13 May 2016

Bubbles!

Bubbles... bubbles... bubbles!

It's not really a bubble unless people are buying them as investment vehicles.

The post-war housing boom wasn't a bubble.

The housing market in the late 90's to early '00's was a bubble.

The difference between a boom and bubble is the why are people buying and it does have an effect on the ending of it.

The end of a boom is a tapering off.  Though it's called "bust" it really means that the expansion has stopped and contraction is beginning.  It means layoffs instead of firings.  It means downsizing instead of shutters.

Another characteristic of a boom is there's actual buyers for the product that want the product for itself and not its future value.

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