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Tom Coburn is a Big Fat Jerk


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Friday, December 03, 2004

And finally --- the housing bubble

Stephen Roach issues yet another warning --- and I doubt this time he tempers it with a public reversal, like he did just a few weeks ago.

Bubble Day

While it has only been four and a half years since the bursting of the equity bubble, memories have already dimmed of that extraordinary speculative excess.  Yet in retrospect, that may have only been the warm-up for the main event.  Bubbles have a way of feeding on each other -- ultimately compounding the problem and leading to an even more treacherous shakeout.  That’s certainly the lesson from Japan and could well be the case in the United States.  America’s housing bubble is now in the danger zone.  So is its saving rate, current account deficit, and overhang of consumer indebtedness.  It’s been a US-centric world for so long, that everyone takes it for granted.  Yet global rebalancing poses challenges for all major countries in the world.  Saving-short America will not be spared -- especially if it must now come to grips with the biggest asset bubble of them all.


Go to the link and read the rest. And cut up those credit cards. Now.

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