Besides the now-famous "Biggest Bubble Ever" article in the Economist earlier this year, I feel this article breaking down the six "bubble proofs" is an excellent read, from an albeit interesting source. Enjoy.
Merrill Lynch economist, David Rosenberg, identifies six characteristics of any kind of asset bubble:
1) Overheated prices
3) Too much debt
Some, including famous investor Sir John Templeton, predict that, when the bubble bursts, housing prices will plummet at least 20 percent just for starters. He expects that 20 percent of homeowners with a mortgage will lose their homes when the bubble pops and has even told investors to prepare for a crash similar to the stock market crash of 1929 that led to the Great Depression! (Daily Reckoning, April 1 and August 18)
December 27, 2005
Posted by blogger at 12/27/2005