The next bubble (2010, real estate, credit, debt)

[Wild Style]

Read this back in Feb. (bought the magazine). It is a GREAT read, would like to see you guys thoughts.

link

[Nor'Eastah]

I'd like to see us get beyond this current crisis before we go on to the next one! We haven't even begun with this one yet...and some people think it is all over! There will be pain - lots of pain - before this is "over". Too many assume it will be like the "dot-com" bust, and life will continue as per usual.

I'm betting that it will not. We won't get out of this for another 5 years - if that.

[Wild Style]

^^

housing bubbles usually take 7+ yrs on their own. I think the housing bubble wont bottom out until 2014 or so. I think in places like florida 50% to 60% decline in housing values. In places that didn't get out of hand 20% to 30% correction. But that doesn't even take into account the credit market, that in and of itself is another beast. So I agree 100% with you. However, recognizing the next bubble is good for savvy investors, means you can get it, invest, wait for a peak or just before it, get out and Bobs your uncle.

[simcity]

If our housing crash is anything like Japan's then we could have another 8+ years to go. Kinda scary eh?! The comparison makes it appear like our fall has only just begun!! Not to fear, the FED will keep rates low for eternity and hyperinflation will take hold. Prices of everything will skyrocket, including our home prices.

Source: The Big Picture | Housing: US vs Japan

I liked the next bubble article. Makes sense that alternative energy and infrastructure could be the next bubble. Thanks, if I had any play money I'd start shopping now. Maybe some of you who do can buy in low now before the bubble begins.

[htmlfamily]

Good find!

[bale002]

Nice detailed summary of the basics of the US economy that can be summarized even further: the US economy is the biggest and most efficient goods and services production and distribution system on the planet, and yet it consumes even more.

Balance between domestic production and consumption, then.

Many have called for a return to basic manufacturing, in decline since the 1970s, as the article reminds us.

But instead of balanced, steady progress over a number of years, we have volatile progress through a series of bubbles - the latest version of the American way - whether internet start-ups, wars, housing, immigration, and now possibly alternative energy.

Yes, we have needed information system and communications technology, housing, immigration, and alternative energy (the wars we could have done without), but social realities and politics demand that some profit more and at a faster pace from the progress than others.

For the folks in the middle, it is sort of a crap shoot, trying to save and trying to decide where to invest such saving without getting burned, used as fuel for the consumption of the fewer, more powerful folks higher up.

Man, it really is a dog-eat-dog world.

Good luck!

[bhcompy]

Originally Posted by bale002

Nice detailed summary of the basics of the US economy that can be summarized even further: the US economy is the biggest and most efficient goods and services production and distribution system on the planet, and yet it consumes even more.

Balance between domestic production and consumption, then.

Many have called for a return to basic manufacturing, in decline since the 1970s, as the article reminds us.

yea, but a return to basic manufacturing will be impossible without increased tariffs on imported goods. labor and real estate costs in the us are lightyears ahead of china, taiwan, malaysia, etc where many of these basic goods are manufactured. i dont see it happening with the "global economy" buzzword being pushed around like it is by everyone and anyone

[tallrick]

This is a very accurate description of what I have seen living in Florida! Interestingly I predicted the tech bubble up and down, about one year off. The real estate bubble hit me by surprise, I thought it was an 80's phenomenon. I expected the energy bubble to follow the tech bubble after a 4 year recession, but instead we got another real estate bubble. For the life of me I will never understand how people view obligations of debt as wealth. Real estate costs you 2% a year just in taxes, in addition to any carrying expenses. In order for manufacturing to return the real estate bubble has to implode. But in the meantime I am sure that many "green" energy schemes will be popping up to absorb the new money. This time I am going to get in on the fun, this is a bubble I can profit from!

[evilnewbie]

I don't put too much stock in alternative energy because 99% of it is all hype and the media and Al Gore is pushing on the hype. Its basically a trillion dollar business designed to keep the wealthy... well, wealthy... Its no wonder that Gore "heavily" invests in these companies for big payouts and then turns to the government and try to make it law. Conflict of interest anyone? Ethanol and hydrogen are NOT good energy sources otherwise it would of been done a long time ago. Solar energy is just not efficient enough especially in most of the country where there isn't as much sunshine. Wind energy is not constant enough. Hydroelectric power affects rivers and streams to drastically and not enough areas that can generate significant amount energy from these sources. Geothermal energy is promising but like hydroelectric power, it isn't available "everywhere".

Of those that offer "real" solution, only solar and geothermal energy is promising. Unfortunately people won't consume from utility companies if they can tap into their own private energy supply... thus we have a problem. Business and government collusion. Its no wonder there isn't much research funds going into these areas and are diverted by "hype" into carbon credits, biofuels, and whatnot. How else would they keep the rich, rich at YOUR expense. Bubble? I don't think so but the author does provide a good detail of what actually happened and the problems about it. I don't think alternative energy will be a bubble.. the next bubble? How about the Housing market AGAIN.. the government trying to bail out lenders and homeowners by getting MORE homeowners to commit. I predict the housing market will undergo a second implosion as the economy continues to stumble and the government tries to get more people into debt by buying more homes...

[lchoro]

Credit crunch will likely spread to the sectors that comprise the next wave (oil & gas, coal, alt. energy, distributed power generation, metals, utilities, transports, etc.). They won't get hit as hard as the rest of the market, and they'll start to bounce back before the last market bottom. Real estate stocks lost about a third of their value in the 2002 market decline (S&P 500 lost half its value) before becoming a full-fledged bubble.

The other alternative market scenario is that this is a 1998 type market decline with another 10-15 percent downside and the Fed is successfull in blowing another bubble to give the economy a temporary reprieve. That bubble will be concentrated in a few large stocks sufficient to push up the indices to new highs along with the energy and commodity stocks. Interest rates would be much higher in 2010 than they are now as inflate accelerates.