What will be the next bubble?

[john5746]

This is just a wild guess, but I think energy will be the next bubble. People will rush to put their money into companies that have a sexy idea and big promises for the future - but zero earnings.

 

What do you think will be the next bubble? Do you think America will be able to generate another bubble?

[iNow]

Religion?

[john5746]

Religion?

 

LOL, that's pretty good. Doesn't Atheism look more like a bubble recently though?

[iNow]

No. Just seeing better marketing and acceptance.

 

As for your comments above, I think energy has too high to climb before it can reach any sort of bubble to pop. IMO, there will be many more bubbles in other sectors before that happens... I am just not sure precisely what those will be yet.

[npts2020]

The next bubble will be the U.S. Treasury. When people finally figure out that it doesn't really have that much money either. At least that is what my ouija board tells me.

[D H]

The next bubble will be theft by proxy, aka wealth redistribution, in the wake of the coming Democratic hegemony. The bubble will burst when the Democrats truly do bankrupt the country. Fortunately for them, they will find some way to blame the Bush.

[Pangloss]

You're talking about the so-called "RePO" fears -- that the focus of the new government will be an extremely active socialist-progressive agenda lead by Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi, and President Barack Obama. But there is an obvious counter to that argument: The ten trillion dollar debt and the one trillion dollar deficit. (And, of course, the promise of middle-class tax cuts.)

 

But yes, I have no doubt that under such a government we will hear a lot more about the value of the farm subsidy and a lot less about the value of the oil subsidy. The question is whether Americans are still willing to put up with that nonsense. The current (abysmal) approval rating of congress suggests otherwise.

[D H]

One obvious way to "cure" the debt and the deficit is to tax the bejesus out of the uberrich. As goes California, so goes the nation.

 

From http://www.sos.ca.gov/elections/elections_j.htm#1344,

Wealth Tax. Constitutional Amendment and Statute.

Summary Date: 08/04/08 Circulation Deadline: 01/02/09 Signatures Required: 694' date='354

Proponent: Paul McCauley

 

Imposes one-time tax of at least 55% on property exceeding $20 million of a California resident or held in California by nonresident. Imposes one-time tax (between 36.5% - 54.3%) on income exceeding $10 million when resident dies or leaves California. Imposes additional 17.5% tax on total incomes of taxpayers with income exceeding $150,000 if single, $250,000 if married; 35% if incomes exceed $350,000 if single, $500,000 if married.[/quote']

This is also known as the "Hasta La Vista Tax", and is so named by the proponents.

[Pangloss]

And how's that working out for California? So well that they're asking for a bailout from the Feds. I'm afraid there's nothing obvious about solving the deficit. They can milk the 250k+ types a little bit more, but that's not going to solve anything. They will have to cut spending. The bailout essentially increased the Federal budget, already half a trillion dollars in the red, by 50%.

 

(And you gotta wonder: Do NASA and the NSF even have a chance?)

[padren]

I'm afraid there's nothing obvious about solving the deficit.

 

I really wonder if "investing forward" can work, which seems to be the crux of the "Obama Plan" overall:

 

* Invest in health care, save money at ERs and through preventative medicine.

* Invest in energy independence, kick foreign oil and spend that here on green sources.

* Invest in education, increase the skills graduates have, and improve their earning potential.

 

The secondary push, seems to be "fix the leaky spending" on programs that have been neglected and are in disrepair.

 

On the one hand, it seems like a good idea, and we could be a lot better for it. On the other, I am concerned as to if the returns will offset the sheer "bureaucratic friction" that goes with the rusty pipes that are the federal funds allocation process.

 

 

As for the next bubble (to stay a little on topic) it could be partly the result of the food market. This could be completely off base, but as food costs go up with emerging buying power in Asia, it could cause some shifts that are hard to predict, but I couldn't personally anticipate the results.

[D H]

And how's that working out for California?

The proposed amendment is still in the greedy thief honorable citizen signature gather phase.

