‘Bubbles Forever’ and stock crashes forever too
Commentary: Warning of new ‘Irrational Exuberance’
By Paul B. Farrell
MarketWatch.com
July 27, 2013
SAN LUIS OBISPO, Calif. (MarketWatch) — “Bubbles Forever” screams Yale economist Robert Shiller’s headline in Project Syndicate. “Bubbles Forever” is a brain scan of today’s collective insanity sweeping through millions of investors searching for a “new, new normal,” something better than today’s uncertainties.
Shiller captured the insanity of the dot-com 1990s in his best-seller, “Irrational Exuberance.” Now, his “Bubbles Forever” warns that “irrational exuberance” is back, as we dump bonds, chase yields, searching.
Yes, bubbles are forever … in our minds. And when the virus takes over our collective brain, there’s no talking us out of it. We’re like “Mad Money’s” Jim Cramer, we know “there’s always a bull market somewhere,” a contrast to Shiller’s warnings of America’s “Bubbles Forever” brain, a bizarre new “irrational exuberance.” Listen:
“You might think that we have been living in a post-bubble world since the collapse in 2006 of the biggest-ever worldwide real-estate bubble and the end of a major worldwide stock-market bubble the following year. But talk of bubbles keeps reappearing — new or continuing housing bubbles in many countries, a new global stock-market bubble, a long-term bond-market bubble in the United States and other countries, an oil-price bubble, a gold bubble, and so on.”
‘Bubbles Forever’: irrational exuberance wants a ‘new, new normal’
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