Crisis: when the bubble is the asset

Saturday, August 26, 2017 // Written by Enzio von Pfeil

Many bright commentators gnash their teeth about the threat of asset bubbles.  We see the risk elsewhere.

  1. Asset bubbles. It will not have escaped you, the reader, that this term has gained currency in the press.  Indeed, Dr. Yellen just addressed this hot topic at Jackson Hole. 
  2. Where the bubble is the asset.  Without wishing to be clever, we think that the real danger lies not so much in an over-valued assets, but in repackaged tranches of collateralized debt / loan obligations, student  as well as car loans.
  3. Thank you, Kaiser Trump.  This is precisely where Kaiser Trump is creating the bubble - by unwinding all of those regulations put in place after our 2007/8 bubble. You know the rest of the story. 
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