Tully says to beware of "bubble" real estate markets, where the price of a house completely diverges from the fundamentals that determine the value of a home personal income and rental rates in a particular market.
On the other hand, due to the high oil prices and the bursting of real estate bubble, the USA economy is recently giving strong signals of a forthcoming stagflation: a recession with increasing inflation rate.
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All the above confirms what we have been forecasting for several months: Government efforts to stop real estate inflation is resulting in the bursting of a huge speculative real estate bubble.
And sure enough, the greed got seriously out of hand and then imploded, in fact twice, once with the bursting of the stock market bubble of 2000, and then even more seriously with the real estate and sub-prime mortgage bubble and resulting financial meltdown of 2008-2009.
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The Spanish banking system is plagued by huge and unrealized losses from the financing of the real estate bubble.
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For example, one needed to be at the cocktail parties engaged in conversation to truly understand the magnitude of the real estate bubble.
Following the bursting of the real estate bubble and the financial crisis that ensued thereafter, businesses and consumers have begun to repair their balance sheets by paring back their debt levels.
However, the problem was that as severe as the recession had been, it had not been severe enough to correct all the excesses of the previous partying on easy money, and bursting of the real estate bubble.
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However, even the combination of the severe recession of 2007-2009, the slowdown last summer, and the renewed slowdown this year, has still not corrected all the excesses of the previous partying on easy money, and bursting of the real estate bubble.
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Just like in the U.S., Spain was the victim of a massive real estate bubble that pushed the country into a full blown financial crisis.
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And incidentally, that could have protected you from the great Japanese bubble because when Japan had its real estate and stock bubble, Japan got to be 50% of the world's capitalization.
In 2006-7, investors poured billions of dollars into homebuilder and financial stocks, following glowing reports about the state of the US housing and financial sectors losing a great deal of money when the real estate bubble burst.
The U.S. is still reeling from the manipulative build-up of the housing bubble, the sub-prime mortgage mess, the resulting real estate crash, and the financial crisis of 2008 that required a multi-trillion dollar bailout of banks and brokerage firms.
With a lack of a so-called real estate bubble, there's been no bubble to burst.
As Harvard public-policy professor Daniel Shoag documents in a working paper, land restrictions became common in high-income enclaves during the 1970s coinciding with the burgeoning of California's real-estate bubble and have increased income-based segregation and inequality.
That failure to get ahead of the curve resulted in the real estate bubble.
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Recovery requires transferring accumulated capital out of residential real estate, particularly where the bubble was most pronounced.
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In the case of the U.S. economy now, the double-whammy of wealth shocks from the real-estate bubble and the stock-market crash has made consumers understandably cautious.
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Furthermore, I have never seen a bull market end without the mania phase (remember during the tech bubble when your favorite plumber became a day trader, or in 2005 in the midst of the housing bubble when your dog walker became a real estate agent?).
All three areas have turned in some of the fastest growth of real estate-driven new money in recent years, and all are feeling the burst of the bubble now.
If the real estate bubble bursts, it may produce a rerun of 2008, when the Shanghai stock market plunged about 60%.
Retail sales have been softer than expected and the real estate bubble there appears to be in the process of popping as property sales and prices are plunging.
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New York's last real-estate boom began later than the bubble in the rest of the country, and lasted longer, until 2008, kept aloft by Wall Street bonuses.
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He has been alerting his readers since summertime about the coming unwinding in real estate and even created a "Housing Bubble Bellwether Index" of about a dozen companies with a significant share of revenue coming from construction and housing related purchases.
Until late in 2011, the focus of policymakers in China was on tamping down inflation, stocked by a surge of stimulus spending in 2008-2009 that led to a real estate bubble and an overheated economy.
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Fearing a bubble, government officials have taken a myriad of steps to reign in the breakneck growth of the real estate market.
The recent real estate bubble and foreclosure crisis in the U.S. created a bit of a scary alternate universe for property owners to fall into.
Critics point to a proliferation of ghost towns as evidence that China's real-estate market is a bubble that's bound to burst in a way that will badly damage the Chinese economy.
Nor does it correspond to the madness of the credit market bubble prior to 2007 when every fool in the world was buying mortgage backed securities without understanding the value of the real estate that backed them or the fantastically dangerous amount of leverage they were playing with.
The real estate market, long considered to be a bubble even by some developers, is now the target of tough government measures intended to cool a speculative fever that has driven up prices dramatically in major cities.
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