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Words in Business News
By Jon Fernquest

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[Thai Economics Library | Archives (for history)]
September 09, 2006

Bubble

economic bubble (noun)
market bubble (noun)
financial bubble (noun)


Example sentences:

* "A financial bubble occurs when asset values rise above the level that can be justified by underlying values and gains."

bubble (noun) - asset prices rise to unreasonably high levels given true asset values, investors make a lot of money, and are very enthusiastic about the market, then one day asset prices suddenly drop (the crash), investors lose a lot of money as well as their enthusiasm for the market, besides causing market instability, bubbles also have a negative effect on economies because they temporarily misallocate funds into non-optimal uses" and then quickly pull them out. (See Wikipedia)

* The prices of dot com stocks drove the financial bubble which had little or no relationship to actual earnings.

* "... the classic features of a speculative bubble: a situation in which temporarily high prices are sustained largely by investors' enthusiasm rather than by consistent estimation of real value." (Source)

* "Measured by the increase in asset values over the past five years, the global housing boom is the biggest financial bubble in history." (Source)

* "Throughout history, financial bubbles—whether in houses, equities or tulip bulbs—have continued to inflate for longer than rational folk believed possible."

* "...housing booms tend to be more dangerous than stockmarket bubbles, and are often followed by periods of prolonged economic weakness."

* "Stiglitz points to several examples of deregulation, or poorly designed regulations, that first inflated the bubble of the 1990s and eventually produced its collapse."

* "...the bursting of the stock market bubble...retarded business investment and personal consumption and thereby slowed overall spending."

* If the next financial bubble bursts, nobody can say they weren’t warned.

* Some claim Greenspan knew the stock market boom was a financial bubble.

* "And there is a troubling similarity between the house-price boom and the dotcom bubble: investors have been buying houses even though rents will not cover their interest payments, purely in the expectation of large capital gains—just as investors bought shares in profitless firms in the late 1990s, simply because prices were rising."


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