The Bubble is Here

I’m getting concerned with the move in home values the last two years. Yes, the economy is doing well yes unemployment is low, but I have an eerie feeling that we’re back in speculative mode as a country. It feels similar to the year before the Bear Stearns hedge funds blew up. The bitcoin runup and the stock market runup are all starting to defy logic. It’s probably way too early, but things are starting to feel as if they are going up too fast for no particular reason(other than speculation!). Maybe I’m just getting old and conservative, but I think some sort of correction is coming around the corner. The scary part is that it is never what is forecast, it’s almost always out of left field. There are a few things of concern right now:

  1. The yield curve is getting really close to being inverted which has always resulted in a recession
  2. The S&P 500 has been positive the last 9 years in a row
  3. Real estate has gone up the last 5-6 years in a row depending on the market which is typically the average numbers of years in a cycle
  4. Bitcoin and FANG are getting really crowded.
Written on April 20, 2018