Paul Farrell proposes a "Megabubble Poll"  — how many of these do you think are  bubbles.   All, some or none?

Real estate bubble. Clues: Speculators driving prices. Lenders offer cheap money, short-term loans. Home-equity loans fund short-term spending. Fed chairman sees minimal froth.

Energy and oil bubble. Clues: Crude hits another record. Political turmoil in oil-producing nations. Consumers buy gas-guzzlers at record pace. GM, Ford in trouble.

Foreign-trade deficit. Clues: Monthly deficits top $50 billion. This year’s deficit will beat 2004′s $617 billion. Foreigners now own $2.5 trillion of America.

Federal-budget deficit. Clues: Federal debt now $7.8 trillion; add another $400 federal deficit this year.

Corporate pensions underfunded. Clues: Airlines, auto, other manufacturers heavily burdened, default to taxpayers.

Local government pensions deficits. Clues: A near $400 billion mess draining local taxpayer resources.

Weak U.S. dollar. Clues: Fear China and other foreign powers will replace dollar reserves. Warren Buffett now betting $20 billion on foreign-currency hedging.

Social Security deficit. Clues: No choice, cut benefits or raise taxes; politicians hate both, so it’ll get worse.

Health-care costs. Clues: Burden shifting to employees. Costs above inflation. 43 million uninsured.

Medicare deficit. Clues: Going broke faster than Social Security. Prescription drug benefit added an unfunded $8.1 trillion. Long-term estimates over $36.6 trillion.

Personal-savings shortfall. Clues: We consume not save. National savings rate is zero, down from 8% two decades ago. Average household net worth less than $15,000, excluding home equity.

Consumer debt bubble. Clues: We’re living beyond our means. Consumer debt at $2 trillion. At 13%, household interest as a percent of income is at all-time high. Personal bankruptcies rising.

War and defense deficit. Clues: Iraq and Afghanistan wars cost over $200 billion a year, $2 trillion a decade.

Homeland insecurity. Clues: Minimal legislation to protect ports and chemical plants. Federal budget even cut border patrol 90%. Vigilantes patrolling.

Class gap widening. Clues: Superrich and CEOs getting increasing share of wealth, ownership and tax cuts.

Congressional pork. Clues: Both parties act like teenage addicts on a spending spree with stolen credit cards. By not using the veto, the administration acts like a parent who needs Nanny 911.
International credibility. Clues: Image problems: Post-9/11 imperialism, WMDs, Abu Ghraib, Gitmo and more.

Junk mailings. Clues: Mail solicitations increasing for credit cards and hot stock newsletters.
New "Mad Money" cable show. Clues: Frantic, manic entertainment; 1990s irrational exuberance again.

Numerous key mini-bubbles. Environmental, resources, technology, educational, outsourcing, jobs, you pick!

Now total up your scores on these individual bubbles. If your total is 50 points or more, you see a megabubble dead ahead. Prepare accordingly. If you’re close to 100 points, consider a very conservative strategy.

The Global megabubble? You decide
By Paul B. Farrell
MarketWatch, June 26, 2005  6:43 PM ET

Category: Commodities, Economy, Markets, Psychology, Real Estate

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

6 Responses to “The Megabubble Poll”

  1. royce says:

    After reading that, my strategy for the future includes climbing to the top of a very tall building and hurling myself out the window.


  2. Fred Boness says:

    We have a bubble in bubbles.

  3. Brandon Rose says:

    I was wondering where the “bubble in bubbles” option was too! The housing bubble is the only one I agree with, and even then only in some markets (unfortunately some of those markets are the ones I’ve lived in for the past 7 years). I completely agree some of those poll points are concerns but not necessarily “bubbles”.

  4. mb says:

    Mobile homes exceed $1 mil up and down this coast. Bubble? Everybody who’s paying a mortgage in CA insists it’s pure Supply/Demand. Beats me, but I’ll continue renting…

  5. babel5 says:

    nobody talks about a bond bubble; that’s merely a “conundrum.”