11 Big Bubbles That Are Happening Right Now

blowing bubbles

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“Maybe there is a bubble in the word bubble,” says renowned Yale economist Robert Shiller.Shiller is the genius who predicted the dotcom bubble and the housing bubble.  So, he’s probably right about their being a “bubble” bubble.

But that doesn’t mean we shouldn’t take seriously the warnings of experts.

We tracked down the sectors that experts have called full-on bubbles, and captured what they said.

US Health Care

Warning stat: Over the past 30 years, health care spending has grown 2.5 times as fast as incomes.

What the experts say: According to Citi's Steve Wieting, 'Functioning market price competition barely exists

Farmland

Warning stat: A farm in Iowa sold for $20,000 an acre in December.

What the experts say: 'Each week brings a new tale of dizzying prices at the most recent farmland auction,' wrote Kansas City Fed Governor Esther George earlier this year. 'I hear from many well-informed, concerned voices across our region wondering whether this could be a bubble. Only time will tell; however, these types of events have played out in the past, and the results were not kind to the industry involved or its banks.'

US Treasury Securities

Textbooks

Warning stat: The price of textbooks have inflated by an average annual rate of 7 per cent since 1978.

What the experts say: 'It's hard to see how the traditional cartel-style textbook model can survive, and that giant hissing sound you might be hearing is the 'college textbook bubble' starting to deflate,' writes economist Mark Perry.

Gold

Warning Stat: In 2011, it hit $1,900/ounce and completed its 11th-straight year of gains. It's currently $1,640/ounce; +127.24% since Nov. 2008.

What the experts say: George Soros called it the 'ultimate asset bubble' two years ago. Although gold is off its highs, Soros and others still think the yellow metal is priced too high and on its way down.

...And Most Other Commodities

Warning stat: On aggregate, commodity prices across the board have exploded higher since 2001.

What the experts say: Analysts at Stifel Nicholas and State Street warn that the decade-long commodity super-cycle could soon end.

Apple

Warning stat: Shares are up 5,000% in the last 10 years. +50.21% YTD.

What the experts say: 'One of my favourite generational shorts is Apple,' said Jeff Gundlach in March. NYU's Aswath Damodaran, the leading mind in investment valuation recently dumped his Apple holdings. 'The new investors of Apple scare me,' said Damodaran.

Tech Stocks

Warning stat: Startups with billion-dollar valuations, 'stupid' companies, Hollywood investors, insane parties, and seven other signs (compiled by BI's Alyson Shontell) that echo the tech heyday of the late 1990's.

What the experts say: 'So far, 2012 has been the biggest year for first-day IPO price surges since 2000, the era of the dot-com bubble, according to data from IPO research company Renaissance Capital,' reports MSNBC.

China

Warning stat: Evidence of empty cities. empty shopping malls, and the growth story is accepted uncritically.

What the experts say: GMO's Peter Chiappinelli recent called China 'the mother of all bubbles.'

Apartments

Warning stat: According to Businessweek, Fannie Mae, Freddie Mac and Ginnie Mae sold $13.5 billion in multifamily-backed securities in the first quarter of 2012, an 81% increase from the year-earlier period and the highest quarterly issuance since records began in 1993.

What the experts say: 'I think, eventually, we will get ahead of ourselves, because we have a tendency to do that,' said Steve Flanagan, a real estate broker in Orlando. 'That's just part of the business.'

Stocks

Warning stat: Since March 2009, the S&P 500 has gone from 666 to 1,380, a gain of 107 per cent.

What the experts say: Economist Gary Shilling and Nomura's Bob Janjuah both think the S&P 500 is heading to 800.

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