once again you insert something in that was not written. Isolationism is not genocide- it's merely defending one's land against a hostile invader. European/American banks have proven themselves to be hostile invaders, with hostile intent.

You're reading between the lines again.

On another matter, how the heck do I delete/edit a "reply"? I only see a reply link, not an edit link like a blog post.

Moral hazards would not exist in a system designed to eliminate fraud.

Maximum jobs, not maximum profits.

jesus seebert

you're about to get yourself in serious trouble. What do you think "kill the foreigners" is? Do you think that is ok to write on here?

I think kill the foreigners

Is an entirely appropriate reaction to an invading hostile force. Even Augustine of Hippo thought so, when he coded the first version of rules for just warfare in the 360s.

I also think it isn't "genocide". Genocide is completely different- it's the extermination of a minority group among your own citizenry. "Kill the foreigners" is instead just protectionism- defending your home and way of life from hostile outside influences that have come to destroy that home and way of life.

In genocide, the target can't escape. In defending one's land against a hostile foreign invader, the foreign invader can always just admit defeat and go home.

It's high time we stopped pretending that economic warfare is any different than hot warfare- and doesn't have the same consequences in the end.
Moral hazards would not exist in a system designed to eliminate fraud.

Maximum jobs, not maximum profits.

You can't be serious

Seebert, you have convinced me on my next blog entry, and it is one that I really did not want to write. It is in defense of foreign workers and yes those "evil" bankers. But, I will honor Robert's aims on focusing on economics, well in this case the economic reasoning. Sadly, I can't show any charts or stats at the moment, so I hope our good man, RO, lets me take a slight turn. If I was well enough, I would make it a multi-part series, and really show you how you're wrong, but these days I can barely even get out of bed.

Seebert, I honestly don't think you're evil or crazy. Just wrong, and hopefully we can be gentlemen about this. The advocation of violence is really not an answer. Oh I'm sure you will cite examples of "exploitation" that would even get my blood boiling. But there is a disconnect between a banker or investor in say the City of London and a diamond mine in Liberia or the Cote d'Ivorie. You remind me of a friend of mine, who basically advocated armed insurrection against business owners so that "the people" could own these operations. To him, everything was part of "The Commons", and thus "the People" should own them. If blood needed to be shed, so be it. He thought of himself as a brother of Che Guevera, and like Che, used revolution as an excuse to kill anyone deemed more better off than he.

There's another answer

If the banker is providing the funds for the diamond mine in Liberia- then he is connected. Yes, there should be a disconnect, and that disconnect doesn't need violence, unless the banker goes to Liberia to try to assert "ownership".

And if the people are starving as a result of that banker's actions, then that banker has *already* committed violence- he fired the first shot. Are you saying that self-defense isn't valid?

Moral hazards would not exist in a system designed to eliminate fraud.

Maximum jobs, not maximum profits.

Going there and not going there

I've been there, done that with trolls and every site has them. Bear in mind the troll ranking on comments does add up and I will now assuredly put in an auto ban on trolls in the upgrade. It's semi here already and why the content promotion/demotion system as well as the ratings are in place.

The comment ratings are also a nice way to acknowledge you read someone and appreciated their comment without having to write a reply.

So, let's not go there in terms of degrading EP from it's original intent...which so far as been working great! and that is to give a voice to the amateur, the people the lay person, the middle class, the workers on economics, policy, labor issues. We know we have corporate lobbyists filling the MSM as well as cable TV with all sorts of pure economic fiction so the goal of EP is to intelligently dissect fact from fiction, promote policies in favor of a strong U.S. middle class..with the underlying assumption that a strong middle class means a strong national economy....
and so on.

There is a fine line between some misinformation, miscommunication, assumptions and then discussion on those, one of those "ah" moments....versus an agenda, or disruption, or something that's just so out of whack it's a time sink from hell to respond.

When we have noise in the system, I frankly think you are of too ill health and I'm way too busy to focus on that noise. Let's just get the noise out of our site and focus on the issues we want to bring to light. Writing these posts for free is hard enough. Each one takes hours and hours of research, formatting, writing to make sure it's a valid, in depth post and none of us are getting paid.

Those ads on the site, well, they do not even cover the server costs maybe is we just continue to do "our thing" which is to write, as citizen watch dogs, journalists, we might be able to make not only the site pay for itself but generate some secondary income for our writing efforts....

I do not believe any of us really care about making money, more we care about inane economic policy that is destroying the United States of America...and why we are here, devoting hours upon hours of our time.

My attitude is to not waste my time in a comment black hole dealing with issues not relevant to the site's purpose or our own.

sounds like

an idea from an oligarchical dictatorship to me, seebert ;)

So George Washington

Was a dictator, right? After all, that's what he did in kicking the British off our soil.

I'm just saying perhaps it's time the third world tells the first world to take a long hike off a short pier- and start enacting policies that protect their people instead of exploit them.

Moral hazards would not exist in a system designed to eliminate fraud.

Maximum jobs, not maximum profits.

George wouldn't have shot bankers

George Washington wasn't a dictator. But to equate the Red Coats and Hessian mercenaries, folks trained for ARMED COMBAT, to a bunch of mainly old pudgy white guys in expensive suits just shows how far out of sync to reality you have come. George Washington lead the military campaign in the rebellion against the Crown, but the leadership circle he was involved with first petition the Throne and Parliament. Yes foreigners were killed, but not in the same context that you are advocating. The foreigners in this instance were mainly military, and in few instances agents of the Crown working in civilian spheres. When Loyalists were held up by mobs, that is non-military folks, 90% of them were Englishmen who were born in the Colonies. There was no, I repeat, no institutionalized pogrom by George Washington against foreign civilians.

No, George just shot the Agents of the Bankers

Since in his time, the King was the banker, George just shot the agents of the bankers.
And the "old pudgy white guys in expensive suits" are the ones paying the folks trained in Armed Combat- and thus are just as guilty.
Today, there are no civilians- only hostile invaders.

Moral hazards would not exist in a system designed to eliminate fraud.

Maximum jobs, not maximum profits.

An Inconvenient Debt

If Glenn Beck's chart is correct there will lots of treasuries going up for sale. Is anybody going to buy?

Glenn Beck is a fictional character

Seriously. I have seen so much just pure, well, not based on reality, at all "experts" on his show it's frigtening.

In this case, that chart is accurate.

It's the St. Louis Fed AMBUS.

What that is Bernanke dramatically increased money to the central banks for commercial banks to loan (which they haven't) as well as increased the money supply to stave off a depression. Supposedly he will ease it down when banks "start lending again".

It's a scary graph to be sure but I think one also needs to look at every other G20 monetary base graph to calm down.

New Deal Democrat has written a series of posts on this dramatic increase of M0. He was on vacation and he's also been ill but watch for his that economically clueless Beck has grabbed it he'll probably do an update (not that everyone is not concerned).

We need an update on the great "credit squeeze" and LIBOR anywho.

I think midtowng did a post on going off of the gold standard, as well as Bretton Woods, which are also informative reads.