 

So well that they're asking for a bailout from the Feds.

No, they are asking for a bailout from the uberrich people who live in the state, and the moderately rich people who bail out from the state. Note well: The Hasta La Vista tax is a tax on wealth, not income.

 

I'm afraid there's nothing obvious about solving the deficit. They can milk the 250k+ types a little bit more, but that's not going to solve anything.

The solution is obvious to some on the left. Donald Trump's 1999 proposal one-time tax on wealth (not income) is regaining a lot of steam as a solution to the deficit. Confiscate Tax enough of those nasty uberrich's accumulated wealth and the deficit will vanish.

[CaptainPanic]

I agree with the OP that some energy companies will see their shares go sky high... which ultimately means that this bubble will burst some day. We can inflate the energy bubble a lot more before it will burst - growth numbers of wind and solar energy are huge (up to 40% per year!)... but this does not guarantee that it will continue for another decade.

 

This however does not mean that sustainable energy will stop growing. Just like the IT bubble / internet bubble, we still use computers and internet - it's just that some companies' values were seriously overestimated. Bursting a bubble just means that the market re-evaluates the stock prices. That means that some companies go bankrupt, but the strong ones survive. It's all the same capitalism that we all love. No problem.

 

It's either having bubbles, or a strong (socialist?) government. A pure capitalist system will have bubbles, always.

[iNow]

The next bubble will be theft by proxy, aka wealth redistribution, in the wake of the coming Democratic hegemony. The bubble will burst when the Democrats truly do bankrupt the country. Fortunately for them, they will find some way to blame the Bush.

 

Perhaps this could be split into its own thread. I'd like to explore some real numbers about how debt increases more with Republican adminstrations as opposed to Democratic ones, despite the favored talking points regurgitated again above.

 

Either way, you guys have completely hijacked the thread and we're still on the first page.

[Sisyphus]

Do you think America will be able to generate another bubble?

 

Always. Our irrational confidence is both our greatest strength and our greatest weakness as a nation.

 

As for what it will be, I don't know. I kind of suspect we're in for another internet bubble at some point, frankly. Facebook is "worth" what, $8 billion or something? Kind of a lot for a company with no physical product, minimal infrastructure, and entirely ad-based revenue, no?

 

You might also be right about an energy bubble. Certainly we're going to see a lot of different approaches emerging (we already are, in fact). Only a few will ultimately be successful. You just have to figure out which ones are Amazon.com, and which ones are pets.com.

[ecoli]

whatever it is, its gonna be worse than this one. The Fed can't continue to keep interests rates low and infuse all this credit into the system and expect there won't be a worse bubble then the one we have now... we're not solving the longterm problems by these bailouts.

[Realitycheck]

Well, I am not entirely convinced that interest rate cuts are all that effective in stimulating business. Remember, we have been on trying to stimulate business with interest rate cuts for quite a while, but apparently bank lending deregulation is the one real thing that has worked. I don't see it being all that effective. After all, it has not gone up that much since they shifted rates upward.

[iNow]

What about the environment? Maybe the environment won't be able to support us for much longer, and we'll burst that bubble?

[Pangloss]

I kinda like the idea of an "environment" or "green energy" bubble. Maybe it's overly optimistic but it would be really nice to see.

 

Tom Friedman of the New York Times (of "The World is Flat" fame) had an interesting take on the lasting impact of the "bubbles" when he appeared on ABC's "This Week" yesterday. He said that each bubble actually produced something useful when all was said and done. The boom-bubble-and-bust of the railroads in the 19th century left us with an extremely useful and productive railroad system. The boom-bubble-and-bust of the dot-coms at the end of the 20th century left us with a powerful network infrastructure. And the boom-bubble-and-bust of the real estate market is leaving us with empty condos in Florida, dead derivative contracts and used Gulfstream jets. He feels that we should use this to produce a green energy technology boom and not just "hand it out to WalMart".

