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MARKET BEAT; In 2005, a Rash of Possible Bubbles
[HOME EDITION]
Los Angeles Times - Los Angeles, Calif.
Subjects: Predictions; Securities markets
Author: Petruno, Tom
Date: Apr 17, 2005
Start Page: C.1
Section: Business; Part C; Business Desk
Abstract (Document Summary)

Given that each of the aforementioned bubble candidates can be linked to one another with less effort than a game of Six Degrees of Kevin Bacon, it might be reasonable to suppose that they aren't individual bubbles but rather one mega-bubble -- the totality of the economic and financial world we live in today.

Recall the hundreds of billions of dollars in retirement savings lost by hardworking people when the technology bubble exploded during 2000-02. Then imagine the potential financial harm if, simultaneously, housing values went the way of tech stocks, China halted its massive buying of U.S. Treasury bonds (which has helped finance our budget deficit and kept U.S. interest rates down) and corporate lenders found that too many of their debtors really didn't deserve credit, or at least not on such benevolent terms.

Barry Ritholtz, market strategist at brokerage Maxim Group in New York, says the severity of the tech stock bust has left many investors seeing its ghost everywhere. The result, he said, is that "we have a bubble in bubbles": Any market that has big numbers attached to it becomes a candidate for bubble-hood.

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