I Can't Believe You Idiots Want Another Bubble
Listen, there are good bubbles and there are bad bubbles. The good ones involve being so totally immersed in a particular situation that the rest of the world melts away and you find yourself absolutely oblivious to the extraneous noise, focused on that singular sound before you. If you've ever been head over heels in love, you know what this sort of bubble feels like.
But then there are the bad bubbles, like the sort Alan Greenspan tried to inflate after 9/11 and the ones we continue to encourage in a futile attempt to get the economic machine greased up again, despite failed attempt after failed attempt to encourage frigid markets to spread their legs and give up the juicy stuff.
Oh please. Don't call me obscene, this is obscene.
This time is different.
That’s what people argue every time a bubble inflates, and what they think every time they are chastened by its popping. But century after century, decade after decade and year after year, human beings irrationally exuberate all over again.
Not long ago, the housing bubble burst and brought the global economy to a standstill. Now economists, recognizing that bubbles tend to come in bunches, are on the lookout for the next market to fizzle. They say that governments, central banks and international bodies should scrutinize a few markets that look likely to froth over in the next few years, like capital markets in China, commodities like gold and oil, and government bonds in heavily indebted countries like the United States.
“Globally, a lot of money is now seeking higher returns once again,” said Rachel Ziemba, senior analyst at RGE Monitor. The steadying of the economy, liquidity injections by governments and big returns reaped early this year by investment banks are encouraging more traders to dip their toes back in the water in search of the next big thing.
“As long as compensation and bonuses are based on short-term performance in the market,” she said, “that’s going to encourage risk-seeking behavior.”
I'll be over here in my little bubble and you asshats can deal with that other mess. Until we wake up and suddenly realize that central banks exist simply to encourage this sort of reckless behavior, we'll keep hitting the same wall and sweeping up the same implosions like some bad real-life version of Groundhog Day. That's all I'm saying.