 

I wasn't entirely sure that I agreed with that or even followed it completely, but it was interesting that George Will, sitting right next to him, reacted by saying that he felt he was hearing the beginnings of a Republican revival in what Friedman was saying. (lol)

 

If anyone's curious the video can be found here, at around the ten minute mark:

http://abcnews.go.com/Video/playerIndex?id=6066098

[Mr Skeptic]

whatever it is, its gonna be worse than this one. The Fed can't continue to keep interests rates low and infuse all this credit into the system and expect there won't be a worse bubble then the one we have now... we're not solving the longterm problems by these bailouts.

 

I'll just go ahead and call it the Bailout Bubble.

[waitforufo]

Perhaps it will be a bandwidth bubble. By this I mean do we really need more data bandwidth. Both fixed and wireless? My young adult children (early 20's) and their friends seem to have waning interest. Media overload makes them not trust anything they see, hear, or read on television, radio, or the internet. I have asked these young people if they are interested in HDTV or 4G wireless services, etcetera, and an amalgam of there responses would be something of the order "I would rather have a real life and a virtual one."

[iNow]

Perhaps it will be a bandwidth bubble. By this I mean do we really need more data bandwidth. Both fixed and wireless?

In a word... Yes. Just because your vision is too limited to see where this will take us as a culture and society does not mean it's not needed or would not lead to amazing things.

[waitforufo]

I kinda like the idea of an "environment" or "green energy" bubble. Maybe it's overly optimistic but it would be really nice to see.

 

Tom Friedman of the New York Times (of "The World is Flat" fame) had an interesting take on the lasting impact of the "bubbles" when he appeared on ABC's "This Week" yesterday. He said that each bubble actually produced something useful when all was said and done. The boom-bubble-and-bust of the railroads in the 19th century left us with an extremely useful and productive railroad system. The boom-bubble-and-bust of the dot-coms at the end of the 20th century left us with a powerful network infrastructure. And the boom-bubble-and-bust of the real estate market is leaving us with empty condos in Florida, dead derivative contracts and used Gulfstream jets. He feels that we should use this to produce a green energy technology boom and not just "hand it out to WalMart".

 

I wasn't entirely sure that I agreed with that or even followed it completely, but it was interesting that George Will, sitting right next to him, reacted by saying that he felt he was hearing the beginnings of a Republican revival in what Friedman was saying. (lol)

 

If anyone's curious the video can be found here, at around the ten minute mark:

http://abcnews.go.com/Video/playerIndex?id=6066098

 

I believe Tom Friedman is correct. Perhaps he left off however, that after the bust, people always go to jail.

 

In a word... Yes. Just because your vision is too limited to see where this will take us as a culture and society does not mean it's not needed or would not lead to amazing things.

 

I hope your "Yes" is correct because my lively hood depends on it. That is why I ask my children and their friends about their bandwidth usage and needs. Strong belief like yours however is what bubbles are made from.

[Pangloss]

I believe Tom Friedman is correct. Perhaps he left off however, that after the bust, people always go to jail.

 

Lol! Well put.

[iNow]

Strong belief like yours however is what bubbles are made from.

Well, I'll just call that an extreme oversimplification and leave it at that.

[padren]

Perhaps it will be a bandwidth bubble. By this I mean do we really need more data bandwidth. Both fixed and wireless?

 

I for one, would welcome an impending bandwidth crisis - we could finally see a push to tighten up all SMTP/POP3 protocols to version that required a level of authentication that would render sending spam nearly impossible, instead of having it fly around the net only to die upon hitting our own server or client side filter.

 

As for the benefits of ultrahigh bandwidth - I already watch Hulu more than cable, but I could easily see the day that all digital TV is truly on demand, via TCP or more likely, a new UDP protocol.

 

Select a station, select a subtitle language, watch any news or show from any country - I would love to see that.

 

Higher bandwidth only means higher quality of data, not that you have to spend more of your life accessing it.